It has taken the appointment of Toby Young to the board of the new Office for Students to set alarm bells ringing in English universities. But why did it take so long – and why did it take this Tory journalist, silly serial tweeter and free school activist to rouse them from their complacency?

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Six years ago universities struck a Faustian bargain with the Conservative-led coalition: more funding today, produced by high fees, allowing them to escape the ravages of austerity – and helping top up vice-chancellors’ inflated salaries – at the cost of more intrusive regulation tomorrow by politicians acting as proxies for unwilling student “customers”. Cue the OfS.

It has turned out badly, as such bargains do. Politicians are unhappy, and are lashing out at universities on vice-chancellors’ salaries and “no platform” policies against offensive – often rightwing – views. They never expected all universities to charge the maximum fee and form a semi-cartel, at an escalating cost to taxpayers because student loans are state provided. They wanted variable fees, for universities to embrace price competition and efficiency. Naive perhaps, but their genuine hope.

Students are unhappy, too. They want a great experience, but don’t want to be treated as spurious “customers”. The absence of a representative of the National Union of Students on the OfS board speaks volumes. The government couldn’t risk its pretension to be acting in the interests of students being exposed as a lie.

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Students also see post-graduation debts ballooning out of control, while many struggle to get decent jobs in a low-growth economy overshadowed by austerity. Academics, too, are alienated as new surveillance instruments are forged – many directly, if ineptly, linked to high fees, such as the Teaching Excellence Framework.

There is a risk public opinion will turn against higher education. English universities cut their moorings to the public sector – and wider public interest. They have embarked on the choppy seas of what is justly perceived to be another tawdry privatisation. Universities no longer feel like “ours”, the public’s.

Facebook Twitter Pinterest Toby Young – silly serial tweeter appointed to the board of the Office for Students. Photograph: Rex/Shutterstock

Few university leaders foresaw any of this. Most hoped to take the extra money from fees while everything else stayed much the same. The very naive even believed the empty rhetoric about universities becoming more autonomous because they would no longer depend on state grants.

But politicians, too, made a Faustian bargain back in 2010 when they accepted the recommendations of the Browne review to increase fees. Did Vince Cable or David Willetts really imagine that their decisions would lead to today’s lose-lose situation – increased (if disguised) public expenditure, because barely half of student loans will ever get paid back, and ever more intrusive state surveillance?

The government’s current review of student funding cannot produce the fundamental rethink that a flawed system needed. It’s an internal exercise. The rumoured report date is March, which hardly suggests a thorough job. A panicky party-political Tory reaction to Corbynmania among students and young people can only produce, at best, cosmetic changes and technical tinkering.

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What needs to be changed, but won’t be, is the ideological architecture of English higher education since 2010: the dogma that it is a service industry producing marketable goods “purchased” by student “customers”.

The OfS is the realisation of that flawed architecture. It will over-regulate well-run public universities, which should be treated as autonomous institutions in an open and democratic society, and under-regulate “alternative providers”, mainly private for-profit colleges, because the task is beyond it.

To conceal this unpalatable truth the OfS will focus on trivia: vice-chancellors’ salaries (rather than the predatory profit-taking of alternative providers) and “no platform” policies (rather than the government’s destruction of university freedoms).

As for Toby Young, maybe he will be forced out. He may already have gone by the time you read this. But the appointment to the OfS board of someone with such unpleasant opinions has shone a light on what is going on. The appointment of equally prejudiced but more discreet members would have allowed the OfS to stay in the shadows.