A new report from think tank Policy Exchange calls for private operators to get the right to call themselves universities and award degrees.
Private operators should also get easier access to taxpayer funding and could even take over failing state-run universities.
The recommendations in Higher Education in the Age of Austerity would pave the way for the biggest shake-up in how universities are run since the 1960s.
Other key recommendations in the report include:
- Establishments with as few as 1,500-2,500 students should be allowed to award degrees.
- Both public and private universities should be forced to have their degree-awarding powers
- (DAPs) re-validated every decade.
- Foreign-owned and operated universities based in the UK should face, for the first time, similar restrictions.
- Students at private universities should have the same access to taxpayer-backed loans as students at state universities, as suggested by Lord Browne.
- Private universities should be able to access Funding Council funds to use for research and for teaching priority courses, as suggested by Lord Browne, subject to stringent checks.
- State universities should be allowed to access private capital as an alternative to full private takeovers.
- The process by which DAPs are awarded should become much clearer, simpler and more transparent.
Only five private providers currently hold British DAPs. These are BPP, the College of Law, Ashridge Business School, the IFS School of Finance, and Buckingham University. BPP – which mainly offers professional qualifications in subjects like accountancy, banking and law – is the only for-profit provider to have UK DAPs, and is also the only private institution to have use of the title of university college.
Buckingham University started life as a university college but is now the only private full university in the UK.
But in countries including Spain and the United States, private providers play a much bigger role than in Britain.
James Groves, Head of Policy Exchange’s Education Unit, said:
“Current guidelines state that only institutions with permanent DAPs can call themselves a ‘university’. But only state-maintained institutions are allowed to have permanent DAPs.
“This circular situation neatly cuts out private institutions from the most prestigious title in higher education. We believe strongly that access to university title should be decided according to an institution’s quality, and not its legal status, so we recommend that the Government immediately end this institutionalised discrimination against private higher education providers.
“In the new system outlined by Lord Browne, universities will face a harsher competitive environment. In the past, the Government has simply kept struggling universities afloat. A much better solution is to make use of the capital and expertise in the private education sector, and encourage private providers to step in and take over the failing university, in whole or in part.”
Alex Massey, the author of the report and a research fellow in Policy Exchange’s Education Unit, said: “The procedures for acquiring and renewing DAPs urgently need to be sorted out. There are
unbelievable discrepancies in the time it takes to acquire DAPs - the College of Law received them within about a year of applying whereas Ashridge Business School had to wait eight years.”