Susan Bassnett: It's time for the bold universities to go private

Another of my friends is retiring this summer. She works in one of the many countries where university lecturers all retire at the age of 60, but she will certainly not be giving up teaching or research. She is moving to one of the many private universities that cream off talent from the state sector, either by offering higher salaries and better working conditions or by taking on top-flight academics when they hit the age barrier. Other friends who have done this all say they wish they had moved years ago.

Here in the UK, we have not encouraged private higher education. There is only one private university, Buckingham, set up in the 1970s. But a sea change is afoot, barely noticed in the media and not trumpeted by the Government, which is sticking to its mantra about how expansion of higher education has led to huge improvements in quality, despite all the evidence from those who teach in universities to the contrary.

That sea change is a gradual process of movement towards private provision, a tacit recognition that the amount of state funding being put into universities is not enough. Over the past few years, fees have risen and student debt is rocketing. My daughter owes more than £12,000, which is apparently on the low side, though it doesn't look like that as she completes an MSc and searches for a job and somewhere to live.

University managers talk cheerfully about the point when the cap will come off fees, and they will be able to charge a great deal more for an undergraduate degree. We have yet to see what more will be provided by cash-strapped universities for those higher fees. No obvious changes were discernible when the first phase of fees was put in place, nor when that rose to the current level. Class sizes have gone on increasing, student contact hours have diminished, research time has declined and I doubt whether any academic who has been in a university for more than a decade could honestly say that anyone gets better value for money since fees came in. No one in government wants to think about the fallout from the prospect of raising the £3,000 fee cap, so instead universities are exhorted to get out and raise money from private sources – from alumni, business, industry, and high fee-paying students who fail to gain entry to decent institutions in their own countries.

Universities are all rushing into the business of fund-raising, setting up development offices and sending vice-chancellors out with begging bowls. Some money is trickling in, but nothing like the much-vaunted US example.

Research shows that there is deep seated resistance to making private contributions to state-funded organisations such as universities in the UK. Comparisons with the US are pointless – Americans invest capital in their former university because they can be certain that there will not be endless state interference. Here in the UK, about the only thing you can be certain of is that the state will interfere – in who is taught, what is taught and how it is taught. This level of interference impedes innovation and creative thinking. No wonder we have difficulty filling academic posts in certain subjects and suffer from a massive brain drain of talent.

But changes are afoot. In 2006, the College of Law, a private, specialist institution, was given degree-awarding powers. Last autumn, the BPP College became the first commercial enterprise to offer higher degrees in law and business. These ventures have been approved by the Quality Assurance Agency. Other bids are in the pipeline from other companies. Meanwhile, the Qualifications and Curriculum Authority has approved the development of courses up to the equivalent of A-level by three companies, McDonald's, Flybe and Network Rail. A trend similar to that seen in the health service is apparent – privatisation is creeping in, aided by government, even as ministers try to conceal the fact that it is happening.

It is highly likely that private providers will offer an excellent service. Across the world, private universities have flourished, often for a very long time. On the Continent there has been a proliferation of private universities, some of which are extremely good and have attracted first-class academic staff and high quality students. It is, perhaps, not so far-fetched to think that some of the bolder UK universities may soon raise enough money to stick two fingers up to government and set off down the private path, knowing that they would be in good company internationally and could finally offer students a quality education. But at what cost to the system?

The writer is pro vice chancellor of the University of Warwick