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 …
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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 the consequences of financial risk in higher education providers which could adversely affect students. The financial sustainability of the sector has been declining since before the pandemic, evidenced most obviously by the fact that the number of providers with an in-year deficit increased from seven (5%) in 2015/16 to 80 (32%) in 2019/20. Of these 80 providers, 17 had been in deficit for the past two years and a further 20 for three years or more. The OfS does not, however have a complete set of measures by which its performance can be judged. Of the 26 performance indicators the OfS sets out on its website, eight are still in development or have incomplete performance information and a further 11 indicators do not yet have associated targets. Complete information is available for just seven indicators, giving an inadequate picture of performance. The Department asserts that it is not 6 Financial sustainability of the higher education sector in England complacent and has committed to reviewing the set of performance metrics and ways to measure them, by the summer. Furthermore, the OfS does not ask providers for structured feedback on its own performance as a regulator. Recommendation: Working with the OfS, the Department should establish a complete set of robust, published performance measures and targets, including structured feedback from providers, and use these to hold the OfS to account for its effectiveness.
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Government response AI summary
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.
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HM Treasury
3
Recommendation
Eighth Report - Financial sustainabilit…
Accepted
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 …
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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 risks and weak refund and compensation policies. When initially registering providers, the OfS approved a number of student protection plans that it considered inadequate, so as not to delay registrations. During the pandemic, it found that it needed greater powers to intervene more quickly, and introduced a new condition of registration from April 2021 allowing it to issue directions to universities it considers at material risk of failure. However, the process of implementing a student protection plan, which the OfS described to us, appears to be reactive. Recommendation: The OfS should prioritise ensuring that all providers’ published student protection plans are fit for purpose and sufficiently clear for students to make confident, well-informed decisions about the protections universities are promising them.
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Government response AI summary
The government agrees that the OfS should prioritize ensuring that all providers’ published student protection plans are fit for purpose and sufficiently clear, highlighting the OfS's risk-based approach, the introduction of Registration condition C4, and intentions to begin discussions with the sector to update and …
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HM Treasury
4
Recommendation
Eighth Report - Financial sustainabilit…
Acknowledged
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 …
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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 comes from income from overseas students’ fees; in 2019–20, there were more than 340,000 overseas students at English providers, almost half of whom came from China or India. Many providers’ medium- and long-term financial forecasts assume continued growth in student numbers, particularly overseas students. The OfS monitors providers’ forecasts and has in the past found their student number projections to be over-optimistic. There are also risks associated with an over reliance on international recruitment which may not align well with the UK’s wider geopolitical interests. The Department asserts that it is aware of such risks and is encouraging the sector to diversify in terms of where providers recruit their students from. There are also cross-government considerations, such as how student recruitment is affected by, and potentially at odds with, the Home Office’s plans to control migration. The Department recognises that it is a very competitive market and that there are many countries around the world seeking to bring in more international students, for exactly the same reasons that UK providers are. Recommendation: The Department, drawing on OfS analysis as appropriate, should set out what it considers to be the risks to achieving the continued forecast growth in overseas student numbers universities are relying on for their future financial security, and explain how it is mitigating those risks. Financial sustainability of the higher education sector in England 7
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Government response AI summary
The government agrees with the Committee’s recommendation and states the financial sustainability of the higher education sector depends on the continuing contribution made by income from overseas students.
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HM Treasury
5
Recommendation
Eighth Report - Financial sustainabilit…
Accepted
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 …
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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 should be protected before, during and after their studies. Overall student satisfaction has been consistently over 80%, but fell to 75% in the pandemic- one of the main contributing factors being dissatisfaction with learning resources required by lockdown restrictions. The proportion of students who thought their course was value for money is much lower and dropped from 38% in 2020 to 33% in 2021, with more than half saying it was not value for money. The OfS acknowledges that students’ view that they are not getting value for money is a cause for concern. The OfS believes that quality of provision is central to how students regard value for money, and asserts that quality is one of its top three concerns. The OfS says that it is looking at quality issues closely and that working with the universities to ensure that, even on oversubscribed courses, quality remains good. Recommendation: The Department and the OfS should set out what action the OfS is taking to improve students’ satisfaction with value for money, including the OfS’s assessment of the impact of hybrid teaching on students’ experience and what progress has been made in addressing the causes of dissatisfaction.
