You say you want a revolution?

Last week, a group of academics and prosperous citizens were to be seen eating a slap-up dinner in the former Royal Infirmary building that is now part of the University of Liverpool. Over their beef and Merlot, they no doubt gave thanks for all the cash that is flowing into the university's coffers, which has facilitated the creation of the new management school that was opened by Lord Owen.

Until now, the university's lack of a proper management school has been considered a weakness. Management or business schools bring in much-needed lucre; they are also popular with students and they link the university to local businesses. So, Liverpool's new management school is being taken as a sign that the university has finally come of age.

Liverpool may have won the race to become the European Capital of Culture in 2008, but its university has been in the doldrums for the past decade. It does not do particularly well in league tables and lacks a clear identity. "The former vice-chancellor led us with warm smiles and strong handshakes, but he didn't have a clear vision about where the university should be going," says one academic.

That is expected to change, now that Professor Drummond Bone is in the top job. An expert on Byron and probably the only vice-chancellor in the UK to drive a Maserati (and a yellow one at that), Bone cuts a dash in the grey-suited world of university big cheeses. He combines charm and sociability with a strong commitment to social justice, and has already ­ with his senior managers ­ crafted a vision for the university that involves widening access, improving Liverpool's research standing, and boosting the regional economy.

"He is good at public relations," says Mike Shattock, the former registrar at Warwick University. "He did a terrific job at Royal Holloway [where he was the principal until last year]. He took it from being a place that no one had heard of to being highly rated. And he was very popular. He's now got to do that again in a much bigger place." He will also have to assert himself in an institution which has been dominated by the registrar for some years. During the Sixties and Seventies, Liverpool was well run and highly thought of. In the Eighties, it ran into financial difficulty. The governors reacted by retrenching; the finances were put on a firmer footing but the result was that little money was spent and Liverpool went into decline.

Bone has been busy putting that right. One of the first things he did was to set up a corporate communications department, which is headed by Taryn Rock, who was recruited from Halliburton, the Texas oil giant. She will run a team of 18, including five posts to be appointed in the next few weeks. This new department will encompass internal communications, media relations, brand management and marketing, community relations, fund-raising and alumni relations, publications, web management and exhibitions.

This shake-up has not gone unnoticed by the academics: "A couple of rooms have been attractively decorated, and they are full of pretty girls who send out the university calendar," said one. But there is general agreement that such a move was needed. "We didn't have a group of people looking at how the university projected itself to the outside world," explains Professor Bone. "It's not so much about the advertising side of it, but about making people inside the institution feel confident by seeing themselves reflected outside. There has been a very favourable response from the academics."

"People in the city felt that the University of Liverpool was taking a back seat to Liverpool John Moores [the former polytechnic that has a go-getting chief]. I don't like to view it in terms of that kind of rivalry, but I do think the university needs to be self-confident."

The new vice-chancellor wants Liverpool to be known as a Russell Group University that is passionately concerned with widening participation. It already has a good reputation for taking young people from disadvantaged backgrounds, and was praised in the White Paper on higher education this year, but it wants to capitalise on this strength.

So the university has gone into partnership with the city of Liverpool and the media giant Granada to set up one of the Government's flagship city academies ­ an inner-city school independent of the local education authority and financed with £18m start-up money. It will be established in the north of Liverpool, in Anfield.

"It was my idea," says Bone. "I'd wanted to do this at Royal Holloway. I asked the city whether they would be interested in the university becoming a partner ­ they said that they would."

The city academy will ensure that the university becomes involved with schools and with helping to raise the sights of young people from families that have not traditionally used higher education. The university has also put together a consortium of nine further-education colleges, with a view to validating degrees that will be run in these colleges ­ and thereby widening participation through this route as well. At the same time, it is mounting a big research investment programme.

Some departments are being rationalised. Education, which did not perform well in the 2001 research assessment exercise, is being axed altogether. That is surprising given the university's involvement with the city academy. Did Bone not think the education department had a role here? Other areas, such as electronic engineering, are being boosted. A total of £80m has already been committed to improving research, and the university is adding another £60m, and putting a further £25m into academic departments up to 2008.

The university prides itself on being the only one outside London to offer veterinary science, a school of tropical medicine, a medical faculty, and a life-sciences department. As a result, it is concluding a deal with the Centers for Disease Control in the US, which will give them joint access to intellectual property.

To improve its standing in the league tables, Liverpool is spending more money on its library and on computing services. It is also planning to change the way it organises its spending on student facilities for the same reason. To the consternation of some academics, it wants them to look at how many first-class and 2:1 degrees they award (too few), which could also improve its standing in the league tables.

To make the academics feel more loved, Bone has introduced open meetings for all staff. He has also started an irregular newsletter which is going weekly from this month. But he acknowledges that it is not easy in an institution with 18,000 full-time students, a turnover of £220m (Royal Holloway's budget was £60m), and a big hierarchy to get his message of love and friendship across.

Not all of the academics feel that he has succeeded in reaching them. This worries Professor Bone. "I've never knowingly refused to see anyone," he says. But everyone agrees that he has taken on a tough job. Thankfully, it's one he seems to relish.

Drummond Bone: A Life In Brief

Born: 11 July, 1947

Schooling: Ayr Academy

MA: University of Glasgow

Research: Romantic irony in Byron, at Balliol College, Oxford (1968-72)

Employment: lecturer, Warwick University; lecturer, dean, vice-principal, professor of English literature, Glasgow University; principal, Royal Holloway, London University; vice-chancellor, Liverpool University

l.hodges@independent.co.uk