Universities are delivering "real value for money" by attracting more students from state schools while reducing dropout rates, vice-chancellors have said.

Data published last week by the Higher Education Statistics Agency show that among students starting full-time first degrees in the UK in 2007-08, the proportion who had dropped out a year later was 8.6 per cent, down from 9 per cent in 2006-07.

Meanwhile, the proportion of young full-time undergraduate entrants from state schools rose to 89 per cent in 2008-09, up from 88.5 per cent the previous year.

Steve Smith, president of Universities UK, said Hesa targets and benchmarks - known as "performance indicators" - were "only partial indicators of change" and did not reflect universities' varying missions and circumstances, but he welcomed the positive trends.

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"The UK still has one of the most successful completion rates for higher education in the world, despite a significant funding gap compared with other countries in the Organisation for Economic Co-operation and Development," he said.

"This emphasises our place as one of the country's most valuable sectors, providing an outstanding return on public investment and real value for money."

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However, the University and College Union criticised the fact that data on changes to the proportion of students from lower socio-economic groups were not available due to a change in the question asked of applicants on the Universities and Colleges Admissions Service form.

Sally Hunt, UCU general secretary, said: "It is quite incredible that the question on students' backgrounds has been changed and that comparisons with previous years are impossible. There is a review of student funding happening right now and we need that information."

Ucas subsequently reverted to the old format, meaning that data should be comparable with earlier figures when they are released this time next year.

But Ms Hunt said this was "little comfort when we are being denied the full picture".

The Hesa figures show that Harper Adams University College is once again the most inclusive institution, with 58.4 per cent of its students coming from lower socio-economic groups. It is followed by London Metropolitan University (57.5 per cent) and the University of Greenwich (56.2 per cent).

The least inclusive institution is the Courtauld Institute of Art (7.9 per cent), followed by the University of Oxford (11.5 per cent) and the University of Cambridge (12.6 per cent).

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Oxford and Cambridge also reported the lowest dropout rates among full-time first-degree entrants, with 1.1 per cent and 1.2 per cent respectively quitting after one year.

The highest dropout rate was once again at the UHI Millennium Institute (25.4 per cent). It was followed by the University of the West of Scotland (21.4 per cent) and the University of Bolton (19.8 per cent).

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rebecca.attwood@tsleducation.com

RESEARCH DIVIDENDS: RECESSION-BUSTING BOOSTS

Universities have continued to increase their income from businesses and research partners despite the recession, new figures show.

Data collected through the Business and Community Interaction Survey, now published by the Higher Education Statistics Agency, reveal that universities boosted their income from contract research by 12 per cent last year.

Despite fears of a fall in income, universities pocketed ?938 million from contract research in 2008-09, up from ?835 million the previous year. Income from collaborative research grew to ?732 million from ?697 million over the same period, up 5 per cent.

Universities raised ?56 million from their intellectual property rights in 2008-09, and spin-off companies partly owned by universities generated ?548 million.

However, the year-on-year growth in income from business has coincided with annual increases in public investment through the Higher Education Innovation Fund, which is under threat after cuts in public funding.

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hannah.fearn@tsleducation.com.