Question to the Department for Education:

To ask the Secretary of State for Education, what steps she has taken to identify the nationalities and ethnicities most associated with (a) childcare grant fraud and (b) student loan fraud.

The government is resolute in its commitment to protecting public money, including all types of student funding. We are working closely with the Student Loans Company (SLC) and other bodies across government to tackle fraudulent behaviour as swiftly as possible and improve controls.

Eligibility for student finance, including Childcare Grant (CCG), is set out within the Education (Student Support) Regulations 2011, which detail a number of provisions which a student must meet to receive funding. These include being registered on a designated course of study, together with requirements relating to immigration status and residency requirements. The intention is to ensure that resources are focused on students who are most likely to contribute positively to the UK economy.

My right hon. Friend, the Secretary of State for Education regularly receives information from the SLC, and other organisations, on suspected and actual fraud cases. This information is used to inform departmental policy and engagement with the higher education sector. The analysis received includes assessment of CCG.

Abuse of student funding is not tolerated. Investigations into suspected student loan fraud, including CCG fraud, are routinely carried out by the SLC. These investigations utilise a range of prevention and detection methods but do not target based on nationality or ethnicity. However, from the SLC’s analysis of recent investigations, as well as intelligence from external partners, we have become aware that some nationalities are disproportionately involved in some cases of exploitation of the student finance system. This relates to both student loans and CCG.

The SLC will always act to stop funding for a childcare provider where fraud or exploitation of public money is identified. The SLC CCG is linked to the Ofsted registration and can only be used for childcare that meet Ofsted’s registration requirements. The department works across government to share intelligence and develop policy, processes and systems that minimise fraud exposure. We are also working with the Public Sector Fraud Authority (PSFA) to help better understand and respond to emerging threats.

The government is aware that cases of confirmed student funding fraud occur disproportionately among students in franchised provision. The National Audit Office reported that, in 2022/23, 53% of the £4.1 million fraud detected by the SLC by value was at franchised providers, although students at franchised providers made up only 6.5% of the total number of SLC-funded students. The National Audit Office report is available at: : https://www.nao.org.uk/wp-content/uploads/2024/01/investigation-into-student-finance-for-study-at-franchised-higher-education-providers.pdf.

We are increasing regulatory oversight of this provision, and any franchised provider with 300 or more students will now be subject to direct regulation by the Office for Students as a condition for access to student finance. This requirement will be brought in for the 2028/29 academic year, with the first decisions on designation being made in September 2027. We have published information on GOV.UK to support providers in understanding what they need to do to implement this requirement.