American owner of McDonald’s of higher education gets foothold in UK market
BPP PLC is no longer. BPP, and with it BPP Law School, has been bought by the Americans… not just any old American, you understand, but by the owners of The University of Phoenix.
The significance of the takeover is that Apollo owns the University of Phoenix, the largest for-profit university in the USA with more than 400,000 students and ambitious plans to expand globally. Phoenix has been spooking American and British universities for years because it educates its students, who are working adults taking vocational courses, relatively cheaply. It packs them in and makes a great deal of money, which is why it is known as the McDonald’s of the university world.
Let me explain my current thinking on this… for what it is worth:
1. BPP Holdings PLC built up a world class brand through shrewd investment, making good hires and by applying well established financial and business ideals to their education business. The quality was world class – subject to the minor gremlins and glitches that every world class organisation suffers and subject, inevitably, to the charge that they were only in it for the money. BPP Law School in recent years has raised its fees to become the most expensive provider of LPC and Bar education in the country and the law school contributed markedly, I would imagine, to the pacy share price of £6.20 on sale.
2. Degree awarding powers of BPP Law School
I would imagine that Apollo were fascinated by BPP Law School – not just for the high profit margins but by an even bigger prize – the right to award degrees. The right of BPP Law School to award degrees is not, I understand, limited to law degrees. BPP Law School has the same right as any British university enjoys - to award degrees in any subject. This latter point may prove to be the main reason Apollo was interested in acquiring BPP PLC. We shall see, in time.
Before I make further comment I would like to put the issue of transparency in legal education back on the agenda.
3. Transparency in legal education
Peter Crisp, the chief executive of BPP Law School, was invited by me to release the report from the Quality Assurance Agency which led to their being awarded degree awarding powers. BPP is not subject to the Freedom of Information Act. Peter Crisp declined to do so, citing the restriction that the document was given to BPP in confidence. See my blog post: A tale of two tribes: Transparency in legal education where I pointed out to Peter Crisp that the QAA allowed organisations to release reports if they choose to do so. Peter Crisp, on behalf of BPP Law School, is perfectly entitled to refuse to release the report but there is no bar to his doing so because of QAA or any other confidentiality provisions.
By contrast – Nigel Savage, CEO of The College of Law, when I put the same request to him about releasing the report on the College of Law which led to their being given degree awarding powers was more than happy to let me see it it. I understand that he may even have plans to make it widely available at some time in the not too distant future.
I believe, with the high fees being charged to students, that students should be entitled to see objective assessments on the law schools they are interested in attending. I believe that BPP should release this report given their standing in legal education and the power and influence they wield and will wield when Apollo moves things up a gear or two as they surely must and will.
The universities publish reports, The Law Society publishes reports on LPC providers. The Bar Standards Board does not, as yet, publish assessment reports on providers of the BTPC (BVC as was) What I believe, however, is immaterial – it is what prospective students, prospective parents or sponsors who are footing the bill believe that is more important. I would be interested in hearing the views of LLB, GDL, LPC and Bar students et al on this issue. feel free to comment in the comments section below.
4. What will Apollo / BPP Law School do now?
I spoke to the QAA and they confirmed that it is not BPP Holdings PLC, the then parent company of BPP Law School, which has degree awarding powers – it is BPP Law School/BPP College of professional Studies. Therefore all degrees which Apollo may wish to run courses and award degrees for will have to go through the BPP Law School/BPP College of Professional Studies part of the operation and, presumably, be identified as such? This may not prove to be an issue, save for branding because, presumably, Apollo will not be able to use any vehicle other than the vehicle with degree powers to award the degrees?
Lucy Hodges in the Independent Minds article writes:
The parent company, Apollo, has an annual revenue of around £1.9bn and has already expanded into Mexico, the Netherlands and Germany. Now it is set to make its mark in Britain. Observers expect it to use its acquisition of BPP to set up business education courses in addition to the legal training already provided, as well as establish a significant British and pan-European platform, and expand advanced degrees and cross-border educational opportunities via online learning.
I would imagine that Apollo, given their track record in the United States and their ethos and business mores, will wish to leverage their acquisition and build – offering business degrees and, possibly, try to penetrate a wider subject market in time. It would be baffling if they did not.
At present BPP and The College of Law have major penetration into the GDL, LPC and Bar course market, followed in price, sometimes fairly closely, by public sector providers. The difficulty for both BPP and The College of Law in the degree market is one of being able to compete on price. Public universities are capped, for the present at £3500 tuition fees per annum. If this cap is removed under a Conservative government following the election next year – the scene could be very different. Universities will, inevitably, put their fees up and then they enter the waters inhabited by very big fish indeed – fish with a lot of expertise, experience and MONEY behind them. It would not be an absurd forecast to suggest that Apollo / BPP may undercut the universities – The College of Law also, and if that happens then some UK university law schools could be in real trouble – because they won’t be able to compete in quality of teaching, resources and marketing with the big fish. Game, set and match?
