ACADEMIA Letters

Death of the public and private sectors in England? The

financial case of an English company delivering higher
education
Nick Mapletoft, University Centre Quayside

Introduction
Students of business and others studying corporate finance, are often inclined to write about
the same companies, the ones on which case studies are readily available; which tend to be
large, well known companies. There is little available about smaller organisations as a form
of contrast, which is why this letter has been written. This letter provides an insight into
the financial independence, strategy and positioning of a UK based University Centre, as
a relatively new Higher Education Provider. As the public sector operate increasingly like
private companies, and private companies provide public services, the article asks if there
really is a public sector and private sector.
University Centre Quayside (UCQ) is a UK based market disrupting challenger university
centre that operates in Britain within public, voluntary and private sectors and across further
and higher education (FE and HE). Working seminally and cross-sectorally means that UCQ
operates according to different and sometimes opposing norms whilst in a state of becom-
ing. Gibbs (in Molesworth, 2011) posits that we are always emerging, that we never become.
Barnett (p. 132, 2012) proposes that this is true of universities, that they are multivariate,
multi-characteristic, multi-modal and ever emerging entities, they are “always a becoming-
university”. To suggest that UCQ is or wishes to become a single type of university is in-
accurate and overly simplistic, UCQ is, as Barnett (p. 72, 2012; Barnett, 2010) suggests, a

Academia Letters, December 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0

Corresponding Author: Nick Mapletoft, nick.mapletoft@ucq.ac.uk

Citation: Mapletoft, N. (2021). Death of the public and private sectors in England? The financial case of an
English company delivering higher education. Academia Letters, Article 4214.
https://doi.org/10.20935/AL4214.
1
mosaic. UCQ is ‘private’ (Barnett, 2012), however it is also ‘business-facing’ (ibid), ‘Mode-
2’ (Nowotny et al., 2001, pp.91-94), ‘open’ (Peters, et al., 2012 in Barnett, 2013) and ‘virtual’
university (Robins, 2003). This essay explores financial management strategies and plan-
ning tools used in the public and private sectors, considering best practice, whilst exploring
the (sometimes conflicting) socio-economic and techno-economic contexts and frameworks
within which UCQ operates.

Introduction to the financial management strategies and tools un-

der consideration
Porter (1996) posits that strategy is an action plan, with Mintzberg (2014) saying that it is
a plan that integrates the company’s goals with its resources. Mintzberg (& Ghoshal, 2003)
argued that strategy is not a plan but a perspective that exists only in the mind. Financial man-
agement strategies are directly related to corporate strategy (Grundy & Scholes, 1998), setting
out a plan of how the organisation will raise and spend financial capital in order to achieve the
organisation’s goals (ibid), with Johnson (1993) stating that such strategies originate within
large enterprises and then appear in smaller companies after a time. Despite their differing
views, authors appear to agree that a strategy always involves planning.
Kisfalvi (2002) found that the likelihood of a business undertaking formal strategy or
planning is in direct relation to the owner’s motivation, with small businesses often operating
tactically rather than strategically (Barber, 1989/2016; Carpenter, 1986; Herbig et al, 1996).

Public and private: sectoral context, evolution, financial best prac-

tice
Extant literature on western universities often starts with the Ancient Greeks: Socrates and
his student Plato. The Platonic view of education is that is makes men nobler and consequen-
tially benefits the state (Plato, 380BCE/2014), Plato and Socrates were critical of students
being thought of as customers (Molesworth, p. 4, 2011), predicting that a commercialised ed-
ucation would result in a pedagogy of limited intellectual value (p.5, ibid). The Socratic view
was that a truly higher education could not be bought; indeed Socrates refused to take pay-
ment and to be called a teacher (Mintz, 2013). The medieval and Newmanian (1852/2016)
metaphysical universities (Barnett, 2012) along with the Humboltdian (Molesworth, 2011)
research universities, believed that education is a social rather than an individual good, that
they should take a collegiate approach to serve society. Newman (1852/2016) saw the univer-

Academia Letters, December 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0

