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Expert Case: Add For-Profit Providers to the Demand Driven System

Higher Education expert Andrew Norton, co-author of the report into the review of the Demand Driven Funding system, has spoken out to defend private providers from some of the misinformation those reacting to the report have put on the public record.

In his blog,, Mr Norton points out that historical experience does not back up claims that the ‘profit-motive’ leads to poor results in higher education.

Private providers tend to score better on student satisfaction surveys, probably reflecting their teaching focus, with smaller classes and more personalised attention than is usual in public universities, he writes.

Mr Norton also notes that the number of students attending private providers has continued to increase despite the fact that universities are much better known and have a public subsidy, so can offer lower fees.

The report recommends that all the measures to ensure good practice in teaching apply to the non-university providers as well as universities. Private higher education providers already have another layer of scrutiny that the universities lack, which is that their courses need to be individually approved by the Tertiary Education Quality and Standards Agency.<>

 “In my view the for-profit providers are an essential part of the reform package we propose,”  he said. Pathway colleges were pioneered by the for-profit higher education sector and many have a very successful relationship with public universities.

“The for-profits are important to developing a competitive higher education sector,” Mr Norton continues. “Generally speaking, they are the organisations with the financial capacity and expertise needed to have an impact beyond the industry, professional or discipline niches of most current not-for-profits.”

Both this report and the Bradley committee, which first recommended inclusion of the private sector, also recommended new measures to extend prudential supervision and public reporting of results. But both reports also conclude that the advantages of expanding the higher education sector significantly exceed the risks.

The report is at: <>

Have your say - Mr Norton’s blog welcomes comments.



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