Category: Regulation

  • Communicate, repeat and compensate – OfS issues principles over industrial action

    Communicate, repeat and compensate – OfS issues principles over industrial action

    University and College Union (UCU) staged a national marking and assessment boycott (MAB) – delaying graduations, job starts, and transitions to postgraduate study.

    UCU members took the action to tackle disputes including headline pay, gender and minority ethnic pay gaps, staff workload and the casualisation across the sector.

    Whenever there’s industrial action, the hope in Carlow St is that students will see the bigger picture – but this time around, at least for some students in some universities, the impact was significant. At the time, UCU estimated that 30,000 students were unable to graduate on time or were affected in some other way.

    In the aftermath, the Commons Education Committee held a mini inquiry to investigate the impact – it wrote to the then Conservative government to raise concerns about the lack of data, the role of the Office for Students (OfS) and the lack of clarity over students’ rights, and the eventual (post election) reply was predictably weak.

    Now, two years on, OfS has published research that was commissioned to develop an understanding of what the impacts were from a student perspective – along with guidance for institutions on protecting the interests of students during industrial action, and a webinar event planned for mid-May on the regulator’s expectations on how providers should support students before, during and after industrial action.

    OfS first ran a text-based focus group via YouGov in July 2024 that discussed short- and long-term impacts, what information they got from their institutions, and how those institutions handled the situation. A quantitative survey followed that gathered 763 responses (279 undergrads, 284 postgrads, and 200 graduates) that had been studying at impacted institutions during the boycott. You’d not be diving into demographic splits on that sample size.

    The polling drilled into how the industrial action affected their academic lives – immediately and over time – along with the comms they received from their universities, and how they viewed their rights as students.

    On the top line

    In a “topline” results report and associated student insights brief, we learn that the industrial action caused delayed or unmarked coursework (53 per cent) and exams (46 per cent), reduced lecture time (68 per cent), and decreased contact with staff.

    Most impacted students reported negative effects on academic work quality (49 per cent) and grades (42 per cent). The MAB’s psychological impact was significant – with 41 per cent reporting increased stress, 32 per cent experiencing poorer mental health, and 15-18 per cent noting negative effects on their social lives.

    One student is quoted as follows:

    I was waiting for the result of a resit that the progression of my masters’ depended upon but it was delayed so much I had to pay for the next module and would not get the results until halfway through.

    International students faced particular challenges, with visa uncertainties arising from delayed results and qualifications. Some students couldn’t attend graduation ceremonies because their results came too late:

    I didn’t manage to get graduation tickets in time due to how late results were, so I didn’t have a graduation ceremony.

    Communication varied considerably across institutions – with most updates coming through emails (65 per cent) rather than during lectures (22 per cent). Students rated information from individual lecturers (78 per cent satisfaction) more highly than university-wide communications (64 per cent satisfaction).

    Many students in the focus group:

    …were not told which of their modules would be affected, or when they would get their marks and feedback.

    OfS says that the institutional response was inconsistent across the higher education sector. Students directly affected by the MAB expressed significantly higher dissatisfaction (54 per cent) with their university’s handling of the situation compared to unaffected students (18 per cent). Just 46 per cent of affected students received alternatives or compensation, primarily through “no detriment” policies adapted from those developed during the Covid era (26 per cent).

    Financial compensation and rights awareness was low – with only 30 per cent knowing they could request it, and a mere 9 per cent successfully receiving any. The boycott also negatively impacted perceptions of education quality (38 per cent reporting a decrease) and value for money (41 per cent reporting a decrease), with one student noting:

    I ended up with a [postgraduate diploma] instead of my MSc, and I came out with a merit instead of a distinction.

    The brief does note that universities employed various mitigation strategies, including awarding interim degree classifications, guaranteeing minimum classifications, improving mental health support, reallocating marking responsibilities, and engaging with employers to request flexibility for affected graduates.

    Were they OK? Some students felt their institutions responded well, others reported that the experience contributed to decisions not to pursue further studies or work in higher education, with 42 per cent reporting decreased trust in their universities.

    Behind the screams

    Much of that won’t come as a surprise – although the sheer scale of the suggested impacts, as well as their depth and breadth on individual students (esp rer mental health and international students) ought to invigorate debates about the morality of the tactic, and how universities handled it to limit legal or financial exposure.

    Arguably of more interest is the letter and “regulatory statement” that accompanies the publication from John Blake, Director for Fair Access and Participation.

    Re-stressing that it’s not OfS’ role to intervene in labour disputes, Blake expresses concern about how strikes and the MAB disrupted students’ academic experiences, notes inconsistencies in institutional responses, sets out an aim to establish clearer expectations for fair treatment for all students in any similar future scenarios.

    And there’s a fascinating section on compensation:

    We want to be clear that we don’t see compensation as a substitute for the holistic experience of intellectual, professional and personal development that a student should expect from their higher education. Institutions should continue to focus their efforts during industrial action on delivering the education that students expect. The inclusion of an expectation in relation to compensation does, though, reflect the rights students have under the Consumer Rights Act 2015.

    Given that many students got neither, the clear implication is that a large number of students should have received both.

    Six principles

    The core of the guidance letter then manifests in six principles:

    1. Providers must remove contractual terms that inappropriately limit liability to students during staff industrial action or other circumstances within the provider’s control, as these breach consumer protection law.
    2. Effective contingency plans must be developed to minimise disruption to students during industrial action, ensuring plans are actionable, timely, and protect qualification integrity.
    3. When implementing contingency plans, providers should prioritise education delivery by: first avoiding impacts on students; if not possible, making minimal changes; and if necessary, providing timely repeat performance of missed teaching or assessment.
    4. Fair compensation must be paid when contingency plans fail to deliver promised aspects of student experience, particularly for missed teaching without timely replacement, delayed assessment marking, or delayed progression decisions affecting jobs or visa status.
    5. Clear communication with students is essential, including transparent information about rescheduled activities or compensation, with proactive identification of eligible students rather than requiring them to submit claims.
    6. Providers must submit reportable events about industrial action to the Office for Students (OfS) in accordance with established regulatory requirements.

    It’s an interesting list. The first one on the inclusion of industrial action in so-called “force majeure” clauses in student contracts – which limit liability for events that are outside of the predictability or control of of providers – is a long-running passive-aggressive row between the Competition and Markets Authority (CMA) and OfS on one side, and providers on the other.

    OfS has previously published a referral to National Trading Standards involving the University of Manchester’s contract – but my spreadsheet suggests that there’s a large number of providers that either haven’t seen that, or are digging in for a battle over it.

    That may be partly because those sorts of clauses – and CMA’s advice on them (which OfS requires providers to pay “due regard to”) – are a key point of dispute in the ongoing Student Group Claim, the UCL portion of which won’t get to court until early 2026.

    From a student point of view, if those clauses shouldn’t exist, the snail’s pace of enforcement on this is as baffling as it is frustrating.

    There won’t be many providers that weren’t developing contingency plans, notwithstanding that they can always be improved – and the one-two-three-four punch of avoid, adjust, repeat or compensate reflects (and translates) the position under consumer law.

    Of course some will argue that a legal duty to undertake any/all of those steps under consumer law depends on those force majeure clauses not existing or being unlawful – and as it stands there’s a major silent standoff that’s unhelpful.

    Even if you just look at compensation, the survey fails to differentiate between compensation paid for breach of contract, and “goodwill” payments where no such breach has been accepted by providers. As far as I’m aware, the former was vanishingly rare.

    The other issue, of course, is with punch three of four – where university managements satisfy themselves that once a dispute is over, teaching or support is rescheduled “because we told them to”, despite the fact that most heads of department find it hard to actually implement those instructions with UCU members.

    The “proactive identification of eligible students” for “repeat performance” or compensation is interesting too – especially over the latter, providers have long relied on students having to make complaints in order to get redress. This not only depends on the breach of contract or not issue being resolved, it also raises questions for universities’ legal advisors and insurers about the relative risks of doing as John Blake says, or waiting for students to raise concerns.

    But as well as all of that, there’s three things we ought to be surprised not to see.

    What’s missing?

    For a set of documents seeped in the translation of consumer protection to a higher education setting, there’s nothing on the extent to which any alternative arrangements in a MAB – especially alternative arrangements over marking – should still be carried out with reasonable skill and care. Academic judgement can’t be challenged, but only if that judgement has been carried out in the way we might expect it to be by people who know their onions. That was a major issue in the dispute for plenty of students, even if it wasn’t a big issue in the polling.

    The second is the lack of answer to the questions raised both in the polling and by the Commons Education Committee – which concern students’ understanding of what their rights are. If OfS thinks that it can vaguely pressure providers into proactively identifying students entitled to wads of cash, it’s misunderstanding the countervailing pressures on providers in similar ways to those identified by Mills and Reeve over provider collapse. And as I often say on the site, good regulatory design considers how individuals come to understand (or access information) on their rights should they need to use them without having to access a regulator or complaints adjudicator – there’s nothing on any of that here.

    But the third is the lack of a clear link to the regulatory framework, and the lack of any enforcement carried out over what must amount to failings. If the guidance is grounded in OfS’ rules, students might well say “well what action have you taken given that the problems were widespread?”

    If it’s not grounded in OfS’ powers, providers might well say “well notwithstanding that we like to look nice, why would we magnify the efficacy of an industrial action tactic if we don’t really have to”.

    It’s all very well for OfS to be “give them guidance” mode, but over this set of issues the financial impacts of compliance with something that sounds contested, and partly voluntary, could be huge both in an individual dispute and in the long-term. That all (still) needs bringing to a head.

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  • Regulating partnership provision can help everyone

    Regulating partnership provision can help everyone

    On a Monday morning in late March, ninety strangers sit down together at the base of one of the towering pillars of glass and steel that pierce the spring blue skies of the City of London to talk about collaboration.

    This was no ivory tower. At mixed tables across the room sat the emissaries of universities old and new, adult community colleges, specialist institutes and industry training centres – awarding providers, teaching providers, and sector bodies too.

    Partners for the day, they heard from sector experts about the latest developments in the policy and practice of academic partnerships and then translated what they learned into their own institutional context through lively and productive small group discussions.

    You might think that the previous day’s headlines would not have made for the most auspicious backdrop to proceedings, but if anything they instilled in the participants of IHE’s first annual Academic Partnerships Conference a clarity of purpose and an impassioned defence of the genuine importance and transformational value of high-quality collaborative provision.

    Not all partnerships! The silent cry went up. And not all franchises either.

    The value of partnership

    Let’s be absolutely clear: academic partnerships are nothing new in higher education. England’s oldest universities – Oxford, Cambridge, London – are themselves nothing less than partnerships in motion, organisational structures evolved to facilitate collaboration across a number of independent self-governing institutions. Academic partnerships have remained the irresistible engine for the expansion of the UK’s higher education sector, driving wider access, greater diversity and more innovation in provision even while the specific models have continued to adapt to changing contexts and circumstances.

    Today, fantastic examples of successful partnerships can be found everywhere you look and they can just as easily take the form of a validation agreement as a subcontractual relationship (aka franchise). While Degree Awarding Powers rightly remain a gold standard, many independent higher education providers would rather dedicate their precious time and focus towards the teaching, learning and industry knowledge exchange that forms the heart of their missions.

