Category: The Market

  • Roll up roll up for the great higher education fire sale

    Roll up roll up for the great higher education fire sale

    Since the announcement, most eyes interested in “radical transformation” have been on the creation of a new “super-university” – Greenwich and Kent becoming the London and South East University Group.

    But The Times is reporting a very different kind of tie-up – which if it comes to pass could have much more interesting implications.

    It says that the University of Buckingham, the UK’s only “independent” university, is considering a £150 million sale to Global University Systems (GUS).

    It suggests that the potential sale could compromise the university’s Royal Charter, non-profit status, and academic integrity – risking its identity as a “free speech and research-focused institution”.

    Precedented

    If that sounds and feels “unprecedented”, you may not have noticed the extent to which everything from research parks to student accommodation are already (part or fully-)owned by private companies.

    You may also not have noticed any number of mergers, takeovers and fire sales among small private HE providers – many of which specialise in the kinds of franchised provision that have been generating considerable regulatory interest in recent months.

    There’s also Richmond, the American University in London. When founder Sir Cyril Taylor died in 2018, he bequeathed his for-profit company (American Institute for Foreign Study) to his own charitable foundation (Cyril Taylor Charitable Foundation).

    It created what former vice chancellor Lawrence Abeln called a charity “operating like a shell for a commercial company it wholly owns” – allowing commercial interests to control educational decisions through charitable structures while maintaining the appearance of independence.

    Abeln argued that the foundation used funding as leverage to demand governance changes, including his forced resignation, threatening the university’s survival unless commercial interests were satisfied.

    It mirrors concerns about the potential Buckingham sale – that once charitable educational institutions become dependent on private sector funding or ownership, academic independence becomes vulnerable to commercial priorities.

    Even when the charitable structure remains intact, the substance of independent governance can be hollowed out, creating what critics might term a “stealth privatisation” where commercial control operates behind charitable facades.

    Any number of things could be going on behind the scenes that already resemble that in universities that have breached, or are close to breaching, their banking covenants.

    But the wholescale takeover of a university with a Royal Charter? Really?

    We work at supplying HE

    Back in 2020, five men registered a UK company called “GGE UK Newco” in a WeWork near London Fields. Within four months, it had acquired university title, degree awarding powers, and registration with the Office for Students – a process that typically takes years for new higher education providers.

    The company pulled this off by purchasing the assets of the former Regent’s University London charity, including its degree awarding powers (awarded in 2012) and university title (granted in 2013). On September 29th, GGE UK Newco changed its name to “Regent’s University London Limited,” becoming the wholly-owned product of a partnership between the original Regent’s University and Galileo Global Education, a large international education provider with over 110,000 students worldwide.

    The transaction appeared to have bypassed normal regulatory processes entirely. While new providers typically wait around 180 days and must pass a Quality and Standards Review, no such review appeared to have been conducted for Regent’s University London Limited. OfS was largely silent on the specifics, raising real questions about transparency and whether standard due diligence procedures were followed.

    As DK noted at the time, the case was interesting insofar as it suggested that university titles and degree awarding powers can effectively be bought and sold as assets. With some independent providers still waiting on registration decisions, the apparent fast-tracking raised concerns about fairness and regulatory consistency, potentially setting a precedent for more financially-motivated restructuring in the sector.

    And there’s more

    Scroll forward to March 2023, when IU Group acquired the education and training activities of the London Institute of Banking and Finance through a structural split.

    The original Royal Charter charity was renamed “The London Foundation for Banking & Finance (LFBF)” and continues as a charitable foundation, while the commercial education business now operates as “LIBF Limited” (a wholly owned UK subsidiary of IU Group) trading under the original name “The London Institute of Banking & Finance.”

    That preserved the charitable Royal Charter structure while transferring the degree-awarding educational operations to private ownership.

    Then in 2014, struggling Ashridge Business School was acquired by Hult International Business School in what was described as both a merger and acquisition driven by Ashridge’s need for “financial salvation.” Hult provided a £50 million investment, and the schools completed an operational merger in 2015.

    Ashridge now operates as “Hult Ashridge Executive Education” – the executive education arm of Hult International Business School, with the historic Ashridge House estate serving as Hult’s flagship executive education campus. Unlike LIBF, this was a complete absorption rather than a structural split, with Ashridge’s independent existence ending as it became part of Hult’s global network of campuses across Boston, London, Dubai, Shanghai, San Francisco, and New York.

    And then there’s the College of Law.

    It can trace its origins to 1876 with the formation of Gibson & Weldon, a leading tutorial firm. In 1962, The Law Society created The College of Law by merging its own Law Society School of Law (founded in 1903) with Gibson & Weldon, establishing it as a specialist institution for training solicitors.

    It was formally incorporated by Royal Charter on 5 December 1975 and registered as a charity in May 1976, with the stated aim “to promote the advancement of legal education and the study of law in all its branches.” This gave it constitutional status as a chartered institution dedicated to legal education. And in 2006, it was granted degree-awarding powers by the Privy Council.

    So when it was sold to Montagu Private Equity for around £200 million in 2012, the transaction revealed just how valuable degree-awarding powers had become as tradeable assets.

