by Rob Cuthbert
SRHE News Editorial, April 2026
The Office for Students has had a significant reset, after it was heavily criticised, not just by the HE sector, but also in a coruscating report by the House of Lords Industry and Regulators Committee in 2023. That report said “the regulator had a poor relationship with both students and providers, and that it lacked independence from the government.” In January 2024 the National Audit Office produced a scathing report on student finance in franchised providers, and Sir David Behan was commissioned to produce an independent review of the Office for Students, published in July 2024 as Fit for the Future: Higher Education Regulation Towards 2035. After the general election in 2024 the new Labour Government replaced the Chair of the OfS, former Conservative MP Lord Wharton, appointing Edward Peck CBE, the widely-experienced former VC at Nottingham Trent in March 2025. Peck had been appointed by DFE as the first Higher Education Student Support Champion in 2022, so might be seen as bipartisan. OfS chief executive Susan Lapworth left at Easter 2026, and John Blake, Director for Fair Access and Participation, left in 2025 to join Wonkhe’s new venture The Post-18 Project, replaced on an interim basis by his widely-respected predecessor Chris Millward.
There are now almost 500 OfS staff, about twice as many as the Higher Education Funding Council for England had when it was disbanded. The Chief Executive has a leadership team comprising eight ‘Directors’ and another 13 ‘Senior leaders’; it is difficult for outsiders to understand exactly who is responsible for what. There are Directors for: Freedom of Speech and Academic Freedom; Quality and Access; Strategy and Delivery; Regulation, and Enabling Regulation; Resources and Finance (2); and Legal Counsel (but, mysteriously, not the Director of Fair Access and Participation). The ‘Senior Leaders’ are Heads of: Interventions; Monitoring; Student Equality and Welfare; Financial Sustainability; Enforcement; Quality and Standards; Communications; Market Entry; Chief Data Officer; Student Outcomes; Provider Governance; Consumer Protection; Pathways and Funding.
If only most problems would fit into those pigeonholes – there must be a lot of day-to-day negotiation about who leads on which issues. With 500 staff there is scope to give every one of the 424 institutions under OfS regulation a different contact person, without even troubling the 22-strong leadership team, but perhaps that would just be too easy to understand. Behan’s 25th recommendation was “That the OfS develops a more transparent style of communications to demonstrate to the sector its independence from government.” It could start with more communication about staff and how the organisation is supposed to work.
New chair Peck wasted no time in recasting the OfS strategy to take account of the many criticisms of the OfS. After the Lords inquiry the Behan review called for a narrower focus on key priorities, and the Strategy for 2025-2030 said the OfS goals were “grouped into three areas”: quality; student experience and support; and sector resilience. Equality of opportunity was “woven into everything we do”. Peck chose four phrases to capture the approach:
- “Ambitious for all students from all backgrounds”
- “Collaborative in pursuit of our priorities and in our stewardship of the sector”
- “Vigilant about safeguarding public money and student fees”
- “Vocal that higher education is a force for good, for individuals, communities and the country”
The OfS announced on 30 March that Ruth Hannant and Polly Payne had been appointed as the new CEO of the OfS, job-sharing as they did as Director-General at the Department of Culture, Media and Sport, after previously being DCMS interim Permanent Secretary during 2023. They also job-shared as Director of Higher Education in the DfE from 2014-2017. Josh Fleming, current director of strategy and delivery at the OfS, will be interim chief executive until Hannant and Payne take up their new role on 15 June 2026. How will they make the new strategy work? What will be at the top of their agenda?
Their first problem is that the Office for Students, because of its name and remit, has a Strategy which can only deal obliquely with the most pressing and interconnected problems facing English HE: finding a way to finance HE sustainably (and sorting out the student loans row) and finding a way to cope with the many failures of the statutory HE market. Issues of academic freedom, freedom of speech and the once-ubiquitous culture wars may now be receding in prominence; at least, that will be the hope on all sides. Financing and markets will be the primary concern of the DfE’s promised review of HE finance, but there is no reason to suppose it will appear soon. Chancellor Rachel Reeves recently declared that the student loans issue was not top of her agenda. This gives scope for the new brooms at the OfS to rearrange the HE furniture in ways which may guide the DfE development of workable proposals.
