Students must pay for their privileges

The London School of Economics may tonight agree in principle to start charging fees. And why not, asks David Walker, if British universities are to halt falling standards

Tonight the governors of the London School of Economics have the chance to start weaning the universities off Welfare State junkiedom - and to confront the parents of children likely to enter higher education in the new century, myself among them, with a hard truth. The market rate for excellence is higher than that which we are currently paying.

The LSE's governors are being asked to approve a contingency plan for charging British undergraduates a "top-up" fee, probably of the order of pounds 1,000 a year, and payable, at the earliest, by the class of autumn 1998.

If the LSE acts, even if it only asserts the principle that students have to pay in order to sustain top-flight institutions, at least half- a-dozen others will move in step. This would present whoever gets elected next year with a fait accompli. Things would be messy for a while as graduate recruiters, students, their parents and bankers sorted themselves out. But faced by the universities of Birmingham, Leeds and Manchester, and London's University College, Imperial and King's all intent on charging extra, the government of the day would quickly move to establish an orderly plan. There are several well-crafted student loan schemes around.

The expansion of higher education in recent years has been paid for by the Government on the basis of reducing the amount of public money per student. The system has proved a lot more elastic than anyone might have guessed, but the issue for the top colleges has now become escape from subsidised mediocrity.

If the LSE and its kind are to enter the new century as autonomous, free- standing institutions, they will have to charge fees (and build an apparatus of scholarships and bursaries to go with them).

This is not just about money. By saying yes to fees, the LSE would restate the importance of academic autonomy - from financial freedom comes the freedom to think. The school's founders, Sidney and Beatrice Webb, may in later life have been enamoured of the Soviet Union but they never intended the LSE to be an organ of the British State.

Nor was it intended to become a kind of up-market finishing school for Americans and other foreigners. Nothing wrong with them, of course, paying full fees at pounds 8,500 a throw; and yet the LSE cannot admit the British students it wants because, it says, they don't bring in enough to keep the institution running.

Not even the Government pretends that higher education's sums add up. To sustain quality - repairing buildings, stocking libraries and giving academics the time to think - simply costs too much. More money for higher education, let alone its expansion, is not a priority compared with nursery programmes and qualitative improvements in secondary schools. Nor should it be.

The LSE cannot be saved by further squeezing the likes of the Universities of Luton and Sunderland, Bath College of Higher Education and the former polytechnics. These may have been ensnared in a high-cost regime, and their destinies may lie in their evolution as explicitly lower-cost local or regional colleges; but there is no denying that the higher education system as a whole needs more money if its strengths are to be preserved and extra numbers of students accommodated.

Two weeks ago, the Association of University Teachers took to the streets to agitate for more pay. It was a paltry action, which went largely unnoticed. Dons' salvation from penury lies in their own hands. To pay professors properly requires universities to charge. Thanks to them, graduates earn consistently more than non-graduates, and could afford to repay fees after graduation.

A new balance has to be struck between personal and public contributions to the cost of gaining a higher education credential. But what about the candle-lit vigil that the National Union of Students has promised outside tonight's meeting, and its fears about LSE's proposal skewing access to the offspring of the better off? Writing on this page six months ago, one of the LSE's governors, the ostensibly New Labour MP Margaret Hodge, came over all Old Labour to bemoan what she called "elitism". This is a red herring: in full-cost-fees America, access is less socially- biased than in the United Kingdom.

The official mantra is: let's wait for Sir Ron Dearing, the businessman who is chairing an official committee on the future of higher education, due to report in the summer. But the day after Sir Ron's committee concludes, the financial facts of academic life will be exactly as they are now. The LSE ought to lead by example. There is only one way forward for an institution keen to protect its reputation, keen to attract world-class scholars (and paying salaries at world-class levels). The way forward is fees.