Introducing a truly open market is the only way to

September 24, 1999

THE PRIVATE SECTOR.

UK public universities will have to move closer to the private sector in order to survive. In which case, they will have to change their ways, says Marcel Van Miert.

The choice of higher education providers in the UK is growing rapidly. Employees of Cable and Wireless or British Aerospace can choose to study through their corporate universities. Would-be osteopaths will find one of the best places to study is the independent European School of Osteopathy in Maidstone. Those seeking top-class postgraduate management education can pay for courses at Henley Management College. Coming soon are a host of internet based courses from many independent international education providers, particularly from the United States.

Of course, there are still 146 UK public sector universities and university colleges, but some have suggested that they will need to move closer to the private sector in higher education provision in order to survive.

Sir Colin Campbell, vice-chancellor of Nottingham University, recently wrote in The Sunday Times of the need for universities to be privatised to increase their flow of research funds and to compete for the best students.

The government has taken steps to improve access to non-state sector higher education with its "connected institutions" scheme, which will allow independent, possibly even profit-making, institutions to receive state funding for students by linking with an existing university.

The rumoured "learning accounts" might eventually allow funding to follow the student to any institution that meets a certain standard. This would set up a truly competitive system that could only benefit students and open prestigious institutions such as the European Business School, London,and the Royal Agricultural College in Cirencester to those who could not afford it before. It would also bring the UK in line with arrangements in Scandinavian countries.

All these changes increase the private sector involvement in UK higher education, but how will this affect the current situation? The first adjustment is already becoming apparent - universities will have to treat their students as paying customers who see themselves as sacrificing three years of work to pay to study. As a result of their large financial commitment, students are looking for courses that reduce their costs or, increasingly, maximise their earnings on graduation. Prospective students may soon choose between taking out a bank loan for a higher rated university course or opt for a flexible part-time course with a private provider delivered via the internet at home.

As has happened with schools, league tables will be pored over by prospective applicants in years to come. A high quality of provision will have to be maintained at all times across all courses, and universities will have to spend more money on advertising and other marketing techniques to increase awareness among potential students, as well as improving the service they offer to their "customers" once they have arrived.

State universities looking to improve in this area would do well to look at the successful independent higher education institutions. They offer smaller classes, fewer drop-outs and a greater focus on individual development. They also offer "extras" that are rated by employers - such as arranging periods of work experience and offering study in more than one country.

Exposure to the private sector also brings risks for all institutions. Size and age are no protection from market forces. Indeed, smaller higher education providers that can regularly update their courses to meet the demands of employers and students and quickly spot new niche markets will do well.

More private sector involvement will also improve the promotion of UK education on an international basis. The prime minister has argued that the UK has the potential to attract more students here. UK institutes offering and validating courses abroad is another area where tremendous growth is possible. UK education is world-renowned and, if managed properly, could become one of Britain's major exports.

But even these changes will not bring the UK to the situation that has developed in the US over the past few years. Private universities compete there in every state and in different market sectors. The private, profit making University of Phoenix now has more than 60,000 students studying on part-time degree courses - arranged around other employment or family responsibilities and delivered in many cases via the internet. On the other hand, a year at one of the top private universities such as Harvard can cost more than $30,000 a year. By 2010, it is predicted that more students in the US will be enrolled in corporate universities than in traditional ones. Their institutions are now increasingly looking across borders to continue their growth.

Opponents of this type of educational future will argue that access to higher education will not be available to poor students. Again, however, the US provides a model of how to avoid this. Ivy League colleges scour the country to find the best talent and offer students the scholarships needed to attract them to their institution. This ensures that the academic standards remain high and that the colleges are not seen as a place just for rich kids. Other students will work and study at the same time.

The British government has taken the first steps towards opening up the market, but, for political reasons, it may well have to wait until after the next election to introduce a truly open market in higher education.

One thing is clear though, UK higher education is operating in a global market and more private sector involvement will have to happen sooner or later if we are to catch up and overtake the aggressive prestigious institutions from the US and Australia. As for the political difficulties, few people would have thought ten years ago that a Labour government would remove student maintenance grants and introduce tuition fees.

Marcel Van Miert, director of the European Business School London, is chairman of the Council of Independent Colleges and Research Institutions.

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