Universities in the UK do not have a coherent system of funding or governance, and both remain heavily debated. A growing body of other legal rights, for instance, for staff in reasonable expectations of fair procedure, or for students in fairness over the awarding of degrees, has grown through judicial review.
Degree awarding powers and university title
Both degree awarding powers and university title are controlled under UK law, and it is illegal for an institution to call itself a university or to purport to offer UK degrees without authorisation. Higher education is a devolved power, so the rules for degree awarding powers and university title differ between the four countries of the United Kingdom.
In Scotland and Northern Ireland the last UK national standards (from 1999) still apply. Institutions may hold taught degree awarding powers, allowing them to award ordinary and honours bachelor's degrees and taught master's degrees, and research degree awarding powers, allowing them additionally to award master's degrees by research and doctoral degrees. Institutions with taught degree powers may be awarded the title of "university college", but for university title an institution must hold research degree awarding powers, as well as having over 4000 full time equivalent (FTE) students, with over 3000 degree on level courses and at least 500 higher education students in each of five broad subject areas. For both degree awarding powers and university title, the final decision is made by the Privy Council on the advice of the Quality Assurance Agency for Higher Education (QAA)
The rules in England and Wales diverged from those in Scotland and Northern Ireland in 2004 and were further modified in 2010 with the introduction of foundation degree awarding powers for further education colleges. Under these regulations, which remain in force in Wales, while taught and research degree awarding powers are awarded indefinitely to institutions in the publicly-funded higher education sector, they are time limited to six years for other institutions (e.g. private colleges and universities) after which they must be renewed. The rules for university title allowed institutions holding only taught degree awarding powers to become universities in England and Wales from 2004, and the requirement for minimum student numbers across five broad subject areas was dropped. The overall higher education FTE student number criterion remained at 4000, with 3000 on degree level courses (clarified to include foundation degrees, which has been introduced since the 1999 regulations). The final award of degree awarding powers continued to rest with the Privy Council; for university title it lay with the Privy Council for publicly-funded institutions while alternative providers had to get permission to use University in their name under the Companies Act 2006, the recommendation in both cases coming from the Higher Education Funding Council for England (HEFCE) via the relevant government department (in England) or from the Welsh Government.
England diverged from Wales in 2012 with a reduction in the number of higher education FTE students needed for university title to 1000 (750 on degree level courses), with the addition that at least 55% of total FTE students had to be on higher education courses. There were further technical changes in 2015 before a complete overhaul of the system in England under the Higher Education and Research Act 2017. This saw the abolition of HEFCE and its replacement by the Office for Students (OfS). A new tier of degree awarding powers - bachelor's degree awarding powers, allowing the award of degrees up to level 6 on the Framework for Higher Education Qualifications - was introduced.
Under this act, degree awarding powers were made available on a probationary basis, termed "New DAPs" to providers without a track record in higher education, who had previously had to have a validation agreement with a recognised body to establish a track record prior to gaining their own powers. Providers with a track record of the years or more can apply for time-limited "Full DAPs" and those who have held time-limited date awarding powers for more than three years can apply for "Indefinite DAPs". Another change is that degree awarding powers can now be limited to some subjects rather than covering all possible degrees at that level as previously. There is also an intention to make it possible for institute to gain research degree awarding powers without taught degree awarding powers. New criteria for university title will apply for applications from April 2019, the government had started its intention that student numbers limits will be removed but that the criterion that 55 percent of students are on higher education courses will remain, and that providers with bachelor's degree awarding powers and single subject degree awarding powers will be eligible for university title. The OfS will take over the responsibility of granting degree awarding powers and university title from the Privy Council, and will also be responsible for the awarding of university title to institutions outside of the publicly-funded higher education sector. The act gives OfS the ability to remove indefinite degree awarding powers and university title from any institution in England, including those granted these by royal charter.
