The internal contradictions of U.K. higher education policy have recently been paraded for all to see in two separate but connected events. The first, in May, was when the chancellor of the exchequer, Gordon Brown, an Edinburgh graduate, accused Oxford University of elitism in denying an undergraduate place to study medicine to a candidate from a state comprehensive school in the North East, an impoverished part of the country. The candidate concerned, who was excellently qualified, subsequently turned down offers of entrance to a number of other well-known universities, including Edinburgh, in favor of a place at Harvard. The accusation of elitism in admissions policies was then leveled at a group of "top" universities by a succession of government ministers, including the prime minister, and the Parliamentary Select Committee launched an inquiry into the whole question of access to higher education.

On examination the case that provoked the accusation turned out to be a particularly bad example in that the college concerned (selection is by colleges not by the university, at Oxford) had interviewed 23 candidates, all very well qualified, for five places, and the candidates admitted included two candidates from state schools and three who were from ethnic minorities. Students at the college who had come from state schools went on television to defend the college's selection policy, and the vice-chancellor who had in the past been congratulated by the secretary of state for education, David Blunkett, for the university's efforts to broaden its intake, accused Gordon Brown of setting back the university's plans for widening access by reinforcing a stereotyped image it was trying to lose. The university went into a successful media overdrive to show that offers to candidates from state schools had increased from 48 percent to 53 percent over the past five years at the expense of the independent schools, that it had recently completed a major review of its admissions arrangements designed precisely to broaden the entry, and that it had more than 30 schemes already targeted on attracting candidates from disadvantaged backgrounds. "Oxford is committed," said the vice-chancellor, "to recruiting the best students it can identify whatever their background" but he wanted Oxford to continue to "have a reputation for being fiercely meritocratic."

The second event was the publication in July of a report by professor David Greenaway an economist at Nottingham University, entitled Funding Universities to Meet National and International Challenges, which argued that charging students much higher fees was the only way that U.K. universities could maintain their international standing and fulfill the national role envisaged for them in the face of a 50 percent reduction in the unit of funding from the state over the past 20 years. The report offered several scenarios but sought to protect access by the introduction of an improved income-contingent loan scheme and by using some of the additional revenue raised from fees to pay bursaries to students from disadvantaged backgrounds. The report, commissioned by Russell Group of leading universities, has attracted widespread publicity and some tangible support in the quality press.

The difficulty in which the United Kingdom finds itself is that the government believes that competition through market mechanisms will drive up standards, improve efficiency, and reduce costs-a policy it inherited from the Tories-but it also believes in social inclusion and a significant widening of access to higher education. However, while only 7 percent of the school population is in private education, these pupils make up 20 percent of the numbers taking "A" levels and 30 percent of those achieving the top grades in three subjects (the normal selection requirement of entry to Oxford, for example). In the sciences, independent schools are even more dominant-providing 42 percent of A-level candidates in physics, 45 percent in chemistry, and 47 percent in mathematics in the top grades. Research for the National Inquiry into Higher Education (the Dearing Committee) showed that, while 4 out of 5 18-year-olds from senior managerial and professional backgrounds entered higher education, no more that 1 in 10 did so from unskilled and partly skilled backgrounds. Dearing demonstrated that the breakthrough into mass higher education after 1988 did nothing to change the social mix of entering students. Naturally the "best" universities (that is, in the United Kingdom, those that are also the most research intensive) attract the best-qualified candidates and, since entry is highly competitive, they find that their entry is socially skewed. Research presented at the Royal Economic Society's conference in July has also showed that social class has a significant impact on graduate earnings: students from advantaged family backgrounds earn 3 percent more than the less advantaged, students who went to independent schools have a similar advantage after graduation compared to students from state schools. There was also an "earning premium" from graduating from a top university-that is, a university that did well in the league tables.

Although recent research has updated the story, the general position about the impact of social class on the entry to universities has been known for many years. David Blunkett has called it an "access challenge to both government and universities." On taking office, he introduced fees of £1,000 but means-tested them so that students from disadvantaged backgrounds continued to enter free (the fees were abolished in Scotland following a revolt in the Scottish Parliament). At the same time, however, he removed student maintenance grants, and this represented a serious disincentive to mature students who, in general, are reluctant to utilize the student loan scheme, so that mature numbers have fallen. In May he announced a £10m fund to pay £1,000 "opportunity bursaries" from 2001-2002 together with support for university summer schools where children still at school can experience university life. More support has just been announced in the government spending review. Universities are themselves beginning to create scholarship schemes of one kind or another but it is increasingly evident that the real difficulty starts further back in persuading children from disadvantaged backgrounds to stay on at school beyond age 16 and if they do obtain good A-level qualifications to enter higher education at a time when, according to Barclays Bank a typical student owed £5,286 on graduation, a figure that has risen by 17 percent in one year.

It is against this background that the debate about the need to generate more university funding from student fees is taking place. In addition to the general distress in universities about the decline in state support for higher education and the resulting relative fall by 30 percent in salary levels, there is deep concern, first, that the fee income stream that the government introduced post-Dearing was being matched by a further reduction in state support rather than being the top-up intended by Dearing; and, second, that the funding system has, in the words of the rector of Imperial College, "echoes of the command economy of the Eastern bloc" with government controlling the number of students as well as all the funding mechanisms. The suggestion that universities might break out of this stranglehold by charging fees at serious levels is therefore doubly attractive, particularly in a university that is highly attractive to students. But there are counterarguments. Greenaway sets out the evidence on the rate of return for graduate qualifications and sees this as justifying high fees that can be paid for out of future earnings, but the economists who addressed the Royal Economics Society were convinced that their evidence pointed to increased fees being a considerable disincentive to less-advantaged students even with a more favorable loan scheme. Moreover, while the report is notably balanced in the way it presents its arguments and in particular in the way it advocates the redirection of fee income into bursaries for the disadvantaged, it does not address the probable plight of those universities that are at the bottom of the league tables but that are addressing the government's access agenda as vigorously as those at the top are addressing its research agenda. Their position offers the sharpest conflict between the government's twin policies of market orientation and social inclusion. The introduction of higher fees would certainly favor the top universities but at the expense of the bottom; the bottom are delivering social inclusivity, but the top are not for the reasons described above and, once freed from government constraints, might be even less likely to do so.

The debate will no doubt continue until after the next general election, but the fear must be that attitudes will polarize either because one or the other of the main political parties endorses some elements of the debate or because the argument becomes increasingly institutionally self-interested. The dilemmas it exposes are not, of course, limited to the United Kingdom.