Neets need our help

The March Budget is going to have a great impact on the lives of many people, particularly the hundreds of thousands of well-qualified 18- to 20-year-olds who are hoping to go to university this autumn.

They are worrying about what the future holds for them with jobs, apprenticeships and higher education places all in short supply. Almost 15 per cent of young people are now classed as Neets - not in education, employment or training - and this figure is rising fast.

Based on current trends, well over a quarter of a million people will fail to gain a university place this year, 100,000 more than last year's record total. As many as 150,000 of these will be well qualified. Together, the government, universities, schools and parents have been actively encouraging young people to "Aimhigher" for many years. This year we are having real success. It is not only our moral duty, but it is also in society's best interests for us to find a way to meet at least some of the record-breaking demand.

Three years ago the system expanded by an extra 43,000 places in one year without a loss in quality. It is feasible that we could do the same again. This would still leave more than 200,000 unsuccessful applicants, of whom about half will have qualifications that would have secured them a place a few years ago. But offering at least an extra 40,000-50,000 places will make a meaningful contribution to tackling the issue of wasted potential.

It has been argued that these extra places must all be fully funded and that the level of the unit of resource for teaching must not be cut. This may be the ideal, but given the size of the budget deficit, is it a realistic possibility? In practice, British universities are either going to have to do more for less, or the same for a lot less. Creating additional places and generating some more revenue for universities is a better alternative to letting young people join the dole queue while our sector faces a round of serious job cuts, strike ballots and unproductive turmoil.

The objections to "fees-only" places (with no state contribution) are understandable given that universities were forced to pay for the student support, as well as the education, of last year's 10,000 "unfunded" students. Of course, universities should not bear all the costs of educating more students. A viable, sustainable short-term deal has to be negotiated, one that will get the bulk of universities on board without hopelessly distorting the public finances. As part of this we should find a way to secure advance repayment of some of the £25 billion in outstanding student debt. Currently there is no incentive for graduates to repay their student loans any faster than is required. Offer discounts for early repayment of these loans and there could be more money in the government's coffers now, when it is needed. We should also look at other options, such as creating extra places for those who study from home without drawing down student support.

The fine on universities for "over-recruiting" must be ended immediately as part of an agreement to allow universities to increase places funded on a short-term fees-only basis. This must be on the condition that the extra cost of student support on fees-only courses is not to be set against the Higher Education Funding Council for England budget.

One vital argument for abolishing the fine of £3,700 per extra student admitted is that each extra British student saves £2,500 a year in Jobseeker's Allowance and a whole lot more in reduced crime.

Yes, as Lord Mandelson suggests, let's also have more students on two-year foundation degrees, and more co-funded places. Putting all these initiatives together, we could probably secure enough money for an extra 40,000-50,000 places this year without a significant loss in teaching quality.

Looking to the medium and long term, of course we need to sort all this out for the next decade through the Browne review of tuition fees and university funding. But in the interests of this year's and next year's well-qualified applicants, many of whom will be left without a place at university through no fault of their own, we need action now.