Applying Student Number Controls to Alternative Providers with Designated Courses

Today is supposed to be the last day in human history. I felt it would be a fitting epitaph to spend a few of my last hours on the earth writing a thousand words on the BIS consultation on alternative providers and the SNC: an exercise in existentialist policy analysis, if you like.

If the world can last that long, the deadline for responses to the BIS consultation is 23 January 2013, so there will still be a little while to reflect on this when we get back from the Christmas break.

The consultation sets out a brief technical description – scarcely more than an outline – of two methods by which a student number control broadly comparable to the current HEFCE SNC might be implemented for alternative (i.e. private) providers. There is also a brief description of some new, institutional-level criteria and processes that will be conditions of designation. Currently alternative providers have individual courses designated for student support by the Secretary of State. Whilst there is no control whatsoever on recruitment to those courses, students on any other course the same institution might offer are not eligible to receive loans or grants from the Student Loan Company. Thus regulation of these numbers is simultaneously much stricter than in public HEIs (because of individual course designation) and much looser (because of no numbers control).

There’s no doubt as to what the two key paragraphs in this consultation are. For the alternative providers themselves, the key paragraph is 2.2.15:

Given that that we [sic] not yet made policy decisions on future student number controls for 2014/15 and beyond for HEFCE-funded providers, it would be premature to commit to exactly how the student number control system will operate for alternative providers in 2014/15 and beyond at this stage. However we are committed to implementing a dynamic system which responds to student choice and allows for a diverse HE sector. We will announce decisions for future years at appropriate points, taking into account the responses to this consultation and evidence on the operation of the new system when available.

Now the 2014/15 cycle starts in nine months’ time so if you are an alternative provider this paragraph tells you that the Government cannot currently even indicate a timetable by which they will decide whether to let your business grow (or force it to shrink) nine months from now. This isn’t the kind of regulatory environment that will persuade many to invest in the UK market. Indeed even for 2013/14, I can’t see any clear statement of how BIS expect to calculate (or rather have HEFCE calculate) what they call a ‘suitable entrant control limit’ for each provider, so it is unclear to me whether this will be on the broadly the same basis as the public providers (which would sharply limit growth in 13/14 – a cycle which is already under way) or on some other basis. Nor is the timetable for this process clear. BIS say they will start to review existing designated providers in April 2013, but give no indication when they expect this process to finish.

This strikes me as a significantly less satisfactory position than the public providers are in. Whilst we public HEIs do not yet know our 13/14 Student Number Control limits, we have a clear understanding of the population to which the limit applies, the general policy informing the limit and the timetable to which the actual numbers will be announced. We can therefore plan pretty well.

For the public providers, the key paragraph is 2.1.4

We are committed, as far as possible within the current legal framework, to reducing the anomalies in the way different types of institution are treated.

So the ‘level playing field’ (if fields can die) is dead. BIS will delegate certain aspects of the designation process (the process which enables students at alternative providers to get access to SLC loans) to HEFCE, but otherwise there will continue to be quite separate regulatory regimes for the original providers and the alternatives. For instance the individual course-by-course designation in alternative providers will remain, with institutional criteria and student number controls merely layered on top of them. In fact neither of BIS’s two options for application of the Student Number Control to alternative providers apply the same definitions to the controlled population as we use in the public sector (and one of them is radically different). Most critically, neither of the options propose collecting the full HESA data set from alternative providers (although this is described as an option that the providers themselves might wish to take). Without the full HESA dataset, HEFCE will never be able to manage and audit the private sector in the way they do the public: so by choosing not to ask for it, BIS guarantees a twin-track approach into the foreseeable future – and beyond.

Indeed, in other news, HEFCE is pushing ahead with a new Financial Memorandum for the funded part of the sector.

Now in one sense none of this tells us anything very new. Way back in June 2011 I was posting that the Government had decisively rejected the market model for HE, and that private providers would, in the medium term, find that HEFCE was one of the chief obstacles to their growth plans. It has been clear since January last that the HE Bill would not be going before Parliament, and therefore that the White Paper’s original aim for a single HE sector was not going to be achieved. What is clearer now, though, is that the Government is no longer even planning for a single sector in future. A Department that still planned to legislate eventually could take steps now to put in place the data collection and management systems that will be needed when that time comes – for instance by making the full HESA dataset compulsory for alternative providers. That would shorten the transition time when it comes. Even if the world continues tomorrow, the revolution in English HE is now pretty much over.