Public Procurement Law, Public Bodies, and the General Interest: Perspectives from Higher Education

• Date: 01 July 2005
• Author: Jennifer Lane
• Published date: 01 July 2005
• DOI: http://doi.org/10.1111/j.1468-0386.2005.00272.x

Public Procurement Law, Public Bodies,

and the General Interest: Perspectives from

Higher Education

Jennifer Lane*

Abstract: This article examines the interaction of EC public procurement law with the

legislative framework governing higher education in England and Wales. It focuses on the

impact of this interaction on changing status of higher education institutions, organisa-

tions that are at the margins of the much-discussed public–private divide in law. The

Higher Education Act 2004 is viewed as a driver of potential change in status, and a dis-

tinction is drawn between mechanisms which appear to support the introduction of change

and those that instead introduce fluctuation and lead to concerns for legal certainty at the

margins of public law. The study thus also has wider relevance where public-sector reform

is premised upon organisational forms with hybrid or ambiguous status.

I Introduction

The boundaries of public law, and the validity of the underlying public-private duality

that it implies, have been the subject of particularly intense scrutiny over the past

decade.1Despite this, such enquiries are not yet exhausted, re-examined whenever legal

development suggests movement of this boundary. The purpose of this article is to

examine the legal mechanisms by which this boundary is fixed and relocated, with a

particular focus on their responsiveness to change in policy and practice. In doing so,

it will attempt to illuminate, primarily from an organisational perspective, issues con-

cerning legal certainty arising from uneven application of such change at the margins,

requiring a distinction to be drawn between the overall direction of change and mere

fluctuation. Both aims also inform the debate arising from the recent Commission

White and Green Papers on Services in the General Interest,2which raise again the

question of the Community role in regulating these services in their broadest sense,

while acknowledging the lack of clear definition of the underlying notion of the general

interest.

European Law Journal, Vol.11, No. 4, July 2005, pp. 487–506.

© Blackwell Publishing Ltd. 2005, 9600 Garsington Road, Oxford OX4 2DQ, UK

and 350 Main Street, Malden, MA 02148, USA

* School of Management and Business, University of Wales Aberystwyth. I am greatly indebted to Pro-

fessor John Williams for his comments and support.

1See for instance M. Freedland and S. Sciarra (eds), Public Services and Citizenship in European Law

(Clarendon, 1998).

2COM(2004)374 F, COM(2003)270 F respectively.

This examination of change results from exploration of the interaction between two

areas of law and policy. The boundaries in question derive from public procurement

law, which takes place in a framework dominated for over a decade by the requirements

of the EC public procurement directives. A new directive has recently consolidated and

amended the previous raft of three directives (each specific to a procurement type),3

but despite the need for further clarification noted by the Commission in a 1998 com-

munication,4does not make any change to the definition of those public purchasers

subject to its rules. It can thus be viewed for this purpose as providing a relatively static

legal context, any change in the practical status of actors being driven by changes in

interacting legislation or practices. In the organisational context of higher education in

England and Wales, a potential legislative driver of such change is the Higher Educa-

tion Act 2004.5In addition to implementing proposals to change the mechanism by

which students are funded, the Act sets out a much-publicised framework for allowing

higher education institutions to vary undergraduate tuition fees,6thus enabling price

competition between them, while also proposing new powers for regulating access.

Although devolution of these powers to the Welsh Assembly means the final shape of

funding and regulation in England and Wales may in future differ, the present poten-

tial for change is broadly similar.

A Higher Education and the Public Interest

The extent and nature of the public interest has been a recurring theme of the wider

debate during the progress of the Higher Education Act, which has raised such ques-

tions as whether establishment of a (quasi)-market would inevitably lead to both a com-

mercial ethos and loss of a distinctively public character. The House of Commons

debate on the preceding Bill provides further illustration: are universities to be regarded

primarily as ‘independent’ bodies (i.e. not ‘public’), or are there factors (such as public

financing) which bring with them a public remit of some kind?7Throughout the expan-

sion of university education in the late nineteenth and twentieth centuries, and the

release (in 1992) of the former polytechnics and colleges from direct local authority

control, universities in the UK have prized their status as independent of the state.8

European Law Journal Volume 11

488 © Blackwell Publishing Ltd. 2005

3Dir 2004/18/EC.

4Public Procurement in the European Union, COM (98)143; 2.1.3.

5Henceforth ‘the Act’. Note that the Act does not affect Scotland. For this reason, and the differing

approaches to contract law (discussed later) found in Scottish and English law, this article focuses on

England and Wales.

6The term ‘higher education institutions’ is used as a generic descriptor. There are two reasons for this;

first, not all bodies in receipt of higher-education funding in England and Wales are called universities,

and second successive domestic redefinitions of a university suggest that it will become possible for some

institutions bearing the title of ‘university’ to fail to meet the understanding of a university underlying

the Bologna process (Berlin declaration) the Magna Charta Universitatum, and the European Higher

Education Area. For a fuller discussion of the second point see: T. Birtwhistle’ ‘What is a ‘university’?

(The English Patient)’, (2003) 15, Education and the Law 227–236.

7See e.g. Hansard, 31/3/2004 at 1623–1624.

8Some institutions are constituted by Royal Charter (chartered institutions), others are corporations estab-

lished by statute or as companies limited by guarantee. See D. J. Farrington, The Law of Higher Educa-

tion (Butterworths, 1998) 7–9.

Many older universities were initially funded by wealthy individuals, religious foundations, or public sub-

scription, but began receiving grant funding as early as the late nineteenth century.For a summary of the his-

torical development of universities and funding in the UK see: S. Court, ‘Government getting closer:higher

education and devolution in the UK’(2004) 58:2/3 Higher Education Quarterly 151–175, at 152–153.