University funds are badly targeted, say MPs

10 Jul 03
The government needs to target its proposed hike in higher education cash more effectively to those who need it, a Commons committee claimed this week. It also argued that plans to improve university admissions of students from disadvantaged backgrounds .

11 July 2003

The government needs to target its proposed hike in higher education cash more effectively to those who need it, a Commons committee claimed this week. It also argued that plans to improve university admissions of students from disadvantaged backgrounds were flawed.

MPs on the education select committee said the government should modify its white paper on the future of higher education, including its controversial plans to introduce an 'access regulator' to ensure universities admit more students from poor backgrounds.

In its report on the paper, published on July 10, the committee warns that a planned £3bn increase in higher education funding by 2005/06 is in danger of being misused unless changes are made to the way student finance, research cash and staff pay are distributed.

The committee, chaired by Labour MP Barry Sheerman, urged Education Secretary Charles Clarke to rethink the proposed introduction of annual top-up fees of up to £3,000 per student, claiming the government should cover all fees for disadvantaged students. Clarke plans to subsidise poorer students by just £1,100 annually.

The report also calls on ministers to modify the current student loans system, possibly by charging some students market rates of interest in order to fund direct maintenance grants for those from poorer backgrounds.

It says: 'We are clear that the government… needs to target expenditure more effectively on those that need it. The removal of the interest rate subsidy would allow the government to spend more on initiatives to improve access.'

Clarke plans to introduce an 'access regulator' to ensure universities meet government targets for disadvantaged students. But the committee blasts the initiative as 'unnecessary micro-management', adding that existing university bodies should monitor progress.

The report also criticises government plans to concentrate university research funds in a few elite institutions, which are mostly based in the South. MPs are worried that universities will lose the ability to attract research that boosts regional economies in the North.

The report was warmly welcomed by critics of Clarke's plans, such as Universities UK. But Liberal Democrat member of the committee Paul Holmes claimed it was not critical enough. He told Public Finance: 'All plans to expand university access should be funded directly by higher rates of income tax.'

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