“So many of the designers that we interview,” Jonathan Ive has said, “don’t know how to make stuff, because workshops in design schools are expensive and computers are cheaper. That’s just tragic, that you can spend four years of your life studying the design of three-dimensional objects and not make one.” Ive, lest we forget, is the British-born chief design officer of Apple, which possibly makes him the most influential designer in history, and is certainly living evidence of the power of design both to change lives and, if that is all you care about, make gigantic piles of money. So his views on such things deserve attention. But, under its current, supposedly corporate priorities, British higher education is going in the opposite direction to the wisdom of this man who has been so successful in business.

From his argument, it follows that the Cass, a school of art, architecture and design in Aldgate, just east of the City of London, is an exceptional asset for the cultural and commercial future of Britain. For its building contains well-equipped workshops and studios of precisely the kind that Ive thinks so important. It is a magical, powerful, productive place. Jeremy Deller, the Turner prize-winner and a visiting professor at the Cass, calls it “a total success story” that supports something that Britain is good at: “What China looks to Britain for is well-made and well-designed objects. The Cass may look like the past, but it is the future.”

The school also has rising numbers of applications, market share and student satisfaction. Its problem is that it is part of London Metropolitan University, which dug itself a huge financial hole in recent years, from which its current administration is trying to extricate itself. So the university is planning to sell the Cass building for £50m or more, so that it can be demolished and replaced with flats.

The Cass would then move to Holloway, north London, where most of London Metropolitan University is based. There is no guarantee, and not much probability, that they would continue to have the space that they have now, of the kind that Ive thinks is so important. The university also plans to reduce its overall numbers from 12,000 to 10,000, which is ominous for space-hungry courses in design.

As a current student puts it in her video A Love Letter to My Art School: “We have too much stuff and take up too much space, and apparently being an artist or a craft isn’t enough to survive in this university. You have to be able to just work in a classroom.” She also argues that the Cass “has great people and great spaces and enthusiasm”, whereas London Met as a whole has a reputation for being “literally the worst university in the United Kingdom”. Yet it is the administrators who are calling the shots.

The current Cass is an amalgamation of several institutions, including the London College of Furniture and the Sir John Cass Technical School, and has taught skills that include silversmithing and the making of musical instruments, as well as film production, fashion, graphic design and product design. Over decades, the Cass and its predecessors pursued consistent aims – to offer education in making things to people from every background, and to benefit the country’s economy by doing so. The location in the poorer areas of London, the East End, was significant. These aims were ultimately the fulfilment of the wishes of the philanthropist John Cass, who died in 1718, and whose foundation helped set up these institutions.

In recent years, the school has been augmented by the addition of London Met’s architecture department to make what the artist Bob and Roberta Smith, a professor at the Cass, has called an “Aldgate Bauhaus”.

Deller praises the “interconnectivity between craft, art, technology and architecture”. This interconnectivity in turn “literally runs through the building” by means of the central staircase that everyone uses. He loves the part where they make electric guitars from scratch: “It’s amazing to find something like that near the centre of London. It’s a real jewel”.

Even if the East End has changed over the last century, it is still an area diverse in income, ethnicity and background, which allows the Cass to pursue its ambition, one theoretically shared by London Met and by successive governments, of widening participation. “It makes me very proud when you go to the awards ceremony,” says one woman who has taught there. “The diversity is just extraordinary. They are giving second-generation migrants degrees. It is wonderful.” She adds: “You can’t widen participation if you’re reducing student numbers.”

The unifying force is making. The act of using skills to transform material – with the help of techniques and tools developed over centuries, but ones that are still changing – crosses barriers and brings people together in ways that other forms of education do not. It is a spirit that runs across the school. In architecture, the emphasis is both on the ways in which buildings are constructed, and on the ways in which design can humanise and enrich the fast-changing city on the Cass’s doorstep. “Art Makes People Powerful”, to quote a sign that Smith is planning to erect on the Cass building’s roof.

Students in a Cass workshop

The current administration deserve some sympathy, to the extent that they are trying to deal with the aftershocks of what has been called “the worst case of mismanagement by a university that this country has ever seen”. But it also, as someone connected with the Cass puts it, “seems institutionally mad to just turn around and snuff it out, given that two years ago they were firing on all cylinders”. The building was, for example, skilfully refurbished by the architect Florian Beigel, an investment that will now go to waste.

While it will be hard for a cash-strapped institution to turn its nose up at £50m, the asset of the Cass building will then, of course, be gone forever. The school will lose goodwill and momentum. Stellar practitioners, like Deller or the architect Peter St John, currently give their time for little or no payment. They do this because they believe in the Cass’s work and principles, and in the forward progress that will now be stalled.

The Cass’s fate is partly a new episode in the increasingly familiar story of London’s evisceration by residential property values, in which places that give a city richness and life are annihilated by the logic of real estate. But it is more than that. It is a manifestation of an attitude to higher education that sees it as a business, in which efficiency overrides such ideas as enhancing students’ lives or giving a range of opportunities to people from different backgrounds. But not even good business, as London Met’s past travails show. And not even good for business for the country as a whole, as Jonathan Ive says.