Category: Regulation

  • New legislation in Scotland increases the SFC’s powers, but only up to a point

    New legislation in Scotland increases the SFC’s powers, but only up to a point

    Post-school reform in Scotland continues to chug along, following last month’s announcement of the preferred future shape of the funding body landscape.

    Today sees the legislation that will enact the changes introduced in Holyrood: the Tertiary Education and Training (Funding and Governance) (Scotland) Bill.

    We’ve been over how responsibilities for further education student support and apprenticeships and skills funding will shift around, and the bill also contains expected changes to the governance arrangements of the Scottish Funding Council (SFC), as well as some technical changes relating to fees and private provision.

    But what’s emerged as perhaps the more pressing question for the higher education sector is how the legislation will change SFC responsibilities and powers, as these apply to its work with universities. The legislation sets out the route the Scottish government will take here, and it’s a fairly balanced one – we are still a long way from an England-style “boots on the ground” regulatory environment, likely to the relief of many.

    Tell us about your finances

    Much of what the bill will do legislatively is through modifications to the Further and Higher Education (Scotland) Act 2005. Section 22(4) of this gives the SFC various powers to “pull” information from universities – or strictly, from their governing bodies – but only where the funder knows that the information exists, or may exist.

    The new legislation aims to create a landscape in which post-16 education bodies must “proactively notify SFC of certain developments of which the SFC might otherwise be unaware” in what the bill’s policy memorandum characterises as a “push” of information – a responsibility to notify the funding council of things it would not have known otherwise. Those who are more used to other UK systems will probably be thinking of “reportable events”.

    It’s suggested that notifications would likely be sought in the following kinds of situation:

    • Where a university is planning voluntary or compulsory severance (so no daily refreshing of the QMUL UCU cuts tracker for the SFC)
    • Where a university has reached a certain threshold in a rapidly worsening financial viability situation
    • A major data breach, such as resulting from a cyberattack.

    But exactly how this will work is not specified on the face of the legislation – it would be determined by ministers via the laying of regulations, with consultation and an affirmative procedure in the Scottish Parliament, “given that they could potentially place significant obligations on post-16 education bodies.” But this does mean that there is a lack of clarity on exactly what the bill is going to mandate.

    Part of the rationale for beefing up the legislation from what was previously anticipated (and let’s be honest, what was in the consultation) seems to be that ministers have not received enough clarity about the financial challenges being faced by certain universities and colleges. When the policy memorandum notes that “there can be challenges for SFC in getting information from post-16 education bodies about their financial sustainability,” you feel that really the issue is about ministerial oversight and the sense of having active levers to pull. This is given an explicit tweak elsewhere in the bill (again, quoting the policy memorandum):

    New section 15A(2) allows the Scottish Ministers to seek information and advice from the SFC relating to post-16 education bodies, this could be an individual body or the bodies as a whole. Section 15A(3) requires the SFC to respond to any such request from the Scottish Ministers and the SFC may also offer information proactively when it considers it appropriate to do so. This is necessary because unforeseen circumstances may arise of which the Scottish Ministers might otherwise be unaware (and so would not know to enquire).

    So what are you going to do about it?

    Also in the 2005 Act is provision for the SFC to “secure the promotion or carrying out of studies designed to improve economy, efficiency and effectiveness in the management or operations of any fundable body” – but no such power exists where the matters are not related to financial support.

    The new legislation would amend this, with the intention of making the SFC able to “address a broader range of matters to assist with performance improvement.” So in scope for an efficiency study would now be the needs and interests of learners:

    The policy intention is that the SFC could, particularly where notified of certain adverse circumstances (such as course closures), instigate studies or reviews of the impact on students and learners so that assistance could be provided to ensure they are not negatively impacted. For example, if a college was heading towards needing to close courses before students could complete them, the SFC could help to make arrangements for the students to continue their education at different colleges.

    Bringing the student interest in scope sounds sensible in theory, but there remains the question of what changes on the ground, beyond the production of a study. The 2005 Act allows the SFC to attend and speak to an institution’s governing body – the new section 15(4) of this bill will extend this to the issuing of a set of written recommendations.

    So the SFC will be able to recommend setting specific improvement targets, or requiring the development of an improvement plan. And it will now even be able to publish these, “where there is wider interest amongst institutions, or the public, in the recommendations and they are not sensitive.” But it won’t be obliged to.

    And what if its recommendations are ignored?

    As with the SFC’s right to address meetings, already provided for in section 16 of the 2005 Act, there is no corresponding duty on the fundable body to do anything in response to the recommendations. However, as a matter of good governance and practice, the Scottish Government would expect the fundable body to consider them appropriately.

    But beyond these recommendations, in the legislation as it stands there would be proper statutory powers for the SFC to influence educational institutions’ behaviour, through the issuing of guidance, which currently is “purely administrative” (though presumably always very welcome). The Tertiary Education and Training Bill will change this, so that institutions must have regard to the guidance, in the carrying out of their funded activities (note that “have regard to” is quite woolly language – something that the Office for Students has exploited frequently within the way HERA was drafted). But the SFC will have to consult both ministers and institutions in issuing guidance.

    It could have been otherwise

    Various alternative approaches were considered and rejected. The use of codes of conduct (“for example to address concerns around breaches of fair work conditions”) was felt to potentially lead to complex interactions with other requirements, and diminish autonomy. Plus there would have been a need for “appropriate enforcement mechanisms,” which is a whole other question.

    More powers of audit and investigation were also considered and not taken forward, which would have been a move towards a “more interventionist SFC.” Likewise for stronger enforcement and intervention action, including serving enforcement notices or the removing, suspending, or appointing of officers or governing body members.

    But this would have been “a fundamental change to SFC’s role which requires more careful consideration” – and would have gone way beyond what was originally consulted on.

    There’s still a long way to go here – Universities Scotland is already noting the “new, very broadly defined provisions regarding the monitoring of the financial sustainability of institutions,” and raising concerns that too much change in the relationship between the SFC and universities (or universities and the Scottish government) could jeopardise the classification of universities in the Office for National Statistics classification.

    The Scottish government seems to be aware of this particular risk – but there are certainly MSPs keen for the SFC to become more “interventionist”, and the legislation now faces a complicated passage through a Parliament in which the SNP does not hold a majority. The ministerial statement to Holyrood launching the bill saw Ross Greer of the Scottish Greens concerned about whether the SFC would have the ability to intervene in matters relating to fair work – higher education minister Graeme Dey said he would be happy to discuss the issue further.

    For now the legislation aims at a delicate balancing act between juicing up the SFC’s role and preserving universities’ autonomy. The next question is whether this persists in the face of deeper scrutiny and parliamentary compromises.

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  • When OfS reopens its register, there will be implications for everyone else

    When OfS reopens its register, there will be implications for everyone else

    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.

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  • DfE steps in to require franchise partners to register with OfS

    DfE steps in to require franchise partners to register with OfS

    The Department for Education is consulting on a requirement for providers delivering courses under a franchise model to register with the Office for Students in order that they and their students can access student finance. We also get an impact assessment and an equalities assessment.

    The consultation defines “franchise” as follows:

    A ‘franchised student’ is one who is registered with a lead provider, but where more than 50% of their provision is taught by a delivery partner

    The proposals suggest that should a provider delivering teaching as part of a franchise arrangement (a delivery partner) have over 300 (headcount) higher education students in a given year it would need to be fully registered with the Office for Students under the existing Approved or Approved (Fee Cap) rules. A failure to register would mean that the institution could not access fee loans, and that students could not access maintenance loans.

    There would be some exceptions: providers already regulated elsewhere (schools, FE colleges, NHS trusts, local authorities, and Police and Crime Commissioners) would be exempt. Providers (not courses) would be designated (by DfE) as being eligible to access student finance, meaning that providers running courses regulated by a Professional Statutory Regulatory Body (PSRB) would not be exempt.

    The consultation (which closes 4 April 2025) will inform regulation from April 2026 onwards, with the first decisions about designation made in September 2027 (based on 2026-27 student data) for the 2028-29 academic year. Once up and running this pattern will continue: providers will be designated (based on student numbers from the previous academic year) for the academic year starting the year after. This gives newly designated providers a year to register with OfS.

    Student numbers would not be allowed to breach the 300 threshold without registration – the expectation is that providers should register the year before this happens. Should the threshold be breached, the provider will lose a year of eligibility for student finance for new students: the upshot being that if an unregistered provider had 300 or more students in 2026-27 and then registered with OfS, it would lose a year of designation (so would not be able to access student finance in 2029-30).

    In November of each year, DfE intends to publish a list of designated providers for the following academic year – providing a point of reference for applicants looking to access finance. Interestingly, despite the requirement being to register with OfS it is intended that DfE runs the process: making decisions about eligibility, managing appeals, and communicating decisions.

    The background

    We’ve been covering some of the issues presented by a subset of franchise providers on Wonkhe for quite a while, and it is now generally accepted that higher education in the UK has a problem with the quality and ethics at the bottom end of such provision. Students either enrol purely to access student finance, or are duped (often by higher education agents rather than providers themselves) into accessing fee and maintenance loans for substandard provision. Continuation and completion rates are very low compared to traditional providers, and the qualification awarded at the end (despite bearing the name of a well-known university) may not open the career doors that students may hope.

    We knew that an announcement on this issue was supposed to be coming in January via the government’s response to the former Public Accounts Committee’s report on franchising, which was sparked by a National Audit Office (NAO) report on the issue from a year ago – so the announcement today has just squeaked in under the Treasury’s wire.

