Oxford reaps reward of its conservative myopia

Last month those who care about these things - which seemed to be most of the British media - were greatly exercised by the governance proposals put forward by the University of Oxford’s Vice-Chancellor, John Hood. Dr Hood’s plan to try and drag the University kicking and screaming into the modern world was defeated by the University’s Congregation, the so-called ‘Parliament of dons’.

Those of us who supported his reforms (the ‘Hoodies’) argued they were the best way in which the University could maintain and enhance its independence from government, and retain its position as a top 10 global university in the increasingly competitive world of higher education.

The joyless conservatives who prefer Oxford to stick in the mud seem to think the University has no reason to be accountable to the outside world - even though the government (and, therefore, the British tax-payer) is the biggest single investor, and even though the University’s charitable status confers on it huge tax advantages. They were warned that unless Oxford proved itself capable of reforming itself from within, it risked having reform imposed from outside.

Well, HEFCE (the Higher Education Funding Council for England) has now fired the first warning shot across the University’s bows. A letter from its Chief Executive, Professor David Eastwood, to Dr Hood makes clear HEFCE’s disappointment with Oxford’s backward-looking rejection of the Vice-Chancellor’s governance reforms:

As you know, HEFCE is the single biggest investor in the University and we assume the lead regulatory role on behalf of all your public sector funders. We set the accountability framework for the HE sector, and within that framework it is a condition of grant that the University has a sound system of governance. We look to the University, its Council, and its Audit and Scrutiny Committee to provide assurance about the system of governance.

Under the recently-rejected proposal the membership of Council would have fallen from 25 to 15 with seven internal members and seven lay, plus a lay chair. The adoption of this arrangement would have given the Council a lay majority for the first time. There is, we believe, a broad consensus across all sectors that corporate governance is enhanced by the external membership and, more particularly, by the discipline and advocacy that non-executives and externals bring to the corporate life and governance of a university.

This has been reflected in reports over the years, including those from Dearing in HE and Turnbull in the private sector. The sentiment is embedded in the Lambert Report and embodied in the good practice guidance to universities published by the Committee of University Chairmen.

The University has accepted that its Council is its single governing body responsible for academic and strategic matters (albeit that Congregation remains the supreme legislative assembly) but has rejected a particular proposal that would have delivered a lay majority. HEFCE takes the view that its investment of public funds must be subject to effective governance oversight, and that this oversight needs to be largely external and demonstrably free from potential conflicts of interest.

I, of course, recognise the academic excellence of Oxford and the effectiveness of many of its operations. I also understand that opponents of reform associate success with the University's governance tradition and consider that fundamental governance changes would undermine continuing success. I consider that argument unproven, and note the performance and progress of some of your competitors who have more modem governance arrangements. I would also remind you that the University's accountability failed as recently as 2003-04 when the accounts were audited and finalised many months after the deadline.

In March of 2006 the HEFCE Assurance Service issued its report on risk management control and governance at the University. We will be following up this report by April 1, and will be seeking assurance about governance arrangements. It would be helpful if you could give this letter your attention before that time.

There will be some who argue that this is ‘government bullying’, that HEFCE has no right to try to meddle in how Oxford University runs itself. They are wrong. For as long as the University is publicly funded, those bodies which dish out taxpayers’ cash have every right to be assured that their money is being well-spent in the wider public interest. I have no doubt Oxford can prove that, in spades; but, by refusing to account for itself in the way every other charitable institution is expected to, it has weakened its position.

There is, of course, an alternative open to Oxford. It could refuse to take the public money HEFCE distributes, and set its own tuition fees at the market rate. Then the University would be free to ignore outside interference (though would still be answerable to the Charity Commission). Many of those who were most passionately agin the Vice-Chancellor’s reforms advocate precisely this.

However, if they think the University could continue to operate as it does - elevating academic self-government above business reality - in the ‘real world’ of tough global markets, without any state subsidy, they are deluding themselves. A private university would be far less tolerant of loss-making academic subjects than a publicly-funded university is able to be. Independence is not the silver bullet for Oxford as it is sometimes portrayed.

The conundrum is clear. Accept state money, and you accept the state’s right to have a say in how you are managed. Reject state money, and you accept the university must manage itself in a far tougher, leaner way.

The Vice-Chancellor saw this dilemma clearly. He proposed governance reforms which would have allowed Oxford to keep its public money, retain its academic self-government, while satisfying HEFCE that Oxford was serious about becoming more open and accountable. It would have also strengthened the University’s decision-making processes, making it easier for Oxford to become increasingly self-reliant, and less dependent on state hand-outs.

Dr Hood’s opponents are delighted at their victory. Their delight may prove short-lived, and they will have only themselves to blame.