Alan Ryan

The best way to determine who should have the largest slice of funding cake is to let the market decide

There are two animals much loved by philosophers: the Pushmi-Pullyu and Buridan's ass. The former tries to head in two opposite directions and gets nowhere, and the latter finds itself equidistant between two equally attractive bales of hay and starves to death because it cannot decide which to eat.

Sir Howard Newby must sometimes feel a bit like Buridan's ass, and he must sometimes wonder whether the Higher Education Funding Council for England isn't a Pushmi-Pullyu. The Russell Group and Campaigning for Mainstream Universities are bickering, the first claiming that teaching clever kids in research-intensive universities is exceedingly expensive and entitles them to a bigger slice of the cake, and the latter claiming that teaching under-equipped students in under-equipped universities - a.k.a non-traditional students in modern universities - is exceedingly expensive and entitles them to a bigger slice of the cake.

They are both right. Or, at any rate, they are right in the arguments they make, if not in the conclusions they draw. We ought not to go further without a few unkind words for Mrs Thatcher's Treasury. Its belief that "a course is a course is a course" and ought to attract the same funding, no matter where, by whom and to whom it was taught, lies at the heart of our troubles; that and the widespread conviction that parity of esteem implies parity of funding.

But it doesn't. A Ferrari F1 racing car is anti-social, bad for the environment, vilely noisy and a miracle of engineering. A Ford Ka is a wonderful city car, more than adequate for going shopping and for trips to the sports club. It is also a nice piece of engineering and design. It is no insult to the Ka to observe that the Ferrari is bound to cost £1 million a shot more than the Ford does, and no insult to the Ferrari to observe that it would be daft to go shopping in it.

So, why might you spend much more teaching someone history at Cambridge University than teaching them business studies at Wolverhampton University? Because you've got no choice. If you want history lecturers to do research that will collect 5s and 5*s from the research assessment exercise, you have to give them time to do it; that means you have to have an expensive staff-student ratio; and since salaries are a large part of the bill in the arts, your salary-bill-per-student is going to be high. But it is also a choice worth making - not always at the expense of other good causes, but intrinsically worth making when you can afford it.

A small number of students - about half the Oxbridge intake - have the wish and the aptitude to begin some serious intellec-tual work while they are studying as undergraduates. It is worth giving them the individual attention that graduates at an Ivy League school would get. And that is expensive.

The science bill is bigger. If it is expensive to pay a lot of individual attention to very clever students in the arts - and to supply their library needs - it is lethal to add in the teaching laboratories that very clever science students need. Add the cost of technicians and supplies - scientists use libraries too - and you can hear the money gurgling down the drain. But seeing how far the sharp edge of research is from freshman science, if the cleverest students are going to do really interesting research eventually, they have to get as far as they can as fast as they can.

But every such thought can be stood on its head. "Non-traditional" students may not benefit from being treated like Harvard University graduates, but they may need as much "one-on-one" teaching as their better-educated peers.

It may be remedial teaching, but remedial teaching is costly, too. By the same token, highly motivated and well-equipped students run little risk of dropping out; their less well-equipped peers are more likely - and rightly - to have doubts about what they should be doing and why. Anything you save in the classroom, you ought to be spending on support services of all sorts.

The obvious solution is to let the market sort it out - if Russell Group universities really do deliver £200,000 more in lifetime earnings than "modern" universities, students should cheerfully pay higher fees for their product, and Hefce can stick to the uniformity of "a course is a course is a course". Otherwise, we shall be doomed to spend the next 20 years, like the past 20, irritably squabbling over shares of an inadequate funding cake.

Alan Ryan is warden of New College, Oxford.