Speedy entrances and sharp exits: letting in more alternative providers

No. 3 in a series of Guest posts by G. R. Evans

Alternative providers from http://www.hefce.ac.uk/reg/register/getthedata/. Key: Blue have University Title; Brown have Degree-Awarding Powers; Pink offer designated courses; Violet deliver HE as a franchise only.

One of the most controversial suggestions in the White Paper of May 16 is a change to the long-standing policy that on the rare occasion higher education providers get into difficulties the funding council will support them to put right what has gone wrong, in order that students may complete their courses and obtain degrees of lasting repute and value. The White Paper sees new providers as ‘challenger’ institutions and approves of ‘provider exit’, provided there are protections for students affected. The Higher Education and Research Bill includes detailed provisions for the future OfS to register and de-register providers.

Making it easier and quicker for new providers to gain degree-awarding powers or university title

In the House of Lords debate on the Queen’s speech on May 19, Baroness Brinton expressed a concern about the proposal to make it easier to gain degree-awarding powers or university title:

The White Paper relaxes much of the protective structure to ensure quality that has been one of the key reasons the UK’s institutions have an enviable reputation. The new degree-awarding powers mechanism must maintain that protection. We await the detail, to see how this will operate, but I have concerns that allowing start-up universities to set up quickly might not provide the security that students deserve.’

That ‘detail’ was partly provided with the publication of the Bill. One speaker on 19 July had personal experience of the development of a private provider. Mark Field explained that he had spent the past eleven years on the advisory board of the London School of Commerce. It had been a positive experience, he said. However, he argued strongly for ‘the proposals to relax the criteria for validating degree-awarding powers’ to ‘be examined thoroughly’. ‘I have some sympathy with the view that because the title of a university is much respected, it should be clearly protected and defined,’ he added.

The starting-point for justifying the proposed easing of the requirements has been the arrival in the last decade or so, mainly in England, of a growing number of ‘private’ or ‘alternative’ providers. The National Audit Office Report (2014) gave a figure:

Between 2010/11 and 2013/14, the number of students claiming student support for courses at alternative providers rose from 7,000 to 53,000.

Half of this growth was accounted for by five providers.

The proportion of these offering only higher education courses below degree level is very large indeed. The National Audit Office was clear in its report that the:

highest growth has been in Higher National courses. Higher National Certificates and Higher National Diplomas are vocational qualifications awarded by Edexcel. They are roughly equivalent to the first one or two years of a Bachelor degree course respectively.

Both the Public Accounts Committee (2015) and the National Audit Office (2014) have published reports expressing serious concerns about the conduct and performance of a substantial number of these, their failure even to register students on courses for which student loans were being claimed, or to check that the students were equipped to tackle at course at that level. Both were primarily concerned with the waste of taxpayers’ money through the huge rise in student loans. The Public Accounts Committee made a series of strong recommendations, for example about the need for the Government to do a proper risk assessment and keep proper records. None of these warnings appears to have been heeded in the drafting of the Bill or the framing of the policy behind it.

The Quality Assurance Agency publishes a series of reports on providers such as Further Education Colleges, which receive some public funding and ‘reports about Concerns’ raised. On the performance of alternative providers the QAA reports a disturbing profile in a number of respects.

The Secretary of State made reference to the concerns which have been expressed ‘about the quality of new providers—that they cannot possibly be as good as what we already have’ on 19 July, but dismissed them with the argument that red brick, 1960s and post 1992 universities had all been new in their time and were now perfectly satisfactory providers. All these were, of course, new universities.

The majority of the alternative providers so far are not offering higher education provision at degree level. The categories of alternative providers in the sub-degree ‘higher education’ market (levels 4 and 5 of the England, Northern Ireland and Wales Credit and Qualifications Framework), and those offering a limited number of ‘designated courses’, have on the whole been the ones censured by the PAC and the NAO.

Is there a demand from providers?

The number of alternative providers actually seeking degree-awarding powers or university title remains small. An ‘Independent Universities Group’ is led by Aldwyn Cooper, Vice-Chancellor of Regent’s University, London (granted degree-awarding powers in September 2012 and university title in February 2013). This group has been seeking to establish itself as a constituency of ‘alternative Russell Group’ institutions. It may be experiencing some difficulty in forming effectively as a group with agreed common interests. It was reported in June 2015 that the group intended to form without the University of Law after that provider was taken over by Global University Systems. The group still appears to lack a website.

Is there a demand from students?

The Secretary of State opened the debate on 19 July with the statement that ‘the creation of new universities is an undoubted force for good, both academically and economically’. She did not evidence this assertion, beyond linking it with the claim that there is a huge unmet need for more higher education places:

The Bill is about opening up the sector to enable new providers to enter it and create the extra places that our young people need.

Taking as read potential student demand and the demand from alternative providers to be admitted to the system at the level where they may grant their own degrees and call themselves universities, she went on to claim that:

this Bill levels the playing field by laying the foundations for a new system where it will be simpler and quicker to establish high-quality new providers.

This radical change is therefore given a ‘centre-stage’ position in the new legislation which may therefore not be warranted by the demand for degree-level provision and which in any case is likely to cater only for teaching-only and not for research provision. The drafters of the Bill appear to have taken no notice of the warnings of the PAC or the NAO.

Is there a demand for easier and speedier grant of degree-awarding powers and university title?

