Watchdog to investigate private colleges’s potential misuse of millions

Following its report yesterday on colleges offering access to loans for students who don’t attend, the Guardian is claiming that Margaret Hodge has called in the audit office to investigate…

The breakneck expansion of private colleges should be investigated by the government spending watchdog, the chair of the powerful public accounts committee said yesterday.

Margaret Hodge MP, a former Labour education minister, said she had asked the National Audit Office (NAO) to draw up a report following what she said were shocking and serious allegations about the potential misuse of millions of pounds of public money.

She said there had been an astonishing growth in private colleges, which had benefited from increased access to public funds – from £40m in 2010 to £900m this year – after the higher education minister David Willetts brought in reforms allowing the sector to use student loan financing .

Hodge’s intervention comes after a Guardian investigation revealed that one college that had tripled in size since the rules were relaxed in 2012 was running poorly attended classes with tiny numbers of students.

A four-month Guardian investigation revealed on Wednesday that senior staff at the London School of Science and Technology (LSST), a college in Wembley, north-west London, alleged the institution was running classes with low attendance . The institution was referred to locally as “the cashpoint” because it offered quick and easy access to student finance.

When the Guardian filmed undercover at the college it found a classroom that had a lecturer but not one student.

The organisation of the school demonstrates flaws in the planned expansion of privately run higher education colleges unveiled by Willetts in 2011. Little known institutions were allowed to recruit students without a cap on numbers or on the cost to the taxpayer.

Speaking in her office at the House of Commons, Hodge said she was taken aback by the footage of students talking about how they could sign up for the loans and then not bother to attend classes.

“I’m pretty shocked,” she said. “[The Guardian] has raised some huge issues. We’re talking about many hundreds of millions, if not a couple of billions in taxpayer money that was set aside to support higher education.”

Hodge said it was potentially a misuse of public funds and that money may have been taken “out of the system to enrich individuals and colleges”.

She said she felt sympathy with genuine students who expected better for their £5,000-£6,000 in tuition fee payments and may not have been receiving the best education…

More at: Watchdog to investigate private colleges’s potential misuse of millions

Is this the right move from Margaret Hodge and the Public Accounts Committee or should David Willetts and the Business Department be left to sort out the situation themselves? Please give us your thoughts in the comments or via Twitter…

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