Universities Challenged: The privatisation of English universities

Year: 2016

Author: Boden, Rebecca

Type of paper: Abstract refereed

Higher education in England has undergone a three-phase transformation in the past 25 years. First, existing independent, not-for-profit, state-funded universities were disrupted by the creation of more institutions, constraints on funding and tightening government control. Second, the introduction of tuition fees facilitated the development of the student-as-customer. The rationale for fees was that ‘knowledge economy’ demands for labour could not be met through state funding; but the new fees systems has entrenched and increased state funding of students. These two phases are explored in this paper via extant literature.In the current third phase, the primary focus of this paper, government is aiding the market entry of ‘alternative providers’ – for-profit commercial firms – to own/operate HE institutions. The fees system creates the explicit opportunity for public money to be channelled to alternative providers, who are now establishing or buying universities and HE colleges. Private firms are also working in ‘partnership’ with existing not-for-profit institutions in an unbundling of traditional universities into activities that can be undertaken by different providers on a fee-payment basis; HE in England is increasingly being undertaken on a for-profit basis. This paper explores and contrasts the public discourse and the private realities that frame this transformation. The public discourse comprises austerity, individual responsibility, social justice and the efficiencies (including deregulation) necessary to compete in the global knowledge economy. The country needs skilled workers, cannot afford to train them and so they must pay for their own education in return for enhanced earnings. In this paper I critique this discourse, exposing and exploring empirically the largely unseen realities of these changes. The data used is from an investigation of corporate structures, governance arrangements and key individuals available from public sources such as company registration documents, corporate information, statutory reports and government registers. The analysis consists of mapping the new networks, structures and systems that are now emerging, following through lines of ownership and control, and tracing capital and revenue flows. I argue that global private capital is financially hollowing out the English HE system. The ‘alternative providers’ are shown to be backed by unknown and unnamed private investors and are owned via complex and opaque webs of international firms which frequently make use of tax havens. Their activities, far from being ‘free market’ are in fact reliant upon the government providing a particular regulatory regime and significant public funding (disguised as student loans). This system is lent legitimacy by the involvement of a people who used to be senior managers in the old university system who reap significant personal rewards. I conclude by considering the possible consequences of these changes in terms of students themselves, public finances, the sustainability of universities and national sovereignty.