Pearson profits from private expansion

Source: Getty

Piling up: the expansion of lucrative HNC and HND courses by private providers could add to the pressure for university cuts

The government’s “uncontrolled” expansion of student numbers at private colleges is boosting a multimillion-pound income stream for FTSE 100-listed education company Pearson while spelling potential cuts for universities.

Higher national certificates and higher national diplomas – for which Pearson’s Edexcel examinations arm is the main awarding body – account for nearly a quarter of private college courses newly designated by the government for student support, documents obtained by Times Higher Education under the Freedom of Information Act show.

Although the Department for Business, Innovation and Skills will introduce private student number controls in 2014-15, it has in the meantime increased designations of private courses – opening the door to unrestrained expansion.

Such is BIS’ concern about the expansion of HNCs and HNDs that it has written to the 23 providers “expanding most rapidly” to tell them to recruit no more students on such courses for 2013-14, David Willetts, the universities and science minister, confirmed last week.

A Pearson spokeswoman said the company was “working with BIS to ensure that students claiming loans on the basis of enrolment at a college go on to register on and complete the qualification”. 

This raises the question of whether there are cases where students are being funded but are not turning up to study.

Mr Willetts told Parliament last week that growth in numbers “has been particularly concentrated” among HNC and HND students, with big increases also seen in the number of Bulgarians and Romanians applying for student support.

Private colleges seeking to have their courses designated by BIS (thus making their students eligible for Student Loans Company funding) must have them validated “by a UK awarding body” – which can mean either a university or, in the case of HNCs and HNDs, Edexcel.

BIS papers released to THE show there were 226 new course designations at private providers between 14 December 2012 and 14 August 2013. Of those, 51 were for HNDs and HNCs.

‘Get a grip on expansion’

Andrew McGettigan, author of The Great University Gamble, said: “I think the number of HNCs/HNDs raises issues about BIS’ policy. It should be designating institutions, not courses, and should have a robust set of criteria – that some are teaching towards a Pearson qualification is not sufficient.”

Libby Hackett, chief executive of the University Alliance, said: “The cost of this uncontrolled expansion will come from further reductions in places at established universities, which are highly regulated” and where expansion is tightly controlled.

She added: “It must be an urgent priority of this government to get a grip on this expansion.”

The colleges with the highest number of newly designated HNDs and HNCs – according to the BIS papers – are Grafton College (12, in business subjects); the London School of Business and Finance (eight, in subjects including hospitality management and performing arts); the West London College of Business and Management Sciences (six); and “Inter-Ed UK trading as The City College” (six).

Pearson’s spokeswoman said that HNDs and HNCs are “internationally respected vocational courses”.

The company receives £159 from colleges for each HNC student and £191.80 for each HND student.

A report by The Guardian based on leaked BIS documents gives a figure of 40,000 for the numbers studying HNCs and HNDs at private colleges this academic year.

The Pearson spokeswoman said the company was “not the only awarding organisation” for higher national qualifications: the Scottish Qualifications Authority was another in the field.

The 40,000 figure “does not match Pearson’s total registrations to date for 2013-14”, she added.

The spokeswoman said that Pearson monitored assessment standards at colleges “through standards verification and sampling”, assessed “on a weekly basis registrations and certifications” and has introduced annual visits to review academic management for 2013-14.

The expansion of higher national courses at private providers is reported to have added to the pressure for university cuts: BIS is said to be considering targeting £350 million in grants for poorer students and £215 million from research funding to meet a budget shortfall, according to a separate Guardian report.

Further pressure could be heaped on BIS by a National Audit Office report, expected to be published on 28 November, likely to examine the department’s forecasting of the resource accounting and budgeting charge – the portion of student loans that will never be repaid by graduates.

The NAO is expected to look at the link between universities attended, courses studied and loan repayment levels, and is likely to suggest that BIS could predict the RAB more accurately.

john.morgan@tsleducation.com