After a decade of dominance at the head of our league table, the University of Cambridge is recognised today as the 2007 Sunday Times University of the Year.

Any list of the leading academic institutions in the world would include Cambridge. It currently ranks second to Harvard in the Times Higher Education Supplement’s world university league table, one place ahead of Oxford, which it has beaten by the same single-place margin in all 10 of our league tables since 1998.

On the world stage, Cambridge competes primarily with American institutions. That it does so on an equal footing, despite a huge disparity in funding, is a tribute both to the financial efficiency of Cambridge, and of course, its intellectual capacity.

Vice-chancellor Alison Richard, the first woman to hold the position full-time, is in a good position to judge Cambridge’s standing, having spent 30 years working in America, at Yale, the last eight of which were spent as provost, the chief academic and administrative officer behind the university president.

“We are totally focused on quality,” she says. “We compete with institutions in the US and we compete with a fraction of their resources at our disposal and without the infrastructure that our American peers have.”

In schools the length and breadth of Britain, Cambridge represents the pinnacle of academic achievement, the holy grail sought by more than 14,000 sixth-formers every year. They vie for about 3,300 places, with more than four applicants chasing each one. Virtually all of the 14,000 are expected to – and go on to – achieve straight As at A-level or the highest scores in the international baccalaureate.

The rewards for those who make it are immense. Thirty-six subjects secured top ratings for the quality of teaching during a decade of reviews conducted by fellow academics for the Quality Assurance Agency for Higher Education. Not surprising when you consider that many of the academics have written the text books too.

Students benefit from the unique supervision system at Cambridge, where they are taught in pairs or small groups by a senior member of staff, usually from the college to which students belong. Unlike in many modern universities, the coursework (often essays) is not formally assessed. The aim is to encourage risk-taking free of the fear that getting it “wrong” might damage the chances of leaving with a high-class degree.

Of course, many do go on to achieve just that, with one in four students gaining a first, 86% a first or upper second. Assessment is mostly by three-hour written examinations.

Fostering a culture of intellectual freedom extends beyond supervisions into Cambridge’s research work.

Ahead of the university’s 800th anniversary in 2009, the UK’s largest fundraising campaign has been launched, seeking to raise £1 billion for the coffers. The aim is to build an endowment that will sprinkle stardust, offering additional funds across four key areas: Support for students; Support for staff; Assisting university collections and preserving the architectural heritage; Fostering the “freedom to discover”.

The university is halfway towards achieving its target and the dividends are already apparent. Richard sees the appeal as getting back in touch with the philanthropic spirit that has underpinned much of what Cambridge has achieved over eight centuries.

“We need more seed capital,” she says. “We call it the freedom to discover, having the flexibility to test ideas before they are ready to take to the research councils for funding.”

Another dividend is apparent in the university’s bursary scheme, heavily revised earlier this month at huge cost. Many universities are still mulling over their response to the government decision to increase grant provision, raising the maximum income ceilings to £25,000 and £60,000 respectively for qualification for full and partial maintenance grants. As many bursary schemes have been pegged to these thresholds, which have risen from about £18,000 and £38,500 respectively, the institutions are facing sharply increased costs.

Cambridge has moved quickly, however, to track the increased income thresholds for grant qualification. Full Cambridge bursaries of £3,150 will be offered next year to all students from families with incomes below £25,000, while smaller bursaries will be given to students from families with incomes up to £60,000. This will bring about 500 extra students each year onto full Cambridge bursaries and the overall cost of one of the most generous bursary packages in the UK will rise by £1m a year to £7m.

The university is determined that nobody be put off from applying on the grounds of cost.

The application process is probably the aspect of Cambridge that is discussed most, aside from the excellence of its teaching and research. Both Cambridge and Oxford have been beaten with a stick for not recruiting enough students from state schools. The problem has never been the selection process itself, but the application process that precedes it. The two universities can only choose from the applications before them. As the Cambridge prospectus puts it: “We can’t offer you a place if you don’t apply to us.”

