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Profit-making company poised to run university in first for UK

Plans for ‘privatisation’ of London Metropolitan to roll out across English universities

Our current management appears to be hell bent on deeply damaging our university’s reputation

Max Watson, chairman, London Metropolitan university’s branch of Unison

Plans for the UK’s first university to have its operations taken over by a private company are poised to be unveiled within weeks.

Exaro can also reveal that the aim is for the contract to serve as a springboard for the winning bidder to take over the running of other universities across England, in a deal worth potentially more than £500 million.

The move is set to provoke a storm of protest from trade unions and opposition MPs.

London Metropolitan university has put out to tender a contract to run most of its services, and is expecting to announce the winning bidder later this month. The university values the contract to run its operations alone at £74 million over five years.

The university, which has several sites in central London, confirmed to Exaro that three companies are on the shortlist of bidders: Wipro, an Indian IT company based in Bangalore; BT Global Services, the BT division providing IT services; and Capita, the UK’s biggest outsourcing group.

It will mark a huge step towards, in effect, privatising many English universities – with the backing of the Conservative-led coalition government. Universities will follow the path set in the National Health Service, which has seen the UK’s first NHS hospital run by a private company.

Some senior university figures see privatisation of services as the future for the sector as government funding is reduced.

However, supporters of the scheme claim that it is not really “privatisation” even though London Metropolitan university plans to have a private profit-making company run all of its services except teaching and the vice-chancellor’s office.

The scheme is being promoted by the university’s Australian vice-chancellor and chief executive, Malcolm Gillies, as a “shared services” initiative.

It has the support of David Willetts, universities minister, and his former researcher, Jonathan Woodhead, who took a job as executive officer to the vice-chancellor on £75,000 per year rather than going into government with his minister.

Gillies and Willetts were due to give talks last November at a conference about “shared services” for universities.

But Woodhead denied that Gillies and Willetts were promoting outsourcing for universities, saying: “Gillies has not spoken about ‘outsourcing universities’. Willetts and Gillies were both scheduled to talk at the same shared-services conference, but Willetts withdrew shortly before the conference.”

The university, which was hit by a financial scandal under previous management four years ago, tells staff in a briefing document: “This is not outsourcing. The shared-services facility will be 100 per cent owned by London Metropolitan university. Over time, as we scale-up the service, other participating universities will be invited to join.”

However, one of the university’s own academics, Steve Jefferys, professor of European employment relations, is challenging the vice-chancellor’s interpretation that the plans cannot be described as outsourcing.

In an article to published shortly by the Working Lives Research Institute, which is based at the university, Jefferys writes: “The logic for the inclusion of ‘outsourcing’ as a ‘shared service’, is based on the rather obtuse stretching of the word ‘shared’ to mean any service that a private company delivers to more than one customer. Hence, T-Mobile or BT could be described as providing a ‘shared service’ to millions of customers.”

Max Watson, chairman of the London Met branch of Unison, the trade union representing support staff at the university, warned of industrial unrest. He said: “Our current management appears to be hell bent on deeply damaging our university’s reputation and risk permanently scarring already bad industrial relations with the ideologically-driven privatisation of London Met.

“They aim to gamble millions of public-sector funds on the free market as if they have learnt nothing from the most recent G4S Olympics security fiasco.

“Unison members have made it clear that they are appalled by these proposals, which have no support beyond the vice-chancellor’s office. We shall never agree to the wide-scale privatisation of our university and we shall do everything within our means to stop this nightmare becoming reality.”

Additional reporting by Frederika Whitehead.

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