    The deal involved splitting the institution – the original College of Law retained its Royal Charter and charitable status under a new Legal Education Foundation, while the commercial education business, crucially including those 2006 degree-awarding powers, moved to a newly created for-profit company called “The University of Law Limited” (originally incorporated as “Col Subco No.1 Limited”).

    DAPs, it seemed, could now be packaged and sold as part of a commercial education business – degree-awarding powers as an asset class.

    At the time, constitutional lawyers questioned how powers granted to a Royal Charter body could legitimately transfer to what was essentially a separate company. But the then responsible Department for Business, Innovation and Skills (BIS) maintained that the powers remained valid because the “whole education and training business” had moved to the new entity. The precedent was set – and so in 2015, when the University of Law was acquired by GUS, its valuable degree-awarding powers travelled with it as part of the commercial package.

    Or take Arden. Originally founded as Resource Development International (RDI) in 1990 by entrepreneur John Holden, the distance learning provider was sold to US-based Capella Education in 2011 as part of Capella’s international expansion strategy. The timing proved crucial – RDI was granted Taught Degree Awarding Powers in April 2014, gained full university status in August 2015, and was immediately put back on the market when Capella’s international strategy faltered.

    By August 2016, GUS acquired Arden for £15 million – demonstrating how rapidly degree-awarding powers could travel through corporate hands. The transaction showed DAPs functioning specifically as tradeable assets – Capella had effectively acquired a company that later gained valuable regulatory permissions, then sold those permissions onwards as part of a portfolio optimisation. For GUS, acquiring Arden provided another set of degree-awarding powers to add to its growing collection, which already included the University of Law.

    Royal charters

    But the potential Buckingham sale arguably represents a qualitatively different proposition from previous transactions. While ULaw, LIBF, Ashridge, and Richmond were specialist institutions operating in commercial-adjacent sectors – professional training, banking education, executive development, or niche international provision – Buckingham is the UK’s flagship independent university, purpose-built to demonstrate that alternatives to state higher education could thrive.

    Established in 1976 and granted its Royal Charter in 1983, Buckingham has operated successfully for over four decades as Thatcher’s “proof of concept” for educational independence. Unlike the struggling institutions that sought private sector rescue or the professional training providers that already operated in quasi-commercial spaces, in theory the sale of Buckingham would represent the commodification of the university ideal itself.

    It would also signal that even the most symbolically important Charter institutions – those created explicitly to preserve educational independence – could be subject to market forces when financial incentives align.

    Whether structured as a direct sale or following a version of a model of splitting charitable and commercial operations, a Buckingham transaction would force regulators to confront fundamental questions they’ve previously avoided. The Office for Students, the Privy Council and potentially the Charity Commission would need to justify why the commercialisation of Britain’s flagship independent university serves the public interest.

    If it happens, regardless of the technicalities of its legal structure, it would also establish that Royal Charter status provides no meaningful protection against commercialization, making virtually any institution a potential acquisition target – completing the evolution of degree-awarding powers from constitutional privileges into tradeable corporate assets.

    Back to the future

    As Mary Synge demonstrates in her analysis of university charity law regulation, universities are charities whose trustees have a fundamental legal duty to act “in the best interests of the charity” – not commercial interests, and not even student interests – at least as variously defined by politicians.

    When charitable assets and degree-awarding powers become tradeable commodities, this feels like a fundamental breach of charity law principles that have governed universities for centuries. The strategic goals of “maximising growth in income” that might benefit institutional finances are legally distinct from – and potentially in conflict with – acting in the charity’s best interests for public benefit.

    But the regulatory conditions that make the Buckingham sale possible have been deliberately created. Synge’s research shows how OfS has systematically weakened charity law oversight compared to its predecessor HEFCE, removing transparency requirements, diluting governance standards, and abandoning serious incident reporting.

    Where HEFCE demanded universities demonstrate compliance with charity law principles, OfS has reduced this to a mailing list subscription. The regulatory hollowing-out creates the conditions where transactions that should trigger intensive charity law scrutiny can proceed with minimal oversight.

    When the regulator tasked with promoting charity law compliance barely acknowledges charity law exists, constitutional protections become meaningless.

    Back to the future

    As ever, we’ve been here before – or at least the FE sector has. Back in 2016, FE Week got hold of a leaked government document that revealed the Department for Education (DfE) was actively planning for private sector acquisition of failing FE colleges.

    A draft “Framework for due diligence in the FE sector following area reviews” (a process which itself had nudged/inspired/funded a series of mergers and groups) specifically addressed the “acquisition of an FE college by a private sector organisation,” noting that private providers “may have different benchmarks and parameters as to what is acceptable in terms of both curriculum and financial performance.”

    BIS guidance published that March had already unveiled government plans to introduce an insolvency regime for colleges, explicitly stating that following area reviews, government would “no longer bail out colleges in financial trouble, but would instead allow them to go bust.” Sound familiar?

    Critics warned of potential “fire sales” where private equity firms could asset-strip college buildings and facilities, cherry-picking profitable courses while abandoning community obligations. And the University and College Union (UCU) pointed to American examples of private equity involvement leading to “derisory rates of graduation, crushing levels of debt and of course dubious value.”