    Partnerships should be prized and protected for their essential role in delivering higher education provision which responds to local, national and sector-specific needs. Let’s not forget that different groups of students with different backgrounds and different learning goals benefit enormously from higher education delivered through partnerships. We ignore their needs at our peril.

    So everything is really fine? Move along, please, nothing to see here? Not quite. At IHE we are under no illusions that everyone in our sector has the same good intentions. It can be all too easy for those of us who work in higher education to believe that we are immune to some of the problems that rear their heads in other sectors. Sadly not. Education is a public good, a universal good, an elemental ingredient of civilisation, but this truth can make us naïve, obscuring the loopholes that still exist and the risks that operating in such an open system built on trust can create.

    Regulating partners

    IHE shares the Government’s ambition to strengthen oversight of subcontracted delivery that underpins DfE’s proposals but the proposals themselves miss the mark, as set out in our response to the consultation. If we are serious about doing this, then there are five areas of focus to which we must turn our collective attention – and fast:

    • due diligence on every provider’s suitability as a partner, and the fitness and propriety of their management and governance;
    • transparency on ownership and the terms of any contract for provision;
    • accountability which is clearly assigned between each partner for the critical aspects of provision;
    • quality and standards which are managed effectively by the relevant partner at the appropriate level; and
    • flexibility in any oversight process so that we continue to facilitate the full range of diverse providers with something different to offer the higher education sector.

    The absolute and non-negotiable starting point for an effective regulatory system must be that the regulator knows who is really in charge of every provider it regulates, and to be able to hold them to account. Ambitions aside, the OfS needs to be far more effective at identifying and keeping out individuals who are simply not fit and proper persons to share in the honour and responsibility of stewarding an English higher education institution.

    Thankfully, the OfS proposals under consultation to strengthen its conditions of registration in relation to governance and student protection signal a new seriousness in its approach to this challenge – and are long overdue. The regulator is on the right track with its plans to take a much closer look at ownership, and in trying to identify unfair and inappropriate practices in relation to student recruitment and admissions.

    Any institution in the business of academic partnerships should be taking a close look at these reforms. These are issues that are important to everyone with a stake in the success of the higher education sector. It is in the entire sector’s interest, in the public interest – and nobody’s more than students’ – that the regulator carves out a constructive and collaborative role for itself in this space, helping to facilitate the positive impact of partnerships while minimising the risk of criminal elements exploiting vulnerabilities in the system.

    Rethinking registration

    But could the OfS go further? What if there was a new approach to registration? A category explicitly intended for providers operating in partnership, designed to fill the gaps in oversight that universities cannot on their own, while letting them lead on the academic quality assurance that is their forte. A process built from the ground up to secure the most essential assurances, that can be proportionately applied to different sizes of institution, and efficiently delivered against clear timetables and stretching service standards.

    A paradigm shift towards expecting every would-be delivery partner to complete such a due diligence process could, at a stroke, drive up standards of transparency and ethical behaviours, and better protect genuine students and the public purse from the threat of academic predators. Only a statutory regulator can really achieve this, with its access to intelligence from other public authorities. There is no reason why an awarding institution would not require a potential delivery partner to undertake this process prior to approving their first course. Indeed a centralised due diligence process delivered efficiently at scale could be used to streamline and speed up a partner’s own institutional approval processes.

    At the same time we in the sector’s leadership should be working at pace with all stakeholders on the development of a better shared understanding and greater mutual agreement over what constitutes the most effective policies and practices in partnership provision. The absence of sector-wide standards or accepted best practice in this area, combined with higher education’s generally held principles of transparency being too often trumped by commercial sensitivities, are what has allowed pockets of poor practice and a risk of exploitation by bad actors to grow unchecked by effective regulation.

    Simply requiring providers of an arbitrary size to register with the OfS without any critical analysis of the proportionality or effectiveness of current regulation will not achieve our aims and could easily make matters worse. Even the failure of one significant delivery partner to pass the ill-fitting regulatory hurdles set under the current proposals – let alone, say, a dozen – would create extreme jeopardy for thousands of students and place the system as a whole under unbearable pressure. We will sleepwalk into this situation if we do not change course.

    It would be far better to make awarding institutions properly accountable for the policies, practices and performance of their delivery partners now, while giving them the regulatory tools to help them achieve more effective oversight, than to create a new Whitehall bureaucracy with a single point of predictable failure as DfE’s proposed designation gateway does. Far better to create a dedicated process focused on a deeper due diligence which properly accounts for the actual strengths, vulnerabilities and diversity of partnership models.

    Academic partnerships are here to stay. A flexible, proportionate and efficient process which applies regulatory scrutiny where it is most needed can offer a foundation for sector-led efforts to enhance the quality, transparency and consistency that students should expect.

    We all have a part to play. And we need to get this right. It is essential for the reputation of the higher education sector that we do. As partners in this collective endeavour, it is time for us to shine a light on this invaluable work that has spent too long in the shadows.

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  • It’s students that suffer when those supposed to protect them fail

    It’s students that suffer when those supposed to protect them fail

    24 hours after it published its (“summary”) report into the sudden closure of the Applied Business Academy (ABA), the Office for Students (OfS) published an insight brief on protecting the interests of students when universities and colleges close.

    When the regulator works with a closing provider, it says that it works with that provider and other bodies to try to reduce the impact on students.

    OfS’ report on ABA is notably quiet on the extent to which it has been successful there – we’ve no idea how many students were real, how many of those that were have successfully switched provider, how much (if any compensation) any of the impacted students have had, and so on.

    Nor has it talked about its success or otherwise in reducing the impact on students from the closure of ALRA drama school in 2022 or Schumacher College last Autumn.

    A number of campuses have closed in recent years – no idea on that, and if your course closes (or is cut or merged in a material way) OfS doesn’t even require providers to report that in, so it would neither know nor feature it on its “current closures” webpage (that plenty of students caught up in a closure will nevertheless find if they google “closed course office for students”).

    The other gap in knowledge thus far is the sorts of things that you might assume the regulator has noticed or done or considered in the run up to a closure. The learning is valuable – and so the new brief shares both its experience of closures and “near misses”, and the experiences of some of those directly involved.

    There’s helpful material on the impact on students, communication and record management, and how providers may be affected by the closure of subcontracted or validated delivery partners – and features anonymised quotes shared by senior managers and “a student” involved in institutional closures.

    Unexpected hits you between the eyes

    The note suggests that providers consistently underestimate the challenges and “resource-intensive nature” of closure processes – one contributor says:

    The challenge is underestimating the level of work and planning that are needed in different areas. Planning prior to a crisis developing can help the situation hugely.

    Financial complexities often catch institutions unprepared, with many discovering too late how their legal structure significantly impacts rescue options. OfS says that providers need to thoroughly understand their financial position, contractual obligations, and legal options well before any crisis occurs.

    Student data management are also a problem – incomplete or inadequate student records prove nearly useless when transfers become necessary, and data sharing agreements essential for transferring information to other institutions are often neglected until closure is imminent.

    The human impact on students is underestimated. Students face difficulties processing their options without timely information, and providers fail to recognise how closure disproportionately affects those with caring responsibilities, part-time employment, disabilities, or those on placements – all groups who cannot easily relocate. Accommodation arrangements create more complications, with some students locked into tenancy contracts.

    Communication challenges see providers struggling to balance early transparency against having finalised options – it says that many fail to develop clear, student-focused comms plans, resulting in confusion and poor decision-making among those affected.

    Validated and subcontractual partnerships demand special attention – with one leader admitting:

    Our mechanisms were too slow to identify the risks for those students.

    Many have failed to identify and plan for contingencies despite retaining significant responsibility for these students. And refunds and compensation frameworks are neglected too – the one student observes:

    We were told we could claim compensation for reasonable interim costs from our institution, but without clear or prompt guidance on what this could cover, it was hard to feel confident in making decisions.

    It also says that early stakeholder engagement with agencies like UCAS or the OIA (as well as proactive communication with OfS and any other relevant regulators) is critical – delays in those its seen until crisis is imminent miss valuable opportunities for support in protecting student interests.

    The benefits of hindsight

    Despite focusing on risks to study continuation of study and provider response planning and execution, astonishingly the brief never mentions Condition C3 – the core regulation governing these areas.

    Condition C4 (an enhanced version of C3) appears occasionally, but we learn nothing about its application in the cited cases, preventing assessment of the regulatory framework’s effectiveness.

    This all matters because OfS’s fundamental purpose is to assure those enrolling into the provision it regulates of a level baseline student interest protection – not merely offering advice.

    And the reality is that the evidence it presents reveals systematic failures across C3’s key requirements. Providers here demonstrated profound gaps in risk assessment and awareness. They “were not fully aware of the risks” from delivery partner failures, with early warning mechanisms that “should have kicked in earlier”, and seem to have failed to conduct the comprehensive risk assessments across all provision types that C3 explicitly requires.

    Mitigation planning fell similarly short of regulatory expectations. Institutions underestimated “the level of work and planning needed” while failing to properly identify alternative study options. Practical considerations like accommodation concerns with “third-party landlords” were overlooked entirely. And plans weren’t “produced in collaboration with students” as both C3 and pages like this promise:

    …we expect providers to collaborate with students to review and refresh the plan on a regular basis.

    Implementation and communication failures undermined student protection. When crises occurred, protection measures weren’t activated promptly, with students reporting “it was difficult to decide what to do next without having all the information in a timely manner.”

    Compensation processes generated confusion rather than clarity. Delivery partners neglected to inform lead institutions of closure risks, while information sharing was often restricted to “a smaller group of staff,” reducing planning capacity precisely when broad engagement was needed.

    And C3’s requirements regarding diverse student needs seem to have been unaddressed too. Support for students with additional needs proved inadequate in practice, while international students faced visa vulnerabilities that should have been anticipated.

    C3 also requires plans to be “published in a clear and accessible way” and “revised regularly” – requirements evidently unmet here, with evidence suggesting some providers maintained static protection measures that proved ineffective when actually needed.

    Has anyone been held to account for those failings? And for its own part, if OfS knew that ABA was in trouble (partly via Ofsted and partly via the DfE switching off the loans tap), even if C4 wasn’t applied, was C3 compliance scrutinised? Will other providers be held to account if they fail in similar ways? We are never told.

    The more the world is changing

    The questions pile up the further into the document you get. Given the changed financial circumstances in the sector and the filing cabinet that must be full of “at enhanced risk” of financial problems, why hasn’t OfS issued revised C3 guidance? If anyone’s reading inside the regulator, based on report I’ve had a go at the redraft that former OfS chair Michael Barber promised back in 2018 (and then never delivered) here – providers wishing to sleep at night should take a look too.

    You also have to wonder if OfS has demanded C3 rewrites of providers who have featured on the front of the Sunday Times, or who have announced redundancies. If it has, there’s not much evidence – there’s clearly a wild mismatch between the often years old, “very low risks here” statements in “live” SPPs that I always look for when a redundancy round is threatened, and I have a live list of those featured on Queen Mary UCU’s “HE Shrinking” webpage whose SPPs paint a picture of financial stability and infinitesimally small course closure risk despite many now teaching them out.

