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Most regions met Dearing's proposals with enthusiasm.

Chris Humphries, director of policy and strategy at the Training and Enterprise National Council, was keen that universities get in bed with local small and medium-sized enterprises. "Small firms are the new creators of graduate employment," he said.

The report was welcomed by The Committee of Vice Chancellors and Principals, particularly by new universities.

Michael Harrison, vice chancellor of Wolverhampton University, where most students come from the West Midlands, said that universities "must become more consumer-led and deliver the courses the community wants".

The Industrial Society did have one problem with the plans: "If there is a shift to students attending local universities would there be consistency of quality?" said Roger Opie, director of education.