THIS was the week when the venerable institutions of higher learning were forced to face up to the dot.com

economy.

In a major speech on the future of higher education, David Blunkett announced that the Government is to spend pound;50 million setting up a new consortium of “e-universities”, designed to exploit the huge commercial potential of Internet learning.

The Education Secretary wants universities to team up with private-sector partners to deliver distance-learning “virtual” degrees to overseas students.

The venture was announced just a day after four of Britain’s leading universities - Leeds, Sheffield, Southampton and York - unveiled plans to link up with four counterparts in the United States. The universities said the partnership would be the first step in building an alliance aimed at securing a slice of the global market in higher-education teaching and research - estimated to be worth pound;300 billion.

Mr Blunkett said entrepreneurial universities would become as important as entrepreneurial businesses in the new “knowledge economy”. And he warned: “The do-nothing universities will not survive - and it will not be the job of government to bail them out.”

In another major development, the Secretary of State also announced controversial plans for new two-year “foundation degrees”, offering a vocational route into higher education. The emphasis would be on courses with a high value in the labour market such as

information and communications

technology, finance and the creative industries. Students would have the chance to continue their studies, progressing to an honours degree after one-and-a-third exta years’ study.

Rejecting critics’ claims that the new qualification would create a two-tier system, Mr Blunkett insisted the country had to keep pace with a global surge in demand for people with high-quality vocational skills. The new degrees are expected to help the Government meet its target of enabling half of all young people under 30 to benefit from higher education in the next decade.

This week also finally saw the publication of Sir Ronald Waterhouse’s report on the 20-year scandal of abuse involving up to 650 children in children’s homes in North Wales.

The report, which follows a three-year pound;13 million inquiry, recommends a massive shake-up in Wales’s care system, including new procedures to encourage whistle-blowers - including teachers - and an urgent review of the regulations governing private residential schools.

The educational under-achievement of children in care homes was once again highlighted this week in new research from the charity Include, which shows a disproportionate number of “looked-after” children are excluded from school.

The research found that more than two-thirds of children excluded from secondary school, and more than a third of children excluded from primaries, never return to mainstream education. These stark figures raise questions about the Government’s prospects of achieving its plan to cut the national number of

exclusions per year - currently 12,298 - by a third within two years.

Meanwhile, one of Labour’s pre-election pledges - to stop the sale of playing fields - appears to have backfired. An investigation by The Observer claimed that more than 100 school playing fields have in fact been sold off in the past 15 months, in many cases to raise cash to build new classrooms.