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making it up as they go along

January 4, 2012

Today, 4 January, was the deadline for expressions of interest relating to a tender pushed out by the Department of Business, Innovation & Skills over the festive break.

They are seeking a partner to produce a survey of the private providers offering higher education in the UK.  Given the white paper’s commitment to creating a level playing field for the private sector, you might think that such research ought to have been done beforehand.  But, no, the tender document admits,“there is only a limited amount of robust information which describes the current scale, organization or potential of private or alternative providers in the UK.”

An earlier report by the influential think tank Hepi, again referenced in the tender, found that private providers had a ‘disproportionate number of students from low income backgrounds; higher default rates; and [a] relatively narrow range of subjects’.  The issue of subprime degrees haunts the government and this rush job is evidence of  pressure bearing on their plans to open up the sector to private providers.

The resulting survey is likely to be instrumental and skewed to meet the arguments being offered against this aspect of privatisation by UCU and other cogent critics of the government’s plans.

In related news, David Willetts today announced his strategy ‘hi-tech future’ at an event put on by Policy Exchange.

The latter think tank has been a chief advocate of increasing private involvement in education.  Willetts did not disappoint announcing plans for a new kind of privately funded ‘university’ concentrating on science and postgraduate research.

“Globalisation is still at its early stages when it comes to Higher Education. The next round of new institutions may well link existing British universities with international partners. The surge in international investment in science and technology would make this a key part of the mission of a new foundation. It might be that today’s institutions propose a new campus or a new international partnership. Or it might be new providers wanting to enter with different models. Today I can announce therefore that the Coalition is inviting proposals for a new type of university with a focus on science and technology and on postgraduates. Local economic partnerships, universities, businesses and international partners can come together to put forward proposals for new institutions.”

While the broader policy and private finance preferences contained within the speech, by happy coincidence, already has an excellent rebuttal in a new article by Chris Newfield, who is based at the University of California and well-placed to grant a different perspective on Willetts’s lessons from the USA.

 As he notes:  “Education is a massive bulwark against market failure in the sense that it makes invention and advancement possible everywhere in society. But the kind of broad social development that education supports is exactly what within tech-based finance capitalism is threatening to the business model.”



  1. I’ve blogged once on this speech already, and may blog again. Given the rather tired content of the speech itself, that may make three more posts than it deserves between us, but I don’t see much role for the market in Willett’s vision of our high-tech future. On the contrary he explicitly sets out a model of planned co-ordination between state and corporate actors by Government-sponsored committee and Government-directed investmnent into specific technologies.

    • Hi Andrew. happy new year. As i’ve been arguing for the last year, the market envisaged by Willetts has to be created which involves artificial supplyside mechanisms in the short-term and nurturing new providers (or creating different conditions for the private sector to compete on a ‘level playing field’). The new postgraduate science institutes will have no finance support but will receive political and legislative backing of this ilk: “As proposals are developed we will be able to identify any specific obstacles that need to be removed including by legislation where necessary.”

      • Happy New Year to you too. I don’t think it is necessarily true that the new providers will receive no finance support – Researtch Councils might well find it appropriate to make grant allocations for instance and this is clearly a concern to the RG.

        I agree that we have a sustained disagreement on whether Willetts & co. genuinely envisage a market outcome in the longer term. I see no evidence of that in this speech but on the contrary an increasing openness about the rejection of market approaches, so I’d welcome concrete evidence that supply side interventions are going to be ‘short term’ if you can point me to some I’ve missed. What if it is crony capitalism all the way down?

      • Well, yes, that’s a possibility. But the commitment to remove core numbers allocations through expanding “AAB+” and increasing the “margin” pool points to a move towards something less artificial in the long-term. (So long as the loan book is under control).

        Similarly, Willetts’s references to RAB charges won’t tell us much new – as you’ve pointed out – but could be the basis for allowing certain institutions to go beyond 9000 fees (ie if their graduates repay high proportions of what’s been borrowed).

        The science institutions, as joint ventures, look like a way to bring in private equity in partnership with universities – without the potential problems around charitable status and ‘buyouts’. I’ll read the Russell group response. (but can’t imagine it has unanimous backing from their members).

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