Staff and student voice
Governance of universities is set by each university's constitution, typically deriving from an Act of Parliament, a Royal Charter or an Order in Council issued by the Privy Council. The most progressive models support a high degree of voice for staff and students, with the Higher Education Code of Governance stating that: "There is an expectation, often enshrined within the constitutional documents of HEIs, that governing bodies will contain staff and student members and encourage their full and active participation." Reforms were first put into law after an Oxford University Commission of 1852 stated it must reverse "successive interventions by which the government of the University was reduced to a narrow oligarchy." For example, since the Cambridge University Act 1856 set its rules in law, Cambridge University's statutes require that its Regent House (mostly full-time university members) elects its governing body, the 23 member "Council". Four members are elected by heads of colleges, four by professors and readers, eight by other academic fellows, three by students, four by a "grace" (a vote) of the whole Regent House.
In Scotland, the Universities (Scotland) Act 1966, with amendments by the Higher Education Governance (Scotland) Act 2016, contains minimum standards for the composition of courts, with a Rector elected by students (but at Edinburgh University, staff also vote) and an elected Vice-Chairman. Assessor are appointed by the local authority, Chancellor, General Council and Senatus Academicus. Also there are student members, employee representatives and co-opted lay members. For instance, Aberdeen University has up to a 22 person "court", with an elected Rector and a person she or he chooses, a principal plus one she or he chooses, a vice-principal (5 members), 2 members appointed by the local councils, 4 members appointed by the General Council, 6 members from the Senatus Academicus, and up to 5 co-opted members.
In England and Wales, the pattern is more haphazard and often deficient in representation. The constitution of the London School of Economics, which unusually takes the legal form of a company limited by guarantee, currently requires its 17 member "Council" to have two student representatives, and three staff representatives. Anomalously, the King's College London Act 1997 required a 38 member Council with five ex-officio members, twenty lay appointees, eight elected by academics, three elected by students, and two by non-academic staff members, however this provision still remains to be put into effect on the "appointed day". Other universities have a broad variety of governance structures, although if there is not a special statute or constitution, the general rules are set by the Education Reform Act 1988. This says that university governing bodies with constitutions issued by the Privy Council should have between 12 and 24 members, with up to thirteen lay members, up to two teachers, up to two students, and between one and nine members co-opted by the others. The wide variations in governing bodies raise the question about staff or student voice should have any limit, given their fundamental expertise in university life.
Funding
Before 1998, universities were funded mainly by central government, although they have been increasingly reliant on charging students and seeking to raise private capital. First, universities have the power to generate income through endowment trust funds, accumulated over generations of donations and investment. Second, under the Further and Higher Education Act 1992 there are funding councils paid for through general taxation for England, Wales, Scotland and Northern Ireland. For England and Wales, the Secretary of State appoints 12 to 15 members and the chair, of which 6 to 9 should be academics and the remainder with "industrial, commercial or financial" backgrounds. Funds are administered at the councils' discretion but must consult with "bodies representing the interests of higher education institutions" such as the University and College Union and Universities UK. After the Higher Education and Research Act 2017, the English council from 2018 will be renamed the "Office for Students". Further, there are seven research councils (AHRC, ESRC, MRC, etc) which distribute funds after peer review of applications by academics conducting research.
