National is concerned about poor outcomes at universities - too much money wasted on people failing courses. So they've announced that in future, university funding will be linked to student grades, and reduced if too many fail.
The aim is higher academic standards. But maintaining them means marking down or failing those who don't make the grade, so there's an obvious perverse incentive for grade inflation and passing marginal students - the exact opposite of what the government says it wants. But pass/fail rates will likely improve, so the government can claim it is getting what it wants (and issue a few press releases about how it has "improved" university standards), while the quality and reputation of our universities goes down the toilet.
(Meanwhile, the reduced funding will mean the government "has" to remove caps on fees, which will naturally see them rise. Which means an even higher entry fee on our meritocracy, and reduced social mobility as a result. National's rich backers, who want to perpetuate their own wealth and privilege, will be very happy with this. But the rest of us, who want the next generation to have a fair shot, should not be).
