Coalition confers university title on second for-profit

BPP decision reached despite concerns over US parent firm

August 8, 2013

BPP has been granted full university status by the government, becoming the UK’s second for-profit university.

The business, law and accountancy institution, whose parent company is US higher education firm Apollo Group, had previously held university college status.

The creation of for-profit universities is part of the coalition government’s drive to expose publicly funded universities to greater competition.

Carl Lygo, BPP University’s chief executive, said that the status would allow the institution to expand internationally and seek out higher-quality partners overseas.

The decision by the Department for Business, Innovation and Skills to grant BPP university title – awarded via the Companies House route used for for-profit operators rather than the Privy Council path taken by universities – comes after a lengthy delay caused by scrutiny of the institution’s link with Apollo.

BPP originally applied for the title in January. But that month, the Higher Learning Commission of the North Central Association of Colleges and Schools, a US accrediting body, recommended that the Apollo-owned University of Phoenix be put on probation because of concerns about the institution’s “insufficient autonomy” from the company.

On 10 July, Apollo announced that Phoenix had successfully appealed against the judgement, with its accreditation reaffirmed for a 10-year period. However, the university has been “put on notice” for two years by the HLC, and Apollo has warned that the sanction “could adversely impact our business”.

Although decisions on university title are officially made by Vince Cable, the business secretary, it is David Willetts, the universities and science minister, who is likely to take the key role in practice.

Mr Willetts said that BPP’s university status was “an important step towards increasing the diversity of the higher education sector”, adding that diversity “helps broaden access, focuses attention on teaching quality and promotes innovative learning methods”.

Like publicly funded universities, for-profit operators wishing to qualify for university title must have degree-awarding powers, show that they have at least 1,000 full-time equivalent higher education students, and meet required standards on financial and academic governance.

Professor Lygo said: “This was the first time BIS has had an application from a proprietary company, so it took time to make the right decision.

“BPP University has independent governance, is financially self-sufficient with no debts and fully satisfies the principles of good corporate governance.”

Simon Renton, the University and College Union president, said the UCU was “surprised and disappointed” by the decision and called on the government “to think again”.

He highlighted Apollo’s US troubles, noting concerns across the Atlantic over for-profits’ teaching quality and student outcomes.

The creation of the UK’s first for-profit university, the University of Law, was rushed through in November 2012 to meet a deadline in its sale to Montagu Private Equity, THE revealed earlier this year.

That sale has prompted an additional review by BIS of the University of Law’s title, although a departmental spokeswoman said that this was in line with guidance issued in November on checking that private universities still meet title criteria after any sale.

Meanwhile in a separate development, the charitable not-for-profit ifs School of Finance has applied for university college status.

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