Third, and most controversially, funding may come from charging students. From WW2 tuition fees in the UK were effectively abolished and local authorities paid maintenance grants. The Education Act 1962 formally required this position for all UK residents, and this continued through the expansion of university places recommended by the Robbins Report of 1963. However, over the 1980s and 1990s, grants were diminished, requiring students to become ever more reliant on their parents' wealth. Further, appointed in 1996, the Dearing Report argued for the introduction of tuition fees because it said graduates had "improved employment prospects and pay." Instead of funding university through progressive tax, the Teaching and Higher Education Act 1998 mandated £1000 fees for home students. In England, this rose to £3000 in the Higher Education Act 2004, and £9000 after the Browne Review in 2010 led by the former CEO of oil corporation BP plc. In 2017, the limit on fees was £9,250 for students in England, £9000 in Wales, and £3,805 in Northern Ireland. The same rates apply for European Union students, who cannot be discriminated against under EU law. By contrast, under the Scotland Act 1998, the Scottish government resolved not to introduce tuition fees for students under 25. Under EU law, while the UK Parliament does not abolish tuition fees, that English students are charged tuition fees in Scottish universities while EU students may not be, because non-discrimination for free movement of citizens does not apply to internal domestic affairs. For English universities, the Higher Education Act 2004 enables the Secretary of State to set fee limits, while universities are meant to ensure "fair access" by drafting a "plan" for "equality of opportunity". There is no limit on international students fees, which have steadily risen to typically around double. A system of student loans is available for UK students through the government owned Student Loans Company. Means-tested grants were also available, but abolished for students who began university after August 2016. While EU students qualify for the same fees as UK students, they only qualify for loans (or previously grants) if they have been resident for three years in the UK. As the UK is in a minority of countries to still charge tuition fees, increasing demands have been made to abolish fees on the ground that they burden people without wealthy families in debt, deter disadvantaged students from education, and escalate income inequality.
There are only five private universities (the charitable University of Buckingham and Regent's University London, and the for-profit institutions The University of Law, BPP University and Arden University) where the government does not subsidise the tuition fees. (There is also the non-profit Richmond, The American International University in London which essentially offers an American liberal arts education; this is not a UK university but is accredited by the American Middle States Association of Colleges and Schools.) In April 2017 the House of Commons voted to increase the cap on tuition fees to £9,250 per year, which took effect for students starting in September 2017. Students in Scotland, Wales, and Northern Ireland are also eligible for a means-tested grant, and many universities provide bursaries to poor students. Non-European Union students are not subsidised by the UK government and so have to pay much higher tuition fees.
Other legal rights
Rights to other standards go for staff, or students, universities are subject to both judicial review and rights in contract law because they are seen as having both an equally "public" and "private" nature. In a leading case of Clark v University of Lincolnshire and Humberside a student claimed that she should not have received a third class degree after her computer crashed, she lost an assignment, and was forced to rush a new one. The Court of Appeal held that her application for both breach of contract and judicial review should not be struck out because there could be a good case to hear, so long as it did seek to overturn "issues of academic or pastoral judgment" where "any judgment of the courts would be jejune and inappropriate". However, the shorter time limit of three months in judicial review was more appropriate than six years in contract. Cases which have sought to challenge academic judgment for failing students are typically bound to fail, as grading with a fair process is in the bounds of academic judgment. In Buckland v Bournemouth University, where the university management interfered with academic assessment of student grades, this founded a right for a professor to claim he was constructively and unfairly dismissed. All access to education must be free from unlawful discrimination under the Equality Act 2010. In the Higher Education Act 2004 sections 11-21 provides for a modern complaints procedure to be followed in universities.
Legal status
All UK universities are formally independent bodies. With the exception of three private for-profit universities, British universities are formally charities. UK universities have four principal charity regulators. For universities outside England, this is the relevant national regulator: the Charity Commission for England and Wales for Welsh universities; the Office of the Scottish Charity Regulator for Scottish Universities; and the Charity Commission for Northern Ireland for both Northern Irish universities.
In England, most (all but twenty, as of May 2018) higher education institutes are exempt charities that are not registered with the Charity Commission; the principal regulator for universities that are exempt charities is the Office for Students while for those that are not exempt it is the Charity Commission. Both of the two charitable private universities in England are regulated by the Charity Commission.
Universities in the UK have a wide variety of legal structures, leading to differences in their rights and powers, and in who is a member of the corporate body of the university.
The most common form among "old" universities is incorporation by royal charter. The form and objectives of the corporation are laid down in the individual charter and statutes, but commonly all graduates are members of the university. Many London colleges were also incorporated by this route. At the ancient Scottish universities the corporation is formed, under the Universities (Scotland) Act 1889, by the university court rather than the graduates. A chartered corporation may not change its statutes without the approval of the Privy Council.
