Tag: providers

  • Higher Education franchising is not the problem. Rogue providers and regulatory gaps are

    Higher Education franchising is not the problem. Rogue providers and regulatory gaps are

    • By Charlie Tennant, Vice Principal at the London School of Science & Technology.

    Higher education franchising is once more in the limelight for the wrong reasons, as many in the sector again question its benefits, the risks it poses to public funds and the use of it by niche, emerging and/or for-profit higher education providers. However, the stories and discourse miss the key factors that have allowed for abuse of the franchise model. It is gaps in higher education regulation that have led to franchising being scapegoated for what is, at its core, abuse by rogue providers that do not represent the vast majority of those engaged in franchising.

    Franchising is a model through which UK universities have delivered higher education for over two decades. Internationally, this forms part of many forms of Transnational Education (TNE), that as seen in Universities UK International (UUKi)’s Scale of UK Higher Education Transnational Education reports, continues to grow in scale. Locally, providers have adopted the franchise model since the mid-2000s, although since then, the market for many of those providers has changed from international students to local students. This change meant the number of students at these providers who were eligible for Student Loans Company (SLC) funding has grown. The model allows institutions that have found new approaches, differentiated courses, or cold spots of higher education to develop and expand their provision, with a significant portion of them hoping to one day gain their own Degree Awarding Powers (DAPs).

    However, the regulation of domestic franchise provision has not been as robust as it could be. The onus has rightly been put on the universities that are franchising their courses to ensure academic quality and standards of the franchise delivery, although there is currently no direct regulation of higher education franchise providers. Therefore, while some blame can be apportioned to universities engaged in franchising, it can be argued that the Department for Education (DfE) and policymakers’ approach to regulating higher education franchises has led to gaps open to abuse by rogue providers. Furthermore, routes for franchise providers to gain DAPs have been prolonged and made complex by the pause in processing of registration applications by the Office for Students (OfS). Now, the abuse of SLC funding by particular providers of the franchise model, reported by the Sunday Times in an article on 22nd March 2025 and in several articles since then, has brought the reputation of all franchise providers into disrepute, and connected the abuse to use of recruitment agents and the settled Romanian population in the UK.

    In a January 2025 press release for their consultation on franchise provision regulations, the Government outlined the benefits of franchising when done right, and its intention to crack down on rogue higher education providers. Professor Nick Braisby’s HEPI blog published in response to the consultation, rightly welcomes the Government’s new proposals, but asks for the sector to remain critical. This blog therefore proposes three ways in which to ensure the Government and the OfS achieve what they hope to through the crackdown.

    Firstly, the DfE, policymakers and the OfS need to enable quicker routes for franchise providers to join the regulator’s Register. This will allow greater scrutiny at an earlier stage in the lifecycle of an emerging higher education provider (which make up the majority of providers delivering franchised courses) and introduce a focus on their governance structures. Since the set-up of the OfS Register, providers have experienced long lead times for joining the Register, and on top of this, from December 2024, the regulator paused applications for the Register, DAPs and changes of registration category, thus exacerbating the issue of missing opportunities to directly regulate more franchise providers. This is counterintuitive given the OfS’s remarks around the risks associated with an over-reliance by both universities and franchise providers on partnership provision in their Insight Brief regarding subcontractual arrangements in higher education published just two months prior to the pause. The OfS’ Register of providers has the potential to be a great tool for transparency, but the current lead times and design of the approach lead to gaps in regulation that can be exploited by rogue providers.

    Secondly, instead of considering an outright ban, the DfE should implement a robust quality framework for domestic student recruitment agents. As a blueprint, they should draw from the established Agent Quality Framework (AQF) developed by the British Council, Universities UK International (UUKi), and the UK Council for International Student Affairs (UKCISA). As with international student recruitment, the unregulated use of agents for domestic recruitment presents significant risks. By adopting a structured quality framework, the DfE and OfS can mitigate these risks and foster greater transparency and accountability. Agents, when operating under clear ethical guidelines and quality standards, can play a crucial role in widening participation, particularly by reaching communities historically underserved by traditional university outreach, for example, the UK’s settled Romanian population. A tailored framework can help to ensure transparency, effective governance and the establishment of professional standards of agents.

