Tag: franchise

The higher education sector should welcome the new proposals on franchise provision but still act to hold the Office for Students and Ministers to account – by Professor Nick Braisby

The Regulation of Franchise Provision

The Government have opened a consultation on the regulation of franchise provision, proposing that all franchisees (delivery partners) with more than 300 students should be regulated by the Office for Students (OfS). Smaller providers will not need to be regulated; larger providers that the OfS does not register in time will not be able to access student finance.

Regulating delivery partners is a positive step forward and the sector should welcome the Government’s proposals. Indeed, my colleagues and I called for just such a move in a recent HEPI report. But whether these proposals will work in practice depends on at least three different aspects of implementation: registration; quality; and duplication of regulation.

Registration

The Government propose delivery partners will need to have successfully registered with the OfS by September 2027 for their 2028/29 courses to be designated for student finance. In theory, given the Government’s final approach will be confirmed in the summer of 2025, delivery partners ought to have two years in which to meet the OfS’s conditions of registration.

However, the practice is likely to be very different. The OfS advise its timescale for registering a new provider is in the range of 41-to-50 weeks, implying delivery partners would need to apply no later than September 2026. But controversially the OfS have temporarily closed applications for registration and changes to the category of registration, including acquiring Degree-Awarding Powers and University Title. Applications are expected to reopen in August 2025, but the OfS is keeping this under review. When applications do reopen, the OfS will stagger recommencing existing cases. It is likely to face an influx of new applications too. Moreover, the sector’s financial pressures, which forced the temporary closure in the first place, will not have gone away. So, there is a very real concern that the OfS will be unable to admit franchisees to the Register quickly enough.

The consequences of not registering a larger delivery partner in time are potentially catastrophic. Even though existing students would retain access to student finance, some delivery providers would simply be unable to continue operating. This kind of failure would be catastrophic for students and for some franchisors (lead partners). If implemented in the wrong way, the Government’s proposals would simply introduce new and equally serious concerns for the financial sustainability of institutions.

There is an alternative, and one which would give stability to students and institutions. The OfS could open a new section of the Register for delivery partners – a probationary register – with more limited initial conditions of registration. This would enable the OfS to meet the Government’s intended timeframe and, critically, start engaging with delivery partners early, setting and agreeing action plans, for example. Delivery partners would then need to move from the probationary register to the full Register within a defined period – two years, for instance.

Quality

Many delivery partners operate in geographic and demographic cold spots. As the Minister for Skills, Baroness (Jacqui) Smith, puts it in the consultation:

good quality franchising has the potential to help more students access higher education, reaching areas under-served by other providers and tailoring delivery models to meet diverse needs.

At my University, delivery partners typically recruit an under-served population segment: 95% are mature entrants; two-thirds are from IMD quintiles 1 or 2. These partners therefore serve a striking demographic intersection. We know that continuation rates across the whole sector are affected by these factors: the OfS data dashboard indicates they suppress continuation rates by 8 percentage points and 5 percentage points respectively. Assuming these factors are independent, the probability of a mature entrant from quintiles 1 or 2 continuing is around 71%, much lower than the OfS threshold.

Registering with the OfS rightly involves an assessment of quality and standards, but the OfS’s current model of quality is too rigid for those operating within such niche demographics. To assess delivery partners, the OfS will need to reconsider carefully how it approaches quality.

Duplication of Registration

The Government’s proposals also include another element which is welcome, that which seeks to remove duplicate regulation. Where a delivery partner is already regulated, state-funded schools or further education colleges, for example, the Government proposes they would not also need to register with the OfS.

There are questions here too about the detail of implementation. Is it right, for example, that those Police and Crime Commissioners who are also delivery partners, need no further regulation in respect of quality and standards? But mostly what is worrying about this aspect of the proposals is the suggestion that delivery and lead partners should both be accountable for delivery. This seems straightforwardly an area of duplicated regulation and it is not clear how it would work in practice. Instead, the OfS should consult with delivery and lead partners to identify those aspects of delivery appropriate for dual accountability and those to which either the lead or the delivery partner will be held accountable.

