It was the ambition of Sands Cox to expand Queen’s College into a great provincial University, the first of its kind in England in a major city. He now had the support of two wealthy Midlands clergymen - the Reverend Samuel Warneford, Rector of Bourton-on-the-Hill, Gloucestershire, and founder of the Warneford Lunatic Asylum in Oxford, who had contributed £27,000 to the building of the Queen's Hospital; and the Reverend James Law, Chancellor of the Diocese of Lichfield. With their backing, two additional Royal Charters were granted to the College in 1847 and 1851, designed to create an Anglican University with a curriculum that included architecture, civil engineering, law, literature, arts and theology, as well as medicine and surgery. The college was no longer to be exclusively medical, but under the influence of Warneford, non-Anglicans such as nonconformists, Jews and Roman Catholics were to be firmly excluded. Such a grandiose scheme would prove to be expensive and soon Queen’s College was plunged into debt, which was not relieved on the death of Warneford in 1855, when the expected legacy to the college did not materialise. The College could hardly look with much optimism to the prosperous and largely non-Anglican citizens of Birmingham with their nonconformist traditions, for over the years after 1851, as a result of Warneford’s strong influence over Sands Cox, it had become even more of a very narrow and all-pervasive Anglican institution, trying to emulate Oxford, and failing. Warneford’s opinions can be illustrated by his plans to "…prevent the spirit of my intentions being perverted by posterity, and to guard against the subtle designs of the Jesuits and malignant dissenters."
The response to what was happening at Queen’s College was twofold. Firstly, it went from financial crisis to financial crisis, and struggled into the 1860s with increasing debts, a demoralised staff and an acrimonious governing body, not helped by an increasing irascible Sands Cox, also Principal of the College for a year in 1858-1859, after which he was forced to resign, and whose autocratic pioneering qualities were no longer appropriate for an institution which had come of age. Secondly, and more importantly, exasperated by Queen’s College’s narrow religious intolerance, a group of General Hospital physicians and surgeons, led by Dr Bell Fletcher, founded a rival secular medical school in 1851 at 12 St. Paul’s Square, called Sydenham College, named after the progressive English physician, Dr Thomas Sydenham (1624-1689). It also eventually had Departments of Classics and Mathematics. Free from clerical domination, it proved a great success at the expense of Queen's College, was managed prudently and achieved vital early recognition by the Royal Colleges and the Society of Apothecaries.
Moreover, the General Hospital happily re-opened its doors to medical students, now from Sydenham College, which it helped found, for clinical instruction. In 1860, by which time the General Hospital had 240 beds, there was a considerable influx of students into Sydenham College, as men were anxious to benefit from the last chance to qualify before The Medical Act 1858 came into force. This established the General Medical Council and limited the right of practice to those whose name appeared on the Medical Register. Those who had been acting as Assistants and many pharmacists closely connected with medicine, enrolled in quite large numbers as students, in order to qualify before the deadline.
As a result, Sydenham College prospered, moving into larger premises in Summer Lane later that year.
By 1867, Queen’s College was facing possible closure. Its rate of expansion into the non-medical fields was too rapid and it had debts of £10,000. Bitter quarrels broke out and Law even suggested that the College be sold and the resultant income used to fund a medicine-only college attached to the Queen's Hospital. Sands Cox’s colleagues now had to act, and over his head appealed to the Charity Commissioners for changes, the result of which was the passing by Parliament of the Queen’s College (Birmingham) Act 1867. It brought an end to this unhappy time. Sands Cox resigned, bitter and disappointed, and retired to Kenilworth in Warwickshire, to write The Annals of Queen's College (four volumes), where he died on 23 December 1875. He was subsequently buried in Aston Parish Church. Regardless of his managerial failings, he is recognised as the founder of the Medical School and he is commemorated by the Sands Cox Society, which brings together medical and dental graduates from the University.