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The Government's policies have helped secure record numbers and participation in higher education. We need to build on this success as we move towards the year 2000 and beyond. This White Paper, together with the separate White Papers on Education and Training for the 21st Century, (Cm 1536), and Access and Opportunity: a Strategy for Education and Training, (Cm 1530), explains how the Government intends to achieve this.

The distinction between universities on the one hand and polytechnics and colleges on the other, known as the binary line, has become an obstacle to further progress. The Government therefore proposes to abolish it and establish a single framework for higher education.

The main features of this new framework will be:

• a single funding structure for universities, polytechnics and colleges of higher education;
• Higher Education Funding Councils within England, Scotland and Wales to distribute public funds for both teaching and research; and new links to continue the present close relationship with Northern Ireland's existing unitary structure;
• the extension of degree awarding powers to major institutions and the winding up of the Council for National Academic Awards;
• extension of the title of university to those polytechnics which wish to use it and, subject to the development of suitable criteria, to other major institutions;
• external scrutiny of the quality control arrangements of UK higher education institutions by a UK-wide quality audit unit developed essentially by the institutions themselves;
• quality assessment units within each Council to advise on relative quality across the institutions; and
• co-operation among the Councils to maintain a common approach to quality assessment.

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The Government proposes to introduce the legislation needed to implement these changes as soon as Parliamentary time permits.

Within this new framework, the Government will continue to set the strategic directions for higher education, and will continue to make the necessary contribution to funding. As now, it will look to students, employers and the wider community to signal their needs and expectations, and to the Funding Councils and institutions to respond by developing the quality and efficiency of the higher education they provide.

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1 This White Paper sets out the Government's policy on the future structure of higher education in the United Kingdom. In particular, it sets out proposals for abolishing the binary line, which currently divides the universities from Other higher education institutions.

2 The Government reaffirms its view of the aims and purposes of higher education and its policies on access set out in the 1987 White Paper Higher Education: Meeting the Challenge (Cm 114). The present White Paper describes the achievements since 1987; considers the funding for further expansion; and announces changes in the five main areas which currently seal the binary line in place, namely:

• funding for teaching;
• funding for research;
• degree awarding powers and quality assurance;
• institutional titles and governance; and
• pay and conditions.

3 Underpinning the changes is the Government's objective of continuing to secure a high-quality system of higher education. The new framework proposed in this White Paper will enable institutions to make yet more effective responses to the increasing demand for higher education. This will bring benefits for the individuals who study as well as for the economy and society as a whole.

4 Throughout this White Paper, the phrase "polytechnics and colleges" is used to refer to all major non-university institutions, including the Central Institutions and Colleges of Education grant-aided by the Secretary of State for Scotland.

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5 A description of the present framework of higher education in the United Kingdom is set out in Annex 1 to this White Paper.

6 The present binary line originated with the creation of the polytechnics. These were established principally to provide vocationally oriented studies in higher education equal in status to that accorded to more academic studies. Together with other colleges of higher education, polytechnics have developed missions which emphasise the provision of vocational studies at both degree level and below There is emphasis too on part-time and other courses designed to widen access and meet local and regional needs. This emphasis differs from that in the universities, which continues to be towards full-time academic courses at degree and postgraduate level, together with associated research. There is however some overlap between degree and postgraduate courses provided by, on the one hand, universities and, on the other, polytechnics and colleges.

7 Higher education in the United Kingdom is more efficient and effective than it has ever been. In line with the Government's commitment in the 1987 White Paper Higher Education: Meeting the Challenge places in higher education have been secured for an increasing number of young people and adults who have the necessary intellectual competence, motivation and maturity to benefit from higher education and wish to do so. More young people than ever before are staying on in full-time education after the age of 16. One in five of all 18-19 year olds now enter higher education each year compared with one in seven at the time of the 1987 White Paper. In Scotland and Northern Ireland, one in four young people already enter higher education. More mature students than young people now enter part-time and full-time courses in higher education each year. Higher education is more accessible to people from all sections of society

8 The increase in the level of publicly funded higher education tuition fees paid as part of student awards has, as intended, provided an incentive to' institutions to expand efficiently The polytechnics and colleges have continued to lead this expansion, achieving considerable improvements in efficiency as capacity at the margin has been taken

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up. The freedom from local government controls granted to English polytechnics and colleges by the Education Reform Act has been a major stimulus for their remarkable recent successes.