Summary

In sum, the sector should welcome these proposals. The Government has clearly listened to the argument that franchise provision, when done well, brings many benefits, and has endorsed that position. There is still a need for a robust, sector code of practice; and the implementation of the Government’s ideas will be critical. But if it continues to listen during the consultation phase we should have every expectation that good quality franchise provision will continue to be supported and the concerns of stakeholders properly addressed.

Source link

January 31, 2025
DfE steps in to require franchise partners to register with OfS
The Department for Education is consulting on a requirement for providers delivering courses under a franchise model to register with the Office for Students in order that they and their students can access student finance. We also get an impact assessment and an equalities assessment.

The consultation defines “franchise” as follows:

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

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

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

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

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

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

The background

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

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

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

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

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

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

How big a deal is franchising

Despite a number of years trying, OfS has never managed to compile full data on the extent of franchised, validated, and other partnership provision – the details are not in any current public dataset. It’s important here to distinguish between:
- Franchised provision: where a student is registered at one institution, but teaching is delivered at another
- Validated provision: where a student is both registered and taught at one institution, but receives an award validated by another institution on successful completion of their course
- Other academic partnerships: which include arrangements where students are taught by more than one institution, or where existing providers partner to allow students to apply to a “new” provider (like a medical or veterinary science school)
Of the three, it is just franchised provision that is in the scope of this new DfE requirement. It’s also (helpful) the most easily visible of the three if you are a fan of mucking about with Unistats data (though note that not all courses are in the unistats release, and the other vagaries of our least-known public data release continue to apply).

DfE has done a bang-up job in pulling together some statistics on the scale of franchise provision within the impact assessment. We learn that (as of 2022–23 – usual student numbers caveats for that year of data apply):
- There were currently 96 lead providers, franchising to 341 partners, of which 237 were unregistered.
- 135,850 students were studying via a franchise arrangement – some 80,045 were studying at unregistered providers (a proportional fall, but a numerical rise, over previous years)
- These students tended to study business and management courses – and were more likely to be mature students, from deprived areas, and to have non-traditional (or no) entry qualifications.
- An astonishing 92 per cent of classroom based foundation years delivered as an intercalated part of a first degree were delivered via franchise arrangements.
- There were 39 franchise providers teaching 300 students or more – of which four would be subject to the DfE’s proposed exemptions because of their legal status. These providers accounted for 66,540 students in 2022–23.
A note on OfS registration

Office for Students registration is confusing at the best of times. Though the registration route is currently paused until August 2025, providers have the choice of registering under one of two categories:
- Approved (fee cap) providers are eligible to access fee loan finance up to the higher limit if they have an approved access and participation plan, receive direct funding from OfS, and access Research England funding.
- Approved providers can access fee loan finance up to the “basic” fee limit. They are not eligible for OfS or Research England funding – but can directly charge students fees that exceed the “basic” fee limit.
In the very early stages of developing the OfS regulatory framework it was briefly suggested that OfS would also offer a “Basic” level of registration, which would confer no benefits and would merely indicate that a provider was known to the OfS. This was speedily abandoned, with the rationale being that it would suggest OfS was vouching in some way for provision it did not regulate.

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

Statutory nuts and bolts

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

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

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

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

What might go wrong

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

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

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

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

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

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

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

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

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

In other words, one of the tests should be “does any of this change the incentives,” and it’s not at all clear that it does.
Source link
January 30, 2025
Exploring the explosion in franchise and partnership activity
There’s a clear need for more regulatory oversight of franchise and partnership teaching arrangements, but – as regulators are finding – there’s no easy way to track which students are being registered, taught, or physically located at which provider.

Knowing where students study feels like a straightforward matter – indeed “where do HE students study” is one of the top level questions posed in HESA’s Student open data collection. If you click on that, it takes you to an up-to-date (2022-23 academic year) summary of student numbers by registering provider.

