University education in the United Kingdom is at a crossroads. The Dearing review will give an opportunity to make decisions with ramifications into the next century. One of the ironies of the Thatcherite era was that through rightwing policies the Government opened the door for more equitable participation in higher education. Just as the population at large was encouraged to purchase shares and buy their own homes, those who never considered higher education found that it became a possibility.

But a higher participation rate led to academic inflation. If everyone has a degree, what is it worth? In 1994/95 the average classification was 2.i, not 2.ii as in previous years. What then becomes the value of the 2.ii classification or the 3rd or the pass degree? The experience of the United States should have given us a clue but if it did we either ignored it or we started to fall into its known traps. Some subjects began to demand a two-tier system in qualifications as with the BSc Engineering and the BEng. The latter was professionally accredited, the former was not. Similarly demands began to be made for a four-year degree to satisfy particular professions. Thus we entered the debate over turning pharmacy into a four-year programme. If students study for four years rather than three, should they not gain a masters rather than a bachelors? Would such a masters be regarded generally as an undergraduate or a postgraduate degree? What of all those pharmacists, already qualified, holding a bachelors degree? Has their qualification been undermined? What of all those students with a postgraduate masters degree in any subject? What effect does the decision have on them?

Academic inflation has thus taken hold and we are now living with its effects. The proliferation of courses and qualifications has prompted an uncertainty in the market place. Former graduates, mainly from the old universities, begin to see the currency of their particular qualification in danger of erosion. Employers become sceptical or confused by the range of qualifications and subjects taken at a plethora of universities, old and new.

The answer from the powerful in the sector is to construct a hierarchy of universities. Thus the notion of elite universities has been promoted and in some areas accepted. Adverts for jobs can now be seen asking for degrees from a "good" university. Yet conceptually, little has been done to define "good". Notions of "fitness for purpose" have become fashionable but the actual hierarchy is based on traditional models and popular conceptions. There is a danger that it is founded therefore on a culture which is happily class conscious in its acceptance of what is regarded to be educational quality. The "fitness for purpose" debate becomes peripheral. Simultaneously the economic knot has tightened and the universities have found that, despite best endeavours, they cannot become more efficient. Redundancies have begun to take place and demands are made by vice chancellors for extra tuition fees paid by the students (or their parents) to attend university. It is the reintroduction of a fiscal elitism in higher education as we retreat to a culture embedded in tradition rather than pragmatically focused on what the country needs.

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Alternative models exist in Australia, Japan and elsewhere and variants could be introduced here. An intellectual evaluation of what is needed by society from a higher education system is required. Enter Sir Ron Dearing and his review. Let us hope he will begin with fundamental questions. Why do we have universities? What is their role and purpose for the new millennium? Do we have them because we have always had them? Or do we need to change our conception, seeing them in partnership with schools, colleges, industry and commerce in developing a continuous curriculum? What are the core and transferable skills required in the new workforce? Can we develop a higher education system dependent not on age barriers and traditional exam patterns, but on attainment of competencies acquired whatever the age?

Whichever party wins the next election, it needs to curb academic inflation and creeping elitism by asking fundamental questions about what universities are for. It also needs to address the funding issue. We do not have to accept short-term solutions from some in the Committee of Vice Chancellors and Principals. We need to find alternative funding arrangements based on value for money, value that is for the society in which we live and the economy through which we enjoy our prosperity.

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Michael Scott Pro vice chancellor of De Montfort University.