THE relatively generous treatment of higher education students compared with their further education counterparts has been called into question in a radical report by a Labour think-tank.

Opportunity for Whom?, published this week, is set to provoke a battle of words for resources between the two sectors as the Government is accused of undermining the principles of wealth redistribution in its determination to get more students into HE.

The 50 per cent HE participation target is “not based on clear labour market rationale or a firm knowledge of the current enrolment rate” says the report, by the Institute for Public Policy Research.

It will be widely regarded as a damning indictment of how Government policy contrasts with its stated commitment to social inclusion. “Although the Labour Government has avoided the word ‘redistribution’ for electoral reasons, one of the core principles of the Labour movement is that resources should be re-channelled from the affluent to the more vulnerable members of society,” it said. “Tony Blair may have to risk rebellion in Middle England if he is determined to minimise social exclusion and give thousands more working-class students the opportunity to benefit from further and higher education.”

The report also goes in the face of the middle-class English preoccupation with HE, which enjoys one of the highest participation rates in the world despite the fact that post-16 participation overall is near the bottom of the international league.

“The main reason why so few working-class students enter HE is that so few obtain the necessary entry qualifications in the learning and skills sector,” say the report’s authors, Wendy Piatt and Peter Robinson.

With barriers to HE being more to do with achievement than finance, it says FE students should not be relying on limited discretionary support and going without loans while those in HE are able to borrow money without paying interest. It says HE loans should be repaid at the market rate, except possibly in the case of poorer students, and the HE fee subsidy should be reduced from 75 to 25 per cent. Also, child benefit for young people over 16 years should be scrapped, and the money diverted into maintenance allowances for students from poor families.

“Funding for post-16 should be distributed more fairly and according to a coherent set of principles,” says the report. “A key principle is that the most generous support should be directed to the neediest. But the definition of need must be clarified. It should not only include present need but also take into account future income.”

It points out that HE students have significantly greater earning potential, adding “Most of the so-called wider benefits of HE, like the financial rewards, primarily benefit the individual rather than society. There is compelling logic in the proposition that those who benefit in financial and personal terms from gaining a qualification should receive a a lower state subsidy than an individual who stands to secure a more modest return.”

The think-tank does acknowledge that aversion to borrowing money could be putting some people off HE, but it insists this is not the primary barrier. It says this could be tackled through increasing the repayment threshold, producing better information about the benefits of HE and creating a non-repayable maintenance allowance for the “most vulnerable”.

“A higher education maintenance allowance, offered to disadvantaged students for the first year and at a reduced rate, could subsequently serve as the main channel for all financial assistance to simplify the system,” it says.

In an argument that will bring comfort to those who privately regard universities as the sector with the silver spoon, but rarely feel able to say so on a public platform, the report questions the very distinction between HE and FE.

“The continued separation between the learning and skills sector and HE in public policy debates and in funding regimes is increasingly illogical. The UK HE system is extremely diverse and many post-1992 universities have as much in common with colleges as with the Russell Group,” which represents the country’s leading universities.

It says the Learning and Skills Council and the Higher Education Funding Council should produce a joint plan for post-16 participation. These quangos should ultimately be merged into one, it argues. The report also supports the case for free entitlement of all adults up to level 2.