The Department for Business Innovation and Skills said today that it had never granted ¡°designation¡± ¨C giving students access to Student Loans Company funding ¨C to ICE Academy¡¯s campuses in Manchester, Bedford and Croydon.

News that SLC funds have been incorrectly paid out to a private college will be a further embarrassment to BIS.

Already, the government is considering cutting funding to universities for the poorest students, following a BIS overspend that arose partly because of the department¡¯s failure to control spending at private colleges.

David Willetts, the universities and science minister, has sought to encourage the growth of private provision.

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In a statement, BIS said of ICE Academy¡¯s campuses in Manchester, Bedford and Croydon: ¡°ICEAcademyshould not have advertised places on these courses as being eligible for support. These students will not receive any further payments and fee loans paid to the college on their behalf will be recovered by Student Loans Company.¡±

But questions will follow as to how SLC funding could be paid out to a private college when BIS had not, apparently, made the courses eligible for such funding.

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BIS added: ¡°Following an investigation ICE Academy admitted that it had supplied misleading information to the SLC about where some of its students were studying. They had provided details that led the SLC to believe that around 400 students studying at Manchester, Bedford and Croydon were studying at campuses where courses were designated for student support.¡±

ICE Academy lists campuses in Leicester, Smethwick and Peterborough on its website. Despite accusing ICE Academy of supplying ¡°misleading information¡±, BIS is not removing all designations from the college ¨C meaning that it can carry on accessing SLC funding.

The BIS statement continues: ¡°ICE Academy have also been informed that if in the future it goes beyond the terms of its designations or knowingly misleads SLC, BIS may decide to withdraw some or all of their designations.¡±

The statement concludes: ¡°The department is sorry that ICE Academy has put these students in such a difficult position.¡±

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The only undergraduate courses advertised by ICE Academy on its website are sub-degree Higher National Diploma courses, in subjects such as business management and travel and tourism.

Nobody at ICE Academy was available for comment when Times Higher Education contacted the college.

john.morgan@tsleducation.com