The process may be paused right now, but if you are thinking of registering with the Office for Students (by choice, or following the requirement for larger franchise providers to get on board) the game is changing.
The Office for Students has issued a consultation on two new initial conditions of registration.
Interested parties have until 23 April to offer feedback, with the overwhelming majority of conditions due to come into force from August – at the point where OfS is planning to resume registration activity following the current pause.
This will have a particular impact on providers who are currently planning (or preparing to restart) submissions quashed when the pause started. Expectations and requirements will change – and while OfS hopes to primarily assess documents a provider will already have, these things do tend to be tailored to fit requirements.
C5: Treating students fairly
New condition C5 replaces C1 (consumer law) and C3 (protection plans) as initial conditions – an assessment will be based on identifying behaviours that constitute unfair treatment of students (there is a list) from documents providers already have.
There are implications from that one that reach far beyond new applications to the register – Jim Dickinson has covered those in detail elsewhere on the site.
E7: Effective governance
This new initial condition replaces the current E1 (on public interest governance) and E2 (on management and governance), though those two remain as ongoing conditions. OfS offers a rationale:
We are increasingly finding that newly established providers (with less experience of delivering higher education) are less sure about what is required in terms of the self-assessment we ask for at registration. This leads to inefficiencies in the assessment.
Providers have been engaged in substantial back-and-forth conversations with OfS about what is expected during registration. The regulator has noted that people are describing existing documents where it would be quicker to submit them, and has spotted that what is submitted can often be poorly written and excessively tailored to paint a rosy (and hopefully successful) picture.
Some applicants have been borrowing and adapting plans and documentation from other providers that are inapplicable (a small, single subject, provider using processes developed for a traditional, multi-faculty, university) – in part because of perceived expectations that newly established providers need to have the same range of processes and policies.
So the self-assessment aspect will go – the plan is that providers should submit actual governance documents, a five year action plan, and other bits on the knowledge and experience of those involved.
One surprising shift is that there will no longer be an explicit test of “public interest governance” (the Nolan principles and suchlike) in the registration process. OfS reckon that the strengths of the rest of these new requirements, plus the continued inclusion in ongoing condition E1, makes up for this.
Ditto the absence of the (largely toothless) student protection plan – the line being that this should be visible to students via the documentation provided, which is a win for all those applicants who read governance documentation before they decide where to apply. See Jim’s piece for more detail.
Documentation
So what would you now need to submit:
- The governing body’s terms of reference (or similar), which would cover purpose, membership, appointment procedures, responsibilities, decision-making procedures, meeting frequency and the arrangements for reviewing effectiveness
- Establishing documents – like a Royal Charter or articles of association
- A scheme of delegation (or anything else useful) about who makes decisions and how
- Documentation pertaining to risk and audit – the operations of the committee responsible is given as one example
- A policy on conflict of interest
These are, to be clear, governance documents, not detailed operational arrangements – although of course such policies would need to be operationalised for ongoing conditions E1 and E2.
In assessing these documents, OfS intends to look at the “appropriateness of arrangements”, bearing in mind a provider’s size, complexity, context, and business plan.
Oh yeah, you need a five year business plan too. The regulator hasn’t been impressed with what has been seen so far.
Some providers applying for registration have not been able to demonstrate that they have sufficient understanding of how the higher education sector operates. This can result in a provider making unrealistic assumptions in its planning, such as overestimating its ability to recruit students in a competitive market, which can pose risks to the ongoing viability of the provider and cause associated harm to students.
Part of being sufficiently equipped to deliver higher education is preparing to meet the relevant regulatory requirements. We have encountered issues where newly registered providers were not sufficiently aware of the regulatory framework and so did not have robust plans in place to meet ongoing requirements
And there’s a telling indication that problems multiply pretty quickly when the plans get hit with a dose of operational reality.
Where a provider does not have robust plans in place, it may encounter financial challenges after registration. Providers have at times taken steps to address this without fully considering the risk of doing so, for example:
a. Rapidly entering into new partnership arrangements because of the unexpected withdrawal of a current partner without having the governance and management processes needed to manage this change properly.
b. Employing financially incentivised external recruitment agents to meet recruitment targets that are too ambitious.
c. Taking out additional unplanned borrowing to fund unanticipated expenditure.
All of these behaviours can result in negative consequences for students and taxpayers
Being objective
Who could possibly have foreseen, eh? Going forward OfS would like business plans to be comprehensive and clearly written – and demonstrate an understanding of the sector, of managing risks, and of the conditions of registration.
It’s all standard stuff (objectives and targets and how to achieve them, risks and how to manage them, regulatory compliance) over a challengingly long five-year period. OfS’ assessment will not be based on the targets themselves, but whether the provider can deliver these in practice given their resources and prevailing sector conditions. As an overriding primary consideration the plans need to focus on the interests of students.
There’s no expectation that there will be an assessment of the objectives in and of themselves (or whether they are a proper thing for the provider to pursue), and OfS would not endorse these objectives – it’s more a matter of understanding a provider’s chosen approach in looking at the plans it has to deliver. A neat distinction.