9 At the same time, reports from Her Majesty's Inspectorate (HMI) suggest that the quality of education for students in polytechnics and colleges is being maintained and enhanced. The proportion of first and second class degrees awarded by universities, polytechnics and colleges has steadily increased during the 1980s.

10 In line with the Government's aims, higher education has continued to promote the advancement of learning, and high levels of scholarship. Higher education has also responded to the need identified by the Government in the 1987 White Paper to take increasing account of the economic requirements of the country There has been an encouraging willingness on the part of higher education to take account of the needs of industry and commerce as evinced by:

• the positive response to the buoyant demand for part- time courses from those in employment;
• the positive response to the Department of Employment's Enterprise in Higher Education initiative which, through partnerships between higher education institutions and employers, aims to develop more enterprising graduates with a knowledge of the world of work;
• the expansion of courses in business studies;
• the continuing increase in private income from research contracts;
• the links established with other European higher education institutions; and
• the introduction of modern languages into a range of courses.

• demand from students for courses in science, engineering and technology has been less buoyant than the Government would have wished; and
• in deciding where to continue their studies in higher education, many able school leavers do not give the polytechnics as their first choice.

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12 The Government's policies for schools, and in particular examination reforms, are encouraging more young people to stay on in school or college after 16 and then to apply for a place in higher education. These trends will be reinforced by the Government's plans for the implementation of the National Curriculum and for the independence of Further Education and Sixth Form Colleges in England and Wales, and the parallel developments in Scotland, with their general aim of achieving equality of status and standards between academic and vocational qualifications. These reforms will also encourage more young people to study science, engineering and technology throughout their school careers and beyond. In addition, they can be expected to encourage the further widening of access to higher education.

13 The latest projection of student numbers (see chart and Annex 2) indicates that participation rates in higher education will continue to increase throughout the 1990s. By the year 2000, the Government expects that approaching one in three of all 18-19 year olds will enter higher education. There will also be increased demand from adults and for part-time study Institutions will need to continue to keep their admissions practices under review Because of demographic trends, the rate of increase in student numbers is expected to slow down in the mid-1990s, followed by more rapid growth towards the end of the decade. Total full-time equivalent numbers of students are projected to increase by approaching one half up to the year 2000.

14 The Government believes that it is in the interests of universities, polytechnics and colleges to continue to look for increased levels of funding from private sources in particular from industry and commerce, from benefactors and alumni, and from present sources of fee income. Such private income can enhance considerably the independence of individual institutions. The Government accepts that public funds will remain the main source of income for funding the projected expansion of student numbers.

15 Increasing national wealth in the five years from 1992/93 can be expected broadly to match the projected increase in the number of students. The Government's commitment to awarding higher education a fair share of public expenditure is clear. Bur the general need to

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18 The teaching and scholarship in our universities, polytechnics and colleges are rightly held in high regard both at home and internationally

19 That quality has been enhanced during the expansion in the five years 1985-1990 which saw numbers increase by over 20 per cent. The challenge to higher education is to continue to expand efficiently, to cater for the projected increase in student numbers of approaching one half by the year 2000, while maintaining quality The Government considers it essential to have in place a funding mechanism which encourages the optimum use of recurrent and capital resources across the whole higher education system.

20 The incentive provided through increased publicly funded tuition fees represents one such development. The Government has considered the proposals from some institutions that tuition fees should be the sole source of public funding for teaching. It has decided, however, that student demand should not be the sole determinant of the shape of expansion, although that will remain a major influence through the fee arrangements.

21 The Government has decided that the most effective way of funding higher education is to provide an element of institutional grant alongside the sum to be provided by differentiated tuition fees. This will:

• allow the development of higher education to be steered, as required;
• permit elements of institutional funding to be linked with assessments of quality;
• provide an equitable means of distributing funding for capital and pump-priming initiatives; and
• avoid the financial instability that might be experienced by individual institutions in the light of sharp changes in demand.

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22 The Government accepts that grants for individual institutions should normally be a matter for bodies other than the Government to determine. That reinforces the autonomy of individual higher education institutions.

23 The Government has also decided that the present separate channels for the funding of teaching in universities on the one hand and polytechnics and colleges on the other will stand in the way of the most efficient further expansion of higher education provision. It therefore proposes to introduce a single funding structure for teaching in universities, polytechnics and colleges.

