Question: You have put out a report saying that universities need £9.94 billion over the next three years. What would you want that money to be spent on?

BARONESS WARWICK: One of our key priorities is to ensure that we can respond to the targets for widening participation. We need to ensure that, if we do attract students from disadvantaged backgrounds, that they are taught well, that they're taught by well-motivated members of staff in properly equipped lecture theatres and laboratories and that they have a decent experience. We also need to make sure that there is investment in university research and in universities' work transferring their knowledge to industry. Universities in this country have a world-class reputation. Unfortunately, the cuts that we've suffered over the last 25 years have meant that that reputation is in jeopardy. If we're going to maintain that world class reputation and stature, then very substantial investment is needed. We have put a large bid in to the government for SR2002. But to ensure we remain world class, and to ensure that we respond to the widening participation agenda it's essential that we receive this level of investment.

Question: What happens if you don't get that money?

BARONESS WARWICK: Well, universities over the past two decades have had to manage with reduced resources. They have managed to maintain quality with continually reduced resources. But one of the areas where institutions have suffered is in terms of their estates, in terms of maintenance of buildings. Another area which has suffered is the pay of their staff. University pay has now fallen dramatically behind other professional pay levels. If resources aren't made available, then I think those two areas will continue to suffer. This will mean that students' experience of higher education will be less than it should be. In addition, we simply won't be able to meet the Government's expansion targets.

Question: What's your assessment on the state of our university campuses?

BARONESS WARWICK: There is certainly a major problem. A report that we are publishing today attempts to look at the cost of putting right the decay of buildings and of infrastructure. The report indicates that in order to put that infrastructure right we need £5 billion investment. This large sum for teaching infrastructure was foreshadowed in our spending review submission bid of £9.94 billion. There's no doubt that there are huge problems of crumbling buildings, inadequate maintenance, inadequate laboratories. And, increasingly, companies are saying that, whereas 20 years ago they expected students would be taught with up to date equipment, in state of the art laboratories, that clearly is no longer the case. Students are leaving having been taught using inadequate equipment and in substandard buildings. This will continue unless universities receive the investment in the spending review to put this right.

Question: Universities are much more reliant on funding from companies. Are universities affected by economic downturns or the collapse of the IT market around the world?

BARONESS WARWICK: I suppose its possible that we will be affected in the same way as other organisations and other employers are. But I don't think we have any evidence to show that that's been a particular problem. In fact, universities have increasingly diversified their income sources. One of the ways in which some institutions have been able to manage the problems of their building maintenance has been through very clever and careful raising of resources from the private sector. I think we've got really rather good at this. But the vast bulk of income still comes from government, which is why we are seeking substantial public investment in the spending review.

Question: As universities have to rely on corporate funding is there an ethical dilemma with sponsored research?

BARONESS WARWICK: Universities need to consider these sorts of issues. That is why Universities UK, a couple of years ago, produced guidelines for institutions on the way in which they should look at any investment offered. As well as investment, the guidance looks at grants from companies, or companies offering to fund chairs and so on. We always advise universities to look very carefully at private investment.

Question: The NUS has claimed the level of student debt is now £10,000 on average and this is causing students to think again. Is bringing the student grant back, as Universities UK has suggested, the best solution?

BARONESS WARWICK: It's difficult to know how much the perception of debt is affecting student choices. We don't have hard evidence as such. Universities UK's debt project aims to produce the hard evidence that is currently lacking. But there is plenty of anecdotal evidence that there is a problem. Interestingly, we also know that student numbers are rising. But, of course, that could well be within those students who have all along been able to afford the prospect of university. It is for this reason that we have suggested the return of guaranteed grant funding for those from the least well-off families. Our proposal to the government is that those students who come from families that are the worst off, should be given a grant up to a maximum of the £4000 that is currently available.

What we've proposed is that there be a grant available for those who are worst off, and that for others who still come within the £20,000 threshold below which they don't make any contribution to tuition fee, that there should be a proportion of the guaranteed grant support available to them on a sliding scale. And we've then gone on to suggest that if government wishes to reduce the cost of that, they could do that in certain ways, eg - through reducing the loan subsidy to those from better off families, or reducing the amount of loan available to those same students. But the choice of these options is for Government to make; it's a political decision.

However, I want to stress that when you look at the long list of needs for university funding in order to ensure students have a decent learning experience, I think you'll understand our concern that it would be all too easy for a solution to be found that meant that students were not discouraged, but which then still left a second class experience once they got to university because institutions were starved of investment. That's our concern and it is shared by the NUS.

Question: The Welsh education minister is now talking about bringing the grant back and Scotland has abolished tuition fees. Is there an inevitability of England having to do something now?

BARONESS WARWICK: One thing we need to do is separate out the issue of student support from that of tuition fees. As I made clear to the Education Select Committee in May, the real issue is student support. There is certainly a lot of evidence that we need to provide guaranteed grant support to those students from the least well off backgrounds. This is vital if the widening participation agenda is to be met.