The strong case made in the Bill and the White Paper for making it quicker and easier to obtain authorisation to grant degrees and gain university title closely follows that put by alternative provider lobbyists, notably by Roxanne Stockwell (of Pearson, a major provider of courses used by alternative providers offering sub-degree level higher education courses).

Added to the risk of debasing the currency both of degree-awarding powers and of university title by making them too easy to obtain, is the risk that a new Office for Students, with a burden of work and a range of responsibilities incomparably greater than that carried by HEFCE at present will need time to find its way. As Gordon Marsden put it on 19 July, ‘the problematic unfolding and development of the office for students, certainly in its early years’ means that ‘it will not be able to have the same sort of international clout [as the Privy Council], and it removes the role of Parliament from either approving or disapproving the university title as a backstop.’

The proposed changes affecting the holding of degree-awarding powers and university title

attempt at DAPUT shortUnder the new legislation ‘authorisation to grant degrees etc’ or to use the word ‘university’ in a title, will be given by the OfS. Previously this was granted by the Privy Council on the recommendation of the Minister, with the advice of the Advisory Committee on Degree Awarding Powers. The new arrangements will remove the established system of thorough scrutiny.

The Bill does not make it clear what is to replace this system of extended and thorough scrutiny. It merely clarifies the nature of the new power. The OfS is to authorise by ‘order’, exercisable by statutory instrument, ‘and the Statutory Instruments Act 1946 is to apply to such an instrument as if the order had been made by a Minister of the Crown’. So it appears that the Minister’s power of recommendation passes to directly to the OfS.

If any condition of registration as a higher education provider laid down in the new legislation ceases to be fulfilled the authorisation to grant degrees may be withdrawn by a further OfS order, even if granted for an indefinite period (see s.42 (2) ).

Authority to call itself a ‘university ‘may also be withdrawn from a provider by order of the OfS ‘even if the authorisation, consent or other approval was granted for an indefinite period’ (see s.53 (2) ).

An exception is made for companies, which may apply to call themselves universities under the provisions of the Companies Act 2006 (see s.53 (1) (a) ).

The implications go far beyond the policy-thrust of making entry to the sector for new providers quicker and easier and treating them as muscular ‘challenger institutions’, to be encouraged to elbow existing providers out of the way by competition if they can. These changes would undermine the fundamental stability of the university system as it has developed in England so far.

An implication pointed to by several speakers in the Second Reading debate was that Royal Charters and Acts of Parliament making grants of permanent powers may be overridden. So any university, however longstanding as a body awarding degrees, could in principle have its degree-awarding powers removed by OfS.

Andrew Smith noted that ‘Clause 43 empowers the office for students to revoke by Order the Acts of Parliament or royal charters that have established our universities. The ability to dismantle so much with so little by way of parliamentary scrutiny cannot be right, and much stronger scrutiny and protection is needed. He insisted that ‘ must be full scrutiny by this House. These are Acts of Parliament that are being overturned by an Order—it is absolutely extraordinary’.

Lyam Byrne touched on the same point, asking:

Is it not incumbent on the Minister to give a categorical assurance to the House that where rights and entitlements proscribed (sic) in royal charter are deleted, they will be reinstated by the Government?

‘Provider exit’

Lord Rees of Ludlow raised a concern about ‘provider exit’ in the debate on 18 May. ‘Surely it is fairer to students that their qualifications should be accredited by a respected institution—in the spirit of the old London external degrees—rather than by, “a provider that may exit the market”, to quote the inelegant phrase in the White Paper.’

Several speakers on July 19 suggested that the wholly new doctrine of encouraging ‘provider exit’ is likely to be harmful to student interests. Mark Field’s constituency includes London Metropolitan University, ‘which has been a troubled institution’. He said he had come to believe that it is ‘a healthy state of affairs’ to allow a provider to fail if they are ‘not doing the job and not providing the education that they ought to provide’. However, this is an extreme case and the effort involved providing the necessary support in this case has also demonstrated the need to ensure that students do not suffer from provider failure and the difficulty of doing so.

Gordon Marsden quoted the White Paper’s assertion that ‘this is a crucial part of a healthy, competitive and well-functioning market’, but put the counter-argument that:

such breezy complacency and laissez-faire attitudes would be comical were it not for the dire consequences that they threaten for thousands of students and dozens of research and higher education institutions.

He pointed to ‘the potential for hundreds of broken careers and dashed hopes of social mobility’. As serious is the reputational damage that failed challenger institutions or scandals associated with them could do to universities as a UK international brand.

Gordon Marsden asked how the proposed required ‘exit plan’ will ‘work’. Carol Monaghan added:

students might get monetary recompense when a provider collapses, but there is no recognition of the time wasted by students who start a course with an institution that subsequently fails. That time is indeed money for those students, whose careers and earning potential could be delayed while they seek an alternative provider. They are being asked to gamble with their fees and, more importantly, their time.

Deliberately to encourage ‘provider exit’ as a dimension of competition marks an immense change of higher education policy which has never been considered by Parliament. Yet the use of secondary legislation to overturn or modify primary legislation is proposed in the Bill in relation to arrangements for ‘provider exit’ even where the provider is an existing university established by royal charter or legislation.

The Public Bills Committee has requested submissions on the Bill, which can be emailed to: scrutiny@parliament.uk

Points to raise:

  • The doctrine that competition is good for higher education and institutions should be kept on their toes by the threat of losing their ‘registration’ with their degree-awarding powers and university title.
  • The removal of the existing safeguards intended to protect against the debasement of the powers to award degrees and the use of university title.