    I’ve posted before about the ways in which things like “teach out” sound great in practice, but almost always go wrong – with no attempt by OfS to evaluate, partly because it usually doesn’t know about them. I’m also, to be fair, aware that in multiple cases providers have submitted revised student protection plans to the regulator, only to hear nothing back for months on end.

    Of course in theory the need for a specific and dedicated SPP may disappear in the future – OfS is consulting on replacing them with related comprehensive information. But when that might apply to existing providers is unknown – and so for the time being, OfS’ own protection promises on its own website appear to be going unmet with impunity for those not meeting them:

    Student protection plans set out what students can expect to happen should a course, campus, or institution close. The purpose of a plan is to ensure that students can continue and complete their studies, or can be compensated if this is not possible.

    As such the brief reads like a mixture between a set of case studies and “best practice”, with even less regulatory force than a set of summaries from the OIA. The difference here – as the OIA regularly itself identifies – is that the upholding of a complaint against its “Good Practice Framework” won’t be much use if the provider is in administration.

    So whether it’s holes in the wording of C3, problems in predicting what C3’s requirements might mean, a lack of enforcement over what students are being promised now, a need for C3 to be revised and updated, a need for better guidance in light of cases surrounding it, or a need for all of these lessons to be built into its new proposed C5 (and then implemented across the existing regulated sector), what OfS has done is pretty much reveal that students should have no trust in the protection arrangements currently on offer.

    And for future students, wider lessons – on the nature of what is and isn’t being funded, and whether the risks can ever be meaningfully mitigated – are entirely absent here too.

    Amidst cuts that OfS itself is encouraging, from a course or campus closure point of view, a mixture of OfS consistently failing to define “material component” in the SPP guidance, and a breath of providers either having clauses that give them too much power to vary from what was promised, or pretending their clauses allow them to merge courses or slash options when they don’t, is bad enough – as is the tactic of telling students of changes a couple of weeks before the term starts when the “offer” of “you can always break the contract on your side” is a pretty pointless one.

    But from a provider collapse perspective, it’s unforgivable. Whatever is done in the future on franchising, you’d have to assume that many of the providers already look pretty precarious now – and will be even more so if investigations (either by the government or newspapers) reveal more issues, or if OfS makes them all register (where the fit and proper person test looks interesting), or if the government bans domestic agents.

    And anyone that thinks that it’s only franchised providers that look precarious right now really ought to get their head across the risk statements in this year’s crop of annual accounts.

    Back in 2017 when DfE consulted on the Regulatory Framework on behalf of the emerging OfS back, it promised that were there to be economic changes that dramatically affected the sustainability of many providers, the regulator would work with providers to improve their student protection plans so that they remained “strong” and “deliverable” in service of the student interest.

    So far they’ve proved to be weak and undeliverable. Whether that’s DfE’s fault for not getting the powers right, OfS’ for not using them, or ministers’ fault for freezing fees, taking the cap off recruitment and letting cowboys in to trouser wads of tuition fee loan money is an issue for another day. For now, someone either needs to warn students that promises on protection are nonsense, or providers, DfE and OfS need to act now to make good on the promises of protection that they’ve made.

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  • Mind the policy gaps: regulating quality and ethics in digitalised and privatised crossborder education

    Mind the policy gaps: regulating quality and ethics in digitalised and privatised crossborder education

    by Hans de Wit, Tessa DeLaquil, Ellen Hazelkorn and Hamish Coates

    Hans de Wit, Ellen Hazelkorn and Hamish Coates are editors and Tessa DeLaquil is associate editor of Policy Reviews in Higher Education. This blog is based on their editorial for issue 1, 2025.

    Transnational education (TNE), also referred to as crossborder education, is growing and morphing in all kinds of interesting ways which, while exciting for innovators, surface important policy, regulatory, quality and ethical concerns. It is therefore vital that these developments do not slip around or through policy gaps. This is especially true for on-line TNE which is less visible than traditional campus-based higher education. Thus, it is vital that governments take the necessary actions to regulate and quality assure such education and training expansion and to inform the sector and broader public. Correspondingly, there is a pressing need for more policy research into the massive transformations shaking global higher education.

    TNE and its online variants have been part of international higher education for a few decades. As Coates, Xie, and Hong (2020) foreshadowed, it has seen a rapid increase after the Covid-19 pandemic. In recent years, TNE operations have grown and diversified substantially. Wilkins and Huisman (2025) identify eleven types of TNE providers and propose the following definition to help handle this diversity: ‘Transnational education is a form of education that borrows or transfers elements of one country’s higher education, as well as that country’s culture and values, to another country.’

    International collaboration and networking have never been more important than at this time of geopolitical and geoeconomic disruption and a decline in multilateral mechanisms. But TNE’s expansion is matched by growing risks.

    International student mobility at risk

    International degree student mobility (when students pursue a bachelor, master and/or doctoral degree abroad) continues to be dominant, with over six million students studying abroad, double the number of 10 years ago. It is anticipated that this number will further increase in the coming decade to over 8 million, but its growth is decreasing, and its geographical path from the ‘global south’ to the ‘global north’ is shifting towards a more diverse direction. Geopolitical and nationalist forces as well as concerns about adequate academic services (accommodation in particular) in high-income countries in the global north are recent factors in the slowing down of the growth in student mobility to Australia, North America and Europe, the leading destinations. The increased availability and quality of higher education, primarily at the undergraduate level, in middle-income countries in Asia, Latin America and parts of the Middle East, also shape the decrease in student mobility towards the global north.

    Several ‘sending countries’, for instance, China, South Korea and Turkey, are also becoming receiving countries. Countries like Kazakhstan, Uzbekistan, Ukraine (until the Russian invasion), Egypt and some of the Caribbean countries have also become study destinations for students from neighbouring low-income countries. These countries provide them with higher education and other forms of postsecondary education sometimes in their public sector but mostly in private institutions and by foreign providers.

    An alternative TNE model?

    Given the increased competition for international students and the resulting risks of falling numbers and related financial security for universities, TNE has emerged as an alternative source of revenue. According to Ilieva and Tsiligiris (2023), United Kingdom TNE topped more than 530,000 students in 2021. In the same year, its higher education institutions attracted approximately 680,000 international students. It is likely that TNE will surpass inward student mobility.

     As the United Kingdom case makes clear, TNE originally was primarily a ‘north-south’ phenomenon, in which universities from high-income and mostly Anglophone countries, offered degree programmes through branch campuses, franchise operations and articulation programmes. Asia was the recipient region of most TNE arrangements, followed by the Middle East. As in student mobility, TNE is more diverse globally both in provision and in reception.

    The big trend in TNE is the shift to online education with limited in-person teaching. A (2024) report of Studyportals found over 15,000 English-taught online programmes globally. And although 92 per cent of these programmes are supplied by the four big Anglophone countries – the United Kingdom, United States, Canada and Australia – the number of programmes offered outside those four doubled since 2019 from 623–1212, primarily in Business and Management, Computer Sciences and IT.

    Private higher education institutions

    This global growth in online delivery of education goes hand in hand with the growth in various forms of private higher education. Over 50% of the institutions of higher education and over one-third of global enrolment are in private institutions, many of which are commercial in nature. Private higher education has become the dominant growth area in higher education, as a result of the lack of funding for public higher education as well as traditional HE’s sluggish response to diverse learner needs. Although most private higher education, in particular for-profit, is taking place in the global south, it is also present in high-income countries, and one can see a rise in private higher education recently in Western Europe, for instance, Germany and France.

    TNE is often a commercial activity. It is increasingly a way for public universities to support international and other operations as public funding wanes. Most for-profit private higher education targets particular fields and education services and tends to be more online than in person. There is an array of ownership and institutional structures, involving a range of players.

    Establishing regulations and standards

    TNE, especially online TNE, is likely to become the major form of international delivery of education for local and international students especially where growing demand cannot be met domestically. Growth is also increasingly motivated by an institution’s or country’s financial challenges or strategic priorities – situations that are likely to intensify. This shift could help overcome some of the inequities associated with mobility and address concerns associated with climate change but online TNE is significantly more difficult to regulate.

    A concerning feature of the global TNE market is how learners and countries can easily become victims. Fraud is associated with the exponential rise in the number of fake colleges and accreditors, and document falsification. This is partly due to different conceptions and regulatory approaches to accreditation/QA of TNE and the absence of trustworthy information. Indeed, the deficiency in comprehensive and accessible information is partly responsible for on-going interest in and use of global rankings as a proxy for quality.

    A need for clearer and stronger TNE and online quality assurance

    The trend in growth of private for-profit higher education, TNE and online delivery is clear and given its growing presence requires more policy attention by national, regional and global agencies. As mentioned, public universities are increasingly active in TNE and online education targeting countries and learners underserved in their home countries whilst  looking for other sources of income as a result of decreasing public support and other factors.

    The Global Convention on the Recognition of Qualifications makes clear the importance of ensuring there are no differences in quality or standards between learners in the home or host country regardless of whether the delivery of education programmes and learning activities is undertaken in a formal, non-formal or informal setting, in face-to-face, virtual or hybrid formats, traditional or non-traditional modes. Accordingly, there are growing concerns about insufficient regulation and the multilateral framework covering international education, and especially online TNE.

    In response, there is a need for clearer and stronger accreditation/quality assurance and standards by national regulators, regional networks and organisations such as UNESCO, INQAAHE, the International Association of Universities (IAU) with regards to public and private involvement in TNE, and online education. This is an emerging frontier for tertiary education, and much more research is required on this growing phenomenon.

    Professor Ellen Hazelkorn is Joint Managing Partner, BH Associates. She is Professor Emeritus, Technological University Dublin.

    Hamish Coates is professor of public policy, director of the Higher Education Futures Lab, and global tertiary education expert.

    Hans de Wit is Professor Emeritus and Distinguished Fellow of the Boston College Center for International Higher Education, Senior Fellow of the international Association of Universities.

    Tessa DeLaquil is postdoctoral research fellow at the School of Education at University College Dublin.

    Author: SRHE News Blog

    An international learned society, concerned with supporting research and researchers into Higher Education

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  • When tuition fee payments are suspended, what happens to students left behind?

    When tuition fee payments are suspended, what happens to students left behind?

    Whilst there may be good reasons for suspending tuition fee payments to “safeguard public funding and ensure students’ interests are protected”, decisions taken to safeguard the public purse often risk overlooking the individual students who are left behind.

    In April 2024 the Office for Students (OfS) opened an investigation in relation to Applied Business Academy (ABA) to consider whether it had complied with requirements to provide accurate information about its students, and whether it had effective management and governance arrangements in place.

    In September 2024, the Department for Education (DfE) instructed the Student Loans Company to suspend all tuition fee payments to ABA, until OfS had completed its investigation. On 27 September, ABA asked the OfS to remove it from the Register because it was no longer able to provide higher education. A decision to permanently close ABA was made on 22 October 2024 and liquidators were appointed.