But as we’ve learned from concerns raised by the Office for Students, the Student Loans Company, the National Audit Office, and (frankly) Wonkhe there is a bit more to it than that. And it is not currently possible to unpick this to show the number of students at each provider – for any given value of “at” other than registering – using public data. But we can do it for the number of courses.

The forgotten open data set

Yes – I’ve started the year abusing the Unistats open data release (it’s the only open data release that lets you find details of courses was the clue). And you sort of, kind of, can unpick some of these relationships using it. After a fashion.

It is worth unpacking our terms a bit:
- A student’s registration provider is the provider that returns that student as a part of their official data returns. If the registration provider has degree awarding powers, this is generally the provider that awards the qualification the student is working towards
- A student’s teaching provider is the provider where a student is actually taught – in the instances where this is different to the registering provider this usually happens via a partnership arrangement of some sort.
- A student’s location provider is the actual place a student is taught – usually, this is the same as a teaching provider, but not always – for example a “university centre” based at an FE college counts as the university in question doing the teaching, but the location would be the FE provider that hosts the centre.
- We’ve also got to deal with the idea of an awarding provider, the place that actually awards the degree the student is working towards. In the main this is the same as the registering provider, but where the registering provider can’t award the degree in question it will be someone else by arrangement.
How does this appear in Unistats? You are probably familiar with the notion of the UK Provider Reference Number (UKPRN): a unique identifier for educational settings. In the unistats data we get something called PUBUKPRN, which identifies where a course is primarily taught. We get something called UKPRN, which identifies where students on a given course are registered. And we get LOCUKPRN, which identifies the location a student is taught at – where this a location with its own UKPRN that is not the same as the PUBUKPRN.

Limits to sector growth visualisation

What’s missing – we don’t get a UKPRN for the awarding body. Not in public data. It is collected (OTHERINST) and used on the Discover Uni website but it is not published for me to mess with. Not yet, anyway.

So what I can show you is the number of courses at each combination of registering, teaching, and location provider. This shows instances where students may be registered at one provider but taught at another (your classic partnership arrangement), and the evolving practice of declaring unilateral branch campuses (where students are registered and taught at one provider, but located at a different one).

That latter one explains the explosion of London “campuses” that area really an independent provider (that may cater to multiple institutions in a similar way). The whole thing gives some indication of where a given provider is involved in franchise/partnership activity – but only where this is shown on unistats.

What I found

First up – sorted by registering provider. You can filter by registering provider if you don’t want the whole list (whyever not?), and I’ve included a wildcard filter for course titles. This is instead of a subject filter – each course in unistats is meant to have a subject associated with it, but this tends not to happen for the kinds of courses we are interested in here:

[Full screen]

And the same thing, sorted (and searchable) by teaching provider:

[Full screen]

Many limitations, but a space to keep asking

The limitations here are huge. What we really want is the number of students registered on each course – we can get this at various levels of aggregation but not reliably at a single course, single cohort level. HESA’s policy of rounding and aggregating to avoid identifying individual students (and of course the historic nature of much of the data presented on unistats) means that most of the information in the data set (entry qualification), NSS, graduate destinations is combined across multiple years and numerous related subjects.

In the usual unistats fashion “courses” are a unique combination of qualification aim, title, and mode for each location. So the handful of remaining providers that do defined “joint” degrees (two or more subjects) look like they are spectacularly busy. And, as always, the overall quality of data isn’t brilliant so there will be stuff that doesn’t look right (pro tip: yes tell me, but also tell HESA).

Here then, is a partial explanation as to why regulators and others have been slow to respond to the growth in franchise, partnership, and other joint provisions: almost by definition the novel things providers are up to don’t show up in data collection. That’s kind of the point.

But is a simple list of available courses, where they are taught, what (and whose) awards they lead to, what subjects they cover, and how many students are on each too much to ask? It appears so.
Source link
January 13, 2025