Recommendations & Conclusions
6 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
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
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
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