Attentive readers will hardly have failed to notice that there was a bit of a kerfuffle at Middlesex University recently. Philosophy was threatened with closure: "I think, therefore I am redundant." The academy seems, at first sight anyway, to have met the world of Lord Sugar. The disclosure of possible redundancies, which followed the earlier threat to staff at King's College London, set off something of a liberal panic - a panic, one might add, that was not forthcoming when the catering and cleaning staff at University College London campaigned for better pay and conditions in March.

More than 8,000 people signed an online petition, and the great and the good of the philosophy world rallied to the department's defence with a letter to ³ÉÈËVRÊÓƵ. The missive, headed by seven named signatories including Judith Butler and Slavoj Zizek as well as 24 others, argues that philosophy should not be axed because "Middlesex is widely recognised as one of the most important centres for the study of modern European philosophy anywhere in the English-speaking world."

"Study" appears to be the key word, but study by whom, one wonders, for the facts, at least according to Middlesex, speak volumes.

The department has six members of staff (including three professors) offering one undergraduate degree and three master's programmes. There are 21 undergraduate students and 44 master's students, half of whom are part-time. As of 28 April 2010, only six prospective undergraduates had accepted a place on the BA single honours philosophy degree to start in October 2010, the same number as last year. The whole course (and therefore its academics' salaries) has been heavily subsidised for a long time.

³ÉÈËVRÊÓƵ

If it were not for the above figures and student-to-staff ratios, there would be no redundancies and no discussion. Philosophy will be phased out over the next two years. Negotiations, which started six months ago, have gone nowhere, although Middlesex's postgraduate provision is set to alight at Kingston University.

The impending closure, says the letter, is a matter of "national and indeed international concern", something we might be led to believe is on the level of Iran's nuclear programme.

³ÉÈËVRÊÓƵ

But the truth of the matter is that prospective students of European philosophy do not want to study at Middlesex, and the staff seem to be underemployed and overpaid; the value they add to the university in terms of research grants, scholarships and prestige has to be offset against the harsh reality of dramatic student decline, horrible under-recruitment (which the department has had much longer than three years to sort out) and a certain level of complacency that their status would win through. Yet just as a university can exist without a faculty of science (which is the case with Middlesex), so too can it exist without one of philosophy.

That "worrying" precedent has, of course, already been laid at the feet of a crass and insensitive management that appears to know little better than to "cram 'em in cheap" and teach only those "relevant" subjects that can be boasted about at recruitment fairs (alongside the provision of student-support facilities). All this may be true, but as a university, Middlesex has long prided itself on its Business School at Hendon and felt less appreciative of its arts and humanities programmes, even though it is the proud inheritor of the tradition of Hornsey College of Art, which it absorbed on becoming a polytechnic in 1973.

The potential closure highlights, perhaps, two problems inherent in the post-1992 universities. The first is their unusual means of accounting and the second is the problem of critical mass, of which the difficulties at Middlesex serve as a prime example.

The charitable status of most universities, dependent as they are on formula-driven government grants, allows for accounting that merely notes turnover rather than either "profitability" (gross or net) or accountable success. This is a trap, robbing managers of an effective measure of success by research income, student recruitment or entrepreneurial activity. It can also be an excuse for bad management practice. There is, however, little room to manoeuvre, as more than 50 per cent of the academy's budget is spent on wages, and those wages rise naturally and most steeply at the top of the chain.

This is not merely to point an accusing finger at vice-chancellors with their pension schemes, productivity bonuses, private healthcare and chauffeur-driven limos - although we could start with the non-accountable fat cats at the top, where there is more than one well-dressed spiv in vice-chancellor's robes backed by a governing board of golf-playing Arthur Daleys. The problem is somewhat deeper than mere actual or moral corruption by a few in the know.

The more a university wants to appear legitimate, the more it needs to play the game, the more readers and professors it needs for its public profile and the higher its salary bill. Less income but higher bills sounds like something for the parliamentary super-duo of Clegg and Cameron to sort out, and it needs sorting. It would not pay anyone too well to enquire too deeply into the amount of courses that run on subsidies. And it is no good saying that we should start by making the accountants redundant, because I have yet to meet an academic who can understand percentages, certainly not philosophers (or professors of management for that matter). Ignorance of the budget is a crime of omission, and academics who argue that budgets are someone else's problem are sadly deluded.

The second problem is equally worrying, and that is the proliferation of university-styled institutions. There are 130 institutions of higher education in England alone, including recent recruits such as the University of Cumbria, all of which duplicate the work of all the other universities and university colleges, and there has been no let-up in conversion rates to institutions offering degree courses.

³ÉÈËVRÊÓƵ

The problem is inherent in that word "university", which suggests a place that teaches a wide spectrum of subjects from physics to philosophy, with thriving departments, state-of-the-art lecture theatres, immaculate lawns, forelock-tugging groundsmen and bow tie-wearing professors, all of whom look slightly bonkers.

³ÉÈËVRÊÓƵ

And yet, except for a very few elite institutions and one or two peculiarly eccentric ones, this has not been the case for more than 50 years. Instead, prospective students (and their parents) are met by crumbling infrastructures in utility buildings that were put up in the 1970s and should have condemned notices festooned about them in the interests of health and safety.

Of course, universities come in a variety of sizes according to their commitment to research, vocational work, international or local standing, student ethos and particular subject specialisations. They are everything and nothing at once, a movable feast that satisfies only those in the Russell Group.

When the so-called "new universities" - made up of disparate colleges or polytechnics, each with its own distinct ethos - were put together, it was in order to break the upper-middle-class elitism of Oxbridge and the middle-class elitism of the redbricks. What was special about the small colleges was lost in the drive for bigger corporate entities able to cope with widening participation. What was gained? Bigger departments. This was triumphantly achieved in a few years, but at a heavy price, for in the past decade many departments have shrunk in real terms under budget restraints.

The growth in university provision has continued, but there is still a distinct pecking order in which the new universities are left right back where they started - at the bottom of the pile and underfunded. Even the spectacular blossoming of innovative and forward-thinking programmes, a trademark of the new recruits in the 1980s and 1990s, has all but dried up, leaving a sense of exhaustion.

Many new universities have lost their way in the race for legitimacy. It cannot be simply a question of widening participation (in an often shrinking market), or of soldiering on under increasing burdens, or of ignoring the issues.

The government no doubt will spare a thought for the higher education sector. The coalition manifesto sets out a few rather general policies, but Vince Cable, the business secretary, has hinted at more dramatic intervention. Things certainly need to be done.

We need to reform the academy, root and branch. There are just too many universities with too small departments offering too many courses, especially in London where there is some of the worst duplication and competition.

David Lammy, the former minister for higher education, suggested cooperation between universities to maintain standards and diversity, but I am suggesting outright closure of the ones at the bottom and amalgamating others in order to get rid of departmental and managerial duplication, pointless recruitment competition and inflated salaries. We should replace them with specialist universities with creditable departments, large numbers of students and really impressive purpose-built facilities. Perhaps David Willetts, the universities and science minister, may wish to take this idea to his next staff get-together.

³ÉÈËVRÊÓƵ

Arts colleges and private dance academies have done this for years and the results have been success on a global scale. There is no reason why this radical model could not work for other subjects. Imagine having a university dedicated to the humanities, including philosophy. It might actually recruit a few students. Now that's something to think about.