The growth of private & for-profit HE providers in the UK: Implications for policy and practice Professor Robin Middlehurst Kingston University

Outline Categories of Private Provider Contexts, policies, rationales (UK & beyond) Scale & scope of Private Providers Myths & Realities Implications for policy & practice

Categories of Private Providers AccessElite/semi-eliteReligious/ cultural Non- elite/demand- absorbing OwnershipFamilyEntrepreneurCorporatePublicly- traded International chains MissionFor-profitNon-profitReligious UK - function Offering a degree with UK DAPs Offering own non-UK awards Offering degrees of publicly-funded universities PPPs in content design & delivery UK - governance Publicly- quoted corporation (or subsidiary of) Private equity owned Private company (for- profit) Private company (non- profit) Charitable status

Context - Knowledge Economy Demands on universities outrun their capacity to respond… -More students of different types seek access -More segments of the labour force demand university-trained graduates for specialized occupations -Governments expect more to be done at lower unit cost (Governments wont support HE at same unit-cost level as for elite arrangements) -Knowledge outruns resources: No university, & no national system of universities, can control knowledge growth. (Clark, B. (1998). p129-30)

Context – Mass Higher Education Mass enrollment has created a need for diversified academic systems – hierarchies of institutions serving different needs & constituencies. Diversified systems – necessary for financial, academic & vocational reasons – will continue to be central to higher education worldwide. In general, governments will manage the diversification with steering mechanisms that will control the scope & nature of academic systems. (Altbach, P. (2009). p157)

Context - Borderless Higher Education Blurring of boundaries (functions no longer distinct) Convergence (of activities, markets, providers) Unbundling & commodification (of processes & provision) Globalisation, internationalisation Universities/polytechnics; HE/FE; public/private/corporate; education/media; Mode 1/Mode 2 research; national/international/glocal.… (Cunningham et al, 2000; Bjarnason et al, 2000; Gibbons et al, 1994; Nowotny et al, 2001; Marginson & Rhoades, 2002)

UK – Policy Context Separation of teaching & research funding (growth in student numbers not matched by equal growth in research funds) 1988 – Ed Reform Act - some polytechnics & advanced FE colleges become HECs 1992 – F& HE Act – polytechnics with Privy Council approval have right to be called universities 1992 – HEQC – 3 categories: T-DAPs, R-DAPs, University title (not mandatory) 1995 > Growth of TNE 1997 – Dearing Review – favoured FE expansion 2003 – White Paper – proposal to break link between research & university title (no need for R-DAPs to be called a university) 2004 – HE Act – relaxation of criteria for university title – Browne & White Paper – HE as private benefit NB - Devolution

Rationales for PP growth - globally Unmet demand for TE (qualifications & skills) Market(s) willing to pay tuition fees Shortage of public funds to meet demand Emergent entrepreneurs able to build private HEIs Favourable government policies & regulatory environment (incl. incentives) Government challenge to public HEIs to improve quality, enhance flexibility, increase choice (Fielden et al, 2010, p11)

RegionPrivate % of total enrolment Numbers of students in private HEIs Private HEIs as % of the total Numbers of private HEIs Africa m Asia36.418m57.818,206 Latin America m71.37,090 Europe m25.72,136 USA m61.32,667 World totals31.335m55.730,555 Source: PROPHE (2010). Public and private higher education shares for 117 countries, (updated November 2010) Note: These figures are amalgams of differently defined data for different years ( ) and are intended to give an approximate feel for the scale of provision. Public & private HE - global

The private sector represents an important share of total enrollment in emerging markets at all levels Share of enrollment in Private Education Institutions by Region (2009) The share of private enrollment is highest in South Asia, Latin America, and East Asia and Pacific It is significantly higher in secondary and tertiary education than in primary education Enrollment in private education grew by 58% ( ) while public enrollment grew by only 10% in the same period. At the tertiary level, private sector growth has stabilized

The private sector is not yet used to its full potential in emerging markets Private % of total higher education institutions and enrollment in East Asian countries Source: PROPHE International Databases and WDI, in Putting Higher Education to Work Skills and Research for Productivity and Growth, World Bank 2011 Private sector grew quickly in countries of the middle technology cluster (Indonesia and the Philippines) and from the lower technology cluster (Cambodia) but face a quantity-quality tradeoff. Sectoral growth is not always accompanied by quality Private sector can play a critical role in supporting more diversified skill provision

UK – Scale of PPs Minimum of 674 privately-funded HE providers (75% in London & SE) 27 lead providers of large provider groups (incl. multiple campuses & subsidiary colleges) Most PPs are small (in UK & Europe) 217 < 100 students 35 > 1000 students 5 > 5000 students Est. of 160,000 HE learners in (c/f ca. 2.5m in HEIs) Majority are for-profit (54.6% - typically Business & Management); non- profit (39% - typically arts/religious); Other – 6.4% Fees: < 3k-£9k + (pre-2012 data) (Fielden et al, 2010; BIS, 2013; UUK, 2013)

