Are universities businesses, manufacturing higher education?

With a current climate of hostility regarding rising tuition fees, many stand divided between the need for universities to be competitive, and what they see as the ever-increasing business model which lead universities to value profit over education.

Indeed Warwick’s vice-chancellor, Professor Nigel Thrift’s pay rise has been well documented across local and national papers.

The recent revelation that Russell Group universities’ chiefs have been awarded salary increases has inflamed the debate once more.

Many students and parents were outraged at Prof. Thrift’s new salary; a 21 percent rise (an increase of £42,000), taking his salary to £316,000 a year. This was the highest twelve-month pay rise for any vice-chancellor in the country.

Some have even compared the rise to bankers’ bonuses, in an attempt to keep top executives, and believe that in a pressurised economic climate, those at the top should make some concessions too. However universities are adamant that the payment of large amounts of money to executives is important is they want to be competitive.

Students at other universities have expressed similar concerns. At Bristol University students protested in previous years over what they perceived as inadequate teaching owing to financial pressures.

Departments’ spending between 2000 and 2009 rose by 85 per cent while administrative costs increased by 261 per cent and Bristol’s vice-chancellors total salary (including benefits and pension contributions) increased by 113 per cent. Some suggested the financial management of the university reflected that of a business.

James Entwistle, the University’s education officer, seems impressed with Prof. Thrift’s work, but sympathises with concerns that universities are becoming more like businesses.

“Although I disagree with the Vice Chancellor on a number of issues, I am still impressed at times with his leadership on issues such as the strategy towards tackling feedback at the start of this year,” he said.

However he added: “How this leadership is translated into pay, especially in a year in which there have been a number of setbacks to the University is not as clear, and a large section of the student body is clearly concerned that success isn’t the major factor involved.

“There is clearly a growth in the business ethic in higher education, best demonstrated by the current debate around privatisation, however it’s still for most institutions a theoretical debate, but one I would strongly oppose if it developed further as it may impact negatively on teaching, learning and widening participation.”

Sara Bunting, a first year student studying French with International studies, was unhappy with the rise. When asked if she agreed with the amount of money paid to executives she said: “I totally disagree, much like any other student, considering so many departments have had cut backs to the point that they nearly have to shut down”

Some students and parents have argued for a move away from what is perceived to a be a business model, whereby the government completely subsidising tuition fees, moving universities away from privatisation.

This would ease the load on students paying the new fines, who are currently looking at leaving university with debts of over £27,000. However, some students and staff members have fears that if a cap is set on wages through restricted government finding, rather than offering competitive wages, the quality of teaching may be compromised, with lecturers and tutors going to other countries for better pay.

Yanjun Deng, a first year International Economics student, agrees with the business model many universities have chosen to adopt. While quick to stress the problems to poorer students, he appreciated the benefits of a business model: “The problem is the structure of the British university system. Even if you are now paying nine thousand pounds a year, there is still a cap on what you pay, and the government subsidises the rest. By removing the cap, making universities more private, they get more money, and you could make the teaching more efficient”.

In addition to the money offered to executives, the merchandising of universities, such as the many items branded with Warwick’s name in the bookstore, adds weight to the argument that Warwick is already being run as a business.

Katie Bergstrom, an Economics, Politics and International studies student, remarked: “I like it, I think it creates a university spirit, and it makes you proud. I bought a Warwick mug for my granddad, he loved it!”

While the commercialisation of the University may appeal to the soft side of students and parents, fears over an increasingly businesses like model which pays competitive bonuses, while the public are out of pocket, are still a major concern.

These criticisms are seen by some within the inner circle of the University, as being detrimental to a university’s chances at progression, when it is only making necessary steps forward.

However some have argued that people who are not close to the university and not aware of the way it is run, can offer short sighted and harmful opinions. Nick Petford, Vice-chancellor and CEO of the University of Northampton, writing for the Guardian in his recent piece “Higher education is a funny old game” stated that “parents are becoming an increasingly influential external voice on a range of issues that focus around value for money. But like the misinformed football fan, they may not always see the full picture.”

James Entwistle called for further clarity from universities giving such pay rises, emphasising that complaints from parents and student about wage rises is not unfair criticism.

In regard to Prof. Thrift’s pay rise, he stated: “it would be helpful for the University management to be clearer about the decision that has been taken, especially as we have been singled out as one of the biggest increased in pay in the sector.”