The steps being taken against the alternative sector to rein in costs speak more of panic than of?carefully crafted policy

In their 2011 White Paper Students at the Heart of the System, Vince Cable and David Willetts stated: ¡°We must move away from a world in which the number of students allocated to each university is determined in Whitehall.¡± At the same time, ministers committed to supporting a more diverse sector, including alternative providers.

The announcement in last week¡¯s Autumn Statement that the limits on the number of students English institutions are allowed to recruit will be abolished by 2015-16 is therefore a logical outcome of the government¡¯s policy. In?normal circumstances, the sector should welcome the move with open arms. Of course the state shouldn¡¯t put a?cap on aspiration through arbitrary controls.

But Chancellor George Osborne spoke only a few days after the Department for Business, Innovation and Skills had informed private providers ¨C without warning and well into the 2013-14 academic year ¨C that they faced a retrospective cap on student numbers for the year. That new students have already enrolled, progression students are in place, recruitment plans are established for semester two and commitments have been made to students, staff and suppliers cut no ice.

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Even worse, Student Finance England suspended all elements of funding to European Union students at alternative providers. This action is discriminatory, a reversal of previous government policy and is questionable under EU law.

The steps being taken against the alternative sector to rein in costs speak more of panic than of carefully crafted policy, and while they may only be short-term measures, they could cause long-term damage to the development of more diverse higher education provision.

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The measures were a reflex response to the government¡¯s failure to monitor potential changes in demand for funding. After it became difficult to sponsor international students, some private providers focused on attracting EU students to study for higher national diplomas and certificates. But this threat was obvious two years ago and action should have been taken then.

It is not reasonable to solve a problem ¨C and one that is not of their making ¨C by penalising well-managed institutions that support government policy and offer an excellent student experience, value for money and high levels of graduate employability.

It is also unacceptable to introduce new controls to the private sector alone and to focus on students from continental EU members who (with the exception of the criteria they must meet to qualify for maintenance loans) have the same rights as their UK peers.

Introducing these student number controls now, when they are set to be abolished in two years¡¯ time, is farcical. It makes efficient planning for the future difficult, hinders institutions with reasonable (although ambitious) growth plans and deters new providers.

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A further ill-conceived element of the government¡¯s approach is that the controls are on the number of students who are eligible for loans ¨C not those who go on to take them up. In the state sector, about 95 per cent of students take out loans, but in some of the alternative sector (particularly at recognised bodies), take-up is less than 25?per cent. Thus, some private institutions are taking pressure off the public purse, particularly since their students can only receive fee loans of up to ?6,000 a?year, rather than the ?9,000 enjoyed by their counterparts in the state sector.

In 2011, ministers promised to level the playing field for higher education institutions of all types, including alternative providers, but their recent actions have not made it any more level. In?fact, the playing field is becoming so tilted against alternative providers that some institutions may fall off ¨C or is that the?idea?

Looking further ahead, the abolition of number controls will be welcome, but we still need to read the small print. The wording of last week¡¯s announcement suggests that private providers will be ¡°freed in a similar manner¡± to publicly funded ones. ¡°Similar¡± is not the same. Ministers need to reassure the?sector that in 2015-16, alternative providers will not find themselves unfairly constrained once again.