A level playing field: Regulating quality and student numbers at alternative providers

“Alternative” providers. The name conjures up joss sticks, bean bags and crystals doesn’t it? Fear not, though, the latest BIS consultation isn’t about the benefits of getting in touch with one’s inner child, or surviving on a diet of quinoa and adzuki beans, but instead the altogether more serious topic of regulating the access of students at non-publicly funded HE providers to the student support budget.

The proposals cover two areas: a new framework for designation and student number controls.

Framework for designation

The proposals build on the course eligibility and other tests that have been applied to applications for designation since November 2011. The aims of introducing the new framework are to ensure that students can be confident that their provider isn’t likely to go bust during their course of study and that it has been independently quality-assured. Protecting the reputation of UKHE is an additional desired outcome of the new framework. There is a commitment to proportionality, so smaller alternative providers will be made subject to a lighter-touch regime, subject to any particular risk factors that make this inappropriate.

In future designation will be based on three criteria:

·         A financial stability, management and governance test, which will seek to establish that the provider is owned by fit and proper persons, is financially viable and sustainable and is at low risk of financial failure in the medium term. Any change in ownership or control will trigger a reassessment of designation. There will also be obligations around the use of recruitment agents, and any commissions or fees paid to them will need to be declared to students. 

·         Providers will need to pass a “proportionate” quality assurance process being devised by the QAA which will consider things like the student experience, compliance with the Quality Code and evaluation of published information. QAA subscribers and providers who have successfully secured educational oversight by the QAA will be deemed to meet the quality assurance requirement for designation.

·         Course eligibility requirements, which it is proposed will be the same as those currently in place.

HEFCE will lead on the new designation process, with the final decisions remaining the responsibility of the Secretary of State. The process for new designation will commence at the start of the 2013/14 academic year, while the process of reviewing existing designations against the new criteria will start in April 2013 with the largest providers first. It is worth remembering that we have recently seen the withdrawal of designation from one provider (Guildhall College) so there may be some further casualties in the review process.

Number controls

Two possible methods are proposed. The first is to base the number controls on students who are eligible for student support, irrespective of whether or not they in fact draw on such support (the system currently applied to publicly-funded HEIs) and the second is to base it on students who actually access student support. There is also a proposal to require private providers to submit returns to HESA to underpin the number controls, and also a proposed exemption for small providers with low numbers of students.

The number control system is intended to be dynamic, allowing increased recruitment for successful providers and reducing allocations for those who fail to recruit.

The closing date for responses to the consultation is 23 January 2013.

Smita Jamdar
Partner and Head of Education
For and on behalf of SGH Martineau LLP
DD: 0800 763 1332
M:  07909 925946
F: 0800 763 1732
International DD: +44 870 763 1332
E: smita.jamdar@sghmartineau.com
W: www.sghmartineau.com

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