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Government response AI summary
The OfS is introducing an enhanced quality regulatory regime including student outcome thresholds and new registration conditions covering students’ academic experience; it is also considering how it measures value for money and is reviewing blended learning.
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HM Treasury
6
Recommendation
Eighth Report - Financial sustainabilit…
Acknowledged
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 …
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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 to take up places at high-tariff providers, but left many medium- and low-tariff and specialist providers undersubscribed, who have therefore lost expected fee income. The Department had anticipated the likely impact of locally assessed grades on providers that would be oversubscribed and that could require additional funding for high-cost courses. But it had not considered the impact on those providers that would become undersubscribed. Being undersubscribed causes financial pressure on providers for an extended period, as most courses last at least three years. At the same time, oversubscribed providers risk not being able to maintain the quality of provision they have promised their students as they may not have sufficient teaching facilities or student accommodation. Recommendation: Learning from the disruption to the higher education market during the COVID-19 pandemic, the Department and the OfS should model and review the financial impacts on providers of changes to the number and profile of domestic students over the short, medium and longer terms. 8 Financial sustainability of the higher education sector in England 1 Oversight of financial sustainability in the higher education sector
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Government response AI summary
The government agrees with the Committee’s recommendation and has undertaken careful monitoring of applications and providers’ offer- making in the 2022 admissions cycle.
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HM Treasury
1
Conclusion
Eighth Report - Financial sustainabilit…
Acknowledged
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 AI summary
The government acknowledges the report and states that the response is the government’s response to the Committee’s report.
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HM Treasury
7
Recommendation
Eighth Report - Financial sustainabilit…
Deferred
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’ …
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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’ views on the value for money of their courses. It also engages with the National Union of Students and listens to a panel of student representatives – the chair of which also sits on the OfS’s own Board.14 We asked the OfS why the National Student Survey was restricted to final-year students, and whether this meant that it missed out on the opportunity for some early warning signals from other students. The OfS responded that it considered that students would have a 6 Q 19 7 C&AG’s Report, paras 9, 2.8 8 FSE0003 Financial Sustainability of the higher education sector in England, The Russell Group, 21 March 2022, para 6; FSE0005 Financial Sustainability of the higher education sector in England, Universities UK, 21 March 2022, pages 1–2 9 Qq97–102 10 Qq 96–97; FSE0001 Financial Sustainability of the higher education sector in England, UCAS, 21 March 2022, page 2; FSE0005 Universities UK, 21 March 2022, page 2; C&AG’s Report, para 2.12 11 Q 25 12 Qq 19, 21; C&AG’s Report, para 3.15 13 Qq 33, 72; C&AG’s Report, paras 4.6–4.7 14 C&AG’s Report, paras 4.6, 4.8 10 Financial sustainability of the higher education sector in England better sense of the overall performance of the university and their experience in the final year. But it also admitted that it was missing out on early warning signals from other students and said it would consider widening the survey to include other students.15
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Government response AI summary
The government agrees with the recommendation and states the OfS is considering how it measures value for money, including the use of student surveys and outcome data, with a target implementation date of Autumn 2022. It also highlights broader enhancements to the quality regulatory regime.
