Raising the prospect of top-up fees: Sir Howard Newby

The President of Universities UK, Professor Sir Howard Newby, said a number of universities had been examining the possibility of charging top-up fees, which would be in addition to the �1,050 paid by better-off students in tuition fees.

"Were public support for universities to decline again significantly then I have to say that this option becomes more and more attractive to more and more universities," he told journalists.

The report suggests four ways the money might be raised.

Top-up fees is one option but universities are currently banned from levying them.

Funding: The options

Top-up fees Bigger government grant Graduate "tax" Money from sale of public assets

Sir Howard has raised the prospect of the government one day removing its opposition to top-up fees.

The Education Secretary David Blunkett recently reaffirmed the government's opposition to such fees and pledged that the government would not introduce them in the next parliament if it was re-elected.

But Sir Howard said governments could change their minds.

"No top-up fees" says David Blunkett

"It is quite common, after an election, for any government to re-examine its policies. We regard this as all to play for," he said.

The report sets out three other options Universities UK has decided are most likely to meet its needs - a bigger government grant, contributions from graduates and proceeds from the sale of public assets.

The government has defended its record on financing higher education.

Blackstone

The Education Minister Baroness Blackstone said Labour inherited universities which were in despair because of a big fall in funding under the Conservatives.

"There was a 36% cut in units of funding in the eight years before 1997.

"Between 1998 and 2004, we will have put �1.7bn into universities, that's an increase of 18% in real terms," she said.

Tessa Blackstone said the government would look closely at the options put forward by Universities UK, but that it did not accept the premise that universities were under-funded.

Between 1998 and 2004, we will have put �1.7bn into universities, that's an increase of 18% in real terms

Baroness Blackstone, Education Minister

"I'm not going to say no more will come their way and, of course, we will continue to argue the case for universities ... in the next spending review," she said.

The Universities UK report said the fall in real terms funding per student had led to a drop in staff student ratios from 1:17 to 1:9.

It is the prospect of even greater student numbers which is increasing universities' financial worries.

Members of Universities UK will meet in Newcastle next week to discuss the report, but Sir Howard said they were unlikely to recommend any of the options to ministers.

Conservatives

The Shadow education secretary, Theresa May, said the report vindicated the Tory policy of allowing universities to opt out of the state funding system by becoming endowed institutions.

"Labour have failed to come up with any new ideas on this issue.

"Meanwhile, our plan has been described by Universities UK as `one of the few schemes that could give universities increased autonomy and independence'."

A report prepared last year for the so-called Russell Group of Britain's top 19 universities recommended allowing universities to charge top-up fees of up to �4,500 a year.

Last month there was an outcry from students when it emerged that Aston University had included proposals to charge top-up fees in its five year plan.

'Divisive'

The National Union of Students says such fees would be socially divisive, discouraging poorer students from entering higher education.

The President of the National Union of Students, Owain James, said: "The report fails to cover the inseparable issue of how a student can bear the cost of increased fee contributions on top of mounting debt.

" What is the point of increasing the funding per student and improving the learning experience if students can't afford to benefit from it?"

The report for Universities UK said that if next year's tuition fee level of �1,075 was increased by �700, that would generate �620m a year.