The rising tide

Last night The Guardian kicked off a major new investigation in to how some private HE colleges are abusing student loans. These revelations, along with those that are planned to follow it over the coming days, are damaging to the whole sector. With the Queens Speech just days away, the Government has one final chance to provide the legal underpinning to allow respectable institutions to thrive, and crack down on those that are exploiting the system.
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Last night The Guardian kicked off a major new investigation in to how some private HE colleges are abusing the publicly subsided student loan system. The scale of the deception these colleges deploy is breathtaking and the revelations, along with those to follow it over the coming days, are damaging to the whole sector.

In 2011 David Willetts announced his intention to drive supply-side reform and allow new entrants in to the market in the belief that this would create dynamism and competition in other parts of the sector. It was to be a ‘rising tide that raises all boats’ as he put it in a speech to Universities UK in February 2011.

The plan was met with scepticism on this site and elsewhere, and seemed predicated on a complete misunderstanding of how the UK higher education market functioned.

But it was the failure to follow through and implement these reforms sustainably that has proven to be the biggest mistake. The market experiment might have at least been made safer (if still remaining misguided) had it been underpinned by legislation and a regulatory regime that protected students, responsible HE institutions and the public interest.

However the Government calculated that introducing HE legislation would be more politically damaging than doing nothing because it ran the risk of replaying their wounding ‘original sin’ of raising fees. The Opposition, media and others would have seized on the opportunity for proper Parliamentary scrutiny of the Government’s HE reforms, feeding a wider public debate – and rightly so.

Instead by prioritising politics over good policy, the Government oversaw a patchwork regulatory regime strung together with good will and a prayer – but it was always going to be inadequate in its ability to deal with deliberate wrongdoing such as that exposed this week.

Because mainstream higher education ‘owns’ its standards, regulatory regime and processes for developing and monitoring both, it designs systems that assume their members are basically respectable institutions, keen to ‘play by the rules’ – and yes capitalise on favourable Government policy. But not deliberately attempt to defraud students or taxpayers. And without the legislative teeth to notice, let alone the ability to root out and stymie such behaviour, the patchwork settlement was always going to be hopelessly insufficient.

The resulting stories of corruption and abuse are reminiscent of the Individual Learning Accounts scandal, excellently recounted in the recent The Blunders of Our Governments. As King and Crewe point out; when Governments are naïve about the implications of their policies and how people will abuse them, deaf to the warnings they are given, fail to learn from past mistakes and act out of short-term political interest; they are prone to blunder.

The first serious warning signs that the failure to regulate could lead to a full-blown blunder were last November. Then we learnt private colleges were over recruiting HNDs and HNCs leading to BIS, the taxpayer and the sector ultimately having to fork out for the bill because of the malicious behaviour of a few.

At the time, although agitating for fresh legislation in different ways both publicly and privately, I was still predicting that the Coalition could get away with doing nothing. But they needed to be lucky because another big scandal could derail their political assumptions and force some sort of action.

Last night The Guardian began publishing the first in a series of damning revelations focusing on the behaviour of a number of private colleges.

The first in the firing line is the London School of Science and Technology (LSST) – also known locally as the ‘ATM’ because of the ease by which ‘students’ were withdrawing public money via the loans system for Edexcel-accredited HND courses. The fraudsters didn’t bother to show up to classes and the college was just happy to pocket the fee money.

A chain of corruption enabled by this Government’s failure to adequately regulate student numbers and student loans having encouraged new providers to proliferate and access both.

The story and those that will follow it in the coming days are not just about LSST, and others yet to be named directly. They speak to all UK higher education because they harm the reputation of the whole sector and damage confidence in the system at home and abroad.

At time of writing, it is not yet clear whether this investigation will ‘cut through’ (politician speak for stories that gain traction in the public outside of sector specialists). However I suspect it will, because unlike the over-recruitment stories from November, its implications are much easier to understand.

With one national newspaper giving the story such sustained prominence, other outlets are likely to add commentary and follow-up pieces in print and broadcast media. This will only add oxygen to the story, give it greater prominence and potentially allow it to ‘cut through’ in a way the Government and sector are understandably wary of.

But some good could come from all this. It’s just under two weeks until the Queen’s Speech and so as we enter this Parliament’s final opportunity to legislate, the Government has one last chance to give the respectable HE sector the legal and regulatory framework it needs to thrive, and show the con artists the door.

And the respectable HE sector (both ‘traditional’ and ‘alternative’) must also be visible in making its own demands for action.

Because the next few days represent a dangerous moment. For UK higher education whose reputation is on the line and for the Government that is supposed to be responsible for protecting, promoting and sustaining the sector. Both have much at stake.

With the world watching, and with one final chance to right the wrongs born of 4 years of failed policy, the Government must act now to stop their rising tide becoming a flood that drowns us all.

3 responses to “The rising tide

  1. At the HEPI-HEA Spring Conference yesterday, David Willetts, Minister of State for Universities & Science, commented that: “we will need a legal framework to provide more coherence for the current system”. Later in the day, Anthony McClaran, CEO of QAA, Rob Behrens, CEO of the OIA and Rachel Wenstone, VP Higher Education, NUS all called strongly for new regulation to protect students’ and tax-payers’ interests. All three organisations along with others including UUK and HEFCE have worked together on the Regulatory Partnership Group to set out the principles needed to underpin new regulation, achieving an important level of consensus – the HE sector itself has done a great deal of practical and political work to move the agenda forward on regulation. However, our Minister also commented that there was unfortunately “no appetite among colleagues in Parliament” for a new HE bill. The type of scandals that the Guardian is investigating have already happened and been picked up in the US by the Federal Department of Education – and BIS, our Minister and other stakeholders have also been fore-warned of what the UK should do in the light of the US experience in a 2011 HEPI Report. The real scandal is that despite “students being at the heart of the system” and tax-payers’ interests being the job of government and Treasury to protect, that political self-interest still trumps all. No wonder public trust in politicians is so low when those in government don’t do the jobs they are paid to do.

  2. Compare and contrast Wales, where a new HE bill is being promoted. I:ve blogged about this at:

    http://sweepingleavesblog.blogspot.co.uk/2014/05/squaring-up.html

    I wonder also whether there’s a distinction to be drawn between alternative providers who are using the same tools as public providers and those that operate in a parallel system. I’ve blogged also on the changing profile of institutions which recruit through UCAS, which has some interesting data.

    http://sweepingleavesblog.blogspot.co.uk/2014/04/say-hello-wave-goodbye.html

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