It was the figure that defined the extent of the Government's ambition for a highly skilled workforce. Four in ten adults, ministers pledged, would have experienced some form of higher education by 2020.

The figure emerged from Lord Leitch's 2006 report into the role education and skills can play in improving the competitiveness of the UK economy.

When questioned at the time, the peer was adamant that a rapid expansion of the sector to meet employers' needs would not result in a utilitarian approach to higher education, insisting that it was about a "flexible approach to higher education that is demand-led".

But with the creation of the Confederation of British Industry (CBI) higher education task force late this summer, business appears to be gaining influence over the design of the higher education sector, and some have suggested that by 2020 the university may become nothing more than a careers training camp.

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Does this matter? Academics and sector leaders think it does. Even those committed to employer engagement have raised concerns about the obsession with employment. Michael Thorne, vice-chancellor of Anglia Ruskin University, a largely "business-facing" institution (see box below right), used a public lecture earlier this year to lament a lost love of learning among students within the 21st-century scramble for graduate jobs.

"The linking of the world of work and universities is inevitable. That's just a reality that we can't deny," he told Times Higher Education. "We can't deny the context of university education now, and the context is obviously that students have to pay. One of the things on their mind, and indeed on the mind of their parents paying for them, is how they will pay that money back."

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Thorne believes that it is important for the Government to strike a balance between meeting the demands of business and preserving the traditional role of the university. Business leaders have told universities that they should begin teaching soft skills, such as communication and teamwork, which can boost a young person's employability, but Thorne says this is not their job.

"It's in businesses' interest to maximise the flow of people qualified and able to work in their business because then you have an oversupply and it reduces the price," he admits. "I don't really think that that is part and parcel of what a university is about, and it's the kind of thing that's not teachable. I think some of the demands are way over the top."

Many academics agree with his assessment. At the University and College Union (UCU) conference this year, two motions expressing concern about the growing influence of business on the sector and the Government's skills agenda were passed by delegates.

One publicly opposed the concept of employer-designed degrees, while the other supported the premise of "education for all, not just for business".

The motion says: "Congress believes that education should serve a full spectrum of aims, including cultural, social, personal as well as economic development, and the pursuit of knowledge which is not distorted by powerful interest groups. It expresses grave concern at the increasing dominance of business over education at all levels."

Sally Hunt, general secretary of the UCU, says the union has never considered universities to be the coal mines of the 21st century. "We do not believe a university's role is merely to churn out graduates with huge debts. Higher education is first and foremost a learning environment, not a training camp for business. Furthermore, we believe it is imperative that it is academics who lead any initiatives with business and that their freedom and right to initiate and challenge is not impeded by any commercial considerations."

The academics may remain purists, but the Government's skills agenda has certainly spoken to today's students. "While it is very disappointing, it's fair to say that many students consider higher education simply as a route to a job," says Aaron Porter, vice-president for higher education at the National Union of Students (NUS).

The NUS believes that any future changes to the funding system, particularly lifting the cap on fees in 2009, would only entrench this sentiment because an increasing number of students would see a university degree simply as a necessary investment to compete in a tough jobs market.

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"It would be potentially disastrous if universities were simply considered a place to churn out graduates for the workplace," Porter says. "Indeed, the international regard for the academy in the UK would be significantly threatened, and I believe would have serious repercussions for future generations of academics. Ultimately we would see universities turned into places where the market rules."

Nevertheless, many universities are taking it upon themselves to become model Leitch institutions. As demographic change means the number of school-leavers is set to slump, it makes sense economically to reach out to a new generation of students, those people already ensconced in the workplace.

Thames Valley University is just one of the institutions pursuing the Leitch agenda. It has undertaken a major curriculum review to ensure that it is focused on what employers want and to help its graduates demonstrate the transferable skills they need for work. It is also committed to working with large organisations to design new degrees.

Ian Tunbridge, deputy vice-chancellor for enterprise, says Thames Valley is putting itself and its students in a stronger position by becoming business-facing, particularly given the current economic climate.

