Universities are not doing enough to make use of information on students who drop out, according to the higher education quality watchdog.

A report from the Quality Assurance Agency says that only a small minority of higher education institutions have developed good systems for gathering and using data on students who fail to complete their courses.

The news comes after a high-profile report from the House of Commons Public Accounts Committee this year said that dropout rates had not changed for five years despite the investment of ?800 million to tackle the problem.

It is important for universities to use information on withdrawal rates to track the performance of students and to highlight those who may need more support, the committee said.

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The QAA's analysis of 59 university audits carried out between 2004 and 2006 says that "only a small minority of institutions have developed completely effective systems for gathering data and have created a culture in which this data is fully exploited at both routine and strategic levels."

A number of institutions had "amassed large quantities of reasonably accurate data" but were "at something of a loss as to what to do with it".

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Although there had been improvement since the previous cycle of audits, there were "wide disparities" in the extent to which institutions had made progress, and practice in this area was still less "mature" than in other areas of quality assurance.

However, the efforts of some institutions are highlighted in the report as examples of good practice.

Sue Grant, academic registrar at the University of Hertfordshire, which won praise for its student record system, said: "We have to collect the data - the Government tells us that - but it is about actually then making use of it to inform decisions. We have information right down to module level, so if an issue is identified we can look at introducing extra classes or support groups, for example."

The University of Bolton, which has higher than average dropout rates, is praised for producing an annual report that looks at trends over periods of up to six years.

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Peter Marsh, its deputy vice-chancellor, said that the university had developed a single reliable system for gathering data, which also covers degree classification, entry qualifications, age, gender and ethnicity.

Before this, data had been collected by individual departments, which resulted in inconsistencies.

"The important thing is that I think that it has the confidence of academics as a reliable system. One of the problems with central management information is that academics tend to be quite cynical about it and can often say that it doesn't apply to us - it is not reliable," Dr Marsh said.

"Because this has been developed in conjunction with the academic areas for schools, and because it has been worked on by an individual academic member of staff ... they have more confidence in it, and they feel they can ask the individual if they have problems about understanding the data.

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"It enables us to understand a very complex student body better," Dr Marsh said.

"We can see patterns of progression and dropout, and where they might differ. As well as individual departments being able to analyse their own data, we can look across the institution."

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The Bolton system has helped identify points in the year when students are more likely to drop out. Student-support officers have been assigned to help students settle into university life in their first year, which Dr Marsh describes as being "the biggest hurdle".

rebecca.attwood@tsleducation.com.