Creative minds enjoy the challenge of change

Howard Newby embraces the opportunities that the HE Act offers to a cash-strapped but energetic sector

A residing strength of the higher education sector is its ability to look beyond itself: its grasp often exceeds its reach. It may not feature strongly in Government spending reviews, but the free transmission of knowledge is the mark of a civilised and open society.

Higher education is also central to economic competitiveness and social inclusion, but our universities and colleges can exist only by continuing to influence the shape of our society and our cultural and intellectual development as they have for nearly 1,000 years. Collectively, the sector constitutes the country's intellectual bloodbank.

Variable fees will bring much-needed additional funding into universities and colleges. How the new quasi-market for higher education will play out in practice has considerable implications for the sector. Setting a maximum fee of £3,000 will no doubt reduce the most dramatic effects of the market, but it remains to be seen whether any sort of market based on price will operate if the majority of institutions charge the maximum fee for the majority of courses. But variable fees could have unintended consequences for some institutions, especially if they misjudge the needs and wants of the customer. We shall see.

A less controversial aspect of the legislation is the birth of an Arts and Humanities Research Council - an achievement that many would argue was long overdue and one that Hefce has helped bring about. This new status will support the linking of the arts and humanities with other disciplines, and ensure greater participation in national and international programmes.

And then there is the new Office for Fair Access. We continue to be sceptical of the need for a separate organisation, but we are determined to make the best of it. So, we welcome the role of Offa in identifying and disseminating good practice to promote equal opportunities for access to higher education. It will be interesting to witness the unfolding relationship between the new regulator, the sector and my organisation, the Higher Education Funding Council for England.

Only time will allow us to judge the impact of the Act on the future development of higher education, but already we can identify a number of challenges facing the sector that are only hinted at in the White Paper and were scarcely debated during the passage of the Bill. The first concerns post-16 progression in the context of lifelong learning. As we move towards a 50 per cent participation rate, we need to have a clear vision and strategy for post-16 progression to ensure that every student or prospective student can find a pathway into and through higher education that meets and exceeds their aspirations. Educational progression in support of lifelong learning is a key element of our strategic vision for higher education: a vision that weaves together the hopes and ambitions of learners with the talent of our lecturers. It is one of the great weaknesses of higher education that flexible qualification and credit frameworks are patchy and hinder progression for some students.

Second, we can see emerging a much greater coherence around how the sector tackles professional standards in management and teaching. The newly created Leadership Foundation, and the Higher Education Academy, will be fundamental to supporting the professionalism of our teachers, researchers and administrators in higher education institutions. The creation of both organisations is a testament to the creativity of the sector and the willingness of many colleagues to focus on those issues that bind us as we take forward opportunities to enhance professional standards.

While all of us in the sector regularly debate and have strong views on the financial sustainability of our institutions, we need increasingly to bend our mind to "sustainability" in the wider context of making the best use of all of the resources that come within the sphere of higher education. This is likely to rise up the political agenda over the next 12 months.

After all the change of the past two years, can we look forward to a more settled and predictable future? I doubt it. Higher education will increasingly play a pivotal role in the future development of our country.

But "changeful" is the word that best describes our future. The only thing that will not change is the presence of change itself. But change represents an opportunity, something the sector can tackle with a confidence and brio that echoes a past rich in intellectual vigour.

Sir Howard Newby is chief executive of Hefce.