"We certainly believe that it's very important to be focused on what employers need as we face a very uncertain future for graduates going into employment, people already in work, and for business in general," he says. "The widening-participation agenda now moves onwards to ensure that we reach out to a quite significantly neglected higher education market: people in work."

But the creation of these business-facing institutions could also lead to a redrawing of the sector as universities stretch themselves to meet the demands of this new type of student.

"We can't just assume that we can have the traditional mix of part-time courses, an evening course and a day-release course, and that will solve the problem. It won't," Tunbridge adds. "We have to be able to give people flexible and responsive higher education that fits in with their lives and is absolutely relevant to what they're doing right now."

At the University of Hertfordshire, Tim Wilson, the vice-chancellor, took a conscious decision to go public about his aim to create a Leitch university. "We decided five years ago we wanted to be a business-facing university," he says. "It's what we always have been - the difference is that we decided we really want to be very honest with ourselves and recognise that this university has always been there to support high-level skills in our local economy. Why should we try to pretend to be anything else?

"We look through the lens of business in the broadest sense," he says. "When we look at our curriculum and the way we deliver our programme, we interact with business from the perspective of business as a client, rather than looking at it from a purely academic sense."

Hertfordshire has come up with innovative ways to engage even its most academic students with employers. The law school runs a community clinic that provides pro bono advice, supervised by local law firms. Even philosophy students have been interacting with big business on placements. "They work with Shell in executive management programmes to talk about business ethics," Wilson explains. "The majority of students are concerned about their careers. If they can relate their experience to something that will be relevant to their career, they jump at the opportunity."

But with universities changing their focus from the academic to the applied, is the Leitch agenda set to prompt a wider debate about the ultimate purpose of higher education? As such, are we on the cusp of a total ideological shift in the sector?

Roger Brown, professor of higher education policy at Liverpool Hope University, worries that the biggest danger is that universities will have become akin to workplace training camps within ten years. "If one takes the statements of ministers at face value, it's not just a danger but something they would like to see," he says.

The growing influence of large businesses and the sector skills councils in the design of courses is causing consternation. Brown calls the councils "dangerous" because once they are encouraged to develop curriculums, universities will lose some of their academic freedom. But the threat to modern curriculum design comes from academic Luddites as well.

"The academic debates have not been necessarily helpful, either. They want to make students into experts in their own discipline. We have got a battle. We have got some business people and students saying the curriculum should be about getting a job, and we have also got the academics who are thinking in terms of our potential historians."

Brown's classic academic view of the role of education may be almost a cliche, but it bears repeating: "The purpose of higher education is the education and empowerment of the individual. We should be recognising intellectual development. The course, and the job a student goes on to, is secondary to that."

Yet despite the proliferation of such high ideals, fears are growing that these subtle shifts in the common understanding of the purpose of education are also beginning to affect how students are taught and how they learn.

In a campaigning pamphlet on the issue, Patrick Ainley, professor of training and education at the University of Greenwich, says students see university as a hoop to jump through on the way to a job. The goal is to pass the degree, rather than to learn, and the market for buying undergraduate essays online provides confirmation that the ends have become more important than the means for students.

"Instead of producing a learning culture, a 'culture of instrumentalism' prevails where students from primary to postgraduate schools learn only what they need when they need it," he says.

Paradoxically, the culture created by focusing on employers is churning out graduates they don't want. As Anglia Ruskin's Thorne explains: "Employers shouldn't be too surprised if people get into the workplace and do precisely what the job requires of them and no more and no less. This whole thing is self-propelling."

Ainley's solution is to broaden the definition of vocationalism in a way that would allow universities to include a more general curriculum supporting students into work. This could include giving them a better understanding of the political, social and economic aspects of employment and work ("students need to learn about work as well as to work," he says). But would this be enough for the Government, and indeed to meet the demands of UK industry?

Partly in response to these arguments, the CBI has spent the past year publicly asserting itself in the debate over the future of higher education, latterly setting up its own task force on the matter. It has bemoaned the quality of graduates, told universities that they are distant from and inaccessible to business and called for more links between the academy and employers. When pressed, though, the mouthpiece of industry still cannot provide a clear message about exactly what it wants from business.

