For profit HE: another way to put taxpayers' money in private pockets

Paul Temple
Interesting, isn’t it, how often bold, thrusting entrepreneurs end up asking for money from the taxpayer? Banks, obviously, but others too. The private (though non-profit) University of Buckingham was created in the 1970s to try to counterbalance what its founders saw as political interference in higher education, which in their view was an outcome of the public funding of universities. “Liberty”, you can read on the University’s website, “is constantly under threat from governments…who seek to over-tax and over-regulate”. 

A pamphlet by Nick Hillman (2014), now Director of HEPI, the Higher Education Policy Institute, but until recently special adviser to the present Minister for Universities and Science, David Willetts, makes some pertinent observations about Buckingham, and UK private higher education more generally. For one thing, Buckingham’s UK and EU students can now borrow up to £6,000 a year as taxpayer-subsidised loans to meet their tuition fees – so, to that extent, Buckingham is now benefitting from the tax-and-spend profligacy of the current government in relation to student support. Even more remarkably, Hillman quotes Buckingham’s Vice-Chancellor telling a House of Commons Committee in 2011 that “our lives would be so much easier at Buckingham if…[we had] access to QR money [the funds that, in England, HEFCE allocates to universities to support research infrastructure] without having to subject [ourselves] to all the regulatory framework of HEFCE.” Vice-Chancellor, we feel your pain!
The present Government’s 2011 higher education White Paper (PDF) takes a lot of space discussing how to encourage the development of private higher education. What it doesn’t do, I have argued, is to describe with any clarity the problem to which private higher education is the answer. Hillman’s pamphlet helps here: he reveals that what he calls “alternative providers” successfully carried out “lobbying…focused on ensuring their students have access to student support” – that is, so students at what are mainly for-profit private colleges could take out subsidised loans to pay their fees. The lobbying was, in other words, to achieve the transfer of public money into private pockets. (I’m not saying that this is sharp practice: it is simply what “for-profit” implies.) This has been hugely beneficial to the for-profit sector: as Hillman notes, the number of their students claiming public support has rocketed five-fold in two years; and it is fair to assume that profits have risen on a similar trajectory.
As I’ve remarked before, the comparison with the waste of public money associated with the US for-profit sector (never mind the human costs) is depressingly plain. This isn’t, mainly, whatever Hillman thinks, about healthy competition between the public and private sectors (they serve largely distinct markets); or about introducing more diversity (for-profit colleges, pretty well everywhere, teach a limited range of popular subjects in traditional ways*): it’s about an ideologically-driven programme that will waste public money – lots of it.
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*see Kwiek, M. (2009), ‘Entrepreneurialism and private higher education in Europe’. In M. Shattock (ed.), Entrepreneurialism in universities and the knowledge economy: diversification and organizational change in European higher education. Maidenhead: McGraw-Hill/Open University Press.