    There is a slightly longer backstory to all of this – and we’re not referring to the various bits of coverage on potential abuses in the system that we’ve run in recent years. It was back in 2023 when the Department for Education’s heavily belated response to the Augar review reached a conclusion – promising to “drive up” the of franchised provision, in part by promising to:

    …closely consider whether we should take action to impose additional controls, in particular regarding the delivery of franchised provision by organisations that are not directly regulated by any regulatory body.

    Given the NAO and the PAC’s interventions since, and the work of the OfS in addressing franchise (and other academic partnership failings) via the coming round of quality (B3) investigations, special investigations, and enhanced data gathering, it is perhaps a little surprising that it is DfE that is in the lead here.

    There’s an important lesson in that to be drawn at some stage – the repeated pattern seems to be that an issue is raised, the sector is asked to self-regulate, it seemingly can’t, the regulator is asked to step in instead, and then it is discovered that what we actually need is secondary legislation.

    How big a deal is franchising

    Despite a number of years trying, OfS has never managed to compile full data on the extent of franchised, validated, and other partnership provision – the details are not in any current public dataset. It’s important here to distinguish between:

    • Franchised provision: where a student is registered at one institution, but teaching is delivered at another
    • Validated provision: where a student is both registered and taught at one institution, but receives an award validated by another institution on successful completion of their course
    • Other academic partnerships: which include arrangements where students are taught by more than one institution, or where existing providers partner to allow students to apply to a “new” provider (like a medical or veterinary science school)

    Of the three, it is just franchised provision that is in the scope of this new DfE requirement. It’s also (helpful) the most easily visible of the three if you are a fan of mucking about with Unistats data (though note that not all courses are in the unistats release, and the other vagaries of our least-known public data release continue to apply).

    DfE has done a bang-up job in pulling together some statistics on the scale of franchise provision within the impact assessment. We learn that (as of 2022–23 – usual student numbers caveats for that year of data apply):

    • There were currently 96 lead providers, franchising to 341 partners, of which 237 were unregistered.
    • 135,850 students were studying via a franchise arrangement – some 80,045 were studying at unregistered providers (a proportional fall, but a numerical rise, over previous years)
    • These students tended to study business and management courses – and were more likely to be mature students, from deprived areas, and to have non-traditional (or no) entry qualifications.
    • An astonishing 92 per cent of classroom based foundation years delivered as an intercalated part of a first degree were delivered via franchise arrangements.
    • There were 39 franchise providers teaching 300 students or more – of which four would be subject to the DfE’s proposed exemptions because of their legal status. These providers accounted for 66,540 students in 2022–23.

    A note on OfS registration

    Office for Students registration is confusing at the best of times. Though the registration route is currently paused until August 2025, providers have the choice of registering under one of two categories:

    • Approved (fee cap) providers are eligible to access fee loan finance up to the higher limit if they have an approved access and participation plan, receive direct funding from OfS, and access Research England funding.
    • Approved providers can access fee loan finance up to the “basic” fee limit. They are not eligible for OfS or Research England funding – but can directly charge students fees that exceed the “basic” fee limit.

    In the very early stages of developing the OfS regulatory framework it was briefly suggested that OfS would also offer a “Basic” level of registration, which would confer no benefits and would merely indicate that a provider was known to the OfS. This was speedily abandoned, with the rationale being that it would suggest OfS was vouching in some way for provision it did not regulate.

    The long and painful gestation of the Lifelong Learning Entitlement (LLE) also yielded suggestions of a third category of registration, which would apply to providers that currently offer provision backed by the Advanced Learner Loans (ALLs) that would be replaced by the LLE. We were expecting the Office for Students to consult on this new category, but nothing has yet appeared – and it does feel unlikely that anyone (other than possibly Jo Johnson) would be keen on a riskier registration category for less known providers that offers less regulatory oversight.

    Statutory nuts and bolts

    The proposal is to lay secondary legislation to amend the Education (Student Support) Regulations 2011 – specifically the bit that is used to designate types of courses for student finance eligibility. There is currently a specific section in this SI – section 5 part 1 subsection d, to be precise – that permits registered providers to franchise the delivery of courses to partners.

    The plan appears to be to amend this section to include the stipulation that were more than 300 higher education students (in total, excluding apprenticeships) are taught at a given franchise provider (I assume in total, across all franchise arrangements) then it must be registered with the Office for Students in order to be designated for student finance (allowing students to receive maintenance loans or providers to receive fee loan income).

    This might seem like a small technical change but the implications are surprisingly far reaching – for the first time, the OfS (as regulator and owner of the register) has the ability to decide who can and cannot deliver UK higher education. If anyone – even a well established university – is removed from the OfS register it will be unable to access fee loans (and students will be unable to access maintenance loans) for intakes above 300 students, even if it enters into a partnership with another provider.

    Let’s say, for example, that a large university becomes financially unsustainable and thus breaches the conditions of registration D1 or D2. Under such circumstances it could no longer be registered with OfS and thus would no longer be able to award degrees. The hope would be that student interests would be protected with the support of another university, and one way that this could happen is that someone else validates the awards offered to students so they can be taught out (assuming temporary financial support is forthcoming from government or elsewhere). Under the new rules, this arrangement would only work for 300 students.

    What might go wrong

    OfS has classically regulated based on the registered student population – the implication being that providers involved in franchise provision would be responsible for the quality and standards of teaching their students experience wherever they were taught. There have been indications via the B3 and TEF dashboards that students studying at franchise partners tend to have a worse experience overall.

    This does pose the question as to whether franchise partners who registered with OfS would now be responsible for these students directly, or whether there will be some sense of joint responsibility.

    There’s also the question of how providers will respond. Those franchised-to providers who either worry about their own outcomes (no longer judged within a larger university’s provision) wouldn’t cut it might stay that way – an outcomes based system that is always playing catch up on experience could see some poor provision linger around for many years. On the other hand, if they are now to be subject directly to conditions like those concerning transparency, finances and governance, they might as well switch to validation rather than franchising, which will change the relationship with the main provider.

    We might in aggregate see that as a positive – but that then raises the question as to whether OfS itself will be any better at spotting issues than universities have previously been. They could, of course, not fancy the scrutiny at all, and disappear with a rapidity that few student protection plans are designed to withstand.

    It’s also worth asking not just about OfS’ capacity or regulatory design, but its powers. Many of the issues we’ve identified (and that have been called out by the NAO and the PAC) concern how the courses are sold – OfS’ record on consumer rights is at best weak, and completely untested when the profit incentives are so high.

    And even if the sunlight of better outcomes data puts pressure on over outcomes, we do have to worry about how some of the providers in this space get there. In at least one of the providers that we have seen an OfS report for, a call centre team in another country that is supposed to offer support to students sounds more like a debt collection agency, chasing students up to submit, with academic staff paid partly on outcomes performance. Remember, providers that do this are already registered with OfS – so clearly the registration process itself is not enough to weed out such practices.

    The impact assessment is very clear that it expects some (an oddly precise four in the first year and two in subsequent years) unregistered franchise partners to drop out of HE provision altogether rather than applying for registration. The unspoken codicil to this is that everyone hopes that this will be the poor quality or otherwise suspect ones – but many excellent independent providers (including a number of Independent HE members) have struggled to get through a lengthy and often bureaucratic process, even before registration was temporarily closed because OfS decided it didn’t have capacity to run it this year.

    The line between supporting students and spoon feeding them is often debated in HE, but we might worry that a decent dose of it in a way that few would think appropriate could enable providers to evade regulation for some time – especially if validation (and therefore less risk to the validator) becomes the norm.

    And naturally, this is an approach that ignores two other things: whether a demand-led system at the edges should respond to the sort of demand that seems to come from those profiting from selling more than it does from students themselves, and whether it’s right. Even if you accept some for-profit activity, for anyone to be arranging for predominantly low-income and disadvantaged students to be getting into full tuition fees debt when sometimes more than half is kept in profits, and what is spent seems to include high “acquisition” costs and quite low delivery and support costs.

    In other words, one of the tests should be “does any of this change the incentives,” and it’s not at all clear that it does.

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  • Institutions may be holding themselves back by not sharing enough data

    Institutions may be holding themselves back by not sharing enough data

    Wonkhe readers need little persuasion that information flows are vital to the higher education sector. But without properly considering those flows and how to minimise the risk of something going wrong, institutions can find themselves at risk of substantial fines, claims and reputational damage. These risks need organisational focus from the top down as well as regular review.

    Information flows in higher education occur not only in teaching and research but in every other area of activity such as accommodation arrangements, student support, alumni relations, fundraising, staff and student complaints and disciplinary matters. Sometimes these flows are within organisations, sometimes they involve sharing data externally.

    Universities hold both highly sensitive research information and personal data. Examples of the latter include information about individuals’ physical and mental health, family circumstances, care background, religion, financial information and a huge range of other personal information.

    The public narrative on risks around data tend to focus on examples of inadvertently sharing protected information – such as in the recent case of the Information Commissioner’s decision to fine the Police Service of Northern Ireland £750,000 in relation to the inadvertent disclosure of personal information over 9,000 officers and staff in response to a freedom of information request. The same breach has also resulted in individuals bringing legal claims against the PSNI, with media reports suggesting a potential bill for those at up to £240m.

