Privatisation gets public study centre

April 5, 2002

The first British research centre committed to the study of the privatisation of higher education has opened at Newcastle University.

The founders of the E. G. West Centre say that the fact that they would have been unwelcome at any British university ten years ago is a sign of changing times. "Our existence is an indicator of the increasing acceptance of the role of the private sector in higher education," said James Stanfield, a research associate.

The reluctance of most academics to accept the role of competition and entrepreneurship in the running of universities, and their failure to embrace market solutions to the funding crisis, meant that the best interests of students were not being served, Mr Stanfield said.

"The majority of research to date has focused on maintaining or increasing the role of the state in higher education, which highlights a fundamental problem within the research community because there is little or no incentive for state-owned universities to research how to reduce the state's role. It is like expecting the turkey to vote for Christmas."

Research ended up being driven by the needs of the university and the state monopoly rather than the needs of students, he said.

James Tooley, the centre's director, said the public vs private debate in higher education was not as straightforward as it might first appear. "It is a moot point who actually owns our universities because they are only partly state-funded and technically they are all private institutions because they were created as such by their royal charters or by statute."

He points out that overall, less than three-fifths of funding of universities comes from government. The rest is made up from a variety of private sources. And the 12 per cent of funding that now comes from student fees is a market mechanism. "Since universities are already private institutions, the fact that they have conceded their autonomy and independence for the sake of the direct funding that makes up only a minority of their total income should not blind us to this fact, nor to the potential behind it."

Professor Tooley's studies of international private education have persuaded him that the private sector, in addition to being innovative, often offers creative social responsibility schemes and includes poor students.

The research centre is named after E. G. West, a former professor of education at Newcastle who died last year. He was one of the first to challenge the notion that the state must control education.

Mr Stanfield said the centre was committed to continuing the debate he began. "Our mission is to play a pivotal role in stimulating choice, competition and entrepreneurship in education," he said. "It is time to admit the state cannot do everything, supply cannot possibly meet demand. Unfortunately, universities here are still squeamish about that idea, but that is not the case overseas - particularly in India, China and the United States."

The British government's stated goal of getting half of all young people in to some form of higher education was "patronising and wrong", he said. "People can decide for themselves whether they want to spend three years studying for a degree in a university."

Professor Tooley believes there are a number of "straws in the wind" that are signalling the way things will change for universities in the future. The first is the fact that some of the most prestigious institutions are rebelling against government regulation. The second is that the principle of student fees has been conceded and that the possibility of charging market rate fees is being explored. Third, there are the various "interesting" student-loan models being developed in different countries.

But perhaps most important, Professor Tooley said, was the growth of private universities around the world. "They are showing that governments are not needed to provide or to fund higher education, and that the private sector is ready and waiting to pick up the slack, if given a chance."

Although many private universities around the world are traditional, not-for-profit institutions, the for-profit sector was also growing globally, Professor Tooley said. A key feature of these for-profit chains was that they were "hungry for international expansion and have the investment to match their desires," he said.

All this pointed to an increasingly competitive global market for higher education, and British universities needed to take note of the new competitive pressures, he said. "The ability to think the unthinkable about the future of universities would have been impossible to contemplate even five years ago. That this debate is happening now augurs well for the future of higher education."

Alan Smithers, professor of education at Liverpool University, agreed that diversity of funding was necessary to support student expansion. "A plurality of funders has got be more healthy than having the government as a monopoly customer," he said. "It would allow universities to better determine their own futures. But we must not underestimate how long it will take for such a shift to be acceptable to people."

Professor Smithers sounded a note of caution about an academic research centre committed to an ideology. "Research in education is an art and it needs to be dispassionate. To advocate a particular view means any research evidence may end up being treated as mere propaganda."

Tony Dickinson, deputy vice-chancellor of Northumbria University, is also an enthusiast for increasing private investment in the sector. He said there was much "subterranean" support for the idea within higher education.

He proposed a radical agenda: "Offer the opportunity to all or some universities to float as publicly owned companies with equity available to private and institutional investors. Not all universities might choose to do so, preferring to remain primarily attached to core government funding, accepting the close policy guidelines that would accompany that route."

Unfortunately, Professor Dickinson said, such a stigma was attached to this idea, for now at least, that many senior members of universities feared speaking out.

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