    On 2 April 2025 OfS published a summary of its investigation. We understand around 300 current and prospective students were on courses partnered with universities who supported students through the closure and offered who were offered individual guidance sessions setting out options which included transfer to complete study as per the student protection plans.

    The other group of students

    However, there were also students who were studying for a Level 5 Diploma in Education and Training (DET) awarded by City and Guilds and some awarded by Organisation for Hospitality and Tourism Management (OTHM) – both at the time eligible for student loan finance. According to the OfS investigation this number looks to be just over 2,000.

    The route to raise complaints and seek redress for these students is different to the route for students on courses partnered with universities. As set out in the section of our Good Practice Framework that covers partnership arrangements, awarding universities and delivery partners will both be members of the OIA, so that students can benefit from a route to independent review of both party’s responsibilities. Where only one partner is a member of the OIA, our remit to review issues of concern to students is more limited.

    As the shape of the HE sector has changed, our legislation has been amended several times to bring as many delivery bodies and awarding institutions accessing public money as possible within our membership, to ensure that all students have access to an independent review of their complaints. But not all Awarding Organisations are currently OIA members, even where these courses are eligible for student finance.

    Access and risk

    There are clearly benefits to students of having access to student finance to access non- universities-awarded courses such as HND, HNC and level 4 or 5 courses with a Higher Technical Qualification approval. But we are concerned that the current arrangements may be inequitable, given that some students cannot seek an independent review of some awarding organisations’ acts or omissions.

    We have sought to close this gap by agreeing with Ofqual that awarding organisations being in membership of the OIA Scheme is compatible with Ofqual regulation and opening our Non-Qualifying membership up for awarding organisations.

    The impact on students of the different arrangements materialises further in cases of provider closure. In previous provider closure cases either the university has proactively put in place appropriate options or if they wanted to raise a complaint, the OIA could look at what the university’s role is in resolving this.

    As things stand, students at a delivery partner that ceases to operate at short notice, on courses awarded by an organisation that is not an OIA member, may find themselves with no clear independent route for complaints and redress. In our experience, students studying at HE level via a non-university awarded route and accessing higher education student finance, have no real understanding of this difference from those on a university awarded course.

    In the case of ABA, we have received a small number of complaints from students on the DET course, who are not able to access any financial remedy since ABA has gone into liquidation and the only option is for the students to become an unsecured creditor against ABA.

    We understand that where City and Guilds has received the work of students, there was not sufficient evidence for them to confirm the qualification requirements had been met for any student. This has been particularly difficult news for some students, many of whom believed that they had passed the course and were simply awaiting receipt of their certificate. They are unable to access further funding to re-take the year, compensation or travel costs to complete their studies.

    In the current financial climate and where franchise provision is coming under more scrutiny, it’s hard to imagine there will not be more students in this situation at a provider impacted by a closure. Alongside this the Lifelong Learning Entitlement (LLE) will potentially open more level 4 and 5 “non university” awarded courses where students may be unable to seek independent redress.

    Whilst we completely agree that protecting public funds is important, we mustn’t forget that there is a real and significant human cost for the genuine students, sometimes with few sources of personal support to help them navigate their limited options, left behind.

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  • The Foreign Influence Registration Scheme has sector-specific implications

    The Foreign Influence Registration Scheme has sector-specific implications

    The Foreign Influence Registration Scheme (FIRS) emerged out of the National Security Act 2023.

    The idea was that, by way of the mandatory registration of activities broadly defined as involving “foreign influence” on the UK, both the UK’s political system and wider civil society would be made both more transparent and, in the case of certain countries’ actions, less of a national security risk.

    The government published light-touch draft guidance for FIRS in September 2023, promising further detail ahead of implementation – including sector-specific guidance for research, academia and higher education.

    FIRS trap

    Nothing happened for a while, and then following the general election news emerged of a delay to the scheme, seemingly tied up with the question of Labour’s (still ongoing) “China audit” and a (hotly contested) claim that guidance wasn’t ready to go live.

    One particular sticking point has become whether China would be put on the “enhanced tier” of the scheme, a development which would enormously increase the scrutiny faced by all organisations – including universities – involved in partnerships or collaborations with Chinese institutions. The Conservatives were rumoured to have been considering it while in power, and more recently Labour has reportedly been “resisting” such a move.

    Fast forward to today, and there is still no decision over China – but the government has laid draft regulations placing Russia and Iran on the enhanced tier, announced that FIRS will come into operation from 1 July, and published sector-specific guidance for academia and research.

    The additional wrinkle for higher education is that when the Department for Education announced that the Higher Education (Freedom of Speech) Act would go ahead in revised form, it decided that the overseas funding measures in section 9 would be “kept under review” while FIRS was implemented and the interaction between the two was assessed.

    Tiers for FIRS

    You will be glad to learn that FIRS is not “a register of foreign spies” – we even get a short section in a fact sheet to make this clear. It is, however, a register of arrangements – and the individual or power who makes an arrangement with a foreign power (or controlled entity) has to let the Home Office know.

    At heart, FIRS is structured around two tiers: the “political influence tier” and the “enhanced tier”. All countries – except the Republic of Ireland – will be put in one or the other. And the difference between the two is vast.

    Political influence is restricted to specific “directions” from other countries to influence the UK’s political domain. So this involves things like elections and referenda (perish the thought), ministerial or departmental decision-making, political parties’ activities, or the actions of parliamentarians (including in the devolved nations). There’s also the wider concept of influencing “public life”, which includes certain kinds of communications and the disbursement of money.

    Where the Secretary of State deems it necessary to keep the UK safe or protect its interests, they will designate a foreign power (or part thereof) as being subject to the “enhanced tier”. This additionally requires the wider registration of “arrangements to carry out activities at the direction of a foreign power”, or activities carried out in the UK by specified entities controlled by a foreign power. In this case there is the possibility of a tailored approach to address particular risks.

    At each level, the requirement is that you register the activities to be carried out, their nature, their purpose, any intended outcomes – plus start dates, end dates, and frequencies where relevant. Of course registration will include passing on details of who is carrying out the activities, and which foreign power is directing them. Some of this information will be published – but this will be limited to what is needed to achieve the transparency aims of FIRS. Personal details, information that would prejudice personal safety or national security, and commercially sensitive information will not be published.

    Designating a country as being subject to the enhanced tier requires parliamentary approval – and as above this is currently being sought for Iran and Russia. How about China? As will be clear when we turn to some examples below, this is the big question when it comes to FIRS for UK higher education – China being moved up into the advanced tier would greatly complicate all kinds of educational and research initiatives.

    The Conservatives in opposition are pushing strongly for it, though they never bit the bullet while in power. Speaking in the House of Commons today, security minister Dan Jarvis said:

    For reasons that I completely understand, the shadow Home Secretary asked about China. He will recall the remarks I made to this House on 4 March, where I was very clear that countries will be considered separately and decisions will be taken by this Government based on the evidence. I said then, as I say again now, that I will not speculate on which countries may or may not be specified in future. That is the right way to proceed, and I hope he understands that.

    It’s likely the question will continue to recur, every time an issue involving national security and China (or other countries) rears its heads – we should expect calls in Parliament and in the press for a country seen as a national security threat to be moved over to the enhanced tier.

    Direction and production

    For the purposes of FIRS, “direction” implies a power relationship – a contract or conditional payment on the one hand, coercion or the promise of future benefits on the other. So for our purposes a genuine collaboration, or a very generic request, would not count as direction. Neither is something “direction” simply because it is funded by a foreign power.

    The actual registration and publication will be done by a special unit within the Home Office. This will also be the means by which the Secretary of State can issue “information notices” to get more information, or remind you to register activity should you be doing something that it is felt you should tell the Home Office about.

    FIRS is an information gathering tool – it doesn’t restrict anyone’s ability to do anything in and of itself, it simply requires that activity is registered appropriately. And it only applies where you are directed by a foreign power – anything else you do or say on your own behalf is not covered by these requirements.

    At FIRS I was afraid

    The meat of the higher education and research guidance (framed oddly as the “academia and research sector”) is a series of 34 examples, illustrating where registration is required and where it would not be. There’s a potential impact in every area of university and related activity – but rather than go through every example here it would make sense to pick out a handful of points to illustrate some key impacts on research, teaching, and SUs – both for enhanced and political tiers. If this stuff is your job, or becomes your job, chances are you’ll be getting to know these examples very quickly anyway.

    Teaching and recruitment

    Let’s start at the beginning (example 1) – the education department of country A (not subject to the enhanced tier) wants to build a relationship with a UK university: the university gets more students via promotion and enticements within country A, but it also has to lobby the UK government about a short-term visa study programme for students from country A.

    Clearly this is registerable – there’s an arrangement with country A, it is directed, and requires the use of political influence.

    A lot of the concerns that led to the requirements that went into the Higher Education (Freedom of Speech) Act were about the potential for foreign powers to influence what is taught at universities. In example 6, a student from country G (enhanced tier) is studying a human rights course at a UK university, which includes material on the oppression of an ethnic group in country G by its government. The country G embassy contacts the students, and requires them to change course – threatening to force them to leave the UK if they don’t.

    Here it is the student that is obliged to register – they have been obliged, with coercion used, by a foreign power, to change their course. What’s not at all clear is what would convince said student that this would be a good idea, or what protections would be available to them when they reported their own government to UK authorities.

    But what about universities reporting back to an enhanced tier government on student behaviour? Examples 15, 16, and 17 all deal with reporting back to country V: we learn that a student reporting back on their progress, or a university reporting back on results, is not registerable. However, where the student is coerced into organising a protest about a speaker critical of country V, this is registerable (again, by the student).

    Elsewhere on the enhanced tier regulations, there’s been an important concession (following consultation responses) regarding scholarships, which are now exempt from being registered. And importantly, activities carried out wholly at overseas universities – such as transnational education – will not require registration either.

    A Swiss cheese of foreign influence

    The more tedious and public end of the free speech debate has been concerned with otherwise low-profile, little known, escaping the public attention student activity. Student societies, students getting together in their own time, and reasonable debate. Almost entirely absent from the public but not policy discourse has been the regulation of research activity. Put bluntly, the ways in which other countries influence research into lethal weapons has had less political attention than which culture issue The Telegraph is upset about this week.

    The new guidance provides that agents of specified foreign powers will have to register under the enhanced scheme where they are “undertaking a research project directed by a specified foreign power or specified foreign power-controlled entity.” As we learn from the Minister of State for Security Dan Jarvis the current specified countries under the enhanced tier are Iran and Russia.

    This means that individuals directed by Iran, Russia, and whoever else comes under the future ambit of the scheme, would be required to register that they are being directed by these states and declare they are undertaking state directed activity. Somehow, this seems extremely unlikely to capture the full range of state directed activity even with the threat of a five year custodial sentence.

    The scheme is narrowly applied and broadly defined as to avoid capturing a broad swathe of activities. Under the political tier

    Registration would only be required under the political tier if the research formed part of an intentional effort by a foreign power to influence the UK’s democracy, for example, a specific area of government policy.

    This is a really high bar to clear. As we learn further in the guidance activity which is funded and directed by a foreign power will not necessarily count as political influencing activity if researchers are free to arrive at their own recommendations. In other words, it is possible to influence the terms of the debate but not its conclusions and remain outside the scope of the scheme.

