In September 2007, BPP Professional Education made history by becoming the first for-profit private company in the UK to be awarded degree-granting powers by the Privy Council. While this is clearly a positive development, it also helps to shed light on the depressing fact that throughout the twentieth century successive UK governments have discriminated against for-profit institutions in higher education.

The end result is that in the first decade of the 21st century, one of the UK’s most important service sectors is now dominated by approximately 133 non-profit educational charities, which nobody appears to own and which are heavily dependent on government handouts. As the profit motive plays a critically important role in a majority of the other sectors of the economy, it would be naive to believe that the crowding out of the profit motive from higher education would have no unintended consequences or hidden costs.

BPP’s innovative approach to education is also attractive. For example, while regular lectures are used, BPP’s programmes also have a strong focus on small group sessions including tutorials, seminars and workshops. Lectures are also available in a variety of formats including traditional delivery, DVD and streamed for download to an MP3 player. As BPP Business School’s mission is to train people to become business professionals they also operate a professional careers service which they view as being an integral part of the educational experience which they provide. A student will receive career support as soon as they enrol.

Finally, the Business School also claims to lead the field not only in client-friendly but also in time-efficient course design. In short they have adopted the Buckingham model and now deliver three year courses in two years. Contrast this with the non-profit, publicly funded institutions who continue to meet and publish reports and set up committees to discuss the pros and cons of reforming the academic curriculum.

The simple fact that BPP can now deliver degree programmes in business and law in two years instead of three, without receiving government handouts, at a lower cost and still generate a profit, confirms that there is no market failure in the provision of these services. Instead it is simply the case that the market has not been allowed to develop. The solution is to privatise every law and business school across the country, allowing each university to keep the proceeds from each sale.

An edited version of the article was published in Economic Affairs, September 2009