New providers, new analogy

One aspect of the Green Paper is the continuation of support for alternative, or new, providers of higher education. Since 2010, we have had a focus on them, described as challenger institutions, disruptive innovators who will remake the market in higher education. What we’ve also had is the repeated failure of new providers to live up to these expectations. Now the UK government wants to go further – removing ‘barriers’ and anti-competitive measures.

Helpfully, HEPI has included a chapter in their response publication about new providers – written by Roxanne Stockwell, who sits right at the heart of things with senior roles in both Pearson HE awards and Pearson College.

Pearson is just the kind of company that you imagine the Government wants to be involved – combining the reach and resources of a multinational focused on education. Also, a company that owns the examining body that provides the easiest route to enter the sector.

Stockwell is keen on the Government’s plans to make it easier for new providers to start, and to gain degree awarding powers quicker. She also supports a new validation service to support new courses, to avoid the problem that new providers have to get existing universities to validate their degrees. This, she says.

… is the equivalent of Apple having to ask Google for permission to release a new iPad. Even more, Apple would have to provide the full specs of the new design and ask Google (who would form a panel with, for example, HP and IBM) for their approval of the design. There is no consumer redress for Apple if Google decides to reject the design for ‘strategic reasons’ – including the reason that it would be too competitive – even though Apple will have paid a validation fee and will have invested many months in the process. (Stockwell, 2016)

We’ve had a version of this analogy before, of course, from Jo Johnson at UUK:

I know some validation relationships work well, but the requirement for new providers to seek out a suitable validating body from amongst the pool of incumbents is quite frankly anti-competitive. It’s akin to Byron Burger having to ask permission of McDonald’s to open up a new restaurant. (Johnson 2015)

Why is this requirement such a problem? It means that a degree should come from a place that subscribes to the HE Quality Code, subject to Higher Education Review and by having obtained those powers is likely to be financially sustainable?

A new national validator could follow one of our historical models, none of which would quite get around the anti-competitive problem.

The external degree model

In this model, a committee establishes a set curriculum for a number of degree courses and recognises providers who may deliver that curriculum. The curriculum is assessed by the committee.

The University of London worked to variations of this. It was seen as inflexible by new providers (places like Nottingham, Leicester, Southampton) who had no say in the curriculum or its assessment

The licence model

Here a committee establishes a set curriculum for some courses and recognises providers who may deliver that curriculum through a light touch process of licencing. The curriculum is assessed by the provider, with oversight from a verifier who is an employee of the committee.

This is the Edexcel model of HN awards – run by Pearsons. HN awards were on the way out as universities replaced them with foundation degrees, but they saw a resurgence after 2010 as they were the easiest recognised HE qualification for new providers to offer. However, oversight by Edexcel was criticised, not least by the NAO, and BIS has acted to constrain student numbers on HN programmes.

The validation model

Here a committee works with providers, which it recognises through an accreditation process, to approve specific courses. Subject committees have oversight of an area to maintain standards, and each course is validated against the committee’s expectations.

This was the CNAA model. Roger King writes about it in the same HEPI publication. It was held in high regard, a function of both the quality of the institutions that participated in it (getting in was not easy) and its commitment to standards.

Competition

The problem appears to be two-fold. Firstly that a validating university has too much sway over the product design – the McDonalds/Byron issue. Here the notion is that a university won’t let a new provider exceed the quality of the original product. This seems unlikely – but we know that the New College of Humanities has been to see ministers, and might have complained that they were impeded in validating courses at a higher cost (twice that of its validating university).

Perhaps more likely is the notion that a franchising company, like McDonalds, demands too much control to allow innovation because it is protecting its brand and the fee for a franchise is too high.

The other issue is direct competition. Despite the notion that Apple and Google or McDonalds and Byron might be in different segments of a market, there is a concern that a university would not allow a new provider access to degrees as these would be competition. Universities certainly don’t want to have other providers hoover up their students, but that’s rare.

A long time ago I experienced that very concern when I worked at a then small HE college whose degrees were validated by the nearby Russell Group university. We were astonished that staff at the university were worried that the same students might go to us, rather than them. Later, as student number constraints tightened, there was a different pressure as universities pulled numbers back from FE colleges. Most universities I know have held that unhelpful competition should be avoided (including the new universities at the start of the 20th century).

The new validation body will have to deal with a different sector – CNAA had neither funding nor planning powers, and you’d imagine a new body would have to deal with similar courses at nearby providers (especially an issue as the vast bulk of new providers are in London).

