The Public Accounts Committee has accused the government of wasting millions of pounds of public money on inadequate higher education providers. Under plans rolled out by the Coalition government, there has been a rapid expansion of higher education providers with over 140 currently operating in the UK. However the select committee has found the sector was expanded without proper regulation.

The committee also found that almost £4m was wasted on schemes aimed at ineligible overseas students. The government is accused by the committee for providing to EU students who had either chosen not to take them or could not provide their edibility. Margaret Hodge, chairperson of the committee said: “The department pressed ahead with the expansion of the alternative provider sector without sufficient regulation in place to protect public money”.

The University and College Union have been warning the government regarding the impact of their plans for years. Mrs Hodge added: “The department was explicitly warned by the Higher Education Funding Council for England and the Universities and College Union about these risks, but chose to disregard them both before and after implementation”.

Higher education providers can be either private companies or hold charitable status. Most of these education providers cannot claim public money directly, however they can access funding through the Student Loan Company.

Between 2010 and 2014, the total amount of public money paid to students at alternative providers, through tuition fee loans, maintenance loans and living grants, rose from about £50m to £675m.

However, the Department of Business, Innovation and Skills has said that alternative higher education providers play a “Significant role in widening access to education”.
Professor Aldwyn Cooper, who chairs the Independent Universities Group, also noted that many of higher education providers offer “first rate value for money, employability and student experience”.