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- The Reformer Blog
25 April 2012
Reform roundtable seminar introduced by Carl Lygo, Chief Executive Officer of BPP, on Tuesday 24 April.
The ongoing controversy about AC Grayling’s profit-making £18,000-a-year college reveals, in the eyes of critics, all that is wrong with the private sector’s growing role in higher education. But for almost 40 years, business and law school BPP has been showing what’s possible. The company was granted degree-awarding powers in 2007 and designated a University College in 2010. While universities across the country trebled their tuition fees, BPP set theirs at a market-beating rate of £5,000 a year. Given the Government’s intention to increase private sector involvement in HE, Reform asked BPP’s chief executive Carl Lygo to lead a discussion, held under the Chatham House Rule, on the merits of profit in the university sector.
The discussion revealed the extent to which the private sector is involved in higher education and the number of different routes to market; this is not just about private colleges offering their own provision. Joint ventures and partnerships with traditional universities are allowing private companies to improve universities’ value for money and spur innovation. Service providers are doing everything from managing real estate to providing access routes for international students. From back office shared services through curriculum development to the front line of teaching, the private sector is boosting diversity and quality in the higher education sector.
The strong brand of UK higher education is undoubtedly an attraction for companies looking to invest in the sector. It was agreed that there is significant foreign capital that investors are keen to bring into the UK HE sector. But the barriers to investment are such that the UK is missing out on lots of this potential investment. The market is such that it is not straightforward for private investors to inject large amounts of capital into the sector.
This comes to the heart of the problem that currently exists in UK higher education. While everyone around the table agreed that greater private sector involvement and thus diversity in the sector is in principle a good thing, the lack of a level playing field is having negative consequences for investment, for private providers and for traditional universities. In the absence of a Bill to follow up from last year’s White Paper, it remains extremely difficult for new institutions to obtain degree-awarding powers. Publicly funded universities, meanwhile, remain subject to caps on fees and student numbers, as well as regulatory requirements tied to public funding from which private institutions are exempt.
Government, then, must help to level the playing field. Removing caps on places and fees would allow traditional universities to compete with their private sector peers who have no restrictions in these areas. Private universities could be given the same access to government student loans as their public counterparts – with the quid pro quo that they are subject to the same regulatory framework. These changes would allow for a much more effective market, with public and private institutions competing on the same footing. The result would be more growth, investment and diversity in the sector, to the benefit of students and UK plc.