24 The benefits of such an arrangement will be:

• all institutions will compete for funds and students on an equal basis;
• unjustified differences in funding methodologies will be eliminated. Present expenditure plans allow for broadly similar levels of unit public funding for teaching costs in each sector. It should therefore be possible to eliminate differences between the sectors' funding methodologies without elaborate transitional arrangements;
• for capital spending, priorities and allocations will be determined across higher education;
• quality will be taken into account on a common basis in the funding of all higher education institutions;
• funds for pump-priming initiatives will be offered more readily on a comparable basis across higher education; and
• there will be increased scope for co-ordination and rationalisation across the whole of higher education.

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26 The quality of research in the United Kingdom has achieved worldwide recognition. The Government remains committed to maintaining an internationally competitive research base through higher education institutions and the Research Councils.

27 Universities, polytechnics and colleges are funded on different bases in respect of the different categories of research:

• basic research - concerned with the advancement of knowledge;
• strategic research - speculative but with clear potential for application; and
• applied research - directed primarily towards practical aims and objectives.

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29 These differences are reflected in the substantially different amounts of funding the UFC and PCFC sectors receive for research, as illustrated by the following table:

30 Government funding of research in the United Kingdom has been underpinned by two key policies:

• the operation of the "dual support" system; and
• the selective allocation of funds by reference to assessments of quality

31 Under the dual support system, which the Government has endorsed, universities receive public funds for research through both institutional funding from the UFC, and specific project grants from the Research Councils. This plurality of funding gives universities the desirable discretion to determine their own priorities. The linking of funding for both teaching and non-specific research also allows a better overview of the financial position of individual institutions.

32 Under the dual support arrangements, UFC funds provide for the costs of the basic infrastructure of university research, such as laboratories and equipment as well as the salaries of academic staff. In this way, universities are enabled to undertake seedcorn research at their own discretion. There is no equivalent funding for polytechnics and

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colleges. The Research Councils provide grants for specific projects distributed on a competitive basis for which all universities, polytechnics and colleges are free to apply Research Council support for research in higher education institutions has grown rapidly, increasing by some 80 per cent in real terms since 1979.

33 The discretionary nature of UFC funding is valuable in enabling universities to pursue speculative and innovative research. Once such research begins to bear fruit, researchers can apply for additional support through Research Council grants. The plurality of funding sources means that a much broader spread of opinion can be brought to bear on the most promising directions for future research.

34 At present, Research Council grants cover certain additional project costs. There has been some confusion over the boundary between those costs funded by the Research Councils and those costs met by universities. To overcome this problem and to improve accountability, the Government has announced new arrangements from 1992/93. The Research Councils will become responsible for meeting all the costs of their projects, except for academic salaries and premises, which will continue to be met from institutions' general funds.

35 The dual support system does not operate in the humanities where, unlike the sciences, there is no general requirement for specific funding in support of larger projects. Although there is no Research Council for the humanities, the British Academy provides funds for high-quality research.

36 In addition to universities' discretionary research and that sponsored by the Research Councils, there has also been a rapid increase in the volume of university research supported by charities, commercial organisations and other sources since 1979. Commercially supported research is expected to be self-financing.

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37 Although they receive no equivalent public funding for research, some polytechnics and colleges have developed a capability to deliver high-quality research. This is demonstrated by their success in competing for Research Council funds, and supported by the evidence of HMI.

38 The Government's policy is that public funding through the UFC for teaching and for research should be separately identified to provide a more effective basis for the planning and delivery of both activities; and that funding for research should be allocated selectively to encourage institutions to concentrate on their strengths,

39 In line with this policy, the UFC has, from 1990/91, separately identified its funding distributed on teaching and research-based criteria, and is allocating an increasing proportion of research funding by reference to the assessed quality of research in individual departments. This has already led to significant differentiation in research funding at individual universities.

40 The principles that the Government considers should inform a new structure for public funding of research in higher education are as follows.

• Plurality: there should be two channels of public funding for research:
  • general funds, to be used at institutions' discretion; and
  • funds tied to specific projects.
• Competition: to promote further the most effective use of resources within higher education, all institutions should be able to compete for research funds.
• Selectivity: research funds should be distributed selectively, as now, on the basis of assessment of research quality This will continue to reward quality, encourage innovation and make the best use of scarce resources.
• Accountability: the principle of accountability must apply to all higher education institutions receiving general research funding, in

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the same way as for other bodies receiving substantial public funds. The Government is determined to ensure greater transparency in the planning and use of general research funds, as well as clearer funding arrangements for Research Council projects.

