Higher Education and Research Bill

Lord Willetts Excerpts

Monday 9th January 2017 Lords Chamber

[Baroness O'Neill of Bengarve (CB)]

My Lords, I should like to ask the noble Lord, Lord Stevenson, what meaning is intended by,

“primarily located in the United Kingdom”.

There is a large number of examples across the globe of franchised campuses, sometimes franchised by extremely reputable universities in this country and in the United States but operating in other countries. Is it a matter of where the majority of their students are in the world, where the governing body is or where the financial control is? I feel that some clarification may be needed.

[Lord Willetts (Con)]

My Lords, perhaps I may put three questions to the noble Lord, Lord Stevenson, about this proposed new clause. First, there is a classic model of a university—a kind of trusteeship model—in which the university has no interest in profit, it is located in a particular place, and its academic staff and the people running it at any one time wish to enhance it and pass it on to the next generation in roughly the same form. That is a completely noble and understandable model of a university and it is what most British universities are like. However, it is not the only form of universities. There are enterprise universities, global chains of universities and for-profit chains of universities.

Personally, I rather regret the fact that there is not a single British-based global chain of universities, as that is probably the only way in which we will meet the surge in demand for higher education around the world. Organisations such as Amity and Laureate meet this demand but no British organisation does so. Pearson College perhaps comes closest to the model but it is not the same. The amendment seems to propose a kind of anti-globalisation measure. If MIT or an American chain wanted to set up a university in Britain, we would not allow that. If an organisation is not located primarily in the United Kingdom, it does not count.

My second point concerns the not-for-profit stipulation in the proposed new clause. It is very important that a higher education institution and a university have very high academic principles. Personally, I do not think that we should require that they should not be for-profit organisations, given that we know that if you really want to provide higher education on a large scale and grow rapidly, some combination of commercial management and access to commercial capital markets is probably the way to do it. Again, the amendment takes a view about what a university is and eliminates a model. It is a model that barely exists in the UK, although we now have some examples of it, and it is a pity that the amendment tries to stop the process of creating enterprising universities alongside trusteeship universities.

My third point concerns the assertion:

“UK universities are public bodies”.

There is a very attractive rhetoric about the public value of universities, and they do indeed contribute to society in the way that is described here. If, through legislation, we define them as public bodies, we are no longer simply making an attractive rhetorical point about their public purpose; I presume that we are saying something real about their status. We went through this very issue only in the past few years with FE colleges, which were defined as part of the public sector. When people realised what that meant—the colleges being subject to public expenditure controls and borrowing counting as part of the PSBR—even some of the people who rather liked the idea that these were public bodies ran away from the implications. Are we really saying that we think that universities are part of the public sector and subject to the rules and constraints of being in the public sector? You could argue that one reason why our universities have done rather well is that they are not part of the public sector. If this is to be anything other than rhetoric, I assume it means that we think that in future universities should be part of the public sector. Therefore, we are invited to consider a future where universities are not part of global chains and not allowed to make a profit, and, instead, we are going to define them as part of the public sector. Sadly, I do not think that that is the future of higher education in this country.