Well… as Lucy Hodges reported…
Professor Mike Thorne, an expert on distance learning and the vice-chancellor of Anglia Ruskin University, who has been watching the growth of for-profit universities over the past decade, does not believe British universities have much to fear, however. He says that Apollo, despite its might, has found it difficult to establish itself seriously outside the United States.
I am always interested in the views of experts, mavens and prognosticators – often because they can be spectacularly wrong. I do not consider myself an expert, despite my background in legal education for 30 years and the founder of what is now a very large fish. I think Professor Thorne could be wrong and I tend to side with Nigel Savage, CEO of The College of Law, who states…
…that the takeover of BPP will have implications that will be felt far beyond law schools. …Universities have got a lot to learn from the private sector,” he says. “I would not be surprised to see an organisation like Apollo or [other private providers, such as] Kaplan or Pearson actually acquiring an English university.”
Neither BPP Law School nor The College of Law are going to sit around talking about the future – they are going to shape it.
Their growth – and I have seen this at first hand – over the last ten years has been phenomenal – and the quality of both is world class. The same cannot, sadly, be said of some university law schools. The culture of the private and quasi-private sector (The College of Law runs to corporate business theory and practice tolerances) is different from the Universities as far as I can see. It would not surprise me at all if less well known law schools, which must already be suffering from lower recruitment because of the credit-crunch recession, find the struggle just too much and close. I made myself unpopular years ago by suggesting that we might be advised to close some of the lesser known law schools down and put the money into the better and better known law schools. My learned friends in academe just laughed or hissed. I may be proven right in the long term – not that it would give me any pleasure at all.
As ever, I am interested in your views, comments and thoughts. Please feel free to comment (anonymity permitted) in the comments section below.
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Of course… Pink Floyd’s Another Brick in the Wall has no relevance today…. Teacher…leave those kids alone… but it was a great song… have a look at the video.
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UPDATE
9th September 2009
I’ll have a supersize BVC to go please!
This made me laugh. I’ve quit BPP because they’re too expensive for me (even though the quality of their courses is excellent). Instead I’m interviewing for a job with one of the other big private fish you mention. Maybe I’ll get to run a university one day…
Heard about you from Jimmy B, he was right. Terrific site.
BPP claim it is the College of Professional Studies and not specifically the Law School which has the power to award degrees.
Your beef with Apollo is surely not that they’re private – BPP are also private [though publicaly floated] – but rather the McDonalds factor. When education comes down to money, which it does and must in the independent sector, then money does talk, sadly.
Only the big unis with the brand names can hold out to an extent.
James
Hi. I have no beef – but I do think that BPP would be better advised to be open with students about the report which led to their being given accreditation.
I cannot see why they should not do so – given they WERE awarded degree awarding powers. there cannot possible be anything to hide – surely?
I also believe that BPP and The College of Law should be subject to the Freedom of Information Act – as UK universities are.
Both Peter Crisp and Nigel Savage in podcasts said they would be quite happy to accede to the same type of Information request that universities have to comply with. This is a matter of record on the podcasts. It seems, however, that Peter Crisp’s hands were tied and he could not do so.
The College of Law has the moral high ground on this one.
I also believe that both BPP and The College of Law – with excellent track records to date – will be a major influence on legal education in the future. They already are.
University of Phoenix? Oh dear… I can’t say the name inspires confidence. Thorn is half-right: not only have they not established themselves seriously outside US, I don’t believe they are not so seriously regarded within the US either… (I’ve known some UP “faculty” — nice people, but the idea of *paying* for their teaching??)
My first thought is that I don’t see this move as having anything to do with BPP at all. I see it as a ploy to give their American front more legitimacy. “Look, we have facilities! Abroad! Do an exchange program! DO A FOREIGN DEGREE!”
Maybe I’m being overly cynical. Maybe the distance learning model can be credible. Maybe UP itself is capable of credibility. Relatively speaking, it may not be that bad…?
Because have you seen the headlines from the US about the woman suing her college because she’s unable to find employment? At first she was greeted with derision, as no one should ever think a degree automatically entitles one to a job. But the better articles dug deeper and uncovered a whole hotbed of fly-by-night private educational institutions that take in far more in fees than they ever return in value. I hope for everyone’s sake UP is not one of them, but the jury may still be out on that.
[...] 4 September, 2009 in education I’m surprised the news of Apollo’s aquisition of BPP has not had more news coverage but yesterday The Independent published a story on us… which has been further analysed and commented on by Charon QC. [...]
BPP – world class brand. Really. Has anyone outside of a small circle in the UK even heard of BPP ? And notice how no one is expressing the slightest concern that the Apollo tie up will, in any way, shape of form, detract from, or change, that brand. Funny that.
Barboy – as ever, your observations are on point.
Back in the distant past, before anyone had heard of frozen pastry, institutions like Chart and Holborn Law Tutors showed that by offering good quality teaching legal education could be a profitable business.
Traditional universities will always struggle to compete on cost because their very function is different. Research is an important part of what they do, this has two consequences. First, some of their lecturing staff are rotten teachers because it is their analytical ability as expressed in articles and textbooks for which they are employed. This necessarily affects their reputation as, let’s put it bluntly, exam factories and will cause some potential students to look elsewhere. Secondly, the necessity for staff to engage in research and produce published work to justify their retention means that the staff cost per hour of teaching is higher than the teach-only institutions.
