The Department for Education and Skills quietly dropped the participation target of an extra 700,000 students a few months ago. In its place are some highly specific numerical goals. For the 16 to 18 age group, the LSC has targets for participation and level 2 3 achievement.

For adults, there are basic skills and level 3 targets. The numbers may not seem large but time is short. Lower targets have been missed in the past few years.

Nevertheless, there is great pressure on the LSC to deliver. The DFES expects to see “demonstrable progress” within the year and will be checking at regular intervals. Estelle Morris has little choice in this matter because she is under contract to Tony Blair and Gordon Brown. The latest set of contracts issued by the Number 10 Delivery Unit are reported to run to 40 pages. The source of all this activity is the Government’s promise to improve public services.

The 2001 Labour manifesto included 10 10-year goals and 25 pledges for a better Britain. Top among these were the pledges to improve the basic skills of 750,000 adults and to increase participation in higher education towards 50 per cent of the population under 30.

The remit letter is the mechanism for transmitting these national pledges into action. The DFES is prepared to compromise on less important issues so long as its main goals are met. The LSC gets funding flexibility - but only if it puts increasing emphasis on outputs. The Standards Fund can be simplified - but only if there is a relentless drive to raise quality. Extra money is available for LSC administration - but only if the systems improve.

The budget decisions also reflect the political priorities. There is an 8 per cent cash increase for youth programmes in 20023 and a 2 per cent increase for adults. With the addition of school sixth-form funding, the LSC’s budget is split 60:40 in favour of young people. Virement between these budgets is limited to less than 1 per cent. Growth will therefore be targeted on teenagers.

If there is any growth for adults, it will be partly paid for by audit-driven clawbacks and cuts in funding for fee-payers. Colleges will be under pressure to deliver more basic skills and better courses for 16 to 18-year-olds. The hope is that more 18-year-olds will get level 3 qualifications. The emphasis on level 3 is also starting to drive capital funding and centres for vocational excellence. The aim is more progression to HE, helping the Government reach its 50 per cent target. From manifesto pledge to delivery - just like that.

There is little doubt that basic skills are a priority but the importance of the HE target is less clear. To a certain extent, degrees are positional goods like property. Your gain is someone else’s loss. It’s not the learning but the getting in that counts. The current job market favours the 30 per cent of young people who get in but the personal return might fall as the numbers rise towards 50 per cent. The last time university recruitment increased was in the early 1990s.

The Higher Education Funding Council cites the graduate pay premium and improvements in GCSE results as the main causes of expansion. The Government hopes to repeat growth by improving 14-to-19 performance. Its efforts will fail if young people don’t see the returns from a degree.

Degrees will continue to warrant a return if the cost to the student is subsidised and if employers pay graduates more. In other words, degrees require public and private money. This is ultimately paid for by the 50 per cent who don’t go to university but straight to work.

If the progression target retains its current priority, it will continue to determine priorities for the learning and skills sector. If this happens, the sector and its students will continue to play second fiddle to higher education.

Julian Gravatt is director of finance at the City Lit in London