223] In return, all designated institutions
would have to abide by undertakings similar to those which are
currently attached to receipt of the teaching grant, including
the tuition fee cap (and the adoption of an access agreement if
they wish to charge fees above the basic limit), subscription
to the Quality Assurance Agency and Office of the Independent
Adjudicator, publication of the Key Information Set and provision
of certain statistics.[224]
Alternative providers which are designated for student support
and those which operate on a not for-profit basis would also be
eligible for direct grant support from the Higher Education Funding
Council. [225]
Source: adapted from Department for Business,
Innovation and Skills, Students at the heart of the system (June
2011) pages 69-70
212. We welcome the Government's
intention to create a more level playing field for all providers
of higher education. In particular we agree that where public
funding is applied, alternative providers should be subject to
the same criteria as traditional universities. This is both a
sensible and proportionate approach to expanding Higher Education
provision.
213. We further welcome the
fact that the Government has decided to restrict access to direct
grant funding to institutions operating on a not for-profit model.
However, for-profit providers may still be designated to receive
student support from the public purse, and it is not clear from
the proposals set out in the Government's technical consultation
whether they will be able to profit directly from tuition fee
income backed by public student loans. We recommend that the Government
clarifies the situation in its response to this Report.
Access and widening participation
at alternative providers
214. At present, alternative providers (for-profit
or otherwise) do not receive any teaching grant, and are thus
not subject to any of the requirements imposed on the traditional
higher education sector as 'conditions of grant'. These conditions
include the requirements to put in place Widening Participation
Strategic Assessments and access agreements. As a result, although
a small number of scholarships and other mechanisms are available,
there is not yet a culture within the alternative higher education
sector of prioritising widening participation in admissions.
215. Carl Lygo of BPP University College told
us that BPP was not "set up for widening access" and
that its focus was on "ABC1s, so high?quality
students who are going on to high?quality
jobs". However, he pointed out that BPP funded around 100
full scholarships and bursaries out of the surpluses that it made
from its operating business. He went on to explain that:
Ninety-nine per cent of our revenues are derived
from the private purse; 60% of our students are sponsored by employers.
Essentially, we plough back employers' and student money into
helping those students who need more help. Very many of us who
teach at BPP have come from backgrounds where we did not have
great life choices, and so we feel compelled, even though we are
for-profit, to put something back and give others access to the
legal profession, to the accounting profession.[226]
216. Terence Kealey, Vice-Chancellor of the University
of Buckingham, believed that it would be a long time before institutions
such as his were able to offer need-blind admissions. Although
the University of Buckingham spends 4% of its income on bursaries
and scholarship schemes. Mr Kealey argued that:
The difficulty we have, quite simply, is that we
are funded almost exclusively by student fees and, therefore,
we are simply under?resourced
for what we would really like to do, which is a much wider widening
participation agenda".[227]
In the long term, Mr Kealey believed that his sector
should aspire to establish endowment programmes on the scale run
by institutions such as Harvard, Yale and Princeton. The size
of their endowments made it possible for them to provide needs?blind
admissions. However, he argued that it would take around 50 years
to build up those endowments.[228]
217. While we recognise the fact that alternative
providers to have scholarship and bursary programmes, our witnesses'
admission that they are not yet designed to accommodate the Government's
proposals for widening access is disappointing. That said, there
are other ways in which alternative providers may be able to contribute
to widening participation more generally. Private providers often
work in partnership with universities to deliver the universities'
courses in local colleges and institutions, sometimes charging
lower tuition fees than the validating university. This can help
increase the available student places on some popular courses,
and enable students who may not wish, or be able, to attend the
validating university to access its courses. Access to student
support for these courses could remove the barrier currently faced
by students who would otherwise have to pay tuition fees 'up front'.
This arrangement does places the alternative provider in direct
competition for students with the partner university, although
the university would still receive some income from validation
fees.
218. Another approach might be to follow the
example set by the London School of Business and Finance in making
its course materials available for free, and only charge fees
for exam registration. Valery Kisilevsky, Managing Director of
the London School of Business and Finance said:
Our rationale in doing so was, by widening access
and enabling people to access content, by effectively waiving
our rights to that content, we will enable people to pursue qualifications
that would lead to better outcomes in terms of full academic programmes.
Our approach was that, in this day and age, it is appropriate
to be more relaxed about intellectual property rights to some
types of content.[229]
219. Access to public funds
brings with it responsibilities. We acknowledge the Government's
ambition to open up the market to all providers of higher education,
but alternative providers must be held to the same standards as
traditional universities in respect of widening participation
and access.
Higher Education in Further Education
220. A second potential solution to increasing
capacity in the Higher Education system and widening access can
be seen in the increasing provision of higher education courses
by further education colleges. According to the Association of
Colleges, 262 further education colleges provide higher education
courses, across all areas and regions of England, enrolling around
10% of all HE students in England.[230]
College income from HE provision is presently £500million,
and the majority of Colleges charge between £1,700 to £2,200
in tuition fees to their degree students.[231]
We understand that "the vast majority of FE Colleges teaching
higher education will be charging fees of £6,000 or below
next year".[232]
221. "HE in FE" courses tend to be
specialist skills-based vocational and/or technical courses, which
may be tailored to the particular needs of the local or regional
economy. Students at FE colleges are often older than those at
university, often live locally, and are more likely to study part-time
to fit around work or family commitments. Colleges often provide
HE in areas that traditionally have lower HE participation rates,
and to students with lower eligibility qualifications than many
higher education institutions.[233]
According to the Mixed Economy Group, FE colleges now have "a
significant, established, strategic and development role in the
provision of higher education" and "colleges also offer
value for money by focussing on teaching and learning, with smaller
class sizes and longer student contact hours".[234]
222. The Government has been explicit that it
expects to see a growth of HE in FE as a result of its allocation
of 20,000 student places for 'low-cost, high-quality' provision
with fees below £7,500 per year.[235]
However, the Association of Colleges was keen to make clear to
us that "FE Colleges are not competing with traditional universities
[…] it should be noted that over 80% of those accepted to
study higher education have qualifications other than A Levels
(compared to fewer than 50% of all HE acceptances)."[236]
223. The Mixed Economy Group and 157 Group, both
of which represent further education colleges which offer a significant
amount of higher education courses, were keen to emphasise the
distinct mission of "HE in FE":
[The] college role should not be seen as doing the
same as universities only more cheaply but expanding the numbers
of part time students, extending opportunities for those in work
and using their links with industry to emphasise local, flexible
and work related programmes. In large part this involves bringing
in new types of student rather than repackaging the offer to traditional
undergraduates.[237]
224. Further education colleges
offer another avenue to higher education and we welcome the Government's
focus on the potential that is in the college system. However,
if overall student numbers are to remain capped (particularly
for institutions recruiting applicants without high A-level scores),
the expansion of places at further education colleges may well
come at the expense of places at traditional universities. We
will expect the Government to set out clearly whether the expansion
of HE in FE is a real expansion in higher education or merely
a transfer of higher education provision from 'traditional universities'
to potentially cheaper alternatives.
216 