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HM Treasury
8
Recommendation
Eighth Report - Financial sustainabilit…
Accepted
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 …
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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 understand the impact of hybrid provision—a mix of face-to-face and online provision—on students, what is going on in the sector and what ‘good’ looks like. It noted that while there might be some lag in identifying trends through the National Student Survey, its work on hybrid provision would give it evidence “that is much more real-time”. It expected this work to be completed by summer 2022.16
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Government response AI summary
The government agrees to improve the quality of higher education provision and ensure students are satisfied with value for money, with the OfS introducing an enhanced quality regulatory regime and reviewing blended learning, with a target implementation date of Autumn 2022.
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HM Treasury
9
Conclusion
Eighth Report - Financial sustainabilit…
Accepted
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 …
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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 approach was “proportionate to the particular circumstances they face”.17 The National Audit Office reported that the sector bodies and providers it had spoken to told it that, because the OfS had not routinely spoken to most providers, they were not confident that the OfS had all the information it needed to contextualise the financial data it collects. The OfS asserted that it did not recognise that criticism in relation to financial data, as opposed to information about quality. It accepted that there were issues around the burden on providers of collecting this data, and that it was doing a lot of work on that, but that “in terms of us needing this core data, the case is unequivocal”.18 The Department’s oversight of the OfS’s performance
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Government response AI summary
The government agrees with the committee's observation but states that the OfS already ensures robust protections through a risk-based approach and a new registration condition (C4) introduced in April 2021, which strengthens providers' plans to protect students.
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HM Treasury
10
Conclusion
Eighth Report - Financial sustainabilit…
Acknowledged
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
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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
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Government response AI summary
The government agrees with the Committee’s recommendation, with the OfS concluding the review of its key performance measures, with a view to these being published by September 2022.
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HM Treasury
11
Recommendation
Eighth Report - Financial sustainabilit…
Accepted
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 …
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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 and a further 11 indicators do not yet have associated targets. We asked the Department how it was able to hold the OfS to account without the management information that such a set of measures would provide. The Department and the OfS recognised that development of the indicators had 15 Qq 72–78 16 Q 33–35, 42–43 17 Q 55 18 Q 55; C&AG’s Report, paras 3.5–3.6 19 C&AG’s Report, para 1.8 20 Qq 45, 50; C&AG’s Report, paras 3.5, 3.25 21 C&AG’s Report, para 16 Financial sustainability of the higher education sector in England 11 not been a priority during the COVID-19 pandemic, but told us that it was not something they were complacent about. They told us that the measures would be reviewed in line with the OfS’s new strategy and would be in a better place by summer 2022.22
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Government response AI summary
The government agrees to work with the OfS to establish a complete set of robust, published performance measures and targets, including structured feedback from providers, to hold the OfS to account for its effectiveness, with a target implementation date of September 2022.
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HM Treasury
12
Recommendation
Eighth Report - Financial sustainabilit…
Accepted
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 …
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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 told us that it planned to ask for more systematic feedback through a survey, which will provide comparable data against which it can benchmark itself each year.23 Providers’ financial dependence on overseas students’ tuition fees
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Government response AI summary
The OfS is in the process of concluding the review of its key performance measures, with a view to these being published by September 2022 and the Department for Education is working with the OfS to agree an aligned suite of internal performance measures which …
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HM Treasury
13
Recommendation
Eighth Report - Financial sustainabilit…
Accepted
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 …
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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 this was a very competitive market, and estimated that international students contributed some £17 billion to GDP.25
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Government response AI summary
The government agrees to set out the risks to achieving continued forecast growth in overseas student numbers and explain how it is mitigating those risks, noting the importance of the International Education Strategy (IES) and diversification of international student recruitment.
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HM Treasury
14
Conclusion
Eighth Report - Financial sustainabilit…
Acknowledged
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 …
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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 numbers and a 31% fall in the number of EU students. The OfS told us that it monitored providers’ student number projections closely to check whether they were credible. Having previously found a degree of over-optimism in some providers’ forecasts, it told us that it continued to encourage caution while recognising that there are reasons why providers might feel more confident about recruitment over the next few years. It explained that this included: an increase in the number of 18-year-olds because of demographic changes; and evidence on international student flows, which do not show signs of abating.26
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Government response AI summary
The government agrees with the Committee’s recommendation and states the financial sustainability of the higher education sector depends on the continuing contribution made by income from overseas students.
