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Student News

Privacy in the UK: Are Universities moving towards privatisation?

As the economic crisis demands that university budgets be cut, less public money is being set aside for public universities in the UK. As a result, more universities are turning to private sources of income, a move which has provoked conflicting opinions.

The rise in student fees is one recent example of the use of private funds to generate cash. The rising use of private funding can be seen elsewhere,such as the sale of the College of Law to the firm Montagu Private Equity.

The College of Law is a perfect example of the pros and cons of privatisation. In April, its purchase by Montagu Private Equity for £200m, sparked controversy as the firm has no previous experience in education. Objectors claim that this privatisation has an impact on the value of UK degrees because companies with non-academic interests own the universities that award degrees. However the sale has meant large investments have been made in telecommunications, software, airfield lighting, waste management and healthcare within the college. Montagu director, Alex Dabbous claimed that the firm’s intention was to "grow the business, enabling it to reach its full potential, and focus on delivering the highest standards of education."

BPP: a private university in the UK

In 2010, the company BPP was awarded the title of University College and become the first new private university in the UK for over thirty years. The move was approved by Universities Minister David Willetts as he claimed it is "healthy to have a vibrant private sector working alongside our more traditional universities." The support of privatisation focuses on how universities become governed by the voice of their students. BPP’s chief executive Carl Lygo claimed privatisation is part of the changing educational landscape in which, “both students and employers will drive demand for their preferred method of study and training.” The government has also acknowledged that through privatisation, the views and preferences of students are given greater weight in judging the quality of education than they currently are in public universities.

Impact of private universities

In a 2010 report by the UCU (University and College Union), the privatisation of UK universities was challenged. The UCU argue that privatisation policies allow the consumerism of education. This results in the dynamic between student and education providers being changed and students become consumers and “arbiters of quality.” With the universities appealing to the student as a consumer, academic standards would no longer be controlled by objective and academic peer review but by the student consumers. The UCU believe that this causes universities to fail as academically and they become a “beauty contest for students.”

The American private model

The move toward private funding is seen as ‘Americanisation’ by the UCU because the majority of US universities are private and rely on non-public sources of income. The UCU exposes the financial problems in American universities as an example of what may happen if public universities in the UK are privatised. Their report reveals the significant losses private American universities have encountered because of  their reliance on endowments which were cut due to the economic downturn.

“Harvard's endowment, which stood at $37 billion on 30 June 2008, tumbled to $29 billion by December of that year and was projected to end in June 2009 at about $25 billion, hit by volatility in financial markets and a drop in donations. The endowment funded about a third of Harvard's operating budget in 2008. Harvard University announced 275 job cuts in June 2009.”

“The Universities of Washington and Illinois have lost around 25%, or $500 million and $370 million respectively.”

The UCU state that although this US model has been proven to be ineffective, the government is still supporting the idea that public universities in the UK replicate this model.

“We believe that the result will be to inject massive further financial instability into the UK higher education sector, possibly leading to the collapse and or privatisation of more than 40 universities.”

Private universities and social mobility

The issue of social mobility and higher education was raised this week by Nick Clegg as he announced his intention to introduce a student premium, which gives a guarantee of government funded financial support to students from poorer families entering university. Looking back to the US university model, private universities rely on high tuition fees to subsidise them, and as such they become less available to low-income families. It appears that privatisation in UK universities would totally undercut Clegg’s aspirations for social mobility within UK universities.

The issues surrounding the privatisation of public universities are apparent. But like all institutions universities are affected by the failing economy and need to make strategic adjustments, consequently privatisation may be an inevitable step. Legal and education policy experts have foreseen a rise in university activities being privately funded. As privatisation becomes more likely, this may well be the universities best approach. By using private funding for non-academic areas, the universities concern of funding an academic education available to all is prioritised.

What are your opinions on the privatisation of UK universities? Would you prefer your university to be public or private? Let us know in the comments.


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