Government was wrong to ignore warnings about for-profit colleges, says report

The government has failed to learn from previous mistakes made at home and abroad in relation to private for-profit colleges in higher education, says a report released today.

The report, by Professor Sir David Watson for the think tank HEPI, says that successive governments' privileging of the private over the public sector has led to a massive waste of public money. He says that the UK has a 'fear, verging on paranoia, about regulating the private and for-profit sector to the same standards and levels of the public sector in case they take away their ball.'

Early this year the Guardian revealed damaging allegations of poor standards, minimal attendance at lectures and suggestions that private colleges are recruiting students simply to access large sums of public money.

UCU said the government had ignored its warnings from as far back as June 2010 about the lack of proper quality checks at private institutions. Private colleges are expected to receive around £1bn of public funds next year.

In his report, Watson says that numerous negative examples from the United States should have alerted government to the dangers of giving the green light to for-profit colleges to access billions of dollars of public funds through loans with a light-touch regulation system.

As UCU warned, the US system the government sought to emulate has been shown to offer derisory graduation rates, crushing levels of debts and degrees of dubious value. According to the US Education Trust, only 20 per cent of students at for-profit colleges complete a four-year course and the same proportion of those who do finish default on their loans within three years.

UCU general secretary, Sally Hunt, said: 'We are glad that more people are now switching on to the incredible damage the for-profit higher education sector has caused both here and in America thanks to a light-touch regulatory system.

'We met with David Willetts time and again to specifically warn him about the dangers of handing out more state-backed loans to private colleges without proper quality control checks or limits on the number of students they could recruit.

'As Watson points out, a quick study of what had happened in America would have delivered a worrying tale of institutions raking in state money. We hope future governments will learn from the lessons about the problems with privatisation.'

As part UCU's campaign against for-profit colleges in the UK, the union showed this film warning of the damage for-profit colleges had caused in America at a special screening for MPs in Parliament in November 2011.