Today the reason why the Government has felt it necessary to set up the Dearing inquiry into higher education becomes evident in hard numbers. Virtually no institution of higher education in England will be better off next year in real terms and scarcely any even in cash terms. Avoiding cuts at a level that would threaten viability has been the priority. This has been achieved - at least the funding council hopes it has - only by juggling the levers.

Those who would have done relatively well had the council's funding formulae been applied according to the book have had their allocations docked to bail out others. The safety net has more or less vanished but other special kitties have been used to soften the blow. Rules dividing capital from recurrent grants have, for example, been smudged so that recurrent bills can be met in the short term. Research money has been evened out within particular programmes.

11 = /This is the opposite decision to that made by the University Grants Committee in 1981 when confronted with imposing a 17 per cent cut over three years. Then the UGC decided to impose the misery differentially, taking the risk (perhaps even hoping) that the hardest hit would close. This time HEFCE, faced with administering a 12 per cent cut over three years in a much larger and far less-padded university sector, has decided to spread the misery equally. Boldly proclaimed policies of selectivity dating from earlier days when cuts were just beginning have now been abandoned. There is not enough money to reward the best without bankrupting the rest.

Speaking at Heriot-Watt University last December, Graeme Davies, the former chief executive of HEFCE, suggested obliquely that the only way to attract political attention to the funding crisis in universities might be the 1981 way of pushing one or more institutions over the edge. But since then his fellow vice chancellors - who have been doing their sums since last November and knew full well what today's announcements would bring - have done the job of upping the political ante in another way with their threat of the Pounds 300 levy. His successor, Brian Fender, whose former university, Keele, suffered from that earlier selective policy, has not had to take that course therefore.

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Indeed he and the council may not in any case have been free to do so. Today's funding councils do not enjoy the independence once enjoyed by the UGC. Their political masters have the right to instruct them in general terms how the grant is to be distributed. Closure of institutions would be almost as politically embarrassing in the run-up to a general election as would imposing tuition charges - particularly if they were in marginal constituencies.

It all adds up to the reason for Ron. This year the money is so tight that there are no winners. The Government could only have expected a united barrage of protest from higher education. Something had to be done to shut up this embarrassing and influential constituency before the detailed implications of November's Budget became apparent.

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The announcement of Sir Ron's inquiry means that everyone is now distracted. Who will be on the committee? How will they be chosen? Who will be called to give evidence? Will they be heard in public or private? How widely will the committee's remit be drawn? Will its reach extend to training and to further education and is the Labour party's decision to abandon the idea of a training levy on employers in favour of a voluntary system part of the bipartisan approach being adopted by Gillian Shephard, the Secretary of State, and her shadow, David Blunkett?

Meanwhile the misery in universities and colleges goes on with little prospect of any improvement before 1999, the earliest time when a Dearing brokered package might realistically bear fruit. But now higher education is once again conveniently (for the politicians) divided over whether to act unilaterally to bridge the funding gap or await the committee's recommendations.

Today's allocations will sharpen disagreement. Equal misery has meant making victims of those who, for historical reasons or because of their research excellence, stood to gain most. It follows that they are also those with potentially the strongest market position. The temptation for them to jump the Dearing gun and go for a levy now, already tempting as a demonstration of their autonomy, must be increased by the council's egalitarian settlement. It would be odd if the Russell group of self-styled research universities did not consider such a move when it meets next.

But they have a problem. The "convergence" policy underlying today's allocations will have deprived them of the potential support of big losers outside the charmed circle. The risk of looking like greedy fat cats will probably cause them to decide to wait and see.

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The likelihood then is that the pain with its grinding down effect will have to be endured for another three years. Those years will be occupied with manoeuvring to capture the Dearing committee: expansionists versus consolidators: vocational training enthusiasts versus defenders of traditional academic values: manpower planners versus those who prefer to trust the market - a confrontation nicely played out in respect of legal training by Declan Cushley (THES, February 16) and Mary McAleese (Letters) today.

There is a suspicion, arising from the bipartisan nature of the committee, that, whatever their recommendations on details and mechanisms - how much to charge students, how to collect debts, who is to accredit courses, what qualifications are to be offered, how many to admit - what the Dearing report will really do is complete the nationalisation of the universities begun by Mrs Thatcher and so graphically described by Simon Jenkins in his book, The Tory Nationalisation of Britain, and in his article (The THES, October 20, 1995).

Provided the funding squeeze is sufficiently eased many might welcome that. Not everyone is enamoured of the market with its messy tendency to bruise people as adjustments are made. Many may at least find more central involvement in such matters as setting fees and accrediting courses an acceptable price to pay for better funding. Others may see in it a loss of autonomy that should not be accepted at any price.

The committee will begin its work after Easter. Whatever the initial assumptions, it will be open to influence. It is therefore up to the academic community to mobilise, as it did at the time of Robbins, to ensure that those things held most dear are retained in the new settlement Dearing is expected to delineate. The THES will be reporting the submissions as they are made. Our pages will be open for debate throughout the committee's deliberations. Do please join in - and help shape the future.

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