The head of a new private college says the state should support institutions like his own

A British Ivy League
Nov 17th 2011 | from The World In 2012 print edition of The Economist



University funding in Britain has become a serious problem that government of any persuasion has to address. But it is not being addressed properly. Decades of cuts coupled with increasing numbers of students have brought the system into crisis. Several bottom-tier institutions are functionally bankrupt; several of the top-tier universities have for some years been thinking about going private on the American model, because the difficulties caused by chronic government underfunding are no longer manageable.

The current fee increase to £6,000-plus annually, with a £9,000 ($14,000) cap, is a stopgap. Those sums are politically chosen; they do not represent a realistic response to universities’ needs. Now that the public purse can no longer support higher education fully, the day is looming when the true cost of a university education will have to be borne by its direct beneficiaries.

Part of the coalition government’s strategy is to allow private providers to enter the field. In line with market theory, the thought is that private providers will undercut the publicly funded mainstream universities by offering cheaper and shorter degree courses, forcing the mainstream universities to find ways to lower costs—and therefore fees—and to follow suit in devising shorter and more vocational degree courses.

But this way of liberalising higher education offers an appalling prospect. It will drive down quality, despite any regime of supervision attempted through regulation. This will compromise the UK brand of higher education, which until now has been a strong one. The eccentric result will be to have high-quality, high-priced private providers at the secondary-education level—the independent schools—and low-quality, low-priced private providers at the tertiary level. These private providers will compete with struggling publicly subsidised providers trying with ever greater difficulty to survive. The cheap private providers will be a drag on public-provider quality; the bad will drive out the good.


Instead of this, the government should be encouraging high-quality independent higher-education providers—like my own New College of the Humanities, which will open its doors to students in 2012—to exist alongside the publicly subsidised ones, with each type competing on quality, not cost. Government support for independent providers should not consist in funding (that should all go to the public universities) but in making it possible for them to exist. The regulatory regime for university status, which has vat and overseas-student-visa advantages, and for the granting of degree-awarding powers (DAP) militates against new providers of any kind coming into the market, because a candidate institution has to exist for four years with a high number of students before it can be considered; yet a would-be independent university college reliant on fee income cannot attract students unless it can offer degrees. So it’s Catch-22: it can begin to exist only if it already exists.

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