    There is also the issue of higher education institutions being a target for cyber attack by criminal and state actors. Loss of data through such attacks again has the potential to result in fines and other regulatory action as well as claims by those affected.

    Oversharing and undersharing

    But inadvertent sharing of information and cyberattacks are not the only areas of risk. In some circumstances a failure to ensure that information is properly collected and shared lawfully may also be a risk. And ensuring effective and appropriate flows of information to the governing body is key to it being able to fulfil its oversight function.

    One aspect of the tragic circumstances mentioned in the High Court appeal ruling in the case concerning Natasha Abrahart is the finding that there had been a failure to pass on information about a suicide attempt to key members of staff, which might have enabled action to be taken to remove pressure on Natasha.

    Another area of focus concerns sharing of information related to complaints of sexual harassment and misconduct and subsequent investigations. OfS Condition E6 and its accompanying guidance which comes fully into effect on 1 August 2025 includes measures on matters such as reporting potential complaints and the sensitive handling and fair use of information. The condition and guidance require the provider to set out comprehensively and in an easy to understand manner how it ensures that those “directly affected” by decisions are directly informed about those decisions and the reasons for them.

    There are also potential information flows concerning measures intended to protect students from any actual or potential abuse of power or conflict of interest in respect of what the condition refers to as “intimate personal relationships” between “relevant staff members” and students.

    All of these data flows are highly sensitive and institutions will need to ensure that appropriate thought is given to policies, procedures and systems security as well as identifying the legal basis for collecting, holding and sharing information, taking appropriate account of individual rights.

    A blanket approach will not serve

    Whilst there are some important broad principles in data protection law that should be applied when determining the legal basis for processing personal data, in sensitive cases like allegations of sexual harassment the question of exactly what information can be shared with another person involved in the process often needs to be considered against the particular circumstances.

    Broadly speaking in most cases where sexual harassment or mental health support is concerned, the legislation will require at minimum both a lawful basis and a condition for processing “special category” and/or data that includes potential allegations of a criminal act. Criminal offences and allegations data and special category data (which includes data relating to an individual’s health, sex life and sexual orientation) are subject to heightened controls under the legislation.

    Without getting into the fine detail it can often be necessary to consider individuals’ rights and interests in light of the specific circumstances. This is brought into sharp focus when considering matters such as:

    • Sharing information with an emergency contact in scenarios that might fall short of a clear “life or death” situation.
    • Considering what information to provide to a student who has made a complaint about sexual harassment by another student or staff member in relation to the outcome of their complaint and of any sanction imposed.

    It’s also important not to forget other legal frameworks that may be relevant to data flows. This includes express or implied duties of confidentiality that can arise where sensitive information is concerned. Careful thought needs to be given to make clear in relevant policies and documents when it is envisaged that information might need to be shared, and provided the law permits it.

    A range of other legal frameworks can also be relevant, such as consumer law, equality law and freedom of information obligations. And of course, aside from the legal issues, there will be potential reputational and institutional risks if something does go wrong. It’s important that senior management and governing bodies have sufficient oversight and involvement to encourage a culture of organisational awareness and compliance across the range of information governance issues that can arise.

    Managing the flow of information

    Institutions ought to have processes to keep their data governance under review, including measures that map out the flows and uses of data in accordance with relevant legal frameworks. The responsibility for oversight of data governance lies not only with any Data Protection Officer, but also with senior management and governors who can play a key part in ensuring a good data governance culture within institutions.

    Compliance mechanisms also need regular review and refresh including matters such as how privacy information is provided to individuals in a clear and timely way. Data governance needs to be embedded throughout the lifecycle of each item of data. And where new activities, policies or technologies are being considered, data governance needs to be a central part of project plans at the earliest stages to ensure that appropriate due diligence and other compliance requirements are in place, such as data processing agreements or data protection impact assessments are undertaken.

    Effective management of the flow ensures that the right data gets in front of the right people, at the right time – and means everyone can be confident the right balance has been struck between maintaining privacy and sharing vital information.

    This article is published in association with Mills & Reeve.

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  • An early look at 2023–24 financial returns shows providers working hard to balance the books

    An early look at 2023–24 financial returns shows providers working hard to balance the books

    In most larger UK providers of higher education, the 2023–24 financial year ended on 31 July 2024.

    Five months and two weeks after this date (so, on or before 14 January 2025) providers are obliged to have published (and communicated to regulators) audited financial statements for that year.

    I’ve got a list of 160 large, well known, providers of higher education who should, by now, have made this disclosure – 43 of them are yet to do so. Of the 117 that have, just 15 (under 13 per cent) posted a deficit for that financial year (to be fair, this includes eight providers in Wales, where the deadline – for bilingual accounts – is the end of the month). This was as of the data of publication, there’s been a few more been discovered since then and I have added some to the charts below.

    If you’ve been aware of individual providers, mission groups, representative bodies, trade unions, regulators, and politicians coming together to make the case that the sector is severely underfunded this may surprise you. If you work in an institution that is curtailing courses, making staff redundant, and undergoing the latest in a long series of cost-cutting exercises, the knowledge that your university has posted a surplus may make you angry.

    But these results are not surprising, and a surplus should not make you angry (there are plenty of other reasons to be angry…) Understanding what an annual account is for, what a surplus is, why a university will pull out all of the stops to post a surplus, and what are the more alarming underpinning signals that we should be aware of will help you understand why we have what – on the face of it – feels like a counter-intuitive position in university finances.

    Why are so many results missing?

    There’s a range of reasons why a provider may submit accounts late – those who are yet to publish will already be deep in conversation with regulators about the issues that may have caused what is, technically, a breach of a regulatory condition. In England, this is registration condition E3. which is underpinned by the accounts direction.

    If you are expecting regulators to get busy issuing fines or sanctions for late submissions – you should pause. There’s a huge problem with public sector audit capacity in the UK – the big players have discrete teams that move on an annual cycle between higher education, NHS, and local government audit. You don’t need to have read too much into public finances to know that our councils are under serious pressure right now – and this pressure results in audit delays, hitting the same teams who will be acting as external university auditors.

    That’s one key source of delay. The other would be the complexities within university annual accounts, and university finances more generally, that offer any number of reasons why the audit signoff might happen later than hoped.

    To be clear, very few of these reasons are going to be cheerful ones. If a provider has yet to publish its accounts because they have not signed off their accounts, it is likely to be engaging with external auditors about the conditions under which they will sign off accounts.

    To give one example of what might happen – a university has an outstanding loan with a covenant attached to it based on financial performance (say, a certain level of growth each year). In 2023–24, it did not reach this target, so needs to renegotiate the covenant, which may make repayments harder (or spread out over a longer period). The auditor will need to wait until this is settled before it signs off the accounts – technically if you are in breach of covenant the whole debt is repayable immediately, something which would make you fail your going concern test.

    We’ve covered covenants on the site before – a lender of whatever sort will offer finance at an attractive rate provided certain conditions are met. These can include things like use of investment (did you actually build the new business school you borrowed money to build?), growth (in terms of finances or student numbers), ESG (are you doing good things as regards environment, society, and governance?) and good standing (are you in trouble with the regulator?) – but at a fundamental level will require a sense that your business is financially viable. If covenant conditions are breached lenders will be keen to help if they hear in advance, but your cost of borrowing (the interest rate charged, bluntly) will rise. And you will find it harder to raise finance in future.

    This is an environment where it is already hard to raise finance – and in establishing new borrowing, or new revolving credit (kind of like an overdraft facility) many universities will end up paying more than in previous years. This all needs to be shown in the accounts.

    Going concern

    When your auditor signs off your accounts, you would very much hope that it will agree that they represent a “going concern” – simply put, that in most plausible scenarios you will have enough money to cover your costs during the next 12 months. If your auditor disagrees that you are a going concern you are in serious trouble – all of the 117 sets of accounts I have read so far have been agreed on a going concern basis.

    This designation tells everyone from regulators to lenders to other stakeholders that your business is viable for the next year – and comes into force on the day your accounts are signed off by the university and external auditor. This is nearly always for a specific technical reason – additional information that is needed in order to make the determination. For some late publications, it is possible that the delay is a deliberate plan to make the designation last as far into the following financial years as possible. This year (2024–25) is even more bleak than last year – anything that keeps finance cheaper (or available!) for longer will be helpful.

    Breaking even and beyond

    So your provider had a surplus last year – that’s good right? It means it took in more money than it spent? Up to a point.

    In 2023–24 we got the very welcome news that Universities Superannuation Scheme (USS) has been revalued and contributions reduced for both members and employers. From the annual accounts perspective, this will have lowered staff costs (very often one of the most significant costs, if not the most significant cost, for most) in USS institutions. Conversely, the increase in Teachers Pension Scheme (TPS) contributions will have substantially raised costs in institutions required by law (yes, really!) to offer that scheme to staff.

    That’s some of the movement in staff costs. However, for USS, the value of future contributions to the current calculated scheme debt (which is shared among all active employers in the scheme) has also fallen. Indeed, as the scheme is currently in surplus, it shows as income rather than expenditure This is not money that the university actually has available to spend, but the drop shows out in staff costs – though most affected separate this out into a separate line it also shows up in the overall surplus or deficit (to be clear this is the accounting rules, there’s no subterfuge here: if you are interested in why I can only point you to BUFDG’s magisterial “Accounting for Pensions” guidelines).

    For this reason, many USS providers show a much healthier balance than accurately reflects a surplus they can actually spend or invest. This gives them the appearance of having performed as a group much better than TPS institutions, where the increase in contributions has made it more expensive to employ staff.

