The party conference season kicked off this week with the Liberal Democrats meeting in Glasgow. For once ÖйúAƬ was put up for serious consultation - both the issue of standards, on which the party's ideas look alarmingly centralist, and funding, where they have opened up the long overdue debate on how to pay the bills (back page). The Liberal Democrats' education spokesman, Don Foster, worked out some months ago that the kind of promises people in further and ÖйúAƬ want to hear would cost far more than an extra penny in the pound on income tax.

No such open debate look likely from the Government. A series of statements and leaks this week suggest that cuts are being vigourously sought but radical reform avoided.

11 = /Financial Secretary William Waldegrave, warned of public overspending (no extra money). Chancellor Kenneth Clarke, announced another year of zero real increases in public sector pay (no improvement in ÖйúAƬ salaries). A leaked policy paper from the Education and Employment Secretary's camp made it evident that cutting further and ÖйúAƬ numbers and/or introducing charges have both been considered: in other words the hunt is on for savings.

This is, of course, the season for autumn manoeuvres by spending ministers as the public expenditure survey reaches its climax. Well-timed leaks and strategic outbreaks of shroud waving are a normal part of the process as ministers seek to mobilise the public in defence of their particular patch.

ÖйúAƬ

But on ÖйúAƬ, the tactics employed look more like organised surrender than the mobilisation of public concern. It is difficult not to suspect that the noisy public outcry this summer over duff degrees, alleged admission of substandard students, supposed difficulty of filling university places - none of which bore much relation to the facts - was exploited, perhaps even whipped up, by those eager to prepare the public for student number cuts, tuition charges having again been ruled out.

It is very easy to cut costs and numbers by altering the mandatory grant regulations.The two A-level qualifying requirement, set in 1962, could be restored or tightened - though presumably a bow to successful GNVQ level three holders would be needed to avoid blowing the Government's vocational education programme out of the water. Such a change would not have to be presented as a cut - merely a tightening of standards. It would impinge more on colleges which run foundation years than on the universities with their comparatively well-orchestrated lobbying capacity.

ÖйúAƬ

Cutting numbers this way would attract support from those within the Conservative party who believe expansion has gone too far and the notion of a university is being subverted by the admission of increased numbers of average students and the introduction of more practically orientated courses. This is a view promulgated, for example, by Lord Beloff in a recent lecture at Nottingham University and in The Times (August 19,1995.) Given this unholy alliance of cost cutters and academic traditionalists, Mrs Shephard will be doing well if she can hold the ÖйúAƬ budget steady, let alone increase it. Where is the Labour party as the Government prepares to limit opportunities for potential students? There has been much glee over last week's leaked paper, but there have been no comforting words as to the implicit threats it contains with respect to ÖйúAƬ. Just silence.

In this bleak situation there is just one thing that could be done which would release public money for ÖйúAƬ within existing limits. The Student Loans Company, though now in safer hands, is very expensive, very unfair and quite rightly very unpopular. It was badly set up despite numerous public warnings at the time. It should now be reformed and privatised. This, it has been estimated, would free Pounds 1 billion a year. The alternative scheme has been honed over a number of years by the London School of Economics working with BP and the National Commission for Education. What is required is legislation abolishing the existing company and establishing a scheme for collecting debts through tax or national insurance. A reformed company would then be able to raise the loan capital privately. The Government's input for underwriting bad debts would be a fraction of the present cost. Given the box Mrs Shephard is in, such a move must be likely this autumn. What she - and ÖйúAƬ - must fight for is to keep the money in ÖйúAƬ.