UK government to review BPP University status after owner’s sale

The UK government will decide whether BPP University should continue to be eligible for university title and degree-awarding powers, after its US owner was sold to a private equity consortium for $1.1 billion (£899 million).

BPP, one of only three for-profit universities in the UK, saw the sale of its owner, Apollo Education Group, completed last month.

The deal, which takes the company private, also includes its big US for-profit institutions, such as the University of Phoenix and Western International University. 

The new owners are a consortium including Vistria Group, a private equity firm run by Marty Nesbitt – a Chicago businessman sometimes described as Barack Obama’s best friend – and former US deputy education secretary Tony Miller. The consortium also includes “funds affiliated” with private equity firm Apollo Global Management, according to the Washington Post.

The change of ownership for BPP comes as the UK government nears the final stages of steering through Parliament the Higher Education and Research Bill, which aims to further open England’s sector to new private and for-profit providers.

While ministers believe that new providers are needed to introduce greater competition for established universities, critics believe creating more for-profit universities that can go through repeated changes in ownership may have an impact on quality for students.

An independent review of BPP will now be submitted to the Higher Education Funding Council for England, including checks on whether the institution continues to meet student number and governance requirements. Hefce will, in turn, advise the Department for Education on the institution's future status.

Carl Lygo, BPP's vice-chancellor, said that "nothing has changed" at the university since the sale was announced.

"Neither of the new owners has any record in delivering higher education in the UK and so their plans will be carefully scrutinised by the Department for Education," Professor Lygo said. "This is not a rubber stamp process."

A DfE spokesman said that there were "clear criteria providers must meet to be able to obtain degree-awarding powers or university title, including demonstrating that they are delivering high-quality higher education".

"If there is a change in circumstances at a provider – such as a change of ownership – eligibility is reviewed," the spokesman said. "We expect this policy to continue under our reforms.”

The UK’s first for-profit university, The University of Law, was created in 2012 when the previously charitable College of Law and its degree-awarding powers were sold to Montagu Private Equity for £200 million.

The University of Law was subsequently sold in 2015 to Global University Systems, a Netherlands-registered company. GUS also bought for-profit Arden University in 2016.

Sally Hunt, general secretary of the University and College Union, said: “It is no secret that private equity firms are circling UK higher education, and they are doing so at the behest of ministers who seem determined to expand for-profit education.”

She added: “We have serious concerns about UK universities being bought and sold amongst private equity firms whose first concern will always be shareholders, rather than students.”

john.morgan@tesglobal.com