The task of constructing appropriate performance indicators for universitie
s is an important one, particularly in the context of political debates suc
h as that associated with widening access to universities. It is argued in
this paper that the proper basis for such performance indicators lies in th
e construction of an appropriate model of student flows. A suitable notatio
n is developed and there is a discussion of data availability. Then, in tur
n, the core model and the main performance indicators are presented. This a
nalysis is compared to that of the Higher Education Funding Council for Eng
land. Some proposals are made for an ongoing work programme to test the mai
n hypotheses of the paper.