    Here I show the level of reported surplus(deficit) after tax, both with and without the USS valuation effect. Removing the impact of valuation puts 35 providers (including big names like Hull, Birmingham, and York) in deficit based on financial statements published so far.

    [Full screen]

    And here I show underlying changes in staff costs (without the USS valuation effect). This is the raw spend on employing staff, including pay and pensions contributions. A drop could indicate that economies have been sought – employing fewer staff, employing different (cheaper) staff, or changes in terms and conditions. But it also indicates underlying changes in TPS contributions (up) or USS contributions (down) with respect to current employees on those schemes.

    [Full screen]

    Charts updated 11am 27 January to remove a handful of discrepancies.

    Fee income

    For most universities the main outgoing is staff costs, and the main source of income is tuition fees. Much has been made of the dwindling spending power of home undergraduate fees because of a failure to uprate with inflation, but this line in the accounts also includes unregulated fees – most notably international fees and postgraduate fees. The full name of the line in the accounts is “tuition fees and educational contracts”, so if your provider does a lot of bespoke work for employers this will also show up here.

    Both of these areas of provision have seen significant expansion in many providers over recent years – and the signs are that 2023–24 was another data point aligned with this trend for postgraduate provision. For this reason, the total amount of fee income has risen in a lot of cases, and when we get provider level UCAS data shortly it will make it clear that just how much of this is due to unregulated fees. International fees are another matter, and again we need the UCAS end of cycle data to unpick it, but it appears from visa applications and acceptances that from some countries (China, for example) demand has remained stable, while for others (Nigeria, India) demand has fallen.

    Here I show fee income for the past two years, and the difference. This is total fee income, and does not discriminate between types of fees.

    [Full screen]

    One very important thing to bear in mind is that these are figures for the financial year, and represent fees relating to that year rather than the total amount of fees per student enrolled. For example, if a student started in January (an increasingly common start point for some courses at some institutions) you will only see the proportion of fees that had been paid by 31 July shown in the accounts. If you teach a lot of nursing students who start at non-traditional times of the year this will have a notable impact, as will a failure to recruit as many international students as you had hoped to do in January 2024 (though this will also show up in next year’s accounts).

    And it is also worth bearing in mind that income from fees paid with respect to students registered at the provider but studying somewhere else via an academic partnership, or involved in a franchise arrangement (something that has seen a lot of growth in some providers) shows up in this budget line.

    Other movements

    Quite a number of providers have drawn down investments or made use of unrestricted reserves. This is very much as you would expect, these are very much “rainy day” provisions and even if it is not actually raining now the storm clouds are gathering. Using money like this is a big step though – you can only spend it once, and the decision to spend it needs to link to plans not to need to spend it in the near future. So even if your balance looks healthy, a shift like this speaks eloquently of the kinds of cost-saving measures (up to and including course closures and staff redundancy) that you may currently see happening around you.

    Similarly, a provider may choose to sell assets – usually buildings – that it does not have an immediate or future use for. The costs of running and maintaining a building can quickly add up – a decision to sell releases the capital and can also cut running costs. Other providers choose to hang on to buildings (perhaps as assets that can be sold in future) but drastically cut maintenance and running costs for this reason. Again, you can (of course) only sell a building once, and a longer term maintenance pause can make it very expensive to put your estates back into use. I should note that the overall condition of university estates is not great and is declining (as you can read in the AUDE Estates Management Report) , precisely because providers have already started doing stuff like this. If the heating seems to be struggling, if the window doesn’t open, that’s why.

    In some cases we have seen decisions to pause capital programmes – not borrowing money and not building buildings as was previously planned. Here, the university makes an on-paper saving equivalent to the cost of finance if it was going to borrow money, or frees up reserves for other uses if it was using its own funds. Capital programmes don’t just include buildings – perhaps investment in software (the kind of big enterprise systems that make it possible to run your university) has been paused, and you are left struggling with outdated or unsuitable finance, admissions, or student record systems.

    Where we are talking about pausing building programmes it is important to remember that these exist to facilitate expansion or strategic plans for growth. The “shiny new building” is often perceived as a vice chancellor’s vanity project – in reality that new business school and the recruitment it makes possible may represent the university’s best hope of growing home fee income faster than inflation.

    What’s next?

    We see financial information substantially after the financial year ends – and for most larger providers this comes alongside the submission of an annual financial return to their regulator. We know for instance that the Office for Students is now looking at ways of getting in year data in areas where it has significant concerns, but financial data (by dint of it being checked carefully and audited) is generally historic in nature.

    For this reason what is happening on your campus right now is something that only your finance department has any hope of understanding, and there may be unexpected pressures currently driving strategy that are not shown (or even hinted at) in last years’ accounts. Your colleagues in finance and planning teams are working hard to forecast the end of year result, to calculate the KFIs (Key Financial Indicators) that others rely on, and to plan for the issues that could arise in the 2025 audit. The finance business partners or faculty accountants – or whatever name they have where you work – will be gathering information, exploring and explaining scenarios, and anticipating pressures that may require a change in financial strategy.

    The data I have presented here is drawn from published accounts – the data submitted to regulators that eventually ends up on HESA may be modified and resubmitted as understanding and situations change – for this reason come the early summer figures might look very different than what are presented here (I should also add I have transcribed these by hand – for which service you should absolutely buy me a pint) – so although I have done my best I may have made transcription errors which I will gladly and speedily correct.

    However scary your university accounts may be, I would caution that the next set (2024–25 financial year) will be even more scary. The point at which the home undergraduate fee increase in England kicks in for those eligible to charge it (2025–26) feels a long way off, and we have the rise in National Insurance Contributions (due April 2025) to contend with before then.

    There are a small but significant number of large providers looking at an unplanned deficit for 2024–25, as you might expect they will already be in contact with their regulator and their bank. Stay safe out there.

    If you are interested in institutional finances, I must insist that you read the superb BUFDG publication “Understanding University Finance” – it is both the most readable and the most comprehensive explanation of annual university accounts you will find.

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  • Ventriloquising the student interest | Wonkhe

    Ventriloquising the student interest | Wonkhe

    Following the devastating review offered by the 2023 report of the Industry and Regulators Committee of the House of Lords, the Office for Students’ (OfS) proposed strategy makes a great play of being centred around “the student interest”.

    But while it recognises that students have diverse and changeable views about their interests, it is still significant that it characterises these as “the student interest” rather than “students’ interests”.

    The reason for doing this is that it makes it much more rhetorically powerful to claim you are doing something in relation to an interest that is definitive, rather than interests which are multivarious and shifting.

    And be clear, the OfS proposed strategy shows a huge appetite to intervene in higher education in the name of “the student interest”.

    Much talk, no sources

    In the draft, OfS boasts that it has done a great deal of work to renew its understanding of the student interest – polling students, holding focus groups, hosting engagement sessions and talking to their own student panel.

    But two things are particularly noticeable about this work. First, whilst a lot of other sources are referenced in their strategy consultation, this is one area where no evidence is provided.

    This means the OfS interpretation of the outcomes of this consultation cannot be interrogated in any way. Clearly OfS knows best how to interpret this interest and isn’t interested in collective conversations to explore its ambiguities and complexities.

    Second, none of this work involves open ended engagement with students and their representative organisations (who appear to have been excluded completely, or at least their involvement is not detailed). They are all forms of consultation in which OfS would have framed the terms and agenda of the discussions (non-decision-making power, as Steven Lukes would have it). It’s consultation – but within tightly defined limits of what can legitimately be said.

    This seems to explain the remarkable number of priorities in the strategy (freedom of speech, mental health, sexual harassment) that are said to be in the student interest but previously appeared in ministerial letters outlining the strategic priorities of the OfS.

    Get a job

    Perhaps most concerning is that the government/treasury logic that the only real reason for going to university is to get a well-paid job is now central to the student interest. Sometimes this is done more subtly by positioning it in the (never-)popular student language of “a return on investment”:

    …in return for their investment of time, money and hard work they [students] expect that education to continue to provide value into the longer-term, including in ways that they may not be able to anticipate while they study (p.12).

    At other times, we are left in no doubt that the primary function of higher education is to serve the economy:

    Our proposals…will support a higher education system equipped to cultivate the skills the country needs and increase employer confidence in the value of English higher education qualifications. High quality higher education will be accessible to more people, and students from all backgrounds will be better able to engage with and benefit from high quality higher education, supporting a more equal society which makes better use of untapped talent and latent potential. The supply of skilled graduates will support local and national economies alike, while the ‘public goods’ associated with high quality higher education will accrue to a wide range of individuals and communities. Public goods include economic growth, a more equal society and greater knowledge understanding (OfS 2024 p.30-31).

    So what we are left with is a proposed strategy that makes powerful claims to be grounded in the student interest – but which could have easily formed part of the last government’s response to the Augar review.

    Whose priorities?

    Through its consultation on its proposed strategy, OfS has presented the priorities of the previous government as if they are drawn straight from its engagement with students.

    We don’t yet know the higher education priorities of the current government, but given the proposed strategy was published under their watch it looks like we are moving in a depressingly familiar direction.

    It is worth reflecting on the profound injustice of this. Students are expected to pay back the cost of their higher education and now have the previous government’s priorities presented as their interest so that OfS can intervene in higher education.