    Finally, the DfE, policymakers and the OfS need to engage more with franchise providers and their university partners jointly. So far, engagements have been disjointed, with either a university or one of their partner franchise providers engaged separately. This creates barriers to collaboration, which would otherwise aid in the pursuit of greater transparency, oversight and the maintenance of academic quality and standards. Bringing both universities and franchise providers together when engaging will enable the Government to find ways to both demonstrate the benefits of franchise provision, as well as develop regulatory approaches and guidance collaboratively with stakeholders. This joint engagement with universities and their partner franchise provider could pave the early steps towards a sector-wide code of practice, an idea discussed in HEPI and Buckinghamshire New University’s Debate Paper on franchising. This could then sit alongside collaboratively developed regulations that would ensure rogue providers cannot abuse regulatory gaps. It will also help to establish a more balanced burden of regulation between universities and their franchise provider partners, and safeguard the reputation of franchise provision.

    Ultimately, effective regulation of the broader higher education student journey, streamlined registration, and collaborative engagement are crucial. By addressing these systemic gaps and promoting transparency, the policymakers, DfE, OfS, and the higher education sector can restore faith in franchising and ensure its legitimate benefits are realised.

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  • Head Start Providers Shocked as Federal Office Serving Wisconsin Shuts Without Notice – The 74

    Head Start Providers Shocked as Federal Office Serving Wisconsin Shuts Without Notice – The 74


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    Head Start child care providers in Wisconsin and five other Midwestern states were stunned Tuesday to learn that the federal agency’s Chicago regional office was closed and their administrators were placed on leave — throwing new uncertainty into the operation of the 60-year-old child care and early education program.

    “The Regional Office is a critical link to maintaining program services and safety for children and families,” said Jennie Mauer, executive director of the Wisconsin Head Start Association, in a statement distributed to news organizations Tuesday afternoon.

    The surprise shutdown of the federal agency’s Chicago office — and four others across the country — left Head Start program directors uncertain about where to turn, Mauer said.

    “We have received calls throughout the day from panicked Head Start programs worried about impacts to approving their current grants, fiscal issues, and applications to make their programs more responsive to their local communities,” Mauer said.

    The regional offices are part of the Office of Head Start in the Administration for Children and Families at the U.S. Department of Health and Human Services (HHS).

    In an interview, Mauer said there had been no official word to Head Start providers about the Chicago office closing. Some program leaders learned of the closing from private contacts with people in the office.

    “We have not seen official information come out” to local Head Start directors, who operate on the federal grants that fund the program, Mayer said. “It’s just really alarming. For an agency that is about serving families, I don’t understand how this can be.”

    The National Head Start Association issued a press release Tuesday expressing “deep concern” about the regional office closings.

    “In order to avoid disrupting services for children and families, we urge the administration to reconsider these actions until a plan has been created and shared widely,” the association stated.

    Katie Hamm, the deputy assistant secretary for early childhood development at HHS during the Biden administration, posted on LinkedIn shortly before 12 noon Tuesday that she had learned of reduction-in-force (RIF) notices to employees in the Administration for Children and Families earlier in the day.

    RIF notices appear to have gone to all employees of the Office of Head Start and the Office of Child Care in five regional offices, Hamm wrote, in Boston, New York, San Francisco and Seattle in addition to Chicago.

    “Staff are on paid leave effective immediately and no longer have access to their files,” Hamm wrote. “There does not appear to be a transition plan so that Head Start grantees, States, and Tribes are assigned to a new office. For Head Start, it is unclear who will administer grants going forward.”

    Hamm left HHS at the end of the Biden administration in January, according to her LinkedIn profile.

    Mauer said regional office employees “are our key partners and colleagues,” and their departure has left Head Start operators “incredibly saddened and deeply concerned.”

    Regional employees work with providers “to ensure the safety and quality of services and to meet the mission of providing care for the most vulnerable families in the country,” Mauer said.

