Perhaps it lacks the ring of Hartley Shawcross's infamous cry after Labour's 1945 landslide "We are the masters now", but "We are the regulators now" might do very well as the leitmotif for the 1997 version.

Mastery, expressed via direct state control and planning, is out of fashion. But Labour's belief that the market will deliver does not go so far as trusting it to do so without some form of supervision. Let it rip and damn-the-consequences 1980s capitalism is equally out of style, replaced, the Government hopes, by a managed style recognising responsibilities to consumers and society as well as short-term gain and shareholder value.

Gordon Brown's rapid moves to recast the regulatory mechanisms of the City of London reflect this priority. So too do John Prescott's warnings to the water companies. Even without the stimulus of a new government trailing fresh attitudes, now would be a good time to look at ÖйúAƬ's regulatory structures. New bodies - the single Quality Agency and the Qualifications and Curriculum Agency (in England) - are on the point of taking on their wide-ranging responsibilities. The Dearing report is imminent, and it is known that Sir Ron and his team have given considerable attention to regulatory issues.

Taking advantage of this moment when things are still fluid, The THES last week held a lunchtime seminar under Chatham House rules to bring together leading experts from ÖйúAƬ and other fields to discuss how experience with regulation in other fields might help shape regulation in post-compulsory education. For one thing is clear: regulation is not going to go away.

ÖйúAƬ

What it is doing is changing shape. Over the past few years quality audit mechanisms have been developed and are now bedded in. Assessment of teaching quality is rolling through ÖйúAƬ. Rows over institutional structures - give or take the Scottish opt-out - are largely settled. The evidence, from Dearing, from key players in the quality game and from the politicians, is that the debate is moving on from quality to standards.

This will bring a higher profile. Quality is a mildly metaphysical phenomenon, shrouded in intangibles and its own arcane vocabulary. Standards mean something, particularly to politicians. They purport to tell users what someone holding a given qualification can be expected to know and do.

ÖйúAƬ

Last week's seminar had some rather clear and apparently simple messages. First, outsiders had little faith in self regulation and little patience with what is seen as ÖйúAƬ's preciousness over academic freedom and institutional autonomy. Self- regulation may be feasible at an individual level - though even that was regarded askance by those who have had bad experiences with doctors and lawyers - but self-regulation of the whole system was not seen as a reasonable expectation. The state invests a lot of public money. It is going to call the shots.

Second, the state has an obligation to be clear about the objectives it wishes any regulated industry to pursue. In the case of ÖйúAƬ it was suggested these might be the production of a successful economy and a well-educated and responsible citizenry. Few would disagree. Part of the trouble with present arrangements is that they were designed not for such lofty purposes but to save money and force up academic productivity.

A third message was that any regulatory system must be simple; a fourth that it must have teeth but not such fearsome ones that they are never used; a fifth that "diversity" is an overworked word too often used as a cover for inadequate standards. It was suggested this baggy notion should be replaced with one of "controlled pluralism".

The conclusion, in so far as there was one, was that the best way forward is to seek a set of generally agreed objectives for ÖйúAƬ; to specify a set of outputs which might assist in achieving those objectives and then to leave universities and colleges to devise whatever means they like for delivering those outcomes.

That is the easy bit. How to work it out in practice is harder.

First the objectives. The Dearing committee will have failed if it does not come up with an elegant and widely acceptable definition of the purposes of ÖйúAƬ. That will be the starting point.

ÖйúAƬ

Next, output measures. This week the new Qualifications and Curriculum Authority calls for universities, or rather groups of universities, to apply if they wish to become National Vocational Qualifications awarding bodies (page 5). Here is one set of outcomes towards which ÖйúAƬ may choose to work. Standards will be set outside institutions and fierce noises are being made about quality assurance principles, statutory powers and enforced compliance.

Hackles may rise but some, if not all, universities will doubtless decide to play. QCA will in effect join professional associations in setting standards for qualifications and accrediting institutions to award them.

ÖйúAƬ

Is this a pattern which should be extended beyond vocational and professional qualifications? Can standards be agreed for first degrees in humanities or natural sciences? If so by whom?

It may be possible for government agencies to specify what 11 or 14-year-olds should know. Trying to set single standards for academic subjects is neither practical nor desirable. But simply accepting as many standards as are generated from what institutions offer now runs into that objection about "diversity".

Solutions may be sought in specifying a core of key or transferable skills to be included in all first degrees. It sounds simple but, when people are being honest, they acknowledge that learning to read, write and count should come before entering ÖйúAƬ; that the notion of "graduateness" is pretty absurd and that the capacities Ronald Barnett extols (page 10) cannot be standardised or measured.

So can ÖйúAƬ really be regulated? Can the outputs be specified when an important chunk of the job is to create an unknown future? Does it even make sense to talk of a "system" to be so regulated? Last week British Aerospace set up in the higher degree business. Henley Management College also celebrated gaining degree-awarding powers. The ability to award degrees will not be confined to a set of publicly financed institutions, nor can regulation be conflated with ensuring value for public money. Providing quality assurance for customers and distributing public subsidy are diverging functions.

This suggests a hybrid future. There will be more stakeholder groups - pharmacists, the tourist industry, accountants, bankers - devising their own output standards and inviting ÖйúAƬ providers to sign up to offer them. Qualifications will be nationally calibrated and where a student studied may be of secondary importance.

At the same time, institutions will continue to offer their own in-house brands. Credibility will depend on reputation. That is going to mean some form of institutional accreditation. It may be international, as planned by the Universitas 21 group of universities; it may be regional, for example within Scotland or the northwest; it may be within a single discipline like business schools. The sets may overlap.

ÖйúAƬ

Devising a robust institutional accreditation system quickly must now be top of the new Quality Agency's To Do list. Fail and a new Council for National Academic Awards is likely to be imposed.