The National Audit Office (NAO) is set to probe private colleges over allegations of misusing millions of pounds in public funds. Margaret Hodge MP, Chair of the Public Accounts Committee, has requested an NAO report into what she describes as 'shocking and serious' claims.
A Guardian investigation has uncovered significant issues within the sector, including the London School of Science and Technology (LSST) in Wembley, where staff allegedly reported low class attendance. Undercover filming at the college showed a classroom with a lecturer but no students, earning it the local nickname 'the cashpoint' due to the ease of accessing student finance.
The sector's rapid growth has been fuelled by reforms introduced by former Higher Education Minister David Willetts in 2011, allowing private colleges increased access to public funds through student loan financing. Public funding has escalated from £40 million in 2010 to an estimated £900 million this year, with many institutions recruiting students without caps on numbers or cost.
Ms Hodge expressed her dismay at the findings, stating she is 'pretty shocked' by the allegations of misuse of public funds. She suggested that hundreds of millions, if not billions, of taxpayer money may have been diverted to enrich individuals and colleges rather than support education.
The University and College Union (UCU) had previously warned the Public Accounts Committee in 2013 about potential misuse of public money in the sector, but their allegations were not taken as seriously at the time. Ms Hodge has admitted regret for this oversight and confirmed that civil servants from the Department for Business, Innovation and Skills will be held accountable for allowing a 'loose system to exist'.
Ms Hodge's intervention follows criticism of the government's approach to regulating private institutions. She stated that she is particularly concerned about genuine students paying tuition fees of £5,000-£6,000 who may not have received the quality education they expected.