A single quality assurance agency, jointly owned by institutions and external stakeholders, principally the Higher Education Funding Council for England, has been proposed by the chairman of the Committee of Vice Chancellors and Principals.

The proposals are contained in a letter from Kenneth Edwards to Graeme Davies, chief executive of the Higher Education Funding Council for England.

In the letter, which was sent before the council or the main committee of the CVCP could endorse it, Dr Edwards proposes an agency known at this stage as the Quality Assurance Organisation. It would negotiate with each institution the most appropriate structure for evaluating teaching quality by subject.

Vice chancellors have cautiously welcomed the idea. James Wright, vice chancellor of Newcastle University, said: "This model would fit in with our departmental review model. It would enable us to build on our quality assurance mechanisms."

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Dr Edwards proposes that internal review bodies contain external members accredited by the QAO, to satisfy the Government's requirements for accountability. He also says that the funding council should ensure "appropriate publication" of the outcome of teaching quality assessments and set a framework to ensure national comparability.

David Watson, director of Brighton University and chairman of the quality assessment committee of the funding council, said: "What Ken Edwards has done is actually respond to some of the concerns of the funding council as to how to meet the requirements of the secretary of state."

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John Stoddart, vice chancellor of Sheffield Hallam University and chairman of the Higher Education Quality Council, which has been conducting audits of institutions as an alternative to the subject-based assessment model developed by the funding council, said: "Dr Edwards's letter deals mainly with assessment and public accountability. It does not talk about how a single agency would tackle quality enhancement, standards and the granting of degree awarding powers."

Clive Booth, vice chancellor of Oxford Brookes University, described the proposals as a "very constructive way forward," but added that they might go "too far in the direction of assessment".