A fair, accessible system that pays its own way

The government's reforms of higher education funding aim to widen opportunities and generate further resources, argues David Blunkett

As the last century progressed, the Left learned to distinguish between its enduring egalitarian values and the particular means, such as common ownership, which it had used to achieve them at any one time. This slow, painful lesson faces us again today in the debate on higher education funding after the Cubie report.

Higher education has to be paid for. The question is who pays and how. Until the government's reforms were introduced, higher education spending was deeply regressive and represented a substantial transfer of resources away from ordinary people to the better-off because only a small proportion of participants were from lower social class backgrounds.

Until recently, graduates had nearly twice as much spent on their education by the state than someone who left school at 16. Graduates earn more over their lives and are less likely to be unemployed. Yet only 17 per cent of the lower income groups enter higher education.

This regressive bias had to be tackled. Consequently, we accepted the Dearing recommendation that those who benefit from higher education should contribute towards its costs. Unlike the proposals in Dearing we thought it essential that those from poorer backgrounds should not have to pay fees. Now more than 40 per cent do not have to. The rest pay a contribution, but only the wealthiest students pay in full. Those who say that fees deter students from less well off families are simply wrong: they do not have to pay them.

We also changed the maintenance loan system. We increased the value of loans, and made sure that parents liable for tuition fees did not have to pay more in total - a fact that has been lost on most commentators on Cubie (the increase will now be scaled back in Scotland). We have also ensured that loans are repaid according to income levels, so repayment is progressive and, for most, over a longer period.

With this fairer system in place, we have a substantial income stream to maximise the resources available to universities and colleges in future years. Fee contributions and loan repayments in England and Wales will total Pounds 710 million in 2001/02. The figure will be even higher in the longer term. We can invest these resources in expanding access and driving up quality, building on the extra Pounds 1 billion (an 11 per cent real-terms increase) that we have already announced for higher education. Further education will get a 10 per cent cash increase in 2001/02. This ploughing back of resources is an essential purpose of the new system that the media often ignores.

The alternative would be to cut other services or to say to the cleaner in my constituency who gets up at 5am to work for the minimum wage that she should again subsidise the better-off.

Neither should we forget other groups such as part-time students, who used to get no state help. Lack of support for part-time study was an injustice typical of the bias in the system, ignoring the reality of flexible, differentiated attendance. We have now extended the disabled students' allowance to part-time students; offered fee payment for those who lose their jobs while studying or who are on low incomes or benefits; and have made available a new loan facility.

These measures will be particularly welcome to mature students, the majority of whom now study part time. I recognise that full-time mature students need extra consideration, especially those with children. Two years ago, I promised to review application rates to higher education from mature students. With a buoyant labour market and more part-time study, it is true that applications from full-time mature students have declined. I am therefore increasing the resources for mature students. There will be a Pounds 1,000 access bursary, primarily to cover childcare and travel costs. A grant will make up for the loss of free school meals for those who move off income support to become students, and new income disregards will raise the thresholds at which tuition fees are paid, which will also help students from poorer families. Hardship support for mature students will be better focused.

I am also creating a bursary system for young entrants, targeted to pupils from the lowest social income groups in schools and further education colleges with poor rates of progression into higher education. I am pleased that more young people have accepted university places this year than last, and that the proportion from lower social class backgrounds has not declined. But I want to go further in widening access and strengthening the role of universities in the drive for social inclusion. The bursaries will be offered by higher education institutions in partnership with designated schools and colleges from September 2000. They will build upon links that already exist, and will help to develop institutional commitment to wider access on both sides.

Globalisation has increased the competitive pressures on the United Kingdom's higher education system. New technology is making learning available to everyone across the globe. More and more people need the knowledge and skills higher education brings. We have to meet these challenges - facing the future, not looking back to the past.

'We have a substantial income stream to maximise the resources available to

universities and colleges in future years' David Blunkett is secretary of state for education and employment.