29 January 2015 | By John Morgan

Greg Clark, the universities and science minister, unveiled the changes – including bringing quality inspections into line with mainstream universities, English language requirements for students and a “fit and proper person test” for college directors – in a written ministerial statement published today.

The changes come after the National Audit Office and the Public Accounts Committee raised major concerns about dropout rates and the value for money obtained in return for taxpayer funding going to private colleges.

Margaret Hodge, chair of the PAC, called the private college situation “nothing short of a scandal” at a hearing in December, when the Department for Business, Innovation and Skills came under fire for the lack of controls on spending at the colleges.

Public-backed funding for private colleges has soared from just £30 million in 2010 when the coalition came to power, to a projected total of nearly £1 billion this year.

Mr Clark says in the statement that the government is “taking a number of steps to secure improved standards among alternative providers of higher education”.

“Alternative providers will need to be redesignated every year, rather than remaining designated indefinitely. This will not apply to the seven providers with Degree Awarding Powers that have courses designated for student support,” the statement says.

It also says that private providers will “undergo a strengthened quality assurance process, Higher Education Review, which will apply to all higher education providers and be the common review framework of the Quality Assurance Agency for Higher Education in England”.

It continues: “From now on alternative providers will be required to have registered any student with the relevant qualification awarding body before a claim for tuition fee support for that student can be made.”

The NAO raised concerns that greater numbers of students on sub-degree Higher National courses were receiving Student Loans Company funding than were registered with Pearson, the awarding body for the qualifications via its exam arm.

“A ‘fit and proper person’ test will apply to all directors of alternative providers as a specific requirement of the annual designation process, in line with practice in the publicly funded sector,” the statement continues.

It also says: “Subject to consultation we intend to introduce a minimum English language requirement to ensure that students studying for qualifications at alternative providers have sufficient language skills to succeed at their course.”

Private colleges will also be required, “subject to consultation”, to provide information on factors such as graduate salaries via the Key Information Set already in place for universities.

The statement continues: “We will remove the student number cap from the seven providers with Degree Awarding Powers that have courses designated for student support, and allow providers offering validated degrees the flexibility to increase the number of students they recruit by up to 20 per cent in 2015-16.

“We will retain the cap on all other alternative providers. From 2016/17 we will allow providers with a strong performance to expand, while reducing student numbers for other providers.”

And the statement also says: “A rapid response investigatory team has been established, headed by the Government Internal Audit Agency and including the Student Loans Company, Hefce [the Higher Education Funding Council for England], the Quality Assurance Agency and BIS. The team will be able quickly to investigate allegations of abuse of the system.”

[email protected]