Company policy: where Uclan restructure plans lead, post-1992s may follow

November 22, 2012

Post-1992 universities could begin to change their legal status and open up to private investment in the wake of the University of Central Lancashire's application to the government to become a private company.

Uclan also plans to adopt a "group structure" from August 2013, whereby its international branch campuses in Cyprus, Thailand and Sri Lanka would be managed separately, with its vice-chancellor running only the UK university and reporting to a group chief executive.

Switches to company status and changes in structure were both advocated in a 2009 report to Universities UK by Eversheds, Uclan's law firm, as ways for higher education institutions to attract private investment.

Malcolm McVicar, Uclan's outgoing vice-chancellor, will stay on as interim chief executive of the group. Questioned about the changes, he said: "We started taking some legal advice on moving to a group structure and our lawyers said: 'You also need to consider your legal status'."

The Eversheds report said that institutions taking the form of private companies, either limited by guarantee or by shares, have "greater freedom" than higher education corporations, the status held by the majority of post-1992s.

Private companies "have the advantage of being able to raise equity or quasi-equity investment from third parties", the report said.

Its author, Glynne Stanfield, a partner in Eversheds, has reportedly described himself as a "legal, non-party political" adviser to David Willetts, the universities and science minister.

Mr Willetts has previously criticised the "restrictive regime for higher education corporations" and said that such institutions should be given more freedom in areas of "governance and dissolution".

By taking the form of a company limited by guarantee - a non-profit distributing entity - Uclan would have "more control and autonomy", Professor McVicar said.

But he added: "It isn't privatisation. It isn't about taking the university into the market and forming a limited company with shareholders. It stays a university, stays a charity."

Dissolve us, we want you to

Uclan's move is likely to stir up interest in becoming companies limited by guarantee among other post-1992s.

Under section 128 of the Education Reform Act 1988, the secretary of state - currently Vince Cable - can, by order, dissolve a higher education corporation and transfer its assets and liabilities.

Uclan has already applied to the Department for Business, Innovation and Skills seeking such an order.

"I understand we are the first," Professor McVicar said.

Regarding the group structure, he added that "as group demands have got bigger, I'm very keen to make sure the university in the UK gets sufficient time and attention from its vice-chancellor".

The Eversheds report said that a group structure, potentially including distinct higher and further education and even school brands, "is likely to be intermeshed with commercial companies within the group which could have funding and interest from outside stakeholders".

Professor McVicar said that the group structure idea came from the university's board, which considered it to be "a model ... used in many medium-sized companies which have ambitious plans for the future".

He added that although he will still retire as vice-chancellor in summer 2013 as planned, he will stay on as interim group chief executive for about a year after that.

You've reached your article limit.

Register to continue

Registration is free and only takes a moment. Once registered you can read a total of 3 articles each month, plus:

  • Sign up for the editor's highlights
  • Receive World University Rankings news first
  • Get job alerts, shortlist jobs and save job searches
  • Participate in reader discussions and post comments

Have your say

Log in or register to post comments

Featured Jobs

Assistant Recruitment - Human Resources Office

University Of Nottingham Ningbo China

Outreach Officer

Gsm London

Professorship in Geomatics

Norwegian University Of Science & Technology -ntnu

Professor of European History

Newcastle University

Head of Department

University Of Chichester
See all jobs

Most Commented

men in office with feet on desk. Vintage

Three-quarters of respondents are dissatisfied with the people running their institutions

A face made of numbers looks over a university campus

From personalising tuition to performance management, the use of data is increasingly driving how institutions operate

students use laptops

Researchers say students who use computers score half a grade lower than those who write notes

Canal houses, Amsterdam, Netherlands

All three of England’s for-profit universities owned in Netherlands

As the country succeeds in attracting even more students from overseas, a mixture of demographics, ‘soft power’ concerns and local politics help explain its policy