    The regional offices provide grant oversight, distribute funds, monitor Head Start programs and advise centers on complying with regulations, including for child safety, she said. They also provide training and technical assistance for local Head Start programs.

    “The Regional Office is a critical link to maintaining program services and safety for children and families,” Mauer said. “These cuts will have a direct impact on programs, children, and families.”

    In addition to Wisconsin, the Chicago regional office oversees programs in Ohio, Indiana, Illinois, Michigan and Minnesota.

    Head Start supervises about 284 grants across the six states in programs that  enroll about 115,000 children, according to Mauer. There are 39 Head Start providers in Wisconsin enrolling about 16,000 children and employing about 4,000 staff.

    The federal government created Head Start in the mid-1960s to provide early education for children living in low-income households. Head Start operators report that the vast majority of the families they serve rely on the program to provide child care so they can hold jobs.

    The regional office closings came two months after a sudden halt in Head Start funding. Head Start operators get a federal reimbursement after they incur expenses, and program directors have been accustomed to being able to submit their expenses and receive reimbursement payments through an online portal.

    Over about two weeks in late January and early February, program leaders in Wisconsin and across the country reported that they were unable to log into the system or post their payment requests. The glitches persisted for some programs for several days, but were ultimately resolved by Feb. 10.

    Mauer told the Wisconsin Examiner on Tuesday that so far, there have not been new payment delays. But there has also been no communication with Head Start operators about what happens now with the unexpected regional office closings, she said.

    “No plan for who will provide support has been shared, and the still-existing regional offices are already understaffed,” Mauer said. “I’m very nervous to see what happens. With no transition plan this will be a disaster.”

    In her statement, Mauer said the regional office closing was “another example of the Federal Administration’s continuing assault on Head Start” following the earlier funding freeze and stalled reimbursements.

    She said closing regional offices was undermining the program’s ability to function.

    “We call on Congress to immediately investigate this blatant effort to hamper Head Start’s ability to provide services,” Mauer stated, “and to hold the Administration accountable for their actions.”

    Wisconsin Examiner is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Wisconsin Examiner maintains editorial independence. Contact Editor Ruth Conniff for questions: info@wisconsinexaminer.com.


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  • Education providers pivot to TNE in price-sensitive Pakistan

    Education providers pivot to TNE in price-sensitive Pakistan

    Speaking at The PIE Live Europe 2025, Stuart Smith, CEO of pathway provider NCUK, said Pakistan’s position as a growing yet price-sensitive market opens exciting opportunities for students to earn their qualifications before transitioning to a high-quality university in the UK or elsewhere. 

    “Financially, one of the biggest barriers for Pakistani students has been the cost of studying abroad. The pathway model helps address this by offering significant cost savings, allowing students to progress to high-quality universities,” Smith told delegates at the London conference.

    “One of the big advantages of our model is that students can come in on an NCUK qualification, spend one or two years at home making really important cost savings, and academically prepare for studying abroad, all in a comfortable environment.”

    According to Smith, the rise in interest in international qualifications among Pakistani students also means easier visa approvals for them. 

    Visa refusals and delays have forced many Pakistani students to miss their January intake at UK universities, with some even withdrawing their applications, as reported by The PIE News last year. 

    “For students studying in-country pathway programs, we’ve seen fewer visa refusals because they are better prepared for the visa process and qualify better for visa interviews,” Smith added. 

    Last year, Pakistan’s Higher Education Commission revised its TNE policy to provide greater clarity on requirements, operational models, and introduce guidelines for establishing offshore campuses of Pakistani higher education institutions. 

    The update also emphasised quality assurance and regulatory assessments. 

    “Instead of targeting a small number of students at a high price point, a more sustainable approach is to offer programs at a lower price to a larger student base,” stated Smith. 

    “That being said, there is a market for institutions at all price points. The key is to find the right strategy that balances accessibility with quality.”

    The HEC has previously cautioned students and parents in Pakistan about some of the violations made by Pakistani institutions in their TNE programmes. 

    Moreover, the HEC warned recognised domestic HEIs offering foreign qualifications in Pakistan to comply with the government’s TNE policy, stating that any violations would result in non-recognition of the student’s degree.

