Public-backed funding to private college students shoots up to £100m

Taxpayer-backed funding for students at private colleges rose by 138 per cent to £100 million last year, with a private equity-owned institution that did not meet all quality standards accounting for more than a fifth of that total.

December 6, 2012

The number of students at private colleges accessing publicly funded support rose to 12,240 in 2011-12 from 5,860 the previous year as the coalition government increased the number of courses at private providers designated for Student Loans Company funding.

While universities have their student numbers strictly capped to control taxpayer spending through the SLC, there is no similar constraint on growth in the number of publicly funded students at private colleges.

The figures were published in a Department for Business, Innovation and Skills consultation, which began on 28 November, on applying student number caps to private providers with designated courses from 2013-14.

The consultation is considering two possible methods for controlling numbers. In the first, caps would be based on providers’ annual forecasts of the number of UK and European Union students eligible for SLC funding on designated courses.

In the second, caps would be based on the actual number of students accessing SLC funding, using SLC data from 2012-13 “and possibly from previous years”.

The consultation document says that SLC support for students at private providers (including all types of loans and grants) rose to £100.3 million in 2011-12, up from £42.2 million the previous year and £29.2 million in 2009-10, the year before the coalition came to power.

By institution, the top five private colleges for SLC funding are: Greenwich School of Management (£22.7 million), London School of Science and Technology (£10 million), BPP University College (£9.3 million), the Academy of Contemporary Music (£6 million) and music college BIMM (£5.5 million).

For-profit Guildhall College - recently cut off from SLC funding by BIS for allegedly registering students on incorrect courses to make them eligible for loans - was 11th highest on the list, with £1.7 million.

Greenwich School of Management is majority owned by the private equity firm Sovereign Capital, which is also an investor in BIMM.

The school, one of only seven private providers to voluntarily subscribe to the Quality Assurance Agency, fell short on two out of three criteria in a recent QAA institutional review.

Alison Wride, the institution’s principal, attributed recent growth to “a strategy of listening to market demands and then delivering on them” and said that given the “relatively small number of international students, any growth was always likely to lead to increased UK numbers and thus increased SLC funding”.

Professor Wride said it was “worth flagging up that the majority of SLC funding included in the quoted figures goes to the students to cover their living expenses” rather than to the school.

Sally Hunt, the University and College Union general secretary, called for “an immediate moratorium on any further designation and an immediate retrospective quality assurance audit on every provider receiving significant amounts of public subsidy”.

The BIS consultation proposes to “introduce an enhanced designation process to include more robust and transparent quality assurance, financial sustainability, management and governance requirements and student number controls”.

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