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Last Updated: Tuesday, 16 September, 2003, 09:00 GMT 10:00 UK
University growth strains funding
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Around the globe, more people are going to university than ever before
The rapid expansion of United Kingdom university places has meant a fall in the amount of funding for each student, says an international survey.

As the debate continues over student tuition fees, the survey shows the extent of the funding gap facing higher education.

It also shows that the UK's international competitors are ahead in the numbers of people entering university.

In New Zealand, 76% of young people enter higher education, compared with 45% in the UK.

The survey, published by the Organisation for Economic Co-operation and Development (OECD), showed that per student funding in the UK had fallen by 9% between 1995 and 2000.

This showed that funding failed to keep up with the rapid growth in university enrolments, and that university budgets in the UK are harder pressed than in many other developed countries, where funding kept pace with an increase in places.

Tuition fees

Sweden, Denmark and Holland matched the growth in places with funding - and at the top end of the scale, Ireland increased per student funding by 54%, Spain by 39% and Italy 26%.

The need to fund the growth in university places is at the heart of the debate over how much students should be contributing to their higher education - with the government proposing to increase fees to 3,000 per year.

And the OECD survey shows that the government's target of 50% participation in university has already been passed by many countries - and that the target, controversial in the UK, is modest by international standards.

In Australia, the participation rate for university is 65%, in Finland it is 72%, in Hungary it is 56% and in the Netherlands it is 54%. Outside the OECD, Argentina has a higher education entry rate of 59% and the Philippines has 52%.

The OECD says that there is a clear international trend for countries in the industrialised world to have an increasing number of graduates.

This reflects the decreasing number of low-skilled jobs available - and one of the biggest problems for the UK, identified by the OECD, is the relatively large number of young people who drop out of education at the age of 16.

The global survey also shows there is a direct economic benefit for people who go to university - and this is also part of the debate over tuition fees, with the government arguing that students should pay towards a degree which will bring them financial advantages.

In the United Kingdom, a university degree boosts incomes by 74% above a mean earnings level - while failing to get decent qualifications at 16 means the likelihood of an income about a third below the mean earnings level.

The Higher Education Minister, Alan Johnson, said that the report endorsed. the government's policy on tuition fees.

"Today's OECD report makes clear why the principle of graduate contribution is correct.

"Our universities have one of the best success rates amongst our competitors and one of the highest graduate premiums. Our higher education is clearly a success story and so it is fair to ask those graduates that benefit exclusively from such advantages to contribute something extra.

"Most our main competitors have been expanding university entry because they know it is good for their economy and society. If our main competitors are expanding then surely it would be foolish for us to do the opposite and stand out from the OECD crowd."

The Conservative education spokesperson, Damian Green, said the report showed that the government's higher education policy was based on a "flawed analysis of the needs of the British economy".

He said it provided " convincing evidence of the futility of the government's 50% participation target for universities".

"Instead of setting arbitrary admission targets the government should be concentrating on improving secondary education relevant to the individual pupil and the economy.

"Our system of vocational education lags behind the rest of Europe, and despite their stated aims, the Government has yet to plug the skills gap."

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