Corresponding Author: Nick Mapletoft, nick.mapletoft@ucq.ac.uk

Citation: Mapletoft, N. (2021). Death of the public and private sectors in England? The financial case of an
English company delivering higher education. Academia Letters, Article 4214.
https://doi.org/10.20935/AL4214.
2
sity as providing man a transcendental development, giving an insight into the term “higher”
education (Barnett, p. 88, 2012).
These factors of ensuring societal value and mind development of learners continued with
the establishment of the ‘civic’ universities in the areas borne of industrialisation (Collini, pp.
29-31, 2012) and then those universities and polytechnics that arose as a result of the Robbins
Report (1963) which were developed to provide instruction for industry without “betraying
the general powers of the mind” (p.6 ibid).
Following WWII and the collapse of the Soviet Bloc (Busch, p.11, 2017), successive
governments have supported marketisation of almost all services, including education, re-
sulting in what critics refer to as a neo-liberal takeover (Giroux, 2014; Busch, 2017). There
is much discussion about UK universities, whether they are public or private (e.g. Barnett,
2012; McGettigan, 2013; Collini, 2012; Collini, 2018), indeed they demonstrate characteris-
tics of both the public and private sectors, so may be viewed as quasi-public or quasi-private.
with the OECD classifying British universities as ‘government-dependent private universities’
(Collini, p.28, 2018); this makes studying them both interesting and confusing.
What was, in the mid 20th century, a clear bifurcation between public and private sectors,
is increasingly convergent. Universities diversified their offering including increased third
stream activities (Watson, 2014), resulting in the entrepreneurial university (Barnett, 2012)
and more recently the corporate university (ibid). As universities have increasingly adopted
the managerialisation, the military metaphors (mission, targets, plan, strategy, bullet points)
and market metaphors (customer service, choice) (Barnett, p.18, 2012) of the corporate sector,
so too, encouraged by the government (McGettigan, 2013; 2017a; 2017b; DBIS, 2016) some
in the corporate sector have begun to look at becoming or establishing alternative universities
(e.g. Dyson) (Press Association, 2016). This corporatisation brought with it the economic
norms of the private sector, UK universities can no longer rely on patronage from the Pope,
Kings, or even government. As they compete in a market-like environment for students and
employer ‘clients’, they adopt the staff, financial management strategies and financial planning
tools of the corporates, they are increasingly data-centric or cogni-centric (Harari, 2017),
knowledge is after all power (Foucault, 1980).
Whether an organisation is classified as public or private is dependent on ownership, ex-
ercise of authority and how it is funded. This is likely to influence what the organisation
does and how it does it, including how it can raise finance, how it can spend and how it must
account. Sources of finance may be internal or external, with internal relying on retained
funds through careful cash-flow planning and profitability. External sources of finance for
public organisations usually comes from the government, taxation, charitable donations or
asset sale, with private funding usually being forbidden. Private companies may seek finance

Academia Letters, December 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0

Corresponding Author: Nick Mapletoft, nick.mapletoft@ucq.ac.uk

Citation: Mapletoft, N. (2021). Death of the public and private sectors in England? The financial case of an
English company delivering higher education. Academia Letters, Article 4214.
https://doi.org/10.20935/AL4214.
3
from a lender, sale of assets or shares. Any external funds will come at a financial cost of re-
turn and accountability. Share sales also change the control of the company and may drive a
change in business strategy if shareholders are looking for a quick and profitable return. UCQ
has been able to fund its developments through shareholders’ funds with financial control via
the Board of Directors being maintained independently of academic integrity which is under
the governance of the Academic Council. This position is incredibly important to the UCQ
Senior Leadership Team (SLT), being a question of control and independence. Maintaining
sustainable financial independence is a strategic goal listed in UCQ’s 2018-2023 Strategic
Plan.
In 1973 Britain adopted the EU legislation which covers public procurement to ensure a
competitive and open market that treats suppliers fairly and equally. Marketisation of British
public services began in 1979 under the Thatcher Government (LeGrand, 1991). The result
is that public bodies must procure goods and service in line with the procurement legislation.
A procurement strategy is used to ensure lawful compliance and to get good value for the
authority and sometimes for their community. Initially authorities failed to fully adopt the
‘openness’ of the single market, so the legislation changed in 1985 to prevent widespread
gaming through using negotiated procedures to award contracts to incumbents and nationals.
The growth of popularity of public procurement is in part due to the ease of publishing and
managing opportunities, the widespread and large number of interested bidders, together with
wide cost savings.
UCQ cannot use the EU systems to release invitations to tender, but it has adopted the
social spirit of competitive procurement to support localisation and UCQ seeks three quotes
where possible, for comparison.
Income is a form of finance, with a cash-flow strategy helping to prepare for any likely
short falls in income and a comprehensive cash-flow spreadsheet providing stakeholders with
some confidence in planning (Dyson, 2010). A cash-flow statement provides for an amenable
high level review rather than ratio analysis (Grundy and Scholes, 1998). Whilst a single prod-
uct provider may experience short-term growth, history show us that products and industries
experience maturation and profitability analysis suggests there are no ‘quick wins’. Higher
profits come from products that require greater investment to develop, many developments
fail and there is no way of knowing which will succeed or fail. The Silicon Valley model is to
invest in ten products, where seven will fail, two will do as expected and one will be a spec-
tacular success (Martinez, 2016); such R&D impacts cash-flow. A portfolio strategy is a way
of balancing products to take account of maturity (for example using Little’s life-cycle matrix
(Ambrosini, Johnson, & Scholes, p.209, 1998)), policy direction (for example McKinsey’s di-
rectional policy matrix (ibid, p.207)) and income trajectory. Sunderland University, like most

