The fundraising deal: we get cash, you get kudos

This week, all but one of the trade unions with substantial membership in higher education embarked on industrial action over pay. No one has apparently noticed. But two other stories hit the headlines.

Nottingham University is under attack for taking money from British American Tobacco and Oxford is again in the spotlight over admissions, this time not in respect of comprehensive school pupils from northeast England but of princes from southeast Asia. What this unhappy coincidence tells us about the state of Britain's universities is first that staff are badly paid, discrimination is rife, and no one outside the universities cares. Second, that universities are seen as an attractive way for companies to polish their public image. Third, it tells us that when universities are told to get more energetic about raising private cash for themselves, go-getting managers go getting.

Unfortunately, those universities most strapped for cash, principally the newer ones in which Natfhe members as well as other unions are now starting industrial action, are the least well placed when it comes to raising private money.

Neither Nottingham nor Oxford are on their uppers. John Kay's open criticism of Oxford has served to flush out the fact that pay, at least for professors, is becoming more competitive in that university. The detail of how Oxford handled the diplomatically delicate matter of the crown prince of Brunei's education shows how a posh university can earn large fees without compromising degree standards.

In Nottingham, the vice-chancellor, Sir Colin Campbell, is not claiming the needs of the university in general as justification for his decision to take BAT's money, despite attempts to elide the two. The university, Sir Colin says, has plenty of money. The deal will just allow it to do something extra.

Thus is more given to those who have and the gap widens between universities that attract private funds and those that rely most heavily on public funding. To make tensions worse, those that are least well placed to raise private money are also those that do most to meet the government's prime target of opening up opportunity to all. It is not surprising that pay negotiating machinery is cracking apart under the strain, nor that debate about the ethical issues involved in private funding is tinged with jealousy.

As to those ethical issues, there is little agreement. Some see the whole business of fundraising as wrong, its wrongness illustrated by the kind of cosy links that brought BAT to Nottingham. Commercial money corrupts: the state should pay so as to protect the integrity of universities. Others look east to the former Soviet bloc and see state control as the antithesis of academic freedom. Yet others pragmatically observe that, whatever the theory, in practice the state does not pay enough.

At present the pragmatists prevail. Private and commercial funding is eagerly sought and accepted. There are many chairs bearing the names of benefactors. Many research centres are dependent on commercial sponsors for survival. All commercial companies are likely to be seeking some advantage. They are not usually, especially if they have shareholders, in a position to give anonymous donations free of strings. It is clear that universities should refuse to accept funding that compromises research - either by controlling the outcome of the work itself or by damaging its credibility. It is less clear that they should deny companies seeking to refurbish their image the opportunity to reap public relations advantage from donations. If universities want to raise private money, the best bet is to parley PR against strings: cachet without influence is the best compromise.