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Education briefing - The OfS end of term report 2019 - and what to look forward to in 2020

  • United Kingdom
  • Education - Briefings

11-12-2019

2019 was the year that the new regulatory landscape for Higher Education came to fruition.  Although the Office for Students (OfS) was established on 1 January 2018, it was not until 1 August 2019 that all its powers were fully implemented.

So 2019 has been the year when the impact of the new regulatory regime became real. In the process the OfS has laid down some challenges for the sector. But as 2019 draws to a close it is also becoming clear that challenge can be a two way street.

Registration - the current state of play

A corner stone of the new regulatory framework is the single registration process for all higher education providers. As of 28 November 2019, over 500 applications had been made and a total of 389 institutions had been registered by OfS. It has not been plain sailing for all institutions however. According to OfS’ report of 30 October 2019: Office for Students registration process and outcomes 2019-20- Key themes and analysis 2019, eight providers had been refused registration at that date, with a further 13 having been informed that the OfS was minded to refuse registration. 90 applications were still outstanding at various stages of the assessment process.

Even for those HEPs whose applications have been successful, the OfS reports having imposed a total of 1,109 regulatory interventions. Although many providers (around 50%) were subject to two or less regulatory interventions, 17 institutions were subject to seven or more regulatory interventions. The gravity of the intervention also varies; ranging from formal communication through enhanced monitoring to specific ongoing conditions.

In addition to the sheer volume of interventions however, the OfS reports that only 12 institutions have been registered without any interventions at all. The OfS characterises the number of interventions as a reflection of the level of its ambition and challenge in relation to access and participation. What those interventions will mean for institutions in practice remains to be seen. It is though a strikingly high statistic given the OfS has previously stated its intention to adopt a targeted and proportionate approach to intervention, according to the perceived level of risk presented by a particular institution.

What’s on the radar of OfS “concerns”?

In reaching conclusions about whether to approve registration, the OfS is of course measuring applications against the 11 Initial Conditions set out in the Regulatory Framework which was established by the Higher Education and Research Act 2017. As to how those are playing out in practice, the Key Themes document reports a number of areas of “concern” for the OfS. Concerns about financial matters centred around the quality of student protection plans (with 266 providers having been asked to resubmit their plans) and a perceived weakness in institutions demonstrating a broader consideration of value for money, The OfS reports that few providers had considered how they could present information about value for money in a way that would be accessible to their students.

Another concern is that providers were basing their financial viability and sustainability assessments on optimistic forecasting. Governance issues also featured, with the OfS highlighting a perceived weakness in providers’ response to the “fit and proper person” public interest governance principle and the adequacy of provider’s management and governance principles.

The themes of financial rigour and robust governance are also evident in other aspects of the OfS activities this year. The Regulatory Guidance on Reportable events, published by the OfS only two weeks before the Key Themes report, focuses on similar issues in the examples of reportable events which it cites in its guidance.

Institutions can expect these issues to remain areas of close scrutiny in 2020 as the OfS moves into a phase of monitoring the performance of registered providers.

The central issue which underpins the OfS narrative in its Key Themes report however is the enhancement of access and participation in the sector. That, the OfS says, is driving its approach to the registration process and to the monitoring of institutions which follows.

Challenge can be a two way street

On this point though there is emerging evidence that the challenge can be both ways. Of the eight institutions whose applications for registration have so far been refused, two have issued judicial review proceedings to challenge the OfS decision. In both cases (and in the case of four other unsuccessful applications) a central theme of the decision to refuse was a perceived weakness in the continuation and progression rates, either from one years’ study to the next or from study to graduate employment.

The court challenges to the OfS’ decision assert that in reaching its conclusions it has failed to adequately consider the characteristics of the institutions’ students. As a consequence it is asserted by those challenging the OfS that it is failing to promote the equality of opportunity and increased participation which it espouses. Furthermore that it is also penalising institutions whose student cohort comes from disadvantaged backgrounds in comparison to institutions whose students have followed a more traditional route to higher education.

It is an issue which will be familiar to a number of institutions beyond those whose applications have been refused and some of the facts emerging from the court proceedings make interesting reading on the point. A Freedom of Information Act request submitted in the context of one of the cases indicates that the proportion of Black Asian and ethnic minority (BAME) students in those HEPs which had been granted registration was 15% compared to 67% in those where registration had been refused.

This is a debate that we can expect to continue into 2020. Court decisions in the two current judicial review cases are expected early next year. The OfS also says it will shortly publish more detail on the baseline it is using for its analysis of Quality condition B3 which incorporates the issues of continuation and progression.

OfS decision making- the rules of the game

Already though these two cases have highlighted the complex issues which the next regime raises. They also demonstrate that, just as the OfS is charged with scrutinising the HE sector, so its actions are open to challenge:

• In exercising it regulatory functions, it must not stray beyond the scope of the powers conferred upon it. If it wishes to intervene it can only do so within the statutory perimeters in which it operates. In the very political landscape in which OfS also exercises its functions, the lines can become blurred.

• So too must it ensure it makes decisions which are consistent with wider legal powers and principles. Hence the debate about whether it has contravened equality legislation when it decided to refuse applications for registration.

• In reaching decisions it must act “rationally”- which means taking into account all relevant and not factoring in irrelevant considerations. These early judicial review challenges, focussing as they do on detailed outcomes data, demonstrate just how complex that requirement can be.

• It must make decisions in a timely way. There are no prescribed deadlines for OfS decision making - and against this principle runs the counter balancing requirement to consider applications thoroughly and carefully. Nonetheless, a failure to make a decision could also, of itself, a ground for challenge.

• Underpinning all the OfS does is the principle that it, like any other body exercising public law functions, must act fairly transparently and consistently.

We will find out in 2020 whether the OfS has fallen short in any aspect of its decision making in the cases under challenge. We can also expect the practical impact of the OfS’ role to gather momentum as it moves beyond registration and into monitoring the performances of increasing numbers of registered providers. The themes are emerging and the sectors faces challenges and opportunity in each measure.

What is beyond doubt is that if 2019 has been a year of change for the sector, we can expect more to come in 2020.