Privatising higher education

Edward Tsang 2013.04.28

The Economist argued that Britain has run out of assets to privatise. I am surprised that they did not mention higher education. It is a very substantial asset with serious commercial potentials. It could generate substantial income for the government.

The Economist: Britain runs out of assets to privatise

In the article Privatisations, the last of the silver", April 27, 2013, The Economist suggested that Britain has run out of assets to privatise.

Higher education as a candidate for privatisation

I am surprised that The Economist did not mention higher education.

Whether education should be a commercial activity is very much debatable. But the reality is: higher education is under funded in Britain. Many higher education institutes are financially unsustainable unless they agressively take a business approach. Therefore, privatisation should not damage higher education more.

Business potential in higher education

Higher education is more suitable for privitisation than most other assets for the following reasons.

To start, universities own plenty of land. These lands do not generate income to the government.
Education is one of Britain's biggest exports. Some universities are hugely profitable. Surely they will be attractive to investors.
There are good examples of successful private universities in the US.
There is genuine competition among higher education institutes. So privatising higher education is far more defendable than privatising, say, British Rail.

With huge varieties in universities and big turnovers, there is substantial commercial potentials for investors.

Saving Government spending

Universities demand substantial public spendings from the government. According to the Guardian, the government's budget on education (which covers more than higher education) in 2011-12 was £56.27bn. By privatising higher education, the government will save billions. The proceedings could help other budgets. Alternatively, the government could use the preceedings to reduce tax, which would please voters.

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