Steven Schwartz has ridden a bitter dispute, shaped national policy and opened minds to the market. Now he's quitting. Faisal al Yafai reports on the man who's engineered radical change at Brunel

Steven Schwartz is not an easy man to get hold of. Questions for the vice-chancellor of Brunel University get passed through his secretary and then on to a public relations firm. In a sector notoriously suspicious of such innovations, Schwartz's unorthodox use of PR experts to manage his image has prompted more than a few raised eyebrows.

To his admirers, such actions signal a moderniser in today's media-savvy world. To his detractors, they are another indication of a publicity-hungry self-promoter. Schwartz is a vice-chancellor who polarises opinion.

In the short time he has been in the UK, he has made a considerable impact. Brunel, which had previously barely distinguished itself from other middle-ranking institutions, is now much talked about. Physical changes range from a shimmering glass extension to the library to a ?170 million campus expansion programme. And Schwartz has enjoyed considerable government access, epitomised by his place alongside Education Minister Ruth Kelly at a fringe meeting at the Labour Party conference this week. Yet he has also presided over arguably one of the sector's nastiest industrial dispute in recent years. And now he is heading home, only three and a half years into his job.

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His arrival had been much anticipated at Brunel. One lecturer at the university, who prefers to remain anonymous, recalls: "There was a feeling of optimism when Schwartz was announced. He does have a presence and with that went an expectation that the profile of the university would be raised. And that has happened."

Brunel's senior management wanted the university's standing in the league tables improved and Schwartz did not delay, introducing a range of headline-grabbing initiatives to turn things around. Subsidised staff housing was one such move, while a sixth-form city academy on campus, intended to give teenagers early contact with higher education, is scheduled to open in 2008.

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But Schwartz was not just about imaginative initiatives. His arrival signalled a profound change in the university's priorities. Research excellence was to be a central element of the Schwartz revolution. John Sumpter, professor of biological sciences, is one of the senior figures at Brunel who concurs. "The council of the university wants to take Brunel into the top third of British universities and that has to mean more research-active staff," he says.

But some are not so enthusiastic. The anonymous lecturer argues that emphasising research means devaluing teaching. "If on the one hand we're saying research is the most significant activity, but we're also supposed to increase students numbers, at some point the level of support is going to suffer and then teaching will suffer," he says.

Schwartz is an outsider in the English higher education sector. He is an American who has spent most of his academic life in Australia, including seven years in charge of Murdoch University. He is charismatic and articulate compared with many of his fellow vice-chancellors, and he has a strong vision for higher education in the UK, one that has upset many of his peers.

"The biggest change in British universities in the past four years has been the opening up to businesses," he says. And that has implications for management. "This is one of the sensitive areas for universities," he admits. "How much do we manage and how much do we allow to take place by consensus?" To Schwartz the answer is clear - tough management is essential.

A glimpse of that philosophy emerged in an article Schwartz wrote for The Times Higher in 2003, which concludes: "University managers... should not be elected but should be selected for their management ability." This free-market model drew a ferocious response from many academics, one of whom wrote shortly afterwards that this "knee-jerk managerialist thinking" was "ill-adapted to a university context".

But Sir Peter Lampl, founder and chairman of the educational charity the Sutton Trust, argues that Schwartz's way is the only way forward if UK universities are to maintain their international standing. "If you look at the alternatives, especially in Europe, it's been a disaster," he says. Lampl is impressed by Schwartz. "He has a different mindset, very receptive to new ways of thinking. He's very business-minded, very aggressive," Lampl says. "His personal style might be better suited to Wall Street than a university." This quality has made the Blair Government especially receptive to Schwartz's ideas.

Barely two years after joining Brunel, he was asked to chair a national review of higher education admissions. And the Government liked his conclusions - two weeks ago, the Department for Education and Skills published a consultation document on one of his committee's recommendations, the implementation of post-qualifications admissions.

One of the UK's most influential academics, who wishes to remain anonymous, agrees that Schwartz's outsider status made him a good choice for chairing the review. But he feels that status could also be a weakness at Brunel. "You have to understand the culture of an institution so you have a better chance of working with the grain rather than against it," he says. "The danger is that you come in, read the situation wrongly, get on the wrong side of unions and staff and you find yourself on a downward spiral."

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In the autumn of 2004, academic staff at Brunel received a letter explaining that the university had "taken the difficult decision to reduce the number of academic staff who are not research active". Brunel's management wanted to drive the university up the rankings by reshaping the academic team.

"Some staff were very upset about it," says one lecturer at Brunel, who feels that the focus on research obscures an understanding of how departments function. "Some were able to do more research because others filled in the teaching and admin," she says. "Now they were being penalised for that."

In March, the university council approved 50 redundancies for non-research active staff. They would be replaced by more research posts. This put the university on a collision course with the Association of University Teachers, which has 350 members at Brunel. Matt Waddup, the union's assistant general secretary, says: "We have no problems with an institution saying it wants to improve. But the way to do that is not to sack large numbers of your staff." The AUT says its members' concerns were being ignored, a claim the university rejects. Some felt the union was being targeted. Waddup stops short of that, saying: "Our activists have been disproportionately affected."

Schwartz insists the university enjoys good relations with other unions and concludes that "the AUT takes exception to the modernisation that we've been trying to do".

In April, the AUT members took strike action as the dispute grew personal. The union nominated Schwartz for a reality TV show called Britain's Worst Boss . Mansoor Sarhadi, the vice-principal of Brunel, who had been charged by the university council to put the redundancy plan into effect, insists the redundancies were a collective decision. "It's difficult when you talk about the future of colleagues we've worked with over a number of years, but it was discussed at all levels of the university and senior management were totally on board," he says.

Then, in July, the AUT called on its members to boycott Brunel over its refusal to withdraw the threat of compulsory redundancies. This was announced in a full-page advert in The Times Higher . Brunel responded with its own full-page advert explaining how important the changes were to the university's future.

That same week, Schwartz stunned everyone when he announced he was quitting. By the end of the year, he will be back in Australia, where his five children live, installed as vice-chancellor of Macquarie University in Sydney. "I'm sad to leave," he says. "It's particularly for family reasons but also for the job, a real chance to combine being home with being at a good university."

Sarhadi is sad about this: "He's done an awful lot of good for the university."

After the bitterness of the Brunel dispute, rumours circulated about Schwartz's performance, and Maurice Newman, the chancellor of Macquarie, felt compelled to issue a statement to staff lauding his new recruit's merits. One Australian academic says: "The chancellor at Macquarie is an astute businessman and he's convinced that Steve is hot stuff." Some speculate that Macquarie is now heading for a similar shake-up to Brunel's.

Brunel's drive to cut numbers of non-research active staff is now over. Forty-three academics took voluntary redundancy and two were made compulsorily redundant. The plan to hire new academic staff is going ahead. But the dispute is not over. Waddup says the greylisting of Brunel will continue until the university signals that it will negotiate with its trade unions.

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And the university has moved up the rankings, albeit slowly. In 2005, The Times University Guide ranked Brunel 43rd, three places higher than two years previously.

Additional reporting by Geoff Maslen in Melbourne