People who need people
So who will be delivering these plans? The new condition would set out key knowledge and expertise for the chair of the governing body, accountable officer, and where applicable, the person with overarching responsibility for financial management and an independent member of the governing body. There’s a sensible sounding list on pages 30-33, but the big shocker is that these would be assessed via an interview with OfS officers!
Yes, you read that right: 30 to 60 minutes based on key questions allowing said knowledge and experience to be demonstrated. On one level it feels sensible to talk to the people involved as a way of establishing the credibility of plans, but the feeling that OfS is appointing (or approving the appointment of) your chief financial officer is a hard one to shake.
In contrast the “fit and proper persons” test is pretty much as expected, with additional requirements to supply new information (if you are disqualified as a director or trustee, or declared bankrupt) during the course of the application process. This is a welcome admission that these processes can take a long time to work through.
You’ve probably spotted that OfS and government are now very focused on fraud in the sector – and assessment of arrangements to prevent fraud will focus on an institution’s track record where it has already been delivering higher education as part of a franchise or partnership arrangement.
Other requirements for registration applications
Got all that? Well strap in, there’s more.
There’s the new C5, the new E7, and OfS intends to beef up their financial information requirements from August 2025 too.
Financial viability and sustainability is currently assessed via initial condition D – providers already submit full, audited, financial statements for up to three years alongside four years of forecasts and a commentary on these. OfS has noted that new registrants tend to defer their first year of recruitment (setting up a HE provider is hard!) and substantially under recruit when they do – with current financial and recruitment pressures this isn’t going to improve any time soon.
The new requirement is an addition to the template, which allows a provider to model financial viability against different yet plausible scenarios: zero growth over four years and 40 per cent below forecast followed by three years of zero growth for those currently delivering HE – zero growth followed by 80 per cent below forecast for the next three years for those entirely new to the sector.
These aren’t set in stone – OfS reserves the right to tweak them based on emerging sector issues. And we may also get an alternative for providers whether the business model is not predominantly balanced on higher education provision.
The commentary to this new table would let the provider set out mitigations, or provide evidence that these scenarios are unrealistic. But even so, there is a risk here that condition D becomes the hard one to pass – OfS reckon this is fair enough given short– and medium– term challenges to the sector. Although one cannot help but think of the many existing registered providers that would not pass these tests.
By OfS request
There’s another welcome recognition that applying for registration takes ages in the requirement for a provider to submit updated finances, student numbers, and commentary in the late stages of application by OfS request. While this makes sense in that the regulator isn’t relying on year-old (and the rest…) numbers this is a hard sell for those prospective registrants now expecting to submit similar data twice – although it could be argued that this gets them used to regular submissions while registered.
Likewise, if the financial year turns over during the registration process you’ll need to put an extra batch of audited financial statements in for that year.
And, wonderfully, OfS wants an ownership and corporate structure diagram too – it’s been finding some structures “complex”, poor thing.
If your provider is or has been under investigation by another regulator – or awarding organisation, professional body, funding body, statutory body, and so forth – you’d better believe that OfS wants to know about that up front too. Apparently it keeps finding out about such things midway through the assessment process – and it does tend to be relevant, even if it is not an automatic fail.
The rules are for the 60 months proceeding application, any investigation that closed or opened during the application period is something OfS wants to know about: a brief description, the responsible body, the dates, and the findings and/or outcomes.
And if you are looking forward to the exciting world of “reportable events”, something similar now applies during registration. If stuff happens (there’s a long and familiar list on page 42) then you’d best drop OfS a note within 28 days.
Finally, from January 2026 you won’t be able to reapply within 18 months of an unsuccessful registration application. This “double jeopardy” rule is a new one, and it looks like it is aimed at ensuring that OfS capacity is not clogged with resubmissions of poor quality applications where identified weaknesses are not addressed. We learn that 40 per cent of applications don’t comply with the existing guidance.
There is the possibility of individual exemptions from this rule, for example where there have been IIT problems or where information that was not available for reasons outside of the provider’s control is now available.
How this will be done
The changes to application requirements were done via the same “manner of application” loophole – section 3(5) of HERA – that was used to pause the registration process. It is, as we said at the time, a reach in terms of legislative interpretation but it is difficult to argue against many of the principles here.
It is regrettable that the same group of providers that have been forced to delay or resubmit applications due to the pause will now have to do considerable extra work to get these into the new format.
While the principle of assessing existing documents rather than new ones is a good one, the reality of this is not as neat as regulators sometimes think. For an expected influx of new registrations – the franchise thing, and whatever ends up happening with the lifelong learning entitlement is expected to flush out at least a few – it makes sense to have all this in order. But there are always winners and losers with these things, and the losers have lost several times in a row here.
The only other disappointment is probably that these new approaches will apply only to new registrations – there’s clearly a lot of benefit to similar approaches (especially for C5 and the financial requirements) to be extended to existing registered providers, and it is likely that there is more to come on that front.
