Dearing split on money

Sir Ron Dearing's committee of inquiry is split on two big issues -plans to charge students a quarter of the cost of their higher education and the funding of research.

One option is to adopt a funding formula used in further education where fees are set at 25 per cent of estimated course costs. Some students, for example medical students, could be asked to pay more than Pounds 2,000 a year, while others on cheaper courses might pay only a few hundred pounds.

This proposal is one of six fee options likely to be included in the committee's final report, scheduled for July 17. Members have yet to agree which, if any, option they prefer, and whether fees should be charged in advance, on completion, or on a pay-as-you-go basis.

Decisions have been held up by last-minute adjustments to funding proposals, disagreements over the levels of fees to charge, and a rift over proposals to provide research funding only to departments scoring 5 or 5-star in the research assessment exercise.

A conclusion must be reached at the committee's final meeting next Thursday if the report is to be delivered on time. Delay would play havoc with government plans for a Lifelong Learning white paper in the autumn.

Tessa Blackstone, the higher education minister, said this week she did not expect the timing of the report to slip.

The committee is expected to recommend a four-tier student support system, including learning accounts for employees, a tax-free savings scheme for other students, means-tested scholarships and grants, and some kind of income-contingent loans system.

The package is designed to cover maintenance and a student contribution for tuition, which the committee recognises is unavoidable if the sector is to avert financial crisis.

Mark Blaug, a member of the committee's working group on the economic role of higher education, said there had been "incredible differences of opinion" over funding. The concept of fee-charging was generally accepted, but it was "just a question of how much to charge".

High fees have been opposed by members who are worried they could deter students from poorer backgrounds. Some want to charge a set nominal fee of a few hundred pounds, and ask the Government to increase its contribution. Others see this as unrealistic.

Another option, originally proposed by a minority of members, which has gained a high level of support is for fees to be set at Pounds 1,000. But this might allow the Government to increase the amount charged as it reduces state contributions to higher education.

The committee is considering basing fee-charging on a formula used in further education where fees are fixed at a set percentage of course costs. A source said: "The broad principle is that fees should be determined by a method, rather than set at an arbitrary figure."

Such a move might work well with proposals to put a financial and educational value on defined periods of learning, by linking a national credit accumulation and transfer system to funding. But it could also run into practical difficulties in the attempt to define the cost of courses. It could put students off more expensive subjects which already face recruitment problems, such as engineering.

David Blunkett, secretary of state for education and employment, is understood to oppose charging fees but pressure from the Treasury may force his hand. Baroness Blackstone has made it clear she believes fees may be necessary to fund Labour's plans.

The committee is also understood to be divided over funding for research. Its research working group has considered a paper suggesting that only top-rated departments should receive RAE-based money, which amounted to almost Pounds 700 million following the 1996 exercise. The suggestion is in line with the last submission from the Department for Education and Employment, which called for greater research selectivity.

Soundbites on the split, page 3

Opinion, page 9

Soundbites on the Dearing money split

Sophie Ansell, a student representative on the inquiry's information technology committee, said news that Dearing was considering recommending the introduction of Pounds 1,000 fees had come as a shock. "Former National Union of Students presidents who are now MPs are likely to struggle with the issue if it comes to a vote in Parliament," she said.

Alec Broers, Cambridge University vice chancellor, said: "I am still firmly opposed to a top-up fee in terms of a flat levy. I believe that if student fees are needed to maintain excellence in Cambridge, then a loan system should be developed that would allow students to pay back after graduating."

Mark Blaug, visiting professor of economics at Exeter University and a member of the committee's working group on the economic role of higher education, said: "What the Government was hoping for was that Dearing would go for one particular option, which would get ministers off the political hook. But he is refusing to make those decisions and is only offering options, which means the Government faces a difficult political decision."

Leslie Wagner, Leeds Metropolitan University vice chancellor, said: "I think the Government is happy to fly a kite on the idea of fee charging. Ministers want to see how their backbenchers will react."

A member of one of the committee's main working groups, who did not wish to be named, said: "One of the objectives is to increase the participation in higher education of people from poorer backgrounds. Another may be to do away with all maintenance grants and load the system in the direction of loans. But this may make it difficult to achieve the first objective."

Tessa Blackstone, the higher education minister, said: "I don't believe he (Sir Ron) is going to slip and I am expecting an announcement on the 17th. It is important for the parliamentary timetable."