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MPs tear into government over uncontrolled expansion of private colleges

16 December 2014

An influential group of MPs has torn into the government over its failings to account for public money as it rubberstamped the expansion of private for-profit colleges.

The Public Accounts Committee (PAC) spent much of yesterday afternoon trying to get answers from bewildered officials from the Department for Business, Innovation and Skills (BIS) as to why the government had gone ahead with the massive expansion of private education providers without having proper quality checks in place.

The committee's chair, Margaret Hodge MP, told BIS permanent secretary, Martin Donnelly, that he was accountable for looking after public money and was failing. She described the private provider situation as a 'complete scandal'. She asked Donnelly how much public money at private colleges had been lost through students dropping out and fraud. Mr Donnelly said there was no such figure available.

Fellow committee member, Austin Mitchell MP, asked Donnelly why no one at BIS had heeded the many warnings from UCUabout the dangers of such rapid expansion. He pointed out that UCU general secretary Sally Hunt had written to BIS pointing to a series of high-profile public scandals involving for-profit companies and that she asked that further steps be taken to regulate them.

Six months later the government doubled the amount of student loan money available to students studying with private providers. Mitchell told Donnelly that, despite UCU's warnings, 'nothing was done, and you showered more money on them'.

The committee decided to quiz Donnelly and representatives from the Student Loans Company, private firm Pearson and the Higher Education Funding Council following a damning report from the National Audit Office, which Hodge described as 'one of the most shocking reports I've read'.

In 2011/12, 403 new courses at private providers were approved, against just 157 in 2009/10. Freedom of Information requests revealed that 100 courses were approved on a single day and that often courses were signed off within four days of application. Much of the expansion and the public money colleges acquired through student loans was in just a handful of colleges*.

Hodge told Donnelly such rapid expansion, where half the growth in student numbers had been in just five colleges, should have been a 'complete red flag'. She described herself as 'gobsmacked', telling Donnelly there were 'so many indicators and you ignored the ruddy lot of them'.

Conservative MP Stewart Jackson told Donnelly he 'should have been pulling your finger out a bit earlier than this and accused him of giving the committee 'a lot of old flannel and gobbledegook'. Having already said at the start of the meeting that the PAC would return to the issue of private providers before the election, Hodge concluded proceedings by saying the situation was 'nothing short of a scandal' and that the committee would return to the issue in March.

UCU general secretary, Sally Hunt, said: 'Members of the Public Accounts Committee were as flabbergasted as we have been over the government's refusal to heed our warnings about private providers. It beggars belief that they did not intervene earlier to stop this disastrous loss of public funds. I cannot remember a committee being quite so stunned or angry.

'It was rather disappointing that the ministers involved left their civil servants out to dry and we hope this situation will be addressed when the committee comes back to this issue next year. What was clear though, is that the scandal surrounding private colleges needs to be urgently addressed and some serious lessons learned very quickly.'

UCU has pulled together some of the Twitter highlights of a very difficult afternoon for those grilled by the committee, which can be read below.


Greenwich School of Management

London School of Business and Finance

St Patricks International College

ICON College of Technology











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Last updated: 29 July 2016