The idea was part of a raft of initiatives for the higher education sector floated by David Willetts, the universities and science minister, today.

Speaking in London, Mr Willetts also said he had asked the ����Vlog Funding Council for England to consider how it could be made easier for universities to set up campuses in “cold spots” of weak provision.

Hefce, universities, colleges and local enterprise partnerships should work together to develop “coherent plans” for new campuses “where they are most needed”.

“There are no barriers to setting up a higher education campus. If this is your town’s dream, we want you to pursue it,” he said.

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On the suggestion for overseas institutions, or even entire countries, to participate in future iterations of the REF, Mr Willetts put forward the example of Hong Kong.

“It’s hard for Hong Kong to run its own comprehensive REF. But you could imagine that Hong Kong institutions might wish to participate [in the UK REF],” he said.

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Mr Willetts said the government had also developed an “alternative” to a student loan that would be compliant with Islamic Sharia law, and was putting this model out for consultation. This was because Muslims, and some from other faiths, might be “put off” from taking a conventional student loan, he said.

Meanwhile, the minister revealed a new national strategy for getting more students from disadvantaged backgrounds into higher education, jointly led by Hefce and the Office for Fair Access.

The strategy would have employability as one of its “key themes”, Mr Willetts said. There was “uncomfortable evidence” that “however well you do at university your employment prospects differ according to your background”, he said, with privately schooled pupils tending to be more likely to gain a “high status occupation” after graduation.

Mr Willetts was speaking at “The contribution of UK universities to national and local economic growth”, a conference hosted by Universities UK where it launched a new report showing that higher education adds £73 billion a year for the UK economy, up almost a quarter on the figure estimated in 2009.

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He also used the speech to announce an independent review of the use of metrics in research assessment.

david.matthews@tsleducation.com