Universities must be freed from state control and become less reliant on public funding, peers argued in a debate in the House of Lords. Many peers, including senior university figures, argued that students' tuition fees should be raised.
Lord Luce, the former vice-chancellor of the private University of Buckingham, a former Conservative Foreign Office Minister and a former Arts Minister, said that to flourish, universities must have more autonomy. "I want to see from the Government and the opposition parties a commitment to a strategy to secure the greater autonomy of universities," he said.
Less political interference in the running of institutions would improve university education, Lord Luce argued during last week's three-hour debate, which he sponsored. "It is a matter of fundamental academic freedom that universities are not, and never should be, agents of the state."
Diversifying funding sources was the key to avoiding state control, he said. "We need a much more ambitious policy to help universities achieve endowment funds." Lord Luce also suggested that the £3,500 cap on student tuition fees would have to be raised.
Lord Patten, chancellor of the University of Oxford, said he believed that tuition fees would rise. At the same time, however, universities would have to offer more generous bursaries to ensure needs-blind admission, which would in turn mean universities had to raise their endowment income, he said.
Several lords argued on behalf of the universities of Oxford and Cambridge that their teaching funding is inadequate. Lord Broers, a former vice-chancellor of Cambridge, said: "The university has to find from its own resources £5,000 to £6,000 a year per student to subsidise undergraduate teaching. The top-up fee has helped, but the gap remains large and unsustainable."
Oxford had an even bigger burden, said Lord Butler, the master of University College, Oxford. "At Oxford, average teaching costs per undergraduate are £20,000 per year, and average income from all sources, including tuition fees, is £7,500 per year."
Oxford bridges the gap by using money paid by the funding council for research to subsidise teaching, he said. "The extent of this, according to recent calculations, is £13 million per year ... it is a tax on research."
Lord Desai, emeritus professor of economics at the London School of Economics, said he "would like to see the full fee charged" to reflect the true costs of teaching undergraduates. Universities should not receive any state subsidy for teaching, he argued, but should meet teaching costs out of their own revenues. "This would encourage more concentration on where the comparative advantage lies," he said.
He suggested that Britain should follow the US example of charging full-cost tuition fees while not insisting on uniformity. "It is because we impose uniformity that we have the problem of, for example, access ... what matters is that people get higher education, whether at Oxbridge, Manchester, Warwick or wherever. Many people should not go to Oxbridge; perhaps it is not suitable for them."
Lord Norton, a professor of politics at the University of Hull, said the Government's overregulation of the sector had led to a risk-averse culture in higher education and pressure on universities to pursue incompatible goals, such as widening participation, raising retention rates and maintaining high academic standards.
Institutions would achieve more "if left alone more often to get on with the job", he argued.
Baroness Rawlings, a former chair of King's College London, said: "We do not want universities to pay for their state funding by drowning in a sea of reporting requirements and bureaucracy."
The Government should make up its mind whether bodies such as the research councils and Higher Education Funding Council for England are autonomous or not, Baroness Sharp of Guildford said. "(Ministers) interfere in decisions by Hefce ... on the other hand when a decision is made and people say, 'Can you really allow the research council to make such a mess of its funding?' they say, 'It is nothing to do with us,'" Lady Sharp said. "They cannot have it both ways."
After the debate, David Willetts, the Shadow Secretary of State for Innovation, Universities and Skills, said: "Our universities are recognised internationally. But we limit their potential if we have too much regulation or the wrong sort of regulation. Compared to America, we have more bureaucracy and less in the way of endowments.
"Now that we have a Department for Universities for the first time ever - a welcome change in many ways - there is a clear risk that ministers will be tempted to meddle more and consult less.
"We need a new approach that recognises that universities are grown-up institutions that should be able to set their own priorities and speak to Government on an equal basis."
PEER-TO-PEER COMMUNICATION: What was said in last week's House of Lords debate on the future of universities
Universities should not all strive to do the same thing. Scarce resources are spread thinly rather than being concentrated in a small number of elite institutions, and training in technical skills tends to be left out as the universities that should be doing this aim to ape the elite. We should distinguish between education on the one hand and training and skills on the other. These are not the same thing. If my daughters came home from school and told me that they had been to sex education classes, I would be comfortable; if they said they had been to sex training and skills classes, I would not.
Lord Krebs, Principal of Jesus College, Oxford
I sometimes worry that we devote a lot of time to talking about how to get students (to university) and too little time talking about how to keep them there ... Too often, they get to university and find a university system that has not adjusted to those changes in teaching style and support that have taken place at school.
Baroness Morris, Former Labour Education Secretary
We recognise that there are only three ways of funding higher education. The taxpayer can do it through public spending; it can be done through benefactions and philanthropy; or it can be done by the student paying more ... Sad as it may be, I do not believe that higher education will achieve a higher priority in public spending arguments over the next few years (...) with this Government, and I would be surprised if it happens after the election when, I hope, there will be a Government of a different political party. In those circumstances, we have to look hard at the question of tuition fees ... It is a question of facing a financial reality.
Lord Patten of Barnes, Chancellor, University of Oxford
Public funding remains vital to the health of our universities. We have been grateful to the Government for restoring stability to the sector after years of underfunding ... I urge the minister to confirm today that this will continue beyond the current spending review. Without this commitment, any other promises will ring hollow ... the UK spends 1.1 per cent of gross domestic product (on higher education), whereas the US spends 2.9 per cent.
Baroness Warwick of Undercliffe, Chief executive, Universities UK
If, as most people assume, the student is to be asked to make an increased contribution, a number of elements will have to be satisfied ... we should avoid differentials in public subsidy, with state-subsidised loans limited to some base level, say £3,000, and thereafter a fair market rate of interest should be charged ... admissions must be needs-blind, supported by bursaries. It is our responsibility to ensure that there is no reduction in the real value of the unit of resource from the Exchequer.
Lord Dearing, Author of the Report of the National Committee of Inquiry into Higher Education
This country enjoys one of the finest reputations in world science ... Yet I am concerned that the Government's growing stranglehold over science funding represents nothing less than a breach of trust with the science community and is putting the independent direction of scientific research at risk.
Baroness Verma, Shadow Minister for Innovation, Universities and Skills
I fervently hope that we do not pursue the misguided notion of having totally separate teaching and research-based universities ... I can think of no better shortcut to falling standards and lowered morale than fostering the concept of a teaching institution with no involvement in research.
Lord Judd, Labour peer
The vice-chancellor of the University of Bristol calculated that his institution would need to charge an additional £19,000 a year (per student) in top-up undergraduate fees if it wanted to replace its Higher Education Funding Council for England teaching grant and bursary provision. As he stated, both he and many others would see such a charge as a controversial and ineffective measure ... At the moment, UK universities need adequate funding from the Government and a range of private (sources) ... Within that mixed economy, moreover, we must be vigilant in maintaining universities' freedom. Academic freedom, including the ability to speak out against falsehood, clouded thinking and injustice, is more than ever a requirement.
Baroness Rawlings, Conservative peer and Shadow Minister for International Development.