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Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers (ATL), said:
"It is all too easy for Lord Mandelson, who went to Oxford when there were no tuition fees and universal grants, to "insist" on the link between higher education and jobs.
"It is clear that when he talks of 'diversity of income' this is just a euphemism for fundraising. In practice this would mean that some of the finest academics in the world would be devoted to raising money to fund their courses rather than teaching and researching. We would risk losing our finest academics to universities overseas, where they can avoid having to justify their work in terms of economic growth. Why would any world class researcher come and work in a British university under these conditions?
"Lord Mandelson also stated that disappointed university students can apply to our finest further education colleges, but they are suffering even greater funding cuts than universities, which makes them a less viable option."