Universities' service to students will be judged on a four-point scale and they will be awarded a "pass or fail" on meeting national standards for awarding degrees under a new process for assessing institutions.

The system of "institutional reviews", to be introduced by the Quality Assurance Agency from September, will also require universities to produce action plans for improvement, even if they achieve top marks from inspectors.

It follows a consultation with the sector over changes to the current system of institutional audits, which judges universities in only two areas and offers them a verdict of "confidence", "limited confidence" or "no confidence".

As mooted in the consultation, universities will be told whether they have met "UK expectations" on the "threshold standards" required to label degree awards as bachelor's or master's.

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However, two other areas - including the "quality" and "enhancement" of students' learning opportunities - will be subject to a four-point scoring system, with two - "commended" and "meets UK expectations" - representing passes.

A third area - the quality of public information - will also be graded in this way from 2012-13.

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Roger Brown, professor of higher education policy at Liverpool Hope University, said the system was a compromise between universities - which are wary of multi-point scoring - and the wishes of government, which wants clearer information for students.

Results from the QAA's consultation, which mainly contain responses from institutions, reveal that universities were worried about "the risk that such graded judgements could lead to the information being used in league tables".

As well as judgements being geared towards better informing the public, there will also be a greater focus on involving students in the process.

This will include the use of student reviewers, plus direct evidence and written submissions.

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Each year, universities will also be inspected - but not scored - on a separate "theme" as well as the core elements. In 2011-12 - the final academic year before higher fees are introduced - the theme will be "the first-year student experience".

Anthony McClaran, chief executive of the QAA, said the eventual intent was that review reports would become "briefer, sharper and clearer", with the information feeding back to prospective students as they decide where to study.

"We would like to reach a position where considering what a QAA review said about a particular institution is one of the key elements that students look at," he said.

He accepted that the forthcoming higher education White Paper could change the quality assurance landscape further, but insisted that the reforms were "important" and fitted in with the general direction of travel.

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Professor Brown said that elements of the QAA's decision showed a move towards the government's agenda. "It is wasted effort because none of things in themselves will do much to improve quality and they'll divert effort away from the things that do need to be sorted," he said.

simon.baker@tsleducation.com.