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January 30, 2004

With market forces unleashed, Peter Knight looks forward to an end to restrictive practices

The excitement is over. The wailing and gnashing of teeth has stopped, and the gentle snapping sound of breaking arms as the whips "encourage" compliance from recalcitrant Labour backbenchers will be heard no more. The higher education bill has passed its second reading.

Now, as political passions cool, there is the possibility of looking forward to working out the actual, rather than the imagined, implications of this policy as it moves through committee stage towards enactment.

Perhaps the most important outcome of this process is not the decision that has been reached on the new £3,000 fees but the change in the political climate around university funding.

In just a few months, the esoteric question of how the country pays for universities has moved from something slightly less interesting than the Manhole Cover Technical Rules (Miscellaneous Amendments) Bill to the political stratosphere alongside the council tax, the Iraq war or even, heaven forbid, foxhunting.

This meteoric rise will change fundamentally the discussion of higher education policy over the next ten years. Now that all the main political parties agree that universities are underfunded, the issue will be constantly re-examined and it cannot escape being a major talking point at the next general election.

Suddenly universities are catapulted into the permanent limelight, a terrifying result for organisations that have usually been at their most successful when operating in graceful obscurity.

Apart from the unseemly intervention of a general election, the next outbreak of excitement can be predicted with complete confidence. It will be Friday, August 18 2006, when the Universities and Colleges Admissions Service clearing starts in earnest.

Then, as always, the vast majority of universities will be in clearing for at least some courses. Will any institution be tempted to do private deals and offer reductions to students to enrol on courses that are proving difficult to fill?

I predict that there will be much vice-chancellorial hand-wringing as we collectively deny even the possibility of letting anything as vulgar as price intrude on the integrity of our recruitment policies.

I also predict, with equal confidence, that a few enterprising reporters will ring the clearing hotlines of universities, both ancient and modern, and pretend to be good A-level applicants to see if they can get a decent discount on the fees for BSc metallurgy. And they will!

Faced with the prospect of a lower fee or no fee and no funding council grant, universities will offer discounts - but always in the best possible taste.

I am sure that this suggestion will be greeted with horror by the opponents of anything as vulgar as a market in higher education - but hang on a minute. Who benefits? The canny consumer, the streetwise student who has successfully negotiated the discount. Good for them. This puts a modicum of power into the hands of the students rather than constantly reinforcing the "producer culture" that has long dominated higher education. Universities that adapt to a bit of modest consumer power will improve, and everyone will benefit.

There is one blot on this free-market landscape. The ultimate weapon for producer control: Ucas.

The Ucas system is based on the idea of regulating admissions for the benefit of the universities. The rules, which are decided by universities, will have to be modified, particularly at clearing. Students who want to change their choice of universities because they get a better offer must be free to do so without the nonsense of requiring a "release" from any existing offer they might hold.

It will be no good trying to get a soupcon of market pressure into higher education without also looking at the restrictive practices that we have devised over the past 50 years. That will be the real challenge; perhaps even more difficult to achieve than a modest freeing-up of fees.

Peter Knight is vice-chancellor of the University of Central England.

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