The government has suspended the processes for applying for degree-awarding powers and university title – the routes for private providers to cement their place in the sector – and is reviewing the related rules.
The Department for Business, Innovation and Skills imposed a “moratorium” on new applications submitted after 2 April, pending the completion of a review, but did not publicise the move beyond an update on its website.
Degree-awarding powers were at the centre of a separate development this month when Global University Systems, the umbrella group for several private colleges, completed its purchase of the University of Law.
Ownership of the university’s degree-awarding powers was seen as a major asset in the 2012 takeover deal completed by the previous owners, Montagu Private Equity, for a sum thought to be about £200 million.
Buying an institution with degree-awarding powers in place means the purchaser does not have to go through the process of applying for them.
Application criteria include a four-year track record of delivering higher education programmes.
The purchase of degree-awarding powers has been seen as a potential route for Pearson, the multinational education company, to make a major entry into UK higher education.
A BIS spokeswoman said the department is reviewing “the criteria and guidance for DAPs, university title and designation for Hefce [Higher Education Funding Council for England] grant funding to ensure they continue to protect the reputation and integrity of the UK higher education sector”.
The “moratorium” on new applications for degree-awarding powers, university title and Hefce grant designation will remain in place until the review is complete, she said. “We currently envisage the review will be complete by early 2016,” she added.
“Except where exceptional circumstances exist, BIS will not accept any new applications until after the review has been completed and updated criteria and guidance are in place,” the BIS website says.
Higher education institutions with degree-awarding powers are able to use them to validate degrees offered by other institutions.
GUS, which has a group structure, has said its takeover of the University of Law “may see realignment of some, or all, of GUS UK’s existing businesses under the umbrella of ULaw, so that…the ultimate oversight of academic standards, quality systems, processes and practices rests with the university”.
One of the colleges included in the GUS umbrella group, the London School of Business and Finance, had seen the breakdown of partnerships where it offered degrees validated by London Metropolitan University and Glyndwr University.
Another GUS college, St Patrick’s, was known for its rapid expansion in students with public funding who were taught on sub-degree Higher National courses, awarded by Pearson.
But MPs on the Public Accounts Committee have raised concerns about what they see as the government’s failure to control public spending in the private college expansion, prompting BIS to tighten rules around designation of private courses for public funding.