The changes have been unveiled today in the long-awaited White Paper on the future of higher education. It says that in the first year of the new funding regime, around 65,000 high-achieving students will be able to go to whichever university will have them.

This represents a change from the present strict controls on the number of students each university can accept. It raises the prospect of some elite institutions expanding their intake to hoover up more top A-level students.

The government¡¯s aim is to ensure that students with grades AAB or above at A level will have a better chance of reaching their first choice of university.

The White Paper has also set out plans to make a further 20,000 student places contestable in a different way, allowing institutions that charge tuition fees of less than ?7,500 to bid for them on the basis of ¡°quality, value for money and student demand¡±.

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These institutions could include not only further education colleges, but also private providers, with the government taking steps to ensure that such institutions are operating on a more ¡°level playing field¡±.

Taken together, the government expects the changes to make a total of 85,000 student places open to competition between institutions ¨C around one in four of the total number.

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It has indicated that this proportion may increase over time.

However, this new contestability will sit within an overall cap on the total number of student places in the sector. Consequently if some elite institutions expand their intake, it will be at the expense of others, which will necessarily have to shrink.

It also means that highly selective institutions, such as those in the 1994 and Russell groups, will have to compete for a large proportion of their students, many of whom already achieve AAB or above at A level.

Speaking to Times Higher Education, David Willetts, the universities and science minister, said the aim was to ¡°dynamise the system¡±.

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¡°It¡¯s a very fine judgement we¡¯ve had to reach. On the one hand I was very keen¡­not to break down the old quota system, [but] we wanted something that was more open and liberal. On the other hand, there¡¯s quite a lot of change happening in 2012, and the last thing I want is a kind of change so disruptive that our universities can¡¯t handle it.

¡°We think that these two proposals, adding up to 85,000 places, get the balance about right. And then, after we¡¯ve seen how it works in the first year, we aim gradually to increase that.¡±

Mr Willetts denied that the government¡¯s aim was to create an elite set of institutions in which all the top-achieving students were concentrated.

¡°I¡¯m not trying to plan the system. The whole point about this is we¡¯re taking some steps back and it will be the choices of students and the reaction of institutions ¨C I have no view on that,¡± he said.

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He argued that with funding following the student, and universities and colleges forced to compete for those students, the quality of teaching and learning, and the student experience, would rise.

¡°We¡¯ve got very strong incentives to reward research, and the intense competition through the [research excellence framework] and research councils has yielded an incredibly strong research [base]. We haven¡¯t had comparable incentives on teaching,¡± he said.

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simon.baker@tsleducation.com