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HM Treasury
15
Conclusion
Eighth Report - Financial sustainabilit…
Not Addressed
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 …
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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 in 2021. About 40% of this increase would be attributable to growth in demand from UK 18- year-olds (driven by increases in both application rates and the population), with the remaining 60% driven by continued growth in demand from mature and international students.27 The OfS assured us that it would be checking whether, if projections do not materialise, providers still have the ability to remain financially viable and sustainable.28 The Department told us that, among its main international competitors, the UK was 22 Qq 44–49; Office for Students Strategy 2022 to 2025, Office for Students, 23 March 2022; C&AG’s Report, para 3.25 23 Qq 59–63; C&AG’s Report, para 3.6 24 Q 24; FSE0003 Financial Sustainability of the higher education sector in England, The Russell Group, 21 March 2022, para 28; C&AG’s Report, para 1.12 and Figure 3 25 Q 80 26 Q 5; C&AG’s Report, paras 2.9–2.11 and Figure 8 27 FSE0001 Financial Sustainability of the higher education sector in England, UCAS, 21 March 2022, page 2 28 Q 5 12 Financial sustainability of the higher education sector in England the only country that significantly grew its international student recruitment during the pandemic. The Department recognised, however, that it is a very competitive market and that there are many countries around the world seeking to bring in more international students, for exactly the same reasons that UK providers are.29
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Government response AI summary
This response is a duplicate of the response to ID 15155 and does not address the specific observation about UCAS projections for growth in student recruitment and the need for providers to remain financially viable if projections don't materialize.
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HM Treasury
16
Conclusion
Eighth Report - Financial sustainabilit…
Not Addressed
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 …
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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 countries that may leave UK universities vulnerable to competition and concerns about global affairs.31 The Department told us that it was seeking to encourage providers to diversify the range of countries from which they recruit, and has identified five priority markets which it was working to develop: Indonesia, Nigeria, Saudi Arabia, Vietnam and India. It also said that it encourages providers to think about whether there might be broader political or other risks associated with becoming over-dependent on students from a particular country.32
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Government response AI summary
This response is a duplicate of the response to ID 15155 and does not address the specific point about diversification of international student recruitment and over-reliance on certain countries.
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HM Treasury
17
Conclusion
Eighth Report - Financial sustainabilit…
Not Addressed
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 …
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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 from overseas and the efforts of the Home Office to control migration. The Department told us that it worked closely with the Home Office on visa arrangements to ensure that overseas students can come and study and also have opportunities after studying. It explained that it also worked with the Department for International Trade to ensure that education opportunities were included in wider trade discussions including, for example, by sending university delegations.33 The impact of disruption to A-level assessments
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Government response AI summary
This response is a duplicate of the response to ID 15155 and does not address the specific concern about tensions between the aims of different departments regarding international students and migration control.
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HM Treasury
18
Conclusion
Eighth Report - Financial sustainabilit…
Acknowledged
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 …
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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 on high-tariff courses. This meant that many medium- and low-tariff and specialist providers recruited fewer students in 2021 than they had in 2019, despite a 10.8% overall rise in undergraduate entrant student numbers over the two years.34
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Government response AI summary
The government agrees with the Committee’s recommendation and has undertaken careful monitoring of applications and providers’ offer- making in the 2022 admissions cycle.
