Homeopathic education from 'alternative providers'.

Are you a student at an 'alternative provider'? You could be forgiven if you're not sure - the terminology is deliberately obscure (and pedagogically suspect). 'Alternative providers' are usually private corporations which happen to be in the education business, teaching mostly HNDs awarded by the giant vampire squid that is Pearson Education, though a small number are non-profit set-ups.

Like 'alternative medicine', 'alternative providers' of education (I hate the idea that we 'provide' education like a workhouse overseer ladling out porridge to waifs) appear not to work. Andrew McGettigan's explosive article in the Times Higher Education Supplement points out that a shockingly low number of students at one particular institution submit work or attain the qualification, despite being funded as full-timers for two years and having five years in which to complete the course. Recruitment material strongly promotes the state funding available to students recruited from the EU, while the quality assurance bodies have little or no access to retention and progression statistics.

The USA has long had a system of private provision of higher and further education, and a shorter but notorious history of provision by for-profit organisations. Most notorious of all is Phoenix, which started off as a decent enough degree-completion outfit, but later became the biggest 'university' in the US when it listed on the stock exchange, with half a million students at any one time. The problem was that only 40% of those students left with a degree: the rest stayed, on average, enrolled for four months. Phoenix is only the worst and most prominent example of these vulture colleges.

Why do they exist? Simply as a means to channel taxpayers' money away from the state and established non-profit HE institutions towards corporate America: it's an ideological move. The free-marketeers are convinced that for-profit organisations are efficient and competitive. Perhaps they are, if the bottom line is all you care about, which I don't think should be the case with education. Every penny of shareholder dividend and executive pay (and Phoenix's profit margins, despite massive student drop-out rates, were around 27% while 18% of the budget was spent on teaching) is removed from research budgets, equipment provision, student support and so on. Economies are made be removing the essential bits of the university experience: being taught by highly-qualified educators at the cutting edges of their fields. Instead, you increase class sizes, cut contact hours, teach from a website or textbook, and dump complicated subjects. Business English ahoy! This also means – pleasingly for a government and indeed political establishment across parties that doesn't recognise non-market thought as valid – that critical thinking will be very much off the menu. Forever.

The quieter motive of course is to lance what right-wingers see as the liberal boil: universities (as Mr Gove's assault on university teacher-education demonstrates) are thought to be hotbeds of opposition to the onward march of market progress.

The providers of for-profit education are, however, not free-marketeers. Like Serco, G4S and co., they pose as competitive capitalists, while making all their money from the state. The UK recently followed the US in providing state monies to private education providers. In the US, companies like Phoenix simply sucked on this cash pipe and forgot to even pretend that they existed for educational purposes. The cash didn't follow on attainment, just enrolment, so there was no incentive to ensure only students with potential for completion were enrolled, nor to ensure they stayed on the courses and gained their qualifications.

As one Phoenix student puts it, the organisation is

"kind of like a car dealership. They want to get you in the door," and "want you to have success with the car. They want it to go well for you. But if it doesn't, they've already been paid."

Instead, turnover became key: far more was spent on recruitment and marketing than on academic support. The shareholders aren't interested in attainment or whether their students should be taking on debt to pay for uncompleted or dubious qualifications, just as McDonald's shareholders couldn't care less about their customers' cholesterol levels as long as they keep ordering more.

The same happened in the UK. Hundreds, perhaps thousands, of private providers sprang up once the Tories and their Lib Dem colleagues authorised state funding. They employed agents across the EU and in the UK to recruit students, many of whom rarely if ever darkened the classroom door or troubled to submit work. The colleges were happy – they've been paid – and so were the students, who acquired a chunk of cash they had little intention of repaying either. So much cash disappeared for so little educational return that even this government had to suspend a swathe of these dodgy organisations, but the push is still very much on, and some very ill-advised universities and FE colleges have even supported this venture for no reason I can see. At least some of us traditional institutions still have a pang of conscience when Admissions recruit students whom we know aren't up to it: for the private providers, such people are the ideal customer. I'd love to see one or two of them invoke the Sale of Goods act and other consumer protection legislation, seeing as they've been turned into consumers.

This is one of the most cynical and scandalous stories of recent times, but it's also invisible (the banks and the DWP tend to dominate the few investigations into financial corruption, but we should be furious about it. For political reasons, a government decided that our money could be handed out to fly-by-night shysters to exploit vulnerable students and reward fake ones. I mention banks because they're a prime equivalent. Blinded by ideology, the government believed that the free market leads to 'best practice'. The banks stole from us, from each other and from the government via mis-selling, manipulation and crime (that's you, HSBC). They couldn't help it: that's what capitalism is. It's not about level playing fields and honour. Companies spot advantages and take them. The private providers of education were offered free money without regulation or responsibility, and they took it. That money was taken from funding for reputable universities and FE colleges with a history and reputation for fairness and student support. Higher Education funding is being reduced, and increasing chunks of it are being reserved for these vampire colleges. Massive debts have been loaded on to taxpayers and good educators have been weakened, all because a government blinded by theory (and their personal shareholdings) abandoned students and embraced rip-off merchants. They aren't educators. They're tax miners who happen to be doing a little educating along the way (to flog the 'alternative' point to death, they're taking our money to provide homeopathic levels of education).

