The rapid expansion of private higher education under the coalition government has been a “good thing” and private colleges should be allowed to raise their tuition fees to £9,000, according to a new report.

The report, by liberal thinktank CentreForum, argues that private institutions have been subjected to unfair regulation in comparison with publicly funded universities, and calls for legislation to establish a single regulatory framework across the whole of higher education.

Public-backed funding for students at private providers has grown from £30 million in 2010 to a projected £900 million in 2014-15, in the absence of student number controls and amid concerns about quality at some for-profit colleges.

“There is a growing recognition within government and within the established university sector that the continued growth in alternative provision is a good thing – good for extended student choice and employment outcomes; supportive of the government’s broadening access agenda for HE; and a driver of new and innovative HE provision through the growing range of partnerships and collaborations alternative providers enjoy with the established university sector,” says the report, written by Stephen Lee, Centre-Forum’s chief executive and professor of voluntary sector management at Cass Business School, City University London.

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But it continues that, in the absence of a higher education bill, private providers face a “restrictive regulatory environment that is inequitable and anti-competitive”, citing the introduction of student number controls for the first time this year as an example.

The report’s recommendations include the implementation of an “equitable playing field” between all providers via primary legislation to establish “a revised and single comprehensive system of regulation and administration that embraces all HE providers”.

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Students at private providers are currently allowed to claim a maximum £6,000 annual fee loan, compared with £9,000 for those at publicly funded universities. “Current disparities in tuition fees and loan caps between the established universities and alternative providers should be removed,” says the report. “Their imposition distorts the market and is prejudicial to the principles and practice of fair competition.”

CentreForum says in the acknowledgements to the report that it is “grateful to GSM London and BIMM”, two for-profit higher education institutions owned by private equity firm Sovereign Capital, “for their kind support in this paper”.

john.morgan@tesglobal.com