A Code of Conduct for Public/Private Partnerships in Higher Education

DRAFT

A Code of Conduct for Public/Private Partnerships in Higher Education

SAUVCA, June 2001

Background

SAUVCA’s members have been discussing the issue of regulating public/private partnerships since early last year. In February 2001, the Executive Committee decided on a process to examine and resolve the key issues in the form of a Code of Conduct.

Recent comment on the issue of public/private partnerships in the National Plan for Higher Education, highlights a growing climate of criticism which focuses on the quality of what is delivered through the partnerships and the accountability of public institutions.

In response, SAUVCA proposed the development of a Code of Conduct, which will ensure that the state, consumers and providers have clarity and confidence in the relationships between public and private partners in the university sector.

SAUVCA’s executive committee agreed to develop the Code in February 2001. The National Directorate began a process of consultation with the major stakeholders, including the Department and private providers, which has now concluded. A brief report on the issues raised in this survey and the core elements of the proposed Code of Conduct are presented for consideration.

Why a Code of Conduct?

The National Plan commits the Ministry of Education to providing regulations governing accreditation and registration of private higher education providers by July 2001. SAUVCA supports the need for such regulations. The Code of Conduct on public/private partnerships is intended to complement the regulations and to work with the Ministry in resolving misunderstandings and a potentially damaging trend in the development of the higher education system. The Code is specifically for the needs of SAUVCA’s member institutions. By nature, Codes of Conduct are about making explicit, formal commitments and are designed to affirm probity. The Code will provide universities with an agreed way of implementing partnerships with the private sector in the interests of the sector as a whole. It is essential that member institutions support and enforce the Code in a spirit of self-regulation.

Problem statement

A set of problems is outlined in the National Plan (Section 4.6.1), which concerns the failings of public/private partnership agreements and the programmes delivered within them. These include:

• Although the public institution registers the students and provides the course materials, the private providers provide the tuition and administrative support with little or no quality control by the public institution.

• The rights and claims of the students on the public institution are often limited despite the fact that the public institution receives a State subsidy for the enrolled students. Thus, for example, in some cases, the students do not have access to the facilities, including libraries and laboratories, of the public institution.

• The public institution is often absolved of any financial obligations for the students it registers. Thus in some instances, the private provider determines the fee structure for the students and also provides loans through subsidiary financial institutions.

• There appears to be very little protection afforded to students in the event that the partnership agreement is terminated or revoked.

• The staff of the public institutions often have personal financial interests in the private provider or act as advisors or even work for the private provider.

• The state subsidy is either shared with the private provider or, in some cases, accrues to the public institution, with additional royalties payable by the private provider based on turnover. In such cases, therefore, it would appear that the public institution claims a subsidy when essentially all it does is to register students and issue certificates.

SAUVCA’s Code of Conduct must therefore respond to the key requirements of the National Plan which are reflected in the following excerpt.

“The approval of programmes [offered through public-private partnerships] will depend on the fit between the programme and the institution’s mission, including institutional capacity, whether it addresses regional/and or national needs, whether it meets the quality assurance criteria of the HEQC and whether the public institution concerned takes full academic responsibility for the programme and students enjoy all the benefits that come with registration at the public higher education institution (Section 4.6.1.)”

Scope

Firstly, SAUVCA’s investigation looked at the extent of public-private partnerships in the university sector, the long-term implications of partnerships for the development of the university sector and the role the state should play, if any, in regulating and subsidising institutions involved in public/private partnerships. A sample of 12 universities were asked to respond, some of which have major involvement with private partners and others which have none. There was insufficient time available to canvass all universities in the first phase of this process. However, the sample does capture the partnerships which dominate the sector in terms of scale. The responding institutions are detailed in Table 1.

Secondly, the survey examined the motivations and success criteria for both public and private partners.

Thirdly, it examined a range of issues which ought to form the basis of a Code Of Conduct. These included: students’ rights, dispute resolution between students and institutions, intellectual property, equity, employment of academic staff, student support, quality management, quality assurance, monopolistic behaviour or other unfair practices, truth in advertising, trans-national institutions governed by foreign jurisdictions, unregistered/unaccredited providers and enrolment reporting for subsidy purposes.

The Form and Content of Public/Private Partnerships

The details presented in this section are summarised from a larger and more detailed research report which SAUVCA has compiled.

SAUVCA’s approach was to focus on the partnerships in which public and private sector organisations collaborate in the delivery of subsidisable academic programmes. The emphases were on programme delivery and public subsidisation. Research partnerships and other forms of collaboration such as those entirely within the public sector were reviewed but they are not the focal point of this exercise.