There's an election in May. Just saying.

Your Uppal round-up

Hi everybody. As it's a while since I updated the world with the activities of my local MP, elusive millionaire fantasist Paul Uppal, here's a bumper edition. You'll laugh, you'll cry, you'll vote to throw him out in May 2015. 

Firstly, Paul's previously noted hilariously unconvincing photo-opportunity following the budget has attracted the attention of better-known satirists than I. Here's Private Eye's take on George's Beer and Bingo debacle:

Insult of insults, they don't even deign to mention who the 'next man' is. But we know, readers. We know. Incidentally, I haven't seen any mention during the Beer/Bingo coverage of the long-standing working-class suspicion of the continuing links between the Conservative Party and the brewing industry. There were even songs about it. Here's Paddy Ryan's 'The Man That Waters The Workers Beer':



THE MAN THAT WATERS THE WORKERS BEER
Now I'm the man, the very fat man,
That waters the workers' beer,
Yes I'm the man, the very fat man,
That waters the workers' beer,
And what do I care if it makes them
  ill,
If it makes them terribly queer,
I've a car and a yacht and an
  aeroplane,
And I waters the workers' beer.

Now when I makes the workers' beer,
I puts in strychinine,
Some methylated spirits and a drop of
  paraffin,
But, since a brew so terribly strong
Might make them terribly queer,
I reaches my hand for the water tap,
And I waters the workers' beer.

Now a drop of good beer is good for a
  man
Who's thirsty and tired and hot,
And I sometimes has a drop for myself
From a very special lot;
But a fat and healthy working class
Is the thing that I most fear,
So I reaches my hand for the water tap
And I waters the workers' beer.

Now ladies fair beyond compare,
And be it maid or wife,
O sometimes lend a thought for one
Who leads a wandering life,
The water rates are shockingly high,
And meths is shockingly dear,
And there isn't the profit there used
  to be
In watering the workers' beer.

And if you've ever tasted Banks's beer (where George and Paul did their gruesome duet) you'll understand where the song comes from.

Anyway, that's enough of the comedy. Paul next popped up on Channel 4 News during a piece on why Asian voters aren't turning to the Conservatives. The obvious answer ('Paul Uppal') sadly wasn't featured, but after a quick chat with Paul's dad (presumably no non-relatives could be found to endorse him), we got some words of wisdom from the great man himself. And what words they were! In perhaps the most audacious instance of inclusion and revisionism in political history, Paul found a way to claim that Enoch Powell, his notoriously racist predecessor in the constituency, would have been pleased that Paul is the MP. You could have knocked me down with a feather. Enoch Powell predicted race war if immigration into the UK wasn't stopped (he later went to Northern Ireland to represent the unionists who'd immigrated into Ireland by force, demonstrating a keen sense of irony). To claim him now as some kind of kindly integrationist is beyond bizarre and into the realms of dishonest. Personally, I'm very pleased that Tory voters in the area are now prepared to vote for an Asian candidate. I just wish a) it wasn't Paul and b) they'd consider not voting Tory. But to appropriate Powell: breathtaking. To mix ethnic cultural references: that's chutzpah on a grand scale.

Finally, Paul also has a job as Parliamentary Private Secretary to the Minister for Higher Education, presumably a reward for his bravery in voting for £9000 tuition fees despite having a majority of 619 and a university serving the economically disadvantaged in his constituency. A while back, I wrote to him asking why the government hasn't projected HE funding streams beyond 2016, a break with normal behaviour. My suspicion – shared with education guru Andrew McGettigan and many of the experts I spoke to at an HE leadership event recently – was that it's simply because they have no clue and have given up. Instead, they've savagely reduced the teaching grant and slashed the support funding for disabled students, which I think we can all agree is the mark of a competent and classy administration.

Anyway, Paul wrote back saying that he couldn't currently answer my question and would get back to me later on. (In case you don't know: MPs have to respond to sensible letters from constituents and more people should take advantage of this). Teasing aside, this seemed perfectly acceptable to me: there wasn't any indication of slipperiness. A few weeks later, a substantial letter arrives.

