Commons debate on college and university fees must look at private providers' role

The union said that as well as moving to cut fees, restore grants and force business to contribute to the cost of education, the government must regulate the existing private sector. The union said the government has widened a loophole that allows it to direct public money - in the form of access to student loans and grants - to private providers, including for-profit companies and companies owned by private equity funds, by the secretary of state designating their courses as fit for public support.
 
As a result, the amount of taxpayers' money flowing to these companies has doubled in one year. Yet the same companies face almost no regulation. Their student numbers are uncapped, they do not have to subscribe to the independent quality assurance agency and no one is even counting how many students they enrol or how many ever complete their courses.
 
The number of private college courses designated by the Department for Business, Innovation and Skills increased from 157 in 2009-10 to 228 in 2010-11, and again to 403 in 2011-12. The amount of public subsidy they receive in the form of loans and grants has leapt from £33.1 million in 2009-10 to £50.8 million in 2010-11.
 
The union said the figure for 2011-12 figure could skyrocket (the figures are published in November), because as well as the number of courses designated for support doubling, students can now access £6,000 in loans compared to £3,000 the previous year.
 
The union said the UK had to learn from the US, which has been rocked by scandals involving for-profit colleges. UCU said Senator Harkin's recent report on for-profit education providers in America showed government de-regulation, a shift away from grants and towards loans for fees and under-prepared regulatory agencies led to the creation of a multi-million dollar racket.
 
UCU general secretary, Sally Hunt, said: 'While established universities are subject to rigorous controls that restrict their recruitment and maintain standards, the taxpayer is funding a free-for-all among private providers who enjoy an enormous competitive advantage in being under-regulated, while being able to access the capital markets to fund their expansion.
 
'The same companies that caused mayhem in America are now circling UK higher education and the government is not listening to our warnings about the danger. Today's Commons debate must be used to ensure private providers are properly regulated.'