    According to Vanessa Potter, director of communications and external relations at the University of Essex, while enrolling large numbers of Pakistani students in TNE programmes remains challenging, the university has shifted its focus. It now puts more into collaborating with its Pakistani alumni, supporting research at local universities, and assisting academic staff in the country.

    “One area we’ve significantly expanded is PhD support for academic staff. We offer our partners substantial discounts on PhD programs, as we believe in supporting both the academy and our institutional collaborators,” stated Potter. 

    “Many universities we work with have one or two staff members engaged in these programs, either full-time or part-time under co-supervision arrangements with Pakistani universities.”

    Just last year, the University of Essex partnered with Beaconhouse International College to offer a variety of business, law, and technology courses to students in major Pakistani cities, including Islamabad, Faisalabad, and Lahore.

    Over the years, Pakistan’s investment in research and development has remained notably low, with expenditure dropping from 0.17% of GDP in 2019 to 0.16% in 2021. 

    This limited funding presents challenges for Pakistani universities in securing high global research rankings, keeping the country’s R & D investment well below international standards.

    Such challenges provide an opportunity for research collaboration for institutions like the University of Essex. 

    “There are pockets of excellent research in Pakistan, though they don’t always reflect in global rankings,” stated Potter. 

    “There is funding available – academic exchanges have already been supported, and the British Council in Pakistan has provided funding for specific initiatives. We are also working with them on scholarships in collaboration, while also receiving support from the British High Commission in Pakistan.”

    According to Potter, the university is also working with the HEC to support laboratory staff in universities.

    “It’s a specialised project, and while we are still looking to pay for it, we are committed to enhancing the development of lab staff in science departments in Pakistani universities.” 

    In recent years, Pakistan has emerged as a major TNE market, especially for the UK. 

    According to the revised TNE policy, HEIs with a strong reputation and ranked within the top 700 in the QS or THE world university rankings, or those classified as Fachhochschule, will be eligible to offer their degree programs in Pakistan.

    Some institutions make the mistake of treating local Pakistani-origin agents differently from international aggregators. This is a clear discrimination
    Atif Khan, University of Hertfordshire

    With the launch of its new initiative, ‘Udaan Pakistan,’ aimed at revitalising the country’s economy, Atif Khan, country director at the University of Hertfordshire, believes that Pakistan has a strategic vision for economic growth over the next five to 10 years. 

    This, in turn, could drive a rising demand for international qualifications among students, he said. 

    “Any universities keen to come to Pakistan – this is the time. Demand will not finish, it will grow,” stated Khan. 

    “Currently, Pakistan has 55 recognised TNE programs, with over 15,000 students engaged. Of these, around 12,000 are involved in UK-affiliated programs, meaning nearly 80% of TNE students in Pakistan are already planning to transition to the UK for their postgraduate studies.”

    On the recruitment front, Khan anticipates a rise in study visas from Pakistan to major international study destinations, noting that the UK issued 35,000 student visas by 2024, an increase of 13% from the previous year.

    But he highlighted how some of the practices adopted by UK universities in the country are discriminatory in nature and need to be fixed.

    “When it comes to selecting recruitment agents, universities need a sustained strategy. They must work with the right agents, ensuring strong compliance and regular training sessions. The market is evolving rapidly,” stated Khan. 

    “Some institutions make the mistake of treating local Pakistani-origin agents differently from international aggregators. This is a clear discrimination. If universities continue down this path, they risk attracting lower-quality students.”

    Furthermore, Potter emphasised that while Pakistan’s economic challenges may prevent an exponential rise in student numbers, universities that offer strong career support and employability prospects could continue to attract Pakistani students.

    “I think being able to articulate clearly how you can support students with jobs, and how having a degree from a particular type of university subject might help that career long term, does help students understand the welcoming environment,” she said.

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  • Parents, Medical Providers, Vaccine Experts Brace for RFK Jr.’s HHS Takeover – The 74

    Parents, Medical Providers, Vaccine Experts Brace for RFK Jr.’s HHS Takeover – The 74


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    While Robert F. Kennedy Jr. ‘s Senate confirmation to head the Department of Health and Human Services was not unexpected, it still shook medical providers, public health experts and parents across the country. 

