David Willetts has defended his policy of allowing uncapped recruitment of students with top A-level grades and suggested that universities that lost students may have themselves to blame for having been "slow" to react to the new rules.
However, the Million+ group of newer universities has urged Mr Willetts to abandon the system for 2013 rather than further deregulate student places based on "guesstimates" of examination results.
Speaking to Times Higher Education during the Conservative Party conference in Birmingham, Mr Willetts discussed the fall in the number of students entering higher education this year - put at 54,000 by preliminary figures from the Universities and Colleges Admissions Service.
He highlighted as key factors the low number of deferrals to this year and larger number of deferrals to next; the fact that "the number of AAB grades that was projected by Hefce [the Higher Education Funding Council for England] to continue on [an] upwards trend has dipped"; and the fact that some places reallocated to cheaper providers such as further education colleges do not show up in Ucas figures.
As a result, the universities and science minister said, he suspected "some modest fall in the number of students going to university this year after a bulge" last year.
Although he conceded that "some universities are finding themselves indeed with less revenue than they forecast" because of the drop in student numbers, he insisted that "liberating" the system through exam grades rather than just allocating universities "a fixed number of students" was "absolutely the right thing to do".
The minister also said that there had been variations in student recruitment "even within the Russell Group". "There are some universities that have recognised that they are in a new world and have entered it aggressively and recruited more. By all accounts, Bristol [is] up, Durham [is] up," he said.
"There are others that maybe were slow to recognise the significance of the new world and have maybe operated as if it was the old system."
Asked if the government would continue with plans to extend the deregulation of places to students with A-level grades of ABB or higher next year - or go further, he said: "Clearly we're publicly committed to ABB. And that is what we will do."
Hit the pause button
But Patrick McGhee, vice-chancellor of the University of East London and chair of Million+, was due to issue a challenge on the AAB policy at a Million+ fringe event on 9 October.
Professor McGhee was expected to advise Mr Willetts, who was also on the event panel: "Instead of deregulating more student numbers in 2013 based on guesstimates about how well students will do in their A levels next year, abandon the policy until we know more about long-term demand. Go for a moratorium on the student numbers market."
Professor McGhee was also expected to warn against any targeting of the higher education budget in future cuts by the chancellor.
He argued that the Treasury "should fund the same number of places in 2013 as in 2012" - taking as its base the 2012 projected figure before the unexpected drop in student numbers.
Chewing it over: government not ready for the bill
David Willetts has conceded that there is "no appetite" in government for a higher education bill.
The universities and science minister made the admission during the Conservative Party's conference in Birmingham - although he insisted that elements of his policy programme would still require legislation.
Speaking at a fringe event on 8 October hosted by Universities UK and the Social Market Foundation, he also gave indications about potential long-term policy.
Mr Willetts discussed the resource accounting and budgeting (RAB) charge, the proportion of student loans that are not repaid and are written off by the government.
Setting out his "vision", he said it was "incredibly frustrating" not knowing the individual RAB charge for each university.
Speculating further, he said: "Imagine that in the future we discover that the RAB charge for a Bristol graduate was 10 per cent," he suggested, meaning that the government would recover 90 per cent of loans. "Maybe some other university ... we are only going to get 60 per cent back."
He added: "Going beyond that it becomes an interesting question, to what extent you can incentivise universities to lower their own RAB charges."
Mr Willetts said that such a system was at least five to 10 years off, but he wanted to get the "research in place" to allow it to happen.
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