Question: How satisfied were you with the funding arrangements for universities that the government announced earlier this year?

Baroness Warwick: We were very pleased with the extra money that was announced although overall, the extra money did not match the amount of investment need that we identified in our spending review submission. Research, for example, did well, but teaching did relatively poorly.

On the other hand, every part of the public sector competes during the spending round and we felt that it was at least a start in undoing the damage caused by past underfunding.

I think it gives a good benchmark against which we can produce our submission for next year. The irony is that we are about to start the next round of submissions, but we haven't even got the new money in yet.

So while we're pleased there is extra money, we have to re-double our efforts to get the amount of money needed to undo past underfunding and to meet the government's priorities for higher education.

Question: How would you justify extra money from the public purse for higher education?

Baroness Warwick: We must be able to deliver excellence to our students and to continue to play our part in the international research marketplace.

In both those we are in severe danger of losing out to our international competitors. The way in which institutions have managed to sustain the quality of what they offer to students has largely been through neglect of infrastructure - which means laboratories, libraries, accommodation and so on have suffered.

Furthermore, they have not been able to pay staff at a level which makes us competitive, so we're facing a prospect of losing staff, and not being able to attract the brightest of our graduates into higher education as a career.

Question: Does the introduction of tuition fees mean that ministers recognise that universities have been underfunded in the past?

Baroness Warwick: There is no doubt that the amount of money required to make good the neglect of universities over the last 18 to 20 years is unlikely to come entirely from public funding. The white paper recognised this underfunding but made clear the government's intention to address this via a combination of enhanced private contribution alongside public funding. However, it will be important in recognising past underfunding that new income from variable fees is truly additional rather than a replacement for public funding.

Universities UK supports the introduction of the new student contributions for two reasons. Universities need the money. But also students gain a very considerable benefit from the value added by their degrees. We think it's perfectly fair that where - and when - they are in a position to do so, they should make a contribution to that added benefit which is paid for by all tax-payers.

In making that additional contribution, students would expect, quite rightly, to have the highest quality.

Question: What was your response to increased concentration in research funding?

Baroness Warwick: I'm very unhappy about the degree of concentration.

Of course we have to invest to international standards - that goes without saying. But we already have the most highly concentrated research funding in the developed world. It's certainly higher than the United States.

What we're concerned about is that you can't afford to invest to international standards at the expense of funding top rated departments elsewhere or particularly promoting emerging areas of research which will become areas of expertise in the future. I think this is an issue on which there is a wide level of unanimity amongst vice-chancellors and HE unions.

Question: Did you welcome the government's decision to introduce an Office for Fair Access?

Baroness Warwick: We'll be responding to the OFFA proposals in detail shortly, but our immediate questions focus on what added value this body will bring to what is already being done by universities. We'll also be looking to see how the proposals will support the needs of all students and all universities, for example. It is vital that the body recognises the past achievements of universities who have been most successful in widening participation and that it will be most difficult for these institutions to afford bursaries out of any additional income they might receive from variable fees.

However, we very much support the government's commitment to widen participation in higher education. Universities have been working hard to improve access and we have produced several reports which indicate very clear examples of that. But we recognise that it is a struggle because whereas all students with good A-levels have a very good chance now of getting into higher education, the people who we're not really attracting are those who are turned off education before they get into sixth form.

We have to find a way to reach out to schools, and of encouraging schools to ensure that those pupils with potential are given sufficient encouragement and support to make them think that universities are for them.

So while there is a lot that universities can do to work with schools, there is a lot of work that has to be done in schools themselves.

Question: How would you persuade applicants that getting a degree is still worthwhile?

Baroness Warwick: I think that there is no doubt that possessing a degree is still very valuable in gaining employment. The proportion of graduates who get jobs after leaving university has held up very well indeed.

There is no doubt that employers want to hire people who have degrees. They also clearly want to encourage students whilst they are at university to take up a wider range of skills - employers always want to have multi-skilled employees. So going to university is worthwhile in gaining a wide range of experience and skills.

And universities have responded very well to that. There is no doubt that the earnings of graduates are enhanced very substantially over those who leave schools just with A-levels. All the indications are that if you have a degree you will be greatly better off and it is definitely worth it.

Getting a degree is about more than getting a job, however. Higher education is a very rewarding experience - certainly all the student surveys show that they feel the experience has been worth it!

Question: The deadline for responses to the white paper has just passed. What did you think about the government producing their own individual proposals, rather than taking the lead from other European countries?

Baroness Warwick: Universities UK was actually very concerned about that because what is known as the Bologna Process is having and will continue to have a great impact on higher education in the UK. The link between teaching and research - which the White Paper challenges - is for example central to the understanding across Europe of what defines a university.

The Bologna Process is also concerned with the creation of a European higher education area and a European research area - and the UK is already committed to these. They will have an impact on the way we deliver higher education here and yet this commitment is virtually ignored by the white paper. We certainly can't afford to be out of step with Europe.

Question: Is the government looking towards America then?

Baroness Warwick: I think there is no doubt that the government is looking towards the American system when it talks about research - wrongly in my view.

It quotes the American system when it talks about differentiation between institutions. One of the things we are concerned about is the prospect that ministers want to change the status of universities and possibly withdraw the requirement for universities to do research.

In Europe by contrast, teaching and research is seen to be indivisible in terms of university education and we will be very much out of step with Europe if we seek in some way to differentiate with them.

Question: What's your view of the Department for Education and Skills?

Baroness Warwick: Well we always complain about the regulatory burden and indeed the latest funding letter from the department has so many strings attached to the money it is allocating that I think there are concerns about the degree of central control.

But I think it is something that we are very alert to and which we have discussed with both Ministers and officials in the frequent meetings we have with them - and we have certainly welcomed the substantial funding settlement the sector has received.

Question: What are your priorities for the rest of the year?

Baroness Warwick: We have a number of key aims.

We will be looking to persuade the government that there needs to be renewed investment to deliver the access agenda.

In order to ensure we meet the targets there is no doubt, particularly given demographic changes, it is going to be a real challenge to ensure that we can reach out to those potential students who are currently disaffected.

We will be working to convince the government as well that it is really important to continue to support excellence in research where it is found and not try to concentrate it too strongly.

Thirdly we have to remind government of the importance and emphasis they placed on teaching excellence in the White Paper and the importance of rewarding staff in order to deliver that excellence.

There is no extra money in the white paper to deliver that excellence. There is more money for research but no extra for teaching.

And of course, we are already preparing our case for the next spending review.