• funding teaching and research separately, with general research funding routed either through the existing Research Councils, or through a new research funding agency building on the existing Advisory Board for the Research Councils (ABRC) arrangements; or
• a single channel - on the lines of the UFC - for the general funding of research alongside funding for teaching.

43 The Government has therefore concluded that, for the purpose of introducing these reforms, funding for teaching and general research should continue to flow through the same channel. This channel would operate alongside the existing system of funding through the Research Councils, with the boundary in place; and there would need to be good working links with the ABRC and individual Research Councils. Such an arrangement would:

• allow quality for both teaching and research to be assessed on an equal footing across higher education; and
• give institutions flexibility to plan their commitments to research alongside those to teaching.

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44 The structural changes announced in this White Paper will make many more institutions eligible for general research funding. In order to retain the advantages of the selective allocation of these funds, the arrangements for rewarding high-quality research will need to be developed. The element of research funding currently allocated by reference to student numbers will need to be phased out. The Government does not expect there to be any abrupt change in the broad research missions of present universities, polytechnics and colleges, and it wishes to see continuing emphasis on applied and strategic research. It accepts, however, that the location of high-quality basic research will evolve and need to be reflected in the distribution of general funds for research.

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45 The binary line underpins the current territorial responsibilities within Government for funding higher education as set out in Annex 1. Its abolition for the purposes discussed in Chapters 2 and 3 requires a fresh settlement of those responsibilities.

46 The size of the various territorial components is indicated by the following table.

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58 The prime responsibility for maintaining and enhancing the quality of teaching and learning rests with each individual institution. At the same time, there is a need for proper accountability for the substantial public funds invested in higher education. As part of this, students and employers need improved information about quality if the full benefit of increased competition is to be obtained.

59 As demand for higher education expands further, and as competition among institutions increases, as a result of the changes outlined in the preceding chapters, the Government considers that new arrangements for quality assurance in higher education will be required.

60 There are various aspects of quality assurance in higher education which, for the purposes of this White Paper, are defined as follows.

• Quality control: mechanisms within institutions for maintaining and enhancing the quality of their provision.
• Quality audit: external scrutiny aimed at providing guarantees that institutions have suitable quality control mechanisms in place.
• Validation: approval of courses by a validating body for the award of its degrees and other qualifications.
• Accreditation: in the specific context of the Council for National Academic Awards (CNAA), delegation to institutions, subject to certain conditions, of responsibility for validating their own courses leading to CNAA degrees.
• Quality assessment: external review of, and judgements about, the quality of teaching and learning in institutions.

61 In June 1990, the Government issued a report of a policy review of the CNAA for consultation. Its central recommendation was that degree awarding powers should be made available to a wider range of institutions than now have them. The Government shares that view.

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However, it departs from the review's other principal recommendations on degree awarding powers in two important respects.

62 The policy review recommended that degree awarding powers should be awarded only to polytechnics in England and Wales and corresponding institutions in Scotland which have received both taught course and research degree accreditation from the CNAA. In common with the overwhelming majority of those commenting on this recommendation, the Government considers that such an extension is too restrictive. It believes that all polytechnics have now developed sufficient self-critical academic maturity to be offered the full range of degree awarding powers.

63 Differing views were expressed about whether such powers should be extended to institutions other than polytechnics. It was claimed by some that taught course accreditation is by itself a sufficient criterion, whether granted to a large multi-faculty polytechnic or a small specialist monotechnic. Others have argued that broader criteria need to be applied.

64 The 1985 report of the Committee of Enquiry into the Academic Validation of Degree Courses in Public Sector Higher Education, chaired by Sir Norman Lindop, suggested that a range of general criteria should be satisfied before degree awarding powers are granted. Of these criteria, the two most important were that institutions should have effective internal validation and review processes, but also that "the range of degree work in the institution should be such as to permit the work in any one subject to be scrutinised by staff in broadly cognate disciplines, but also to be seen in the perspective of quite different disciplines and the way they are taught". The first criterion is satisfied by CNAA accreditation. The Lindop report was silent on what should be considered a minimum range of degree work to satisfy the second.

