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Lifting student numbers cap will expose regulatory weaknesses, HEPI director warns

New primary legislation is urgently needed in higher education to regulate the market and prevent an explosion in costs and a fall in quality once student number controls are lifted, the Higher Education Policy Institute’s new director has warned.

In his first report for HEPI, Unfinished business? Higher Education regulation, Nick Hillman says lifting the cap on student numbers will highlight how outdated the sector’s current legal and regulatory framework has become as student loans will effectively become “transferable education vouchers” in a more market-driven HE system.

With no checks in place, the UK runs the risk of repeating the financial and quality control problems experienced in Australia when student number controls were removed there, he suggests.

The removal of student number controls is likely to affect the size of individual institutions and the level of competition between them, and introduce an element of price sensitivity.

But the biggest impact could be an increase in the number of people from underrepresented groups entering higher education, as “recruitment will be less of a zero-sum game”.

Under these circumstances, Mr Hillman warns that it “remains unclear who will pay if recruitment runs higher than 60,000 extra entrants a year and whether additional entrants would be treated as ‘off-quota’ students ineligible for financial support”.

While university groups fear the government will give itself “over-mighty powers” through secondary legislation in order to regulate the market, the absence of primary legislation means there may continue to be an unlevel playing field between public universities and private providers who have more freedom on tuition fee setting but are more restricted on the award of student loans.

Policy-makers and political parties need to offer a response to these challenges before next year’s general election because “the long term reputation of the higher education sector rests upon it”.

The papers concludes: “The last few years have proven that some flexibility exists in the current system to resolve challenges as they occur – for example through the ability to add extra conditions to the process for designating courses for student support. But this is not always completely watertight in legal terms and seems haphazard. New legislation is likely to prove necessary eventually.”

Get the full picture from HEi-know: Briefing Report 130