Unfinished Business?: Higher education legislation

In this report from the Higher Education Policy Institute (whose remit is to identify important policy issues in higher education), Nick Hillman, former advisor to David Willetts, examines the need for changes to higher education regulation, to deliver a level playing field.


From the HEPI website
Commenting on his first Hepi report, Unfinished Business? Higher education legislation, the new Director of the Higher Education Policy Institute (Hepi), Nick Hillman, said:
“The Coalition promised a level playing field for all higher education providers. But that has not happened. Critical features of English higher education are different depending on the type of provider. They include fees and loans, the treatment of international students, VAT, degree-awarding powers and student complaints. In place of a level playing field, we have an unkempt meadow.
“There is still a case to be made for having the same rules for different providers. There is also a case to be made for an equitable, rather than equal, system with risk-based differences. But the case for maintaining the messy status quo is not nearly as strong.
“Political parties need to say whether they will support a new legal framework for higher education. The answer may not affect their short-term electoral fortunes but it will affect the educational fortunes of students, as well as the long-term reputation of our higher education sector.”
Hillman recognises that there is little to be gained electorally for any political party in supporting changes to HE regulation as part of their campaigning in the next election.
Acknowledging the current state of the HE market, Hillman identifies 8 pinch points that must be addressed when asking the following questions about the future of HE in the UK:
  • What exactly are the differences in the regulation of HEFCE-funded providers and alternative providers?
  • Which elements of the current regime that apply to HEFCE-funded providers should be spread to others – and vice versa?
  • What differences should there be between insitutions with their own degree-awarding powers and others?
  • Is a level playing field still desirable and what would it look like in practice?

1. Tuition fee loans

A key question for policymakers is whether to continue

maintaining the differential in tuition fee loans, but not

maintenance loans or maintenance grants, according to

whether the institution is funded by HEFCE or not. The current rules run counter to the concept of a level playing field, although they also suggest it is possible for the alternative sector to grow rapidly even while their students are entitled to a smaller tuition fee loan than HEFCE-funded providers


2.Tuition fee caps

The current position has emerged as a consequence of

more thought being applied to the HEFCE-funded sector than to alternative providers, which have nonetheless grown considerably since the two-tier fees cap regime was legislated for in the Higher Education Act (2004). Each of the three options would have a different impact on the future diversity of the sector and it is time for a more conscious decision on what fee cap, if any, should apply to alternative providers


3. Research funding

Although not all private providers are interested in being involved in research, some such as Buckingham ( a not for profit) have expressed interest in being able to access this HEFCE funding stream. However, currently institutions cannot pick and choose which bits of HEFCE funding and regulation they wish to sign up to.

4. Renewal of degree-awarding powers

In the absence of legislation, alternative providers will

continue to face more onerous duties in maintaining their

degree-awarding powers than other institutions. Given their

greater likelihood of a change in ownership, this may be

appropriate. But it is another important area where a level

playing field was promised but has disappeared by default

rather than as the result of a conscious decision.


5. Working rights of international students

Recent changes in migration regulation have tightened the rules applied to international students particularly at private providers to remove bogus institutions from the HE ecosystem and protect the very good work that UK HE does in this area and its reputation.

The Coalition is committed to educational exports and a

diverse higher education sector but their migration policies are a barrier to both. Some believe the Government could lose if legal action were brought by alternative providers opposing their differential treatment on students’ working rights. So the current situation may prove unsustainable even without premeditated Government action

6. VAT exemptions

For profit HE providers are generally liable for VAT, many other providers who receive funding from HEFCE are not

‘It is difficult to see how the Government can

effectively open up the higher education sector to competition from for-profit providers without levelling the VAT playing field’


7. External degrees

A anomaly exits in terms of the student support that can be accessed , when a student is taking an external award at a different Inquisition – student support is available depending on the nature of the teaching institution. This means that a student studying an award, franchised from an awarding university, but delivered in an FE college would receive student support, but the same student studying the same award in a private college could not access support.

The report notes:

When there is a looser relationship between a
teaching institution and an examination body than in the usual franchising and validating arrangements between alternative providers and universities, there can be an explosion in student numbers and questions are raised about quality control.


8. Office of the independent adjudicator

The report notes that some students are protected better than others.

• HE in FE students have different access to the OIA

depending on the precise franchise arrangements of

different universities;

• students at overseas campuses of English and Welsh

institutions are not always covered; and

• students studying at colleges with Foundation Degree

awarding powers are not covered.

Also international students are more likely to use the services of the OIA, and international students are more likely to attend private providers.


Against each of the 8 pinch points, Hillman identifies how each of the different forms of regulation apply to different types of providers, and how this lack of consistency of application of regulation and practice means that there is not a true level playing field for HE providers.

Hillman concludes with reiterating the view that although this is not electorally significant, it is a subject that needs to be tackled by government because it “will affect the educational fortunes of thousands of students and the long term reputation of the UK’s higher education sector”.