THE principal of the University of the West of Scotland said Britain's universities should consider offering refunds to students who fail.

Professor Craig Mahoney said the university was already considering introducing rebates and guaranteeing students paid employment beyond their degree.

Speaking at Westminster yesterday, he said publicly-funded universities needed to become "more commercially sensitive" and act more like private industry. He said "radical change was needed" in the face of increasing competition from private education providers.

He said: "It is my firm belief that the UK's publicly-funded universities won't have a particularly attractive future unless they become more commercially sensitive and begin to act more like private industry - including private higher education providers - to allow us to remain competitive across the globe.

"We have to acknowledge that students are customers and we have to meet customer expectations. To do that, we have to know who our customers are and understand their needs and desires.

"One possibility we are considering is introducing a rebate system. If you are admitted to UWS on the basis we only admit students with the potential to succeed, and then you fail to complete your degree - having attended and participated in all the support and development opportunities we offer - we will refund the tuition fee you have personally paid or taken a loan for."

He added: "In the global economy, the environment changes quickly and the magnitude of that change can be staggering. We cannot sit in our ivory towers, observing and imagining that we will be unaffected by the changes taking place around us.

"If you keep doing the things you've always done, you keep getting what you've always got - and in the future that might not be enough."

Professor Mahoney said he also believed a more international approach was required, with UWS already in discussions to open new campuses in London, Dubai and Berlin to supplement delivery centres in Beijing and North China.

He added: "This isn't all about monetisation of higher education - it's about ensuring the considerable investment of time and money students make in their education is an investment that delivers an acceptable return.

"To do that, we have to create an environment where we can invest to deliver the kinds of experience our students expect."