    The Technical and Further Education Bill (2016) created a “Special Administration Regime” for FE – essentially corporate insolvency procedures for FE colleges with an “education objective” twist. One battle during debate on the Bill came when Labour’s Gordon Marsden attempted to protect publicly-funded college assets from private acquisition.

    Marsden argued that FE colleges represented decades of public investment – from 1950s local authority funding through the multi-billion pound Building Colleges for the Future programme – and warned that defeat would enable private equity “asset stripping” of educational institutions built with taxpayer money.

    But then Minister Robert Halfon rejected the amendment – arguing that student protection must override asset protection, even if it meant transferring publicly-funded infrastructure to private companies. When the division was called, Conservative MPs defeated the amendment 8-5, explicitly authorising education administrators to transfer college assets to private entities if deemed necessary for the “education objective.”

    It established the principle that educational assets, regardless of their public funding history, could be commodified and transferred to private ownership when market logic demanded it.

    Here in 2026, we have a Labour, not Conservative government. It is already “interested” in what’s been going on in the franchised for-profit sector. But it doesn’t seem to have been especially keen to question what’s been going on from a profit/principle point of view. And it’s not clear that what is planned in regulatory terms will be nimble enough to tackle the real questions that surround outcomes or quality.

    As is increasingly clear, the “line” between private and public interest has already been blurred by loans, accommodation, research parks and all sorts of other aspects of HE. What the government does or doesn’t do over a potential sale of Buckingham will tell us whether it’s interested in, or willing to, draw a line before the examples in blogs like this become much less obscure.

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  • Beware the sharing issue in the depths of the higher education iceberg

    Beware the sharing issue in the depths of the higher education iceberg

    If you’re a proper Eurovision Song Contest loser like me, you look forward each year to the crowdsourced fansourced compilation of the season’s Iceberg.

    On the surface is the stuff you figure that “normal” casual Saturday night viewers will notice – like the considerable coverage afforded to Malta’s entry this year, which involved its artist Miriana Conte attempting to argue that her song “Serving Kant” really meant “serving song”.

    Then several layers below sea level there’s things like the news that Sasha Bognibov – who has entered the Moldovan selection several times with a series of increasingly creepy entries – had died of a heart attack, only to come back alive a few days later.

    “Icebergs of ignorance”, as they’re officially known, were originally invented by a Japanese management consultant in the 80s. Sidney Yoshida’s keynote at the 1989 International Quality Symposium in Mexico had described his research on a car manufacturer named Calsonic – where he’d found that senior managers at the firm only saw about 4 percent of the issues, with the bulk hidden at lower levels.

    And like an iceberg, most of the danger lies beneath the surface – with supervisors and frontline staff far more aware of the everyday challenges. In theory it all highlights the need for stuff like open communication, feedback loops and genuine staff voice – so decision-makers aren’t steering blind.

    Under the surface

    I’ve long been fascinated by the way the concept might apply in a university. Plenty of senior leaders might take the view that the cultural (and now regulatory/legal) protection afforded to academic staff saying critical things on social media on everything from workload to the travel booking system means very little is below the surface – but my guess is that that can breed complacency about the things that people don’t say out loud.

    From a higher education sector and public perception point of view, we might interpret new research from the Policy Institute at King’s and HEPI in a similar way – an iceberg of misunderstanding where the surface-level chatter obscures the submerged reality.

    The public apparently overestimate graduate regret, assumes that nearly half of graduates feel crushed by debt when only 16 per cent say so, and underestimate higher education’s economic heft. And like Yoshida’s managers, the danger isn’t so much ignorance of the big headlines as it is the quiet accumulation of false assumptions beneath the surface – gaps in knowledge that, if unchallenged, steer the national conversation off course.

    But it’s the big financial crisis in the sector where I keep thinking most about the Iceberg. Above the surface, to the extent to which the issue is “cutting through”, it’s the prospect of a provider going under that the press seem really keen to report on. Every other day one of us at Team Wonkhe will get a message from journo or other asking us who might be on the brink, presumably because stories like this in the i Paper (“At least six unis at risk of going bust before 2025 freshers finish their degrees”) get clicks.

    Just below the surface (for me at least) is what’s happening to student demand (or, more accurately, supply) – a process that seems to be converting “high”, “medium” and “low” tariff group categories into “medium”, “low” and “has a pulse” as each day of Clearing 2025 goes on.

    The next level down for me is redundancy rounds and telegraphed cuts. They definitely sound bad – especially if a course closes. But if they result in 24 hour library becoming a 15 hour one, or the optional electives on an undergraduate degree being slashed, they seem be harder to pin down and understand – and often aren’t being picked up and protected by consumer law, complaints or Student “Protection” Plans.

    The worst of all of that, at least so far, has been down the bottom end of the league tables – although journos hoping for an actual collapse may find that the realities of processes like endless cost-cutting remain buried at the bottom of the iceberg because of the amount of debt that everyone’s in.

    A small provider like Spurgeon’s can fall over because the banks aren’t expecting millions to be repaid on shiny buildings – big universities extended in that way are likely to be able to renegotiate because banks like being paid back, albeit in a way that effectively surrenders the already shaky illusion that the Board of Governors is in control to a shadow board of bankers insisting on deeper and deeper cuts to students with the least social capital and confidence to complain about them.

