That is the view of David Willetts, the universities and science minister, who made the comments during a fringe event at the Conservative Party conference in Manchester as he launched a charter for business schools that help small businesses and start-ups.

Mr Willetts told the event, hosted by the Association of Business Schools, that he had been ¡°frustrated¡± by the position of business schools two years ago.

As well as a US-dominated research agenda, ¡°universities were extracting money from students, both domestic and international, at business schools without giving a high enough quality teaching experience,¡± said Mr Willetts.

When he visited business schools, it was often the case that their main request was to be able to declare independence from their universities ¡°so they could keep more of their money¡±, Mr Willetts.

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This was because business schools were being ¡°used as a cash cow for the rest of the university¡±, the minister said.

He added: ¡°Business schools were not as engaged with the local economy and the local business community as they should have been.¡±

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But Mr Willetts said that under chief executive Paul Marshall and chairman Angus Laing, the ABS had ¡°moved from ignoring these issues to a very constructive engagement¡±.

And the government¡¯s changes to fees and student number controls had allowed students to push for higher teaching quality, Mr Willetts said.

He argued that ¡°unleashing the forces of consumerism is the best single way we¡¯ve got of restoring high academic standards¡±.

In May, a report by Lord Young, the prime minister¡¯s adviser on enterprise, recommended that business schools become more closely engaged with small businesses.

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Following this up, Mr Willetts announced plans for a Small Business Charter and Awards scheme for business schools.

The scheme aims to establish, under a Royal Charter, a professional association for business schools. Membership will be based on a business school¡¯s ability to demonstrate effective help to small firms and their students to start and grow a business.

Mr Willetts said this was an ¡°excellent example of how we can engage with the local economy¡±.

john.morgan@tsleducation.com