Private bodies saddle up for state subsidies

Students on private college courses such as animal chiropractic care, acupuncture and "contemporary person-centred psychotherapy" have been eligible to receive state-subsidised funding during the past two years, with one private institution being given state loan access for nearly 100 sub-degree vocational courses in a single day.

The coalition is increasing the number of "designated" private courses, where students are allowed to apply for loans from the taxpayer-backed Student Loans Company, thereby giving an indirect public subsidy to what are often commercial providers.

The information on designation, which is nominally approved by the business secretary, Vince Cable, was obtained by Times Higher Education from the SLC under the Freedom of Information Act.

The number of private college courses designated by the Department for Business, Innovation and Skills increased from 157 in 2009-10 to 228 in 2010-11, and again to 403 in 2011-12.

Fifty-six applications for designation have been refused since February 2009, according to a written parliamentary answer from David Willetts, the universities and science minister.

The institution that gained the most designations in 2011 and 2012 was the London College UCK. On 5 December 2011 alone, it gained designation for 98 Edexcel-awarded higher national diploma and higher national certificate courses.

Data placed in the House of Commons Library by BIS show it awarded London College UCK the designations four working days after receiving the applications.

However, a BIS spokeswoman said: "Forty-four of the courses being applied for in this case were due to changes to course names rather than brand new courses."

Referring to the quick turnaround on the applications, she added: "Prior to referral to the department, SLC will have undertaken a full review of the courses included in the London College UCK application and made a recommendation to the department."

Other private colleges given designation in 2011 and to date in 2012 include the Wales Evangelical School of Theology; McTimoney College of Chiropractic (including a "two-year full-time MSc in animal manipulation"); UCFB at Burnley Football Club (degree courses in football business); the Northern College of Acupuncture; and the Sherwood Psychotherapy Training Institute (including an MSc in "contemporary person-centred psychotherapy").

Although postgraduates are not eligible for SLC funding, postgraduate courses can be designated for the purpose of Disabled Students' Allowances.

After the London College UCK, the institutions gaining most designations this year and last were the Greenwich School of Management (38) and BPP University College (35). Both are for-profit: the former is majority owned by equity firm Sovereign Capital and the latter's parent company is US giant Apollo.

Cause for concern

Roger King, visiting professor in the School of Management at the University of Bath and author of the Universities UK report Private Universities and Public Funding: Models and Business Plans, said that the issue of designation was "a matter of concern to the taxpayer" as SLC funding was "public money".

He called for more information in the public domain about designation and how decisions are reached, "particularly as we've had a spike".

In 2011, the coalition introduced a system of "due diligence" checks for private colleges seeking designation, arguing that it was making the process more rigorous by requiring institutions to provide information on governance and finances.

Last month, ministers also announced that they may start restricting the number of loan-assisted student places on designated courses, thereby ending the current situation where private colleges can expand provision uncapped.

However, this could lead to already designated private courses going head to head with universities by bringing them under the same student numbers cap.

Sally Hunt, general secretary of the University and College Union, said the government "must act now to stop all further designation and introduce stringent regulation for private providers".

She added: "At a time when public universities are being starved of funds, ministers seem to be falling over themselves to sign off ever-increasing amounts of taxpayers' money to more or less any company that applies for designated-course status."

But Paul Kirkham, managing director of the for-profit Institute of Contemporary Music Performance, criticised an "unbalanced and unfair obsession" with private providers, which accounted for "less than 1 per cent" of SLC expenditure.

In contrast with the already "pretty strict" designation process for private colleges, he said, universities gained automatic SLC funding for any course they wished to launch.

And, Mr Kirkham added, before criticising private providers about so-called "Mickey Mouse" courses, critics would "do well to look first at the unfocused course portfolios of many universities, where they will find plenty of questionable provision".

john.morgan@tsleducation.com.