Private firms could run universities

STRUGGLING universities could be taken over by private firms when the government cuts off financial support for troubled institutions.

Under the radical plans, vice-chancellors would be asked to pay a management fee to profit-making private firms, who would run the university on a day-to-day basis for a period of ten years or more.

The private contractor would then be tasked with nursing the institution back to financial health, likely by ditching unpopular or unprofitable courses and slashing costs.

Traditionally, the government has stepped in to prop up cash-strapped institutions or negotiated mergers with stronger rivals. But a double-whammy of huge cuts to teaching grants and higher tuition fees of up to £9,000 will put renewed pressure on some weaker universities.

The idea is to be included in a White Paper to be published by universities minister David Willetts, who said private sector management was “one possible way in which a failing institution could be turned round”.

BPP, the private for-profit firm that was granted university college status last year, has said it is interested in running universities and is understood to be in talks with several struggling establishments.

A government source told City A.M. that private providers would also be more likely to slash fees to compete with other universities.