Pay-as-you-go favoured

Students and employers would make a bigger contribution to higher education funding under one of three financial models for the future of the sector being considered by Sir Ron Dearing's committee of inquiry, it emerged today.

The committee is looking at the introduction of learning accounts and the creation of a learning bank as one of its preferred options for reforming the funding of higher education.

Details are likely to be influenced by proposals for a learning bank put forward by the Labour party, the Liberal Democrats and the Commission on Social Justice. These involve contributions from students, the state and employers into individual learning accounts held with a national learning bank, to help pay for the future expansion of higher education and lifetime learning.

Sir Ron's committee is so interested in the idea that it is to commission a further examination of the practical implications, including national consultation.

The other two options it wants to explore are extending the notion of learning entitlements or credits, which might be available for anyone accepted on a recognised higher education course; and a revision of the funding system.

Nigel Brown, the committee's funding consultant, said computer models on how the three options might be costed were being tested to determine which was the best to see British higher education through the next 20 years.

The Higher Education Funding Council for England has already proposed a wide-ranging review of its method of funding teaching. This includes plans to bring the average funding per student for each institution within 5 per cent of new standard levels to be set by the funding council; and to take student demand, quality and regional and special needs into account when allocating numbers.

But HEFCE has put back introduction of its proposed new system by a year to September 1998 to take account of Dearing's conclusions.

Sir Geoffrey Holland, vice chancellor of Exeter University and chairman of the Dearing committee's working group on the economic role of higher education, said it was sensible for the funding council to "sit tight".

In 1994 the Commission on Social Justice, in its report on "strategies for national renewal", proposed a system under which contributions from employers, employees, the state, and private finance, were paid into a learning bank and passed on to institutions in the form of fees. Both the Labour party and the Liberal Democrats have since incorporated the idea into their lifetime learning and training manifestos.

* Institutions will be able to bid for extra student numbers for 1997/98 on the basis of offering high quality science or engineering courses, or geographical location, HEFCE has said. Some additional numbers available due to under-recruitment in 1996 will be shared out to institutions which can show they have had to reduce intakes following the introduction of an additional year in some science and engineering programmes.