HEPI is today (5th January 2017) publishing a new report, Alternative providers of higher education: issues for policymakers (HEPI Report 90) by John Fielden and Robin Middlehurst.

The paper discusses the present state of higher education providers that do not receive direct public funding, summarises the strong opinions for and against them and examines experience in the USA and Australia, before drawing policy lessons for the UK.

The authors suggest the Higher Education and Research Bill currently before Parliament risks missing the Government’s own declared objective of encouraging a vibrant and high-quality range of alternative providers. Notably, over two-thirds of alternative providers (553) are expected to remain outside of the new regulatory system, with just 207 coming within it.

John Fielden said:

Alternative providers are numerous and diverse, with over 700 institutions operating in England alone. Designing a regulatory system for both the traditional sector and the newcomers is a bed of nails.

The Higher Education and Research Bill before Parliament is designed to give the Office for Students oversight of all English higher education but many providers will remain outside.

Moreover, while it removes some barriers to market entry, the new high-speed approval system for degree-awarding powers is a risk too far.

Robin Middlehurst said:

Better protection of the public purse is overdue, especially given the growth in the number of for-profit providers.

Experience in the USA and Australia shows overly generous rules for alternative providers are a magnet for questionable business practices.

The end results can include stranded students, a bill for taxpayers and regulatory intervention.

Nick Hillman, Director of HEPI, said:

A new legal framework for higher education has been necessary ever since tuition fees were tripled five years ago. It is good that the Higher Education and Research Bill before Parliament clarifies the position of alternative providers.

All higher education institutions were new entrants once, and many alternative providers are providing flexible and innovative provision to under-represented groups.

But, as the higher education market continues to change shape, we must be vigilant in ensuring bad apples do not contaminate the sector as a whole.

Notes for editors:

  1. The last major official survey of alternative providers, which was published in 2016, found 295,000 students in 732 institutions in England. At many of them (122), students are authorised to draw tuition and maintenance loans from the Student Loans Company.
  2. The growth in provision has raised concerns about cost and quality. The Higher Education and Research Bill seeks to introduce a common system of regulation for different providers. However, in 2018/19, over 550 English providers will continue to be outside of the new system.
  3. Experience abroad suggests student outcomes at alternative providers (eg graduate employability) could usefully be linked with entitlement to student loans for maintenance and tuition.
  4. The Government wants new entrants to offer more competition and innovation but this is not guaranteed to happen through the new legislation. For example, there will continue to be a lack of support for more innovative provision, such as accelerated degrees.