The Great British higher education sell-off

If these proposals become law, then, over time, the fee-paying student will become the human equivalent of black gold.

Ehsan Masood
9 June 2016

Jo Johnson, Minister for Universities and Science, talking to Cameron in 2013 when he was his new Head of Policy. Gareth Fuller / Press Association. All rights reserved.Unnoticed in the noise of the Brexit referendum debate is a Higher Education and Research bill that the House of Commons is getting ready to consider. The magnitude of the changes and their impact are on a scale not seen for a generation, perhaps two. And notwithstanding a minor miracle, they could be passed into law with minimal scrutiny.

So, what exactly is coming down the track?

If the bill becomes law then the big change coming is that the UK will get to experience what it is like to have a private higher education sector. Britain is a rare nation with a well-funded high quality public university system; and – with a handful of quality exceptions – next to no private universities. Colleges that wish to offer degrees need to have them validated by existing public universities.

The government believes that this is fundamentally anti-competition and there is no reason why we can’t have the best of both: high quality public and high quality private universities. To achieve this it is lowering the barriers to entry so that England’s high streets and hills will soon come alive with the sound of fee-paying students.

Private sector involvement in public services is now so mainstream it is surprising that it has taken so long for the market to meet higher education. But surprised we should be. The idea that we should be allowed to become rich from the education of present and future generations was a step too far even for Margaret Thatcher. Not so, however, for her successors.

The logic of the government’s argument is straight out of the centre-right playbook. Ministers believe strongly that markets bring competition, and that competition creates consumer choice, both of which help to drive up standards. But the UK already has universities that are judged independently to be among the best in the world. And with nearly 200 to choose from there is no lack of competition in the sector.

Ministers respond by saying that there is always room for more. Moreover, the UK is home to several world class education companies. In fact it is odd that their home market is the one these companies are prevented from playing in. And so it wants to loosen the suffocating effect of what it regards as red tape.

Red tape

So far, so plausible, so what exactly is this red tape that is preventing Britain’s private university sector from flourishing?

Let’s imagine I am an entrepreneur and that I wish to set up a private university, let’s call it Loft Conversion University. Under the government’s plans, cutting red tape means that I will no longer need to have a minimum number of registered students. The minimum used to be 1,000. And that, too, was lowered from the previous minimum of 3,000 by the admirable David Willetts in his time as science minister. But the present government thinks that a number is just a number: it might as well be zero.

The government wishes to make things yet simpler for me. The amount of time I will need before Loft Conversion University is allowed to use the word ‘University’ in its title is being reduced to three years, essentially the life cycle of a single bachelor’s degree.

And last but not least, the government, in its desire to help me make more money, is not against raising tuition fees. It is proposing that if my university performs well in something called the Teaching Excellence Framework, I can keep on raising my fees. In the past, governments have wobbled and political parties have been decimated over tuition fees. What this bill is proposing means that fee increases will become a routine, if not automatic process.

If the bill becomes law, students applying to Loft Conversion University will be able to access finance through the Student Loans Company, and Loft Conversion University will be able to raise its fees without any need for parliamentary approval.

As a budding businessman I have everything I need: I have a market (the students). I have access to capital (students taking out loans). And I have my product (Loft Conversion University). If I am successful, in time I may choose to open sister campuses in the UK and then abroad and hopefully a new breed of British multinational will have been born. This is precisely what the government envisages for me and hundreds like me.

I challenge any entrepreneur to read the research and HE bill, and not emerge feeling that you have struck oil.

If these proposals become law, then, over time, the fee-paying student will become the human equivalent of black gold.

The Office for Students

If you, the taxpayer are wary of my intentions to use public money for private profit, the government has second-guessed your reservations, and already has a solution. This is to create a new regulatory body for universities, which is to be called the Office for Students. Except that under current proposals, and in line with its desire not to create onerous regulation, the government wants universities to pay for the regulator through a levy.

Ordinarily, regulatory bodies are paid for by the state, and the best are given the power and the resources to undertake forensic examinations. But we live in tough economic times. The size of the public sector is perceived to be too big and the Department for Business, Innovation and Skills, which looks after universities, has promised the Chancellor George Osborne yet more cuts, which its overworked teams are busy implementing. So instead of them paying for the regulator, the two ministers in charge, Jo Johnson and his boss Sajid Javid, the secretary of state, are proposing that universities should take the hit. That means that as the vice-chancellor of Loft Conversion University, I will pay the regulator to regulate my institution.

I’m not quite finished, as there is more.

Meddling governments

One of the genuine strengths of the UK’s publicly funded universities is that, like the BBC, they are autonomous from governments. I, along with others, would argue that this has been central to their success and why they remain among the world’s most popular destinations for students. Governments have largely understood that there need to be strict limits on how much and where they can meddle. Governments for example cannot say who should be a professor; what courses the professor should teach; or which research project should be funded. Universities are protected to a large degree by what are called Royal Charters. In practical terms it means that the institution’s leadership is responsible to parliament and not to the executive.

