The controversial Economic Activity of Public Bodies (Overseas Matters) Bill 2023 seeks to prevent UK public bodies from being influenced by “political or moral disapproval of foreign states” when taking certain economic decisions, such as procurement and investment. The intention is to ban boycotts of other countries – particularly Israel.
This bill is aimed primarily at local government, but it also specifically covers higher education providers, with enforcement being for the Office for Students. But universities are not public bodies. Most of them are not private bodies either. They are a third category of institution, being not-for-profit and independent of government.
As charity law specialist Mary Synge has shown in her recent book, The University-Charity (2023), many universities are, in fact, “exempt charities”, meaning that although they are regulated by the Office for Students rather than the Charity Commission, they are still subject to charity law and must be regulated accordingly. Most saliently, they must be treated as independent of government.
In 2013, the High Court recognised that even though universities are in receipt of large sums of public funding and subject to statutory regulation, they should not be equated with government; consequently, they can sue for defamation. The counter-argument was that the provision of higher education is a state responsibility delegated to universities, but the court dismissed this line of reasoning as an “Orwellian project”.
The misunderstanding about universities’ status is not just a problem with regard to the Economic Activity of Public Bodies Bill. It has confused too much of the regulatory and political discourse recently. For example, the Higher Education (Duty of Care) Bill, a private member’s bill first debated in June, asserts that universities, like schools and prisons, should be subject to a statutory duty of care requiring them to benefit students (rendering them liable for failing to intervene to protect health and well-being).
But universities are different from schools and prisons, as confirmed by the Department for Education in its rejection of the need for a statutory duty of care. Universities must take their welfare responsibilities to students seriously, but this does not require expansion of their existing duty of care – which can generally be breached only by action rather than omission.
None of this means that universities should be exempt from regulation or statutory intervention in return for receipt of public funds. The same is true in the US. Harvard is a private university but, because it is in receipt of federal funding, it is subject to the Civil Rights Act 1964 – which is why the Supreme Court had jurisdiction to consider and reject its race-conscious admissions policy recently. It is the equation of universities with the state that is incorrect.
In 2017, I argued in Times Higher Education that the Higher Education and Research Bill should recognise that universities exist in part as the critics and consciences of society. Such a clause, which was introduced but removed just before the bill was enacted, would have distinguished universities more clearly from the state and encouraged them – and those working within them – to engage in public debate, embracing the freedom to develop new ideas, test received wisdom and examine controversial positions.
The Higher Education (Freedom of Speech) Act 2023 has gone some way to doing the same by protecting academic freedom. But the protection would have been stronger if the language of “critic and conscience” had been used since this would have encompassed universities as well as individuals.
The Office for National Statistics (ONS) currently considers universities to be part of the private sector, but this is being reviewed. A conclusion that universities should be redefined as public sector bodies would undermine the autonomy enshrined in the Higher Education and Research Act and challenge universities’ charitable status.
Instead, the ONS should take the opportunity to confirm that most universities form part of a third sector, distinct from both the public and the private sectors. That means that, regardless of the merits of the Economic Activity of Public Bodies Bill, it should not encompass universities because they are not public bodies.
Graham Virgo is professor of English private law at the University of Cambridge. He is master-elect of Downing College, Cambridge.
