Chair's statement: Financial support for higher education
2 December 2014
A statement from The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts:
Today’s NAO investigation has exposed the potential misuse of millions of pounds of public money, with EU students at some private colleges accessing public funds to which they were not entitled. It is incredible that 992 students from the EU who were not eligible for publicly funded support received a huge £5.4 million from the Student Loans Company before payments to them were suspended.
The Department went ahead with its reforms to expand the role of private colleges without ensuring there were controls in place to ensure that taxpayers’ money was used for its intended purpose of supporting higher education and not for private gain.
The number of students claiming support for courses at private colleges went up by an enormous 650% between 2010/11 and 2013/14, from 7,000 students to 53,000 students. Yet in 2012/13 more than 20% of students at some providers dropped out of their courses after the provider had received its tuition fees and the students their loans, compared to just 4% for the rest of the higher education sector.
This extraordinary rate of expansion, high drop-out rates, and warnings from within the sector ought to have set alarm bells ringing.
As Government hands more and more taxpayers’ money to private companies and institutions to deliver services for the public good, we have to be able to follow the taxpayers’ pound wherever it is spent.
I look forward to hearing from the Department for Business, Innovation & Skills, the Student Loans Company and the Higher Education Funding Council for England on 15 December about how they are getting on top of this.