    We need a shrink

    What then manifests is the scourge of shrinkflation. You know the idea – when the Quality Street tubs appear in the supermarket in September, you’re only minutes away from a national newspaper pointing out that there’s two fewer toffee pennies in this year’s tub of 525g than last year. I mean have you seen how small a Freddo is these days?

    The problem for students is that this stuff is hard to spot and even harder to enforce rights over. It is simply not possible to lose the number of academic staff that the sector has lost over the past two years and for providers to not be in breach of contract – promises have either been broken, or the contract itself gives a university too wide a discretion to vary, or it doesn’t and the risks of not making the cuts are greater than the risks of a handful of students having the energy to complain.

    And when the big red flags from the Office for “Students” are about financial sustainability with the odd askance murmur about finding efficiencies in a way that protects the student experience, it’s not as if the regulatory environment is doing anything other than egging on the shrinkflation. You’re only going to get inspected on the provision by OfS if your outcomes are terrible, and it seems to have all but given up doing inspections anyway.

    Will a student enrolling onto a three year degree get the course they were promised in two years time? I’ve no idea, and all OfS can offer in protection terms is “let’s hope you paid your fees on a credit card because you might be able to get the credit card company to do a chargeback”.

    Every year I get taken in by a fresh promise that OfS will actually enforce the stuff about broken promises. Almost a year ago to the day Director for Fair Access and Participation John Blake turned up at an SU staff conference to declare that he’d heard students worried about being promised one thing and getting another loud and clear. What he didn’t say was that a full year on, its new definitions of “fairness” will only apply to students in newly registered providers – with no sense of when “fairness” might be a thing for everyone else.

    Deep down

    But the temptation would be to assume that the harms of where we are are exclusively in those layers already mentioned. For me, right down at the bottom of the Iceberg – for the public, regulators and students themselves – is the sharing problem.

    I often lament that being in a university library in certain weeks of the year is like being on a short-formed Cross Country train with no air con on a Bank Holiday Monday when the service before it has been cancelled. There’s nowhere to sit, everyone is very tense, and there’s a real sense that an actual fight might break out between two otherwise polite members of the public over a seat reservations issue.

    There’s always an idiot with their bag on a seat, the catering trolley can’t get through, and the wheelchair user finds themselves yelling at those with suitcases because they’ve been plonked in the space for chairs at the end of the carriage. It’s carnage.

    Over the years, I’ve often skim-read commentary from financial and management consultant types that “one less international PGT means needing to recruit two home students”, as if the only thing that matters is the overall financial target rather than having enough of everything for the students being recruited.

    What I (almost certainly naively) never expected is that it pretty much is panning out like that at the top end of the tables – and while there’s debates to be had about acquisition costs, suitability for a course and/or culture, market instability and the loss of “local” options and choice, the thing that worries me most of all is the sharing thing.

    Let’s imagine – hopelessly simplistically, I know – that some universities are indeed setting a financial target regardless of the number of students that would involve recruiting. As part of that, let’s imagine that these are universities more likely to recruit students living away from home. If 1 x PGT becomes 2 x UG, are there enough bed spaces in the city?

    Enough is enough

    Enough books in the library? Enough marking capacity to hit the 2 week turnaround pledge? Enough sockets for laptops when everyone’s in at once? Enough spaces in seminar rooms to avoid students sitting on the floor? Enough counselling staff to cope when that extra intake tips more students into crisis? Enough careers support to avoid queues that make the whole thing feel tokenistic rather than transformative?

    Enough quiet corners for those who can’t concentrate in noisy shared flats or packed libraries? Enough placements to go around when professional courses all need them at the same time of year? Enough personal tutor appointments to avoid the system becoming decidedly impersonal? Enough contact with actual academics rather than a carousel of casualised staff? Enough eduroam bandwidth when every lecture, seminar, and social is streaming at once? Enough student housing that isn’t mouldy, miles away, or eye-wateringly expensive?

    “Enough” is already pretty subjective – and itself subject to wild differences between subject areas on campus in a way that makes it hard to not always spot someone (probably an international PGT in the Business School) who’s worse off. Even if they knew they could and even if they were minded to, it’s pretty hard for a student to argue that something that is still there and was always shared is being stretched a little too thinly now.

    And this sort of thing almost always manifests in conflict between students rather than pinning the blame tail on the university donkey – see our dismal debates about things like NHS access and immigration for a classic example.

    It’s not even as if the regulator doesn’t understand. John Blake again, a year ago:

    When the 2012 number controls were abolished, there are institutions that literally doubled in size overnight… I don’t know that the answer is us saying, no, you can’t have your students, or you have to do this. But I think there’s definitely scope for us thinking about what the obligation of institutions is to have discussions with their local community about where their students are going to go, because it’s clearly not sustainable for every institution to double itself overnight in small places.

    See also everything else about a university experience that, by definition, involves sharing things.

    Swear words

    It remains the case that it’s almost as bad to sing the uncensored version of Miriana Conte’s Eurovision entry in a church as it is to even gently propose some student number controls. And even though one of the least publicly resisted immigration rules is not a cap but a “if you want more CAS, you have to think about whether you have the capacity” (maybe because it’s never been meaningfully or publicly enforced by UKVI), people even seem to be nervous about suggesting something like that for home students.

