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Alan Ryan and I appear to agree that Oxbridge should wean itself off the ����Vlog Funding Council for England (Hefce) teaching grant (“One cheer for Brian Roper”, 20 November). Not only would this liberate Oxbridge from much of the tiresome regulation that attaches to public funding, it would also enable resources to be channelled towards institutions willing to accept the widening participation challenge.

On the issue of private and social rates of return on investment in higher education, there is still some distance between us. I believe that value added is the key. If you select the “best prepared” students, guiding them to good graduate outcomes should be a near-effortless pleasure. But “best prepared” and “best” are not the same thing. If you believe, as I do, that people, regardless of their ethnicity, gender, age, family background and postcode, have the capacity to benefit from HE, you must accept that supporting diverse needs is a more challenging and more expensive proposition. Imagine that other institutions were able to subsidise teaching to the extent that the Russell Group does, with the benefits of small(er) teaching groups and major research/copyright libraries. Who then would be best placed to add value?

The participation rate of the “best prepared” students is close to saturation point. If genuine mass higher education is to be achieved, it is precisely the growing number of those from under-represented constituencies that must be embraced. Using graduate earnings as a proxy for the rate of return on investment (personal and social) ignores one of the least palatable facts of life in contemporary Britain. If, as a graduate, you are older, female, from a minority ethnic background, disabled or not socially connected, then you will suffer discrimination in the labour market.

On the issue of research, I have no real disagreement with Ryan. Blue-skies research is fundamental and Oxbridge does it well. But it has, comparatively and historically, been well supported by public investment - at a price. The 2008 research assessment exercise results, to be published in ����Vlog on 18 December, will doubtless replicate the pattern of overconcentration previously witnessed. The underweighting of applied research will be perpetuated and the effective entry of new players will be stifled. Is it not time to revisit the proposition that the Hefce quality-related grant be switched to the research councils, where new entrants have a fighting chance of competing without both hands tied behind their backs?

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On the issue of third-stream activity, I agree with Ryan that the “budget is penny packets”. That is my point. Knowledge transfer clearly follows knowledge creation, but without application knowledge creation can become introspective and self-serving. Curiosity should not be curtailed, but it distorts priorities to the extent that it overshadows knowledge application in resources and prestige.

Ryan points to the effort put into fundraising at Oxbridge. I am reminded of a time spent in Oxford (at the polytechnic, now Oxford Brookes), working with colleagues at the University of Oxford, which was at that time engaged in a major fundraising campaign. I enquired of the head of a wealthy college why the money was needed. “Dear boy,” he said, “it is to protect us from the changes which will impact on you in the future.”

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Fundraising is clearly a prerequisite for liberation from public accountability. Reinforcing existing social advantage with ever-greater resources is necessary for those in international competition with other private providers. By its very nature, this will finally destroy the illusion that there is a single higher education sector in Britain.

But such clarity is not necessarily bad. Those excluded from this rarefied world need now to have the courage of their convictions. Is it not now time for the rest of us, responsible for the overwhelming majority of students, to mobilise? I believe we need a unified, publicly supported state university for England, with geographic reach, subject depth (including “at risk” subjects), advanced scholarship and knowledge transfer capacity and a real commitment to inclusion. This would be underpinned by a substantial capital endowment from a rationalised estate, and its shared services would reap substantial scale economies. That sounds like a proper return on public investment to me.

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