The unassuming significance of David Willetts’ statement on profit-making universities

By Peter Hoskin
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Bongos, Gibraltar and Mark Carney – all three have set the printing presses roaring today. But there’s another significant story in the newspapers that is altogether less conspicuous. It’s this one in the Independent about a new profit-making university. According to the paper, David Willetts has welcomed it as “an important step towards increasing the diversity of the higher education sector”. He adds: “A wider range of higher education providers helps broaden access, focuses attention on teaching quality and promotes innovative learning methods.”  

It’s worth setting out the bare facts about this university, for clarity’s sake. It was originally a college, with branches across the country, specialising in law, business and various other professions, that was operated by the private company BPP Holdings. When it was granted degree-awarding powers in 2007 it changed its name to BPP University College of Professional Studies. But it’s only now that it’s achieved full university status according to the Business Department’s criteria. After registering with Companies House on Tuesday, it became the second for-profit university in the country, after the University of Law last year. It is now officially called BPP University.

Why is this so significant? Because it could be the first movement of a wholesale shift in higher education in this country – and not just because other for-profit companies will probably establish universities, too. BPP University, you see, isn’t bound by the Government’s £9,000 tuition fee cap and various other strictures. It can set its fees at whatever level it chooses. That is has set them at £5,000-a-year is beside the point: other universities, who worry that the currently funding arrangements will hamper their research capabilities, will look on BPP’s example with interest. It could be another spur to make them go it alone, and charge whatever makes financial sense to them.

And it’s also significant in a broader sense. As I’ve noted before, this Parliament already features several high-profile exercises in profit-making, such as Hinchingbrooke Hospital and IES Breckland. Now two universities can be numbered alongside them. This, as evidenced by the unions’ response today, will be divisive. Indeed, it’s likely to be a point of contention at the next election.