The NAO issued a damning report on 7 December 2017 on The higher education market. It said that, if HE had been a financial product, they would be complaining of mis-selling by universities. But the NAO’s deeper criticism was of the idea that HE could be treated as a market at all, with the report listing all the ways that the market and its regulation fell short of what was necessary and desirable. The new chief executive(s) at OfS were in charge of HE at the DfE from 2014-2017. They must have been closely involved with the NAO investigation, but even more closely involved in the passage of the Higher Education Act 2017, which created a statutory HE market and the Office for Students.
Markets, student tuition fees and higher education financing have been inextricably linked since 2017. The Labour government in 2006 raised undergraduate full-time fees from £1000pa to £3000pa and created income-contingent loans as a means of repayment. In the 2010 general election a new Coalition government faced the perennial question of how to finance mass HE. Deputy Prime Minister Nick Clegg had made a very public pre-election ‘pledge’ to abolish undergraduate fees, but instead the government tripled them, to £9000 pa from 2012. Deciding exactly how to make it work proved to be rather tricky. David Willetts, the universities minister in BIS, repeatedly promised an HE Bill setting out new policy, but it took years to arrive, prompting scepticism if not ridicule. Willetts declared that markets would “drive up quality” in HE. The hare had been running on ‘low quality courses’ even before Labour HE minister Margaret Hodge complained about ‘Mickey Mouse courses’ in universities (so the hare was really Bugs Bunny). Willetts believed that HE institutions would choose to set fees in a range from £6000-9000, reflecting their supposed ‘competitiveness’ in the market. Every university, of course, understood that price signals quality and accordingly set fees at £9000. From that moment the HE market – as imagined by statute – was dead.
Nevertheless the 2017 Higher Education and Research Act institutionalised the economic idea that markets and regulation are the answer to effective performance of the whole HE sector, even though Willetts’ Special Adviser Nick Hillman always knew that “Straight comparisons between regular markets and educational markets don’t actually make much sense.”, as he said in response to the 2017 NAO report. By 2017 Willetts had been replaced by Jo Johnson (later ennobled by his brother Boris), who doubled down on the script about “low-quality courses”, as did most of his many successors, with the honourable exception of Chris Skidmore.
Behan’s review said:
“I am of the view that higher education is not a ‘pure’ or ‘perfect’ market, but rather a ‘quasi-market’. Some of the reasons for this include:
• There is a complex relationship of choice between the student and the provider whereby students’ choices are dictated not solely by their preferences, but also by their expectations at being accepted/rejected by the provider.
• Government not only sets the price of a domestic undergraduate course that a provider can charge, but also heavily funds the sector through student loans.
• There are numerous and significant cross-subsidies between cohorts of students.
• There are significant asymmetries of power and information between providers and students. Taking on a student loan and pursuing higher education is likely to be the biggest contract new undergraduate students will ever have entered.”
With that list of deficiencies, calling HE a ‘quasi-market’ was charitable, even if – at a stretch – it reflected academic thinking. HE providers responded to the market in various ways, many eventually frowned on or outlawed. After 2010 new ‘challenger institutions’ expanded sub-degree business courses in London, exploiting the income from students able to gain £9000 tuition fee loans – money paid direct to institutions. They grew so much that in 2013 23 private colleges were suspended from student loans eligibility by the DfE. Government didn’t want that kind of response to market demand.
As universities increasingly suffered from rising cost but frozen tuition fees, many saw international student recruitment as the answer. Increasing numbers of universities outside London decided to open a London campus to exploit the overseas market, but were and still are criticised for it. The sector’s broad reliance on optimistic projections for international recruitment was deemed unsustainable and too risky. Government didn’t want that kind of response to market demand – but it decided to cash in anyway, with a levy on institutions for every international student recruited. Meanwhile some institutions thought they could still tap into new demand by expanding franchise relationships with partner colleges, but some of the largest of these have also now been discouraged or discredited. Government didn’t want that kind of response to market demand either.
