by GR Evans
The House of Lords Committee on Industry and Regulators pulls no punches in Must do better. This Report on its Inquiry on the Office for Students published on 13 September finds the OfS to be underperforming in a number of respects. It criticises its ‘prescriptive regulatory requirements and time-consuming processes’ and its ‘inappropriate micromanagement’, with ‘little regard to the need to protect institutional autonomy’. Institutions are found to be reluctant to engage with it ‘for fear of a punitive regulatory response’.
‘The student interest’ in which it was set up is described as ‘defined by the OfS in line with the political priorities of Ministers rather than the priorities of students’. In comparison with its threatening mass of detailed rules for providers the OfS definition of required ‘outcomes’ affecting students (student continuation beyond a first year; progression to completion; gaining employment) is found to be ‘simplistic and narrow’.
The Office for Students is a non-departmental ‘arm’s length’ public body with executive functions. These are far more extensive than HEFCE possessed in its role of ‘buffer’ between Government and providers of higher education and Must do Better is concerned that the OfS has been adding to them. Moreover Must do better says that the lack of close attention to the underlying objectives of his statutory duties ‘makes it difficult for the OfS to be held accountable’.
The OfS is a regulator. Must do Better says it ‘should improve its adherence to best regulatory practice through closer alignment with the Regulators’ Code’ dating from 2014. It should do so ‘with respect to how it implements its policies and procedures, as well as how it develops them’. The Regulators’ Code has ‘accountability’ as its overall aim, and emphasises reciprocal and mutual responsibilities between regulator and regulated, a point on which the OfS is now found conspicuously wanting.
The provisions for its accountability seem inadequate to address the potential abuse of power arising from a failure of the OfS to engage appropriately with the providers it regulates. If it decides a provider ‘must do better’ in meeting its ‘outcomes’ requirements, the Office for Students can remove it from its Register, take away its degree-awarding powers and its university title or impose a monetary penalty, with the provider paying the costs of its investigation, with internal appeal only against the scale of the costs.
Appeal against an OfS decision on such matters lies to the First-tier Tribunal Health, Education and Social Care Chamber (Care Standards). It must be made within 28 days of the issue of the decision by the OfS, on the grounds that the decision was based on an error of fact; was wrong in law, or unreasonable, except where the decision was to revoke degree-awarding powers or University title. In that case the grounds of appeal are not specified and the decision may be made afresh. The Tribunal will take into account evidence that was not available to the Office for Students when it made its decision.
A landmark case was brought by Bloomsbury Institute Ltd, formerly the London School of Business and Management, after its application for Registration was refused by the OfS in May 2019 under Registration Condition B3, namely that ‘student continuation rates from year one to year two (“continuation rates”) and rates of progression to professional employment or post-graduate study (“progression rates”). First came an attempt at judicial review on a several grounds. That was unsuccessful but an appeal succeeded on two grounds, ‘delegation’ and the failure of ‘publication and consultation’. Bloomsbury is now on the Register subject to an Ongoing Condition about student ‘continuation’ (R. v. Bloomsbury Institute Ltd. and The Office for Students  EWCA Civ 1074).
Must do better points to the agreed accountability ‘framework’, not between OfS and providers but between OfS and Government. The current Framework document between the Department for Education and the Office for Students is dated January 2023. This promises ‘reviews’ to ‘ensure intra alia that the OfS is delivering effectively’ against the ‘aims and objectives’ of the Public Bodies Review Programme, but ‘The date of the next review is yet to be determined’.
It may take some time to arrange. Must do Better notes the National Audit Office’s recent criticism in its Central Oversight of Arm’s Length Bodies that ‘review programmes’ had ‘failed to meet their ambition of reviewing every ALB [Arms Length Body] within a Parliament’. Must do better notes ‘that the Government is committed to a public body review of the OfS’, but calls for that to go beyond the ‘considering whether the OfS’ work remains useful and necessary’ by placing ‘ its work in a wider context, focusing on the strategic issues facing the sector’.
In any case the Office for Students’ Framework Document provides accountability only through the Secretary of State (ultimate accountability to Parliament) and the Minister for Higher Education (day-to-day responsibility). The DfE’s Senior Sponsor for OfS will ‘hold quarterly performance reviews with the leadership of the OfS as part of performance monitoring and accountability’. These do not seem to be on published record. Government ‘recognition of the problems created by regulatory duplication in the higher education sector’ is welcomed but Must do better wants the DfE to ‘set out in further detail the steps it is taking to streamline regulatory responsibilities within the sector, including its proposed timetable for this’.