65 The Government envisages that degree awarding powers may be extended beyond the existing polytechnics, subject to the development and application of satisfactory criteria for so doing. These criteria will need to include effective internal validation and review processes. The Government has an open mind on what the other criteria should be,

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but recognises that they will need to take account of the recommendation in the policy review of the CNAA that degree awarding powers should be extended to at least some non-polytechnic institutions in Scotland.

66 It will seek advice in the first instance from the CNAA and the Committee of Vice-Chancellors and Principals' (CVCP) Academic Audit Unit, and will discuss that advice with institutions and the present funding bodies before coming to a final decision. The criteria will be applied in determining which institutions should be granted degree awarding powers under the proposed legislation, and in considering subsequent applications for such powers.

67 There is a common view throughout higher education on the need for externally provided reassurance that the quality control mechanisms within institutions are adequate. Quality audit is a means of checking that relevant systems and structures within an institution support its key teaching mission. This audit role is currently played by the CNAA in relation to most polytechnics and colleges, and is currently being developed in the university sector by the recently established Academic Audit Unit.

68 The Government accepts the views put to it by some representatives of universities and polytechnics that, in a unitary system, this quality audit role should become the task of a single unit in which the institutions have the major stake. It believes that any doubts about the effectiveness of self-regulation are more than offset by the self-interest which institutions will have in demonstrating that internal quality controls continue to be rigorous. The unit's remit would desirably cover arrangements in all higher education institutions throughout the United Kingdom.

69 The Government will discuss with representatives of the institutions the nature and development of such a quality audit unit. It will expect the unit's steering council to have industrial and professional as well as academic members and to admit assessors from the Funding Councils to its meetings. It will expect the unit to publish reports on institutions and an annual report. It will also look to the unit to liaise

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as necessary with the National Council for Vocational Qualifications (NCVQ), the Business and Technician Education Council (BTEC), the Scottish Vocational Education Council (SCOTVEC), the professional bodies and others involved in quality control and validation in higher education.

70 The Government intends to include reserve powers in the legislation to ensure the satisfactory establishment of the unit.

71 Depending on the Government's decision, institutions currently validated by the CNAA and which will not be granted power to award degrees seem likely to provide something under 10 per cent of all higher education in the United Kingdom. That is about the same proportion as is currently validated by universities in colleges of higher education.

72 The Government considers that non-degree awarding institutions and other organisations should seek validation of their courses from a degree awarding institution of their choice. There is no need to retain a central validating role for the CNAA. In order to provide proper safeguards, the Government will require all validation arrangements entered into by non-degree awarding institutions to be subject to the approval of the new quality audit unit.

73 The changes announced above leave no major role for the CNAA, and the Government will include in legislation provision for the Council to be wound up.

74 The Government pays tribute to the work of the CNAA since its incorporation in 1965. It is, in large part, due to the Council's efforts that polytechnics and colleges have developed in such a way as to enable the changes announced in this White Paper to be introduced. The CNAA will retain an important role as those changes are developed for implementation. In particular, the Government will look to the

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Council for advice on criteria for the initial and subsequent granting of degree awarding powers outside the polytechnics. It will also be necessary for the Council to consider with the institutions and the Funding Councils the best future location for the services it currently provides in respect of, for example, credit accumulation and transfer schemes, the promotion and dissemination of good practice, the recognition of access courses, and the promotion of debate on matters of current interest.

75 Arrangements will be needed to enable institutions to achieve degree awarding status in the future. The Government proposes that decisions on individual cases will be for the relevant Secretary of State, who will need expert advice on whether the criteria developed for the initial granting of degree awarding powers are met.

76 It would not be cost effective to retain the CNAA only to advise on claims from those institutions for such status. Three options are to seek advice from:

• the Higher Education Funding Councils;
• the new quality audit unit; or
• ad hoc committees specially appointed by the relevant Secretary of State.

78 The preceding paragraphs have considered quality control mechanisms for teaching within institutions, and audit arrangements to ensure that provision is at or beyond a satisfactory level of quality. To complement these, arrangements are needed to assess the quality of what is actually provided.

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79 While recognising that the precise arrangements will be a matter for the Funding Councils themselves, the Government considers it important that assessment of quality should continue to inform the funding decisions of the new Funding Councils. This is already the case with the PCFC and UFC.