Many of the former polytechnics suffer from the false desire to try to emulate Oxford, Cambridge, London, Manchester and the other “top” universities in research when they would be better served (and would better serve their students) if they concentrated on teaching. They might then be able to compete with the private institutions.
As it is, the BPP / Kaplan / College of Law model will always have the upper hand provided they do not get too greedy and price themselves out of the market.
While it’s true that good researchers don’t always equate with good lecturers, I’m not sure doing away with the traditional university model particularly advances knowledge. Learning means discovery. A school with no research component can only teach what is already known; a school with research faculties can teach things that are new. Moreover, students themselves learn from researching too; surely they should study somewhere that opportunity exists?
Of course, the question remains, while research may be important for studies in the sciences, is it necessarily as important in law? To that I’d say yes. Even private law schools in the US require faculty to research, and research they do into the causes/effects/balances/imbalances of law. Law is more than a series of facts to memorize; it’s a social construct that shapes societies. If we are going to manipulate it, we’d best understand how it does that. And through research, students can come to.
Miss Cathy, I was not intending to suggest that research by law students should not be required as part of their course. Whether they are taking a first degree, a conversion course, a Masters or a professional course it will be essential that they undertake some research.
However, research falls into two camps: (i) broadening the knowledge and skills of the researcher (into which falls almost all research by students) and (ii) extending the total understanding of a subject (which is almost exclusively the province of those who already hold strong paper qualifications). Understanding and discussing new published papers always form an important part of courses at all levels.
In the context of a discussion about commercial law schools offering courses to fee-paying students, however, I consider it irrelevant whether the law school in question is staffed by people who write such papers as part of their salaried duties. There is, I believe, no escaping the fact that the students are customers and expect a high-quality service. Professor X’s ground-breaking research might make him the top man in his field but it is Assistant Lecturer Y’s tutorials they want to attend because she has the ability to explain the concepts they find difficult today and poses the questions that get them thinking ahead to tomorrow. She provides the service for which they pay.
When deciding to take a course that might set you back fifteen, twenty or thirty thousand quid your mind is necessarily concentrated on “who is going to give me the best return?” Not the best return in any esoteric sense of broadening the mind, but the best return in the sense of the best possible results to equip you for the next stage.
This is of particular importance these days when there is so much competition for training contracts (as I believe articles are now called) and pupillage that exam results are everything at the first stage of the filtering process undertaken by firms of solicitors and sets of chambers. “Satisfactory” doesn’t cut the mustard against “very satisfactory”. “Satisfactory” results in an early letter saying “thank you for applying”, whereas “very satisfactory” has a chance of moving to the next stage. Which college would you attend – the one with an outstanding reputation for teaching or the one that is outstanding in its publications record but so-so for teaching?
Of course there is much more to it than this, especially at first degree level. At professional exam level the point I make is, I believe, of particular importance because the debt incurred by students of modest means is additional to first-degree debt and this means the grade awarded at the end takes on special significance.
[...] view of someone who has first hand experience in the business of education on Charon QC’ s blog . Our tuppence – we’d be inclined to agree that a £1.9bn turnover company like Apollo [...]
the real issue is that of the london providers, i had no idea which had the best reputation. had i known, i would have gone there regardless of cost – i mean it was going to cost an arm and a leg anyway so give them the digits as well if you will end up with a job. I think that lack of information (who even knows what the bvc results are for each provider? not me and i just finished mine) means choice is down to hearsay and rumblings on the blogs of those who have done a course there. people in practice don’t really seem to know or care much about providers – i asked loads of people and they failed to express a preference. anyway, most barristers in practice wet t inns of court for the obvious reason. and crucially it’s not a market where you can sample the wares and gravitate towards the best. there is no repeat business except in the limited sense of people (like me) doing a gdl and thinking ‘better the devil you know’. as it happened, i thought my bvc was less well managed and less well taught than the gdl, which was satisfactory but only that. i signed up for the bvc because i was certain there were enough computers to go round at bpp.
it’s not like there is an ‘oxbridge’ in vocational training to which you can aspire – especially as all institutions appear to take anyone who can sign a cheque. until you get some kind of competitive entry (not the aptitude test, which will surely be the equivalent of advanced cheque signing) where those judged (however unfairly) as most likely to get pupillage are able to attend a particular institution, where you do the bvc is likely to remain an irrelevance. i know fine well that my university is a major factor in getting interviews – not so my choice of law school.
it is politically impossible for the bar to do this because it is being hounded with misunderstood notions of ‘openness’. i agree that would be a good thng but despite the convoluted process, i don’t see anything other than chambers recruiting in their own image and that means the ‘right’ look, accent, age, colour, gender. at least when you can prove you have gone to a ‘better’ law school than others you can trump those factors with something concrete and allow those who genuinely want the best to pick them.
anyway, where are my fries? – i’ve been waiting a year and all they have given me is this odd-looking call certificate.