James Tooley

Our browbeaten universities

The row over vice-chancellors’ salaries misses a vital point

Are university vice-chancellors paid too much? The government clearly thinks so, and is planning to fine universities that can’t justify paying their leaders more than the Prime Minister’s salary of £150,000 per annum.

Louise Richardson, vice-chancellor of Oxford University (salary £350,000), strongly disagrees, and has contrasted her salary negatively with those of bankers and footballers. But bankers and footballers work in the private sector and so are not the concern of government. It’s surely an established principle that government can intervene in the pay of chief executives of public bodies, but not of private ones. And any fool knows that universities are public bodies.

Or are they? Actually, Professor Richardson is on to something important. It’s a myth that we have public universities in England. It is worth reiterating (because in my experience, it’s always news to someone) that our universities are all in fact private institutions.

Richardson’s university is a civil corporation, first established under common law, then formally incorporated in 1571 under the name ‘The Chancellor Masters and Scholars of the University of Oxford’.

Most of the other old universities are corporations under Royal Charters, which spell out the corporation’s objectives and typically include all graduates as university members. New universities are often Higher Education Corporations, a legal status enshrined in the 1988 Education Reform Act specifically to ensure that the old polytechnics became independent of the local government authorities that previously ran them. Other new universities are companies limited by guarantee, a legal status also adopted by the London School of Economics.

So why do people usually think of our universities as public? Simply because they receive public funding and, as a result, are subject to a huge range of government regulations. For most of university history, however, universities received no public funding at all and so were very clearly private institutions, funded through philanthropy and fees.

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