Use of private money is a private matter

Higher education institutions should remain free to engage in overseas activities, argues Geoffrey Alderman

Does National Audit Office criticism of Southampton Institute for having squandered Pounds 1 million of taxpayers' money in badly conceived or executed off-shore operations mean taxpayers' money should never be used to support overseas activities?

The report into the institute's activities under former principal David Leyland has raised sensitive issues about overseas activities of UK-based, publicly funded higher education institutions.

Higher education institutions work offshore for various reasons, all of which can be justified on broad academic grounds. An international partnership can enrich the academic portfolio of an institution by providing opportunities for student and staff exchange, joint delivery of teaching and joint design of programmes. At relatively modest cost, a partnership can add unique dimensions to scholarly activity, leading to international cooperation in pure and applied research. It is inevitable that some of these initiatives will not bear much, if any, fruit. That does not mean they are wrongly conceived.

Overseas activities also generate profit - sorry, surplus. That may indeed be a primary, perhaps the primary, purpose of them. But that is no reason why institutions should not be free to engage in them, provided academic quality is maintained.

Both Conservative and Labour governments of the past 30 years have encouraged, if not demanded, more commercial conduct. They can hardly complain if some investments turn sour, provided that, taking one year with another, the overall operation is in balance. While recklessness cannot be condoned, institutions must be free to take calculated risks, and those who run them need to be reassured that the occasional failure will not be used as an excuse to pillory them or force them from office.

Public Accounts Committee chairman David Davis was right to condemn Southampton Institute's incompetence in losing Pounds 1 million and to berate both Brian Fender, chief executive of the Higher Education Funding Council for England, and Michael Bichard, permanent secretary at the Department for Education and Employment, for claiming that this had "nothing to do with us". It clearly did.

But it would be quite wrong to argue or imply that organs of government such as the HEFCE had any mandate to control, regulate or rein in all overseas activities as a matter of principle.

A significant number of institutions need and use overseas income to supplement dwindling HEFCE-dispensed resources. It may well have been the case that Southampton was subsidising its offshore activity from taxpayer-provided funding. For many institutions, however, it is the overseas income that subsidises domestic activity. The HEFCE itself engages in overseas activities from which I assume it makes a profit - sorry, surplus.

And why not? The Quality Assurance Agency uses British taxpayers' money to fund overseas academic audits. British taxes are used to assure the quality of education enjoyed by foreign students who follow British degree programmes wholly overseas. If the PAC or the NAO think this is ultra vires, they had better say so at once, before QAA chief executive John Randall dispatches any more audit teams abroad.

Then there is the issue of academic autonomy, which, however battered and bruised a concept, is worth preserving. In this respect, the case of Southampton Institute is probably not a good example to follow, since it does not enjoy academic autonomy nor degree-awarding power. But for universities and other degree-awarding bodies, which are responsible for assuring the quality of the qualifications they offer, it is vital that government agencies be made to respect three vital principles.

The first is the right of universities and other degree-awarding bodies to use privately raised monies however they please, subject to the obligation of those who govern them to exercise prudence. The second is their right to use reasonable amounts of public money to generate private income, subject to the same caveat. The third is the ability to apply private income without being accountable to the government, its agencies or Parliament.

Academic autonomy means that s/he who pays the piper does not call the tune. I would advise those in Westminster or Whitehall who are eager to use the extreme case of Southampton as a precedent to think carefully. For if it is wrong to use taxpayers' money in ways that might be controversial, though not reckless, I can think of many other activities of otherwise well-meaning institutions that the NAO might be persuaded to put a stop to. All UK universities subscribe to the Committee of Vice-chancellors and Principals. But whether this is a prudent use of taxpayers' money is debatable.

Geoffrey Alderman is pro vice-chancellor of Middlesex University.