The report by the Higher Education Commission, published tomorrow, warns that ¡°proper regulation¡± of the sector is needed to capture all higher education providers. It appears to highlight the risks posed not just by unknown new providers, but by private subsidiary colleges set up by universities.

England¡¯s funding council has previously warned that such offshoots could evade requirements to take part in Key Information Sets and subscribe to the Quality Assurance Agency.

¡°New market entrants are not facing the scrutiny they should, takeovers and complex corporate structures are being used to evade fundamental protections for students, and institutions are facing more pressure than ever to recruit students and crucially, therefore, bring in funding,¡± says the report, titled Regulating higher education: protecting students, encouraging innovation, enhancing excellence.

At present, unlike publicly-funded universities, private providers are not required to undergo full institutional review by the QAA (except for the small number with degree awarding powers) or to subscribe to the Office of the Independent Adjudicator.

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The report, co-authored by Conservative peer Lord Norton of Louth and Roger King, former vice-chancellor of the University of Lincoln, says that this growing ¡°unregulated¡± private sector ¡°has the potential to damage England¡¯s reputation as a leading provider of higher education¡±.

The failure of even small private providers and resulting damage to students could have a negative impact on the standing of the entire sector overseas, it argues.

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Lord Norton told Times Higher Education that one of the motivations behind the report was that there are ¡°so many new providers coming into the field¡±, without regulators knowing ¡°who they all are and what they are doing¡±.

The report recommends that all higher education providers be forced to subscribe to a common regulatory framework, enforced by a new Council for Higher Education.

The council, a new chief regulator for the sector that would build on the powers of the Higher Education Funding Council for England, would include a new Office for Competition and Institutional Diversity, focused on private providers including universities¡¯ private offshoots.

john.morgan@tsleducation.com