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Alternative provider expansion – 1st figures for 2013/14 published

January 23, 2015

On Wednesday, the Student Finance England quietly published the supplementary tables to November’s ‘2013/14 statistical first release’. Despite sounding rather dull, these tables give a breakdown by institution of payments made by the Student Loan Company for maintenance grants, maintenance loans and tuition fee loans. They also differentiate between ‘alternative’ and ‘public’ providers.

The new figures confirm that public funding to students at private providers has now touched £600m per year, despite the suspension of funded student recruitment at some of the fastest growing colleges in November 2013.

In academic year 2013/14, £160.25m of maintenance grants were issued, as were £192m of tuition fee loans and £246m of maintenance loans. Roughly 45 000 private students benefited from a total of £598m. When the coalition came to power, the equivalent figures were 4000 students accessing £30m.

The main growth has occurred since 2011 with 2012/13, when the total outlay leapt from £100m to over £400m in one year. Growth was so rapid that the first figures for 2012/13 – released this time last year – initially thought only £270m paid out. That discrepancy of over £100m was due to the manner in which private providers enrolment late in the year, some with monthly start points. These first release figures therefore come with a caveat – they may go higher when all the data is in.

I have not had an opportunity to examine the new figures in detail, but London School of Business & Finance and its sister college, St Patrick’s International jump out.

In 2011/12, St Patrick’s had roughly 50 funded students, LSBF none. By 2013/14, St Patrick’s had over 6600 and LSBF over 4000, both are using Pearson’s HND/HNC qualification. In the last two years, students at the two colleges have received over £250m with £75m of that going straight to the institutions as tuition fees backed by the Student Finance England. That’s a big public subsidy for a new market entrant, particularly when you consider that £50m went to for-profit St Patrick’s, which is now owned by a Dutch holding company.

Even more staggering is that Martin Donnelly, the accounting officer for the department of Business, Innovation & Skills, told a Public Accounts Committee hearing in December that BIS had considered removing St Patrick’s ‘designation’ for student support in the Autumn. The reason? ‘Financial sustainability’. Despite all that public funding? Indeed. And one further point that’s relevant here – when it was first designated St Patrick’s had never submitted audited accounts to Companies House and BIS did not request any. It was only last year when designation was tightened up that colleges were required to do so. But we now know that over £1.1bn of grants and loans went to private students in the 3 years prior to that omission being rectified. Chapeau!




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