Does the British higher education system have too many students?

Hammering away at our universities to admit more students from state rather than independent schools - as New Labour has been doing - misses one major point. This is not a case of the haves against the have-nots, with pampered middle-class kids on the independent school team and dedicated but disadvantaged working-class pupils on the state one. London-based politicians and journalists tend to see it that way because in central London (and some of our other large cities) the middle classes have abandoned the state system. In most of the country, they have not - so what we actually have are two sets of applicants of which one (the independent schools) is entirely middle class and the other (the state schools) is overwhelmingly middle class.

Furthermore, universities are not turning down qualified poor pupils. An admission target tied to school type and students' home postcodes will not bring an upsurge of students from poor homes, because the gap between middle-class children and the rest yawns wide well before university application. Children who make it into the sixth form with equivalent GCSE grades have the same chances of A level success, regardless of their parents' occupation. But your chances of actually getting a decent set of GCSE grades depend enormously on your family and the quality of the local school. Only one in seven children from semi-skilled and unskilled homes gets two or more A levels; and with almost all of them already going on to university, there is no reservoir of qualified, disadvantaged students to draw on. With current population figures and school performance trends, we could expand participation to 50 per cent tomorrow with no effect on the relative chances of children from unskilled worker homes going to university.

Financial barriers do exist for poorer students, although they are - here, and in most other developed countries - far more about living expenses than fees. The British taxpayer spends an average of well over £4,000 per student per year on the universities' infrastructure and teaching staff. Fees were introduced (or re-introduced) in 1998 to augment this: even so, the most any student contributes to the cost of his or her degree course is around £1,000 a year. Moreover, although you would never guess it from the rhetoric of student leaders or the self-satisfaction of the Welsh Assembly and Scottish Parliament, the children of the poor do not pay fees; not even in benighted England. The fees that are so reviled are not, and have never been, paid by anyone with a family income under £20,000, after which a sliding scale kicks in. However, poor students are more averse to taking loans than middle-class ones: which isn't surprising, given their families' lack of financial cushion. Middle-class students often borrow up to the limit. So when the Labour government abolished means-tested grants in favour of (state subsidised) loans, this did seem to have a disincentive effect on low-income students.

But this underlines, once again, how the middle classes are the major beneficiaries of mass higher education. They are the ones who meet the entry criteria in vast numbers. They obtain their higher education overwhelmingly at taxpayers' expense. They benefit from it over a whole lifetime, through far higher salaries and far lower risks of unemployment. They may even benefit through wider interests, wider experiences and the intrinsic benefits of study.

Nor is Britain unique or a particularly bad case of a general phenomenon. In France, entrance into the most selective institutions is dominated by students from a dozen or so lycées - all of them state, not private, schools, but ones which cater to a metropolitan upper-middle-class elite. In Japan's best universities, the percentage of students from high-income homes has increased sharply since the 1960s. It is often claimed that top US universities are less exclusive than Britain's, but this is not true. Harvard offers generous aid and loans to cover its annual fees of around £17,000 plus board and lodging of £7,000, as do other top colleges. But in a country where most of the best universities are also private, less than one in five US students from a poor background attends a private institution, while almost half of those from families in the top income decile do.

Thanks to the "cohort studies" which track British children born in 1958, 1970 and 2000, we are able to look at how the experiences of successive generations have changed. Between the first two groups - born just 12 years apart - there is a big difference. The incomes of the 1970 cohort are twice as strongly determined by their parents' income as they were for the 1958-born. In other words, family circumstances had an increasing effect on your life chances as the post-war decades advanced. The reason is that education is not only critically important but is itself increasingly tied to family income. So it is hard to argue that a mass university system is creating a fairer, more open society. Indeed, the opposite seems to be the case: university helps to "lock-in" middle-class advantage in the career system.

If today's universities are not a response to economic need, or a fair way of sorting out the most talented and deserving, then what has society received for its money? Have we, at least, got a much more skilled population? A more cultured one? People who are better citizens? Maybe. There is convincing evidence that university educated adults are healthier, and less prone to depression, than their peers and that at least some of this difference is directly related to their education. They are also more involved in the community and voluntary work, more likely to vote and less cynical about political parties. On the other hand, the rise of the universities coincides with a period in which broadsheet newspaper sales have fallen and anxiety about "dumbing down" has grown.

More seriously, we don't really know what our new graduates will be like, because the findings cited above are for previous generations. And our mass system is not just the same as in the past, only bigger. It is increasingly different in what it offers students. Which brings us to what mass higher education has done to the universities themselves and, in particular, what is happening to the quality of student learning and the quality of academic staff.

Many people are unaware of just how different British universities now are from those of 25 years ago. "Tutorial", to most educated people over the age of 30, conjures up images of one or two students and a don in a booklined study - maybe in Oxford, but possibly on a green Sussex or East Anglian campus. But today's "tutorial group" is more likely to feature 12 or 15 students in a functional seminar room, as a weekly or fortnightly addition to a diet of mass lectures. And few academics can think of giving their students long reading lists with which to trawl the library shelves. No university library could cope: so instead, textbooks and prepared photocopied readings are the norm. What else could one expect after 25 years in which government funding per student has more than halved and staff-student ratios are down from between 1:8 and 1:9 in the mid-1970s to between 1:17 and 1:18 now.

Of course, student experiences vary because British universities have very different histories and resources to draw on. The "old" universities (and especially Oxford and Cambridge) have established libraries, attractive campuses, and affluent alumni; they may have endowments built up over centuries, along with the reputation which attracts lucrative overseas students. Most important, they can cross-subsidise their facilities from research funding, which is highly competitive and unequally distributed. Research reputations are what underpin and reinforce the hierarchy of British universities: the result is that Imperial College can ask applicants for three or more A grades at A level for courses in chemistry or engineering, while other universities are accepting two E's as they rush to fill places during the annual "clearing" process. This year the former polytechnics (in England), which only entered the research field since becoming universities in 1992, received about £64.5m of the £940m higher-education funding for research. The big four-Cambridge, Oxford, UCL and Imperial-received £260m between them.

Research success buys better facilities and attracts better staff, but it also makes research, not teaching, the priority: and Britain surely can't need 136,000 academics producing largely unread journal articles. The learning of skills demands the teaching of them, even when the skills are such generic ones as "communication," or "IT" or "making presentations," rather than anything to do with the subject being studied. The argument for expanding higher education is always expressed in terms of the skills students will acquire; not as a back route to creating and funding 200 separate research institutions. This is certainly the logic for the way the teaching of students is funded: namely on a uniform basis. (The Oxford and Cambridge college fee is being phased out by Labour.) So universities all get so much per student, depending on the nature of their course-more for medicine and science, less for humanities.

The new universities average far less per student than the old because fewer of their students are in medicine, scientific and technical subjects. And in the attempt to keep recruitment up and costs down, these are the courses they have been jettisoning. Yet these institutions were created as technical universities. If the labour market did not need these technical skills then abandoning the courses might be justified, but in fact these are precisely the skills it does need. The wage premium commanded by an Oxbridge degree is dwarfed by the gap in average earnings between physicists, engineers and quantitatively skilled economists, compared to people with arts degrees.