Britain's higher education sector faces major structural upheaval and possible fracture as vice-chancellors concede that a single funding solution for all institutions may be impossible.
The Committee of Vice-Chancellors and Principals revealed this week that its fundamental review of funding options was "highly unlikely" to produce a financial model that would be acceptable to all institutions in an existing, let alone an increasingly diverse, higher education system.
Leading research universities represented by the Russell Group are in favour of charging far higher tuition fees. Many post-1992 universities fear that such a move could deter students from the poorest backgrounds, creating a two-tier system. Other universities, both old and new, are open-minded about differential fees but want the reintroduction of some form of maintenance grant.
Sir Howard Newby, vice-chancellor of Southampton University and president of the CVCP, said that different universities may have to be funded differently.
Sir Howard said: "We will look carefully at which funding models can avoid fracturing the system while meeting a diversity of needs. But if it is demonstrated that it is impossible, then so be it."
Vice-chancellors attending their annual conference at Durham University's Stockton Campus this week had hoped to see detailed economic models of how different funding options might work, but the modelling, by consultants London Economics, has been delayed. Instead, Sir William Taylor, who chairs the CVCP's funding options group, drafted a paper listing options for consideration. A final report is to go to the CVCP's spring conference.
Sir Howard described the review of funding as an attempt to complete the unfinished business from Dearing. But he said that the future direction of higher education would depend on the political will in government to remove the legislative obstacles to charging different levels of tuition fee.
He revealed that the Department for Education and Employment had to battle with the Treasury to prevent it cutting the unit of funding for higher education by 2 per cent for year one of the spending review (2001-02). There is a 0.5 per cent rise in the unit of resource in 2001-02, according to education department figures.
Opinion, page 16; Soapbox, page 18