Despite the downturn in franchising some people made a lot of money. Mike Ratcliffe noted on his MoreMeansBetter blog that the for-profit London School of Commerce had been “… incredibly profitable, with over £100 million paid in dividends to the family that own it.” He asked “Surely we can’t allow companies to stop being providers but to hang onto tens of millions in cash or other assets if either there have been a majority of non-genuine students or only a fraction of genuine students have completed their courses?”. It seems there were Mickey Mouse students as well as Mickey Mouse courses. Elsewhere, responsible HE institutions faced increasing financial problems as their real income fell precipitously. That line in the OfS strategy about resilience has a lot of work to do, and the OfS should look again at Behan’s recommendation “That the OfS board reviews its risk appetite framework and approach with a view to becoming more proactive in anticipating, identifying, and responding rapidly to address emerging risk.” After all, the new Strategy says; “We intervene where we have concerns that public money is not being used as intended …”
Students have repeatedly pronounced themselves largely satisfied with their course experiences in successive National Student Surveys, but this did little to quell the politicians’ and media obsession with course quality. The 2017 Act envisaged a Designated Quality Body to work with the OfS, the QAA was accordingly designated, but the OfS set increasingly restrictive conditions which the QAA ultimately deemed incompatible with its international role and credibility. The House of Lords Industry and Regulators Committee
“… expressed concern about the circumstances surrounding the QAA’s de-designation … The QAA … “blamed” this suspension on the “OfS’ regulatory approach”. The committee said it was “concerning” that England’s regulatory framework had “shifted away from European standards” because it had the potential to damage the international reputation of England’s HE sector. … it was unclear if the OfS had the capability to take on the role previously carried out by the QAA. It called on the regulator to align its framework with international standards and to appoint the QAA or another arms-length body to perform the quality assurance role.”
The OfS instead formed an apparently permanent intention to conduct quality investigations itself, defying the explicit intention of the 2017 Act. OfS now has many Senior Leaders with a finger in the pie, presumably including those for Interventions, Monitoring, Enforcement, Student Outcomes, and Consumer Protection, but most of the others might have grounds to join in.
The quality investigations by OfS generally reach conclusions much too late to benefit the students whose experience prompted the investigations. The OfS strategy says: “We will help drive improvement across the sector, recognising that while much provision is already excellent, there is room to improve further. And we will hold institutions to account when they fall short.” So far the OfS investigations have focused on newer providers or universities near the bottom of the pecking order. The OfS has not, for example, investigated the very public problems with veterinary courses at Cambridge. In those as in many others it seems that institutional self-regulation can deliver better and quicker results.
Those with long memories will recall the opposition of the pre-1992 universities to any incursions by Her Majesty’s Inspectorate, as it then was, which had the run of post-1992s. But HMI were able exactly to be “proactive in anticipating, identifying, and responding rapidly to address emerging risk.” Perhaps the OfS should not only reappoint a DQB but also look around for an independent and respected cadre of, say, His Majesty’s Inspectors. Behan said: ”The OfS should develop its regulatory model to create a virtuous policy circle with the objective of driving improvements in the quality of the higher education sector, and thus acting in the interests of students. The OfS and higher education providers should regard quality improvement as their common shared goal.”
English HE continues to be highly respected and in demand worldwide, but time is running out. The ‘narrow reputational range’ acclaimed by David Watson is jeopardised by misbehaviour by some new providers, misjudgments by a handful of institutions in desperate financial straits, and cutbacks everywhere. Nevertheless, the National Student Survey shows that students continue to be broadly satisfied, while identifying particular problems such as feedback which institutions have worked hard to address. Some in the media persist in asking “Is higher education worth it?” by highlighting graduate debt, but student demand remains doggedly high. This suggests that you really can’t buck the market, and what we need is the right kind of review to deal with the student loans row and make higher education finances sustainable. In this the OfS has a huge role to play: the new OfS Chief Executives have to transform how the OfS works, to live up to this optimistic but necessary condition for success: “We will deliver our work in collaboration with students and the institutions we regulate. Accepting there will be issues on which we disagree, we will cultivate relationships based on mutual respect, confidence and trust. We will work with student bodies, sector agencies and other partners that share responsibility for stewardship of this important sector to support a cohesive regulatory environment and foster a thriving ecosystem equipped to create opportunity and drive growth. We will champion the many benefits of higher education for society, culture and the economy and regulate in a way that enables universities and colleges to drive growth, create opportunity, champion free expression and support a flourishing society.”
Rob Cuthbert is Emeritus Professor of Higher Education Management, University of the West of England and Joint Managing Partner,Practical Academics rob.cuthbert@btinternet.com. X/Twitter @RobCuthbert. Bluesky @robcuthbert22.bsky.social.