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The future of higher education regulation: Higher education election issues, Day 7

  • 11 June 2024
  • By Nick Hillman
  • HEPI has been running a seven-day blog series on important election-related issues, aimed primarily at non-specialist readers. This final piece, written by HEPI’s Director, Nick Hillman, looks at the future of higher education regulation, primarily in England. The other pieces can all be found here.
  • If you are not yet registered to vote at the forthcoming general election, you can still register here (until 11.59pm on Tuesday, 18 June 2024):

Regulation in England

In England, the main regulator of higher education institutions became the Office for Students in 2018. From 2012 onwards, the majority of teaching income for home students had shifted from grant funding from the old Higher Education Funding Council for England (HEFCE) and towards higher tuition fee loans paid out by the Student Loans Company. As a result, the Conservative-majority Governments of David Cameron and Theresa May came to regard the pre-existing regulatory arrangements as unfit for purpose.

The work of the Office for Students is governed by various statutory duties, including:

  • protecting institutional autonomy;
  • ensuring choice for students; and
  • promoting value for money.

Since its foundation, the powers of the Office for Students have grown, most notably through the addition of a new Director for Freedom of Speech and Academic Freedom (a post filled by Arif Ahmed) and also as a result of taking on duties previously undertaken by the Quality Assurance Agency (QAA). 

The Office for Students’ Register separates regulated higher education providers into two groups.

  1. ‘Approved (fee cap)’ providers: These make up over 80% of the total, may not raise their fees for regular undergraduate degrees above £9,250 a year and must have an agreed Access and Participation Plan but, in return, they are entitled to grant funding for more expensive courses as well as Quality-Related (QR) funding for research.
  2. ‘Approved’ providers: These are exempt from some of the conditions applied to other institutions. Their fees for home undergraduate students are not capped – although their students can borrow less than others from the Student Loans Company in fee loans, leaving a likely shortfall. These institutions have no entitlement to direct public funding.

If any regulated institution breaks their conditions of registration in areas such as access and participation, student outcomes or free speech, then the Office for Students has a range of penalties at its disposal.

Supply-side reform

When the current regulatory system began, it was in large part designed to stimulate competition through the establishment of a ‘market regulator’ to promote supply-side reform, including the foundation of new institutions.

The stated goal was to:

remove the regulatory barriers that are preventing a level playing field for higher education providers of all types, including further education colleges and other alternative providers.

However, the original importance ascribed by Ministers to supply-side reform quickly waned. In 2022, the Department for Education confirmed to the Education Select Committee that ‘it is not currently government policy to actively seek to increase the numbers of HE providers.’

As of mid-2024, there are around 420 regulated higher education institutions on the Office for Students’ Register, significantly fewer than the 600+ that were originally expected by 2023/24. However, this excludes many franchisees that deliver higher education in partnership with universities. Following concerns expressed by the National Audit Office, the House of Commons’ Public Accounts Committee has recommended the Department for Education consider ‘requiring all providers to register with the OfS [Office for Students] in some form’.

Must do better’?

A number of organisations and individuals have complained that the Office for Students gets the tone of its communications with institutions wrong, fails to implement a fully risk-based approach to regulation and is closer to government and therefore less independent than originally envisaged. One Vice-Chancellor has recently published a book entitled Cry Freedom: The Regulatory Assault on Institutional Autonomy in England’s Universities.

A 2023 critical report by the House of Lords’ cross-party Industry and Regulators Committee entitled Must do better: the Office for Students and the looming crisis facing higher education concluded:

the OfS’ approach to regulation often seems arbitrary, overly controlling and unnecessarily combative. It has been selective in choosing which of its duties to prioritise, expanded its remit into new areas and created the impression that it seeks to control and micro-manage providers.

… there have been too many examples of the OfS acting like an instrument of the Government’s policy agenda rather than an independent regulator. 

However, the Office for Students have responded constructively to such criticisms, promising:

we recognise the challenge on our relationship with the sector we regulate. Robust, two-way dialogue is key to regulation that works effectively in the interests of students. We have significantly increased our engagement with institutions in response to feedback, and this will be an ongoing priority.[vii]

While it may not to be an urgent priority of any new government to impose significantly different regulatory arrangements on English higher education providers, there is a potential opportunity for a recalibration of both the relationship between Whitehall and the Office for Students and that between the Office for Students and regulated providers. These relationships could be put on a more mature footing as the Office for Students’ growing pains subside.

As part of the Public Bodies Review Programme, an independent assessment of how well the Office for Students performs on efficacy, governance, accountability and efficiency has recently concluded under Sir David Behan. The incoming Government will need to publish  the review’s conclusions and these could prove a useful guide to any new Minister for Higher Education. (As I was a member of the independent Challenge Panel for this review, I declare an interest in the process.)

Thinking tertiary

There has also been some discussion about a bigger shift, by moving away from England’s current bifurcated system of regulation for post-18 education in which the Office for Students focuses on higher education and the Skills Funding Agency focuses on other post-18 provision.

Such an approach might conceivably lead to some policy convergence across the UK, as – for example – the Scottish Government has pushed ‘a whole-system view of coherent tertiary provision’. In Labour-run Wales, the new Commission for Tertiary Education and Research / Y Comisiwn Addysg Drydyddol ac Ymchwil, which is now to be known as Medr, is starting its work as the UK’s first combined higher education and further education body. 

In a recent HEPI paper, the former Vice-Chancellor Professor Sir Chris Husbands has painted a possible future scenario for England in which there is ‘much more active involvement from employers and devolved administrations in designing, funding and shaping skills and regional knowledge-transfer arrangements.’ While it seems unlikely that an England-wide tertiary system could be implemented easily or swiftly, as England is so much larger than the other parts of the UK, the growth of regional devolution may offer a spread of new options.

Further reading

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