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Last Updated: Monday, 12 February 2007, 17:44 GMT
Universities back US-style funds
It is hoped more former students will donate money
Plans to boost the funds of England's universities with an American-style scheme have been welcomed by academics and students.

Prime Minister Tony Blair is to announce that the government will give 1 for every 2 universities raise from ex-students and philanthropists.

The government money will be capped at 2 million for each institution.

Students and academics have given a cautious welcome to the proposals, designed to encourage more donations.

Downing Street would not give details ahead of the Prime Minister's speech, which is expected on Thursday.

But a spokeswoman said the aim was "to create a lasting culture of giving, while boosting funding from former students".

Leading US universities raise considerable funds. Harvard has a total endowment of almost 15bn and last year received 300 million in donations from 89,000 individuals.

Funds are often used to help students from disadvantaged backgrounds pay fees.

In the UK, top universities attract funds but last year only 13 out of 120 raised more than 5 million.

Under the scheme, England's top 75 universities would be eligible for the funding matched to donations while the rest would be given money to help set up fundraising centres.

Mr Blair will also pledge the new scheme will not replace existing funding methods for higher education.

He will be continuing work begun last year, when the government announced it would give 7.5 million in matched funding over three years to help 27 universities in England to set up development offices to increase income from private donations.

Diana Warwick, Chief Executive of Universities UK said: "This is a new and creative initiative which will provide a terrific boost to university finances.

"The endowment scheme will be a very welcome addition to the pubic funding universities rely on."

The National Union of Students tentatively welcomed the plans, but warned that taking on American-style university funding and fees structures wholesale would be a mistake.

NUS vice-president Wes Streeting said: "NUS recognises that at a time when increased funding is desperately needed, government commitment to match voluntary donations for a large number of universities and to assist others in building fundraising capacity is a positive step.

"However NUS remain committed to lobbying for greater, direct public expenditure to ensure quality as well as to prevent the cap on fees being lifted, and we sincerely hope that American-style fees are not announced to match American style additional fundraising mechanisms."

Academics in the University and College Union (UCU) welcomed the promise of extra funds but said what was most needed was an increase in the level of the country's Gross Domestic Product spent on higher education.

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