Morrisons to pay tuition fees for students on university course it funds

A supermarket chain says it will pay for students' university fees if they enrol on a degree course it is sponsoring, heralding a new era of commercialisation in England's university system.

Morrisons is to announce tomorrow that it is to fund 20 undergraduates a year on its three-year BSc in business and management, which starts in January. The students will spend half their time working in the company's factories and half studying for the course, run by Bradford University's management school.

The supermarket admits the course will leave little time for the recreational side of university life. Students will not take university holidays, but will have an annual leave allowance. They will receive £15,000 a year and will not have to pay their tuition fees of £3,290 a year. The students are also guaranteed a job once they graduate and must work for Morrisons for at least three years. Teenagers apply through Morrisons rather than Ucas, the centralised system for all university applications in the UK.

Morrisons is not quite the first retailer to offer a degree: in June Harrods announced it was to offer two-year degrees in sales with Anglia Ruskin University. A week ago GlaxoSmithKline announced it would sponsor a module on University of Nottingham chemistry degrees – the first collaboration of its kind between a pharmaceutical company and a university. Tesco sponsors a pre-degree foundation course in retail with Manchester Metropolitan University and University of the Arts London.

Corporate degrees are expected to proliferate in the next few years. Students fear they could soon graduate with at least £30,000 of debt. Last week, a cross-party review led by Lord Browne recommended that tuition fees – currently £3,290 a year – should be as high as universities can command. Many expect vice-chancellors to more than double fees, particularly as deep budget cuts are expected in the government's spending review tomorrow.

Browne also recommended that private companies should be allowed to apply for public funding for degree courses. The universities minister, David Willetts, has said he wants to expand the number of profit-making private sector institutions in higher education.

Julian Rawel, the director of executive education at Bradford School of Management, said the Morrisons course would be independently controlled to ensure high academic standards. However, assignments would relate only to Morrisons.

Rawel hopes that corporate degrees will soon be "something that every bluechip company will want to offer". "The investment businesses make in future talent will stay in their organisation. Students gain the skills and experience they need for career progression, plus the enrichment of a university education, a salary, no debt and a job," Rawel said.

"People won't necessarily be able to afford degrees in future and will be concerned about increased levels of debt. This is a very smart move … we are replacing some of students' leisure time with working life, but in return they get financial compensation and a job."

The University and College Union and the National Union of Students said all businesses should be asked to contribute to higher education.

Sally Hunt, UCU's general secretary, said: "Morrisons clearly recognises the benefit of employing graduates. However, what we need is a national strategy driven by our broader economic needs rather than the market. The fairest solution is to keep student costs down by asking business to contribute towards higher education in the form of a levy or education tax."

Aaron Porter, president of the NUS, said it was no surprise that employers were recognising the need for investment in universities, but "ad hoc sponsorship of higher education was no substitute for structured public investment".

"The average graduate is expected to change careers seven times in their working life and universities must be funded to provided skills that last beyond one job," he said. "Lord Browne's recent report fails to make any recommendations on securing structured business funding or tax incentives for employers to invest in higher education in a sustainable manner whilst calling for the removal of Government funding."

The Guardian contacted other bluechip companies, including Kraft Foods – which owns Cadbury – and the clothing giant Next. Neither had plans to sponsor degree courses.