Browne's imaginative proposals

Today's report from Lord Browne on university funding offers an imaginative set of proposals to a difficult problem at an impossible time. By setting a partial cap at £6,000, with a tapered cap linked to student affordability above that, he has gone a long way to satisfy the universities, including those in the Russell Group who want to charge more without having the taxpayer subsidising the higher fees. Including part-timers in the loans system is a big step forward that reflects contemporary student realities. It also makes sense to increase the starting point at which students pay loans back to £21,000, which means a £16 a week repayment for those earning £30k a year, and to add interest to the loan: that will reduce the taxpayer's subsidy of student living expenses. There is also a larger grant for poorer students, though I wonder whether it would have made more sense to focus those resources on much larger targeted bursaries linked to getting poorer able students onto economically valuable courses.

For the graduate, the package would mean higher debt, but repayments would be lower initially and his proposals reflect the good sense of the graduate repayment system introduced in 1998 (contrary to popular mythology, the level of student loans rose in 1998 by the same amount as the new £1000 tuition fees although they were given for living expenses, so 'upfront fees' were never actually required). Lower earners would do better from this new system.

We must await the government's detailed response. But they would be wise not to tamper too much with what seems like an elegant and fair solution. More important than tinkering with the repayment formula is ensuring that some of Browne's other proposals get implemented. The first is to increase undergraduate places. The second is to ensure that careers advice is radically improved, particularly at a time when cuts could threaten its extinction. Students must have a better teaching and tutorial experience while at university. And universities should use the availability of loans to sell the part-time route more effectively to those in work who could benefit from higher education.

For Labour, John Denham has issued a sensibly cautious response, drawing attention to the likely cuts in government support for teaching: it is important that ministers are clear about the extent to which graduates and taxpayers pay for universities now and in the future. The Browne proposals should not simply be a substitute for HEFCE grants - the must support expansion, particularly in science, technology, engineering and maths (STEM) courses. And there may be more to do in targeting support to able disadvantaged students. But how Labour responds to the final package will be a test of its seriousness. Browne has shown why a graduate tax would not work (indeed Labour found the same in government, as Tony Blair reminds us in A Journey) and the report explains how this proposal is fairer to low earning graduates. Provided that the final package is also fair, Labour should support it in a Commons vote. Doing so would do far more for its political credibility than propping up a Lib Dem rebellion.