It should be noted that there are exceptions where partnerships exist for which universities do not earn subsidies, such as in the delivery of short courses or where a university may provide a private partner with individual courses which contribute towards a programme delivered by the private partner. However, students may be serviced by the public provider and students earn qualifications accredited by the public institution. Students serviced through partnership agreements have been included in the analysis provided in Table 1.

Some important features define the broad picture of partnerships in the university sector.

1. It is clear from SAUVCA’s analysis that partnerships are primarily organised around the delivery of distance education programmes though there are a few cases where private partners have been engaged for residential programmes. The partnerships involve the delivery of programmes both nationally and internationally.

1. The bulk of enrolments are in teacher education upgrading programmes that, are typically low cost and for which there appears to be buoyant market, and the majority of students enrolled through partnership agreements are likely to be black.

1. Partnerships have enabled public institutions to access new markets, provide access to higher education for many new students and bring new skills into the sector. The educational value of the partnerships is particularly evident where the private partners provide access to up to date workplace technologies and experience. Some universities can also legitimately claim that students perform better in well-managed high quality partnership programmes. The existing partnerships are only the first wave of what could be more innovative and far reaching changes in response to global changes in higher education.

1. The scale at which the partnerships operate is conspicuously large in relation to the residential programmes and internally managed distance education programmes. For example, in at least two cases the size of student enrolments through the partnership agreements is more than double the size of internally managed distance education programmes. This is an important characteristic because it points to the capacity (or lack thereof) of primarily residential institutions to deliver support services on such a large scale.

1. Private sector partners do not necessarily have to be engaged in the education sector or particularly in higher education provision. In one case, a private partner has been engaged primarily for its information technology expertise and it has no other involvement in education. This has raised questions as to whether such private partners, which have no other involvement in the delivery of higher education, are required to be covered in the registration process. There is also confusion about whether partnerships with foreign public institutions need to be regulated in the same way as private partners.

1. Logistical capacity, infrastructure, administrative systems, marketing expertise, cost effectiveness and reach are the key factors which attract public institutions to private partners. Few have been selected especially for their expertise in delivering academic programmes.

1. Most of the partnerships appear to have originated in the early and mid-1990s and many institutions admit to have ‘learnt along the way’. A few private partners dominate the current scenario. Historically Afrikaans Universities have the highest level of involvement in public/private partnership agreements. Other institutions in the university sector have deliberately decided against partnership agreements or have not been approached by private partners. Agreements that were initiated in the early 1990s are now being reviewed as a result of changes in the higher education market and new requirements from public partners. The contractual nature of these agreements is likely to change substantially in the next two to three years to a competitive outsourcing model. Many institutions in the technikon sector are engaged in similar partnership agreements. The de-listing of the EDUCOR group, one of the largest private providers in the private higher education market, is expected to have repercussions for the market and for partnerships with the public sector.

1. At the 12 responding institutions in this survey, there were roughly 80 134 students enrolled or serviced through partnerships with the private sector at present. This figure will change once a more complete picture emerges of partnership agreements at other universities. Nevertheless, this is a significant number in relation to total enrolments in the sector and especially in relation to the number of students in residential teacher education programmes (+/- 5 000). There are serious weaknesses in the planning of teacher education which have resulted in a mismatch between supply and demand. If the DOE uses the funding mechanism to steer supply of teacher education in line with emerging priorities – many existing partnership programmes could be affected. In the first estimates being considered by the DOE which take account of the impact of HIV/AIDS, it is estimated that 30 000 teachers per annum may be required over the next 10 years.

1. There are acknowledged problems in the quality assurance and management of programmes on offer but this is not universally applicable.

1. There is little information available publicly on the quality of programmes delivered through public/private partnership agreements. Two institutions have recently completed reviews of partnership programmes (University of Port Elizabeth and University of Pretoria). This lack of information is compounded by a lack of confidence – expressed by a number of responding universities - in the capacity of the CHE to provide the necessary quality assurance back up.

1. There is a danger that private providers will be inclined to increase enrolments without due consideration of the support and quality assurance requirements.

1. To guard against misrepresentation - which has occurred - all public partners feel compelled to monitor advertisements by private partners.

1. Students’ rights are unclear in some agreements and separate contracts with both the public and private providers may create confusion and disputes.

1. Intellectual property issues have been dealt with in an ad hoc manner by some institutions.

1. There is widespread criticism outside the universities of the levels of support with which students in partnership and distance education programmes are provided. Inadequate support may be compounding the difficulties faced by under-prepared students who can only gain access to higher education through distance education programmes offered through partnership agreements.

