This report was commissioned by Universities UK's Longer Term Strategy Group to examine private and for-profit providers' role in the delivery of higher education in the UK, and to inform further discussions on this issue. The private higher education sector is emerging as a growing force in many parts of the world and presents a range of potential opportunities and challenges. This report examines where we are now and provides a series of likely scenarios for the future in terms of how the private sector may develop, and how we might respond. These scenarios include private providers awarding degrees, funding systems that give students a choice of public or private provision, and changes to the marketplace to neutralise any competitive advantage. Appended are: (1) Some future scenarios; (2) Recent developments in Australia, by Professor Roger King; (3) Private higher education in continental Europe; (4) Private higher education in the UK: institutional survey; and (5) People interviewed. (Contains 8 tables, 1 chart, and 68 notes.) [This report was written with the help of Professor Robin Middlehurst, Steve Woodfield, and Don Olcott.]