This trend took a decisive step in 1992 with the conversion of polytechnics – higher education institutions that were established mainly in the second half of the twentieth century for vocational training – into universities. It was taken further under New Labour, after Peter Mandelson, as secretary of state for trade and industry, said in 1998 that his department would “turn universities from ivory towers into business partners”. The soul of the university was sacrificed.
On that criterion, Arden fits the modern mould and merely promises to go further and faster in that direction. It boasts proudly, “All of the courses at Arden come with a strong focus on employability.” To this observer, it is just a technical training corporation out to make a profit, of which it has been making a great deal. Between the financial years 2022-23 and 2023-24, it doubled operating profits and revenue to £53m and almost £190m respectively.
Arden is presumably hoping to emulate BPP Holdings, owned by British private equity firm TDR Capital, which last year put BPP University, together with four recently acquired training businesses, up for sale for some £2.5bn. Though TDR abandoned the sale in January for lack of a buyer, it is clear that the group’s market value far exceeds the £700m TDR paid the previous owner, a US private equity company, in 2021. This raises a second question: should private capital be allowed to profit from and control the direction of a British university? When profit is the motive, the incentive is to maximise tuition fee revenue, standardise teaching and cut costs to the feasible minimum.
In July 2024, the Office for Students, the regulator for higher education in England, put Arden University on an improvement notice for its low rates of degree continuation and completion, which the OfS attributed to a lack of adequate student support. And although Arden says it is investing to improve these outcomes, its breakneck growth in student numbers from just 5,700 in 2017 and Claure’s expansion plans suggest quality will continue to be sacrificed to growth and profits.
This is not just an issue for private universities. They compete with public universities, which also compete with each other, for students and their revenue from tuition fees. One of the worst features of forcing universities to compete in a market is the diversion of much of their limited resources towards so-called ‘fighting competition’, such that only about 40% of tuition fees in most of them is now spent on tuition.
In that context, letting private equity into the sector is a nightmarish folly. It has a business model that is both parasitic and monopolistic, motivated by short-term profit maximisation. In every sector it has penetrated, there has been asset stripping and conglomeration, the latter intended to gain economies of scale and scope.
Allowing private equity to run a British university creates fertile ground for it to deploy its full range of tactics in the higher education sector, just as it has done in pre-schooling and SEND (Special Educational Needs and Disabilities) schools. I have discussed this in my new book, Human Capital: The Tragedy of the Education Commons, which will be published in January. But consider how just one of these practices might work. There is nothing to stop the private equity owners from indulging in ‘education dumping’ – lowering the ‘price’ for degree courses as a means of drawing students from state universities and thus driving the latter into bankruptcy or out of their selected spheres. Once successful, they could put up the prices, acting from a monopolistic position.
There can be no doubt that private-equity funded ‘universities’ represent an existential threat to most of the 150 state-funded independent universities across the country. A study of 88 private equity deals involving nearly 1,000 American colleges found that buyouts led to less being spent on education, higher fees, more debt per student, lower graduation rates, lower repayment rates, and lower earnings for graduates. Other studies show that healthy firms taken over by private equity have a much higher probability of going bankrupt than other similar firms.
In 2011, one of England’s largest for-profit colleges, GSM London (formerly the Greenwich School of Management), was acquired by private equity firm Sovereign Capital Partners. It was implicated in a student loan fraud in November 2017, when the BBC’s Panorama found that a freelance recruiter who had a contract with GSM was allegedly helping bogus students to ‘enrol’ at the college to secure a student loan. GSM suspended the recruiter pending investigation, but it later fell into deep financial trouble. Yet the government continued to provide it with funds by paying for student fees. It was to no avail. It went bankrupt in 2019, leaving staff and thousands of students in limbo.
Private owners of universities may have ideological or political motives, too. We know from numerous examples in the US that when plutocrats gain influence over universities, whether for-profit or via donations, they drastically re-orient what is done in them and by whom, with a say in the direction of teaching, the structure of staff, promotions, dismissals and so on. This was made only too clear when several major donors to Harvard University stopped funding due to student protests against Israel’s war on Gaza, later reinforced by newly elected President Donald Trump’s attack on Harvard and other American universities.
A third question is whether it is culturally, socially and politically healthy for a British university to be owned by foreign investors? If the owner is a foreign individual or entity, those profits are syphoned off abroad, with little or no benefit to students and staff. And to return to Arden and Claure’s plans for expansion, how can the university award a UK-accredited degree that is taught in a foreign language, meaning students may emerge with little knowledge of English? This threatens to further debase the reputation of UK universities for quality education.
There is a still wider concern. What sort of country and society is Britain becoming, in selling off its cultural commons? The country of William Shakespeare, John Milton, William Blake, Isaac Newton, Jane Austen, Charles Darwin and William Morris is casually selling off universities and schools to foreign finance, which has no deep interest in Britain, its history or culture. It must be stopped.
Guy Standing’s new book Human Capital: The Tragedy of the Education Commons, published by Pelican, is due out in January 2026.
