Changing%20corporate%20form:%20Why%20is%20UCLan%20doing%20it%20and%20why%20does%20UCU%20care?

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
Overview

• Why is UCLan doing this?
• Why is it important?
• Why is UCU opposed?

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
New providers with deep pockets

• 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

6
Financiers looking for new investment
opportunities

• The financial crash and the search for new assets
• Private Equity UK HE is a Treasure Island
• Investment Banks demand would be enormous

7
Universities and the dash for cash

• 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

8
Corporate form matters

• 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.

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
  universitys assets

10
Why is this new?

• Other CLGs former ILEA Polytechnics and HEIs
  created after 1992
• Little evidence that its 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.
• Its 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 corporations limits on management are
  imperfect, but valuable, instruments for
  asserting the interests of university
  stakeholders, including the public.
• There is an alternative.