Universities should receive a block grant based on their individually defined missions rather than having to jump through centrally determined funding hoops, a report recommends.
The report warns that diversity and excellence are threatened by the distortions and dangers of the "quasi-market" approach to funding. This can mean universities scrambling for any available cash, even if it has no relevance to individual institutional missions.
The report, published by the Council for Industry and Higher Education for Sir Bill Taylor's inquiry into future funding, warns that universities are being forced to spread their activities too thinly.
They are afraid to close the door to any potential funding source "just in case this becomes the latest government priority", the report says. Universities are also forced to reject students for popular and successful courses while accepting students with low-entry qualifications for subjects to fill centrally planned student quotas.
But "the most conspicuous distortion" is the periodic dash for cash under the research assessment exercise. This forces universities to pursue sometimes inappropriate research agendas.
The regime should be scrapped in favour of "mission-based funding", where a block grant would be awarded based on a formula evaluation of a five-year business plan from each university.
Achievement of the plan would be "monitored against measures agreed between the funding council and the institution, and funding would be adjusted if they were not being met", the report says.
"Funding would support the diverse missions of institutions, mission distortion would be reduced and greater parity of esteem across different missions would be encouraged," says the report, written by CIHE chief executive Richard Brown and Gareth Williams, the head of the Centre for Higher Education Studies at the Institute of Education.
Soapbox, page 14