Recommendations & Conclusions
26 items
2
Recommendation
Eighth Report - Financial sustainabilit…
Not Addressed
Despite a background of deteriorating financial health of an increasing number of providers, the Department is not effectively holding the OfS to account. The Department is responsible for the overall regulatory framework of the sector and for holding the OfS to account. The OfS’s role includes protecting students’ interests from …
Government response. The response does not address the recommendation of establishing robust performance measures and targets, and instead discusses internal performance measures and consultations with the sector.
HM Treasury
3
Conclusion
Eighth Report - Financial sustainabilit…
Protections for students, in the event of providers facing financial distress, are not strong enough. The OfS requires providers to have a student protection plan in place to address the risk of continuity of study for its students, but it has identified common weaknesses in them – including over-optimism about …
Government response. 3.1 The government agrees with the Committee’s recommendation. Target implementation date: March 2023 3.2 The OfS’s focus has been ensuring that protections are as robust as possible in those providers which might face financial distress. This reflects the OfS’s risk-based …
HM Treasury
4
Recommendation
Eighth Report - Financial sustainabilit…
We are concerned that the financial sustainability of some providers is being put at risk by their heavy dependence on their ability to continue growing overseas student numbers. Many providers are already highly dependent on cross-subsidy to make up deficits in publicly funded teaching and research. Much of this subsidy …
Government response. 4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 The department recognises that the financial sustainability of the higher education sector depends on the continuing contribution made by income from overseas students, if not necessarily on the growth …
HM Treasury
5
Recommendation
Eighth Report - Financial sustainabilit…
Student satisfaction with the value for money of their courses is at a worryingly low level. One of the OfS’s four regulatory objectives is that students receive value for money. OfS says that students should receive the academic experience they were promised by their provider and their interests as consumers …
Government response. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2022 5.2 Both the department and the OfS are committed to improving the quality of higher education provision. Ensuring that students are satisfied with the value for money …
HM Treasury
6
Conclusion
Eighth Report - Financial sustainabilit…
The Department failed to adequately assess the current and future financial impacts on providers of disruption to A-level assessments. The use of locally assessed grades in place of A-level exams during the COVID-19 pandemic led to substantial grade inflation in 2020 and 2021. This meant that more students were able …
Government response. 6.1 The government agrees with the Committee’s recommendation. Target implementation date: September 2022 6.2 The department has undertaken careful monitoring of applications and providers’ offer-making in the 2022 admissions cycle. Ahead of the 2022 cycle, the department engaged extensively with …
HM Treasury
1
Conclusion
Eighth Report - Financial sustainabilit…
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Education (the Department) and the Office for Students (the OfS) on the financial sustainability of the higher education sector in England.1
Government response. Based on a report by the National Audit Office, the Committee took evidence on 21 March 2022 from the Department for Education and the Office for Students. The Committee published its report on 15 June 2022. This is the government’s …
HM Treasury
7
Conclusion
Eighth Report - Financial sustainabilit…
The OfS carries out the annual National Student Survey to collect students’ views on, for example, the quality of teaching and learning they are getting. The 2021 survey ran from January to April and was open only to final-year undergraduates.13 The OfS commissions a separate survey each year, seeking students’ …
HM Treasury
8
Conclusion
Eighth Report - Financial sustainabilit…
We asked the OfS whether satisfaction rates among students had changed as a result of the pandemic, and what the impact of hybrid learning had been on students. The OfS told us that, following the widespread use of online provision during the COVID-19 pandemic, it was undertaking work to better …
Government response. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2022 5.2 Both the department and the OfS are committed to improving the quality of higher education provision. Ensuring that students are satisfied with the value for money …
HM Treasury
9
Conclusion
Eighth Report - Financial sustainabilit…
To create and maintain its regulatory independence, and seeking to minimise regulatory burden, the OfS does not maintain close ongoing contact with individual providers it considers at low risk. The OfS explained that it collected “a basic core from every registered university and college” but beyond this it considered its …
HM Treasury
10
Conclusion
Eighth Report - Financial sustainabilit…
In addition to setting higher education policy, the Department is responsible for the overall regulatory framework for the sector.19 It holds the OfS to account through quarterly performance reviews with the OfS’s leaders and has regular discussions about the performance indicators which the OfS uses to measures its own performance.20
