The UK¡¯s oldest private university may need to make ¡°significant adjustments to its model¡± to attract investment after it was rumoured to be up for sale despite leadership and financial issues.

After a torrid year, the University of Buckingham was reportedly the subject of a bid of ?30 million from 51³Ô¹Ï University Systems last month, with the institution apparently believing it was worth closer to ?150 million.

While minutes from a university council meeting held earlier this year confirmed the institution¡¯s interest in private investment, some have questioned the appetite among potential buyers given the university¡¯s troubled financial position.?

It is also searching for new leadership after vice-chancellor?James Tooley did not have his contract renewed after a very public row in which he was?suspended over allegations?related to a past relationship and then reinstated, only to miss out when reapplying for the role. He officially leaves in December.?

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A spokesperson from the university told?51³Ô¹Ï: ¡°As with all universities operating in a challenging environment, it is routine to continually review our position and explore options to ensure we achieve our ambitions and remain resilient.¡±

In 2024, Buckingham, which does not receive government funding, recorded a ?2.1 million deficit.?

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A key financial challenge included the?sudden closure of the Applied Business Academy, a private provider that had a validation arrangement with Buckingham.?

According to council minutes, the closure ¡°contributed significantly¡± to this shortfall, with ?1.6 million in income forecast but only ?200,000 received.?

Student recruitment numbers also remained flat in 2024 despite a?9 per cent growth target.

The university recorded underlying reserves totalling ?13 million, of which ?5 million were borrowed funds.

In order to bolster reserves, the chair of the university¡¯s finance and resources committee told the council in February that the institution would need to ¡°either improve profitability or secure additional endowments and/or external investment¡± ¨C although a sale was not discussed at that point, according to public documents.?

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Given the university¡¯s financial position, ¡°it is hard to see this as an appealing prospect for a private investor without radical expansion that would change the university fundamentally from its current character and approach,¡± said Chris Millward, professor of practice in education policy at the University of Birmingham.?

Private equity ¡°involves the purchase of a business that the [private equity] folk believe can be run better and be more profitable; the cost of purchase is often funded by loading the new business with debt and the investor gets a return by selling on the business after five to seven years with its debt burden,¡± said David Palfreyman, bursar at the University of Oxford¡¯s New College.??

¡°So success for the investor in this case depends on there being another business that is building up a collection of HE entities and hence wants to buy the [university] in due course to add to its portfolio of for-profit HE entities.¡±

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Others have previously said there is?widespread interest in higher education?among private investors, despite the financial challenges across the sector.?

And, while investment of this sort can stoke fears that coveted degree-awarding powers could end up in the wrong hands, commentators said the Office for Students (OfS) would closely oversee any sale.?

¡°The OfS has been set up to manage these risks and it will be experienced in factoring in the particular circumstances of private ownership into that, for example the due diligence that will be needed in relation to potential owners,¡± said Millward, who was previously a director at the regulator.

The Buckingham spokesperson added: ¡°The university¡¯s vision is to be a beacon of independence and academic freedom, internationally recognised for nurturing the leaders and thinkers of the future. We believe our founding principles, coupled with our unique model, are well suited to the challenges facing higher education.¡±

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helen.packer@timeshighereducation.com