Two-tone cash call

In successive weeks, the Higher Education Funding Council for England is putting out its major consultation documents on the two main things academics are meant to do - teaching and research. The two cut in opposite directions. The teaching document proposes a more equal spread of resources, while the one on research finds merit in greater concentration.

Anyone supporting a reduction in inequality between different institutions teaching the same subject can point to the regime in Scotland, where a student reading chemistry is worth as much to Paisley as to Aberdeen.

Both students and staff have an interest in equity and there are few strong arguments against it. But in England the likely outcome of the new paper is not simple equality. Instead, institutions will be able to argue their case for extra funds - perhaps involving a central London location, or special equipment needs.

For institutions wanting to bid for preferential treatment, HEFCE has provided a useful checklist of favoured categories, including part-time and mature students and those with socioeconomic disadvantages. The list is likely to benefit new universities over their older and better-resourced competitors.

Paying money in response to such claims reduces the amount available for level distribution, and adds to Hefce's power as a system-adjuster, if they do not resist the ever-present temptation to pay out significant sums in special factors money.

HEFCE claims that its purpose is to ensure equality at the level of the student experience, not of the institution. But at the moment, it is unreasonable to think that levelling means levelling up when HEFCE's overall cash position is so tight.

The best guess is that a small number of the least well-resourced institutions may come out ahead, some in the middle will be left as they are, and others which have so far been comparatively well looked after will lose out.

To the cries of the losing institutions in this process will be added those of subjects at the upper end in cost terms of the broad subject areas which the new document proposes. A subject band called "part-laboratory based" covers a lot of ground from archaeology to astronomy, and a wide range of cost levels for the institutions teaching them. This will mean special pleading which will partly erode the saving in bureaucracy that the new system is meant to produce.

In some institutions, the squeeze on teaching costs will coincide with a loss of research income as selectivity becomes more pervasive. Perhaps the most unpleasant effects will be felt at middle-ranking universities which have so far maintained their research base and where teaching is funded relatively generously.

Increased equity in teaching funding will mean teaching economies, while increased concentration of research cash could damage some activities that have so far held on.

This raises the prospect of the safety net needing to be deployed for some surprising victims. Indeed, HEFCE's modelling of institutional finances no doubt allows it to predict who will be in the biggest trouble if its plans for both teaching and research are implemented.

And there is certain to be tension between HEFCE's claim that its funds are unhypothecated - given to a university to use for its general purposes - and the ambitious system-building plans which both the teaching and research documents reveal. In research, there will be money in doing things which chime with "national needs". National policy priorities identified by HEFCE will also bring in teaching cash.

There is a heavy planning element in both documents. Both reveal an intention to hypothecate. There are plans to award money for research of international standing, for teaching of regional significance, for teaching of high quality or to students from lower socioeconomic groups, and to provide pump-priming research cash.

It is apparent that Brian Fender, HEFCE's chief executive, is equipping himself with a dirigiste toolkit beyond the dreams of the Labour front bench.

This does not inspire confidence. There is no reason to suppose that a funding council will be any better at determining the national interest than a research council or the Office of Science and Technology.

In practice, Hefce plans to lean on the judgements of research councils, learned societies and and other organisations. In effect funding council research money will follow research council priorities, whereas genuinely unhypothecated money would give the university the ability to pursue its own plans.

Some of the hostility to these proposals will be assuaged by the extra money they bring. The only upside for the universities which lose out is that it is not for ever. In 1997/98, the new system will be operating transitionally. After that it will probably only run full tilt for a couple of years before any findings from Dearing come into effect. It would be surprising if Dearing called for funding councils to hand out cash blindly, but he might think that the priorities they identify should balance institutional autonomy with central direction.