    Yes, you have to pay – but the government and its friendly neighbourhood regulator are here to tell you why you want to pay! It seems that despite the excoriating criticism of the House of Lords Committee, OfS have not really learned how to engage with students or to reflect and reconcile their interests.

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  • A new funding body landscape emerges in Scotland

    A new funding body landscape emerges in Scotland

    Last June the Scottish government set out two proposals for changing up the funding bodies in post-compulsory education, following James Withers’ damning indictment of a “lack of cohesive approach, common purpose, or strategic narrative” in how Scotland’s skills system was organised.

    There were two options on the table, and the less drastic reshuffle has prevailed following consultation: the Scottish Funding Council (SFC) will take on all the funding responsibilities from Skills Development Scotland (SDS), which currently handles apprenticeships and training. And the Student Awards Agency Scotland (SAAS) will take further education student support off SFC’s hands, rather than being dissolved as per the other consultation option.

    We’ll be left with one funder – SFC – and one student support distributor – SAAS. SDS will still exist, retaining its careers information and guidance roles. It all sounds fairly coherent, when put like that, though open to criticism that it is simply a rejiggling of the funding system component parts (Annex B to the business case presents an exhaustive list of all the possible permutations of changes to the landscape, which some poor civil servant had to go through). Certainly from what we’ve seen, many consultation responses stressed that when it came to funding, the burning question is “how much” rather than “who”.

    Whether student support responsibilities stayed with SAAS or became a department of SFC was probably at the end of the day a somewhat moot point, and the Scottish government doesn’t bother to give any particular justification for the decision, besides it being slightly preferred by consultation respondees (44 per cent to 35 per cent). It would likely have been a whole heap of organisational work for little strategic reward.

    But let’s not underestimate the overall change that’s going to take place. We’ve now got post-school funding responsibilities all in one place within the SFC, including apprenticeships and other training – a landscape-wide role for new chief executive Francesca Osowska (who starts this week) to get thinking about. It’s a similar tertiary lens to Medr in Wales, and the kind of thing that some commentators on the English system would bite your hand off for. That said, there’s no indication that the Scottish government will think about giving the SFC freer rein to assign funding across the skills system as it sees fit – we’ll still be puzzling over itemised budgets each December covering exactly how much will be spent where, for the foreseeable future.

    Legislation to enact the changes will now arrive “in the coming weeks”, with a view to it all being in place by autumn 2026. This may prove ambitious given that there are elections in Holyrood in the interim.

    Anyone for new powers?

    The consultation also asked for feedback on changes to SFC governance (all largely welcomed by respondents), as well as on “enhanced functions” for the funding council. This wasn’t a set of proposals, but more along the lines of a call for ideas, on issues like the information that those funded need to return to SFC, or the strengthening of data collection processes (respondents unsurprisingly were pro-strengthening rather than anti-strengthening).

    But it’s worth thinking about what’s changed since the consultation was launched. The financial situation at various Scottish universities has worsened significantly (meanwhile in England the sector has been hammering its regulator for not having collected more timely financial data). Higher education minister Graeme Dey has explicitly linked possible new powers with the SFC – for oversight and intervention – to its ability to respond to university financial crises.

    So in the consultation responses we see “calls for up to date information on the financial sustainability of institutions and skills providers, and the financial health of the skills sector as a whole” – moves here would seem to chime with ministerial thinking. On the question of new powers of intervention, there’s likely to be much more pushback:

    A number of fundable education bodies, individuals and others […] did not see any need for additional powers for SFC. These respondents suggested that SFC had all of the powers required for their current role, and that proposed reforms should be implemented before reviewing the need for new powers. This was also linked to a view that implementation of reforms should initially focus on policy and support.

    Today’s announcement on the preferred rearrangement of funding bodies is not accompanied by any indication of where government policy is going on powers and duties for the SFC – this will come with the legislation, and then almost certainly be the subject of parliamentary horse-trading during the bill’s passage through Holyrood.

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  • Your 2025 higher education policy almanac

    Your 2025 higher education policy almanac

    Well, it’s January again.

    The early months of last year were dominated by the Conservatives’ slow swan dive into electoral oblivion, and then we got a general election that saw little serious discussion of the sector’s future, aside from the trotting out of a few old canards.

    And since Labour took power in July, there have been two broad phases: an initial “these things take time” framing in which universities – as well as many other groups and industries – were asked to be patient. In November we got the tuition fee uplift in England (in cash terms, for one year) and news of a bigger reform plan due next summer. A little movement, but in grand terms it was still can-kicking. Even the concrete announcements we’ve had, such as on level 7 apprenticeships, have not been accompanied by detailed policy papers or formal consultations.

    There’s reason to think that 2025 will have more for wonks to get their teeth into. There’s plenty pending, promised, or otherwise pretty damn urgent. So the below is an attempt to reckon with absolutely everything we know is on its way that matters for HE. Please charitably ascribe any oversights to a post-holidays sugar crash on my part rather than wilfully turning a blind eye, and let me know what I’ve missed in the comments.

    Big ticket items

    In Westminster politics, the first half of next year is going to be completely dominated by the spending review, which will set departmental budgets for three financial years (2026–29) as well as lay out a five-year programme of capital spending. It has always been described as being “in the spring”, but recent reports suggest that Labour will fly as close to the summer solstice as they can with this definition, so make sure you’ve got some free time in June to deal with the fallout.

    If what we read in the papers is to be believed, what is – counterintuitively – the default policy of inflation-linked tuition fees will be confirmed for England at this point, taking us up over £10,000 a year by the end of the Parliament.

    This is also when we’ll hear more about the government’s plans for ten-year R&D budgets. Attendees of the 2023 Labour conference may recall science secretary Peter Kyle promising a decade of confirmed funding for UKRI and ARIA – this commitment has been repeatedly qualified since then, partly due to issues of practicality (given that it’s not a ten-year spending review) and partly due to a question mark over whether fixing research spending in this way is really a good idea. It’s likely to be restricted now to “specific R&D activities” – the (much) bigger question will be around levels of investment in R&D. Plus we’ll see to what extent the government really wants to commit to linking research and its missions – last autumn brought only a small pot of cash for this in 2025–26.

    Also due alongside the spending review is “further detail and plans for delivery” for the Lifelong Learning Entitlement – so don’t expect to hear much more before then, though the delayed commencement in 2027 makes the need for information marginally less pressing. And the finalised industrial strategy will also arrive, “aligned with” (and likely published together with) the spending review, laying out specific sector plans for areas like the creative industries, the life sciences, and professional services. Once complete, the idea is that these plans can then inform Skills England’s work, and potentially migration policy – it’s all very ambitious.

    The HE reform announcement in England that we’ve been promised for “the summer” will land – it appears – fairly hot on the heels of the spending review settlements, and any money needed for it will need to have been allocated already, or at least tucked in to Office for Budgetary Responsibility (OBR) projections in some way. On the topic of the OBR, its spring forecast is due on 26 March – there are rumblings that its revised projections could spell fiscal trouble for the government.

    There are also clear indications that the HE reform statement will be preceded, or possibly accompanied, by a review of some kind. There have been rumours of a panel in place, and the indications are that this will fly under the radar somewhat and happen quickly – think Becky Francis’ curriculum review or Lord Darzi’s NHS audit, rather than a grand commission in the traditional “major review” style we have become used to.

    Around the sector

    Part of the Westminster government’s reform agenda is predicated on the sector coming up with ideas itself, which may end up drawing quite a lot on Universities UK’s blueprint from back in September. UUK’s own “efficiency and transformation taskforce” will be busy putting out recommendations on business models and collaboration, with the endorsement of education secretary Bridget Phillipson – “all options are on the table,” we are told, with plenty of policy debate likely to ensue once publications begin to appear.

    With many universities in poor financial shape, the search for longer-term sustainability will likely be derailed at regular intervals by news of redundancies and course closures. National industrial action is a possibility, though there are real questions around the willingness of struggling union members to take action on pay at this point. Local disputes will continue to flare up. Alongside this we have a renewed push for newer English universities to be exempted from the Teachers’ Pension Scheme due to the massively increased costs it is now carrying, a move which would substantially inflame industrial relations if it came to pass.

    And looming over all of this is the possibility of a disorderly market exit, and the question of whether the government has a viable plan in place to step in if a large institution were to hit the wall. All the other policy developments we are highlighting here could be hugely complicated by a sudden shock to the system and what is likely to be a political rather than a strategic response.

    The world of regulation

    There’s a lot to look out for from the Office for Students, from the appointment of a new permanent chair down (interviews are being held this month).

    There’s the ongoing consultation on a new strategy, the continuing fallout from the temporary closure of the register (this should supposedly also bring new proposals on improvements to the registration process), whispers of a more “integrated approach” to quality and whatever that means for the TEF, and a greater regional focus to access and participation.

    We should start getting assessment reports for the second round of quality investigations (where franchising and foundation years will be a focus) as well as the belated release of those grade inflation investigations that were announced on 2 September 2022. We’re waiting for consultation responses on a new approach to public grant funding and even on LLE regulation, though you can’t blame them for waiting to see what exactly the government is planning with this one.

    According to last summer’s business plan, there should also be consultations of potential new initial conditions of registration on both management and governance, and consumer protection. And this year’s National Student Survey will have a sexual misconduct questionnaire appended – though it’s not clear at time of writing to what extent the results will be made public.

    Over in Wales, Medr is taking shape, with a finalised strategic plan due to have been submitted to the Welsh government for approval just before the Christmas break – we should hear more of this soon, along with the consultation response.