1. The legal framework within which the agreements are based is ambiguous in many respects. The Higher Education Act of 1997 does not provide sufficient clarity on partnerships specifically. This has led to some institutions questioning the basis on which the DOE will regulate the agreements.

1. Enrolment reporting has improved but there do not appear to be standard requirements.

1. The efficiency of programmes based on graduation rates and through put has not been sufficiently monitored by public institutions.

1. There is a possibility that non-exclusive agreements which allow private partners to market unaccredited programmes side by side with public programmes will undermine the credibility of public institutions and lead to perverse incentives in the system.

1. Issues of equity, providers operating under foreign jurisdictions and relationships with unaccredited providers were also examined in the course of this exercise. The latter issues (foreign jurisdictions and accreditation) are expected to be resolved by the Department of Education’s forthcoming regulations on the registration and accreditation of private higher education providers and have therefore been excluded from the Code. With respect to equity, stakeholders have argued that a Code of Conduct designed to regulate partnership agreements is not the appropriate mechanism to pursue equity objectives. More careful monitoring of institutional equity plans is necessary.

1. This exercise has taken full account of the Codes of Ethics developed by NADEOSA, APDEC and APCSA and where appropriate, has incorporated them.

ANNEXURE 8 (cont’d)

Public/Private Partnerships in Higher Education

The Code of Conduct

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Preamble

1. SAUVCA recognises the importance of partnerships between public universities and private partners. It is committed to working closely with private partners to ensure that both sectors work in a complementary framework, which ultimately benefits the private and public sectors, students and the public.
2. SAUVCA is committed to ensuring that the quality of publicly accredited programmes is assured and that students receive all the benefits of public higher education and the highest possible levels of support.

3. SAUVCA’s members will endeavour to apply this Code of Conduct rigorously to all partnerships with the private sector which concern the delivery of academic programmes. By nature, Codes of Conduct are about making explicit, formal commitments and are designed to affirm probity. It is essential that member institutions support and enforce the Code in a spirit of self-regulation.

1. This Code will be applied within the law and the spirit of the South African Constitution of 1996 and the Higher Education Act of 1997.

In particular, SAUVCA undertakes the following:

5.0 Student Rights and Obligations

5.1 Students enrolled for publicly funded programmes at universities offered through public/private partnerships will enjoy all the rights and be subject to the obligations of a student at a public institution.

5.2 Where their enrolment is facilitated or managed by a private partner, students will be informed fully beforehand and their rights to all the benefits, services and recourse will be agreed to with the public university.

5.3 Separate contracts for services provided by private providers are to be concluded only if deemed necessary and will in no way limit the rights students’ have in respect of the public university.

5.4 In the event that a private partner is no longer able for administrative, financial or any other reason, to provide the agreed services to students on behalf of the public provider, the public institution will assume full responsibility, in so far as this practicable, and will ensure the continued delivery of the programme or arrange for the full or partial reimbursement of the student fees paid.

6.0 Dispute Resolution

6.1Where a public university has contracted a private partner to service its students, it will make all efforts to resolve disputes in the best interests of the student and the university.

6.2Disputes involving staff of the private provider will be resolved expeditiously and avoid compromising access to the programme, delivery and quality.

7.0 Intellectual property

7.1All intellectual property vested in programmes developed within the public university system will be protected.

7.2No employee of the universities will be permitted to use intellectual property developed within the public system for his/her own gain within the public/private partnership, unless otherwise agreed. The same applies to intellectual property developed by persons as a result of a contract of services with the public institution.

8.0 Employment of academic staff

8.1 Conditions of service agreements at universities will ensure that staff employed by public universities must declare any involvement, contractual or otherwise that may exist with a private partner that may influence their involvement in the partnership.

9.0 Student support

9.1.1Through careful monitoring universities will ensure that students, particularly those supported through distance education programmes and enrolled in collaboration with a private partner, are offered every form of academic support available.

9.1.2Where this presents logistical difficulties, the university will endeavour to find alternatives within the available resources. Enrolment through a private partner will not limit or compromise the quality of services offered to students.

10.0 Quality assurance

10.1.1The university will take full academic responsibility for the delivery of publicly funded programmes offered through a public/private partnership, ensuring that they meet both internal and external requirements and those of the CHE. If any quality assurance function is delegated to a private partner, the university will ensure that the CHE approves of such arrangements and that adequate controls exist to guarantee the accreditation of the programme.