Private sector muscles in

Private-sector companies are queueing up to get UK degree-awarding powers, raising the prospect of cut-throat competition that could threaten university courses and jobs.

Three providers, including the College of Law and professional training company BPP, have applied for degree-awarding powers under rules introduced by the Government that open the way for teaching-only institutions, including commercial companies, to become universities.

It is understood that BPP, if successful, could be enrolling students in September 2006. It plans to offer two-year accelerated degrees in law and accountancy, with fees of £9,000 a year. BPP will seek university status.

Michael Shattock, visiting professor at the Institute of Education, University of London, said: "We have been too frightened of private-sector higher education in this country. In the US, such competition provides quality benchmarks for the public sector. But these new providers will certainly pose a threat to universities, particularly new universities."

Charles Prior, chief executive of BPP, which enrols 20,000 people in 32 study centres across the country, confirmed the company would apply for university status.

Mr Prior said: "BPP will provide an element of healthy competition."

BPP is considering running degrees and masters in accountancy and law for about 100 students in the first year of courses.

"We will initially offer these degrees in London and believe they will be very attractive to students facing high fees, particularly overseas students," Mr Prior said.

A Department for Education and Skills spokesman welcomed the move. He said:

"In the past, the higher education system did not sufficiently reflect the legitimate roles of organisations outside the traditional university and college sector in providing high-quality education."

Chris Haslam, deputy director of the reviews group at the Quality Assurance Agency, said that the QAA had completed "initial scrutiny work" on the applications. Recommendations will go to the Privy Council next Easter.

In addition to the three formal applications for degree-awarding powers, a fourth provider is considering following suit.

The Financial Training Company, part of Kaplan Inc, an international education firm based in New York, was also looking into the possibility of seeking degree-awarding powers, a company spokesman said.

The new rules have dropped any requirement for universities to carry out research - as long as institutions have 4,000 full-time equivalent higher education students.

Mr Prior said: "BPP already has about 3,000 full-time students on postgraduate courses such as the legal practice course."

But the QAA said that it had yet to decide which courses would count towards university status.

Universities UK welcomed the QAA's "rigorous approach".

Nigel Savage, chief executive of the College of Law, which runs part-time degrees with the Open University, said: "Awarding our own degrees will make us more competitive in Europe as the Bologna Process gathers pace."

He stressed that the college was a charity, set up under royal charter, rather than a for-profit organisation. He said that it would not be seeking a university title.

claire.sanders@thes.co.uk