Higher education is becoming such fun.

Things were once so simple: institutions selected students, some people taught them, other people examined them and they went off with degrees, or not.

A move to more continuous assessment muddied the water a bit, in that the same people were teaching and examining, but that could be managed. Then institutions were told to expand to the point where many of them needed to recruit, and student surveys started to become important.

The introduction of fees put more pressure on the "customer" relationship. Higher education is different from most businesses in that students are simultaneously customers, raw material and outputs. It is difficult to apply the normal rules of competition.

Nevertheless, we are now being told that increasing competition is the answer. The process is starting to look a bit like setting up driving-test centres that also teach, determine their own examination regimes and compete with one another on charges.

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And, of course, we are told that institutions should be able to save vast amounts of money by sharing and collaborating with their competitors. And, of course, we are told that they can save money by outsourcing their non-core activities.

I was, however, completely bowled over by the news that the latest study from Policy Exchange, Higher Education in the Age of Austerity: Shared Services, Outsourcing and Entrepreneurship, cites as good practice the example of a university that evolved a student-only carrier into a local bus company. Now we are expected to set up bus companies as well.

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Can this strange mix of conflicting objectives get any more bizarre?

No small surprise that Policy Exchange found that rapid implementation of these objectives was being hampered by senior managers' "lack of enthusiasm".

Bob Walder, London.