At £67,750, the overall cost of a two-year MBA at the London Business School is one of the more eye-watering price tags in UK higher education. To put it into some kind of perspective, with that sum you could buy a brand new Porsche Panamera 4 with £276 change for petrol.
But for Andrew Likierman, LBS’ dean, the worth of his institution’s premium degree transcends mere pounds and pence. And he is also keen to dispel any notion that LBS is a cash cow – an accusation that has been levelled at UK business schools.
“This is a not-for-profit institution, so we’re not making any money out of this or salting it away,” he told Times Higher Education.
“Quite a lot of universities run surpluses; we’re not able to run a surplus. That’s because the provision of postgrad management education, at a very high level, is very expensive. That’s a fact. And if you want to be in the world league, you’ve got to have people here who are world-league people. You’re competing against the best in the world for the best faculty and students.”
It is London Business School’s global position that prompted Professor Likierman to initiate “The Campaign”, a fundraising scheme to raise £100 million in five years. Just two years in and LBS has managed more than 90 per cent of its target.
“We didn’t know how long things would take, and the [established] record, as it were, for both us and institutions more generally is that it takes quite a lot of time to make money,” he said. “The fact that we’ve done so well I don’t think indicates that we were hopelessly conservative in starting things off, but rather that we had no experience of how things might go.”
The money has already gone into acquiring and refurbishing the Old Marylebone Town Hall as an additional site for the school, creating more scholarships for students, funding endowed chairs and establishing two new research institutes – with a third in the pipeline.
“In terms of our ability to attract the brightest and the best students from around the world, we knew we had to increase our scholarship offering, and that’s what we’re able to do now as a result of The Campaign,” he said.
In January, LBS was ranked second in the Financial Times’ Global MBA Ranking 2015, an improvement on 2014’s third place. Again, it was the only UK institution in the top 10, sandwiched between Harvard University and the University of Pennsylvania. He said that it was the US schools that LBS was effectively in competition with.
“The American schools have long raised substantial sums of money. If we’re going to be able to offer things that are comparable, then this is not likely to be a one-off campaign,” he said.
Global view, British bedrock
Is there a risk though that by focusing on competing with global private universities, LBS will be perceived differently in the UK higher education sector?
Professor Likierman said that the school is “very proud” to be part of the University of London and UK higher education, and is not “seeking to be a private institution”. He also questioned those who might already regard LBS as a private institution – perhaps because of its specialist provision, its high fees and its campus location in the smart environs of Regent’s Park – and therefore, undeserving of its publicly funded status.
“The funding we get from the government is quite small. We don’t have undergraduates, we don’t have science, technology and medicine [courses], which are of course the elements of universities that absorb very large amounts of government funding,” he said.
“We get our money for research. Everything else is paid for by the students, so the public purse is not paying for something here that they’re not paying for in other institutions.
“Why should you say: ‘Let’s discriminate against business schools specifically, because we don’t care about their research?’ In general, people say it’s a good idea to have research in business schools because it helps the economy. I could argue, if you cut off our money and gave it instead to people doing wonderful work in Greek or Latin studies; is that a better use of the government’s money?”
A defence of LBS’ academic research is understandable, but what does Professor Likierman have to say about the proportion of support staff at his institution, which a THE analysis showed showed was the highest in the UK at 85 per cent of the school’s workforce?
“It is one of the real challenges of trying to run a successful business school,” he said. “One has to bring both worlds. The fact is that students aren’t customers in the conventional sense and can’t be treated as customers. On the other hand, and this is no different to any other university, students have got rights and they have a reason to expect that they’ll get a quality of education, and that must be right.
“Holding the balance between the academic and the need to balance the books, this is not new to this place. And I hope and believe that we manage that tension well here.”
He also challenged interpretations that “we operate in some stratosphere” in terms of staff pay.
“We operate in London; London is a relatively expensive place for people to live and work, and we pay market rates, as it were,” he said.
“If people are going to come to somewhere they perceive as one of the best business schools in the world, they expect a certain level of delivery and an environment where things are really good.”
From alumni who have gone on to run large companies such as Jim Ratcliffe, chairman and CEO of chemicals company Ineos – worth an estimated £2.5 billion, and 40th on The Sunday Times Rich List – to those setting up small businesses, Professor Likierman also argued that LBS’ contribution to the economy is substantial.
“I’m very proud of the fact that we have such a direct impact, potentially, on employment in the UK, on creation of wealth. I believe we do some very impressive things,” he said. “We’ve got lots of things we’d like to do that we’re not doing now. The Campaign is very much about enabling us to do those.
“As far as I’m concerned, being number one, or among the top 10, is not…to be there for its own sake. The thing that really excites me is the fact we’ve got some very capable students here, we feel we make a huge contribution to their lives, and they tell us, very nicely, that we have.”