Top civil servant Sir Michael Bichard has admitted that the introduction of tuition fees and scrapping of maintenance grants has failed to widen participation.
"I'm not going to say I'm proud of tuition fees," Sir Michael said in an interview with The THES , a month before he leaves his post as permanent secretary at the Department for Education and Employment.
"There are still nowhere near enough young people, in particular from non-professional families, going into universities. It's very controversial to say the introduction of tuition fees and the diversification of the funding base is intended to try to address that, but in some ways it was. The fact is at the moment we still haven't achieved it."
Tuition fees had posed a challenge to the department, Sir Michael confirmed, and were one of the most significant changes he had overseen. Although he said he was proud that the DFEE had got to grips with the issue of funding, he added: "I know that many universities feel there's a lot more to do, but the fact is no one has managed to diversify the funding base at all."
The year after tuition fees were introduced, Sir Michael admitted that university applications had dropped, particularly from mature candidates, probably as a consequence of a rush to beat fees in 1997.
He acknowledged that student debt was "more around grants and loans than tuition fees".
He added that despite a large number of students being exempt from tuition fees, the government had to be aware of the way debt was perceived by students and prospective students.
"One needs to be careful not to give the impression that people are leaving university with very high debts," he said.
Universities are also failing to provide equal opportunities for women, according to Sir Michael. Dated policies and inflexible attitudes had held back women, with just 10 per cent of professors being female, he said.
"I don't think the sector should be proud of its track record. Universities themselves and vice-chancellors have got to take some responsibility. They have got to show by their actions that equal opportunities is an important issue for them."
Sir Michael said he expected to see an increase in mergers, collaborations and partnerships in future. He said he saw universities playing a greater role in regional development agencies as they increased their activities in knowledge exploitation and business partnerships.
Sir Michael's outspoken comments to government select committees have in the past caused controversy. Last May, he was reported as saying the higher education sector did not need more money.
Although he claimed to have been misreported, he maintained: "Across the piece, the figures we had didn't indicate that we were dramatically behind the rest of the world on average."
Sir Michael, 54, will leave the DFEE on May 19 and will take over from Sir William Stubbs as rector of the London Institute in September.