    And if all that sounds like a lot, in Scotland we are due a Post-School Education Reform Bill at some point in the 2024–25 parliamentary session, which will make big changes to how the Scottish Funding Council (SFC) and Student Awards Agency Scotland operate. A consultation which closed in September asked stakeholders for thoughts on what the funding agency landscape should look like – we haven’t heard much since then. The sector is keen to stress the importance of universities retaining their autonomy, whatever happens – legislative passage could see MSPs push for new duties on the SFC.

    We’ve been aware for a long time that the Office for National Statistics is undertaking a review into whether higher education should be seen as “public sector” in the national accounts – it’s now been slightly rejigged into a review of the statistical classification of “the transactions in which UK universities engage.” For what is a very technical definition, an eye over the recent travails of the FE sector suggest that there are potential implications for everything from procurement to senior staff pay. The long delayed work will kick off early in 2025.

    The research agenda

    What little research policy we’ve seen come out of the new government so far has been limited to haggling over budgets and science minister Patrick Vallance stressing that ministers should not meddle in university research. There’s no reason to think we will get big policy pronouncements out of the Department for Science, Innovation and Technology, which feels more interested in the tech and digital side of its remit, both legislatively and aesthetically. But there’s lots going on around the margins that could end up being quite consequential.

    First up we have the appointment of a new UKRI chief executive, where there’s already evidence the new minister has been having a think about longer term strategic direction. While the new roleholder won’t take up office until June, we should get news of the appointment fairly soon.

    In the Research Excellence Framework world, the “modular” approach to releasing different policies on a staggered timetable will see the release of the volume measure policy (imminently) and the contribution to knowledge and understanding policy (scheduled for the summer). The more contentious people, culture and environment pilot will continue throughout the year, with criteria and definitions due for the winter – any slippage on this will likely provoke controversy.

    At UKRI, January will bring an update on its work reviewing how PGR stipends are set (as well as the stipend level for 2025–26). Elsewhere, the ongoing National Audit Office work looking at UKRI grants and loans could be a wildcard – it’s due to report in spring 2025 – and at the very least is a moment where the government will need to comment on how the research funding system is operating. Research England is also thinking about the current state of research infrastructure, via its condition of the estate survey, and how the sector’s financial challenges are affecting research – for both of these pieces of ongoing work, it’s doubtful that much will be shared publicly.

    Further afield, a European Commission proposal for the successor to Horizon Europe is due midway through the year, preceded by an interim evaluation of the current funding programme which will likely give an indication of its plans. We will also get regulations for the Foreign Influence Registration Scheme in the new year – the measures, which will speak to research security, are now expected to come into effect in the summer. It’s been reported that the government is resisting calls to put China on the “enhanced tier” of the scheme, a move that would have greatly complicated UK-China academic partnerships. On a related note, the government has quietly been conducting a “China audit” – this will be released in the coming months, and in theory will spell out the policy areas where closer ties will be permitted.

    Finally, the House of Commons Science, Innovation and Technology Committee will be conducting a timely inquiry into regional R&D, which should be a good opportunity for some more insight into how the government’s English devolution-related plans for more mayoral involvement in the research system will come together.

    International

    If you had to pick a policy area that will have the biggest macro impacts on the sector in 2025, you could do a lot worse than opt for international recruitment (you would arguably have been proved right if you’d chosen it in any of the last few years).

    Two big policy items are on their way here: a legal migration white paper, spelling out how the government will fulfil its electoral promise to bring net migration down. And a revised international education strategy (IES), which we’re told is coming “early spring” – whether it will appear before, after, or alongside the white paper remains to be seen, but could be significant.

    The big questions here are whether the government will put a recruitment target on the face of the strategy – the aspiration for 600,000 students in the last one ended up coming back to haunt the Conservatives among their own base – and what the plan for education exports targets might be. But there are other areas we could see movement, such as on post-study work, where some in the sector seem hopeful that a little improvement could be on offer, despite the enormous political pushback the Graduate route has faced over the last couple of years. It feels like an outside bet.

    More important to keep an eye on will be whether some kind of arrangement is arrived at with net migration statistics – we know that the Office for National Statistics is looking at how estimates excluding students could be arrived at, and it’s been on the higher education sector’s wishlist for years.

    If it did come to pass, the devil would very much be in the detail – the Migration Advisory Committee annual report has already been noting the contribution that students make to long-term net migration, and Starmerite think tank Labour Together’s recent proposal is for visa routes such as Skilled Worker and Graduate to have multi-year targets, even if the Student visa does not. Put like that, it sounds like a recipe for universities to recruit pretty freely but for students’ post-study options to remain a political football – the seeming lack of student involvement in the IES review would appear all the more glaring in this case. The Universities UK blueprint did promise a kind of quid pro quo on responsible international recruitment, and it has been notable that government ministers have stressed the importance of housing availability when the question has come up in Parliament recently.

    Whatever comes out of it, it looks clear that the Home Office will continue to toe a careful line on student visas, and continue to implement the last government’s Graduate route review response. The use of “action plans” by UKVI for certain providers will continue, even if there is no substantive public comment from the Home Office about what these are and why they are being imposed. And there will also be a review of English language self-assessment policies over the next few months, “driven by growing concern around underlying reasons for reports of students being picked up at the border or entering UKHE with low levels of English” (in UUKi’s words). It’s unlikely much will be shared publicly about these, but they are items to watch, especially in the event that there is further negative publicity about international students in the media.

    It’s worth stressing that developments in migration and visa policy do not only affect students – the House of Lords Science and Technology Committee is next week highlighting the interplay between visas and international researchers, and there are ongoing issues such as the future of the family visa income threshold where the government will eventually need to take a position.

    And despite all this policy in play, the three most significant factors for future international recruitment with likely be the Australian federal election – where the incumbent government’s attempts to impose number caps have been thwarted by an opposition that wants bigger caps – the Canadian election – which could happen at any minute if Justin Trudeau is forced out, and where the Conservatives are strongly favoured to take power – and the impact of Donald Trump on the USA, where universities are already reportedly asking international students to return before he takes office. All these things have the potential to greatly benefit the UK “market”.

    Skills, skills, skills

    Before we get any HE reform news out of Westminster, there’s going to be policy elsewhere in the post-compulsory system, with Skills England gearing up for action – we’ll learn the appointments of chief executive and permanent chair pretty soon – and various policy pronouncements at this end of the tertiary sector are overdue.

    Probably the most impactful for higher education is confirmation about exactly what is happening with the apprenticeship levy, both in wider terms of the planned additional flexibility for non-apprentice courses (this will be less than the 50 per cent originally proposed… at least probably), and for the “defunding” of level 7 apprenticeships.

    Many universities are big operators in this space, and it appears that most if not all of these programmes will be removed from the levy’s scope (“a significant number” is the most recent framing from the government). Over Christmas the Telegraph reported that the much-feted doctor apprenticeship is now “paused in perpetuity”. We should get the full picture very soon, as well as the much-awaited post-16 strategy, which you would hope would give a decent insight into the government’s wider vision for tertiary education. Though it may not.

    The defunding of level 7 apprenticeships is also relevant for those higher education institutions that have been spending their levy contributions on such courses for their staff as part of their professional development offer. DfE assures us all that employers are more than welcome to pay for them using different funds, “where they feel they provide a good return on their investment.”

    Our world in data

    We’re getting the outcome of the Data Futures review soon! There may be some lessons to learn about programme management and platform delivery, which could play out as a shared commitment to improving processes or as an unedifying multi-agency row. Whatever the case, this year’s HESA Student data will arrive later than usual – “in the spring, earlier than last year’s August publication but later than the January release date achieved in previous years.” Whether this is spring as in daffodils, or spring as in spending review, remains to be seen – but the delay (and issues with data quality as we saw last year) will have a knock on effect on data releases elsewhere, once again.

    At the end of this month we are getting HESA Staff data for 2023–24. The headline figures from last year’s release did get quoted the odd time by the previous government – in answer to questions about the impact of redundancies and cuts, it would occasionally be pointed out by ministers that (academic) staff numbers were still rising when you look at the sector as a whole. These figures won’t show the impact of this academic year’s cuts, however.

    Of course, elsewhere we have the usual releases which make up the HE wonk’s annual working rhythm. UCAS end-of-cycle numbers, at provider level, are due out at the end of January, and further down the line (probably around spending review time!) we have HESA Finance data and the Office for Students’ accompanying financial sustainability report, which will likely once again be a moment of maximum attention for higher education’s bottom line.

    One other piece of data we are getting this spring is a new ONS release on student suicides. This will come alongside the independent review commissioned by the last government, and whatever the findings is likely to generate a lot of press coverage and renewed pushes from campaign groups and opposition parties for a statutory duty of care. Early indications from the current government is that they are happy with the voluntary, sector-led approach to mental health – but things can change.

    Elsewhere in government

    It’s amazing it’s taken us this long to get to it, but probably the biggest, most controversial item on DfE’s to-do list is a decision on the fate of the free speech act and its associated provisions and complaints scheme. The Free Speech Union has its day in court on 23 January as part of a legal challenge over the pausing of the bill’s commencement – it’s just possible that the government will try to get a decision out before then. Or it could all drag on intractably for several more months, very much in keeping with the legislation’s passage through Parliament.