    One of the oddities of the regulation is that “activity is only registerable where carried out in the UK.” This would seem to mean that where there are campuses abroad which included UK researchers, researchers from other countries, and researchers who would be a specified power within the UK, activity would be outside of this scheme.

    The political influence tier of activity is designed to capture activities which are directly aimed toward parliamentary mechanisms and procedures. Aside from any debate on whether the specified countries are broad enough this means that political but not parliamentary political activities are not covered either. The guidance specifically states that

    …any published research which intended to influence a political process would not require registration under the political influence tier, if it was clear on the research report that it was completed as part of an arrangement with a foreign power.

    The scope of the research element of the scheme feels very narrow. The examples make clear that a UK provider would need to register under the political scheme where they are lobbying the UK government to further the interests of a foreign power as part of a funding arrangement. An individual would need to register under the political tier where they are acting as an intermediary for selling the technologies of a foreign power. And under the enhanced tier UK universities cannot rely on the ambiguity of a relationship and would seemingly have to register where there are future potential income opportunities.

    It is also made clear that just because activities clear these schemes they do not get a clean slate for other legislation like the National Security and Investment Act. As long as a provider is not taking funding from a foreign power, and especially specific foreign powers, to direct research, funding, and influencing outcomes, they should not be impacted by FIRS. This does not mean they will not be impacted by the bureaucracy of every other scheme.

    FIRS is helpful in setting an obvious floor for what is in scope but the ceiling is cavernous. There is significant latitude for influencing UK politics outside of parliamentary procedures and without directing research outcomes. The participants in the research ecosystem will on the one hand favour the flexibility but will rue the potential for being personally liable for another addition to an increasingly complicated web of international research rules.

    Societies, SUs and CSSAs

    One of the major concerns floating around the press coverage and the think tanks has been the activities of student societies on campus – specifically (but not exclusively), Chinese Students and Scholars Associations (CSSAs).

    Last year a Henry Jackson Society report, Studying Abroad to Serve China, alleged that CSSAs are closely tied to and influenced by the Chinese government, presenting themselves as cultural organisations while actually being integral to China’s “United Front Work” strategy.

    Meanwhile, the Telegraph has published allegations of Chinese students facing serious repercussions, including detention and interrogation in China, after participating in protests or making critical comments about the Chinese government while studying in the UK – which involve CSSAs locally and nationally.

    Like plenty of religious, political and sporting groups on campus, societies of this sort will say that they affiliate to a national body. Many rarely discuss or disclose the ways in which overt or covert control or influence may be placed on their activities.

    The sector-specific guidance covers “student bodies, societies or associations” – but there’s a problem. It appears from the guidance that Home Office officials think that student societies are legally separate bodies from their students’ union. But in the vast majority of cases, they have no separate legal personality – they are part of the SU. That matters because it impacts who has the legal duty to register.

    For example, in a section designed to reassure universities about their own liability to register, the guidance says:

    Where a registerable arrangement is made by a student society of a university: the society is required to register.

    And across three case studies discussing different types of activity, there’s the same issue. So where one describes a society being directed by the government of a country to sign a petition and campaign against a UK government decision, the guidance says:

    The student society is required to register as they are in an arrangement with the government of Country P (foreign power) from whom they receive funding (direction) to undertake campaigning activities to influence a government decision (political influence activities).

    But legally, in most universities the student society doesn’t exist. It’s a part of the SU – placing the onus on the SU to register – and so places duties on underfunded student activities staff to risk assess and probe the activities of societies in ways that many will object to.

    Separate guidance for charities then puts onerous duties on the trustees in the usual way.

    The upshot is that CSSAs – and any other international society undertaking activity of this sort – will soon clock that they themselves are under no legal duty to register. Universities will also take comfort in guidance that makes clear “societies” are separate and have their own reporting duties.

    The buck lands on the SU – who will be thinking hard about disproportionate scrutiny over a group of students that share protected characteristics, and who may object to their treatment by the SU to the university under OfS’ new harassment expectations.

    Not only will the SU not have experience of what amounts to a whole new type of complex risk assessment, it will all happen in a way that actually discourages joined-up risk assessment and sensible concern over the sorts of things the HJS and the Telegraph alleges. You really couldn’t make it up.

    If you believe the allegations that swirl around CSSAs, there are major student welfare concerns here – both for students who might be “under surveillance” from their colleagues, and for students who might be being coerced into watching others and reporting them. If you’re less sure that what the Telegraph or the HSJ say is widespread or even real, then there’s welfare and harassment concerns that surround poking around and applying heavy scrutiny to a particular group of students. And in England, the moment you start to think about potential interactions with free speech requirements and OfS’ new harassment requirements a headache ensues given both seem to cover SUs and societies without directly regulating them.

    If nothing else, the guidance repeatedly states that it’s not that the activity is per se illegal – and if not, is it “free speech within the law” or does the influence chill free speech, and so on and so on and so on.

    It would certainly seem like a good time to consider whether those straight-line cuts to the SU’s already tight budget are wise if junior staff are about to start to have to offer training on these complexities – and front out difficult conversations with those running international student societies.

    Upshots

    All of these new duties kick in on July 1st – so there’s very little time to understand the implications and get houses in order. The question on China and its tier allocation will be one to watch – the allegations are unlikely to go away.

    There are several “foreign influence” offences, including a failure to register a foreign influence arrangement, and carrying out political influence activity where the overarching arrangement is not registered and the person knows that the activity is being directed by a foreign principal. The maximum penalty for failure to comply with the requirements of the political influence tier is 2 years imprisonment – and the maximum penalty in the enhanced tier is 5 years imprisonment.

    If there are those who are carrying out what is currently covert activity who are under pressure to keep it that way – whether through incentives, or threats, or both, there is a real question about the way in which those individuals might evaluate that against any rules put in by a university (or so) in pursuit of the scheme.

    More broadly, it’s yet another thing in terms of regulatory burden – and another one of those things where a duty is being placed on a public authority to do what many would argue is not their job to do at all, that they’re not sufficiently funded to do, and have not even been properly consulted on.

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  • DfE and OfS are running out of road on regulating a “free market” effectively

    DfE and OfS are running out of road on regulating a “free market” effectively

    On The Wonkhe Show, Public First’s Jonathan Simons offers up a critique of the way the higher education sector has been organised in recent years.

    He says that despite being more pro-market than most, he’s increasingly come to the view that the sector needs greater stewardship.

    He says that the theory of change embedded in the Higher Education and Research Act 2017 – that we should have more providers, and that greater choice and contestability and composition will raise standards – has worked in some instances.

    But he adds that it is now “reasonably clear” that the deleterious side effects of it, particularly at a time of fiscal stringency, are “now not worth a candle”:

    If we as a sector don’t start to take action on this, then the risk is that somebody who is less informed, just makes a judgment? And at the stroke of a ministerial pen, we have no franchising, or we have a profit cap, or we have student number controls. Like that is a really, really bad outcome here, but that is also the outcome we are hurtling towards, because at some point government is going to say we don’t like this and we’re just going to stop it overnight.

    Some critiques of marketisation are really just critiques of massification – and some assume that we don’t have to worry about whether students actually want to study something at all. I don’t think those are helpful.

    But it does seem to be true that the dominant civil service mindset defaults to regulated markets with light stewardship as the only way to organise things.

    Civil servants often assume that new regulatory mechanisms and contractual models can be fine-tuned to deliver better outcomes over time. But the constant tweaking of market structures leads to instability and policy churn – and bad actors nip around the complexity.

    Much of Simons’ critique was about the Sunday Times and the franchising scandal. But meanwhile, across the sector, something else is happening.

    Another one

    Underneath daily announcements on redundancies, senior managers and governing bodies are increasingly turning to data analytics firms to inform their academic portfolios.

    The advice is relatively consistent – close courses with low market share and poor demand projections, maintain and grow those showing high share or significant growth potential.

    But when every university independently follows that supposedly rational strategy, there’s a risk of stumbling into a classic economic trap – a prisoner’s dilemma where individual optimisation leads to collective failure.

    The prisoner’s dilemma, a staple of economic game theory, runs like this. Two prisoners, unable to communicate, have to decide whether to cooperate with each other or defect. Each makes the decision that seems best for their individual circumstance – but the outcome is worse for both than if they had cooperated.

    I witnessed it unfold a couple of weeks ago. On a Zoom call, I watched four SU officers (under the Chatham House rule, obvs) from the same region simultaneously share that their university was planning to expand their computer science provision while quietly admitting they were “reviewing the viability” of their modern languages departments.

    It did sound like, on probing, that their universities were all responding to the same market intelligence, provided by the same consultancies, using the same metrics.

    Each university, acting independently and rationally to maximise its own market position, makes decisions that seem optimal when viewed in isolation. Close the underperforming philosophy department. Expand the business school. Withdraw from modern languages. Double down on computer science.

    But when every university follows the same market-share playbook, the collective result risks the sector becoming a monoculture, with some subjects vanishing from entire regions or parts of the tariff tables – despite their broader societal value.

    The implications of coordination failure aren’t just theoretical – they are reshaping the physical and intellectual geography of education in real time.

    Let’s imagine three post-92 universities in the North East and Yorkshire each offered degrees in East Asian languages, all with modest enrolment. Each institution, following market share analysis, determines that the subject falls below their viability threshold of 40 students per cohort. Acting independently, all three close their departments, creating a subject desert that now forces students in the region to relocate hundreds of miles to pursue their interest.

    The spatial mismatch of Hotelling’s Location Model means students having to travel further or relocate entirely – disproportionately affecting those from lower-income backgrounds.

    And once a subject disappears from a region, bringing it back becomes extraordinarily difficult. Unlike a coffee shop that can quickly return to a high street when demand reappears, universities face significant barriers to re-entry. The sunk costs of hiring specialist staff, establishing facilities, securing accreditation, and rebuilding reputation create path dependencies that lock in those decisions for generations.

    The Matthew effect and blind spots

    Market-driven restructuring doesn’t affect all providers equally. Higher education in the UK operates as a form of monopolistic competition, with stratified tiers of universities differentiated by reputation, research intensity, and selectivity.

    The Matthew effect – where advantages accumulate to those already advantaged – means that elite universities with strong brands and secure finances can maintain niche subjects even with smaller cohorts.

    Meanwhile universities lower in the prestige hierarchy – often serving more diverse and less privileged student populations – find themselves disproportionately pressured to cut anything deemed financially marginal.

    Elite concentration means higher-ranking universities are likely to become regional monopolists in certain subjects – reducing accessibility for students who can’t meet their entry requirements.

    Are we really comfortable with a system where studying philosophy becomes the preserve of those with the highest A-level results, while those with more modest prior attainment are funnelled exclusively toward subjects deemed to have immediate market value?

    Markets are remarkable mechanisms for allocating resources efficiently in many contexts. But higher education generates significant positive externalities – benefits that extend beyond the individual student to society at large. Knowledge spillovers, regional economic development, civic engagement, and cultural enrichment represent value that market signals alone fail to capture.

