srhe

The Society for Research into Higher Education


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Five reasons why rich people shouldn’t found universities

By Paul Temple

Some ‘alternative providers’ are the product of a rich person’s ambition to create something different or distinctive in the HE sector. But it doesn’t always work in the longer term…

1             Rich people expect to get their own way

Rich people – I mean seriously rich, not merely well-off – tend, in my limited experience, to want to have things their own way. Doing what other people suggested probably wasn’t how they became rich in the first place. So a university founded by someone like this will be planned the way they want it, with other ideas being pushed aside. (If the person had simply wanted to support higher education they could have become a benefactor of an existing university – as many rich people of course do – but they would then have had to fit in with how an established institution worked or risk having their money politely declined.) The founder’s ideas may have been quite sensible, perhaps even innovative, at the time of the university’s creation, but he or she will have been reluctant to adjust their views as time passed and the original conception became less attuned to contemporary realities. Universities need to be in states of constant evolution, while pretending that nothing has really changed: that is the secret of their longevity. A single founder, continuing to exercise at least a degree of control and certain of the correctness of their original “vision”, impedes this evolutionary process.

2             “How did you go bankrupt?” “Two ways. Gradually, then suddenly.” (Ernest Hemingway, The Sun Also Rises)

Having access to a seriously rich person’s cheque-book might seem like a dream come true to most university finance directors. But a kind of dependency culture develops if, whenever a financial problem arises, some more cash magically appears. The university comes to resemble an oil-rich sheikhdom, able to buy-off internal tensions without having actually to resolve them, and not having to bother much about external pressures. So the university business model appears on the face of it to be working, because of regular cash injections into the balance sheet. Difficult questions about the university’s priorities and how its future sustainability can be ensured don’t get asked seriously, let alone answered: the priority is to ensure that the founder is happy in order to keep the cheque-book open. Short-term imperatives obscure longer-term perspectives. The university gradually drifts further and further away from real sustainability – but…

3             Even the rich don’t live for ever (yet)

If the university had problems when the founder was alive, they can become much more intractable once they’re dead. However clear the founder thought his or her intentions were about supporting the university financially after their death, there will be others with their own claims to understand the founder’s “vision” and what should be done to protect it (see below). The magic cheque-book is suddenly not so open: it’s not that the money isn’t there, it’s just that, well, we maybe need to reflect a little on what the founder “really” wanted and how best to achieve the “vision” in the new circumstances. Someone involved in a “wishes from beyond the grave” discussion of this sort remarked that early Christianity must have been a little like this: “Speaking as someone who knew Jesus well, I can say that what He would have wanted is…”

4             “Let me tell you about the very rich. They are different from you and me.” (F Scott Fitzgerald, The Rich Boy)

You might perhaps think that your financial affairs are complicated because you have a couple of bank accounts, a few credit cards, a mortgage, and an ISA. The seriously rich, though, are surrounded by a horde of financial advisers and lawyers who set up offshore accounts, “investment vehicles”, trusts, foundations, real estate portfolios, the list goes on, to protect their wealth. When their client dies, these advisers become strangely reluctant to hand money over, regardless of what seems (to the intended beneficiary) to have been their client’s clear intentions (see above). Those controlling the money emphasise their heavy responsibilities to safeguard their late client’s “vision”, and can they be quite certain that the university’s plans are consistent with it? How can they be completely sure that the founder’s money will be managed wisely? “Tell us more about your plans” is a request to which the answer can be, as university planners know, a one-paragraph mission statement or volumes of studies and data – to which endless queries and objections can be presented. When the late founder’s wealth is tucked away in different forms, controlled by different people, under different legal jurisdictions, getting it can be slow, expensive – or, in practice, with the clock ticking and the university budget going into the red, impossible.

5             Just buy the yacht

Instead of founding a university, just buy a nice yacht and sit on deck in the sunshine at Monte Carlo with other rich people and, really, save the rest of us a lot of trouble.

SRHE member Paul Temple is Honorary Associate Professor, Centre for Higher Education Studies, UCL Institute of Education, University College London. See his latest paper ‘University spaces: Creating cité and place’, London Review of Education, 17 (2): 223–235 at https://doi.org/10.18546


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“A market exit…with a material negative impact”

by Paul Temple

Our late and much-missed friend David Watson used to say that every government department should have an office marked “Cassandra”. Whenever a new policy was proposed, someone had to poke their head round the door and say, “Cassandra, what went wrong when we last tried this?”. David went on to point out that, just as the mythological Cassandra was cursed to make accurate predictions that were never believed, so policy-making would plough ahead regardless of what the Cassandra down the corridor told them about last time’s mistakes. Still, he thought, it would be nice to know in advance in just what respect a policy was going to fail.

A number of Cassandras predicted, in general terms, the disaster – or “material negative impact” [1] , in OfS-speak – that has now overtaken the 3,571 students of for-profit GSM in London. This was one of the “alternative providers”, so enthusiastically promoted by David Willetts following the 2011 White Paper. In my chapter on private sector higher education in Claire Callender’s and Peter Scott’s Browne and Beyond: Modernizing English Higher Education (2013), I invented the conditional-optimistic tense to describe the White Paper’s language about “alternative providers”: “new entrants to the sector…may have different strengths…they may offer particular well-honed teaching models…” (2011 White Paper, para 4.5). They would shake up the stuffy old university sector with a bracing private-sector ethos – although the exact problem to which they would provide the answer was never precisely set out. This was evidence-free policy-making, but with a blithe assurance that everything would turn out for the best (remind you of anything?). I suspect that the unlucky GSM 3,571 would now prefer to have been at a university with some of the boring old strengths.

The OfS email to other universities about the GSM collapse could serve as a text for a doctoral class on bureaucratic buck-passing: its message might be summarised as, “We’re only the regulator; can the rest of you do something? No, we won’t do anything to help.” The GSM 3,571 are, it is clear, on their own; OfS isn’t going to do anything constructive to clear up the mess. On the contrary, when asked “whether transferred students can be subject to special arrangements relating to the reporting of their progression, completion or in respect of other outcome data/metrics…The answer is no.” Nice.

As I noted in my 2013 chapter, you didn’t need particular insights, let alone Cassandra’s skills of prophecy, to foresee problems ahead in the “alternative” sector – because we had the worked example of the United States before us. A devastating critique of for-profit higher education there was made in 2012 in a report by Senator Tom Harkin, Chairman of the Senate Health, Education, Labor and Pensions Committee. “In this report”, Senator Harkin was reported as saying, “you will find overwhelming documentation of exorbitant tuition, aggressive recruiting practices, abysmal student outcomes, taxpayer dollars spent on marketing and pocketed as profit, and regulatory evasion and manipulation”. The for-profit sectors in the US and the UK depend on easily-available public funding to cover student fees and light-touch regulation of institutions with minimal records of achievement and limited accountability. It is a tragedy that British politicians, driven by free-market ideology, and regulators, following politicians’ biddings, failed GSM’s students so comprehensively.

SRHE member Paul Temple, Centre for Higher Education Studies, UCL Institute of Education, University College London.

[1] Office for Students email, 21 August 2019