Blair boosts universities' funds

The funding scheme is for three years

Tony Blair has confirmed that the government is to offer universities in England cash incentives to raise money through private donations.

The government has pledged to give £1 for every £2 universities raise from ex-students and philanthropists.

It has earmarked £200m to be spent over three years for the matched-funding scheme.

The Prime Minister said it was vital that universities boosted donations to compete and improve participation.

And he hit back at critics who had predicted that fewer people would opt to go to university following the introduction of tuition fees and then top-up fees.

"We recognise that universities need the funding to compete and to improve participation," he said.

The figures yesterday showed that student applications are not only rising again, but they are at their highest ever level Tony Blair

"Variable tuition fees from 2006 - and fees in 1998 - gave universities substantially more money, and we have greatly improved investment in world-class research.

"Our critics said tuition fees would harm participation. But the figures yesterday showed that student applications are not only rising again, but they are at their highest ever level.

"However, it is important that our universities have every opportunity to raise the resources they need."

There has been a warm welcome for the matched-funding scheme from university chiefs, who are represented by Universities UK.

But student leaders say they fear a growing divide between top-performing universities and others.

Gemma Tumelty, president of the National Union of Students, 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 remains committed to lobbying for greater, direct public expenditure.

"Given the huge divide between Harvard-style excellence and countless other less elite universities in the USA, UK vice chancellors' and politicians' apparent determination to emulate the American system, if they intend to emulate it wholesale, is deeply worrying."

Harvard

Leading US universities raise considerable funds. Harvard has a total endowment of almost £15bn and last year received £300m 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 £5m.

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.

Last year, the government announced it would give £7.5m in matched funding over three years to help 27 universities in England to set up development offices to increase income from private donations.