Oxford University vice-chancellor Sir Colin Lucas fuelled speculation that his institution could go private and charge tuition fees of up to £15,000 a year with a critique of the government's vision for higher education published this week.
In his annual oration issued by the university today, Professor Lucas:
- Attacked core public funding for the university's teaching and research as being "woefully below cost" and unlikely to improve much with the introduction of top-up fees
- Warned that teaching British undergraduates brought "a net financial loss to the university" that would not be rectified by the introduction of a maximum £3,000 tuition fee
- Revealed that the university was planning to bring in extra private funding by focusing on teaching full-fee paying overseas students at postgraduate level
- Insisted that the university would not enter into a "Faustian bargain" with the government over widening access in return for higher fees income if it compromised the university's admissions principles
- Denounced the "audit society" that "seems to be eating at the cherished autonomy of universities" and said he was "dismayed" at the likely critique of Oxford's governance and management structures in the forthcoming Lambert review of university and business links.
Professor Lucas' oration, delivered last week, was published in the university's Gazette while a group of college heads and finance directors met to discuss a research paper that calculates how much money the university would need to raise through increased tuition fees if it were to break free of state control and lose its state teaching grant of £52 million a year.
In his oration, Professor Lucas said he supported the government's argument for top-up fees but was unsure that they, and a series of other measures outlined in the higher education white paper, would be enough to solve the crisis in higher education.
He said that Oxford had a £23 million deficit in its teaching account, excluding college teaching funds, and "we know that the measures taken by the government will not entirely remedy the underfunding of higher education".
Top-up fees also came with unwelcome scrutiny of admissions policies. "We are explicitly committed to seek our own interest in recruiting the brightest students irrespective of background... But there is a fine line between pursuing every means to provide proper access within our principles and a Faustian bargain where we allow the composition of our student body to be determined by other considerations in exchange for some additional income."
Professor Lucas cast doubt on the government's moves to keep elite universities competitive internationally by focusing research cash on them while encouraging other institutions to focus on teaching. "It is not clear whether this will simply redistribute inadequate funding under different addresses," he said.
Although he avoided any specific talk of privatisation, he concluded: "We should understand that the state is not going to withdraw from active regulation of higher education for the foreseeable future. The consequence of the end of the social-democratic state as provider of services and benefits has turned the state into a customer and a controller, something that it has not yet learnt, I think, to be very good at."
Several key Oxford figures are enthusiastic about privatisation. David Palfreyman, bursar of New College and director of the Oxford Centre for Higher Education Policy Studies, which met this week to prepare a research paper on the financial implications of going private, said: "The vice-chancellor has made a very perceptive analysis of the problem faced by UKHE plc. If we believe what the white paper says - that we need to address major academic salary shortfalls while competing with the world's best universities - it is obvious to anyone who spends more than five minutes with a calculator that it cannot be done with the kind of fee levels the government is talking about."
Mr Palfreyman thinks the richest students should pay between £12,000 and £15,000 a year, while poor students should pay nothing.