Magazine article Times Higher Education

Commercial Pressure Led to Rushed Job on For-Profit Title Award

Magazine article Times Higher Education

Commercial Pressure Led to Rushed Job on For-Profit Title Award

Article excerpt

Hefce uneasy over University of Law deal and process for private applicants. John Morgan reports.

The government decision to approve the UK's first for-profit university was hurried through to help meet a deadline in its sale to a private equity firm, a document obtained by Times Higher Education suggests.

According to a paper given to THE under the Freedom of Information Act, the University of Law's application for university title was approved by correspondence without a full board meeting of the Higher Education Funding Council for England.

The move helped to meet a deadline set by the government so that the institution's Pounds 200 million sale to Montagu Private Equity could be completed. University title was a crucial part of the sale package.

"The sale is contingent on the prior agreement by BIS (the Department for Business, Innovation and Skills) that the College of Law Limited can use the word university in its company name," says the Hefce board paper, dated 2 November 2012. "If that is not agreed by 30 November 2012 we have been told that (Montagu) has the right to terminate the sale agreement. We do not know ... if it would do so."

The revelation comes as two other privately funded institutions - BPP University College and Regent's College - are set to gain permission to become universities via the same new process for awarding university title to private providers.

That process - where the title is conferred via the official register of UK firms, Companies House - has sparked concerns at Hefce, according to the board paper.

"There is a risk that (privately funded) providers operate at a lower standard of corporate governance than is expected of institutions that receive public funding, with consequent risks to the 'brand reputation' of UK universities," it warns in a section on "risk implications".

BPP (owned by the US for-profit firm Apollo Group) and charity Regent's College are both scheduled to have their applications for university title considered by Hefce at its board meeting on 31 January.

Under the Companies House process, an institution wanting university title lodges its application with BIS before Hefce checks that it meets requirements on student numbers and corporate and financial governance, based on audits commissioned by the applicant itself. The Quality Assurance Agency checks on the existing arrangements for academic governance. …

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