Marks out of Ten

A good habit I have picked up from Brad DeLong is to go back over one’s work from time to time and identify the things one has gotten wrong. He calls this ‘marking my beliefs to market’. Reading through the last year’s blog posts I can see a number of pieces about the UCAS recruitment cycle. I’ve already published my self-defence on that one here, and I continue to think that the 2012 recruitment cycle was a lot less than catastrophic.

On the other hand I posted a number of pieces on the degree awarding powers of the University (ex-College) of Law confidently predicting that they would not be transferred with the sale of the College’s teaching business, but I proved to be completely wrong about that. The Government decided that the degree awarding powers did not pertain to the Chartered corporation once called ‘the College of Law’, but pertained to the actual teaching business which the College used to run. Therefore a change of control of this business automatically meant a change in control of the degree awarding powers.

The reason I failed to foresee this is simple enough: the College of Law was a single legal entity, and it simply never occurred to me that the degree awarding powers might actually be an attribute of something that wasn’t a legal entity in its own right. When the Chartered corporation created a company to control the teaching business, I assumed that the degree awarding powers could not be transferred to this new entity, and I was not wrong about that: the powers were not ‘transferred’ because they can’t be. Rather the Government recognised that the new company contained all and everything to which the original degree awarding powers had been granted – that is the teaching business.

To get a bit more technical, the distinction rests on some words in the 92 Act (under which the College of Law’s DAPs were granted) which distinguish Higher Education Corporations (HECs) from the institutions which they ‘conduct.’ (see comments here). Although the College was not a HEC, this language is taken to mean that the degree awarding powers were awarded not to a legal entity, but to an ‘institution’ which may be distinct from the legal entity responsible for it.

From one perspective, the implications of this error of mine are startling. The College of Law precedent already shows that the degree awarding powers don’t rest with the formal governance structure, and it can’t possibly be the case that they remain in the buildings that the college operates from, so they must belong to the staff themselves. Consider the case of an institution whose staff fall out with the governing body - for the sake of plausibility let’s make this institution a small one. It seems that if the staff go off in a body to set up their own new provider, it is this provider which will have the degree awarding powers, not their ex-employer, since this is the organisation which continues to operate the ‘institution’.

From another perspective, the precedent that the University of Law sets turns out to be rather limited. As a chartered corporation with degree awarding powers, the College of Law looked a lot like the old Universities but it is very different in one critical respect – its degree awarding powers were granted under the 1992 Act and not as part of its charter. Thus the precedent of the College of Law cannot apply to the chartered pre-92 Universities.

The post-92 universities can use this precedent, but they will face problems which the College of Law did not. As statutory corporations, the HECs which ‘conduct’ the post-92 institutions are only permitted to do those things which they are explicitly permitted to do by law (whereas the chartered institutions, like most of us, can do anything which isn’t explicitly forbidden). Moreover they can only use the powers they have for the purposes for which those powers were originally granted. The HECs were created by the Education Reform Act 1988 for the explicit purpose of conducting educational institutions. A HEC, then, cannot decide it no longer wishes to run a university, and recast itself as a different kind of educational charity, without the risk of legal challenge.

Of course a HEC can be dissolved by the Secretary of State, but this has been the case for ages.

So whilst I was wrong, and I misled the people (fortunately not very many of them) who read my blogs about this, I think the overall impact is small. Implausible fantasies about universities declaring UDI from their governors aside, this precedent may be useful when other alternative providers change their corporate form, as they will also have been given their degree awarding powers under the 92 Act without being HECs and a few of them are charities. As long as these powers remain time-limited (unlike the permanent degree-awarding powers of the existing universities), I struggle to see this making that much difference to anything. A supportive Government could always have found a way to award degree awarding powers: an unsupportive future Government will always be able to take the powers away.