In each chapter to this point, we have analysed shortcomings in the current university funding arrangements, but have stopped just at the point of making policy recommendations. This is because we have wanted to bring everything together in constructing holistic policies.

The objectives of changes of policy initiated by the Browne Report were:

• 1. to improve participation and in particular access from less advantaged groups;

• 2. to improve quality and student choice in a diverse system by creating a market leading to competition.

We believe that creating a market was neither necessary nor desirable in achieving the stated aims, which we otherwise completely support. However, we have taken the regime change on its own terms and will continue to do so in this chapter. It is for the government of the day to determine the funding regime, and the current government clearly supports the market elements arising from the Browne review.

Our problem is that the manner in which the Browne Report was implemented and the way in which subsequent policy has developed has led to a failure to achieve the stated objectives. The system constructed is simply inefficient in its inability to encourage competition and in how it rewards failure. Further, it has encouraged micromanagement of and within universities to the detriment of the traditional focus on the academic esprit that has been essential to the high standing traditionally enjoyed by our Higher Education system.

In the following, we present clear and concrete policies that follow recommendations made (for example) by Browne. Further, everything is not only ‘costed’ but we impose the rigorous rule that additional support from the taxpayer cannot be provided at this time. The sector has done extremely well in funding over the period of national austerity, and the priorities lie elsewhere.

The hierarchy of universities

The economics model of marriage is based upon the idea of ‘assortative matching’, where individuals of similar standing in characteristics form relationships. This model can be applied more widely and is relevant to universities. Suppose there are good and weak students. If learning is ‘complementary’, putting the good students together and the weak students together produces more learning than if there are two mixed groups. In this world, it is efficient to match together the good students. But, even if it is not efficient, this may be the outcome on the basis of individual interest.