Leader: Whoa! You forgot the road map

In its reckless rush for change, the government is endangering the charitable public-interest mission at the sector's core

November 10, 2011

If good things are said to come to those who wait, higher education had better hope that the converse is also not true. One of the biggest criticisms of the government's proposed changes for the sector is the breakneck pace at which they are being conducted.

Determined to take higher education into a new era of market efficiencies, the coalition has driven off in such haste that what plans it has are poorly formed (it has even forgotten to pack a map or satnav). Is it any wonder, then, that it has lost its way, taken wrong turns and created unanticipated problems - rather many, to be frank - as it has raced off down the road?

One of the most contentious issues is the universities and science minister's desire to allow for-profit providers to compete for students. Anxieties over such a move were exacerbated by the recent revelation that David Willetts met a dozen or so such firms before the publication of the higher education White Paper in June. This and the fact that two of the for-profits concerned have been accused of recruitment or public loan fraud in the US drew fierce criticism from opposition politicians and the University and College Union. But perhaps we should look on the bright side. If this is indeed the direction of travel, at least Mr Willetts seems to be getting a sense of what went wrong across the Atlantic and what controls are required to prevent the same thing happening over here.

The need for safeguards is abundantly clear, especially when we are hurtling along at speed and a takeover of a university by a private firm is said to be imminent. In this environment, what is becoming increasingly important is not so much whether universities are public or private - that line has long been blurred and it will only become more so - but whether they are charitable institutions or for-profit ones.

The regulatory reforms proposed in the White Paper consider making it easier for universities - legally considered independent institutions with charitable status (most are termed "exempt charities") - to become for-profit enterprises. And this has worried the Charity Commission. In its submission to the "technical consultation" on the proposals, it expresses concern that if the charitable interests in higher education institutions are not protected, "it would set an alarming precedent in charity law, with serious implications for the whole charitable sector". In other words, the government would be opening up a whole new can of worms.

As charities, universities have the public benefit of their work in effect enshrined in law. The White Paper outlines the need to ensure that the public interest will be protected if a change in legal status occurs, because universities have over time acquired many assets through direct public funding.

Public benefit is the key difference between a charitable and a for-profit institution; it is the "really important" distinction in higher education that one legal firm believes should be the key test the government applies when considering who should get public funding.

In their response to the consultation, the lawyers query why a private firm should receive public cash when it has no obligation to provide any public benefit or to act in the sector's long-term interests. Perhaps it is time for the government to slow down, check its bearings and maybe even ask for directions.

ann.mroz@tsleducation.com.

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