Willetts warnings

On 25 June 2010, Sally Hunt wrote to David Willetts raising the issue of private providers lobbying for greater relaxation of the regulatory framework to make it easier for them to enter the sector. She requested a meeting with Willetts to discuss the issue.

On 14 September 2010, following that meeting, Sally wrote to Willetts again stating that the union was 'deeply concerned about any moves to make it easier for for-profit providers to access either university title or student loans and government funding'. She pointed to 'a series of high profile public scandals' involving for profit companies, 'alleging malpractice in recruiting and the sale of poor products to lower income students'. She enclosed a copy of the union's Subprime Education report [102kb] on the subject. 

Sally asked that 'no further moves are made by this government, either now or in the wake of the Browne review, to make it easier for the for-profit sector to access public fund or the brand reputation of UK higher education.' Such moves would, she warned, 'create conditions very similar to those that have generated the current controversy in the United States'.

In April 2011, David Willetts doubled the amount of student loan available to students studying with private providers.

In May 2011, Sally again wrote to David Willetts in the wake of the publication of a report by the Funding Council HEFCE, which included warnings about the dangers posed by private providers in higher education. HEFCE expressed specific concern that private providers were under no obligation to provide public information comparable to public institutions, nor to provide regular, reliable and valid data which could be used to hold them to account for their activities. Sally asked what steps David Willetts would take to mitigate the risks posed by this situation. 

In a letter dated 6 June 2011, David Willetts said that the forthcoming Higher Education Bill would deal with these issues.

In November 2011, Sally again wrote to Willetts pointing to ongoing scandals and problems in the US for-profit sector and stating that UCU believed the Higher Education White Paper contained insufficient recognition of the risks posed by for-profit companies and called on the government to ensure that no public subsidies went to companies whose primary obligation was to their shareholders.

In January 2012, Sally met with David Willetts and again raised the issue of for-profit providers. The notes from this meeting state that David Willetts claimed that 'alternative providers' would be operating in a much more stringent environment than has been the case in the United States.

Later that month it was confirmed there would be no Higher Education Bill.

In April 2012, Sally used another meeting to raise the issue of private providers accessing public subsidies without regulation and pointed to the sharp rise in public money flowing toward private providers.

Following this meeting, on 8 May 2012 Sally wrote to Willetts again, calling on the minister to take urgent action to get control of the situation.

She wrote, 'UCU finds it unacceptable that in contrast to our publicly regulated universities and colleges, private providers operating courses designated for public support do not have to observe any controls on the number of students they recruit. Nor are private providers regulated in any way comparable to our universities and colleges.

'Neither HEFCE, the Higher Education Statistics Agency nor the Business for Innovation and Skills collect any information about recruitment figures orcompletion rates, meaning that at the most basic level, it is practically impossible to judge the value for money of these subsidies to the private sector. Private providers accessing public subsidies directly from the Student Loans Company via your Department are operating uncapped and unregulated.'

Sally called on Willetts to take a series of emergency measures, including:

1. 'First and most importantly, impose an immediate moratorium on the practice of designating courses for public support until the position of private providers within the higher education system has been finally resolved through legislation. There must be no more uncapped expenditure of public money on these courses.
2. Bring the Department's 'due diligence' checks on new courses seeking designation into line with HEFCE's requests for financial information from universities and colleges.
3. Conduct immediate retrospective due diligence checks on all private providers whose courses have been designated by the Secretary of State.
4. Publish the details of these due diligence checks as far as possible.
5. Instruct HEFCE to commission HESA to write to all private providers in receipt of public support requesting the submission of information on their student recruitment and completion rates, together with those Key Information Sets already being collected from universities and colleges.
6. Instruct HEFCE to commission the QAA to write to all private providers requesting the opportunity to conduct a review of quality at their institution.'

Willetts wrote back in June to 'note' our concerns and state that the government would take steps soon. The government continued to designate courses and took none of the measures suggested by UCU.

On 6 December 2012 it was revealed that the amount of money flowing to private providers through designation, in spite of the ongoing problems with regulation and the lack of information about the providers or their students, had trebled to £100 million.

On 6 December 2012, UCU wrote to the Public Accounts Committee calling for an inquiry into course designation.

The chair of the Public Accounts Committee wrote to the minister raising the issue and received a reply from a BIS civil servant which stated that the government was consulting on bringing in student number controls.

'Alternative' providers responded to the consultation and the ministerial register shows that between November 2012 and March 2013, David Willetts continued to meet with several private providers to discuss higher education, including US company Capella Education Company, who own UK online provider RDI, Parthenon Group, consultants and lobbyists for the for-profit industry, Pearson and BPP.

When the government's response was published it was clear that private providers had pushed for a delay of a year to any implementation of student number controls and that Willetts had conceded this. In the response to the consultation, the government said (pdf):

'The ability for providers to grow their student numbers was another issue for the majority of alternative providers. Providers requested that a clear mechanism for growth should be built into student number controls, allowing for growth of existing providers and for new providers to enter the sector.'

In his press release on 27 March, Willetts put a very positive spin on this:

'Today's announcement will enable alternative higher education providers to continue with their current plans rather than blocking planned expansion.'