University staff are being stifled and demotivated by government-driven micromanagement that could damage the international reputation of British higher education, a government task force has warned.
The Cabinet Office Better Regulation Task Force report also suggests that the Quality Assurance Agency could be all but abolished as an irrelevance in a more market-driven sector, where informed student choice would determine standards without external regulation.
The task force calls for a permanent "gatekeeper" body to reduce the burden of bureaucracy and to guard against further ill-conceived and over-burdensome government initiatives.
Launching the report this week, task force chairman David Arculus said that multiple audits, excessive data requirements and over-restrictive funding were being imposed as a result of a "lack of trust" between the government and the sector.
He told The THES that the government and its agents were imposing micromanagement from the centre that was "the exact opposite of the higher trust regime we should be seeking".
He said the obsession with strings-attached funding and quality assurance was damaging the quality of teaching and research.
Mr Arculus said: "Higher education is a high-performing sector. The problem is keeping it that way. We do not want highly constrained, demotivated academics who are paid just enough to stay in post.
"The core business of universities is the teaching of undergraduates and it is the most tightly funded part of their activities. But it is also the most tightly regulated.
"It is perverse. I want us to be a world leader and this is not the way to achieve that," he said.
The report calls for a new body, possibly funded by the Department for Education and Skills, to agree an action plan to reduce the burden on universities. It should take on the role of gatekeeper to "prevent any unnecessary new burdens being placed on higher education institutions".
The task force criticises the 21 separate funding initiatives from the Higher Education Funding Council for England and the six from the Department of Trade and Industry.
It says that intense competition for often small pots of money was seen by the sector as "the most burdensome and most wasteful way of allocating funds", without even a guarantee of success.
The report says: "Government should reduce funding initiatives into a small number of key theme funding streams."
It says financial audits should be based more on risk to "limit to the absolute minimum work carried out elsewhere". Data collection was often unnecessarily duplicated for a number of different agencies.
Quality assurance was also a problem. The report says that despite welcome efforts to move towards a "light-touch" quality assurance regime, there were still concerns about the level of scrutiny, with the QAA, Ofsted and various professional bodies duplicating work.
The QAA's new regime, to be rolled out from next academic year, should be fully reviewed, it says.
The report suggests that the QAA's institutional audits - the agency's key future activity - need not be necessary and that a student-driven market could provide a sufficient check on quality.
It says: "Those higher education institutions providing poor-quality education would find students preferred other places, and would be forced to improve in order to attract students."
Higher education minister Margaret Hodge said she welcomed the report and accepted that more needed to be done to cut the accountability burden. She has 60 days to respond in full to it.