Privatise the Universities!

By Leadbeater, Charles | New Statesman (1996), November 22, 1996 | Go to article overview
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Privatise the Universities!

Leadbeater, Charles, New Statesman (1996)

But don't privatise knowledge. Universities are a central resource in the new knowledge economy. We need a richer debate about their future

It is surely only a matter of time before a university creates Britain's first department of astrology. Students could study the subject's science, its sociology and history, as well as using it as a way to learn about statistics, the media and marketing. Practical skills learned would lead directly to self-employment. The market for an astrology degree would thus be huge; ideal for the increasingly commercial world of higher education.

For money is the abiding preoccupation of universities these days. They are in the midst of the most far-reaching upheaval since the second world war, raising questions about their purpose, funding, ownership, governance, regulation and management.

At one time, these matters interested only a minority. But no longer, now that a third of British families send their children to higher education and when we are entering the era of the knowledge economy, where the most important assets will be ideas, skills and creativity. Universities are vast, self-replenishing open-cast mines of the knowledge economy; their future direction is vital.

The immediate source of the universities' turmoil is their own success. Britain has gone from an elite to a mass system of higher education almost without realising it. In 1962 there were 125,000 students at 25 universities; today there are more than a million at more than 100. In the early 1970s Britain sent 14 per cent of 18-year-olds to university; now it sends more than 30 per cent, but still lags behind most comparable European countries, which have reached a figure of 40 per cent.

This expansion has been achieved largely through a long-overdue rise in academic productivity. In 1962 the staff-to-student ratio was eight to one; now it is 16 to one. The unit cost of teaching an undergraduate has fallen by 50 per cent since 1971, with more than half that fall coming after 1989.

Despite that productivity surge, universities face a growing financial shortfall. State spending on universities is being diverted to the more politically sensitive primary and secondary schools. Last year's budget cut total public funding for universities by about 10 per cent in real terms for the 1995-1999 period. Capital funding is being cut particularly hard and will be running at half its level of recent years by the end of this decade. It is a fearsome financial squeeze and has generated a fundamental rethink.

The first stage of that process will come with Sir Ron Dearing's report into university finance, due to be published next summer. Sir Ron's committee was set up after vice-chancellors threatened to impose top-up fees on students to make good the shortfall in public funding. Whatever measures Sir Ron recommends - a graduate tax, greater use of student loans - the big facts are already clear. No one expects free tuition to last much longer; even France charges enrolment fees. And if students have to pay more themselves, they will shop around for the best deal and so reward universities that stand out either because of the strength of their brand name (Oxford, Cambridge), the imagination of their marketing, or the flair they display in developing courses.

But universities will also have to seek more strategic partnerships with the private sector, in order to finance research, new courses and capital expenditure. Oxford's rejection this month of a [pounds]20 million donation from the Middle East arms dealer Wafic Said, to finance a new management centre, is just the latest dilemma to be thrown up by the growing reliance on private funding. Before Said there was the debacle over the Frick chair in European history, the row over a tobacco company sponsoring health research, and sniping over the Murdoch chair of language and communications.

Universities have always been places where the rich have laundered their reputations.

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Privatise the Universities!


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