Sector split by CBI's vision of higher fees and less aid

The sector has been divided in its response to a controversial report that suggests that tuition fees will rise, student support should be slashed and the Government's 50 per cent target for participation in higher education should be put on the back burner.

The report by the Confederation of Business Industry's (CBI) higher education task force, Stronger Together - Business and Universities in Turbulent Times, comes as pressure groups wrangle over how to fund universities in the recession.

Saying that an increase in tuition fees now appears "inevitable", it proposes an overhaul of student finance, including tuition-fee loans provided at the cost of borrowing, the removal of the interest-rate subsidy for "all but those most in need" and tougher means-testing.

The recommendations, published on 21 September, come despite research commissioned by the CBI that suggests that 71 per cent of pre-university students would be interested in two-year degrees because they are already worried about the costs of higher education.

Richard Lambert, director-general of the CBI, said: "If we have got to make choices that are not comfortable, then the starting point is to look at what by international standards are very generous student-support systems."

The task force also concludes that industry must act to improve its relationship with universities by sponsoring students and paying for courses, providing financial support for new graduates and offering internships and work experience.

The recommendations of the task force were welcomed by some in the sector, among them Wendy Piatt, director-general of the Russell Group of large research-intensive universities.

She said the CBI was "right to call for an exploration of new sources of funding and to say that the priority is to maintain quality rather than expand numbers".

"Educational underachievement - not finance - is the key reason for a lower proportion of working-class students in higher education," she added.

Steve Smith, president of Universities UK, said businesses sitting on the task force had shown leadership by committing to do more to support universities.

But the calls to slash student support and drop the 50 per cent participation target were criticised by others.

The National Union of Students labelled the report "offensive", while the University and College Union dismissed its findings as "tired business rhetoric".

The Guild HE group of colleges and specialist institutions said the recommendations were "blinkered", with too strong a focus on science, technology, engineering and maths.

Alice Hynes, Guild HE's chief executive, said: "It seems to be looking back to the days when industry was based on 19th-century manufacturing and an elite management class."

Meanwhile, Roger Brown, professor of higher education policy at Liverpool Hope University, said it was "naive" to expect firms to pay for higher education.

David Lammy, the Higher Education Minister, responded to the report by reiterating the Government's commitment to the 50 per cent target for participation in higher education.

hannah.fearn@tsleducation.com

www.cbi.org.uk.