Competition issues in further education sector

A new research report by the Department for Business, Innovation & Skills (BIS) is designed to help colleges and training organisations take advantage of the new freedoms and flexibilities introduced in December 2011 by ‘New Challenges, New Chances: Further Education and Skills Reform Plan: Building a World Class Skills System’, BIS’s reform strategy for the further education (FE) sector. The reforms resulting from this have given the FE sector more flexibility in the way that they can use funding and the ability to use new business models.

This increased flexibility, however, means that FE providers could potentially do something that is anti-competitive and breaches UK and EU competition law. The report explains the nature of the FE market and why it is vulnerable to anti-competitive behaviour, due to its localised nature, the need to meet social obligations (which can mean courses are run at a lower cost for some learners) and the availability of funding influencing which courses are run and where. 

It sets out some examples of anti-competitive practices, including a group of providers agreeing the fees that they will charge learners in a certain area or exchanging information about the fees they are going to charge…

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