    Another hugely consequential move which we may see from DfE this month is the launch of a consultation on proposals to “strengthen oversight of partnership delivery in higher education” in conjunction with OfS. The department “will be developing options for legislative change, if required,” the Public Accounts Committee was told back in September, with a target date of January 2025 for an update.

    We’re due impact assessments and regulations for the tuition fee and maintenance “increases”, which should also involve a government pronouncement on how much the national insurance increase will cost the sector. And while it’s not higher education business, the soon-to-appear curriculum review (covering the curriculum in England from key stage 1 to key stage 5) will have long-term consequences for the wider education system – as well as likely sparking further backlash among those worried about it recklessly promoting diversity and risking PISA scores.

    Elsewhere in Westminster, the ongoing parliamentary passage of massive pieces of legislation will have big consequences for universities and students. The Employment Rights Bill and the Renters’ Rights Bill will both likely see some amendments, and we’re still awaiting the text of the English Devolution Bill and the promised “Hillsborough” bill. The government’s NHS plan for change – again, due at some point in the spring – and proposed updates to the NHS Long-Term Workforce Plan are important to keep an eye on as well.

    Up in Scotland, one day we may see the fruits of the ongoing review of student maintenance for part-time students. Negotiations over the 2025–26 budget will dominate the parliamentary agenda in the early part of the year, with ministers appearing in front of committees to get into the details of what exactly will be funded and what will not – and then the countdown to 2026 elections begins (all of this sentence is also true in Wales).

    It’s dangerous to go alone – take this

    If you’ve made it this far, congratulations. It feels like there is currently a huge number of moving parts in play in policy-land, all of which will contribute to the future shape and operations of the UK higher education sector in various, often hard-to-predict ways. Some are pretty immediate, others are issues that should have been tackled long ago, and then there are long-term policy changes that will be massive news in the 2030s.

    Here at Wonkhe we try to cover every single policy development that affects the sector, especially in our Daily Briefings (which restart on Tuesday 7 January – my alarm is already set).

    So if you’re interested in following even a fraction of the stuff that’s set out above, do join us for the ride this year. And fair warning, it’s likely that a good number of the most important developments that 2025 has in store for us are not even on this list. We’ll cover those as well, the moment they arrive.

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  • Universities want more money upfront. DfE wants proof students are really there

    Universities want more money upfront. DfE wants proof students are really there

    When students get their student maintenance loans, they get the first instalment a lot earlier than their university gets the corresponding tuition fee payment.

    That might help explain the curious case of disparities between pulldown – but there’s a sound theory to it. Students without savings could face a cashflow issue if it was any other way.

    It’s becoming a problem for universities too. The Office for Students’ (OfS) financial sustainability update report highlights low liquidity levels in the sector – especially during certain points in the annual cycle.

    That matters because universities have to meet minimum liquidity requirements in the registration conditions in England. A failure to maintain those levels can also impact “going concern” status and breach some lending covenants.

    In the past, cash flow imbalances tended to be offset by other income sources, borrowing, or cross-subsidies, such as from international student fees.

    But given how universities operate and the demands on cash before those SLC payments come in, there is in some providers a disproportionate reliance on arrears payments from SLC-funded students compared to other funding sources.

    For non-SLC funded students, universities typically charge fees upfront (or at least in front-loaded advance instalments) or get payments for stuff like government-funded apprenticeships monthly. Research funding streams also match payments to incurred costs.

    But the SLC’s payment profile for undergrads is 25:25:50 – so universities face significant upfront costs in the first two terms and then wait longer than standard 30-day payment terms to receive funds, forcing them to bridge the gap using other resources.

    So the University Alliance has a proposal – switch those payments to 40:40:20 to improve the sector’s funding position:

    Even if the move was phased first to 33:33:33 and then to 40:40:20 it would have an immediate impact on the current situation which has been adversely impacted by the previous administration’s approach to international student recruitment through restrictive visa policies.

    The current system is going to have to undergo change anyway, given the potential implications of the LLE. I note in passing that one of the most common student leader manifesto goals this year is better, less front-loaded instalments – surely the principle (and the issue in terms of cashflow) cuts both ways.

    But UA’s proposal might not land in quite the way intended – partly because the Student Loans Company is under pressure to increase yield.

    Leakage

    DfE’s “Tailored Review” of the Student Loans Company back in July 2019 talked of the rapidly increasing size of the student loan book, and the increasing importance and value of having a robust, well-resourced and effective repayment strategy which actively seeks to maximise yield.

    That said that the SLC is hamstrung by IT systems which do not “adequately facilitate the use of smart diagnostics for effective modelling, proactive use of data analytics and more precise customer segmentation” to minimise repayment leakage:

    Indeed, unverified customers account for c. £7bn of uncollected repayments (although many of these would not be in a position to repay)

    September’s SLC board minutes noted that its CEO had been along to DfE’s Audit and Risk Committee, where the department led an item on the student finance loan book, with an emphasis on its “scale and yield potential”.

    And its newly published Business Plan for 2024-25 says it will work with partners in DfE to progress proposals to “improve repayment customer verification rates”, “improve data quality to increase verification and yield” and look at options to apply stronger sanctions to customers not adhering to the terms and conditions of their student finance repayments.

    Some of that is about the SLC’s systems – but one of the problems noted in the National Audit Office’s report into franchising is that there is often “insufficient evidence” that students are attending and engaging with their courses:

    In determining a student’s eligibility for loan payments, and before making payments, SLC uses lead providers’ data to confirm students’ attendance. Lead providers self-assure their own data… there is no effective standard against which to measure student engagement, which attendance helps demonstrate, and there is no legal or generally accepted definition of attendance. Providers themselves determine whether students are meaningfully engaged with their course.

    So in a set of circumstances where the NAO and the Public Accounts Committee (PAC) are already worried about attendance and engagement, and providers are worried about their own cashflow, it seems unlikely that DfE is going to be receptive of a proposal to give providers more of the money early – especially if, in the case of franchised provision, it can’t just claw it back from the lead provider if there’s a problem like the Applied Business Academy.

    As we noted back in October, the government’s response to the NAO and the PAC was that it published guidance on attendance management in May, against which providers can be held to account “in relation to the release of SLC tuition fee payments”.

    That said that there is an “understanding and acceptance” across the sector that providers should have in place published attendance and engagement policies, so that students understand the commitment expected of them and the respective process a provider follows if attendance expectations are not met.

    It also said that in any circumstance where a provider does not have a published policy, the department “expects” that one will exist from the 2024-25 academic year – but it’s pretty clear talking to people around the country that that goal hasn’t been meaningfully met in large parts of the sector, at least in terms of a policy that both covers home students and is “auditable”.

    And part of the difficulty there is what is or isn’t meant by “attendance”.

    Attending isn’t always in person

    The Attendance Management guidance says:

    Attendance means participation in a course by a student, including, but not limited to, teaching face-to-face or blended study, in line with a provider’s published attendance policy. A provider should communicate its policy to a student and have an auditable process in place to support the action it may take when a student does not meet attendance expectations.

    It goes on to say that providers have flexibility to ensure every student engages with a course, and that the student and/or the course may require greater or less attendance than another due to circumstances or content.

    SLC told me that there is no difference between “attendance” and “engagement” – the definition of “attendance” for student finance purposes is active and ongoing engagement. Crucially, it said that “attendance” doesn’t have to mean “in person”, or “studying on campus”.

    But the conflation of “attendance” and “engagement” doesn’t seem to apply when a course is designed and designated. Noting that “blended learning” combines traditional classroom teaching with online learning and independent study, it says that there has been some confusion as to whether these courses should be coded as distance learning courses:

    Courses of any teaching method are distance learning if the students only attend occasionally, for example once a term. If students attend regularly, for example once a week, and follow a structured timetable, the course is not distance learning and you should not add it to CMS as such.

    That paragraph draws a clear distinction between attendance and engagement. Its two scenarios also appear to draw a distinction between (physical) attendance and “engagement”:

    • Scenario 1: Thomas is studying a BA Hons in sports coaching. His course hours are 30 weeks online study including lectures and tutorials, 2 days per week physical attendance at sports academy, 6 days per year attendance at university. As Thomas needs to attend the sports academy regularly rather than occasionally, this is an in-attendance course.
    • Scenario 2: Kate is studying an HND in Musical Theatre. Her course hours are 30 weeks online study including lectures and tutorials, 3 days per year (1 day per term) attendance at college. As Kate only needs to attend college occasionally rather than regularly, this is a distance learning course.

    The difference between Scenario 2 and the patterns of attendance being seen by many providers around the country this term is that in that scenario, the course is designed not to include regular physical attendance.

    A two-stage process

    SLC told me that whether it’s distance or in-person, engagement on a course is required and confirmation of that engagement is therefore required for SLC to make a fee loan payment on the student’s behalf.

    Ongoing engagement is not part of the definition of in-person or distance learning. That distinction relates to the attributes of the course that is supplied by the provider, as to whether the course has elements of in-person learning or if the student is not required to be in-person.

    But the obvious question is as follows. Notwithstanding codified exemptions for disabled students, if a course is designed as blended, would an acceptable “attendance management” policy for a course of that sort allow a student to engage all term, but only occasionally physically attend?

    If yes, and Kate’s HND wasn’t designed as blended, and her mate Kathy was on a course that was designed as blended, that would seem to mean that they could both have exactly the same attendance and engagement pattern, but Kathy would get a maintenance loan while Kate wouldn’t.

    If, on the other hand, a course was designed as blended and requiring regular in-person attendance, and SLC would expect an attendance/engagement policy to enforce that regular in-person attendance, there’s plenty of providers right now falling foul of those expectations.

