So the Conservatives have put forward proposals to free universities from state funds by means of endowment ("Party pieces: promises and prescriptions", THES , May 18). Whatever their merits, one would hope that the proposals could lead to constructive debate about the relationship between universities and government.

Political reaction, however, degenerates into accusations that the Tories want to "privatise" universities. But they are private. Legally and economically, they belong to the "private non-profit-making" sector - like charities and friendly societies. They are private autonomous bodies, established by act of Parliament, royal charter or incorporation.

Universities are neither owned nor controlled by government. The government neither employs nor pays university staff, nor does it accept liability for university activities or financial obligations. Universities are non-profit-making, they do not have shareholders, no dividends are paid and any surplus in one area of an institution's activity must be reinvested in the institution to support its education mission.

The government is the single largest purchaser of university outputs (funds paid directly to universities for teaching and research account for about 60 per cent of university income) and as such can heavily influence how they operate. The formal relationship is between customer and supplier, not between master and servant.

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For the past decade, the government has drastically reduced the amount it is willing to pay per unit of teaching and research. As a major customer, it has every right to seek to get more for less.

However, instead of simply contracting transparently with universities for the provision of a service, government has sought to gain more control by attaching burdensome conditions to the much depleted "unit of resource" - such as insisting on compliance with highly bureaucratic and onerous research assessment and quality assurance exercises.

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The government wants to have it both ways - to give universities, which are private bodies, all the burdens of the public sector with none of the advantages. One result is that they are exposed to the risk of breaching employment and other legislation in their attempts to comply with these government "requirements". Another, more obvious, result is that a growing proportion of money designated for teaching and research is being used for bureaucratic purposes.

The only real debate concerning ownership of universities revolves around nationalisation. But it is unlikely that the Treasury would countenance such a suggestion as the costs of compulsory purchase of the physical and intellectual assets of any single university (never mind world-class ancients such as Cambridge, Oxford or Edinburgh) would run into hundreds of millions of pounds.

The government would also be obliged to upgrade the pay and pension provisions for university staff to bring them into line with the civil service. It would be directly responsible and legally liable for the operation of universities and employment of staff.

The United Kingdom will not achieve the quality higher education system it deserves until the contract between government and universities is made clear and fair to all.

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It is not surprising that the government is content for the real legal and economic status of universities to continue to be obscured in the mists of political argument. The more interesting question is why our university leaders, through Universities UK, continue to accept such a poor deal for their organisations, their staff and their students.

I. H. McNicoll
Glasgow