Tuesday, October 26, 2010

Ex-BP CEO Reforms British Education

Lord John Browne of Madingley was surprisingly clueless of BP's operations in his deposition on the Texas City explosion, which killed 15 people.  Despite this clear lack of knowledge and horrific track record, British Prime Minister David Cameron tapped Browne to lead a higher education overhaul.

Browne's penchant for culture has some hopeful that he won't decimate higher education institutions (HEI) like BP.  Lord of Madingley loves Venice, ceramics, pre-Columbian artifacts, papyrology, opera, Chinese terracotta soldiers, contemporary art and artist's lofts. 

Browne's report lists three aims:

1.  Ensure higher education teaching is sustainably financed
2.  Ensure teaching is of world class quality
3.  Higher education remains accessible to anyone

It concludes that higher education financing should be drastically altered, with students "paying more in order to get more."  This means students should pick up where the government cuts, i.e. university operating funds.  Recall BP's 25% cuts at their Texas City refinery under Lord Browne.  After Amoco merged with BP, Browne ordered:

"Reduce business unit cash cost for the year 2001 by at least 25 percent from the year 1998 levels."

The Texas City plant exploded in April 2005.  How long before university operations explode or implode?

The fascinating thing about the HEI report is how Browne positions his current employer, The Carlyle Group, to benefit.  Riverstone Holdings is Carlyle's energy joint venture.  Carlyle is making a large investment in London student housing.  Browne's report states:

Support for living costs available to all through an annual loan of £3,750. No means testing to access to loans for living costs.
Carlyle has a government guaranteed income stream, no risk.  They'll be able to rent their student housing for premium rates during London's Summer Olympics.  Lord Brown is maddeningly slippery.

As for his three aims, I suspect the first two will worsen under any Browne scheme.  His HEI report refers to universities "maintaining minimum quality standards." Lord Browne repeatedly proved he knows nothing of quality.  But he loves money and his boy toys. Carlyle keeps him in both.

Update 7-24-11:  FT noticed Carlyle's strategic investment in 4,000 student beds for British higher ed. It cited how Lord John Browne's report impacted housing prices. "Rental values in Docklands have increased dramatically, with the average one-bedroom apartment rising from £250 to £350 per week in the course of four months at the end of 2010."

Update 2-29-12:  Carlyle's Leap Day luck found the PEU landing three additional student housing sites in London.  They should be up and running for Olympic cash generation.

Update 11-11-12:  Carlyle's  Pure Student Living struggled to fill rooms intended for London college students.