Student cash in melting pot: Labour Party Conference

'Don't expect too much' is the message from Brighton. Alan Thomson reports.

Prime minister Tony Blair has ordered a special task group to review student funding policies raising the prospect of a return to grants and a new graduate levy.

He has asked education secretary Estelle Morris to lead the review that will look at undergraduate tuition fees and student loans and whether they deter poorer people from going to university.

High maintenance grants: freshers arriving at Cardiff University found the streets around the students' union plastered with posters inviting them to become escorts
Credit: Jeff Morgan An education department spokesman said: "The review will consider all options including taking contributions from students after university and setting up new bursaries for hard up students." Results of the review are due in the new year.

Mr Blair and chancellor Gordon Brown called for reform of the system of fees and loans in their keynote speeches to delegates.

Mr Blair thought it necessary to mention student finance even though his overriding concerns were global in the wake of the terrorist attacks on the United States three weeks ago.

Mr Blair said: "This programme of reform is huge: in the NHS [National Health Service], education, including student finance - we have to find a better way to combine state funding and student contributions - criminal justice and transport."

Mr Blair has been pushing for reform since a Labour Party national policy forum in July, when he said that student hardship was the number one concern during the general election campaign. In his 1999 conference speech, he set a target of half of all people under 30 benefiting from higher education.

Mr Brown, who addressed conference on Monday, said: "As we examine the financing of universities and the problems of student loans and fees, the test will be to break down the barriers that hold people back so that all and not just those who can afford it have the chance to make the most of themselves and their talents."

But despite the prime minister's call for reform, education ministers initially held their line that they were monitoring the situation. They have said this since fees were introduced and maintenance grants cut in 1998.

Higher education minister Margaret Hodge said: "We are talking about a very radical step in the last parliament, which was to introduce the concept of students and their families contributing to higher education.

"Now we have to monitor to see if it is working in the way intended and to see if it supports the widening participation agenda."

Ms Hodge was unable to say whether the review would be conducted internally or externally, whether there would be a call for evidence or even the timetable for any review or announcement of reform.

At a later fringe meeting on expansion, Ms Hodge said that the government was gathering evidence of debt aversion among working-class students and that the Department for Education and Skills was looking at it. She has described the student funding system as an "absolute nightmare".

She praised former education secretary David Blunkett and former higher education minister Baroness Blackstone for their "courageous" introduction of fees and their abolition of grants. She said that there was public consensus on the principle of private contribution to tuition and that this acceptance would make it easier to ensure sufficient funding for students.

But, in a clear message to a higher education sector that is finalising its submissions to next year's comprehensive spending review, Ms Hodge said students, lecturers and universities could not expect too much despite their long and costly "shopping lists". She said that there was greater need for careful prioritisation of demands in the wake of the terrorist atrocities and the ensuing global economic downturn.

Ms Hodge laid down six challenges for higher education: the global challenge in research and teaching; widening participation, which included a criticism that some universities remained aloof from their local communities; gender equality and pay; accountability and quality assurance, which she said universities were resistant to; more partnerships between institutions; and improved links with schools and colleges.

Owain James, president of the National Union of Students, welcomed the review and called for the scrapping of fees and the reintroduction of grants.

Universities UK said: "A simpler system of student support is urgently needed."

Paul Mackney, general secretary of lecturers' union Natfhe, said: "We would urge the government to reintroduce maintenance grants and to scrap up front tuition fees."

Phil Willis, Liberal Democrat education spokesman, said: "It is about time that the government fully acknowledged the damage its higher education policies have done to student access."