Funding is the only issue that matters

The Dearing committee of inquiry into higher education is nearing the end of its work. As the committee struggles to agree its final report it is as well to remember why it was set up. In February 1996, the then secretary of state, Gillian Shephard, announced that Sir Ron Dearing was to conduct an inquiry into the shape, structure, size and funding of higher education. His review would subsume her department's own review which had bogged down.

The timing was no accident. Vice chancellors were threatening to impose a top-up fee the following autumn for all new students to make good the financial cuts imposed in the previous autumn's budget.

The inquiry had the backing of both the government and the Labour party. Both knew that students would have to pay. Neither wanted a row before the general election. Sir Ron was to take the unpopular decision for them - after the election. It was only after he had agreed to take on the review that, unlike previous reviews, Sir Ron found himself encumbered with a heavyweight committee representing the whole range of vested interests.

Now report day looms, copy is due at the printers, and squaring the committee on the crucial issue of funding - both of students and of research - is proving difficult. None the less, an inquiry launched to avert the introduction of a Pounds 300 charge is expected to recommend a range of options which starts from around that level.

For the vice chancellors funding is the only issue that matters. Beyond that they would rather be left to do their own thing. But non-university members of the committee are keen to make sure that if they are going to find a way to provide more money they also have a say in what is done with it.

Nor, it seems, are ministers agreed on what they want to hear. Minister of state Tessa Blackstone, with her intimate knowledge of higher education, has strong views about how this opportunity to reshape the system should be used. She spoke recently of her wish to see research centres of excellence, regional groups of institutions and universal credit accumulation and transfer arrangements. For this she is expected to back national tuition charges.

By contrast, her boss, education secretary David Blunkett, is conservative. His heart is in the schools. His interest in higher education is limited to ensuring that it is open to people from disadvantaged backgrounds, which is why he has set his face against fees, at least if they have to be paid up front. He would dearly like to find a way of shifting student support off the public sector borrowing requirement to allow more spending on schools, but he would probably rather leave higher education to its own devices.

Unfortunately, though it commissioned research of all kinds, the committee does not seem to have cracked this particular problem of the PSBR, a failure said to be making the secretary of state tetchy.

Meanwhile, there have been other developments outside the committee's scope which could greatly affect the overall outcome for higher education. This week saw the formal launch of the Qualifications and Curriculum Authority with a day of consultations - big cheeses at breakfast time, interested organisations over coffee, press at lunchtime. The new agency, under the control of Sir William Stubbs (a member of the Dearing committee), Sir Dominic Cadbury and Nick Tate, shows every sign of being very clear about its purpose, very determined and likely to diminish the importance of higher education's own Quality Assurance Agency.

Though everything is being expressed in the politest terms and the universities are to be asked for their help and advice, the authority clearly intends to concern itself with all qualifications offered in publicly-funded institutions.

The first area in which its activities are likely to impinge on higher and further education is, however, over the structure of 16-19 qualifications. This is another of the areas where Sir Ron was called in by the Conservative government to reconcile the irreconcilable. When he was asked to sort out 16-19 qualifications, he was explicitly required to preserve A levels. The big question was ducked.

The result was an opaque report dealing with the second order. The mass of post-compulsory qualifications were to be tamped into a single "framework" so that all "pathways", though distinct, would lead to higher education or employment and would enjoy equal esteem. It failed to grip the public imagination.

It is welcome news therefore that the tamping operation is being suspended while a more radical rethink is considered. Unfortunately Baroness Blackstone, talking this week at QCA's launch of a unified qualification system leading to higher education, was still referring only to it as a long-term goal. Here too it seems Mr Blunkett does not entirely share her radical enthusiasm. It will be a pity if a government with a such a large majority fails to seize the moment. The case for reforming A levels has been persuasively made ever since the Dainton report in 1968.