Government defends reforms in long-awaited response to committee

The government has defended the public financing of for-profit higher education providers and has said that it wants widening participation funding to be “better targeted”.

June 18, 2012

The comments came in the government’s much-delayed response to a report on the coalition’s higher education reforms published in November 2011 by the Commons Business, Innovation and Skills Committee.

In the response, published today, the Department for Business, Innovation and Skills responds to concerns from MPs on the select committee that it was “not clear” from a government consultation whether commercial providers “will be able to profit directly from tuition fee income backed by public student loans”.

BIS says that via its designation of which private courses are eligible for Student Loans Company funding, for-profit providers “can already benefit indirectly”.

It says the student is “the direct beneficiary of the tuition fee loan, not the provider” and adds: “The government intends that for-profit providers will continue to be able to benefit indirectly from public support through government-backed fee loans.”

In answer to select committee concerns about support for widening participation, BIS notes that ministers have written to the Higher Education Funding Council for England and to the Office for Fair Access asking them to “develop a joint strategy for promoting widening participation and fair access”.

BIS says it wants Hefce and Offa to consider “how the impact of investment might be better targeted across the whole sector and the whole range of potential activity which supports widening participation, taking into account the latest available evidence here and abroad”.

Some may see this as another sign that the current widening participation premium, which aims to compensate universities for the costs of teaching disadvantaged students and mainly goes to post-1992 institutions, could be axed in favour of a new “student premium”.

The select committee expressed concerns in its report about the affordability of the student loans system designed to accommodate higher fees.

It said the government’s response would “need to demonstrate not only that its assessment of affordability is accurate, but that it has robust contingency measures in place to deliver an affordable system without cutting student numbers”.

BIS says the actual total of fee loans drawn down will not be known until the end of 2012-13, adding: “It could be higher or lower than estimates, and we will take stock then. Out of a higher education budget of around £10 billion we consider that this should be manageable.”

In conclusion, BIS says it is “cautiously optimistic about progress to date” in its reforms.

It defends the time taken to introduce regulatory reforms, saying “it will be 2014-15” before all students are under the new fees system and all changes must be in place.

“Overall, we believe that our reforms will sustain our world-class universities, improve higher education opportunities and increase social mobility,” BIS says.

john.morgan@tsleducation.com

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