This Go8 Backgrounder explores the possible uses of compacts in government financing of university activities, examines their potential costs and benefits, and outlines principles for their design and implementation. The Government has committed to compacts as an element of its future funding arrangements with public universities but has not yet determined their scope, role and shape. This Go8 Backgrounder raises issues and options to assist policy considerations. This paper is designed to aid the consultation process by providing a set of references for universities in their forthcoming discussions with Commonwealth officials. Appended are: (1) University College London: Knowledge Transfer Strategy; (2) King's College London: Access Agreement Submission To The Office For Fair Access (Offa) 2008-09; and (3) Elements of a Postsecondary Education Compact. (Contains 2 figures, 1 table, and 69 endnotes.)