    Mary Koslap-Petraco, a pediatric nurse practitioner who exclusively treats underserved children, said when she heard the news Thursday morning she was immediately filled with “absolute dread.”

    Mary Koslap-Petraco is a pediatric nurse practitioner and Vaccines for Children provider. (Mary Koslap-Petraco)

    “I have been following him for years,” she told The 74. “I’ve read what he has written. I’ve heard what he has said. I know he has made a fortune with his anti-vax stance.”

    She is primarily concerned that his rhetoric might “scare the daylights out of people so that they don’t want to vaccinate their children.” She also fears he could move to defund Vaccines for Children, a program under the Centers for Disease Control and Prevention that provides vaccines to kids who lack health insurance or otherwise wouldn’t be able to afford them. While the program is federally mandated by Congress, moves to drain its funding could essentially render it useless.

    Koslap-Petraco’s practice in Massapequa Park, New York relies heavily on the program to vaccinate pediatric patients, she said. If it were to disappear, she asked, “How am I supposed to take care of poor children? Are they supposed to just die or get sick because their parents don’t have the funds to get the vaccines for them?” 

    And, if the government-run program were to stop paying for vaccines, she said she’s terrified private insurance companies might follow suit. 

    Vaccines for Children is “the backbone of pediatric vaccine infrastructure in the country,” said Richard Hughes IV, former vice president of public policy at Moderna and a George Washington University law professor who teaches a course on vaccine law.

    Kennedy will also have immense power over Medicaid, which covers low-income populations and provides billions of dollars to schools annually for physical, mental and behavioral health services for eligible students.

    If Kennedy moves to weaken programs at HHS, which experts expect him to do, through across-the-board cuts in public health funding that trickle down to immunization programs or more targeted attacks, low-income and minority school-aged kids will be disproportionately impacted, Hughes said. 

    “I just absolutely, fundamentally, confidently believe that we will see deaths,” he added.

    Anticipating chaos and instability

    Following a contentious seven hours of grilling across two confirmation hearings, Democratic senators protested Kennedy’s confirmation on the floor late into the night Wednesday. The following morning, all 45 Democrats and both Independents voted in opposition and all but one Republican — childhood polio survivor Mitch McConnell of Kentucky — lined up behind President Donald Trump’s pick.

    James Hodge, a public health law expert at Arizona State University’s Sandra Day O’Connor College of Law, said that while it was good to see senators across the political spectrum asking tough questions and Kennedy offering up some concessions on vaccine-related policies and initiatives, he’s skeptical these will stick.

    “Whatever you’ve seen him do for the last 25 to 30 years is a much, much greater predictor than what you saw him do during two or three days of Senate confirmation proceedings,” Hodge said. “Ergo, be concerned significantly about the future of vaccines, vaccine exemptions, [and] how we’re going to fund these things.”

    Hodge also said he doesn’t trust how Kennedy will respond to the consequences of a dropoff in childhood vaccines, pointing to the current measles outbreak in West Texas schools.

    “The simple reality is he may plant misinformation or mis-messaging,” he said.

    During his confirmation hearings, Kennedy tried to distance himself from his past anti-vaccination sentiments stating, “News reports have claimed that I am anti-vaccine or anti-industry. I am neither. I am pro-safety … I believe that vaccines played a critical role in health care. All of my kids are vaccinated.”

    He was confirmed as Linda McMahon, Trump’s nominee to head the Department of Education, was sitting down for her first day of hearings. At one point that morning, McMahon signaled an openness to possibly shifting enforcement to HHS of the Individuals with Disabilities Education Act — a federal law dating back to 1975 that mandates a free, appropriate public education for the 7.5 million students with disabilities — if Trump were to succeed in shutting down the education department.

    This would effectively put IDEA’s $15.4 billion budget under Kennedy’s purview, further linking the education and public health care systems.

    In a post on the social media site BlueSky, Randi Weingarten, president of the American Federation of Teachers, wrote she is “concerned that anyone is willing to move IDEA services for kids with disabilities into HHS, under a secretary who questions science.”

