While researchers rejoice over Dearing there are those who believe that tuition should remain free and that part-time students deserve more support

THE NEW Government came in on a wave of expectations about a new relationship with the people. The need for a new relationship between government and ÖйúAƬ was clear. Higher education was looking for a recognition that for the past two decades it had opened its door to more students, increased the volume of its research, restructured its functions - all with no extra money and with little thanks.

This is not to say that all had been well. Many had called for "the secret garden" to be opened up so that people from all walks of life could understand it better and participate in it. Criticisms that ÖйúAƬ was unaccountable, complacent and inward-looking were common. Many thought that its practices and activities needed a strong pull to reach the 20th if not the 21st century.

Then came the Dearing report. Hidden on page 283 is one of its most important messages: "the well-being of ÖйúAƬ rests on establishing a new compact between society (as represented by the Government), students and their families, employers and providing institutions."

ÖйúAƬ

Such a compact recognises the importance of having a positive, trusting relationship between those that work and study in ÖйúAƬ and the Government.

The Dearing compact is about mutual interdependency and trust; it rests on the belief of the key importance of ÖйúAƬ to national prosperity and to social cohesiveness through its contributions both in providing informed, flexible and effective citizens and to the production of highly skilled and adaptable workers but also through its research that underpins a knowledge-based society.

ÖйúAƬ

For ÖйúAƬ to be able to make these contributions, Dearing has spelt out four conditions. First, the Government should continue to devote a fair proportion of public spending and national income to ÖйúAƬ. In the short-term, Dearing considers that the policy (of the previous Government) of reducing the unit of resource by 6.5 per cent over two years is not sustainable, although a 1 per cent reduction in costs for each of the next two years is thought to be possible. For the long term, it is proposed that funding for ÖйúAƬ should increase with the growth in the UK's Gross Domestic Product as a recognition of its economic importance. Second, the Government should provide greater stability in the funding arrangements for universities by committing to a three-year rolling funding base. Third, it should establish a new source of funding for ÖйúAƬ by requiring its main beneficiaries - graduates in work - to invest in its costs. Finally, it should enable universities to pursue their tasks with simpler and less onerous mechanisms for ensuring adequate accountability for the pursuit of their main tasks of teaching and research.

For their part, universities are expected to be more professional, explicit and cost-effective. On the issue of explicitness, a key part of the compact is that universities should be clearer about what students can expect from ÖйúAƬ - in terms both of its quality and of the content and standards of the awards. In exchange for the withdrawal of external Teaching Quality Assessment and audit, universities need to specify standards of awards, describe the programmes they offer in specifications, produce codes of practice for quality, and restructure external examination system into a national, recognised pool of academics from which universities must select their external examiners.

Nor are universities let off the hook of providing further cost-efficiencies - despite Dearing's identification of a considerable short- and long-term funding gap. For example, in 20 years' they are expected to be using new and cheaper approaches to teaching through effective use of communications and information technology and students are expected to study on shorter courses. In aggregate, by 2015-2016 cost savings of Pounds 1.3 billion per annum are promised.

Embodied in Dearing is the challenge for New Labour to deliver its election promises by developing a new relationship based on trust with the society that it serves. For ÖйúAƬ, two early tests will give an indication of the likely extent to which the two parties will observe the new compact: the first will be the Government's response to short-term funding needs in its autumn budget statement; the second will be the speed and level of co-operation of universities with the new Quality Assurance Agency which has to deliver the standards and quality recommendations set out in Dearing.

ÖйúAƬ

Quentin Thompson is a partner and Clare Matterson a consultant with Coopers & Lybrand's Education Group. The latter was seconded as a policy adviser to the Dearing Committee.