The government hasn't noticed, but access is expanding, and the case for fees is unsound, argues Tim Curtin

As the period for consultation on the government's higher education white paper ends, two issues central to the strategy remain open to serious challenge.

Have British universities really failed to attract enough students from "underprivileged" social groups? And is it justifiable to load yet more of the cost of a university education on to graduates in the shape of higher fees when higher earners already repay more than the cost of their studies over a working life?

The bottom 63 per cent of income taxpayers (mostly non-graduates) paid ?21 billion in 2002-03, while the top 37 per cent (mostly graduates) paid ?91 billion. The difference of ?70 billion indicates the extra income tax contribution of graduates relative to non-graduates, and is 12 times larger than the ?6 billion to be spent on higher education in 2003-04. This suggests that graduates already make a much larger contribution to all public spending than was ever spent on their degrees.

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Under-representation of lower social class groups is assumed in both the precursor report by David Greenaway and Michelle Haynes to the Russell Group (2000) and the white paper itself. But both fail to compare the social structure of the student body with that of the population at large.

For at least the past 30 years, the proportion of the lower-skilled classes in the population has been falling. In reality, the lower social classes in the student body represent a larger proportion of their source population than ever before.

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Professor Greenaway's own figures show declining shares for the top "professional" category by as much as 25 per cent, and "intermediate" by 10 per cent. The shares of all the others - especially the skilled non-manual category - increased. The white paper's claim that "young people from professional backgrounds are over five times more likely to enter higher education than those from unskilled backgrounds" is without foundation.

While 15 per cent of applicants in 2000 were from professional backgrounds, and only about 3 per cent from unskilled, the proportion of professionals in the whole population was also five times larger than the proportion of the unskilled in the whole population. Students from the lowest three socioeconomic groups make up a rising proportion of the student population, while their home households are declining as a share of the total population. It is clear therefore that students from the lowest skill households are a rapidly rising proportion of their source population - contrary to the impression conveyed by the white paper.

The white paper's evidence fails to support the claim that "the proportion of the student body coming from lower-income families has not substantially increased" since the upper group's share of the student body increased by 70 per cent only while the lower group's share tripled. The rhetoric that "this state of affairs cannot be tolerated in a civilised society - it wastes our national talent; and it is inherently socially unjust" is a stirring call to arms but completely misplaced.

A rise in the absolute numbers of students from all lower skilled households since 1980 means that their own numbers much more than doubled.

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This occurred during a period when the lower income group's share of the total population, which increased by 5 per cent only between 1980 and 2000, was falling. This lower overall share of the student body is consistent with both their very rapidly rising proportion of their source households and the falling share of those households in the total population.

Students from upper-income households increased tenfold from 1960 to 2000, while lower-income students increased 28 times. With the lower-income household group progressively reducing at this rate, the need for the government's proposed access agreement and regulator is, to say the least, open to question.

So what about the case for fees? Even if the total average costs of tuition are about ?12,300, the extra taxation from graduates' higher lifetime incomes, compared with non-graduates with the next highest level of qualification, is likely to be at least ?160,000. This ignores extra national insurance contributions of ?6,000 per graduate, the extra VAT from graduates' extra spending and the extra taxation on savings (more than 50 per cent of graduates' lifetime extra savings of about ?80,000 if these are invested in equities).

The probability is that the total cost of a university degree is quite likely to reduce the number of applicants from middle-income households by as much as, if not more than, the potential success of the Office for Fair Access in securing new applicants from the vanishing lower-skilled households.

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Tim Curtin is visiting fellow at the Asia Pacific School of Economics and Government, Australian National University, Canberra.