Baroness calls for higher education to be privatised

September 25, 1998

Universities and the Government should urgently consider privatising higher education to allow it to meet financial and widening access targets, according to Baroness Perry, president of Lucy Cavendish College, Cambridge.

In a special higher education issue of the Journal of the Institute of Economic Affairs, Baroness Perry, former vice-chancellor of South Bank University, sees no reason why universities such as Cambridge and South Bank, despite the diverse nature of their missions, should not be allowed to move into a contractual relationship with government to educate a defined number of students.

The arrangement would be the same as that which exists for contracts with industry for specific training programmes.

A government not committed to central planning could decide it would be to the advantage of taxpayers to move into such contractual relationships with universities, she argues.

These would give institutions the financial freedom to receive the block grant and fee for the number of students that government wished them to educate, while charging a differential fee for any other students they wished to attract. Such students might be independent, funded by employers or funded by overseas government.

"This would allow a limited free market to the majority of universities, while allowing government to continue to control the number of students publicly funded in higher education, and in this regard to engage in whatever form of price control it so wished," says Baroness Perry.

The system would enable some universities to contract for fewer students paid for by government and to take more private students funded through endowments and private fees.

Also in the Journal, Lord Dearing, who chaired the national committee of inquiry into higher education, predicts continuing strong growth of the higher education sector worldwide over the long term. This growth will be accompanied, he says, with increasingly fierce competition between institutions and nations for a share of a market which globally could be worth between Pounds 20 billion and Pounds 40 billion in 20 years' time.

One impact of this growth will be a growing emphasis on the practice of higher education across national boundaries, with cross border consortia of universities mushrooming.

Journal of Economic Affairs, Volume 18 No 3, ISSN 0265 - 0665

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