Changing corporate form: Why is UCLan doing it and why does UCU care?

1. Changing corporate form: Why is UCLan doing it and why does UCU care? Jonathan White Deputy Head of Campaigns, University and College Union

2. Why is UCLan doing this? Why is it important? Why is UCU opposed? Overview

3. “Exciting times in higher education” Wider policy context: • renewed attack on public services through the Health and Social Care Act, the Work Programme and the higher education White Paper: “Putting students at the heart of the system”

4. “Students at the heart of the system” • Changing the form of the public subsidy from grant funding to a fee and loan system that is choking off student demand • Creation of a competitive ‘margin’ for student places that is creating a ‘squeezed middle’ of universities • Removed some of the regulatory barriers to new providers getting access to the markers of prestige – university title. • Deliberately subsidising the creation of new, for-profit providers

5. A new kind of animal: for-profit companies with Big Capital backers: BPP University College – owned by Apollo The University of Law, owned by Montagu Private Equity Greenwich School of Management – owned by Sovereign Capital Pearson college – owned by Pearson plc New providers with deep pockets

6. The financial crash and the search for new assets Private Equity: UK HE is a ‘Treasure Island’ Investment Banks: ‘demand would be enormous’ Financiers looking for new investment opportunities

7. A scramble to access new sources of capital to fund the beauty contest for students: Private partnerships and Joint Ventures Outsourcing Subsidiary companies International campuses Bond issues Buyouts Changing corporate form Universities and the dash for cash

8. Different HEIs have different constitutions and different corporate forms: chartered universities – broadly the Pre-92 sector higher education companies – the majority of the post-92 universities companies limited by guarantee – former ILEA Polytechnics and more recent new HEIs now, with BPP, Pearson, Kaplan and the University of Law: companies limited by share. Different corporate forms give institutions different powers. Corporate form matters

9. What changes if UCLan becomes a CLG? • Does not have to seek Privy Council approval for fundamental changes • Loses statutory requirement to have governing board and academic council • Could dissolve or sell itself to a third party without seeking Privy Council permission • Could float a loan on the stock market • Easier to set up a for-profit subsidiary company with a private investor, controlling the university’s assets

10. Why is this new? Other CLGs: former ILEA Polytechnics and HEIs created after 1992 Little evidence that it’s a stronger form of governance – London Met, anyone? Key thing is the policy context and the movement of private capital into the sector. This makes the move to CLG status a key stage in the hollowing out of democratic governance and the placing of charitable and public assets at the disposal of private profit. It’s privatisation.

11. To conclude: • UCU is opposed to this form of privatisation as it is to others. • Students are not consumers and universities are not businesses. • The corporation’s limits on management are imperfect, but valuable, instruments for asserting the interests of university stakeholders, including the public. • There is an alternative.