CMA warns firms over price-fixing of supplies to disabled students

@CMAgovUK has cautioned companies supplying goods and services to disabled university students, following concerns that there may have been price-fixing.

The Competition and Markets Authority (CMA) has sent advisory letters to a number of firms, reminding them of their obligations under competition law, after learning of allegations that some suppliers colluded over the price of key services and equipment. Price-fixing is a serious breach of competition law and can cheat people out of a lower price, which could have been available if competition was working properly.

Disabled students who are eligible can receive funding through the Disabled Student Allowances grant scheme, managed by the Student Loans Company (SLC), which acts on behalf of the UK and Welsh governments’ education departments. Under the current system, an independent needs assessor will provide SLC with recommendations for products and services along with quotations from suppliers, and SLC will work with the student to put the support in place.

The CMA is concerned that SLC – and so ultimately the taxpayer – may have paid over the odds for certain goods and services because some suppliers agreed prices before providing quotations. This alleged activity could also have reduced the overall amount which disabled students have available for purchasing equipment through the scheme.

While the CMA has been considering these allegations, SLC has told the CMA that it is making a number of changes to the way it procures goods and services for disabled students. The changes will increase price transparency and competition amongst companies, and should therefore limit the potential for anti-competitive behaviour to take place.

Michael Grenfell, the CMA’s Executive Director of Enforcement, said:

“Healthy competition is the cornerstone of getting the best deal so we are concerned if companies might be doing something to threaten that. It is particularly troubling in this case if the interests of disabled students are affected, and if public funding is hit.

“We trust that the letters we have issued, and today’s announcement, send a clear message. Any suppliers engaging in price fixing with competitors, or other illegal collusion, need to review their practices and make changes now.”

The CMA has not made a legal finding as to whether competition law has been broken at this stage, but it will keep this sector under review, remaining open to the possibility of further action if these concerns are not fully addressed.

The Students Loan Company welcomes the CMA’s actions following allegations that some DSA suppliers have colluded over the price of key services and equipment.

The Students Loan Company provides funding to disabled students through Disabled Students’ Allowances. 

SLC administers the DSA grant scheme on behalf of the UK Government’s Department for Education (DfE) and the Welsh Government’s Higher Education Division. The scheme aims to ensure that all students study on a level playing field by covering some of the extra costs students may have because of a disability.

DSAs provide funding for specialist support such as equipment, software, training, non-medical help (e.g. tutoring, mentoring or note taking), travel and other costs of studying related to the students’ condition.

The Student Loans Company welcomes the Competition and Markets Authority’s (CMA) action in sending advisory letters to a number of businesses involved in the supply of goods and services funded by Disabled Students Allowances (DSAs), on the basis of allegations that some suppliers colluded over the price of key services and equipment.

The concerns expressed by the CMA further reinforce the importance of the work we have underway to reform the provision of DSA to both enhance the customer experience and improve value for money for the taxpayer. The Department for Education (DfE) and SLC have already embarked on a programme of significant reforms, designed to transform the customer experience, improve the provision of DSA and to make the overall processes more efficient. These reforms will also increase transparency of pricing and increase competition thus limiting the potential for any anti-competitive behaviour. SLC has already procured an e-quotation system, which will allow more suppliers to quote for work and will increase transparency of pricing and competition.

SLC is also finalising the design of a new procurement to centrally contract the supply of certain goods and services funded by DSA, which aims to both improve the customer experience for students in receipt of DSA and, in introducing robust contractual arrangements, deliver greater value for money for the taxpayer.

SLC takes these allegations of anti-competitive behaviour within the DSA supplier base extremely seriously, as the extensive nature of our reforms demonstrate.