    Market failure is especially acute for subjects with high social utility but lower immediate market demand. Philosophy develops critical thinking capabilities essential for a functioning democracy. Modern languages facilitate international cooperation. Area studies provide crucial cultural competence for diplomacy and global business. And so on.

    When market share becomes a dominant decision criterion, broader societal benefits remain invisible on the balance sheet. The market doesn’t price in what we collectively lose when the last medieval history department in a region closes, or when the study of non-European languages becomes accessible only to those in London and Oxbridge.

    And market analysis often assumes static demand curves – failing to account for latent demand – students who might have applied had a subject remained available in their region.

    Demand for higher education isn’t exogenous – it’s endogenously shaped by availability itself. You can’t desire what you don’t know exists. Hence the huge growth in franchised Business Degrees pushed by domestic agents.

    Collective irrationality

    What’s rational for an individual university becomes irrational for the system as a whole. Demand and share advice makes perfect sense for a single institution seeking to optimise its portfolio. But when universally applied, it creates what economists call aggregate coordination failure – local optimisations generating system-wide inefficiencies.

    The long-term consequences extend beyond subject availability. Regional labour markets may face skill shortages in key areas. Cultural and intellectual diversity diminishes. Social mobility narrows as subject access becomes increasingly determined by prior academic advantage. The public good function of universities – to serve society broadly, not just commercially viable market segments – erodes.

    But the consequences of market-driven strategies extend beyond immediate subject availability. If we look at long-term societal impacts, we end up with a diminished talent pool in crucial but less popular fields – from rare languages to theoretical physics – creating intellectual gaps that can take generations to refill.

    An innovative economy – which thrives on unexpected connections between diverse knowledge domains – suffers when some disciplines disappear from regions or become accessible only to the most privileged students.

    Imagine your small but vibrant Slavic studies department closes following the kind of market share analysis I’ve explained – you lose not just courses but cross-disciplinary collaborations that generate innovative research projects. Your political science colleagues suddenly lacked crucial language expertise during the Ukraine crisis. Your business school’s Eastern European initiatives withered. A national “Languages and Security” project will boot you out as a partner.

    Universities don’t compete on price but on quality, reputation, and differentiation. It creates a market structure where elite institutions can maintain prestige by offering subjects regardless of immediate profitability, while less prestigious universities face intense pressure to focus only on high-demand areas.

    In the past decade, some cross-subsidy and assumptions that the Russell Group wouldn’t expand disproportionately helped. But efficiency has done what efficiency always does.

    Both of the assumptions are now gone – the RG returning to the sort of home student numbers it was forced to take when the mutant algorithm inflated A-Levels in 2020.

    Efficiency in market terms – optimising resources to meet measurable demand – conflicts directly with EDI and A&P goals like fair access and diverse provision. A system that efficiently “produces” large numbers of business graduates in large urban areas while eliminating classics, philosophy, and modern languages might satisfy immediate market metrics while failing dramatically at broader social missions.

    And that’s all made harder when, to save money, providers are reducing elective and pathway choice rather than enhancing it.

    Choice and voice

    When we visited Maynooth University last year we found structures that allow students to “combine subjects across arts and sciences to meet the challenges of tomorrow.” It responds to what we know about Gen Z demands for interdisciplinary opportunities and application – and allows research-active academics to exist where demands for full, “headline” degrees in their field are low.

    In Latvia recently, the minister demanded, and will now create the conditions to require, that all students be able to accrue some credit in different subjects in different institutions – partly facilitated by a kind of domestic Erasmus (responding in part to a concern about the emigration caused by actual Erasmus).

    Over in Denmark, one university structures its degrees around broad disciplinary areas rather than narrowly defined subjects. Roskilde maintains intellectual diversity while achieving operational efficiency – interdisciplinary foundation years, project-based learning that integrates multiple disciplines, and a streamlined portfolio of just five undergraduate degrees.

    As one student said when we were there:

    The professors teaching the classes at other universities feel a need to make their little modules this or that, practical or applied as well as grounded in theory. Here they don’t have that pressure.

    And if it’s true that we’re trapped in a reductive binary between lumbering, statist public services on the one hand, and lean, mean private innovative operators on the other, the false dichotomy paralyses our ability to imagine alternative approaches.

    As I note here, in the Netherlands there’s an alternative via its “(semi)public sector” framework, which integrates public interest accountability with institutional autonomy. Dutch universities operate with clear governance standards that empower stakeholders, mandate transparency, enforce quality improvement, and cap senior staff pay – all while receiving substantial public investment. It recognises that universities are neither purely market actors nor government departments, but entities with distinct public service obligations.

    When Belgian student services operate through distinct governance routes with direct student engagement, or when Norwegian student welfare is delivered through regional cooperative organisations, we see alternatives to both market competition and centralised planning.

    They suggest that universities could maintain subject diversity and geographical access not through either unfettered market choice or central planning mandates, but through governance structures that systematically integrate the voices of students, staff, and regional stakeholders into portfolio decisions. The prisoner’s dilemma is solved not by altering individual incentives alone, but by fundamentally reimagining how decisions are made.

    Other alternatives include better-targeted funding initiatives for strategically important subjects regardless of market demand, proper cross-institutional collaboration where universities collectively maintain subject breadth, regulatory frameworks that actually incentivise (rather than just warn against extremes in removing) geographical distribution of specialist provision, new metrics for university performance beyond enrolment and immediate graduate employment and better information for prospective students about long-term career pathways and societal value when multiple subject areas are on the degree transcript.

    Another game to play

    Game theory suggests that communication, coordination, and changing the incentive structure can transform the outcome.

    First, we need policy interventions that incentivise the public good nature of higher education, rather than just demand minimums in it. Strategic funding for subjects – and crucially, minor pathways or modules – that are deemed nationally important, regardless of their current market demand, can maintain intellectual infrastructure. Incentives for regional subject provision might ensure geographical diversity.

    Universities will need to stop using CMA as an excuse, and develop cooperative rather than competitive strategies. Regional consortia planning, subject-sharing agreements, and collaborative provision models are in the public interest, and will maintain breadth while allowing individual institutions to develop distinctive strengths.

    Flexible pathways, shared core skills, interdisciplinary integration – all may prove more resilient against market pressures than narrowly defined single-subject degrees. They allow universities to maintain intellectual diversity while achieving operational efficiency. And they’re what Gen Z say they want. Some countries’ equivalents of QAA subject benchmarking statements have 10, or 15, with no less choice of pathways across and within them. In the UK we somehow maintain 59.

    At the sector level, collaborative governance structures that overcome the coordination failure means resource-sharing for smaller subjects, and student mobility within and between regions even for those we might consider as “commuter students”.

    OfS’ regulatory framework could be reformed to incentivise and reward collaboration rather than focusing primarily on institutional competition and financial sustainability. Funding could reintroduce targeted support for strategically important subjects, informed by decent mapping of subject (at module level) deserts and cold spots.

    Most importantly, universities’ governing instruments should be reformed to explicitly recognise their status as “(semi)public sector bodies” with obligations beyond institutional self-interest – redefining success not as market share growth but as contributing to an accessible, diverse, and high-quality higher education system that serves both individual aspirations and collective needs.

    Almost every scandal other than free speech – from VC pay to gifts inducements, from franchising fraud to campus closures, from grade inflation to international agents – is arguably one of the Simons’ deleterious side effects, which are collectively rapidly starting to look overwhelming. Even free speech is said by those who think there’s a problem to be caused by “pandering” to student consumers.

    Universities survive because they serve purposes beyond market demands. They preserve and transmit knowledge across generations, challenge orthodoxies, generate unanticipated innovations, and prepare citizens for futures we can’t yet imagine.

    If they respond solely to market signals, the is risk losing what makes them distinctive and valuable. That requires bravery – seeing beyond the apparent rationality of individual market optimisation to recognise the collective value of a diverse, accessible, and geographically distributed higher education sector.

    It doesn’t mean running provision that students don’t want to study – but it does mean actively promoting valuable subjects to them if they matter, the government intervening to signal that quality can (and does) exist outside of the Russell Group, and it means structuring degrees such that some subjects and specialisms can be studied as components if not the title on the transcript.

    It also very much requires civil servants and their ministers to wean themselves off the dominant orthodoxy of regulated markets as being the best or only way to do stuff.

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  • Five regulatory process points you may have missed from the University of Sussex decision

    Five regulatory process points you may have missed from the University of Sussex decision

    We’ve covered elsewhere the implications for policy related to academic freedom and freedom of speech stemming from the Office for Students’ decision to fine the University of Sussex for breaches of ongoing registration conditions E1 and E2.

    The publication of a detailed regulatory report also allows us insight into the way in which OfS is likely to respond to future breaches of registration conditions. It is, effectively, case law on the way OfS deals with concerns about higher education providers in England – and while parts of your university will be digesting what the findings mean for academic freedom policies, others will be thinking more widely about the implications for regulation.

    The University of Sussex, perhaps unsurprisingly, wishes to challenge the findings. It is able to challenge both the regulatory decisions and the amount of the fines at a first tier tribunal.

    As always, appeals are supposed to be process based rather than just a general complaint, so the university would have to demonstrate that the application of the registration conditions was incorrect, or the calculation of the fine was incorrect, or both. As above, there is no meaningful defence of the way the fines were calculated or discounted within the judgement so that would feel like the most immediately fertile ground for argument.

    Here’s some of the points that stood out:

    How and why was the decision to investigate made?

    We are told that, on 7 October 2021, the OfS identified reports about an incident at the University of Sussex. This followed the launch of a student campaign at the University of Sussex the previous day – which involved a poster campaign, a masked demonstrator holding a sign, and a hashtag on social media – calling for Kathleen Stock (a professor in the philosophy department) to lose her job.

    This was widely covered in the media at the time, and sparked commentary from interest groups including the Safe Schools Alliance UK and the Free Speech Union. The OfS subsequently contacted the university seeking further information, before starting a full investigation on 22 October 2021. However, despite significant public interest, the decision to start an investigation was not made public until a statement by an education minister in the House of Lords on 16 November (when we were told that the Department for Education was notified on 11 November).

    Kathleen Stock resigned from her role at the university on 28 October – six days after the start of the investigation, and substantially before the public announcement. She noted that “the leadership’s approach more recently had been admirable and decent”, while the university claimed to have “vigorously and unequivocally defended Prof Kathleen Stock’s right to exercise her academic freedom and lawful freedom of speech, free from bullying and harassment of any kind”.

    What’s not clear from this timeline is the nature of the notification on which the Office for Students was acting: the regulatory framework in place at the time suggested OfS would take action on the basis of lead indicators, reportable events, and other intelligence and sources of information. There are no metrics involved in this decision, and we are told the provider did not notify the OfS so there was no reportable event notification.

    We are left with the understanding that “other sources of information” were used – these could be “volunteered by providers and others, including whistleblowers”. Perhaps it was the same “source of information” that caused then Minister Michelle Donelan to shift from backing the university response on 8 October to calling for action on 10 October?

