Cash converters

John Holmwood warns that firms with closed-door government access will turn state-funded public assets into private profit

February 21, 2013

Source: Patrick Welham

Peter Crisp, the chief executive and dean of BPP Law School, recently wrote in these pages of the “hostility, sometimes bordering on hatred” towards private-sector higher education. He claimed that those who criticise private providers do so on ideological grounds.

The argument was reminiscent of that made by David Eastwood, vice- chancellor of the University of Birmingham and a member of the Browne Review, who once suggested in a national newspaper article that public policy-making is best conducted behind closed doors.

Certainly, those who advocate for-profit higher education have access to ministers behind doors that remain closed to its critics. For-profit lobbyists met David Willetts, the universities and science minister, on at least 12 separate occasions prior to the publication of the 2011 higher education White Paper. Meanwhile, newly ennobled John Nash of Sovereign Capital, which owns the private Greenwich School of Management, is now Conservative spokesman on education in the Lords, alongside his earlier appointment as a non-executive director at the Department for Education.

Critics of the marketisation of higher education, according to Crisp, are distorting the debate, offering unreasoned opposition and no evidence for the risks they claim. Yet Crisp’s own use of evidence is highly selective.

He states in his article (“Sound and Fury”, 24 January) that for-profit providers are more tightly regulated than public universities, which hold their degree-awarding powers in perpetuity. But this is in the current context of for-profit higher education forming only a very small part of the UK sector. The concerns of its critics are about the consequences of a much-expanded role.

It is significant that Crisp makes no mention of the 2012 US Senate (Harkin) report on for-profit higher education, which is particularly critical of the University of Phoenix - part of BPP’s parent group, Apollo - and of the involvement of private equity companies. The same issue of Times Higher Education reported that for-profits in the US have moderated their behaviour in order to avoid regulation that would harm their interests. As the Senate report sets out, these interests are at odds with those of the wider sector and the students who purchase its courses.

Crisp also claims that public universities in the UK have under-invested in undergraduate degrees and “can waste public money hand over fist”. For- profit providers, however, have to meet much higher executive salaries, shareholder returns and significantly increased advertising and recruitment costs (between 25 and 30 per cent of their revenues, according to a Parthenon Consulting presentation to Universities UK). This makes Crisp’s example of profligacy - a vice-chancellor’s Daimler - pale into insignificance.

In trumpeting the £5,000 annual undergraduate course fee charged by BPP, Crisp does not mention the fact that this represents a significantly lower investment in undergraduate education than that found in public universities. He cites the leading law firms that use BPP and the College of Law (which recently gained university title), but he does not say that these organisations predominantly pay for high-fee postgraduate and continuing professional development courses.

What, then, is the evidence of the inefficiency of public universities? A 2009 report for the European Union by Miguel St Aubyn et al, Study on the Efficiency and Effectiveness of Public Spending on Tertiary Education, suggested that the UK had the most efficient and effective university system in the Organisation for Economic Cooperation and Development. If any income assigned to undergraduate education has been “diverted” elsewhere we can be sure that it has not gone to shareholders but to other, wider functions of the university.

It is precisely these functions - research and community engagement - that are at threat from the expansion of for-profit higher education. These activities, with all their public benefit, become simply “inefficiencies” in the profit-seeking sector. Research is, quite rightly, a requirement of a public university, but it is not required of for-profit providers holding the “university” title.

Yet the curriculum taught in the for-profit sector is dependent on the research activities of academics elsewhere. And the expansion of for- profit higher education threatens that research activity: competition with for-profits for students will drive universities out of some subject areas.

Many of these issues are at the heart of the current debate over open- access publishing. Unlike public universities, for-profits do not provide library facilities on a similar scale for their academics and students - but open access means that they will be allowed free access to research for curriculum development. With few of their staff publishing research, these organisations will not have to meet the costs of an author-pays “gold” system. What will they share in return? Crisp’s organisation does not even list its staff or their publications on its website. And while many academics in public universities are sharing their curriculum materials, BPP’s are locked away.

Those who criticise for-profit higher education are not opposed to new forms of higher education, but to the encroachment of a new set of private interests. What is at stake are the very principles that have informed higher education since the Robbins report: the principle of higher education as more than training; of the advancement of learning through the complementary combination of teaching and research; and of university education as the development of culture and of citizenship.

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