Universities have expanded, polytechnics have joined them, students pay tuition fees, their numbers have soared and loans have replaced grants, but the Higher Education Funding Council is still in place – itself a successor of the University Grants Committee, set up in 1918 to channel funds from government to universities.

This mix of past and present helps to highlight the ambiguities and contradictions of the tertiary education sector.  Some British Universities are among the best in the world, but the international league tables that measure their work search for research excellence, not teaching quality.  Students pay more, but there is little sign of the competitive and innovative education market that we were promised, with more higher education institutions charging the maximum tuition fee.  Government spends more, subsiding the loans system to the point that, for some students, it turns out not to be such a system at all.  And all the while, employers say that graduates are not up to the job.

During the summer, Jo Johnson, the Universities Minister, complained that the sector’s market was “frankly anti-competitive”; mocked the requirement for new institutions to have degrees validated by an existing university, which he said is “akin to Byron Burger having to ask permission of McDonald’s to open up a new restaurant”, and declared that “we need to bust this system wide open”.  He has a plan to do so.  A Green Paper on Higher Education is to be published soon.  A bill is pencilled in for the next Parliamentary session.  And near the heart of his proposals is the replacement of that funding council which, in one form or another, has been in place for the best part of a century.

Johnson’s proposals begin with the student experience.  Some University teaching is excellent; too much is “execrable”, to borrow a word sometimes used in the department.  To help raise the standard, he wants Universities to be rewarded for better teaching.  The metrics used will include lower drop-out rates, good graduate outcomes for disadvantaged students, and an improved national student survey.  His friends claim that evidence shows students value better teaching above lower fees: there is an reflection here of Nick Hillman’s finding, over at the Higher Education Policy Institute, that they are “less motivated by student issues, like tuition fees, than has often been supposed”.

The Higher Education Funding Council will go.  Although it has oversight duties that its predecessor did not, the clue to its deficiencies are in its title: there is too much stress on giving money to Universities – hence “funding council” – and too little on how it is spent.  Johnson wants this to change.  The new body will be charged with overseeing the metrics that measure teaching, and ensuring that Universities offer value for money to students, taxpayers and employers.  It will also be empowered to allow new entrants to enter the higher education market: here is the means of busting the system open that the Minister wants.

However, it will probe and inspect these new institutions to a greater degree than it will older and established ones: this is Johnson’s means of balancing quality assurance with a light touch.  Finally, that emphasis on disadvantaged students will reach wider.  David Cameron has pledged to double the university entry rate among students from disadvantaged backgrounds by 2020, and wants to see a 20 per cent increase in the number of black and minority ethnic students going to university by 2020.  He is championing colour-blind applications.  Johnson has pressed UCAS, the body charged with processing University applications, to publish place offers by ethnic group, which it will do.

If the new inspection body is to be the stick, there will also be a carrot. As George Osborne announced in the Budget, Universities that teach better will be allowed to raise fees in line with inflation from next year.  Permitting further rises later has not been ruled out.  There will be no shortage of objections to all this.  Some Universities don’t want to be challenged by new entrants.  There will be questions of detail, such as whether the metrics will work.  There will be those of principle, such as whether it is really government’s business to tell the Universities how to conduct theirs.  And there will be concerns about whether a tuition fee hike will deter poorer applicants.

But the age in which Universities were open to only a small percentage of young people, educating an elite with a stress on knowledge for its own sake, is long gone.  And if the state pays the piper, it will end up calling the tune – and Johnson’s, with its emphasis on better teaching and an improved market, is an appealing one.  There is no intrinsic reason why good new universities should not put worse older ones out of business.  Nor have fears that higher fees will deter students from disadvantaged backgrounds from applying been realised to date.  Applications from poorer students are at their highest level ever (though loans are now to replace maintenance grants altogether).

The weakness in the plan flows from the proposal to increase their numbers further.  On the one hand, improving access of disadvantaged students to higher education is a work of social justice.  On the other, it is unfair to lump Universities with a requirement to put right what schools have got wrong – and an implicit threat to maintaining standards.  The ideas advanced by the Fair Access to University Group of Conservative MPs to ensure that schools raise their game offer a more reliable route.  Johnson should also look at John Glen’s paper for the group (if he hasn’t already). In the longer-term, he might ponder replacing loans with commissions, as the ConservativeHome Manifesto suggested.

But it is noticeable that his plans appear to by-pass the Office for Fair Access – set up under the Coalition after pressure, in particular, from the Liberal Democrats.  Where they wanted to set up a special new body, he wants to replace an old one.  Indeed, Johnson’s plans owe less to the party that previously presided over the department he now serves in than to Steve Hilton.  The latter’s ideal of accountability and transparency, honed in opposition, has flowered in government – in the form of Michael Gove’s overhauled Ofsted, Theresa May’s crime maps, Hunt’s MyNHS data information service, Eric Pickles’s publication of spending of over £250 online…and so on.

Johnson’s new body has echoes of Ofsted, though it will not be inspecting courses directly.  His friends say that he clocked some of the problems in the Higher Education sector while heading Downing Street’s Policy Unit during the last Parliament.  There is a view that Jo Johnson is the real Johnson to watch.  I am not quite sure about that, but the signs are very good.