Last month the SEC launched an informal inquiry into BPP Law School’s parent Apollo Global over the issue of revenue recognition at the University of Phoenix – something that caused Apollo’s shares to dive by 15 per cent in a single day. As owner of the University of Phoenix, Apollo Global – a joint venture between Apollo Group and Carlyle Group – is the biggest for-profit higher education provider in the US. The £305m takeover of BPP this summer gave Apollo a bridgehead into a rapidly liberalising UK market and was supposed to give BPP some US muscle over here.
Now that students are seen by education providers as units of production rather than potential citizens, revenue recognition is a major issue; when a student drops out, exactly how much of their fees can be left on Apollo’s balance sheet? Life choices meet accounting principles: it’s a tricky mix.
And the saga continues to escalate, with one LPC provider lodging a complaint to the Bar Standards Board and the Solicitors Regulatory Authority.
The BPP story highlights a wider issue that will be of intense interest not just to those working in legal education and graduate recruitment, but to anyone with children about to go to university – that is, the prospect of higher education institutions being opened up wholesale to businesses.
BPP has been assiduously courting the Tories, with chief executive Peter Crisp up at the party conference this autumn doing the prawn cocktail rounds. It has just been allowed to award degrees, but is not yet classed as a university – much as it would like to be.
Despite the University of Buckingham’s comparative success, private providers of higher education have been viewed with a certain amount of apprehension among the Labour establishment, but a Conservative government would be more sympathetic. For BPP, the timing of the SEC inquiry couldn’t be more awkward.