Plans for further university deregulation due in autumn, says government

Speaking at an industry conference this week, Jo Johnson said that he would shortly lift the moratorium on new applications for degree-awarding powers and the title of "university". The government would set out options to speed up both processes, and to create "alternative" routes for new providers that did not wish to partner with an existing institution to validate their degrees, in a green paper to be published later this year, he said.

The government would also consult on new consumer protection measures for universities, so that "students who benefit from greater choice and diversity do not lose out in the event of provider failure", he said.

In his speech, Johnson said that the current system "stifles competition, innovation and student choice" and was "akin to Byron Burger having to ask permission of McDonald's to open up a new restaurant".

"This government values competition," he said.

"We want a diverse, competitive system that can offer different types of higher education so that students can choose freely between a wide range of providers. Competition not for its own sake, but because it empowers students and creates a strong incentive for providers to innovate and improve the quality of the education they are offering," he said.

"We have already made a start by providing a new route for trusted new and smaller providers to grow their student numbers. We are also beginning to link student number controls to the quality of the provider, through a 'performance pool' which will operate for 2016 to 2017. But the green paper will consult on options to go further. Success in higher education should be based on merit, not on incumbency. I want to fulfil our aim of a level playing field for all providers of higher education," he said.

The green paper would also set out plans for a new 'Teaching Excellence Framework' (TEF), designed to incentivise and reward better teaching; and look at how to widen higher education participation particularly among young people from black and ethnic minority (BME) backgrounds and white male students from disadvantaged backgrounds. To assist with this, admissions service UCAS has already agreed to publish more data on the outcomes of the admissions process, broken down by ethnic group and type of institution, Johnson said.

The government also planned to "reform the higher education and research system architecture", moving it away from being "based upon a system where government directly funds institutions rather than reflecting the fact that students are the purchasers, and needful of all the protections that consumers of complex high value products receive in other regulated markets".

Universities expert Nicola Hart of Pinsent Masons, the law firm behind Out-Law.com, said that any further opening up of the higher education sector had to ensure that "any public money channelled into independent providers via student loans must be protected and properly accounted for". Regulation also had to protect students effectively in case of 'market exit' by providers, "whether they are publicly funded or otherwise - something which will become increasingly likely as competition hots up", she said.