Oxford University's new business school has plans to launch a four- year undergraduate degree - charging students Pounds 12,000-Pounds 15,000 a year - despite the government's stipulation that tuition fees for undergraduate courses should be no higher than Pounds 1,000.
John Kay, director of the controversial business school - partly paid for with a Pounds 20 million donation from the businessman Wafic Said - said that preliminary designs for the degree were drawn up by an internal working party as part of the school's strategy document.
Plans for the new degree "partly depend on what happens to the public funding of higher education in the UK", said Professor Kay. He added: "One of the things that is certain in my mind is that the funding of higher education is not going to stay as it is today. The current set-up is not viable.
"We are planning this course in the belief that we will be able to run it in due course and, indeed, that we must if Britain is to remain a major player in management education."
Ministers are understood to be aware of the course proposals. A spokesperson for the Department for Education and Employment said: "We believe this is a long-term idea, a range of things the business school is pushing around, so it is not something for the forseeable future." She confirmed that the government had the powers to take action against universities that charge an undergraduate tuition fee of more than Pounds 1,000 and was considering using them.
The school's plans include a commitment to ensure that poorer UK students are not excluded. Scholarships and loans packages are part of the proposals.
The degree is intended to fulfil the same kind of role for business as Oxford's PPE courses have traditionally fulfilled for government. It would, said Professor Kay, produce business leaders for the 21st century. Demand is likely to be high - one source said that "if they get it right people would kill to get on such a course".
Fees would be comparable with those at American Ivy League universities, which charge about $20,000-$25,000 a year for undergraduate business programmes. The course, admitting 70 students a year, would be launched after 2003 as "phase two" of the school's development.
"We have an opportunity to do something very new here. Historically undergraduate management courses outside Oxford have not been that good.
The best students do not do them," said Professor Kay. "We would have to charge. You could not develop this kind of a course as a publicly financed course. The economics just do not add up."
Paul Flather, director of external relations at Oxford, said:"There is a draft strategy document which does mention a proposal but the proposal has not been formally considered by the university."
A spokesman for the National Union of Students said the NUS was "shocked and disappointed that a university would consider such a plan, particularly since the secretary of state for education has indicated his opposition to top-up fees".
He added: "We said that the Pounds 1,000 tuition fee would be the thin end of the wedge. We said it was a sort of slippery slope towards full fees. We issue a challenge to the government to make good its promises to students."
There is argument too about how much business school staff can be paid. Oxford's standard professorial salary is Pounds 40,500, but Professor Kay has said that business school staff will have to be paid double that. He says he wants the university's regulations changed on this point. "Salaries will be internationally competitive. You couldn't expect to attract the kind of business professionals we have for anything less."
Rory Knight, dean of Oxford's Templeton College, which specialises in graduate executive education, agrees that competitive salaries should be paid. "I would be standing shoulder to shoulder with John to achieve this."
But, he added: "It's a hot potato. The university is very nervous about this because it could make university structures very difficult to manage."
Dr Flather is adamant that Oxford is "not going to pay salaries of Pounds 80,000", although it has endorsed arrangements to allow certain lecturers at the business school to be paid a supplement of about Pounds 10,000. Lecturers can also undertake 30 days' private consultancy work a year. "If we can't do the things we need to do without engaging in controversy we will have to engage in controversy," concluded Professor Kay.
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