Andrew Oswald: Private universities will help us stay in the race

Last week I had to give a talk at a conference in Durham. It was fun and enlightening. The conference was good too. I was reminded of the grey beauty of northern England and of the interesting university contained in that evocative dark-stoned place. My audience was 150 men and 10 women. This was the annual conference of the British Universities Finance Directors Group.

I hope I was frightening. I argued that British universities are not good enough. Drawing on recent statistics from the website www.isihighlycited.com, I pointed out that this nation now has few of the world's top university researchers. We are being trounced by the USA. I said this is serious for our country and bad for students. And I said we are in denial about it.

New figures have just been released on to the website. They provide the first league table of the world's most-cited 231 mathematicians (only mathematicians would know why that number got chosen: perhaps it is a special formula of the lowest primes). By any standard, these are distinguished people. Yet there is much to disturb a Briton.

For instance, I was struck by the fact that out of this 231-strong world elite, only two work at the University of Cambridge. That is the same number as at the University of Connecticut. Stanford University, a private university in California, has on its own 11 of the world's top mathematicians.

The rest of the website's bad news is one click away. Of the globe's top 231 maths stars, only 13 work in England. One extra Scotsman gets us to a luckier 14. By contrast, the United States houses 162 of the world's leading mathematicians. That is a US to UK ratio of 12 to one. Way too much. Such an imbalance cannot be explained by population; we have one fifth of theirs. It cannot be explained by income; we have one seventh of theirs. The explanation is that the United States has private universities and they are happy to pay for global talent.

I believe our country also needs private universities, and straight away. At the moment we have one: it is the University of Buckingham. In my judgement it is the lack of private universities that has allowed the quality of UK higher education to fall so severely that we follow the exhaust pipes of the American powerhouses.

Consider a thought experiment. What would happen to English football if Manchester United and Arsenal were taken into public ownership? Within a few years, I bet the teams would be finished. Quality would collapse. There would be fuss over the salaries needed to hold the likes of David Beckham; innovation would cease. Worse still, people with audit forms would arrive. Yet no government quality-inspector has ever walked on the pitch at Highbury. Arsene Wenger's team has prospered without clip-boardy advice.

Perhaps you think me a dull economist, but it seems to me that change is vital and, indeed, will be driven unstoppably by competition. It will be produced by market pressures writ global.

No rocket science is involved here: today everywhere is just a plane ride away, and the English language is spoken more and more, which means that differences are going to be eroded by competition.

If our nation wants to stay in the game, by the middle of this century I expect us to have many private universities and to be paying roughly the same kinds of salaries as offered by the top US universities. I expect us to be charging the same (very high) fees as American colleges. There is no other way to get the resources that will maintain quality. Whether these things will happen more quickly, say by 2010 or 2020, is hard to predict. They may well.

Sir Kenneth Calman, the boss of Durham University who is also a fantastic speaker, quipped in his opening talk that he wanted the finance directors present to ignore the true meaning of their conference acronym BUFDG. Calman said that he preferred the interpretation Be Unique: Forget Doom and Gloom. Another interpretation of the group's acronym came into my mind. Bloody Underfunded For Depending on Government.

The writer is Professor of Economics at the University of Warwick