This paper explores the function and effects of recent government reform of higher education in the United Kingdom particularly on quality assurance and quality assessment. The reforms have aimed to make institutions more akin to business and have used the language and techniques of "management." It is argued, in agreement with Michel Foucault, that Jeremy Bentham's panopticon prison provides an instructive model. In a panopticon, a tower is situated at the center of a courtyard surrounded by buildings of cells with each cell window under direct scrutiny of the tower and each inmate visible to the surveillant alone. The cells are theaters in which each actor is alone, individualized and constantly visible. It is further argued that such a prison is a model for understanding the new management practices in higher education and how these function to control, classify and contain teachers. Thus, quality control exercises actually lead to a lowering of academic standards. The paper also argues that current education policy can be usefully analyzed in terms of discourses of power and their relation to systems of control and bureaucratic surveillance and that current policy has been constructed in accordance with a political agenda for social control and ideological reordering with devastating consequences for intellectual freedom and student learning. (Contains 15 references.) (JB)