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It's another 1988 moment. Universities can break free | Simon Jenkins Governing bodies must take advantage of this brief window to finally wrest back control over fees and teachingIf I ran a university today I would be very afraid. Lord ÂMandelson, with all the power of his Cromwellian interregnum, has told universities that the next academic year will be Âfinancially savage. They must expect less money from the Âgovernment, Âperiod. Since nobody votes for ÂMandelson, he can say and do anything he wants, even before an election. This is a rare moment of political truth.Student numbers, which rose by 10,000 this year, have peaked at 43% of the age cohort, with Labour's target of 50% in higher education unachieved. The talk is now of fewer numbers, fines for over-recruitment, two-year courses, 20% of cuts in research money and 4,000 jobs at risk. With one in three graduates now forced to take a "non-graduate job", universities will find it hard to plead any economic fruitfulness. While hospitals and schools enjoy political protection, universities are defenceless against the coming storm.This is excellent news, but only if… following the last great cutback in 1980-2 British universities signed a pact with the devil, in the person of Margaret Thatcher's education secretary, Lord Baker. In the Education Reform Act 1988 they sold their academic souls for money and placed their independence at the disposal of Whitehall. They submitted to Baker's demand that they "accord with the economy's needs" and come "closer to the world of business". If they disagreed, the government would decide, from year to year, "whether the planning framework should be adjusted". It was a typical Thatcher lurch into Leninism.Universities now face another 1988 moment: should they again knuckle down to the diktat of government, or should they break free? There is no question what Mandelson and, for sure, the Tories will want. It is more control, probably in return for a small rise in fees and in grant. In setting up the Browne review of university finance last autumn, Mandelson said the job of universities was "to fill skills gaps in the economy". Research grants would be assessed on "impact on the economy and society", and funds would be directed to the "stem" subjects – science, technology, engineering and maths.Mandelson wanted a battery of new data controls – recording how effectively lecturers teach, how much their graduates earn, and the social background of their students. To a chorus from the Russell Group of 20 top universities demanding a rise in the fee cap of £3,290, he hinted consent, but the theme is constant. Universities must remain his lackeys. The brainwashing effect on Bristol's vice-chancellor, Eric Thomas, was instant. He promised to teach "the unemployed … to be an appropriately skilled and educated workforce for our future economy and to escape recession".What is forgotten is that British universities are legally private. Even Thatcher dared not nationalise them. Their lack of autonomy lies in the reliance of most of them on the government for money. Government grants cover half their total income of £23bn. The customers – students – contribute only £1.2bn. For the users of any service to pay so small a proportion of its costs is unsustainable. Universities have become no different to hospitals, except that with hospitals, taxpayers know what they are buying.The future of university independence is bound up in fee income. This is currently so low as to bear no relation to the cost of a degree, especially in science subjects. Oxford and Cambridge subsidise their fees by £6,000-£7,000 per student a year, costing them each roughly £60m even after a similar government teaching grant. They can just afford it, but most universities cannot.When top-up fees (paid by students) were introduced in 2006 it was thought they would curb access from working-class homes. But the Office of Fair Access admits that has not proved the case. The £2.5bn to meet Gordon Brown's fixation with "wider access" has achieved hardly a blip in the social background graph, while consuming a reported £211,000 per extra working-class student recruited: classic wasted money from another dysfunctional Whitehall quango.Student fees are paid in pain and at the point of delivery. Their erosion in the 1960s and 1970s was engineered by the Treasury to increase university dependence on teaching grants, and thus aid central planning. In contrast top-up fees led to student revolts against poor teaching, such as at Bristol last year. Accountability suddenly began to bite – more effectively than through Mandelson's inspectors.Most universities now want the fee cap raised to £5,000 or £7,000 – or removed altogether so they can Âcompete for students in the marketplace. If the latter, the Russell Group has proposed that the top rate might be some £15,000 for wealthy families (still cheaper than a private secondary school) to cross-subsidise poor ones. At a certain level, the government's central teaching grant would no longer be required, or could be converted into a national bursary scheme.The issue is not the level of the fee but the custodianship of the revenue. As long as universities receive any central teaching grants, they will be beholden to government for every aspect of undergraduate policy. As long as the government regards university finance as a branch of social engineering, it will hold down fees to curry favour with students and keep universities on direct grant rations.Universities now have a real opportunity to break free of 20 years of this Âsubservience. Research is being ever more Âconcentrated on Russell Group institutions, and higher education will revert in time to the "binary" system initiated in the 1960s by ÂLabour's Tony Crosland and Âextravagantly abolished by Thatcher's Tories. The rest of higher education should be liberated from bureaucratic "research assessment" and become mostly Âvocational, local and home-based.Full fees with bursaries to meet the public requirement for equity, would let them ignore ministerial speeches, Whitehall monitors and socio-political agendas. They could do what they are supposed to do – teach those who come to their door what they want to learn, and make their own decisions on how to finance it. University governing bodies are notorious for their conservatism and pusillanimity to government. Here is a brief window through which they might escape and be true to themselves.Higher educationEducation degree coursesEducation policyUniversity administrationUniversity fundingUniversity teachingSimon Jenkinsguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |