Improve or else

Universities and colleges falling behind government targets for drop-out rates or widening access were this week warned by Baroness Blackstone, the education minister, to improve their performance. This was a clear signal that new benchmarks will soon be used to drive funding.

"Where any university has a performance indicator that varies considerably from its benchmark, we would expect it to analyse the reasons why and take remedial action. It might look to similar institutions to learn about best practice. What the government will want to see is evidence in next year's performance indicators that these issues are being addressed."

South Bank and Aberdeen universities are among a small group of poor performers singled out for the sin bin of academic institutions with worryingly high drop-out rates, but who also do not register larger than usual intakes of poor students most likely to bail out of degrees.

Universities and colleges have to fail two criteria set by the higher education funding councils to fall into the list of poor performers where there is particular cause for concern. First, their student drop out rate must not exceed the national average for institutions with similar entry requirements and degree subjects by more than three per cent. Second, the drop-out rate must not be significantly worse than that recorded by most other similar institutions.

With 36 and 30% of full-time undergraduate students dropping out before completing degrees, the universities of East London and Paisley lead the pack of poor performers, both exceeding national drop-out rates by some 13%. But these institutions are also highlighted for praise by the councils for attracting large numbers of students from poor backgrounds, who are still very under-represented in academic institutions as a whole.

Institutions likely to face greater scrutiny, though, are South Bank and Aberdeen with higher than average drop-out figures but also little indication of larger than average intakes of under-represented students. Anglia Polytechnic and Greenwich universities are also identified as having comparatively poor retention rates, but also have larger than average intakes of state school pupils.

Education ministers are treading a thin line between urging universities to widen their doors to poorer students while at the same time pushing for lower student drop-out rates. Students from under-privileged backgrounds are much more likely to bail out of university than those from the middle classes, which account for the vast majority of university places.

In the forthcoming Whitehall spending battles education ministers will come under pressure from Treasury officials to show that universities are performing well when it comes efficiency measures such as the numbers of students completing degrees and securing jobs.

Education officials are likely to stress that even the lowest drop-out rates revealed by the performance statistics place UK academic institutions in a favourable light compared with other countries where more than half of students can fail to complete degrees.

Baroness Blackstone said ministers also wanted to see universities judged on how employable their graduates were but she accepted there were still problems in using this as an indicator.

Universities have complained that local unemployment rates, age and ethnic origin of students can affect how soon they get jobs.

"Before performance indicators can be used to drive funding they need to be robust, well accepted, and not introduce perverse incentives," she said.

• Dr Lee Elliot Major is deputy editor of Research Fortnight.