The first paragraph is the normal waffle about HE being a paradise:

The principal aim of our reforms was to put higher education on a sustainable footing for the long-term. Our universities are now well funded and this is driving up the quality of the student experience while helping to stimulate economic growth. What is important is that we have protected our world-class higher education system; we have not deterred students from participating in HE and we have increased the participation of those from lower income backgrounds. 

Then we get on to the details.

As you are aware, the government has announced its intention to realise value for the taxpayer through sales of English pre-2012 income contingent student loans. The loan book will be sold in a series of tranches over a number of years. The first tranche of loans is expected to be sold by the end of financial year 2015-16. However the decision to proceed with first sale has not yet been taken. As is normal with transaction of this type there will be a value for money assessment made before each sale. 

'Realise value' of course means selling the student loan debt off to financial institutions. It automatically incurs a massive loss because the banks will calculate the non-repayment rate, build in a profit and offer the government a price far less than the face value. But it moves a debt figure on the government current account to an entry on the income list – essentially exchanging a reliable future income stream for the equivalent of a payday loan. As you can probably tell from the undertone of this paragraph, there's a considerable amount of uncertainty about whether the government actually can flog off the loan book. As non-repayments approach the 48% level at which the whole student finance model becomes economically pointless, the banks reckon it's a dog and aren't queuing up. 

The department will ensure that sales from the pre-2012 ICR loan book represent value for money to the taxpayer. A refined model has been developed to provide an accurate forecasts of future repayments. This will be used by government and purchasers to assess the value of the loan book. In reaching a sale decision, careful consideration will be given to the comparison between the value of the sale and the value of retention. 

We'll have to trust Mr Uppal about the value-for-money model because he doesn't provide it and I presume it won't be made public at all. Let's hope that their model is better than the one which led to the disastrous Royal Mail giveaway (disastrous for us, not for the Tory donors who snaffled up the shares at a bargain price before flogging them on at a huge profit). 

Current market conditions are favourable and BIS advisors have confirmed there is potential interest from a range of buyers in investing in the loan book. This has informed the estimates of potential proceeds of approximately £12 billion over a five year period. It has been calculated that the additional outline of loans for the expansion of students numbers over the forecast period will be more than financed by proceeds from pre-2012 loan sales. If the sale of the loan book does not go ahead or does not provide the expected receipts, The Treasury will need to consider the impact on public sector net debt. This will be a wider consideration of the state of the public finances, but will include the affordability of higher student numbers.

I'd love to know what makes him think market conditions are favourable. Graduates aren't repaying their loans because the country is in a deep recession; jobs are low-paid and often part-time, and because graduates are filling positions previously open to non-graduates. We are running a low-wage economy, quite deliberately. Labour did it, and the Conservatives are extending it, because their primary concern is corporate and elite profit, not sharing the wealth.

The second half of that paragraph bothers me. The Conservative Party recently removed student numbers from the existing university sector and transferred them to the private HE sector to kickstart it: not to improve the quality of education but an ideological act designed to damage existing institutions which are viewed in Conservative circles as Marxist enemies of freedom. An astonishing range of institutions appeared as if by magic, some of them very flaky indeed, and overloaded the student finances to such an extent that an emergency cap then had to be re-introduced. Now the cap is supposedly off again but nobody I've spoken to knows what on earth is happening. Clearly that last line refers to the possibility of numbers being cut again - and we all know that unfashionable former polytechnics like mine will be hit hard, while private and elitist universities will be protected.

Moving on:

The higher education finance projections are aligned with other areas of government expenditure in not going beyond the final year of the current spending review period, 2015 to 16. These reforms mean that higher education institutions on how well funded; this has been sustained through recession and is driving up the quality of student experience. Students now have a greater stake in their learning and their future but can expect to be protected should they go on to learn low incomes and do not repay their is loans in full.

I'm not entirely convinced by the argument that projection are in line with government methods. Universities are large, complex organisations which require stable and predictable funding arrangements, as governments have long understood. At the HE leadership seminar I attended, one finance director described the HE funding model as OK for universities but bad for the country, and I can understand their perspective. The system is in fact an accounting ruse, not a policy. After all, university funding has actually dropped (fees don't increase in line with inflation, other funding streams have been abolished) and been shifted from the state to the individual. 

I find the last couple of lines particularly depressing. I really resent the idea that students need £50,000 of debt to feel that they have a 'stake' in their education. It fails to recognise the innate benefits of higher education, and denies that students understand their education as contributing to the public good. Instead, it implies that education is simply a means to individual enrichment: the custom mentality writ large. 

I'm pleased that Mr Uppal took the trouble to write a substantial reply to my letter. I remain troubled, however, by both the economics and the ideology contained within. I hope you all write to your MPs asking for further enlightenment – and vote accordingly.

Update: HE finance expert Andrew McGettigan has unearthed the contradiction between this letter and what MPs were told. Read it all here.