College of Law – sale confirmed
The sale of College of Law for around £200million has been confirmed. The purchasers are Montagu Private Equity. As predicted on this site, the sale was not an ‘outright’ purchase, instead Montagu now own all assets formerly belonging to College of Law, including degree awarding powers, while the proceeds of the sale will remain with an organisation to be called, Legal Education Foundation.
The latter will be the legal entity that was College of Law, maintaining its original charitable objectives and Royal Charter, but effectively operating as a trust that disperses grants and bursaries. The management team move over to run the new for-profit entity, College of Law Limited, for better remuneration in all likelihood.
I hope someone, such as UCU, investigates the possibility of a legal challenge here. The treatment of degree awarding powers as an asset that can be sold to another entity is troubling, while turning a chartered corporation into little more than a trust would seem to require some kind of primary legislation even if dissolution is not sought.
This would not simply be interfering in private business. If it stands, this is the model of purchase that could be brought to bear on most public universities (though many post-92s, as higher education corporations, and therefore quasi-public bodies, have stronger protections on assets). In addition, an additional sum would in theory have to be paid to the Treasury to compensate for the assets that had been built up with public money. (For information on this see ‘A Big Bang’ and the final page or so of ‘The Truth about Middlesex’).
There’s been a lot in press about charities recently, but this whole process looks like an abuse of that status. I imagine a signficant proportion of that trust fund will be used to finance students at College of Law Ltd.
Update 19 April 2012
Andrew Fisher, who has commented below, has now provided an alternative account of the sale here. It seems that the degree awarding powers have not transferred. This doesn’t seem to make things any clearer since College of Law’s degree awarding powers depend on having a ‘self-critical community of scholars who safeguard standards’. If all the staff transfer to the new entity, then the renewal of CoL’s powers (due this year) must be jeopardised. The White Paper did intend to extend degree awarding powers to non-teaching bodies, but that change has not happened yet (unless Willetts is proposing to give new instructions to the QAA and the Privy Council and we just haven’t been informed yet).