Next year’s cap won’t fit for-profits

For-profits welcome delay but may have to get ready for quality assessment, John Morgan writes

April 4, 2013

Government plans to leave private providers outside student number caps until 2014-15 have been welcomed as “very fair” by a leading for- profit college, although a charitable provider says the Treasury is “right to be concerned” by the continued lack of controls.

The Department for Business, Innovation and Skills announced the move on March, in its response to a recent consultation on number caps at private providers. BIS will require such providers to subscribe to the Higher Education Statistics Agency, and the numbers cap for 2014-15 will be calculated using a baseline of each institution’s 2012-13 numbers, with BIS deciding the rate of “increase or decrease” at a later date.

Unlike directly publicly funded institutions, private providers are not currently limited in the number of students with publicly backed loans they can recruit.

Universities UK said in its response to the consultation that uncontrolled expansion in the private sector “has the potential to impact on the sustainability of overall funding to the higher education sector”.

The government is also likely to introduce a new designation system for private providers in 2014-15. For the first time, private providers would have to be assessed on quality by the Quality Assurance Agency, and on financial sustainability and governance by the Higher Education Funding Council for England, if they want their students to be eligible for publicly backed loans.

William Hunt, deputy chairman and co-founder of for-profit GSM London - which has more students receiving Student Loans Company funding than any other private provider - welcomed the fact that BIS will not introduce controls until 2014-15. “It is what we were hoping for, giving us reasonable time to engage with Hesa, Hefce and the QAA,” he said.

The government’s response says that “to allow for new investment by providers (such as new campuses) where significant prior financial commitments to expansion have been made”, it will consider applications for additional student numbers “on a case-by-case basis”.

GSM London recently opened a new campus at Greenford.

Dr Hunt said: “The alternative sector is financed by investors, whereas the state-funded sector is funded by the taxpayer…You need to have growth [in student numbers] to provide investors [with] justification in their investment.”

Aldwyn Cooper, chief executive officer and principal of private, charitable Regent’s College (soon to be Regent’s University London), said that introducing a cap in 2013 would have been “quite impossible” as most offers to students for that year were “already out there”.

With regard to suggestions of tension between BIS and the Treasury over the lack of controls, Professor Cooper said that the Treasury was “right to be concerned”.

But he added that all institutions, including publicly funded universities, should be able to “opt out of [student loan] designation in particular programmes” so that unlimited numbers of non-publicly funded students could be recruited.

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