Read full response →
HM Treasury
19
Conclusion
Eighth Report - Financial sustainabilit…
Acknowledged
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, …
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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, loss-making. There 29 Qq 6, 80–81 30 C&AG’s Report, para 2.10 31 FSE0005: Financial Sustainability of the higher education sector in England, Universities UK, 21 March 2022, page 2 32 Qq 6, 8, 11 33 Qq 6–7, 79, 81, 85–86 34 Qq 1–3; Correspondence from Susan Acland-Hood, Permanent Secretary, Department for Education, re PAC hearing on the financial sustainability of higher education providers 21 March 2022, dated 4 April 2022, page 2; C&AG’s Report, para 4.24 35 Q 3; C&AG’s Report, para 4.28 Financial sustainability of the higher education sector in England 13 are also risks to quality of provision and the overall student experience in oversubscribed providers. For example, some have offered students financial incentives to defer entry and some have struggled to provide accommodation for their first-year students.36
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Government response AI summary
The government agrees with the Committee’s recommendation and has undertaken careful monitoring of applications and providers’ offer- making in the 2022 admissions cycle.
Read full response →
HM Treasury
20
Conclusion
Eighth Report - Financial sustainabilit…
Acknowledged
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 …
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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 up to £10 million capital funding to help them expand capacity. However, neither the Department nor the OfS modelled in advance whether the changes to A-level grades would, by themselves, lead to some providers becoming undersubscribed and what the financial consequences for those providers could be. The National Audit Office reported that many medium- and low-tariff and specialist providers recruited fewer students in 2021 than they had in 2019, despite a 10.8% overall rise in undergraduate entrant student numbers over the two years, and that this created short-and medium-term financial risk.37 The Department told us that it had been challenging for the, typically middle- and lower-tariff, institutions that had ended up being undersubscribed. It explained that there had been some financial impact on those providers, although that impact had not been uniform because it also depended on the local actions taken and the subject profile of each provider. However, the Department asserted that its priority had being making sure it was doing what it believed to be the right thing for students.38 The OfS told us that it was now seeing universities’ financial forecasts starting to return to normal, but that it remained concerned about the quality of provision where courses had been very heavily oversubscribed. The OfS told us it was now looking at this issue closely and working with the universities to ensure that, notwithstanding increased numbers, quality remained good.39 36 Q 4; FSE0003 The Russell Group, 21 March 2022, paras 15, 19; C&AG’s Report para 4.27 37 Qq 1, 4; C&AG’s Report, paras 4.24–4.26 and Figure 12 38 Qq 2–3; Correspondence from Susa
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Government response AI summary
The government agrees with the Committee’s recommendation and has undertaken careful monitoring of applications and providers’ offer- making in the 2022 admissions cycle.
Read full response →
HM Treasury
21
Conclusion
Eighth Report - Financial sustainabilit…
Acknowledged
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 …
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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 reported in October 2019 that, when assessing applications for initial registration of providers, it had found student protection plans very variable in quality. Because it believed it was not in students’ interests to delay registration, it nonetheless approved a number of plans that were significantly below the standard it would expect. It identified weaknesses including providers being over- optimistic about the risks they faced, lack of detail about what specific actions providers would take, and weak refund and compensation policies. In the small number of cases where the OfS had required providers to undertake more detailed planning, it had found that existing student protection plans had been the starting point for discussion, rather than a set of actions that could be taken. We asked whether the OfS was now confident that student protection plans are fit for purpose and would adequately protect students. The OfS acknowledged that protections for students did still need further review and told us that it was committed to doing this over the course of the next 12 months as part of its next business plan.41
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Government response AI summary
The OfS introduced a new registration condition in April 2021 to strengthen its ability to ensure the rigour of a provider’s plans to protect students against the risk of the provider ceasing to deliver higher education and intends to begin discussions with the sector to …
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HM Treasury
22
Conclusion
Eighth Report - Financial sustainabilit…
Accepted
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 …
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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 it consulted quickly and introduced a new regulatory condition, effective from 1 April 2021, which enables it to impose directions on providers it considers at material risk of failure. The OfS described to us examples of the sort of directions it might make, including: requiring a provider to specify what it was doing to protect students’ interests; ensuring that students could transfer to a different institution to complete their studies; complete their intended course of study, or complete their current academic year or term and receive an exit award or credit to recognise their achievements with sufficient evidence retained to enable students to demonstrate the credit they had secured; and ensuring that complaints processes and a compensation scheme were in place.42
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Government response AI summary
The government agrees with the Committee’s recommendation and the OfS focus has been ensuring that protections are as robust as possible in those providers which might face financial distress.
