Bring on market dash and cash

Charles Clarke, the former Labour education secretary, has backed the government's aim of attracting more private investment into higher education - and has argued that persuading academics to change "products" is "exceptionally difficult".

His comments to the annual EducationInvestor Summit, held in London last week, came on the same day as the announcement that Montagu Private Equity had bought the College of Law, a charity with degree-awarding powers.

Mr Clarke, who was secretary of state for education and skills from 2002 to 2004 and introduced variable tuition fees, told the conference that the current government was "rightly" keen on private investment in education.

Everywhere in the world, demand for education is going up "dramatically", but the public funds available to meet this demand are "flat or even negative in certain areas", he said. "The answer, of course, is private investment."

Mr Clarke went on to underline how hard it was to bring about change in the sector.

Many universities "don't really get it", he said, and "even when the leadership of the university gets it, persuading the deans of the faculties, the academics, the professors" is "exceptionally difficult" because it requires changes to "products" and the way that courses are taught.

His point was echoed by Andrew Colin, chairman of INTO University Partnerships, a company that has established centres that teach pre-degree qualifications at nine UK universities and also employs Mr Clarke as a paid consultant on transnational education.

While concurring that the sector needed both private funds and initiative, Mr Colin acknowledged that "frankly there's not an awful lot of evidence around of the private sector doing a great job" in higher education.

He later explained to Times Higher Education that he thought INTO's investment had helped to improve universities despite there being no "formal basis" for evidence that private money alone could raise quality.

INTO recently launched a £100 million fund that universities could tap into for expansion projects such as establishing an overseas campus.

The firm was also talking with unnamed UK universities about jointly setting up a new engineering or media and communications department, Mr Colin said.

But Sally Hunt, general secretary of the University and College Union, said that the first priority of for-profit firms was their shareholders.

"They are not interested in providing a broad base of educational programmes. Their modus operandi is to undercut the competition in the search of profits, posing a real threat to those universities still pursuing costly ideals such as research," she said.

INTO is not a listed company, and Mr Colin insisted that he was "not in the slightest interested in higher education for (the purpose of) making money".

Documents filed at Companies House show that INTO's highest-paid director received £200,000 in the year ending 31 July 2010 on a company turnover of £17.6 million.

david.matthews@tsleducation.com.