    We also know that – despite OfS’ insistence that it “does not currently have a role to act on behalf of any individual” – it appears that the only person to submit a “witness statement” to OfS was Stock. If OfS was concerned generally about the potential for a chilling effect on academic speech, would it not want to speak to multiple academics to confirm these suspicions? Doesn’t speaking to just one affected individual feel a little like acting “on behalf” of that individual?

    Finally – sorry to bang on – we don’t know who at OfS made the decision to conduct an investigation or on what basis. Can, say, the director of regulation just decide (based on a story in the press, or general vibes) to investigate a university – or is there a process involving sign-off by other senior staff, ideally involving some kind of assessment of the likelihood of a problem being identified within a reasonable period of time? If I were an internal auditor I would also want to be very clear that the decision was made using due process and free from political or ideological influence (for instance I’d be alarmed that someone was content for then-chair James Wharton to posit an absolutist definition of free speech in the Telegraph) shortly after the investigation started.

    Why did it take so long to investigate and make a decision?

    The only clue we are given in the regulatory report is that this is a “complex area”. OfS requested a substantial amount of documentation from Sussex – it even used a “compliance order” to make sure that no evidence was destroyed. However, it does not appear that OfS ever visited the provider to speak to staff and students – in other regulatory investigation reports, OfS has been assiduous in logging each visit and contact. There is none of that here – we don’t know how many interactions OfS had with Sussex, or on how many occasions information was requested. Indeed, OfS appears not to have visited Sussex at all. Arif Ahmed told us:

    “There may have been occasions where the university wanted to meet in person and communication was done in writing instead

    Various points of law are referred to in the regulatory report : it is notable that none of this is new law requiring additional interpretation or investigation (the new Higher Education (Freedom of Speech) Act had not even left the House of Commons committee stage at this point). It shouldn’t really take a competent lawyer that knows the sector more than a few weeks to summarise the law as it then stood and present options for action.

    The investigation into the University of Sussex was mentioned in the Chief Executive’s report from the 2 December 2021 Board meeting, and it turned up (often just as an indication that the investigation was ongoing)

    If OfS was able to fine a university for a breach of an ongoing registration relating to academic freedom, why do we need the Higher Education (Freedom of Speech) Act?

    Well, quite. On our reckoning, the Act would have made no difference to the entire affair, save potentially for a slight chilling effect on students being empowered to exercise their own freedom of speech, and a requirement for both providers and OfS to promote free speech. The ability of the OfS to reach the conclusion it reached, and to instigate regulatory consequences, suggests that further powers were not necessary to uphold freedom of speech on campus – despite the arguments made by many at the time. There is nothing OfS could have done better, or quicker, or more effectively had the Act been in force. Sussex, in fact, had a freedom of speech policy at the time, something that the regulatory report fails to mention or take account of.

    It is curious that the announcement of the investigation came at the start of a long pause in parliamentary activity on the Higher Education (Freedom of Speech) Act – at that time we were keenly anticipating a report from the House of Commons committee stage, but we got no action at all on the bill until it was carried forward into the next session of parliament.

    How was the amount of the fine arrived at?

    There is a detailed account of the process by which it was decided to fine Sussex £360,000 for a breach of registration condition E1, and £225,000 for a breach of registration condition E2. It appears thorough and convincing, right until the point that you read it.

    OfS appears to be using a sliding scale (0.9 per cent of qualifying income for “failing to uphold the freedom of speech and academic freedom governance principle”, 0.5 per cent of qualifying income for “a failure to have adequate and effective management and governance arrangements in place”, an additional 0.2 per cent for not reporting the breach, a 0.2 per cent reduction for taking mitigating action…) and although Regulatory Notice 19 takes us through the process in broad terms we don’t get any rationale for why those proportions apply to those things.

    It’s all a bit “vibes based regulation” in truth.

    It is to be welcomed that OfS reduced its initial calculation of a £3.7m (1.6 per cent of qualifying income) fine to a more manageable £585,000 – but why reduce to that amount (by a hair under 85 per cent) purely because it is the first fine ever issued for this particular offence? What reduction will be applied to the next fines issued under registration conditions E1 and E2? If none, why not – surely “sufficient deterrence” is possible at that amount so why go higher?

    The documentation covers none of this – it is very hard to shake the impression that OfS is pulling numbers out of the air. When you compare the £57,000 (0.1 per cent) fine issued to the University of Buckingham for not providing audited accounts for two years (something which would have yielded something altogether nastier from Companies House you do have to ask whether the Sussex infractions were 1.5 percentage points more severe at the initial reckoning?

    Are the wider implications as the regulator intends?

    There are so many questions raised that will now be hurriedly posed at universities and higher education all over England – and my colleague Jim Dickinson has raised many of them elsewhere on the site. He’s had enough material for four pieces and I’m sure there will be many more questions that could be explored. Why – for example – should the regulator have a problem with “prohibiting the harmful use of stereotypes”? Is there a plausible situation where we would want to encourage the harmful use of stereotypes?

    It would also be worth noting the many changes to the policy that appears to have caused the initial concern (the Trans and Non-Binary Equality Policy Statement) between 2018 and 2024. Perhaps these changes demonstrated the university dealing with a rapidly shifting public debate (conducted, in part, by people with the political power to influence culture more generally) as seemed appropriate at each point? So why is OfS not able to sign off on the current iteration of this policy? Why is it hanging a hefty fine on a single iteration on what is clearly a living document?

    There’s also a burden issue.Is it the position of the regulator that every policy of each university needs to be signed off by the academic council or governing bodies? Or are there any examples of policies where decisions can be delegated to a competent body or individual? A list would be helpful, if only to avoid a burdensome “gold plating” of provider-level decision making.

    Beyond the freedom of speech arguments

    There are 24 ongoing conditions of registration currently in force at the Office for Students – a regulatory report and a fine (or other sanctions) could come about through an inadvertent breach of any one of them. Many of these conditions don’t just apply to students studying on your campus – they have an applicability for students involved in franchised (and in some cases validated) provision around the world.

    We should be in a position where the sector can be competently and reliably regulated, where providers can understand the basis, process, and outcomes of any investigation, and that these are communicated promptly and clearly to the wider public. On the evidence of this report, we are a long way off.



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  • We can all share the credit

    We can all share the credit

    I remain in two minds about credit transfer.

    The sector is so split on the issue it can seem at once both an intractable issue never to be fully realized and an obvious enough mechanism to promote access and mobility.

    In reality, it’s somewhere between the two and, today, a new report from QAA looks at where we might find that common ground. After looking at what the current state of play on credit transfer is last year, this year we’ve delved into why it is that way and what might instigate change.

    Hierarchies of need

    Credit transfer is the process by which a provider recognises the credit a student has accrued at another institution, exempting them from modules they’ve already undertaken elsewhere. The Lifelong Learning Entitlement (LLE) doesn’t require credit transfer, but it will fall far short of its vision if more isn’t done to facilitate transfer between institutions.

    The current financial precarity of much of the UK’s higher education sector has also brought into sharper focus the value for students of being able to transfer their credit and their studies between providers – whether prompted by the threat of course closures, the movement of key teaching staff, or even the prospect of institutional collapse.The latest Office for Students board papers tell us that this has happened recently in the case of the Applied Business Academy.

    Last year’s Student Academic Experience Survey found that more than a fifth of students said they would, with the benefit of hindsight, have chosen a different institution or/and course. Smoother processes of credit transfer would make it possible for those students to change courses midstream. Those mechanisms wouldn’t just reinforce their rights as consumers; those opportunities should enhance their satisfaction, their chances of completion and academic success, and their employment prospects.

    Credit transfer is more important for some providers than for others. The Open University receives over 6,000 applications for credit transfer every year. At multiple specialist providers, credit transfer accounts for more than 10 per cent of their annual intake.

    Some providers may feel sufficiently confident in the profile of their provision to welcome an open system of credit transfer that would result in their net gain. Others have concerns about the administrative burden posed by credit transfer, the logistical complexities caused by the unpredictability of shifting student numbers, and its impacts on institutional autonomy and their academic brands.

    In short, it seems clear that a one-size-fits-all approach wouldn’t fit all, or indeed suit anyone. So, what might work? We thought it might be a good idea to ask.

    Mission: Improbable

    QAA’s latest research, published today, involved a survey of sector perspectives, and a series of stakeholder conversations and focus groups involving representatives both of providers and of professional statutory and regulatory bodies (PSRBs).

    Those we engaged in this research overwhelmingly agreed that credit transfer is a valuable tool for students and can underpin lifelong learning. The advantages most cited were the flexibility it provides and its impact on widening participation, particularly for returners to learning – as well as the practical benefits for students who can gain qualifications and learning in a shorter time and at a lower cost, by removing the need to duplicate learning unnecessarily. The benefits also extended to institutions, particularly as an instrument to promote retention and improve completion rates.

    The idea of a sector-owned framework was also welcomed by our participants, with 84 per cent agreeing it would be helpful to achieve credit transfer at scale. But our participants were rather less optimistic about the possibility of a more formal integrated sector-wide system of credit transfer. The providers themselves tended to consider this prospect unrealistic, while sector organisations were more likely to welcome the idea.

    While participants were positive about the effectiveness of institutions’ individual approaches, their responses expressed concerns around transparency, resourcing and cultural resistance. Though our stakeholders largely agreed that credit transfer was a valuable route and necessary to facilitate lifelong learning, they often doubted the feasibility of delivering it at scale.

    The art of the possible

    Action on credit transfer falls into three (fairly) neat buckets, each with its own level of impact and compromise.

    For starters, there’s some low hanging fruit that would make this process work more smoothly for applicants. Our participants observed that applicants often don’t realise credit transfer is an option – and that its processes are difficult to understand. We’d therefore recommend that providers embed greater transparency and promotion of credit transfer – and agree a sector-wide terminology to explain it.

    But there’s little point making the policies more accessible if what applicants find there isn’t great. We also have to work to improve the policies themselves. We’d recommend the development of a sector-owned good practice guide to the key principles of credit transfer policy; student engagement in determining the information required and how it should be presented; and that providers consider routes through which forms academic credit can be automatically recognized for transfer.

    The greatest challenge is to develop multi-institutional initiatives to ease transfer between providers. There are pockets of the sector where this would be welcome, and others where it would be hard to get it off the ground. We’re not recommending hard enforcement on credit transfer – frankly, the sector has enough to be getting on with – but some level of accountability through regional consortia or partnerships, a charter of best practice, or folding its focus into existing regulatory processes would be a start.

    What’s clear is that credit transfer remains in limbo until we get a clearer direction from the government on just where the LLE is going. It might help the policy’s ambitions, but without a better sense of what the government wants the sector to achieve, it’s understandably falling down the list of priorities.

    To move beyond this impasse, the government needs to make clear where the strategic imperative is for action, so the sector can get to work on addressing the cultural and practical barriers.

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  • The franchise problem may not have a quick answer

    The franchise problem may not have a quick answer

    So everyone is (still, after more than a decade) agreed that student loan fraud and poor quality provision is a huge mark against the practice of franchise provision.

    Moreover, we’ve generally come to the conclusion that something needs to be done – and although an investigation will be helpful, that something needs to be fairly swift and concrete action.

    Most people are assuming that this will take the form of a requirement to regulate franchise partners, via compulsory registration by the OfS, or some other regulatory change.