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"Business is a significant funder of higher education and a key employer of graduates - therefore it is right that industry communicates what it values from higher education and how business and universities can work better together," says Lizzi Holman, senior CBI policy adviser. "But businesses recognise that the universities' role is wider, varied and more complex than just delivering to the needs of businesses - we must educate people for life, and work." So far, so predictable. "Neither side has the monopoly on wisdom, and we can learn from each other," she says.

Many members of the CBI task force seem keen to ensure that the university system meets the Leitch agenda by churning out bespoke graduates, in particular those with skills in science, technology, engineering and mathematics (STEM) disciplines.

One task force member goes so far as to suggest that universities are failing businesses. Graham Love, chief executive of QinetiQ (the defence technology company that grew out of the Defence Evaluation and Research Agency), says there must be change if the nation's demand for high-level skills is to be met.

"Over the past few years, we have seen a decline in the quality of the graduates that we're talking to. It is interesting that the numbers have certainly declined and that (the) process of selecting high-quality graduates has become more difficult for us," he explains. "It's certainly getting tougher."

Love blames the range of courses on offer at many universities, lamenting the lack of core business skills such as mathematics and communication. QinetiQ is working with school pupils and sixth-formers to encourage them to study STEM subjects at university. "It's surprising really how little students know of how business operates. There just hasn't been a close enough dialogue between business and universities to explain the sort of skills that we're looking for," he says. "It's quite selfish on our part; we need to be able to recruit graduates with these skills."

Another bastion of British business, Network Rail, has invested ?30 million in university education and training specific to its own industry. This includes the development of niche degree programmes targeted at its own staff and potential new recruits - for example, a new professional service management qualification at the University of Warwick. Like QinetiQ, Network Rail is concerned about a potential shortfall of quality STEM graduates. "You can't just have education for education's sake," says Iain Coucher, its chief executive. "We need to be able to attract the very best engineers and project managers to Network Rail."

Although he adds that the CBI task force is not in place to tell universities how to do their jobs or to control the curriculum, Coucher believes that business ought to be influencing higher education to some extent.

"I'm not in the school of those people who believe that universities should be simply training grounds for employers. The last thing I want to do is to shape and manipulate the coursework they do for my benefit ... (but) I think we should have a role in shaping higher education. Our role is to look to the future - ten to 15 years ahead - to ensure the sorts of people we will need."

Reassurances from business leaders will not be enough for some academics, who worry that it is not just post-1992 or business-facing universities that will have to adapt to please the Government and industry by 2020, but the entire sector. Although this seems unlikely, fear has flooded through the veins of the institutions. Even business-facing universities express concerns about the future of their elite academic counterparts.

"There has to be that place for research that's driven by curiosity and by inquiring minds seeking to push barriers forward," says Hertfordshire's Wilson. "We must not in any way try to divert them (elite universities) away from their mission, which is world-class research."

For all its educated assertion, the CBI and its task force have already come under attack from academics for drawing quick conclusions based on an outdated model of higher education. John Brooks, the vice-chancellor of Manchester Metropolitan University, claimed that he had encountered an "enduring ignorance" on the part of today's business leaders. Their criticisms, he explained, were based on their experience of university in the 1970s.

Those resistant to any fundamental change to the independent higher education system to please the whims of Government and business recognise the view. "My puzzlement here is that all these captains of industry and business seem to have got where they are on the basis of an education that they now consider unsuitable for their successors, for whom they prescribe an instrumentalist approach that they never had," says Lewis Elton, honorary professor of higher education at University College London.

"I certainly think that universities should stand up to business and not kowtow to it, as vice-chancellors are apt to do at present. The whole idea that universities are 'just like business' is complete nonsense."

