A number of leading universities intend to take up the government's challenge to increase their intake of high-achieving students, raising the prospect of expansionist competition under higher education's new market system.

Times Higher Education contacted vice-chancellors in the Russell and 1994 groups of research-intensive universities to ask them how they planned to respond to government proposals to allow unlimited recruitment of students with the best A-level grades.

Of the 12 who responded, six said they planned to expand their recruitment of students with AAB grades or better, with one aiming to boost total undergraduate numbers by as much as 10 per cent via such recruitment in 2012-13.

One vice-chancellor, speaking anonymously, said he would "respond to the emerging market for AAB students by increasing the availability of merit-based scholarships".

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Asked for comments on the changes ushered in by the White Paper, two vice-chancellors were critical of plans to make another 20,000 student places "contestable" by auctioning them off to institutions that charge average fees, after waivers, of below ?7,500.

One expressed concern that "the debate is about cost and not value for money", adding that "low cost does not necessarily equal good value for money".

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Under the government's proposals, universities with students who secured grades of AAB or higher would lose those students from their standard allocation of places, but would then be allowed to recruit as many above the AAB threshold as they wanted, provided they could attract them.

As an estimated 65,000 such places become contestable, some universities will lose AAB students and will be forced to drop their average fees below ?7,500 if they want to claw back their numbers. THE understands that an elite group of just 10 institutions have 40 per cent of all AAB students.

On the AAB plans, most vice-chancellors planning to expand student numbers in 2012-13 said they were considering "modest" rises, but others were more expansionist. One told THE that he was aiming for an increase in the total undergraduate intake of "about 5 per cent"; another planned "at least 6 per cent" more; and a third envisaged a rise of "5 to 10 per cent in the first year as a proportion of total intake".

However, the universities of Oxford and Cambridge said they had no plans to increase undergraduate numbers. An Oxford spokeswoman said: "Our collegiate and tutorial systems put a natural ceiling on the numbers we can admit."

'Social sorting'

Martin Hall, vice-chancellor of the University of Salford, said the combined effect of the AAB plans and the sub-?7,500 auction would be to increase "social sorting". Applicants would increasingly "end up going to universities with students like themselves", he argued.

Professor Hall said the government was allowing universities with more privileged student cohorts to charge ?9,000 because they were perceived to be "high quality", while seeking to force down fees at universities such as Salford with high proportions of disadvantaged students.

"We serve that group. That is our mission, and we try to serve them well," he said. "The assumption that we don't do that through providing quality is completely untested.

"If you are serving students...from non-traditional university backgrounds...you have to provide more resources to help (them). In my university, teaching provision costs more than in a so-called 'top' university, where students come in with two As and a B."

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Professor Hall also argued that the government's description of the White Paper as putting students in the "driving seat" was false.

"It is not student-centred at all," he said. "It is Treasury-focused."

As the number of contestable places is stepped up in future years, students who lack AAB grades will be shepherded into cheaper universities that offer "a different sort of experience", he said.

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With universities already focused on efficiencies, he added, further cost-cutting to bring fees below ?7,500 could only come through job cuts and worsening student-to-staff ratios. "The only way you can cut (fees to) that level is by dramatically reducing staffing," he said.

Asked whether the sector had made these points to the government prior to the White Paper, Professor Hall said: "The government is talking to organisations such as Universities UK. I'm not confident that UUK expresses a representative position of all parties in the sector. It certainly didn't do so last December (when it urged MPs to support the trebling of fees)."

The new binary line

Roger Brown, professor of higher education policy at Liverpool Hope University, said: "Far from improving the experience of most students, the core-plus-margin methodology will create, as it is intended to, a much more sharply differentiated sector with far greater disparities in institutional resourcing and esteem than anything we have hitherto seen, and without any educational justification or rationale.

"In effect, a new binary line is being (drawn), with a small group of elite research institutions sitting on top of an increasingly pressed sector trying to provide an adequate education for the mass of the population without...the resources to do so."

This "new hierarchy" would "reduce social mobility", Professor Brown said.

Malcolm Gillies, vice-chancellor of London Metropolitan University, predicted that many universities that had pitched above ?7,500 would have to "rethink" their fees in the wake of the White Paper.

He said: "If you positioned rather too high and see yourself having these margin places taken away...I would imagine many institutions might look at how to drop the fee."

London Met has pitched its fees deliberately low, with the average figure likely to be ?6,850 in 2012-13 - meaning it could bid for some of the 20,000 student places.

"We see ourselves as having some ability to take advantage of this," Professor Gillies said. But given likely competition from for-profits and further education colleges, he added that "in no regard do I think anyone can be complacent".

He also pointed out that the White Paper appears to allow institutions to bid for extra places if their average fee is below ?7,500 - even if, as at London Met, the charges on some courses are as high as ?9,000.

"It seems to be by institution, not by course," he said.

Sir Steve Smith, president of UUK, said the organisation had made it clear in all its discussions with the government that the AAB plans "could not happen unless (they) opened the prospect of allowing contextual data" to be used in the student admissions process, otherwise the system would contradict the government's stated social-mobility aims.

The White Paper refers to contextual data, such as achievement levels at candidates' schools, as "a valid and appropriate way for institutions to broaden access while maintaining excellence".

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Sir Steve said of the AAB places that a university "could offer some of them contextually".

john.morgan@tsleducation.com.