80 There are two ways in which quality assessments should be developed. The first is through quantifiable outcomes. Performance indicators and calculations of value added will have a role to play in the future. The PCFC Committee of Enquiry on Teaching Quality has launched a wider debate. However, these approaches cannot by themselves provide a comprehensive view of quality.

81 The second approach to quality assessment is through external judgements on the basis of direct observation of what is provided. This includes the quality of teaching and learning, its management and organisation, accommodation and equipment. Such judgements are currently made in respect of polytechnics and colleges by HMI.

82 A quality assessment unit will be established within each Funding Council. Such units will need full-time professional staff with suitable academic backgrounds. They will be recruited initially in part from staff with responsibility for higher education in HMI, of which a proportion has a background mainly in the university sector. This will help to retain existing experience and to continue good practice. The remainder of the staff of the units will be recruited mainly from the academic world.

83 The role of the assessment units will be for the Funding Councils to determine in consultation with institutions and subject to guidance from the Secretaries of State. The Government will look to the Councils and their units to develop similar general approaches. They will each be required to establish steering committees, comprised mainly of institutional representatives, to advise them on the operations of the units.

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84 The units will be expected to maintain, across the whole of higher education, the constructive relationship which HMI already have with individual polytechnics and colleges. In addition, the Government expects that they will consider how best to make available to potential students and employers information about the actual and relative quality of institutions and of the courses they provide.

85 The Government will expect the Funding Councils to look for other sources of advice on quality, including the new quality audit unit. They will be expected to monitor and encourage developments in higher education, for example:

• the development of performance indicators, including quantifiable outcomes;
• access policies and responses to changing student profiles;
• links with industry and commerce; and
• the industrial and commercial relevance of provision.

86 Special considerations arise in relation to initial teacher training. Here the Secretaries of State have a particular interest, because of their responsibility under the present arrangements for the approval of individual courses. In connection with the discharge of these responsibilities, HMI advise on provision on both sides of the binary line. The UFC and the PCFC in their funding decisions already have regard to advice from I-IMI in assessing the quality of the provision of teacher training and that advice will continue to be available to the Funding Councils.

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87 A summary of the current and proposed arrangements for quality assurance is shown in the following Table:

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88 The policies announced in the preceding chapters of this White Paper will introduce fundamental changes to the present higher education framework. In the light of these, the Government has reconsidered its policy of maintaining separate categories of higher education institution. This chapter sets out its conclusions and addresses related issues of governance.

89 The changes announced in this White Paper will end the distinctions between universities and polytechnics in terms of degree awarding powers and the channels for funding teaching. They will also end the exclusion of polytechnics and colleges from the dual support system of research funding.

90 The title of polytechnic has never been widely understood. The British academic world realises that the polytechnics are higher education institutions achieving the same academic standards and giving the same quality of education as most universities. Many able school leavers and their parents still tend, however, to regard the title as a reason for making them a second choice to a university when seeking a place in higher education. In their international contacts, polytechnics still find that they have to explain that they are not further education or sixth form or technical colleges.

91 The Government considers that the new framework described in this White Paper points decisively to allowing polytechnics, if they wish, to adopt a university name or to include it in their titles. Any such name changes would require approval by the Privy Council to ensure consistency in approach and no duplication.

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92 There is a diversity of other higher education institutions. The Government does not want to rule out some of these institutions being allowed flexibility over their titles in the same way as polytechnics. It will consider with the interested parties whether suitable criteria can be drawn up. These will need to be considered alongside the criteria for the granting of degree awarding powers to institutions other than polytechnics, but will not necessarily be identical.

93 Under the present arrangements, proposed changes to university statutes, or to ordinances of the ancient Scottish universities, are submitted to the Privy Council for approval, whereas changes to the articles of government of polytechnics and colleges come to the relevant Secretary of State. This distinction will be removed by introducing the Privy Council procedure for all institutions. This will not entail polytechnics and colleges needing to depart in substance from their present management structures, although some detailed changes to their instruments and articles of government may be needed.

94 Universities operate on a financial year starting on 1 August in line with their normal operating cycle. For the same reason, the Open University operates on a calendar year basis. For most polytechnics and colleges, the financial year starts on 1 April, reflecting the cycle of public funding. With a move to unitary Funding Councils, it will be desirable to introduce a common financial year. The Government will consult with the funding bodies and representatives of institutions on what the standard should be.