As major businesses publicly bemoan the lack of skilled graduates, it is unclear whether they have already picked through their own recruitment processes with the same fine-tooth comb that universities have been forced to use on their curriculums. Many blue-chip companies recruit from only a narrow spectrum of universities, institutions that are not necessarily focusing on sector skills. These employers could be wrongly judging the entire higher education sector on these few institutions. "If they were to cast their net more widely, some of these criticisms might fall away," says Thames Valley's Ian Tunbridge.

While the Government continues to wave the Leitch report around and fret about skills shortages, the debate between the two parties will inevitably go on. A little context, however, would calm the nerves. There is nothing new in business influencing higher education or in the obsession with skills and employability.

Although Leitch gives the skills agenda a name and a date, the popular sandwich degree courses of the 1970s and 1980s amounted to the same drawing-together of academic rigour and vocational aptitude. Sandwich courses were perhaps the biggest casualty of the introduction of tuition fees as students found four-year courses unfavourably expensive, but they nevertheless provide an example of how universities have worked profitably with businesses.

"The notion of universities working with business to design appropriate and relevant courses is one of significant long standing," confirms David Watson, chair of higher education management at the Institute of Education. "On the matter of the outside world's involvement in higher education, it's always been there. It has waxed and waned in different ways."

What could be more damaging to universities in the long term is the subtext of the simmering row between business reformers and purist academics.

"What worries me is that we can have an unhealthy alliance between a very aggressive business view of higher education - which is that the people it's producing aren't quite as good as they used to be - and a kind of academic populism inside universities," Watson says. "There is a small but vocal group of teachers who are disappointed by everything, including their students. There is a danger of typecasting this generation of undergraduates as being concerned solely with getting a job. That is unfair. Of course, in a situation where something approaching one third of new workforce entrants are graduates, students are concerned about what their degrees will help them to do."

Although the job of the university is the job of providing a liberal higher education, it must continue to be relevant and attractive to students. When the Government calls for a highly skilled population and when students are expected to accumulate years of debt, the sector has to be responsive to student demands to stay alive. It should not be surprising that student demands depend on the requirements of their future employers.

The last word goes to Watson. "A little bit of calm reflection on what is actually going on now in historical perspective is quite important," he says. "The sector constantly reinvents itself."

DEFINING OUR TERMS: WHAT IS A BUSINESS-FACING UNIVERSITY?

Since the Leitch report was released in 2006 and businesses have publicly debated their fears about skills shortages in the graduate workforce, many universities have begun to describe themselves as "business-facing".

Correctly used, the term "business-facing" indicates an institution that is focused on educating young people to become employable graduates, offering both vocational degrees and opportunities to get into industry for those studying for academic qualifications. These opportunities can include work placements, partnerships with major local employers and mentoring programmes.

Business-facing universities are usually also keen to widen participation, bringing in students and those already in work and educating them so their higher-level skills will boost the local economy. These universities ask local employers what they want from graduates.

However, the Government's focus on skills and employability among graduates has led to almost all universities labelling themselves "business-facing" in an attempt to show they are hitting Whitehall targets.

In fact, when research-intensive universities use this term, they are referring to their efforts to work with big business to fund and drive research and development.

INSIDE VIEW: ADAPTING TO É«ºÐÖ±²¥ LEITCH AGENDA

Even business schools are changing their ways to adapt to the Leitch agenda, according to Steven Haberman, deputy dean of Cass Business School at City University London.

"Given our proximity to the Square Mile, we have access to senior City practitioners who contribute to programmes at Cass as visiting lecturers. Our overriding objective is that our degrees should be relevant and rigorous.

"We are keen for our students to be influenced by what is currently happening in the financial services industry and to understand likely future trends. So our students are informed, first hand, by the operations in trading rooms, for example. This approach also enables us to remain a competitive provider of education for our graduates, most of whom progress to jobs in the City.

"The practical expertise of our visiting practitioners enhances the academic foundations of all our programmes and enables us to achieve these objectives of relevance and rigour, and it is clear that our students want this element included in their studies.

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"From the outset, therefore, we are transparent about the contributions of our visiting faculty and value these contributions. However, the underpinnings of all of our programmes balance both academic and practitioner input."