    I’ve said it before and I’ll say it again – higher education is an endeavour that is profoundly unsuited to very rapid expansion and very rapid contraction at programme, subject and institutional level. But the biggest mistake of all would be to focus on the end of the league tables where the impacts of contraction are closest to the Iceberg’s surface.

    Cramming tens of thousands more students into the cities of the (not so) high tariffs may well be just as damaging, all while the tone of their recruitment relationship – “you’re lucky to be here” – reduces the chances of students doing anything other than the HE equivalent of putting your head down, crouching next to the toilet and staring at your phone for three gruelling hours. Or, in HE’s case, years.

    It’s really not hard this one. You want to expand your student numbers by more than 5 per cent in a subject area? Publicly consult on how you’ll do it – including the results of conversations with staff, students, the local community and local providers, and you’re on. Imagine suggesting out loud that doing some planning to ensure more students doesn’t mean a worse experience would represent a regulatory “burden”.

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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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  • 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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  • Hindsight is a wonderful thing – but foresight is better

    Hindsight is a wonderful thing – but foresight is better

    If students think that they’ve made the wrong choice – either of course, university or both – depending on how deep in they are, there’s often not much that can be done.

    That’s a problem – one that has appeared to be considerable in successive waves of the HEPI/Advance HE Student Academic Experience Survey, despite higher education policy in the last decade supposedly making it both easier to choose, and easier to switch.

    “Regret” in the SAES – measured by asking students if they had a second chance to start again, knowing what they know now, what they would do, has been running at between 35 and 42 per cent since 2018.

    The pandemic will have hit that – but it’s still a large proportion of (in this case) undergraduates given that most of them will be paying for those decisions for decades to come.

    To work out what to do about it, we’d need research on what lies behind the figures – and now a research collaboration between Bristol University, HEPI and Advance HE (along with a steering group including UCAS and UCL’s COSMO project) has produced some – all under the careful eye of former Office for Students CEO turned Professor of Practice in Higher Education Policy, Nicola Dandridge.

    Via two surveys, each of 2,000 students (one for students and graduates), The benefits of hindsight tells us only 2-3 per cent felt higher education was the wrong path altogether – it’s the choices within that that are the issue.

    Similar (enough) to the SAES, 65 per cent of undergraduates were happy with their institution and course choices. 10 per cent would study the same subject at a different university, 6 per cent would change courses at the same institution, 6 per cent would do both, and the rest would have preferred an apprenticeship, a gap year, or direct employment.

    If you’re thinking that that would improve post-graduation, there’s bad news – only 48 per cent of graduate respondents (aged 25-30) were happy with their original decisions, while 15 per cent would have chosen a different course at the same institution, 11 per cent the same course elsewhere, and 12 per cent both – with a further 8 per cent wishing they’d chosen an apprenticeship.

    Why? Students primarily cited “happiness” and better “fit” as reasons for wanting different choices, with 40 per cent acknowledging insufficient research. Graduates, unsurprisingly, were more concerned with career opportunities, with a similar percentage suggesting they needed better career guidance.

    Under the microscope there are two things – the structures and support for choice, and the structures and support for transfer. Neither come out well.

    I travelled each and every highway

    The report kicks off with some historical and international comparisons.

    A HEFCE report from 2016 surveyed graduates 3.5 years after graduation and found 32 per cent would have chosen a different subject, 21 per cent a different institution with ethnic minority graduates most likely to express choice regret.

    International surveys show varying levels of choice satisfaction – 83 per cent of Irish students and 73 per cent of Dutch students report they’d have chosen the same institution or program again.

    OfS analysis from 2021 suggested that less than 3 per cent transfer to different providers (with fewer than half transferring credits), and a 2016 DfE study said that 23 per cent of students who changed providers found the process difficult or very difficult. The data stopped being returned in September 2021 when DfE asked the OfS to stop in the interests of reducing burden.

    Anyway, the results. Among those who would have made different choices, 85 per cent say they would have made a significant difference in their lives, with regret increasing by year of study – 25 per cent of first-years versus 41 per cent of third-years.

    Satisfaction varied by region too – 74 per cent in Scotland vs. 64 per cent in England – as well as by subject, health related students were 10 points happier than social science students.

    For graduates, those employed in highly skilled occupations or pursuing further education reported greater satisfaction with their choices than those in less skilled positions or unemployed.

    You can read all of that, along with various other splits by region, stage and so on, in two ways – either a lot of regret isn’t about the course at all, or a lot of it is about the extent to which a student believed a course might set them up for the labour market, and then (at least a few years on), failed.

    Cracked up to be

    The focus group findings fill in some of the statistical blanks. Learning-related concerns were prominent – with students expressing disappointment about course content, teaching quality, and facilities. One lamented inadequate professional knowledge development:

    I found that the knowledge they had to offer, the experiences of the tutors themselves, and the actual equipment and facilities weren’t that great.

    Many noted discrepancies between university marketing and reality, with one observing:

    I think the way that it was sold is not quite exactly how it is now.

    Resource constraints were also cited, with one student describing how financial issues at their university led to their course being “gutted” with many modules eliminated.

    Career limitations emerged as another regret, particularly among STEM graduates struggling to find employment. One explained her degree’s narrow academic focus rather than industry-relevant skills, and cost of living concerns also featured, with one student regretting moving to Bristol, which they discovered was:

    …the second most expensive for rent outside of London.