Newcastle University is the only English university to be purely a statutory corporation, and the only "old" university not incorporated by royal charter, having been created by the Universities of Durham and Newcastle upon Tyne Act 1963. Among London colleges, Royal Holloway, University of London was created in 1985 by the Royal Holloway and Bedford New College Act 1985 (merging the 19th century Royal Holloway and Bedford colleges), and is similarly a statutory corporation. The main difference between this and a chartered corporation is that a statutory corporation has no power to do something that is not aligned with its defined aims and objectives.
Durham and London, while both incorporated by royal charter, have statutes made under Acts of Parliament rather than under their charters (in the case of Durham, this arrangement dates back to its creation by Act of Parliament in 1832, while for London it dates from the university's reconstitution by Act of Parliament in 1900). This makes them both chartered and statutory corporations.
At Oxford and Cambridge, incorporated by a public Act of Parliament in 1571, only graduates who have proceeded to the academic rank of MA are members of the university. Their statues are made under Acts of Parliament, thus they are also considered statutory corporations for some purposes.
Most new universities are Higher Education Corporations, a form of corporation created by the Education Reform Act 1988 to incorporate the polytechnics independently of their local councils. In a higher education corporation, only the governing board is incorporated, not the graduates. Some newer London colleges share this status. Some new universities are companies limited by guarantee, a common form of incorporation used inter alia for some charities. The London School of Economics is also incorporated in this manner. The University of Chester and Bishop Grosseteste University are both unincorporated trusts within the Church of England. This was also the original form of Durham University (at that time also a church university) between its foundation in 1832 and its incorporation by royal charter in 1837.
Under the Education Reform Act 1988, higher education providers will be either recognised bodies or listed bodies. A recognised body is defined as "a university, college or other body which is authorised by Royal Charter or by or under Act of Parliament to grant degrees" or a body authorised by such a body "to act on its behalf in the granting of degrees" (this later category covers the colleges of the University of London with regard to the issuing of London degrees). A listed body is defined as a body which either "provides any course which is in preparation for a degree to be granted by a recognised body and is approved by or on behalf of the recognised body" - independent institutions whose degrees are validated by a recognised body; or "is a constituent college, school or hall or other institution of a university which is a recognised body" - including the colleges of the universities of Oxford, Cambridge, Durham and the Highlands and Islands, the central institutes of the University of London (although not its colleges, which are recognised bodies), Manchester Business School, the university colleges affiliated to Queens University Belfast (Stranmillis University College and St Mary's University College), and the Royal Welsh College of Music and Drama (part of the University of South Wales).
Mergers
The first merger between British universities was that between King's College, Aberdeen and Marischal College, Aberdeen under the Universities (Scotland) Act 1858 to form the University of Aberdeen, explicitly maintaining the foundation date of King's College.
In 1984 the New University of Ulster merged with Ulster Polytechnic to form Ulster University. There have also been a number of mergers between colleges of the University of London, of particular note is the merger of Royal Holloway College and Bedford College in 1985 by Act of Parliament.
Cardiff University merged with the University of Wales Institute of Science and Technology in 1984, and then re-merged with the University of Wales College of Medicine in 2004, the two having previously been separated in the 1930s.
Also in 2004, the Victoria University of Manchester and the University of Manchester Institute of Science and Technology merged to form the University of Manchester.
In 2002, London Guildhall University and the University of North London merged to form London Metropolitan University.
At around the same time a merger was proposed between Imperial College London and University College London, but was abandoned following protests.
In 2011, a merger was proposed between two universities in Scotland: University of Abertay Dundee and University of Dundee. This similarly did not occur.
In Wales, the University of Wales Lampeter and Trinity University College merged in 2010 to form the University of Wales, Trinity Saint David, with Swansea Metropolitan University joining in 2012 and the University of Wales committed to joining once out has completed its commitments to current students. Legally this was a takeover rather than a merger as UWTSD remains incorporated under Lampeter's 1828 charter.
Also in Wales, the University of South Wales was formed in 2013 by a merger of the University of Glamorgan and the University of Wales, Newport. The University of Wales Institute Cardiff declined to take part in the merger, becoming Cardiff Metropolitan University.