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HM Treasury
23
Conclusion
Eighth Report - Financial sustainabilit…
Not Addressed
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 …
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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 the OfS first had concerns, rather than something that is suddenly triggered. It explained that, as the situation got more serious, the OfS’s expectations would increase and it would ask the provider to put plans in place if they were not already there. The OfS told us that, at the point where the OfS issued a direction, the provider would “just have to do it”.43 40 Qq 50–51; C&AG’s Report, para 4.2 41 Q 82; C&AG’s Report, paras 4.3–4.4 42 Q 65; Office for Students Regulatory notice 6: Condition C4: Student protection directions; C&AG’s Report, para 4.5 43 Qq 66–67 Financial sustainability of the higher education sector in England 15 Student satisfaction
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Government response AI summary
This response is a duplicate of the response to ID 15144 and does not address the specific question about how the OfS ensures that providers have the relevant preparations in place to access support if their financial sustainability is threatened.
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HM Treasury
24
Conclusion
Eighth Report - Financial sustainabilit…
Accepted
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. …
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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. In this survey, the proportion of then-current undergraduates saying that university offered good value for money fell from 38% in 2020 to 33% in 2021, and the proportion saying it did not rose from 48% to 54%.45 We asked the OfS whether it was concerned by these figures. The OfS told us that value for money is one of its four regulatory priorities. It agreed that the proportion of students thinking that their course was value for money was a very low figure and “absolutely” a cause for concern. The OfS assured us that it saw tackling the situation as a priority. It explained that a lot of the OfS’s work would be looking to reverse that, primarily by addressing issues of quality, where students think they are not getting the quality that they deserve.46
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Government response AI summary
The government agrees with the Committee’s recommendation, with the OfS introducing an enhanced quality regulatory regime to tackle the pockets of low-quality provision.
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HM Treasury
25
Conclusion
Eighth Report - Financial sustainabilit…
Not Addressed
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 …
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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 should be, and had found there were different views. There were some common themes and priorities, of which quality of provision was at the core, but also outcomes for students on graduation.47 It told us that quality was at the heart of what the OfS does and is one of its top three concerns, along with financial viability and sustainability, and access, participation and social mobility.48
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Government response AI summary
This response is a duplicate of the response to ID 15150 and does not address the specific finding that the OfS lacks a definition of value for money.
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HM Treasury
26
Conclusion
Eighth Report - Financial sustainabilit…
Accepted
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 …
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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 recognition of the shift to online learning required by lockdown restrictions, and restricted access to laboratories, libraries and other learning resources. Student satisfaction with learning resources had the greatest fall of factors measured between 2020 and 2021. The government’s position was that students ordinarily should not expect any fee refund if they were receiving adequate online learning and support. The government did not define what it meant by ‘adequate’, and students were not consulted on this decision nor on how it affected the value for money they were getting. The NAO found that it was likely, however, that the government’s position reduced financial stress on providers.49 44 Q 69; C&AG’s Report, para 4.7 45 Qq 33, 69, 71; C&AG’s Report, para 4.8 46 Qq 69, 71 47 Qq 29, 70, 83; C&AG’s Report, para 4.8 48 Qq 69, 83, 95 49 Q69; C&AG’s Report, paras 4.19–4.20 and Figure 11 16 Financial sustainability of the higher education sector in England
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Government response AI summary
The OfS is introducing an enhanced quality regulatory regime including student outcome thresholds and new registration conditions covering students’ academic experience; it is also considering how it measures value for money and is reviewing blended learning.
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HM Treasury