But we would have reservations if changes were made to the tuition fee. We've always said that the tuition fee issue is a complete red herring. The real issue is the amount of money that's available for maintenance and the way in which students support themselves through university. The amount of money that students have to find for tuition fee contributions is very small in comparison to the amount of money that it costs them to maintain themselves whilst they're at university.

The first point to stress is that half of all students - those that we need to attract into HE - do not make any contribution to the costs of their higher education. If changes were made to the way students contributed to the costs of their higher education, I think I'd set two tests. One would be that if the tuition fee contribution was abolished, it would have to be replaced for universities with additional resources to make up the difference, because it's now a very substantial income stream for universities. The second point is that we have been in favour of direct student contribution to their tuition fees because of the link that it establishes immediately between the student and the institution and the relationship that that produces. This link is only produced under the current tuition fee arrangements. So we think for two reasons we would be very concerned if the direct contribution to tuition fees was dropped. It would certainly be a very expensive option for the government if standards were to be maintained.

Question: The government has looked at 70 ways of student funding. Are you concerned that getting the problem resolved is taking too long?

BARONESS WARWICK: We would like the result of the review to be known as soon as possible. But it is also important that the timing of any announcement takes into account the likely effects it will have on the pattern of student applications. We're also concerned that the very complex existing system continues. One of the suggestions we've made to government is that whatever else happens, that they should simplify the system. We fear not only that students are being put off by the perception of debt but also because many do not know what support is available to them.

Question: Higher education minister Margaret Hodge has said the main reason why students give up their course is not funding but because they don't like the course that they're on? Is that a fair assessment?

BARONESS WARWICK: This is certainly one of the reasons that students give for students not completing their course. But there is a whole complex set of reasons, actually, why students drop out. It's also important to acknowledge that the drop out rate in the UK is very low, second lowest only to Japan in the OECD. Of course not all dropouts are permanent. Quite a lot of students leave one course, for all sorts of reasons, go off to do other things and then come back to university. So I think one's got to be a bit cautious about interpreting the dropout rate. But certainly, if a student gets the choice of their course wrong, and they don't feel happy in what they are doing, it's much more likely to mean that they will drop out.

Question: Students are increasingly doing part-time work while they are studying. Could that affect results?

BARONESS WARWICK: I think that would be the crucial test; you'd have to make a judgement in each case about the impact of any work on a student's performance. If a student works excessive hours, because of fears of the burden of debt, and this affects their university study, then this would be a concern.

But you've also got to remember, of course, that the student population has changed dramatically. A very substantial number of students are now mature students. They're people who are already in work and they're balancing work, family life with their studies. It would be ironic if we were condemn that as something that shouldn't happen. That's no longer the case and we'd expect that to continue as we increase number of mature students. There must come a point beyond which it is not possible for a student to do both - its very much a matter for the individual student and the tutor to work out the best solution for somebody who does need to work.

Question: What do you think of the idea that universities should take people from poorer backgrounds even if their exam grades do not meet the entry requirements?

BARONESS WARWICK: The range of qualifications that are available now is considerable. Admissions tutors have always adopted a broad approach to judging an individual student. Clearly, examination results have been a key indicator. But many universities look at the performance of a student in the round and ensure that they take into account the efforts that the student has had to make to get the qualifications that they've achieved. I think Margaret Hodge was referring to the prospect of somebody who, against all the odds, has done well at a rather rundown school, and that this means that there is a lot going for them and that the university ought to acknowledge that. I think universities do this and it is right that they do. But the most important thing universities do is to judge each student on his or her own merits.

Question: Gordon Brown has promised more funding for science in schools. Is this recognition of a problem getting students to study science?

BARONESS WARWICK: It's a problem, and it's a growing problem. As with so many issues around widening participation, much of the answer has to be in the schools. It has to be found in the quality of teaching, in the encouragement that staff provide for students to think in terms of, not only studying science in higher education, but thinking in terms of going to university at all. There's a lot of work being done on the way in which subjects like physics and chemistry are declining in schools. Universities certainly have had to try to respond to the reduction in numbers.

Question: Estelle Morris has claimed that as a nation we put too much store by sports stars like David Beckham and celebrities. Should people be encouraged to think that aiming for a degree is as good as being a top athlete?

BARONESS WARWICK: Well some of the advertising campaigns that the Department for Education and Skills have introduced, such as the Aim Higher campaign, which Universities UK supports, have used these very people, such as Steven Gerard and the model Naomi Campbell, to think about higher education. They show that many of the routes into the worlds of sport and fashion, for example, rely upon the skills acquired at university.

If you can look to those heroes to encourage young people then I think that's a very good idea. But, the increased numbers of students now coming into universities actually suggests that young people are becoming increasingly aware of the advantages of a university education. The fact that the demands that are going to be made on them when they do get into work will mean that they need those qualifications. And they're aware that they will earn more. Not only will they earn more, but they'll also remain in employment longer, and be less likely to be unemployed. So young people a taking some quite hard-nosed judgements. But if they can be supported by encouraging words from sports heroes, all the better.