Government stops private colleges taking on new students

With BIS budget under pressure, coalition reverses policy of encouraging growth in the higher education sector

Private colleges in England have been thrown into chaos after the government acted to stop half from recruiting any more students from Britain and the EU to study higher national diplomas and certificates.
A sudden intervention from the Department for Business has meant that in the past 10 days colleges educating thousands of students on courses such as business finance, hospitality management and IT management are no longer able to recruit any more this academic year.
Sally Hunt, general secretary of the UCU, which represents lecturers and academic staff, said her union had "specifically warned" ministers about recruitment at the colleges and added the department had got its sums "so spectacularly wrong" and that the situation had become "embarrassing".
In the past 10 days it has emerged that the department's budget for providing student loans and grants was overspent by £80m in 2012/13 – and that ministers were considering cuts to ensure that the budget balanced in future years.
The Department for Business has now suspended recruitment to HND and HNC courses at 22 private higher education colleges and chains.
With students at alternative providers accessing loans and grants now thought to number nearly 40 000, the department has been forced by budget pressures to reverse its policy of encouraging rapid growth in the higher education sector.
In all, the department has halted 200 courses from being taught to new students at the colleges. One hundred of the courses are offered by London College UCK, based in Notting Hill Gate. The department approved these courses in 2011/12, taking just four days to deal with the application paperwork.
The colleges where student recruitment has effectively been suspended by the curtailing of financial support are almost exclusively located in London and the south-east.
The list of suspended colleges includes London School of Business and Finance (LSBF), which won the Queen's Award for Enterprise in 2013. The suspension also affects its Birmingham and Manchester campuses.
David Blunkett, Labour MP and former education secretary, receives £40,000 annually from LSBF for a "visiting lecturer" position and the college's website features pictures of high profile celebrities such as Richard Branson, Tony Blair and Bill Clinton.
But despite the impact on the government department's budget, some of the affected colleges nevertheless appeared happy to accept the situation. A spokesman for LSBF said: "We are pleased to have seen a sustainable growth in demand for HND programmes."
He added its courses "have been a great success" and the college was "hopeful that, following its review, [the business department] will continue to fund HND and HNC programmes". LSBF is also in a partnership with St Patrick's College International, another college affected by the suspension.
"These courses are widely recognised, including by David Willetts, as well-respected and reputable qualifications," the college added.
A department spokesperson said that HNDs and HNCs were "well respected qualifications".
The department said: "Take up is growing rapidly and we're taking measures to manage this growth within our budgets. We have instructed the providers that are growing most rapidly to stop recruiting students to these courses for this year."
In an exchange of letters seen by the Guardian, Willetts dismissed fears from the head of University College Union (UCU) that a lack of controls on student recruitment in the private colleges sector would cause budget problems.
UCU general secretary Sally Hunt wrote to Willetts in the spring of 2012 saying "UCU finds it unacceptable that … private [colleges] operating courses designated for public support do not have to observe any controls on the number of students they recruit."
In a reply Willetts said that her concerns were "noted" but government plans to support the sector to help it compete with public universities would continue.
• This article was amended on 29 November 2013. The original version incorrectly stated that LSBF and St Patrick's College International were owned by the same company. In fact they are in a partnership with each other as part of the Central London Campus Alliance.

(Source: TheGuardian)