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The British government's apparent move to suspend the higher education bill will not automatically derail the expansion of private provision, according to government critics and leading private institutions.

It was reported this week that the bill, which was to be introduced in the Queen’s Speech expected in May, has been "indefinitely delayed," and is unlikely to be published before 2015.

The delay has reportedly been caused by coalition concerns about increasing the role of for-profit providers and Prime Minister David Cameron's unwillingness to tackle further radical reforms while facing battles on the National Health Service and welfare.

The higher education white paper, on which the bill was to be based, included moves to expand private, for-profit higher education by making it easier for such institutions to attain degree-awarding powers and the university title – as well as to ease the partial or complete buyouts of universities. The white paper also included plans to establish the Higher Education Funding Council for England as a regulator.

Aldwyn Cooper, chief executive of not-for-profit private institution Regent's College, said he was "really happy" about the latest developments on the bill. Maintaining the "gold standard" of degree-awarding powers under the government’s revised stance could "quite possibly encourage the expansion of good-quality private provision," he added.

Carl Lygo, chief executive of BPP University College, a for-profit body that already has degree-awarding powers, said: "I think it’s very likely that reforms will continue because many of them do not require primary legislation. I suspect that’s the discussion taking place within the government at the moment – can [it] achieve most of [its] policies without legislative change?"

Dropping the bill may allow students at some designated private providers to access state-backed loans, but with the institutions remaining exempt from certain controls – as at present.

However, Lygo said: "I know [the Department for Business, Innovation and Skills] takes the view that it can control private sector numbers by designation."

Lygo said that BPP had always argued that the government should not undermine degree-awarding powers by allowing reforms such as examination-only degree-awarding bodies. If the plans were dropped, it would affect education giant Pearson, which has been lobbying the coalition to become a non-teaching body with such powers.

The government’s exact policy on for-profit higher education will be tested by the takeover of the not-for-profit College of Law by a for-profit company. Some believe ministers can theoretically veto such a move as the college has degree-awarding powers – although the Quality Assurance Agency says that is not the case. 

Glynne Stanfield, a partner at law firm Eversheds, said: "It is really a question of whether this is a policy change on the part of the government, which [it] will exercise through BIS. Because a lot of the things that the public sector may want to do with the private sector can be done under current law."

Pearson, pursuing another route that may now become more attractive, is competing to buy the college and its degree-awarding powers in a field otherwise made up of private equity companies – with scope for rapid expansion into areas beyond law.

Meanwhile, Liam Burns, president of the National Union of Students, said that shelving the bill was "not a U-turn – it’s a way to avoid parliamentary scrutiny."

Howard Hotson, professor of early modern intellectual history at the University of Oxford, said the latest developments represented "a huge climbdown for the coalition in general, and for David Willetts [the minister with responsibility for higher education] in particular," as well as "evidence that opposition to radical reform … is having an impact in Westminster."

But, he added, it "does not mean that the proposed reforms will not be driven forward. It only means that they will be discussed and decided not on the open, transparent platform of Parliament, but through private and undemocratic negotiations with special interests.”

Martin Hall, vice chancellor of the University of Salford, said: "This isn’t a victory over the coalition or over Willetts or Cameron. It is a sensible outcome on a dialogue about these issues, which has been moving through the public domain." The "unintended consequences" of increased for-profit provision would include reduced student support at institutions seeking to cut costs to maximize shareholder value, along with a movement away from high-cost science and technology subjects, Hall said.


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