95 Building on the greater collaboration already introduced, the Government will look to the Universities Central Council on Admissions (UCCA) and the Polytechnics Central Admission System (PCAS) to come together as a central agency for admissions. But it will continue to be for individual institutions to decide whether to join these arrangements.

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96 The new Funding Councils will need to have access to comprehensive and coherent statistical information. The Government will consult me UFC, PCFC, Universities Statistical Record and representatives of me institutions about how best to take this forward.

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97 Pay and conditions in higher education are settled primarily through negotiations between employers and employees. The Committee of Vice-Chancellors and Principals acts as the management side for universities in the United Kingdom, and the Polytechnics and Colleges Employers Forum for polytechnics and colleges in England. The Conference of Scottish Centrally Funded Colleges forms the management side for the grant-aided colleges in Scotland. In Wales, salaries for staff in the Polytechnic and the colleges are currently negotiated under the auspices of the National Joint Council (Further Education). The normal settlement date for the pay of polytechnic and college lecturers in England is 1 September while that for university lecturers, and college lecturers in Scotland, is 1 April. Academic salaries are currently broadly comparable across higher education.

98 Each sector has arrangements for settling the pay and conditions of non-academic staff whose pay is also broadly comparable across the sectors.

99 The Government looks to employers in higher education to settle their own negotiating arrangements in the light of the proposals in this White Paper. The Government will continue to influence pay and conditions of service through the level of funding provided for the new Higher Education Funding Councils.

100 Conditions of service vary between the sectors. For example, the professional contract recently agreed for academic staff in the PCFC sector sets out national arrangements in some detail while leaving certain areas of conditions of service for local settlement. Similar arrangements apply in the centrally funded sector in Scotland, where main conditions of service are negotiated on a national basis.

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101 In the universities, on the other hand, conditions of service are left for negotiation by individual institutions. There are particular differences in the arrangements for the dismissal of academic staff on grounds of redundancy, incapacity or misconduct; and for appeals on these matters and for dealing with grievances arising from employment. The University Commissioners, appointed under the Education Reform Act 1988, are on schedule to establish uniform arrangements for the present UFC sector. The Government does not envisage that polytechnics and other colleges seeking a university title would need to depart from the straightforward and standard arrangements which they already have for handling those issues.

102 The main difference in conditions between the sectors lies in the pension arrangements. University lecturers contribute six per cent of salary to the universities' superannuation scheme (USS) while polytechnic and college lecturers make the same level of contribution to the teachers' superannuation schemes (TSS) managed by the Department of Education and Science and the Scottish Office.

103 The benefits available through the schemes are similar, but the USS operates a real fund while the TSS contributions are assessed on the basis of a notional fund. University employers contribute some 18 per cent of salary for academic staff, while polytechnic and college employers, who do not at present pay for the increase of pensions, contribute some eight per cent. In Wales, academic staff in the Polytechnic and colleges have remained in the TSS.

104 The Government does not intend to make additional public funds available to polytechnics and colleges if, following implementation of the proposals in this White Paper, they choose to seek membership of the USS. However, the Government will seek Parliamentary approval for amendments to the Regulations to permit continued membership of the TSS for polytechnics and other institutions for which a university title is approved.

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105 The Government has concluded that the future development of higher education will be enhanced by the elimination of the binary line. In particular, increased competition among the present universities, polytechnics and colleges will promote the further efficient expansion which the Government wants to see.

106 Taken together with the Government's policies in schools and further education, it can be expected that nearly one in three of all young people will enter higher education by the year 2000, and that participation by mature entrants will also increase. The Government is determined to maintain and enhance the quality of higher education, and to ensure that this education is increasingly relevant to students' various needs. This will benefit both the individuals who participate and the economy and society as a whole.

107 Higher education in the United Kingdom is already amongst the most efficient and effective in the world. The Government applauds what the academic community has achieved in teaching, scholarship and research. It expects the new framework proposed in this White Paper and summarised below to provide for yet greater achievements in the future.