    And as seen in studies on value for money (not least the one commissioned by Nicola Dandridge when OfS was set up), financial pressures intensified students’ critical assessment of their education:

    The fact that I’m so aware of the cost of it makes me think more critically.

    Much of that intensifies in the graduate results. Career limitations emerge as a dominant theme – with many lamenting overly specialized degrees that restrict employment options:

    I regret the course that I picked: it’s too specialised. It has limited where I can work – I can work on a children’s ward and nothing else.”

    Several pointed to insufficient internship opportunities as hindering their career progression. One theatre studies graduate wished that employability had been emphasised more – another regretted not completing a placement year.

    Making good choices

    On the assumption that getting the choice right to start with would have helped, for those in the regret camp, 41 per cent of undergraduates thought they should have researched more themselves.

    Students reported universities presenting misleading information at open days and in prospectuses, failing to provide detailed module information, and “putting on a show” that didn’t accurately reflect the actual experience.

    External pressures also significantly influenced regretted decisions with many students choosing subjects based on parental expectations rather than personal interests. Cultural expectations – particularly pronounced among Asian students – and social pressures prevented students from exploring alternatives.

    Preparing for exams whilst decision making also compromised decision quality – many selected “safer” universities based on predicted grades rather than aspirations. Timing was also a key factor in regretted decisions.

    Many wished they had taken gap years to gain clarity on their goals and undergraduates regretted looking “backwards” at subjects they enjoyed in school rather than “forwards” to potential careers. Graduates particularly lamented not understanding the labour market, wishing they better understood the importance of work experience and placements.

    Students who regretted their choices identified some things that could have helped – more transparent information about course content, better integrated career guidance, “taster courses” allowing students to experience subjects before committing, and targeted support for first-generation students.

    But 37 per cent of undergraduates and 21 per cent of graduates believed nothing would have enabled them to make different decisions – social, family, or educational influences overwhelming whatever agency they thought they should have had.

    I did what I had to do

    If students do get their choice wrong, one of the solutions – at least one promoted heavily in the last decade and the now largely abandoned duties given to the Office for Students in the Higher Education and Research Act 2017 – is transfer.

    And interestingly, the majority who regretted their choices would have transferred to another course or institution if possible – 59 per cent of undergraduates and 63 per cent of graduates.

    But multiple barriers prevented it – nearly half of undergraduates believed transferring wasn’t worth the effort and disruption. 52 per cent of graduates said a lack of information or support was their primary barrier, and many (38 per cent of graduates, 22 per cent of undergraduates) were completely unaware that transferring was an option.

    Additional barriers included financial concerns, poor timing (realizing too late), and family pressures.

    Students and graduates identified two major factors that would have enabled transfers – better information and guidance and financial support.

    Many also suggested early intervention systems – first-month “grace periods,” independent advisors, and regular check-ins with first-year students – to identify dissatisfaction before students became too established to transfer easily.

    But again, a significant minority (23 per cent undergraduates, 19 per cent graduates) believed nothing could have enabled them to transfer regardless of support offered.

    There’s some interesting demographic and characteristics splits. Students from lower participation areas reported their choices having greater consequences, higher proportions of private school students wished they attended different institutions for different courses, and Asian students were more influenced by university rankings but less by social media and career advisors.

    Worryingly disabled students showed significantly higher rates of regret and a stronger desire to transfer than the average. Focus group participants highlighted late diagnosis of neurodiversity, or a lack of disability support.

    I planned each charted course

    You do wonder whether, knowing what they know now, having looked at the results, the team would have chosen a different set of questions. What the results tell us is a lot that we already know – both about how students choose a course and university, and how they evaluate the value of that experience.

    If anything, the problem is the paradigm – the assumption in the hypothesis being that students either need to make the right choice first time, or that they need to be able to transfer if they don’t.

    Insofar as the research tests the central solutions to potential regret in both Students at the Heart of the System from 2011 and the OfS (F2) duty to facilitate transfer required via the Higher Education and Research Act 2017, it’s pretty clear that those solutions have failed.

    As such, we might expect the potential solutions on offer to at least contemplate something more radical than “do those things only better.”

    Sadly not. Students should conduct more comprehensive research earlier and consider gap years; schools should shift focus from university attendance to appropriate course/institution matching; graduate perspectives are to be incorporated into school career guidance; and universities are mildly exhorted to make sure that information is “accurate and realistic,” eradicating any “blur” with marketing and promotional material. Good luck with that.

    Meanwhile, work-related learning and the embedding of employability in the curriculum should be “scaled up in universities,” information and guidance should be available and accessible to students to support transfer arrangements, and consideration should be given to UCAS playing a “greater and more visible central coordinating function” in supporting students who wish to transfer.

    If none of that feels like it will shift the dial, that’s perhaps because there’s a dead-horse flogging aspect to them – coupled with nothing in the report that recognises the lack of incentives on universities to make much of that happen. It’s perhaps in the lone recommendation on the LLE that some better solutions might be found.

    I ate it up and spit it out

    Some of the material from students in the report looks at the balance between the theoretical and the practical, and some at (over) specialisation. Both point clearly to programme design, and flexibility within it – at just the point that providers are busy ripping choices and pathways out in favour of more efficient core module credit.