A plethora of initiatives, including summer schools, partnerships with local authorities and schools with little history of progression into higher education, visits to Cambridge, visiting schools, open days and student mentoring have all borne fruit. The Cambridge Special Access Scheme is open to first-generation applicants, those from schools with a poor record of sending children into higher education, or those whose education has suffered significant disruption.

The success of these initiatives has produced clear water between Cambridge and Oxford, helping to lever up the state school intake to 57.9% of all entrants, according to the most recent figures, which is significantly ahead of Oxford’s 53.7%.

“There is no magic bullet, no single issue that will solve the problem we have in terms of applications. It is an aspirational problem. We have to convince them to give it a try – and we work on many fronts to do that,” says Richard.

But she is adamant that this should never translate into favouring applicants from one sector over another, dismissing the theory that in a changed world removing a child from an independent school and putting them into a state sixth form could increase the chances of their application to Cambridge succeeding.

Cambridge’s contribution to the world across its 798-year history is staggering. There have been 81 affiliates of the university awarded the Nobel Prize since 1904; Cambridge academics have been at the forefront of advances throughout the centuries.

The development of the jet engine (Frank Whittle) and the unlocking of the structure of DNA (Francis Crick and James Watson) are just two of the defining moments of the 20th century that can be laid at the door of this giant of the academic world.

Our University of the Year award, however, is not an acknowledgment of Cambridge’s illustrious past; it is a recognition of how the university is tackling issues of the moment and building for a future where it will continue to be a dominant force in world academia.

The publication of the 2008 research assessment exercise in December next year will confirm Cambridge’s preeminence in research terms. The £50m Cancer Research UK Cambridge Research Institute, opened by the Queen in February, is typical of the research initiative that will keep Cambridge at the cutting edge. More than 300 scientists in up to 30 research groups will be based there, dedicated to finding the causes of cancer and developing treatments.

Richard is particularly pleased with The Sunday Times award. “I am absolutely delighted that we have won this award. I am pleased and proud that we have occupied first place in this table for the past 10 years, but that is only one aspect of what is important. We are being recognised not merely for being top of the league table, but for the education we provide and the contribution we make.”

The students recognise this contribution, too, taking part in the national student (satisfaction) survey for the first time, they placed it second only to the small, private University of Buckingham.

St Andrews, winner of our University of the Year title in 2002, ran Cambridge closest for this year’s award, the nearest a former winner has come to repeating the trick.

No longer can the good times at St Andrews be ascribed to the good fortune of having Prince William study there. Only five multifaculty universities have returned higher levels of satisfaction.

Teaching and research is of the highest standard, graduate unemployment is low and the level of entry qualifications held is only just below that of Oxbridge. This combination of excellence has helped St Andrews rise in our table from 14th to 10th to sixth in successive years.

Three other universities make our shortlist. The most remarkable is Queen’s University Belfast, a casebook study of how a university can help drive the regeneration of the city and region in which it is located.

Under vice-chancellor Peter Gregson, Queen’s has been reborn. Free of the long shadow cast by the Troubles, it is now recruiting academics from the world stage to boost its research profile. Admission to the research-led Russell Group of universities – the British equivalent of the Ivy League in the US – recognises the turnaround in its fortunes.

The University of Leicester earns its shortlisting for all-round strength and excellence. Only Oxbridge and Loughborough, among multifaculty institutions, get higher ratings in the national student survey. A £300m development plan will transform the city centre campus.

Harper Adams University College, which offers primarily land-based courses from its Shropshire base, is the final shortlisted institution. Included in our league table for the first time, it debuts ranked 44=, well above the leading modern university, Oxford Brookes (53). It has the lowest rate of graduate unemployment, a dropout rate running at about half the expected level and some of the happiest students in the UK, judging by its outstanding performance in this year’s national student survey.

The University of Glasgow is our Scottish University of the Year.

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