Many vice-chancellors lack the skills to pilot their universities through the emerging market in higher education and risk ruining their institutions financially, the head of one of Britain's most popular universities has warned, writes Phil Baty.
Eric Thomas, the vice-chancellor of Bristol University, said in a lecture last week that so many vice-chancellors were "unskilled in understanding markets" that it could cause the sector major difficulties when the £3,000 cap on top-up fees is lifted in 2010 or before.
Professor Thomas also said the sector was generally ignorant about the full cost of teaching and that some universities had an inflated view of their own status.
He said of all the "stormy waters" faced by the higher education sector in the near future, the anticipated lifting of the £3,000 cap and the emergence of a true marketplace in higher education "has the potential to be the most difficult to navigate".
Delivering this year's Bolland Lecture at the University of the West of England, Mr Thomas said: "The long-term challenge is what will happen if the cap is lifted in 2010, or before. I don't believe universities have thought about pricing seriously and certainly they do not know the full economic cost of teaching. I am not convinced that vice-chancellors are skilled in understanding markets.
"Some universities have a hyperbolic view of their own brand and competitiveness and this could lead to real institutional failure."
Warming to the hyperbole theme, he added: "We are a sector riddled with hyperbole. Bristol, you will be pleased to hear, is one of the 54 universities in the top ten in this country."
Bristol has more applications per place than any other institution in Britain. But Mr Thomas said that only Oxford and Cambridge universities could safely charge any amount of fees they wished.
"The rest need to be sure that they know how they are perceived and how much students may consider their degrees to be worth," he said.