    So you end up with three categories:

    1. Providers who’ve never really had a proper policy on any of this for home students – let alone enforce one – beyond noticing if a student doesn’t submit what can often be end-of-year summative assessment.
    2. Providers who designed a course as blended where students are in reality engaging in a “distance learning” kind of way – which, while confirming engagement in accordance with the rules, seems hugely unjust to tens of thousands of OU students if nothing else.
    3. Providers who are heavily auditing and requiring physical attendance – partly to achieve parity with international students – at just the point that students are struggling to attend in-person given wider demands on their time.

    It may well be the case that SLC is stuck with the definitions it has – which in part date back to the Teaching and Higher Education Act 1998.

    But if it’s the case that it’s OK for an attendance policy to not actually require regular in-person attendance, it’s hard to believe that whatever size and shaped-problem that DfE and the SLC have with student loan fraud is going to get anything other than worse.

    And in the end, this all comes back to an old problem – not knowing what’s going on underneath headline non-continuation.

    How far in?

    Remember those risks that OfS identified in its insight brief on subcontracting:

    • Data of extremely poor quality has been submitted in relation to students at some subcontractual partnerships, leading to payments being made to, and on behalf of, students who are not genuinely entitled to them.
    • Delivery partners have lacked clear attendance policies, making it almost impossible for lead providers to submit accurate data to the OfS and the SLC in relation to these students.
    • Students have been encouraged to register for courses that they do not genuinely intend to study, to access public funding through maintenance loans. In some cases, students have withdrawn from courses shortly after receiving these funds; in others there are grounds to doubt that they are continuing to study, despite their termly attendance being confirmed.

    Whether we’re looking at a select group of partnerships as OfS published data on last week or directly taught provision, while we know what percentage of UG students don’t make it to the second year, we don’t know what proportion:

    • Got instalment 1 of the maintenance loan but didn’t get as far as “engaging” enough for the provider to claim instalment 1 of the tuition fee loan (they don’t show up at all in non-continuation)
    • Engaged enough to enable the provider to claim instalment 1 but not enough to enable the provider to claim instalment 2 (and what proportion of them claimed maintenance instalment 2)
    • Engaged enough to enable the provider to claim instalment 2 but not enough to enable the provider to claim instalment 3 (and what proportion of them claimed maintenance instalment 3)
    • Engaged enough to enable the provider to claim instalment 3 but then failed and was withdrawn
    • Engaged enough to enable the provider to claim instalment 3 and was eligible to progress but then self-withdrew
    • And we don’t know any of the above for subsequent years of study.

    In many ways, what we have here is (yet) another iteration of the stretch involved in a single level playing field. There have been endless tales down the years of Russell Group alumni not really “engaging” at all for entire years, and in some cases entire degree courses – only to pull it out of the bag at the end. It’s an adult environment, after all.

    On the other hand, with another part of the sector now under close scrutiny over ghost students of differing definitions – just as the FE sector saw scandals over in the 90s – it doesn’t feel like that kind of legend is to be allowed.

    In terms of the cashflow thing, if DfE and the SLC are going to push more of the money upfront, they’re surely going to want to know the percentages and numbers in each of the above categories.

    And the accuracy of those percentages and numbers involves providers being sure about “enough” engagement – in an auditable way across the diversity of programmes and reasonable adjustments – to tick the box in the data return to SLC three times a year.

    It does feel like there’s some distance to go on all of that as it stands.

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  • Collaboration is key when it comes to addressing harassment and sexual misconduct

    Collaboration is key when it comes to addressing harassment and sexual misconduct

    In all of the noise about the OfS’s new regulation on harassment and sexual misconduct there’s one area where the silence is notable and disappointing – sector collaboration.

    Back in 2022, the independent evaluation of the OfS statement of expectations on harassment and sexual misconduct made a clear recommendation that OfS and DfE “foster more effective partnership working“ both between HE providers and with those external to the sector. Now, having published details of the new condition E6 and the accompanying guidance, this seems to have been largely forgotten.

    There’s a nod to the potential benefit of collaboration in OfS’s analysis of consultation responses, but it only goes as far as to say that providers “may wish to identify collective steps” – with little explanation of what this could look like and no intention or commitment to proactively support this.

    This feels like a significant oversight, and one that is disappointing to say the least. It’s become clear from our work with IHE members that collaboration needs to be front and centre if we have any hope as a sector of delivering in this area. Without it, some providers – especially smaller ones – will not be able to meet the new requirements, creating risk and failing to achieve the consistency of practice and experience that students expect. This feels even more true given the current context of widespread financial insecurity. Any new regulation ought to be presenting mechanisms and incentives to collaborate – and reduce costs in doing so.

    Working together for a stronger sector – or only sometimes?

    The silence around collaboration is also surprising, given that in other spheres it is seen to be – and in many cases is – the solution to institutions meeting regulatory requirements and student expectations. John Blake’s latest speech on a regional approach to access and participation is just one example of this. There is implicit recognition that in this era of “diminishing resources”, working together is the solution. There’s also the recognition that partnership working needs funding – more on that later.

    It’s also surprising given that OfS has made clear that both providers in any academic partnership are responsible for compliance with the new condition, including where there’s a franchise arrangement. This seems like an open door for collaborative approaches, given that over half the providers on the register do not have their own degree awarding powers. However, as usual, it is unclear what this means in practice. There is no reference in the regulation to how the OfS would view any collaborative efforts, or examples of what this might look like in practice.

    Academic partnerships make logical collaborators

    IHE’s recent project on academic partnerships demonstrates the potential of such arrangements for collaboration that benefits both providers and their students. Our research found a number of innovative models where awarding institutions facilitated collaboration with and between their academic partners in areas including shared learning opportunities and use of shared platforms.

    There’s a clear opportunity here when it comes to staff training. All institutions need to have staff who are “appropriately trained”. Training in areas such as receiving disclosures and conducting investigations benefits from group delivery – where staff can learn from each other. A small provider might only have one or two staff who require it, meaning they are unlikely to draw much benefit from this. It would also make such training prohibitively expensive. It’s likely to need to be delivered by an external organisation (to ensure the “credible and demonstrable expertise” required) and such solutions aren’t scaled to an institution with just a handful of relevant staff. Awarding institutions sharing such group training would solve this – and also benefit shared processes in that staff across both institutions have the same level of knowledge and competence.

    A further benefit of shared training would be that partners could share staff when investigations need greater independence than a small provider can offer. This could be staff from the awarding partner, or another academic partner. This would effectively bring together useful knowledge of institutional context, policies and processes with the necessary external objectivity to run a credible investigation.

    Another opportunity for collaboration is in shared online reporting tools. These can be an effective way of encouraging disclosure, but such systems are often not scaled for small institutions. As well as being more cost-effective, sharing these could lead to greater confidence of students reporting in the independence of tool and the process that follows.

    Think local – for everyone’s sake!

    Regional or local collaboration is the other area with the potential to benefit students, providers, and other services supporting those who experience harassment or sexual misconduct.

    Local or regional collaboration on reporting and investigation can support disclosure by creating more independence in the system. The independent evaluation spoke specifically of this, recommending the facilitation of

    formal or informal shared services, such as regional support networks, and in particular regional investigation units or hubs.

    And it would enable more effective partnerships with external support services. Rather than every provider trying to establish a partnership with a local service (putting a greater burden on groups who are often charities or not-for-profits), group collaborations could streamline this. This needs to include all types of provider, including small providers and FE colleges delivering HE. This would be more efficient, reduce unhelpful competition for the limited resource of the service, and ensure that all students have access to these support services irrespective of their place of study.

    Where there aren’t local services, providers could pool resource and expertise to develop and deliver these. This would reduce competition for specialist staff in the same geographic location, and again ensure parity of support for students across providers.

    It’s important that such collaborations involve all parts of the sector, including small providers – with the burden of their participation reflective of their smaller size. This is vital to ensure that collaborative models are cost effective for everyone.

    Getting it right on student engagement

    Collaborative approaches are also going to be critical to make sure we get it right on student engagement. The OfS expectation is clear that providers work with students and their representatives to develop policies and procedures. But what happens when an institution doesn’t have an SU, or a formal representative structure, or the necessary experience in student engagement to do this? There’s a risk that it won’t be done properly or be done at all.

    We need to consider how we facilitate students to support each other to engage in co-production. This could include sharing staff or exploring the development of local student union services that bring in smaller providers or FE colleges without the means to partner with students in the way that is needed.

    Making it happen

    The sort of collaboration outlined above will need more than just the goodwill of institutions to make it happen. It needs regulatory backing, with more explicit recognition of the value of these approaches and guidance on what this might look like in practice. We also need to recognise that it’s costly.

    Catalyst funding, like that provided back in 2019, would represent far better value to the sector than asking individual providers to fund collaboration. The risk is that without it, the burden of developing a system that works for all students at all providers will be left to the smallest institutions who need these collaborative options the most. Funding would also boost evaluation and resource sharing across the sector. It could consider the benefits of collaborative approaches between awarding and teaching institutions as well as regional structures which ensure a greater parity of support across providers large and small.

    Somewhere on this path to regulation we lost the perspective that harassment and sexual misconduct is a societal issue. What we do now to educate, prevent harm to and support students will have a lasting impact on the future as students become employees, employers, parents and educators themselves. It is not a task to be shouldered alone.

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