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Varsity wins funding race

Like it or not, the big political issue in post-16 education this year is higher education funding.

This year started with the higher education White Paper and will end with draft legislation setting out the Government's plans for "top-up" tuition fees. The parliamentary debates that follow will occupy spring and summer and could determine the course of university funding for the rest of the decade.

The Government's current plan is to implement a new fees system in 2006, which means that most graduates will not start paying back new, higher, fees until 2009 at the earliest.

Although the issue is described as a debate about fees, much of the controversy is about supporting poorer students. The principle fees should be raised and future graduates pay them back when they are earning has many critics but also many supporters. There may be enough support on the Labour backbenches to carry this policy. The MPs on the education select committee supported higher fees.

Much of the criticism from MPs is focused not on fees themselves but on who sets them and who will pay them. The first issue is whether different universities can charge different fees. The proposal is that some institutions could charge pound;3,000 but others could ask for less. Many (including the Association of Colleges) who support higher fees argue against variable ones.

The second issue concerns the fees for students from poorer families. So far, the Government has held fast on variable fees but looked for compromises on supporting such students. The higher education minister, Alan Johnson, has said that he hopes that poorer students will be able to use a combination of grants and bursaries to reduce their fee liability to zero. The details of that proposal will emerge as the Bill progresses through Parliament.

The higher education debate coincides with major reform within further education. In September 2004, education maintenance allowances become available across England. As many as 200,000 16-year-olds will be eligible for means-tested payments of pound;30 per week if they do full-time courses.

It took 10 years of campaigning from organisations such as the Association of Colleges to make this happen. It also took three years of testing to convince ministers that allowances would work - in some areas they raised participation by 5 per cent. The TES will be campaigning with the AoC for an increase to pound;40 per week but at least this is a start.

The allowances are an important policy and will eventually cost as much as pound;500 million a year. A key decision has been to retain the pound;16-a-week 16 to 18 child benefit for the parents. Anyone hazy about the value of this money to families may have gained an insight from the recent TV programme featuring Michael Portillo. He just about fed a family of five in Liverpool on pound;80 a week but, by Friday, had resorted to frozen pizzas at three for pound;1.

The support put in place for 16 and 17-year-olds is part of a longer-term drive to raise participation and education levels. The allowances follow free tuition which has been guaranteed since 2002. The plan is to remove financial barriers to participation, which should help widen access to higher education.

But when an individual reaches 19 the choices and financial support narrows. A key principle set out in the higher education White Paper is that individuals should be treated as adults at this point and stand on their own two feet. Parental contributions should not be expected as a matter of course. But there is, as yet, no second principle that gives equal access to government help whatever course students do. It seems higher education students will still get a better deal.

University students may face higher fees but do not have to repay them until they are earning at least pound;15,000 a year. In the long-term, a system of grants and bursaries will make university free for some of them.

In the short term, new access grants will pay pound;1,000 to the poorest.

Compare this to adult students outside higher education. They also pay fees, unless on a means-tested benefit. Their only loan scheme - career development loans - is managed by the banks. Repayments start the month the course finishes, whatever your income. Adult learning grants are being offered on a pilot basis this year but will only be available for a limited list of level 2 courses. College learner support funds can help out but act mainly to fill gaps in national entitlements.

The differences are apparent in the budgets. The Government spends some pound;300m a year supporting FE students but some pound;2 billion on higher education grants and loan subsidies.

The skills strategy may lead to reform of financial support for adult learners. There may also be changes that make it easier for those on benefits to study while they look for work. But there are no signs of any change in the distribution of resources between higher education and the rest.

The challenge to policy-makers for the rest of the decade is to decide whether the huge disparity between the support for FE and HE students should remain.

Julian Gravatt is director of funding and development at the Association of Colleges

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