Academia Letters, December 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0

Corresponding Author: Nick Mapletoft, nick.mapletoft@ucq.ac.uk

Citation: Mapletoft, N. (2021). Death of the public and private sectors in England? The financial case of an
English company delivering higher education. Academia Letters, Article 4214.
https://doi.org/10.20935/AL4214.
4
universities, undertake research alongside teaching, they also deliver third stream activities.
The third stream activities are typically a source of private income (Watson, 2014), research
is largely publicly funded, endowments and gifts are charitable donations, and course fees are
commonly viewed as private funding, although in reality student loans come from govern-
ment. Having a balanced portfolio provides the University with the finance it needs in the
short-term whilst they speculatively invest in R&D and a property portfolio for the long term.
UCQ endeavours to maintain a balanced portfolio, using a Boston box (Ambrosini, John-
son, & Scholes, p.206, 1998)) and portfolio cube (ibid, p. 215) for visual representation.
Since starting in 1993, the company has seen products and services mature. Approaches used
to survive include diversification (Ansoff, 1957) including tangible and intangible relation-
ships (Porter, 2004a), joint venture and acquisition. Porter (2004b) warns of joint ventures
carrying a high cost to overcome structural barriers and incumbent retaliation. Rumfelt (p.
156, 2012) cautions that engineered growth through acquisition means “you usually pay too
much”, suggesting it is unhealthy and that it is better for firms to have “superior products and
skill” (ibid, p.159).

In conclusion
This letter has described in rich detail the financial strategy and positioning of a small, pri-
vately owned company, that is operating predominantly in the public sector; it provides a
current case for comparative analysis. It considers the public and private sectors in England
and questions whether today, either sector can truly say that is it private or public.

Academia Letters, December 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0

Corresponding Author: Nick Mapletoft, nick.mapletoft@ucq.ac.uk

Citation: Mapletoft, N. (2021). Death of the public and private sectors in England? The financial case of an
English company delivering higher education. Academia Letters, Article 4214.
https://doi.org/10.20935/AL4214.
5
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Academia Letters, December 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0

Corresponding Author: Nick Mapletoft, nick.mapletoft@ucq.ac.uk

Citation: Mapletoft, N. (2021). Death of the public and private sectors in England? The financial case of an
English company delivering higher education. Academia Letters, Article 4214.
https://doi.org/10.20935/AL4214.
6
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Academia Letters, December 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0

Corresponding Author: Nick Mapletoft, nick.mapletoft@ucq.ac.uk

Citation: Mapletoft, N. (2021). Death of the public and private sectors in England? The financial case of an
English company delivering higher education. Academia Letters, Article 4214.
https://doi.org/10.20935/AL4214.
7
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Academia Letters, December 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0

Corresponding Author: Nick Mapletoft, nick.mapletoft@ucq.ac.uk

Citation: Mapletoft, N. (2021). Death of the public and private sectors in England? The financial case of an
English company delivering higher education. Academia Letters, Article 4214.
https://doi.org/10.20935/AL4214.
8