    As Jim noted in this piece on marketisation, it’s the opposite that students want – both in terms of majors and minors, and students being able to accrue credit for learning outside of their subject area through work and service.

    Clear signals to that end in the LLE would help – as would some actual rights in that space over credit transfer and accumulation. Providers that don’t want to play ball don’t have to be able to access the student finance system.

    We note, for example, that in Poland students have the actual right between 25 and 30 per cent of their credit as optional, non-core. In Latvia the minister is about to afford students the right to accrue credit across universities. In Austria, course reps have the right to input on and sign off on a programme’s electives before they are finalised for the year ahead, and in plenty of countries the right to accrue credit for learning via work and service is enshrined.

    More broadly, the lack of student rights in general in the UK – and the lack of a role for student organisations in promoting and enforcing them – is also a barrier. This kind of stuff isn’t going to happen by asking nicely. And the mis-selling thing is only going to change if, for example, OfS applies that new fairness condition to everyone, and strengthens students’ confidence to complain.

    Some of the material is about age – and I’m reminded that across the OECD, the UK has pretty much the youngest entrants and youngest Bachelor’s graduates. The first of those is about everyone in the system normalising a pause – the second is about a credit and student finance system that allows pauses, setbacks, reductions in study intensity and other wheezes that would prevent a student from thinking that they weren’t able to experience what they wanted through no fault of their own.

    Naturally, the stuff on costs needs tightening up – the woeful state of information that both encourages fiscal illusions and reduces any effort in getting those costs down – and the idea that rent or other participation costs can’t be properly researched at least at subject level through some of the national survey infrastructure that we have now is endlessly frustrating. The fact that the UK is one of the few countries in Europe where students have to keep paying their rent if they’ve dropped out means that bigger structural solutions are required.

    There are some ironies in the incentives currently hurled at universities that the report misses too. Anyone that thinks that regret, as described here, will improve while OfS is dangling damocles over continuation is naive; anyone that thinks that similar stats for PG would be improved when our “big sell” is getting a Master’s done in a year and UKVI looks down on changing course, is also kidding themselves. And a student finance system that continues to treat adults as dependent (the means test in the maintenance loan) almost guarantees that parents will hold more sway than their children.

    But as we talked about at The Secret Life of Students, reimagining what “full-time” study means in an era when most students must work to survive is arguably the most important task. If we force students to choose between earning, learning, and contributing, there’s going to be regret – over “fit” and happiness, work experience, skills acquisition and the inability to stop and think in general.

    Hindsight is a wonderful thing, but foresight is better. Unless central government sets itself the task of slowing down both the initial choice and the experience itself – supported by a framework of structural change and actual student agency – we expect that the relentless efficiency demanded of both students and their universities in a mass system will continue to overwhelm whatever OfS does on DiscoverUni or whatever providers think a lonely webpage is doing on the facilitation of transfer.

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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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  • Policy change can help manage the demand for graduate knowledge and skills

    Policy change can help manage the demand for graduate knowledge and skills

    “Our universities have a paramount place in an economy driven by knowledge and ideas.”

    These are the opening words of the 2016 white paper Success as a Knowledge Economy, which created the funding and regulatory architecture governing English higher education today. The arrangements are founded on a broad faith in the economic benefits of generating and communicating knowledge.

    This vision assumes that an increasing supply of university graduates and research, coupled with open markets that reward enterprise, leads to endogenous economic growth. That can happen anywhere because ideas are boundless and non-rivalrous, but particularly in England because our universities are among the best in the knowledge business.

    English higher education has grown by integrating the development of specific skills for the workplace alongside universally applicable knowledge. This is clear from the progress of most English universities from institutes established for professional and technical training towards university status, the absorption of training for an increasing range of professions within higher education, and the way in which universities can now articulate the workplace capabilities of all graduates, regardless of their discipline.

    Notwithstanding this, the reforms proposed in 2016 emphasised knowledge more than skills. By that time, most of the cost of teaching in English universities had been transferred to student tuition fees backed by income-contingent loans. So, the reforms mostly focused on providing confidence for the investments made by students and the risks carried by the exchequer. This would be delivered through regulation focused on issues important to students and the government, whilst positioning students as the pivotal influence on provision through competition for their choices.

    Universities would compete to increase and improve the supply of graduates. This would then enhance the capacity of businesses and public services to capitalise on innovation and new technologies, which would yield improved productivity and jobs requiring graduates. That is a crude characterisation, but it provides a starting point for understanding the new imperatives for higher education policy, which are influenced by challenges to this vision of nearly a decade ago.

    From market theory to experience in practice

    Despite an expansion of university graduates, the UK has had slow productivity growth since the recession of 2008–09. Rather than the economy growing alongside and absorbing a more highly educated workforce, there are declining returns for some courses compared with other options and concerns that AI technologies will replace roles previously reliant on graduates. Employers report sustained gaps and mismatches between the attributes they need and those embodied in the domestic workforce. Alongside this, ministers appear to be more concerned about people that do not go to university, who are shaping politics in the USA and Europe as well as the UK.