Government response. 2: PAC conclusion: Despite a background of deteriorating financial health of an increasing number of providers, the Department is not effectively holding the OfS to account. 2: PAC recommendation: Working with the OfS, the Department should establish a complete set …
HM Treasury
11
Conclusion
Eighth Report - Financial sustainabilit…
The National Audit Office reported that the OfS does not yet have a complete and transparent set of performance measures to demonstrate its own performance as a regulator.21 Of the 26 performance indicators the OfS sets out on its website, eight are still in development or have incomplete performance information …
Government response. 2: PAC conclusion: Despite a background of deteriorating financial health of an increasing number of providers, the Department is not effectively holding the OfS to account. 2: PAC recommendation: Working with the OfS, the Department should establish a complete set …
HM Treasury
12
Conclusion
Eighth Report - Financial sustainabilit…
The OfS assured us that it consulted widely on changes to its regulatory framework and holds meetings and workshops with stakeholder groups. However, there is no routine way in which it captures structured stakeholder feedback through which it can gather the views of regulated bodies on its own performance. It …
Government response. 2: PAC conclusion: Despite a background of deteriorating financial health of an increasing number of providers, the Department is not effectively holding the OfS to account. 2: PAC recommendation: Working with the OfS, the Department should establish a complete set …
HM Treasury
13
Conclusion
Eighth Report - Financial sustainabilit…
Publicly funded teaching and research make a loss across the sector once the full economic costs of those activities are taken into account. Providers’ financial viability depends on subsidising these activities from the surplus generated by non-publicly funded teaching – primarily fees from overseas students.24 The Department told us that …
Government response. 4: PAC conclusion: We are concerned that the financial sustainability of some providers is being put at risk by their heavy dependence on their ability to continue growing overseas student numbers. 4: PAC recommendation: The Department, drawing on OfS analysis …
HM Treasury
14
Conclusion
Eighth Report - Financial sustainabilit…
The medium- and long-term financial sustainability of some providers is heavily dependent on continued growth in student numbers, particularly overseas students. In 2018, providers forecasted that the number of non-EU students would grow by 29% between the 2019/20 and 2024/25 academic years, compared with a 17% increase in UK student …
Government response. 4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 The department recognises that the financial sustainability of the higher education sector depends on the continuing contribution made by income from overseas students, if not necessarily on the growth …
HM Treasury
15
Conclusion
Eighth Report - Financial sustainabilit…
We received written evidence from the Universities and Colleges Admissions Service (UCAS), which told us that it also projected growth in recruitment of both domestic 18-year-olds and international students between now and 2026. UCAS projected that the 2026 admissions cycle would have one million applicants compared with just over 700,000 …
Government response. 4: PAC conclusion: We are concerned that the financial sustainability of some providers is being put at risk by their heavy dependence on their ability to continue growing overseas student numbers. 4: PAC recommendation: The Department, drawing on OfS analysis …
HM Treasury
16
Conclusion
Eighth Report - Financial sustainabilit…
In 2019–20, more than 340,000 overseas students came from 204 countries worldwide (excluding the EU and UK): 35% of those came from China and 14% from India.30 We received written evidence from Universities UK that this income stream may be subject to pressure from wider concerns, with overreliance on certain …
Government response. 4: PAC conclusion: We are concerned that the financial sustainability of some providers is being put at risk by their heavy dependence on their ability to continue growing overseas student numbers. 4: PAC recommendation: The Department, drawing on OfS analysis …
HM Treasury
17
Conclusion
Eighth Report - Financial sustainabilit…
The Department described the responsibility for maximising international student participation as being a shared one between government as a whole and individual institutions. We expressed concern about potential tensions between the aims of the Department, along with the Department for Business, Energy and Industrial Strategy, to see more students coming …
Government response. 4: PAC conclusion: We are concerned that the financial sustainability of some providers is being put at risk by their heavy dependence on their ability to continue growing overseas student numbers. 4: PAC recommendation: The Department, drawing on OfS analysis …
HM Treasury
18
Conclusion
Eighth Report - Financial sustainabilit…
During the COVID-19 pandemic, the government moved to a system of locally- assessed grades in place of the usual A-level examinations. This led to significant grade inflation in 2020 and 2021 and meant that many more students than expected were able to take up places at their first-choice providers and …