UK - Scope of PPs - Students Full time %; Part-time 21.6%; Distance learning 18.1% UK domicile 49%; International non-EU 41%; EU 10% (Just under 80,000 UK-domiciled students) Full-time students – in creative arts/design; complementary medicine, law Part-time students – architecture/planning; business/administration; education 65.3% - aged % - in paid employment (30% unemployed) 52:48 male : female ratio (BIS, 2013)

UK – Scope of PPs - Provision Non-specialist (offering range of provision) % Business, Management, Accountancy, IT % Religious colleges – 9.2% Arts-focused – 8.9% Science & Technology focused – 4.6% Alternative & complementary medicine – 2.4% 54% offer post-graduate courses; also first & sub- degrees Majority only offer 1 or 2 courses; 18% > 4 undergraduate-level courses (BIS, 2013)

Myths & ClaimsRealities Its a separate sector Not a homogeneous sector, very diverse providers & boundaries blurred with HEIs Private sector poses threat to traditional universities Far fewer students studying in PPs: 160,000 v 2m+ in HEIs Large number of PPPs – eg 30+ pathway providers (Study Group, INTO, Navitas) PPs increase & widen capacity? Students in PPs are very diverse (ethnicity, age, subject, gender) PPs increase choice for students Flexibility of time-tables, modes of study, awards Specialisms offered – eg mode of study & subject Range of fees & modes of payment

Myths & ClaimsRealities PPs are all low qualityUK data – N=1495 students 86.1% satisfied with course (c/f 86% NSS ) 82.4% satisfied with provider (c/f 85% overall satisfaction NSS – 2012) 82.3% satisfied with accrediting organisation Global – elite private providers top league tables High quality private providers in Kenya, Malaysia, Bangladesh, Japan, Korea PPs are expensive Undergraduate fee range: from £3k to >£9k

Why choose PPs? N = 1495 students Personal interest in the subject – 93.6% Career relevance – 90.5% Range of options/modules available – 79.7% Reputation of provider – 86.9% rated this as important Range of subjects offered – 63.4% Fee levels – 57.4% Facilities – 59% (BIS, 2013)

Implications for practice across providers Innovation in teaching, learning & research (within & across sectors) New organisational structures & partnerships Staffing opportunities (& staff development) New approaches to QA? Blurring of boundaries, shifting missions? Need for distinctiveness?

Implications for policy Regional variation Subjects & associated challenges Employment Regulation & de-regulation QA Fraud Level playing field?

Regulatory challenges Four types of regulation: DAPs, Title, course designation & Home Office BIS, HEFCE, QAA were all involved, now HEFCE i/c Operating Framework is aimed at equal treatment with the publicly- funded sector V wide diversity of sector makes this difficult, particularly in governance Coming into SNC net & reporting (KIS etc) – opposed by many PPs FP & NFP treated the same Still large data gaps (eg TNE) – policy blind

Key References Altbach, P., Reisberg, L. & Rumbley, L. (2009). Trends in Global Higher Education: Tracking an Academic Revolution. Boston, Boston College/UNESCO. Bjarnason, S., Davies, J., Farrington, D., Fielden, J., Garrett, R., Lund, H., Middlehurst, R., Schofield, A. (2000). The Business of Borderless Education: UK Perspectives. Vols.1-3. London, CVCP (now UUK) Clark, B. (1989) Creating Entrepreneurial Universities: Organizational Pathways of Transformation. Paris, IAU/Pergamon Press. Cunningham, S., Tapsall, S., Ryan, Y., Stedman, L., Bagdon, K., Flew, T. & Coaldrake, P. (2000). The Business of Borderless Education. Canberra, DETYA Fielden, J., Middlehurst, R., Woodfield, S. & Olcott, D. (2010). The growth of private and for-profit higher education providers in the UK. London, UUK. Gibbons, M., Limoges, C., Nowotny, H., Schwartzman, S., Scott, P., & Trow, M. (1994). The New Production of Knowledge: the dynamics of science & research in contemporary societies. London, Sage Hughes, T., Porter, A., Jones, S. & Sheen, J. (2013). Privately funded providers of higher education in the UK. BIS Research Paper no June 2013 Marginson, S. & Rhoades, G. (2002). Beyond nation states, markets, and systems of higher education: A glonacal agency heuristic. Higher Education. 43 (3) Middlehurst, R. & Fielden, J. (2011). Private providers in UK Higher Education: Some policy options. Nowotny, H., Scott, P. & Gibbons, M. (2001). Rethinking Science: Knowledge in an age of uncertainty. Cambridge, Polity