108 The main features of the Government's plans for bringing universities, polytechnics and major colleges of higher education into a Single structure for higher education are:

• the establishment of Higher Education Funding Councils within England, Scotland and Wales to distribute public funding to institutions in their areas to support both teaching and non-specific

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research; and new links to continue the close relationship between Northern Ireland's existing unitary structure and provision elsewhere in the United Kingdom;
• the extension of degree awarding powers to polytechnics and some other institutions; and the consequent winding up of the Council for National Academic Awards;
• the introduction of new measures concerning quality assurance, principally:
  • external scrutiny of institutional quality control arrangements across the United Kingdom by a quality audit unit developed essentially by the institutions themselves;
  • units within each Higher Education Funding Council to assess and advise on quality across the funded institutions; and
  • co-operation among the Funding Councils to maintain a common approach; and
• permitting polytechnics and, subject to the development of suitable criteria, other major institutions to adopt the title of university

• measures to promote developments which will assist in achieving the required expansion with greater efficiency;
• arrangements for supporting computing in higher education, currently undertaken by the UFC's Information Systems Committee;
• the criteria and arrangements for extending degree awarding powers beyond the present polytechnics;
• the nature and development of the proposed quality audit unit;
• the scope for extending the use of the title of university beyond present polytechnics;
• the financial year to be adopted across higher education; and
• arrangements for bringing greater coherence to statistical information across higher education.

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1 The main features of the current organisation of higher education in the United Kingdom are as follows:

• The universities in England, Scotland and Wales are, except for the directly funded Open University and the independent University of Buckingham, funded for both teaching and research through the Universities Funding Council (UFC) established under the Education Reform Act 1988. Lead responsibility within Government is taken by the Secretary of State for Education and Science.
• There are separate arrangements for the funding of teaching in non-university higher education:
  • within England, the 1988 Act re-established polytechnics and other major local education authority (LEA) colleges of higher education as independent free-standing institutions, and set up the Polytechnics and Colleges Funding Council (PCFC) as the channel of public funding to a new sector composed of those institutions and all but a few of those formerly directly funded by the Secretary of State for Education and Science. The PCFC also funds most of the higher education provided alongside further education in LEA colleges;
  • within Scotland, the Central Institutions and Colleges of Education are directly funded by the Secretary of State for Scotland. Some higher education is also provided in local authority further education colleges; and
  • within Wales, the Polytechnic and some colleges are currently maintained by local authorities, while one college is directly funded by the Secretary of State for Wales. Local authority funding is determined at a national level by the Secretary of State with advice from the Wales Advisory Body for Local Authority Higher Education. The local authority higher education institutions in Wales are to become independent free-standing institutions from April 1992
• Northern Ireland's higher education is already largely constituted as a unitary system. Central funding of the universities by the Secretary of State for Northern Ireland takes account of advice from the UFC, with the aim of ensuring broad parity of provision with universities elsewhere in the United Kingdom.

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2 Public funding for specific research projects throughout the United Kingdom is managed by the Research Councils.

3 Alongside institutional funding, higher education institutions also receive public funds in the form of tuition fees paid on behalf of students in receipt of an award. To encourage more efficient expansion in higher education, the Government has substantially shifted the balance of public funding from institutional grant to tuition fees. The standard undergraduate tuition fee has been increased from £607 in the academic year 1989/90 to £1675 in 1990/91 In the academic year 1991/92, the fee will be differentiated into three bands to reflect the relative costs of classroom, laboratory/workshop and clinical courses. The average fee (of some £2,200) will amount to nearly half the teaching cost per student made available from public funds. This compares to about 15 per cent in 1989/90. In the case of Oxford and Cambridge Universities, public funding in the form of institutional funding from the UFC and tuition fees for award holding students flows only to the parent universities. The colleges receive public funds in the form of college fees which, like tuition fees, are paid on behalf of award holding students. These arrangements were considered in the Croham Committee's 1987 report on university funding matters (Review of the University Grants Committee, Cm 81).

4 In the 1989/90 academic year, the distribution of students within United Kingdom higher education was as follows:

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1 The chart in Chapter 1 shows the Department of Education and Science's April 1991 projection to the year 2000 of:

• numbers of full-time equivalent home students in higher education in Great Britain; and
• the associated Age Participation Index for young home initial entrants to full-time and sandwich first and sub-degree courses.

Like its predecessors, the April 1991 projection is derived from the methodology set out in Projections of Demand for Higher Education in Great Britain 1986-2000 (Department of Education and Science 1986). The results are shown in the following table.