    Keri Rodrigues, president of the National Parents Union and a parent of a child with ADHD and autism, told The 74 the idea was “absolutely absurd” and would cause chaos and instability. 

    Kennedy’s history of falsely asserting a link between childhood vaccines and autism — a disability included under IDEA coverage — is particularly concerning to experts in this light.

    “You obviously have a contingent of kids who are beneficiaries of IDEA that are navigating autism spectrum disorder,” said Hughes, “Could [we] potentially see some sort of policy activity and rhetoric around that? Potentially.”

    Vaccines — and therefore HHS — are inextricably linked to schools. Currently, all 50 states have vaccine requirements for children entering child care and schools. But Kennedy, who now has control of an agency with a $1.7 trillion budget and 90,000 employees spread across 13 agencies, could pull multiple levers to roll back requirements, enforcements and funding, according to The 74’s previous reporting. And Trump has signaled an interest in cutting funding to schools that mandate vaccines.

    “There’s a certain percentage of the population that is focused on removing school entry requirements,” said Northe Saunders, executive director of the pro-vaccine SAFE Communities Coalition. “They are loud, and they are organized and they are well funded by groups just like RFK Jr.’s Children’s Health Defense.”

    Kennedy will also have the ability to influence the makeup of the committees that approve vaccines and add them to the federal vaccine schedule, which state legislators rely on to determine their school policies. Hodge said one of these committees is already being “re-organized and re-thought as we speak.”

    “With him now in place, just expect that committee to start really changing its members, its tone, the demeanor, the forcefulness of which it’s suggesting vaccines,” he added.

    Hughes, the law professor, said he is preparing for mass staffing changes throughout the agency, mirroring what’s already happened across multiple federal departments and agencies in Trump’s first weeks in office. He predicts this will include Kennedy possibly asking for the resignations “of all scientific leaders with HHS.” 

    Kennedy appeared to confirm that he was eyeing staffing cuts Thursday night during an appearance on Fox News’s “The Ingraham Angle.”

    “I have a list in my head … if you’ve been involved in good science, you have got nothing to worry about,” Kennedy said.


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  • Degree Apprenticeships in England: What Can We Learn from the Experiences of Apprentices, Employers, and Education and Training Providers?

    Degree Apprenticeships in England: What Can We Learn from the Experiences of Apprentices, Employers, and Education and Training Providers?

    By Josh Patel, Researcher at the Edge Foundation.

    Degree Apprenticeships (DAs) were launched in 2015, as a novel work-based learning route to obtaining a degree. On their introduction, then Prime Minister David Cameron said they would ‘give people a great head start, combining a full degree with real practical skills gained from work and the financial security of a regular pay packet’. Since then, they have taken the higher education sector by storm. Their growth has been the key factor in the expansion of higher apprenticeships from 43,800 starts in 2015/16 to 273,700 in 2023/24, a rise from 4.8% to 35% of all apprenticeships. They have stimulated innovative models of delivery and new and productive relationships between employers and providers. Former Skills Minister Robert Halfon remarked that ‘Degree Apprenticeships’ were his ‘two favourite words in the English language’.

    DAs have, however, recently come under scrutiny. Concerns persist that the growth of DAs and their high cost – reported in the media as growing from 2% of the apprenticeship budget in 2017/18 to 21% in 2021 – might crowd out opportunities for young entrants to the workforce, as DAs are primarily taken by existing employees. The suitability of DAs as instruments to improve upward social mobility has been contested. Meanwhile, the government is drawing up plans to increase the flexibility of the Apprenticeship Levy through which Degree Apprenticeships can currently be funded, asking employers ‘to rebalance their funding for apprenticeships… to invest in younger workers’.

    Our report, ‘Degree Apprenticeships in England: What Can We Learn from the Experiences of Apprentices, Employers, and Education and Training Providers?’, written in collaboration with colleagues from the Universities of Bath, Huddersfield, and Oxford, was published on Tuesday and is a timely intervention into these discussions. Here, we present the evidence for some our policy recommendations, gathered from nearly 100 interviews with stakeholders including large employers and SMEs, providers, degree apprentices, and policymakers.