    Didn’t we try something like that before?

    The government is currently consulting on whether all institutions in England delivering higher education to more than 300 students should register, at some level, with the regulator.

    This in itself is far from a new idea. When the Department for Education first consulted on what became the Office for Students regulatory framework, providers had the option to register in the “Registered basic” category – a third category that simply recognised that an institution was providing higher education in England.

    This category will provide a degree of confidence for students that is not present in the current system with providers in the Registered basic category being able to let students and other bodies know that they are recognised by the OfS as offering higher education courses.

    As registration in this category was intended to be optional there would need to have been a benefit to registration, and there would be no way of assuming that all England’s higher education provision was covered. On franchise arrangements in particular, the initial proposals suggested that:

    the delivery provider [in a franchise arrangement] will not normally be required to register. If it chooses to register, the Registered basic category will normally be the most suitable category because the lead provider is responsible for compliance with all required registration conditions for the Approved and Approved (fee cap) categories.

    For many in the sector responding to these ideas, these assumptions offered little to protect students or the system as a whole. In summarising the consultation responses, the government reported that

    there were widespread calls for the Registered (basic) category to carry additional conditions to protect students’ interests, such as transparency, student protection plans, student transfer and electoral registration conditions. Respondents were concerned that students at those providers in the Registered (basic) category would be at risk of assuming greater protection than will be provided in that category

    The combination of the limited oversight offered to those in the “Registered basic” category (which was configured pretty much as a list of people who had paid OfS £1,000), and the additional burden that that any more active requirement would place on smaller providers, meant that OfS concluded that:

    we have decided to remove the Registered (basic) category from the published regulatory framework. The effect of this decision is to avoid misleading students about the protections available at Registered (basic) providers

    But that wasn’t the end of it. OfS also noted (and this is worth setting out in full):

    we recognise that unregulated providers will continue to operate, as they would have done even if the Registered (basic) category had been included (albeit, possibly, in lesser numbers). We are concerned with all students, not only those at registered providers, and remain committed to the policy intention set out in the regulatory framework consultation – to improve transparency and student protection at those higher education providers that are currently unregulated. We shall therefore give priority to developing our understanding of providers and students in the unregulated parts of the sector, to determine how we can most effectively have a role in protecting the interests of students at these providers

    At the time, when franchise arrangements were considered at all by ministers, they were painted as an unnecessary rigmarole for exciting new entrants to the market. Speaking to Universities UK in 2015, then higher education minister Jo Johnson famously said:

    Many of you validate degree courses at alternative providers. Many choose not to do so. I know some validation relationships work well, but the requirement for new providers to seek out a suitable validating body from amongst the pool of incumbents is quite frankly anti-competitive. It’s akin to Byron Burger having to ask permission of McDonald’s to open up a new restaurant.

    So how’s all that going, then?

    Byron Burger, of course, entered administration twice in three years. In contrast, the franchise model in higher education never looked short of cash or interest. The Office for Students never used its own “validation powers” (section 51 of the Higher Education and Research Act allowed the OfS to get involved in academic partnerships directly, as kind of a response to the argument that delivering courses on behalf of a competitor in order to enter the sector was anti-competitive). Instead, it commissioned the Open University to be (effectively) a validator of last resort for FE colleges on others seeking to enter the HE market (this arrangement is set to conclude in July 2025).

    When the Higher Education Funding Council for England closed in March 2018, it directly funded 313 higher education providers, while having at least an awareness of 816 places in England where higher education was being delivered. The Office for Students currently has a funding and regulatory arrangement with 425 providers – for the current regulator, there is no regulation without funding. The impact assessment published alongside HERA implied that in 2024-25 there would be 631 in either the Approved or Approved (Fee Cap) registration category – postulating 1,131 institutions delivering higher education in England in total.

    The postulated rush to register did not happen, even when DfE closed the old “specific course designation” route to regulated and funded provision for alternative providers in August 2019. As sector interest group Independent HE has documented, the Office for Student registration process was generally experienced as expensive and cumbersome: where providers have been actively seeking regulation and oversight, it has been very difficult to obtain. Indeed, when OfS faced pressure to get more actively involved in securing sector finances, it was able to unlock significant internal resources by “pausing” registration.

    By closing the “specific course designation” route, and making full registration slow and difficult, OfS has incentivised smaller providers to enter the least regulated (and riskiest, for students and public funds) part of the higher education sector. If that constitutes “developing an understanding” of the unregulated part of the sector, one has to question what this “understanding” actually is.

    The other end

    The financial pressures currently engulfing the sector has encouraged many established providers to get involved in franchising arrangements – they get to keep a portion of the fee income related to students involved in such arrangements. In return, they are expected to provide oversight of quality and standards on courses leading to awards bearing their names, and handle all of the regulatory requirements relating to those students.

    The numeric threshold approach to regulation (wherein a provider faces further investigation if the proportion of students continuing on their course, completing their course, and progressing into employment or further study, falls below a minimum) does mean that such provision is regulated, after a fashion. There is an open investigation on franchising at Leeds Trinity University, and we understand that current quality-related investigations are focused in part on franchise provision.

    Where the Student Loans Company spots evidence of potential fraud (or when OfS is notified of a concern) usually but not always involving a franchise arrangement, both OfS and DfE may become involved in an investigation. A recent uptick in such cases has led OfS to set out expectations in more detail.

    For these reasons most providers that franchise out provision are assiduous in ensuring what is being delivered is of a decent quality. However, the market incentives – at least in the short term – are stacked in the other direction. Some larger providers are increasingly reliant on income relating to students studying within franchise arrangements, and the demand for such relationships gives franchise providers the ability to shop around. Where an awarding organisation has attempted to impose more stringent quality requirements, there have been instances where the delivery partner has simply ended the partnership and entered a new relationship that offers less work and/or more cash.

    What regulatory tools are actually workable?

    So when something bad is identified, there’s always a subset of the population who think that there should be a law (or at least, regulation) to stop it happening. It’s an attractive idea, until you start to think about implementation. There are many trade offs.

    Option one: ban all franchise provision

    In other words, you would decree that unless you have degree awarding powers, you shouldn’t be delivering higher education. You would, in practice, have to ban all new recruitment to franchised courses and allow for some form of teach-out, unless you want to face a mass legal action. On a teach out, with no likelihood of any new students, the quality of provision would fall even further as providers withdraw funding and interest.

    Meanwhile, a fair number of large providers rely on franchise income to make ends meet. So factor in the closure of a few universities – with further pressure on other providers to offer teach out – as that part of the sector slowly becomes unviable. Which would be a shame for all those students working hard at FE colleges (franchising pretty much started as a way to support FE colleges delivering HE in hard-to-reach areas), and at the quality and specialist end of franchise provision, and for on campus students at providers heavily involved in franchise provision.

    To be clear – you may not value some of the providers involved, or some of the courses students are enrolled on. But if either disappeared you would need to come up with a way to look after the interests of the legitimate students involved.

    Option two: selectively ban some franchise provision

    Take all the drawbacks of option one, but also add in the difficulty of reliably and consistently distinguishing the kinds of provision you want to see supported in this way from that which you want rid of. You could use metric thresholds in a B3-esque way, you could attempt to do something clever with subject areas, or even base the ban directly on your suspicions of fraudulent activity. You’d have to be absolutely certain, mind – such decisions will almost certainly end up in court (you are dealing with a lot of higher education income, and it is unlikely you will get it dead right every time). Even something as straightforward as a subject area (“business studies”) is notoriously tricky to define when you get down to actual course content.

    Option three: require all providers involved to register with OfS

    Even assuming OfS has the capacity to quickly register a load of providers currently delivering franchise provision, there has to be a question as to how quickly and how well the regulator can then act where there is low quality provision. Back in 2024 we got a promise that the next round of OfS quality investigations would have a particular focus on franchise provision (from last time this story cropped up) – as yet we’ve not even seen reports, much less regulatory action.

    It’s looks like this has been one of many casualties of the regulator, at the urging of the government, throwing as much effort as possible behind addressing the financial issues the sector has been facing (we’re also expecting findings from the investigation into the academic partners of Leeds Trinity University that kicked off more than a year ago)

    Option 4: continue with tripartite enforcement

    OfS, DfE, and SLC already work together (increasingly regularly) to act on evidence and information relating to student finance fraud. One approach to address the problems as reported – which encompass value for taxpayer funding in the wider sense of good quality provision as well as the more specific fraudulent and criminal examples – would be to continue to reinforce and prioritise this collaboration and data sharing. There have been some steps taken to ensure that OfS is gathering and using the appropriate data, and that the three organisations are able to work together in using regulatory or financial sanctions to deal with concerning situations.

    However, this is what we are doing currently, and it would appear that the rate of success is not yet high enough. There were recommendations in the NAO report that cover stuff like risk management, drawing on evidence, and agreeing responsibilities: all of which are examples of basic stuff that is not being done consistently or well. That’s a worry.

    Option 5: number controls

    There is a case for number controls for franchised provision, linked to a regular (ideally cyclical rather than risk based) quality engagement. Where there is good and useful franchise provision we should be happy to let it expand, where there are even mild concerns we should be happy to constrain recruitment. And there is no way that the kind of rapid scale up of activity we’ve seen at some providers can be done without compromising quality – there should be an absolute proportional limit on expansion.

    Last time this story did the rounds, Jim made a compelling case for a 25 per cent of total provision cap similar to that used by the ESFA to regulate franchise FE provision in 2020. There’s not a lot of the current HE sector that would be hit by such a rule, but there are a handful of prominent examples for whom a higher ratio is pretty much existential (yes, you could argue that such institutions may not be viable anyway, but how does that help students or the wider sector?). There would need to be a time delay on full implementation, and support and guidance for those that need to rapidly downsize existing operations. Again, you might need to consider teach out arrangements as well.

    So where next?

    If you’ve set up, as the government in England has over the last decade, a fairly open market for higher education provision based on students as consumers having enough information, you need to regulate in the interests of the consumer (in this case both the individual students and the taxpayer). It’s neither unexpected or unprecedented for schemes with incomplete safeguards and developing approaches to regulation to be at risk of fraud – and it is essential to be able to quickly identify and act where it is happening.

    For me, the speedier collection and use of data around franchise provision – regarding the student experience, student outcomes, and the financial and operational approaches involved – is essential. There should be specific and regular data submission points for lead providers involved in franchise provision – this should be assessed quickly and action taken where there are causes for concern. OfS already has a notification system, which should be better promoted – it should also work with other bodies who collect information about the student experience. As much data as possible should be published: transparency is a valuable tool in avoiding murkier practices.

    I’m not convinced of the benefit of a full regulatory relationship with franchise providers. OfS does need to know who they are and keep some records as to which delivery providers have been problematic in the past – but in terms of incentives it makes more sense to regulate the lead partner. And number controls, while far from universally popular, would help in this case.

    You’ll note that none of this requires new legislation – we should take with a grain of salt the claim that OfS does not have the powers to act in these situations, it absolutely does. However the regulator may not have the capacity to act as quickly or as decisively as it may like – so there may need to be additional money available from DfE to build these capabilities.

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