Government response. 6: PAC conclusion: The Department failed to adequately assess the current and future financial impacts on providers of disruption to A-level assessments. 6.: PAC recommendation: Learning from the disruption to the higher education market during the COVID-19 pandemic, the Department …
HM Treasury
19
Conclusion
Eighth Report - Financial sustainabilit…
As most degree courses last three or four years, there is an ongoing negative impact on the income of providers who are unable to recruit enough students to match their forecast numbers.35 Oversubscribed providers can also face adverse financial consequences from exceeding their planned recruitment as domestic students are, overall, …
Government response. 6: PAC conclusion: The Department failed to adequately assess the current and future financial impacts on providers of disruption to A-level assessments. 6.: PAC recommendation: Learning from the disruption to the higher education market during the COVID-19 pandemic, the Department …
HM Treasury
20
Conclusion
Eighth Report - Financial sustainabilit…
The Department told us it had not modelled the impact on providers of grade inflation in 2020 because nobody had anticipated the last-minute decision to use locally assessed grades. For the 2020/21 academic year, it provided an additional £10 million to support oversubscribed providers that were teaching high-cost subjects, and …
Government response. 6.1 The government agrees with the Committee’s recommendation. Target implementation date: September 2022 6.2 The department has undertaken careful monitoring of applications and providers’ offer- making in the 2022 admissions cycle. Ahead of the 2022 cycle, the department engaged extensively …
HM Treasury
21
Conclusion
Eighth Report - Financial sustainabilit…
As a condition of registration, the OfS requires each higher education provider to have in place and publish a student protection plan setting out what it would do to safeguard students’ interests—such as by making arrangements for continuity of study— if it, as an institution, were in difficulty.40 The OfS …
Government response. 3.1 The government agrees with the Committee’s recommendation. Target implementation date: March 2023 3.2 The OfS’s focus has been ensuring that protections are as robust as possible in those providers which might face financial distress. This reflects the OfS’s risk-based …
HM Treasury
22
Conclusion
Eighth Report - Financial sustainabilit…
The OfS told us that one of the things it became very aware of during the early days of the pandemic was that it did not have the tools needed to intervene quickly if facing a provider failure. It said that, because addressing that issue was urgent, in early 2020 …
Government response. 3: PAC conclusion: Protection for student, in the event of providers facing financial distress, are not strong enough. 3: PAC recommendation: The OfS should prioritise ensuring that all providers’ published student protection plans are fit for purpose and sufficiently clear …
HM Treasury
23
Conclusion
Eighth Report - Financial sustainabilit…
We asked the OfS how it made sure that providers had the relevant preparations in place to access support in the event that their financial sustainability was under threat, since some risks could materialise quite quickly. It described a process of escalating requirements, starting with discussions with the provider when …
Government response. 3: PAC conclusion: Protection for student, in the event of providers facing financial distress, are not strong enough. 3: PAC recommendation: The OfS should prioritise ensuring that all providers’ published student protection plans are fit for purpose and sufficiently clear …
HM Treasury
24
Conclusion
Eighth Report - Financial sustainabilit…
The results of the National Student Survey show that overall student satisfaction was stable at 82–83% between 2017 and 2020, falling to 75% in 2021.44 The OfS measures students’ perception of value for money in a separate survey, which, unlike the National Student Survey, is not restricted to final-year undergraduates. …
Government response. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2022 5.2 Both the department and the OfS are committed to improving the quality of higher education provision. Ensuring that students are satisfied with the value for money …
HM Treasury
25
Conclusion
Eighth Report - Financial sustainabilit…
The OfS told us that it did not have a definition of value for money because it believed that it could mean different things to different people at different times. In 2018 it had commissioned a consortium of student unions to look at what the definition of value for money …
Government response. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2022 5.2 Both the department and the OfS are committed to improving the quality of higher education provision. Ensuring that students are satisfied with the value for money …
HM Treasury
26
Conclusion
Eighth Report - Financial sustainabilit…
The OfS suggested to us that students’ satisfaction with their courses and assessments of value for money were also related to their perceptions of what they were getting for the tuition fee. During the pandemic, there were calls for higher education providers to refund a proportion of tuition fees in …
Government response. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2022 5.2 Both the department and the OfS are committed to improving the quality of higher education provision. Ensuring that students are satisfied with the value for money …
HM Treasury