    Engaging employers

    The government needs to consider a more systematic approach that serves to rationalise the way that employers are supported to offer a wide range of work-based opportunities. As Edge has identified in other programmes, such as T Levels or plans to provide universal work experience through the government’s Youth Guarantee, DAs are restricted by the number of employers willing to engage. We repeatedly heard evidence of the difficulties ‘resource-poor’ employers had in engaging with the design of apprenticeship standards and participating fully in collaboration with providers. As one SME told us contributing to the design and development of a DA ‘doesn’t give me any benefit now, and I’m impatient’.

    The government needs to develop a coherent strategy for DAs with a particular focus on support for SMEs, including improved awareness of levy transfer schemes. Involvement in DAs is often based on being ‘in the know’ and contacts with providers and local authorities. In our ‘Learning from the past’ stream of work, we reviewed Education Business Partnerships, as an example of intermediary organisations, noting both their strengths and shortcomings, which could inform effective initiatives for supporting employers.

    Reducing complexity

    With the creation of Skills England, the government should take the opportunity to review and simplify the process of design, delivery and quality assurance for DAs, and ensure regulatory elements work together. DAs currently draw in a large number of bodies including the OfS, IfATE, regulatory bodies, professional bodies and Ofsted. Providers told us that this had created a complex landscape of ‘many masters’ where lines of accountability are blurred and innovation is stifled. Providers described ‘overregulation’ as limiting ‘our ability to go off-piste’, and while the process could be constructive, providers were unconvinced of its added value. ‘Does that add to the quality?’ one provider asked. ‘I don’t think it necessarily does’.

    Skills England’s remit includes shaping technical education to respond to skills needs, and its incorporation of IfATE has already begun. As a first exercise, it could review the regulatory requirements to remove any duplication and contradictions and then consult with the sector to devise a simpler, clearer mechanism for providers to report.

    Increasing flexibility

    These difficulties meant that, while we found examples of excellent integration of academic learning and the workplace, concerns persisted as to the vocational relevance and obsolescence of learning, particularly in fast-moving sectors such as IT and mental health provision. One employer involved in delivery said they told their apprentices: ‘we have to teach you this so you get through your apprenticeship, but actually in practice that is not the way it’s done any longer’.

    In other countries, such as the Netherlands, a proportion (up to 20-25%) of an apprenticeship standard is kept flexible to be agreed between the employer and provider so that it can take better account of the current and changing situation in that particular industry, location and employer – such flexibility could be piloted in the UK.

    …without compromise

    The government’s commitment to adapting the levy into a ‘Growth and Skills Levy’, offers opportunities to improve DA delivery. Diversification was not a major consideration for the majority of employers when recruiting, though we certainly did hear evidence from those with a strong sense of their social corporate responsibility. As one SME put it:

    there are too many people in the IT industry that are like me. So we’re talking middle-aged white guys. […] Now, DAs allow people who don’t necessarily, wouldn’t consider getting into this industry from a variety of backgrounds, creeds, colours…

    We recommended in our Flex Without Compromise report that the government should take a measured approach to levy reform to minimise the risk that a broadening of scope diminishes the opportunities available particularly for younger people and newer entrants to the labour market. It should consider modelling the impact of differentiating levy funding available for DAs by either or both age and staff status, and diversification of the workforce. This could be a powerful mechanism to encourage employers to focus DA opportunities on younger people and on new recruits but would need to be considered carefully to allow for continued expansion of DAs.

    These initiatives might help address existing challenges and enhance the efficacy of Degree Apprenticeships in fostering equitable access and meeting the needs of learners and employers.

    To find out more about Edge and to read the report in full, visit www.edge.co.uk

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

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

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

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

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

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

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

    Why are so many results missing?

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

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

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

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

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

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

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

    Going concern

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

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

    Breaking even and beyond

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

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

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

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

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

    [Full screen]

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

    [Full screen]

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

    Fee income

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

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

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

    [Full screen]

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

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

    Other movements

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

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

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

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

    What’s next?

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

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

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

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

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

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

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