    These are common challenges for countries experiencing increasing higher education participation. The shift from elite to mass higher education is often associated with a “breakdown of consensus” and “permanent state of tension” because established assumptions are challenged by the scale and range of people encountering universities. This is particularly the case when governments place reliance on market forces, which leads to misalignment between the private choices made by individuals and the public expectations for which ministers are held to account. Universities are expected to embody historically elite modes of higher education reflected in media narratives and rankings, whilst also catering for the more diverse circumstances and practical skills needed by a broader population.

    In England, the government has told universities that it wants them to improve access, quality and efficiency, whilst also becoming more closely aligned with the needs of the economy and civil society in their local areas. These priorities may be associated with tensions that have arisen due to the drivers of university behaviour in a mass market.

    In a system driven by demand from young people, there has been improved but unequal access reflecting attainment gaps in schools. This might not be such a problem if increasing participation had been accompanied by a growing economy that improves opportunities for everyone. But governments have relied on market signals, rather than sustained industrial strategies, to align an increasing supply of graduates with the capabilities necessary to capitalise on them in the workplace. This has yielded anaemic growth since the 2007 banking crash, together with suggestions that higher education expansion diminishes the prospects of people and places without universities.

    In a competitive environment, universities may be perceived to focus on recruiting students, rather than providing them with adequate support, and to invest in non-academic services, rather than the quality of teaching. These conditions may also encourage universities to seek global measures of esteem recognised by league tables, rather than serving local people and communities through the civic mission for which most were established.

    Market forces were expected to increase the diversity of provision as universities compete to serve the needs of an expanding student population. But higher education does not work like other markets, even when the price is not controlled as for undergraduates in England. Competition yields convergence around established courses and modes of learning that are understood by potential students, rather than those that may be more efficient or strategically important for the nation as a whole.

    Navigating the new policy environment

    After more than a decade of reforms encouraging competition and choice, there appears to be less faith in well-regulated market forces positioning knowledgeable graduates to drive growth. Universities are now expected to become embedded within local and national growth plans and industrial strategy sectors, which prioritise skills that can be deployed in specific settings ahead of broadly applicable knowledge. This asks universities to consider the particular needs of industry, public services and communities in their local areas, rather than demand from students alone.

    Despite these different imperatives, English higher education will continue to be financed mostly by students’ tuition fees and governed by regulatory powers designed to provide confidence for their choices. We suggest four ingredients for navigating this, which are concerned with strategy, architecture, regulation and funding.

    The government has promised a single strategy for post-16 education and a new body, Skills England, to oversee it. A more unified approach across the different parts of post-compulsory education should encourage pathways between different types of learning, and a more coherent offer for both learners and employers. But it also needs to align factors that influence the demand for graduates, such as research and innovation, with decisions that influence their supply. That requires a new mindset for education policy, which has tended to prioritise national rules ahead of local responsiveness, or indeed coherence with other sectors and parts of government.

    Delivery of a unified strategy is hampered by the fragmented and complex architecture governing post-16 education. Skills England will provide underpinning evidence, both influencing and drawing on Local Skills Improvement Plans (LSIPs), but it remains uncertain how this will be translated into measures that influence provision, particularly in universities. A unified strategy demands structures for convening universities, colleges, employers and local authorities to deliver it in local areas across the country.

    That could be addressed by extending the remit of LSIPs beyond a shopping list of skills requirements and enhancing the role of universities within them. Universities have the expertise to diagnose needs and broker responses, aligning innovation that shapes products and services with the skills needed to work with them. They will, though, only engage this full capability if local structures are accompanied by national regulatory and funding incentives, so there is a unified local body responsible for skills and innovation within a national framework.

    Regulation remains essential for providing confidence to students and taxpayers, but there could be a re-balancing of regulatory duties, so they have regard to place and promote coherence, rather than competition for individual students alone. This could influence regulatory decisions affecting neighbouring universities and colleges, as well as the ways in which university performance is measured in relation to issues such as quality and access. A clear typology of civic impact, together with indicators for measuring it, could shift the incentives for universities, particularly if there is a joined-up approach across the funding and regulation of teaching, research and knowledge exchange.

    Regulation creates the conditions for activity, but funding shapes it. Higher education tends to be a lower priority than schools within the Department for Education, and research will now be balanced alongside digital technologies within the Department for Science, Innovation and Technology. A new Lifelong Learning Entitlement and reformed Growth and Skills Levy may provide new opportunities for some universities, but any headroom for higher education spending is likely to be tied to specific goals. This will include place and industry-oriented research and innovation programmes and single-pot allocations for some MSAs, alongside the substantial public and private income universities will continue to generate in sectors such as health and defence. In this context, aligning universities with the post-16 education strategy relies on pooling different sources of finance around common goals.

    Closer alignment of this kind should not undermine the importance of knowledge or indeed create divisions with skills that are inconsistent with the character and development of English higher education to date. The shift in emphasis from knowledge towards skills reframes how the contributions of universities are articulated and valued in policy and public debate, but it need not fundamentally change their responsibility for knowledge creation and intellectual development.

    This appears to have been recognised by ministers, given the statements they have made about the positioning of foundational knowledge within strategies for schools, research and the economy. We have, though, entered a new era, which requires greater consideration of the demand for and take-up of graduates and ideas locally and nationally, and a different approach from universities in response to this.

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