Growth and speed

Although the topic of these new providers could easily fill a book-length treatise, I do want to touch on a point that Stockwell makes about growth. Recently BIS has imposed a student number cap on alternative providers – effectively at the same time as we have seen it removed for the rest of the sector. BIS will allow a starting number, and then 20% growth per year – which she notes means it would take eight years to reach 1000 students.

Pearson College is an example of a smaller college, which (as Andrew McGettigan tweeted), seems to have had plenty of scope to grow. However, Pearson in its Edexcel guise knows all about rapid growth – having seen much of the growth of the alternative sector through their qualifications. The NAO noted between 2010/11 and 2013/14 students claiming student support for courses at alternative providers rose from 7,000 to 53,000 (NAO 2014).

Rapid growth has come with issues for some prominent providers. Concerns were raised about the growth of LSBF, for example. It was unclear whether its courses had been designated for 2014/15 (only emerging in December 2015 its student numbers had been capped at 1306 by BIS). It had 4979 students on HN programmes when the QAA visited in March 2015 but it was found not to meet the expectations for these programmes. It then lost its Tier 4 licence. In September 2015, its parent company announced that LSBF would be ‘withdrawing from designated and UKVI-licensed provision’.

Personally, I think the barriers to new providers have not been sufficient. We have seen a diminution of the controlled reputational range of UK HE as a result. The mess that BIS has made of their regulation in the period 2010-2015 was foreseeable (and indeed was foreseen). BIS is now regulating these providers mostly in secret, so it is hard to be confident that things are going well. The Government would like to move to a situation where a new provider can move to get degree awarding powers faster than a student on a three-year programme can get to finals – how can it possibly assess the aptitude (and integrity) of that provider? 

At present, it is too early to tell whether the new powers BIS has written for itself are working, too soon to change them again. But; this is a fundamental reason we need a new Act, as it should hand these powers over to the new regulator. Then it would be free to promote and support these ‘challengers’, while someone else looks after both the students’ and taxpayers’ interests. 

A version of this article appeared first on More Means Better

4 responses to “New providers, new analogy

  1. Wonkish note: When the CNAA was abolished in 1992, not all institutions validated by the CNAA got their own powers, so the Open University picked up those through an arm’s length outfit called Open University Validation Services, later reorganised into the OU’s Centre for Inclusion and Collaborative Partnerships.

    On the broader question, I really dislike conceptualising the question as being whether we need more or fewer barriers to new entrants. To my mind, arguing in broad terms for more or less regulation is as unhelpful as arguing in broad terms for more or less medicine. A better framing is whether the regulation is doing what it should with minimal side effects. (This is the good idea behind the Better Regulation Delivery Office nee Task Force.) It’s entirely possible to be getting both too much of the wrong medicine and not enough of the right one at the same time, and I think we have something of that situation here with regulation of new HE providers. It’s over- burdensome and unnecessarily anti-competitive on the one hand, and on the other is simultaneously in serious danger of failing to ensure the quality of provision that students must have and are in a poor position to enforce through a market mechanism.

  2. AP’s are not exempt from the UK quality code – see this document from last year on the QAA’s quality review process for alternative providers:

    “The review of quality assurance arrangements is carried out by peer reviewers –
    staff and students from other providers. The reviewers are guided by a set of UK
    Expectations about the provision of higher education contained in the UK Quality Code for
    Higher Education (Quality Code).” http://www.qaa.ac.uk/en/Publications/Documents/HER-AP-handbook-15.pdf

    Is there any reason why an institution which passes such a review should not be allowed to validate their own degrees?

    1. Passing the HE review is a necessary, but not sufficient, basis for gaining DAP. The nature of the review process is such that it could be layered onto a provider that is not financially stable. The HE Review doesn’t look at the quality of staff (in particular their engagement with the sector) or their engagement with scholarship.

      DAP is a gateway to a regulated system where HE Review is the intermittent health check. You wouldn’t want to apply the DAP criteria to a well-regulated provider every five years, but while there continue to be examples of institutions passing HE Review (or its predecessors) but then having excoriating Cause for Concern reports – and/or losing course designation – then new providers should be put through a rigorous test before gaining that status.

      For better or worse, the monopoly that the state has in granting degree awarding powers has served the UK well – the controlled reputational range (albeit still with our obsession about two universities) held well.

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