Half of UK private providers ‘exit sector in three years’

For-profit institutions at particular risk of collapse, researchers say

四月 1, 2019
During a windy afternoon, a sandwich board man holds on to his sign advertising for a menswear shop's closure sale in central London
Source: Getty
Closed doors: of the 732 institutions listed as operating in 2014, half – 363 – had ceased to operate

Half of the private higher education providers operating in the UK exited the sector in the space of three years, according to new research.

Researchers from Durham University and the UCL Institute of Education found that there were 813 private providers in operation in the UK in 2017, an 11 per cent increase compared with 2014.

However, of the 732 institutions listed as operating in 2014, half – 363 – had ceased to operate, at least as higher education providers, by 2017. Of these, 165 were listed as having been dissolved at Companies House, 70 had “simply vanished without trace”, and a further 128 were still in operation but were no longer providing higher-level courses.

The study, which also drew on data from provider websites and sector agencies, found that for-profit providers were particularly at risk of closure, accounting for nine out of 10 of the institutions found to have shut their doors between 2014 and 2017.

The data cover the period in which the Westminster government imposed student number controls on private providers operating in England amid concern about the rapid growth of the sector and standards in it. The same period saw some institutions lose their licence to sponsor international student visas.

It also raises questions about the ability of the private sector to live up to English ministers’ hopes that “challenger” institutions will add innovation and choice to a higher education sector that continues to be dominated by traditional universities.

Stephen Hunt, a research associate at UCL’s Centre for Global Higher Education, who conducted the study with Durham University’s Vikki Boliver, said that there was a “huge amount of churn in the private higher education provider sector”.

“Most of the losses confirmed by Companies House data were associated with for-profit institutions. These tend to be more recently founded. These may be newer arrivals offering similar subjects at similar levels, amounting to a greater concentration in an already crowded market, increasing competition and the likelihood of market exit”, Dr Hunt said.

“The threat of market exit is, though, seldom experienced by the sector’s larger or higher profile providers.”

The study finds that only 39 per cent of providers claimed to have been the subject of any form of external review, most typically by the Quality Assurance Agency. Eighty-seven per cent of providers, however, claimed to guarantee the quality of their provision via some form of oversight or validating arrangement, either with a professional body or a university.

Perhaps more concerning was the finding that less than one in five current private providers was likely to become registered with the English regulator, the Office for Students, although the largest and most significant institutions will. Providers outside the register “will continue to remain an unknown quantity, unregistered, and essentially unregulated”, the study says and – crucially – these institutions will not be covered by OfS-mandated student protection plans covering arrangements for supporting students in the event of closure.

“The private provider sector as currently configured is unlikely to provide a more general alternative to the public system of standard undergraduate higher education envisaged by the government”, the study concludes. “Many providers are small scale, concentrating on sub-degree or postgraduate qualification across a narrow band of subjects – often characterised as being popular but with low overheads. This means private providers are as likely to compete amongst themselves as with the public sector.”

chris.havergal@timeshighereducation.com

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