Look out, there are customers about

When travelling I find it mildly disconcerting to be referred to as a customer rather than a passenger. The former implies a purposeful freedom rather than the relative imprisonment of, say, a high-speed train. The same with students. While universities could treat students as though they were customers, the relationship is hardly on a par with shoppers at Currys. Many, if not all, students feel at least a quasi-membership of their institution, and often seek to derive wider meaning from their involvement than simply being the recipient of services.

The Dearing report recommends that, by 2003, about 60 per cent of public funding to higher education should be conveyed by the student, presumably through some form of entitlement in a learning account. No doubt such an approach will bolster the role of the student as a discerning and perhaps more demanding customer. Some juiced-up staff-student relationships undoubtedly will follow.

Yet without a greater relaxation of public expenditure limits, such devices may not be sustainable. As the Higher Education Funding Council for England has said, student-based funding could fuel expansion and an unplanned rise in government spending that could result in more restrictions over student numbers.

Moreover there is little doubt that voucher-type funding would lead to institutional planning being surrounded by greater uncertainty, an outcome that jars with another Dearing recommendation for three-year allocations to institutions. This latter provision is designed to provide predictability rather than volatility. Our university sector would be likely also to become even more stratified with student-based funding. Potentially this could lead to a situation where considerable additional fixed asset investment will be required at the more popular institutions, but with premises unused at the less attractive. Would the taxpayer be prepared to support this extra expenditure while contemplating previous investments standing idle?

Yet the Roderick West inquiry into Australian higher education, which recently published an interim report, appears to be moving towards an even fuller system of student-carried funding than that envisaged by Dearing. A deregulated Higher Education Contribution Scheme is viewed as freeing universities to use their market strengths to vary fees.

Deregulated tuition fees raise ethical issues, not least if they are regarded as denying access on financial grounds. Such objections could be overcome if income-contingent loans were made available for "top up" as well as government-regulated fee charges. Yet problems will remain, particularly if universities do not distinguish between "quality marketability" and "vocational marketability".

Institutions may be on stronger moral ground in charging extra fees for quality programmes, especially where high levels of investment are required, than when they simply rip off a captive, largely immobile and relatively poor group of students who have nowhere else to go.

Institutions need a better understanding of a heterogeneous and mass student market. Many students are not knowledgeable consumers and find daily existence away from home an exhausting enough challenge without the rigours of independent or deep learning, or the need to understand the benefit of employability skills. Sometimes there is collusion between staff and students in not seeking change to comfortable teaching routines.

Life at university is fast becoming an extension of compulsory education for some. To be effective a student-based funding system must do more than rest on taken-for-granted assumptions about consumer behaviour.

Roger King is vice chancellor of the University of Lincolnshire and Humberside.