However, once the bill becomes law, my Loft Conversion University and my neighbour’s Garden Shed University will not have Royal Charters. So the government’s solution is to bring everyone, including the likes of Edinburgh and Oxbridge, under the Office for Students, to have the power to award degrees and allow universities to use the word ‘university’ in their name.

Universities are not the only learning institutions for whom Royal Charters will become worthless. Under the terms of the bill, the UK’s seven research funding councils, which collectively spend several billions of pounds annually on research, are also to lose theirs. In future, the leaders of Britain’s science funding agency will report directly to ministers, and not to parliament, which was the case previously.

So why is this happening now?


Business Secretary Sajid Javid, Jo Johnson’s boss, 2016. Lauren Hurley / Press Association. All rights reserved.To be fair to this government, some of the direction of travel was in fact set by Gordon Brown when as prime minister he commissioned the former boss of BP, Lord Browne, to “review” the financing of higher education in 2009. The intended outcome of the Browne review was to create a genuine market in higher education. That didn’t quite materialise. Instead, we had a trebling of fees among existing universities to £9000; and a certain amount of pressure on academics to work more closely with industry.

What the coalition government and now this all-Conservative government has done is to take that policy and to marry it with another over-arching policy objective: this is to move funding for education and for research away from parliament and instead to concentrate it in Whitehall. If that sounds familiar, that is because it is. It’s the same thinking that has seen Academies and Free Schools funded directly out of Whitehall, and away from local authority control.

Academies and free schools take away overall responsibility for education from those whom we elect, and they give that power to the Department for Education. In the same way the government is proposing weakening removing parliament’s link to universities and science, and instead transferring more control that to the business department.

You might wonder

Now you may be thinking: How is this ‘The Great British Higher Education Sell-Off’? Public universities, after all, aren’t being privatised. All that is happening is a relaxation of the rules to create new private ones, offering more choice to students. Well, that is true, up to a point. The likes of the Russell Group members, for example, are unlikely to see a dent in either student popularity or research excellence. The University of Cambridge has nothing to fear from Loft Conversion University taking its prospective students.

But it is different for the universities of Bedford, Bolton or Bournemouth. These excellent, smaller institutions do a first-rate job, often serving under-served and often low-income communities. That is perfect for me, as vice-chancellor of Loft Conversion University, I will seek to draw their prospective students by offering lower fees, which I can do as I will have smaller overhead costs.

It doesn’t matter to the government that smaller city and provincial universities provide excellent teaching along with opportunities for high quality research to an under-served demographic. What matters to the government is that they are a public monopoly, which is crowding out the private sector. The government won’t lose any sleep if they fail. On the other hand, it wants desperately to see Loft Conversion University succeed. And over time that is precisely what will happen. Perfectly good community universities will start to fold as the money increasingly funds the private sector.

Government by stealth

You are probably wondering why none of this is being debated more widely, and at higher volume. That is because the two ministers in charge at the Department for Business, Innovation and Skills are smart enough to know that giving big media interviews will draw unwelcome scrutiny, of the kind that results in policy U-turns.

Better to just get on with things; keep public appearances tightly controlled, and absolutely on no account talk to journalists.

To some extent that shouldn’t matter now that the bill has reached parliament. But I worry that without some external buzz, MPs will waive it through without properly engaging with the text. At the time of writing Labour certainly seemed utterly clueless about what is coming down the track.

That is why I have chosen to write this somewhat over-length article.

Unravelling consensus

After the Great Depression and the end of World War II, the major world economies came together under the newly-formed United Nations. They agreed that there needed to be a minimum set of services for which the profit motive would be inappropriate. For example, it would be wrong to make a profit from the suffering of the sick, or elderly. Similarly, it would be wrong for companies to create wealth on the backs of our children’s and grand-children’s education. That consensus has been unravelling for four decades. Now, it has reached universities.

Javid and Johnson have learnt a valuable lesson from their colleague, education secretary Nicky Morgan. The government recently ­– and unsuccessfully – tried to turn all schools into Academies, but Morgan was forced into an embarrassing U-turn because of a backlash from Conservative local authorities and Conservative parliamentarians. The ministers won’t make the same mistake. Better to just get on with making things happen, and keep communication to an absolute minimum.

That is why if you care about the exploitation of our children for profit. If you care that parliament and not Whitehall should have oversight of universities. If you care about preserving high quality public education, a genuine and rare British success story. If you care that we have learnt none of the lessons that lax regulation creates instability major problems (such as the 2008 financial crisis) then speak up now, by writing to your MP, or in any other way. Because without your voice, the government will get its way, without question.

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