Tony Blair: Keeping universities up to the mark

Tony Blair wants ex-students to fund universitiesTony Blair: Keeping universities up to the mark

Today, I will launch the first national scheme to encourage a "culture of giving" to universities from business, former students and philanthropists. It is a vital part of our changes to higher education to ensure universities remain world-class and competitive.

And United Kingdom universities are still a huge strength for Britain. Out of the top 50 universities worldwide in the independent Shanghai University rankings, Britain alone of all European countries has five. No other European Union country has more than one.

Our new endowment plan will give them a third major source of funding - alongside the £10 billion a year provided by the taxpayer and the £1.4 billion that fees will raise annually.

This comes as new figures show a record number of university applications, despite our decision to raise tuition fees in 2006. Indeed, since 1997, despite fees, there has been a 23 per cent increase in undergraduate enrolment, and a higher proportion of poorer students go to university.

Britain spends about the same public money on higher education as does America. But private giving there is much greater - and not just in elite institutions such as Harvard and Yale. The average American university has an endowment 15 times that of a comparable United Kingdom university. More than 200 American universities currently have endowments worth more than £100 million. Only seven in the United Kingdom do.

The reason for this difference is not just cultural. Until 20 years ago, most public universities in America had very small private endowments. That has changed dramatically, often as a result of schemes where the state provides funding to match what is raised privately.

While some universities have increased their fundraising recently, research by Professor Eric Thomas of Bristol University and by the Sutton Trust has shown that a similar initiative here could encourage far greater giving to universities.

So we intend to provide £200 million over three years to stimulate universities to raise at least £400 million more for new facilities, new staffing, new bursaries for students or new research capacity. Our scheme will benefit most universities in England, particularly those with no tradition of fundraising.

Our universities could never have continued to survive solely relying on public funding when 42 per cent of the under-thirties go to university, rather than the five per cent who did so in the 1960s, and where a greater proportion will do so in the future.

Although this expansion is sometimes presented as a problem, the truth is that we need more, better-educated young people with higher-level skills if our economy is to meet the global challenge from fast-growing economies such as India and China, which are already investing substantially in higher education.

That was why we took the politically difficult decisions to introduce tuition fees in 1998, initially at £1,000 a year, and to move to variable fees last year with a £3,000 cap adjusted for inflation. More than one vice-chancellor has told me that tuition fees have saved their university. Yesterday's numbers, which show a seven per cent increase on last year's applications and a rise even on the unusually large intake of 2005, suggest our critics were mistaken.

Yet, like many difficult political battles, once won, the policy quickly becomes the conventional wisdom. Many other European countries are now planning fees. The Conservative Party opposed us until it saw the policy demonstrably working and then belatedly conceded we were right.

And this extra funding has allowed universities to adapt to changing demands. Time was when it would hardly matter that a university was isolated from its local business community. Today, links between higher education and business are critical, having improved immeasurably over the last decade.

We may be in a stronger position than 10 years ago, but we cannot afford to rest on our laurels. Global markets have increased the pace of change. And universities will face big challenges over the next 10 years.

As a nation, we need more highly skilled workers. Lord Leitch's recent skills report estimated that we would need more than 40 per cent of the workforce - not just of young people - to have higher-level skills by 2020. That means more people going to university, many studying part-time and opting for vocational foundation degrees.

We must attract more overseas students. United Kingdom universities are now second only to American ones as their destination of choice - with 47 per cent more foreign students since 1997. Their presence benefits us with their talent and enhances our international influence. But we must maintain that strength.

Our research base is in very good health, with 70 per cent more funding since 1997. We are now exploiting our ingenuity and turning scientific innovation into entrepreneurial business practice better than before.

But we need even more research that promotes innovation, with universities working more closely with business to develop more research parks and spin-out companies.

These global challenges will only intensify in the years ahead. Our universities must be empowered to excel as they meet those challenges. Today's initiative - combined with the successful introduction of tuition fees - will help to ensure that they are.

The Daily Telegraph, 16/02/07

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