There is published self-criticism. The OfS’s Annual Report for 2022-3 took stock of its own performance expressly in terms of the requirements of its Framework relationship with the DfE:
This year we experienced some resource challenges, which had implications for some business plan activities. Our Performance analysis report identifies where this was the case.
OfS accordingly tracked its ‘performance against’ its eleven Key Performance Measures and Operational Measures and ‘reported to the DfE’ on its ‘progress’. KPM 11 covers ‘Efficient Regulation’ and lists under the headings: ‘Minimum and maximum number of OfS data and information returns for providers’; ‘Average number of OfS conditions of registration subject to enhanced monitoring per registered provider’; Amount of regulatory fees paid by providers per student’. The Operational Measures count Reportable Events; Notifications; Registration; Degree awarding powers, and time taken to resolve these. The OfS Annual Report adds that its ‘performance against budget’ is ‘monitored and reported each month’ and its ‘performance against financial target’ on an in-year basis. It has monitored its performance in paying its creditors, ‘greening’, the Cabinet Office’s Functional Standards for Counter Fraud and salaries.
Must do better makes recommendations but it is far from clear how accountability can be insisted on. Must do better finds it ‘worrying that some institutions would be unwilling to engage with the OfS’ particularly ‘in the early stages of falling into financial difficulty for fear of a punitive regulatory response’. The 2022-3 Annual Report looks towards the individual providers with which the OfS has a regulatory relationship, but chiefly in terms of their ‘Financial sustainability and governance’. It had required 250 providers to complete their annual financial return for the 2020/2021 financial year:
Of these, 117 were subject to further assessment, there was informal monitoring of 51 providers, of which 31 were subject to additional formal monitoring. Three providers were subject to Student Protection Directions, which enable the OfS to intervene “quickly and in a targeted way” where there is a material risk of market exit. One provider exited the market.
It was recognised before the burden was increased with the creation of the OfS that already ‘the accountability burden in the higher education sector is out of proportion to the risk of financial or academic mismanagement.’ This may no longer be true, and if so that matters in connection with the full title of Must do better: the Office for Students and the looming crisis facing higher education. The Report outlines this crisis in terms of the diminishing value of the tuition fee against the expanding institutional cost of teaching an undergraduate and the growing reliance on income from international students.
It expresses concerns about the adequacy of OfS’s checking of financial sustainability especially with reference to the latter. It finds it too trusting, which is especially a concern in the light of the recognition that providers in financial difficulties are afraid to raise their concerns with the OfS. The OfS Register defines the providers whose students are entitled to loans from the Student Loans Company. It currently lists 425, in two categories, those which may charge fees up to £9,250 and those without a ‘fee cap’ to which the SLC will lend only £6125, less if the provider has no TEF rating. There is perhaps a further growing concern which Must do better fails to pick up and that is the multiplication of alternative providers not all of which have degree awarding powers or university title and not all of which are offering courses above Levels 4 and 5.
How badly is the Office for Students failing? Can it improve sufficiently to help protect the future of English higher education? It has been publishing reassurance that it is making efforts to connect better with the providers of higher education it now regulates. It has published the findings of two assessment visits on Business and Management courses and celebrates ‘positive engagement’ from local graduates on an OfS programme. It is ‘advising’ on ‘what works in supporting disabled students’. This is all a warrant of a wish to repair flaws and to improve what it does but the criticisms of Must do Better may not be easy to meet piecemeal.
A letter to the Chair of the House of Commons Education Select Committee from the chief executives of the Russell Group, GuildHE, MillionPlus and the University Alliance in January 2023, suggesting that the OfS was failing to comply with the Regulators Code helped to prompt concerns that this was encouraging providers to resort to litigation. That led to further concerns in March about the lack of ‘basic safeguards around transparency, fairness and accountability’ in the conduct of the OfS.
The Lords’ Industry and Regulators Committee began its inquiry in March and the now published evidence submitted to it fully supports the conclusions of Must do Better. If the Office for Students is beyond reform could it be abolished? That would require fresh legislation. The Higher Education and Research Act (2017) depends heavily on the belief that, with the block grant shrunk to vanishing point for teaching and tuition fees a chief source of university income, HEFCE’s allocation of a block grant in the capacity of a buffer between Government and providers would no longer be enough. When providers were attracting their funding directly, institutional autonomy was no longer to be trusted without a new Regulator. The drawbacks of this policy change are now apparent. Perhaps it is time for a radical rethink.
SRHE member GR Evans is Emeritus Professor of Medieval Theology and Intellectual History in the University of Cambridge.