Privatise at a price

Some private cash benefits higher education, writes Natalie Fenton, but core funding should be public.

The government kicked off its second term with a pledge to improve public services through increased private investment. The public-sector unions responded with alarm, and although the debate at this week's Trades Union Congress conference in Brighton was cut short, public-sector unions remain worried.

But higher education is ahead of the game. We have been relying on private finance for longer than most other public-service providers and we have a cautionary tale to tell. Over the past 20 years, for each higher education teacher in the United Kingdom the number of students has doubled. At the same time, public funding per student has been cut by more than 30 per cent. Only about 60 per cent of the annual income of universities and colleges comes from public funds. Expansion has put pressure on institutions, which have in turn put pressure on staff. Without research, an academic's promotion prospects are often dead, but the ability to do research frequently depends on private means.

Few academics find the move from public-service intellectual to academic entrepreneur an easy one - it compromises the values that inspired them to join the profession and it renders the job soulless. Even ethics have a price, as Nottingham University knows, having accepted a big pay-cheque from British American Tobacco.

Furthermore, the market is not a fair place in which to trade. Some institutions will always attract private funding more readily than others, while the constant chase for research funding is a demoralising and grossly inefficient practice. The consequent lack of secure funding translates into insecure employment for the thousands of contract research staff employed to do the job that keeps our research base healthy.

The government wants at least 50 per cent of people under 30 to have participated in higher education by 2010. This is equivalent to an additional 100,000 full-time undergraduate places. Greater student access is a worthy goal, but how it can be achieved in a system stretched to breaking point does not appear to have been thought through.

In the past, the funds for replacing and expanding the infrastructural requirements of universities and colleges came entirely from the public purse. Directly targeted public funds now provide only a small fraction of the requirement, and the government has made it clear that universities should make greater use of private finance.

The problem is that ours is not an industry best suited to maximising profit - short-term returns are hard to come by through the nurturing of students and the pursuit of knowledge. Where public-private partnerships are used, student services are often undermined by the profit motive.

The days of complete public funding have gone. Many argue that it adds to the sector's autonomy and ultimately to the health of higher education to have mixed income streams. There is some merit in this thinking. But the balance is a precarious one, and it pivots on the issue of democratic accountability. If we get to the point where our core funding ceases to be from the public purse, who are we answerable to - the government, the students, British American Tobacco?

Universities have struggled under adverse circumstances and survived often because of private finance. Few institutions would want the trend reversed completely. But a simple look at staff salaries and burgeoning staff-to-student ratios illustrates the limits of private funding. Private finance, closely regulated and operating within clearly specified ethical parameters on the margins of public-service provision may have a place, but core funding for public services must remain public or we will all pay the price.

Natalie Fenton is president of the Association of University Teachers.

• How far should private interests in universities go? Email soapbox@thes.co.uk