A public or private academy?

The Adam Smith Institute is an influential think tank, which approaches the issues on which it comments from a ‘free market’ perspective. That puts it on what most would regard as the more right wing end of the political spectrum, though the Institute itself stresses that it is non-party and maintains good relations across the whole political field in the UK and elsewhere.

One of its most recent reports, The Broken University, has addressed the issue of higher education. The author of the report, James Stanfield of the University of Newcastle, draws some fairly startling conclusions. His key point is that ‘there is no evidence that there is any economic benefit whatsoever from transferring over £14.3 billion a year from the taxpayer (including those on low incomes) to students and universities’. However, he is not suggesting that universities are not a worthwhile investment, but rather than funding them through public money is wrong. To back up this assertion he gives a number of reasons, saying that government funding (and therefore control) has a number of consequences:

• Undermining the autonomy and independence of private institutions
• Crowding out philanthropic donations
• The complete disruption and distortion of the pricing system
• Combining and confusing academic, professional and vocational education
• The widespread rationing of university places
• Restricting private investment from home and abroad
• Crowding out for-profit institutions and entrepreneurial talent
• Restricting competition and innovation throughout the sector
• Qualification inflation

The net effect, he suggests, is that public funding is an unmitigated disaster, because not only does it redistribute funding from the poor to the rich (who disproportionately benefit from higher education), it also disrupts and undermines the success and vitality of higher education. He then makes a number of recommendations, which in essence envisage the removal of public subsidies from universities (while transferring some of these resources to students instead to spend as they may decide), and the opening up of a deregulated system of higher education to private and for-profit participants.

Speaking for myself, I find his analysis interesting, but would find it hard to go with his conclusions. I would agree that public funding and control has, particularly over recent times but in fact to some extent for along time, sometimes damaged rather than supported higher education. I agree that the at first creeping and now galloping bureaucratisation has been damaging. I agree that politicians all too often meddle with higher education without really understanding it. I agree that the narrow political vision of university resourcing and funding has crippled their strategic development.

However, higher education is a public good and should not be outside the realm of public accountability and transparency. And while I do not object in principle to some for-profit higher education, I would suggest that the major world class institutions will always be public or not-for-profit entities.

But this report does raise some very important issues, and its suggestion that organising and funding universities as public sector bureaucratic agencies is not necessarily a recipe for success. There are issues here that merit debate at least, not least because we appear to have entered an era in which the traditional model of higher education has been made non-viable.

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Tags: Adam Smith Institute, James Stanfield, private universities

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