Select committee inquiry
Investigation into student loans issued to those studying at franchised higher education providers
Closed
What the inquiry looked at
“Higher education providers can create partnerships, or ‘franchises’, with other institutions to provide courses on their behalf. These franchised providers are not required to register with the Office for Students (OfS), which regulates higher education. Lead providers keep responsibility for teaching quality and protecting students’ interests. In 2022 and 2023, the Student Loans Company (SLC) and the Office for Students (OfS) identified fraudulent student loan claims involving a small number of franchised higher education providers, exposing systemic risks relating to franchised providers. The Government Internal Audit Agency has concluded that controls in this area were not strong enough, leaving the student loan system exposed to further fraud and abuse. In 2018, the Committee warned that serious allegations of fraudulent practices at alternative providers showed that the Department for Education had not done enough to close down opportunities to play the system, allowing the sector to become a ‘chancer’s charter’. The report expected the then new OfS to learn these lessons when it took over responsibility for the alternative provider sector from the DfE. Based on a National Audit Office (NAO) study on the controls over loans issued to students at franchised higher education providers, the Committee will take evidence from the DfE, OfS and the SLC on subjects including effective oversight of the sector, and fraud detection and prevention. If you have evidence on these issues, please submit it here by 23:59 on Sunday 11 February 2024. Please look at the requirements for written evidence submissions and note that the Committee cannot accept material as evidence that is published elsewhere. Please note that the Committee is unable to investigate individual cases. This inquiry was closed due to the 2024 General Election.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
In the committee's words, from the summary of Twenty-Eighth Report - Student loans issued to those studying at franchised higher education providers ↗
Universities and other higher education providers are free to conduct commercial activities alongside teaching and research, and may create partnerships, also known as franchises, with other institutions to provide courses on their behalf. In the 2022/23 academic year, the Student Loans Company (SLC) paid £1.2 billion in loans for students to study at franchised providers. However, a lack of government oversight over these providers exposes the student finance system to exploitation from systemic and organised fraud and abuse. In 2022/23, detected fraud involving franchised providers totalled £2.2 million, 53% of the £4.1 million fraud identified by SLC.
Higher education providers (lead providers) are responsible for teaching quality and student experience at their franchisees. However, the Department for Education (DfE)
has insufficient assurance they are adequately overseeing their franchisees, a model that has been increasingly adopted. The number of students at franchised providers more than doubled between 2018/19 and 2021/22, to 108,600 (4.7% of all students). We are concerned that, for some providers, reliance on franchising is material to their financial sustainability. Some providers assume student numbers will continually grow to remain viable, but we are not persuaded that this is a credible assumption for them all.
It is extraordinary that lead providers can retain such a high proportion of tuition fees – in some cases likely to be between 12.5% and as much as 30%. The Office for Students (OfS) described some of the tuition fee amounts retained by lead providers as “quite shocking”. With franchised providers also taking profits, a significant proportion of student funding may not be spent on giving students the best possible university experience and better educational outcomes. What makes this even more unpalatable is the lack of public information, which means students do not necessarily know if they are studying at a franchisee, how much is being spent on their teaching, or how the quality of teaching compares to other providers.
Regulatory oversight of the higher education system, including franchising, is complex, with gaps in responsibilities. The DfE has overarching responsibility, but OfS and SLC also share responsibility to prevent, detect and address fraud. As we have reported before, tackling fraud cannot be left to counter-fraud technical experts – it must be embedded into the design and delivery of services. It is encouraging that the responsible organisations now recognise the issues highlighted by the NAO, and we have seen some progress. But more is needed to address fundamental problems with the system and embed the recent positive changes within organisational cultures and formal processes.
What the government said
The government responded on 11 July 2025.
Summary written by Accountability Index from the government's response.
The government states that it "agrees with the Committee's recommendation" on each of the recommendations set out, with target dates of between autumn 2024 and December 2025 for those not already implemented.
- On transparency, the government will ask the OfS "to consider requiring" providers to publish the proportion of tuition fees they retain and for what purposes, "when the OfS next makes changes to ongoing conditions of registration".
- On the proportion of fees lead providers could reasonably retain, the OfS "does not consider it possible to set out a standard proportion", but will "review its position on this".
- On oversight, the government is "proposing to consult" on strengthening oversight of partnership delivery and "will set out these proposals by January 2025". It will develop options for legislative change "if required".
- On risk and roles, the response says a data sharing protocol and joint incident response plan "are now in place", and that attendance guidance was published in May 2024.
Read the government's response ↗ Read the report ↗ Report an error
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 10 January 2024 to 11 July 2025.
- Oral evidence 26 Feb 2024
- Report 24 Apr 2024
- Government response 11 Jul 2025
- Correspondence 18 Mar 2024
What it recommended 9 recommendations · 18 conclusions
2Publish overview of higher education delivery models and define reasonable tuition fee retention for lead providers.
Recommended (the committee's words)
To remain financially viable, some providers may be incentivised to increase student numbers through franchising, which creates risks for students and taxpayers. In 2022, the Committee highlighted the risk of providers being financially vulnerable. OfS analysis, published in May 2023, suggests some rely on increases in student numbers to remain viable. Some providers have used franchising to increase their student numbers, depending on this income. A small number of franchised providers have expanded very rapidly. The C&AG’s report explained that lead providers could be taking between 12.5% and 30% of tuition fees paid in respect of students at their franchised providers. OfS cannot access these contracts, but expressed shock at the figures, and voiced concerns about the impact this might have on teaching quality. Some providers use recruitment agents to increase student numbers. Because these recruitment practices are unregulated, agents may not make it clear what students get for their money, and there are incentives to recruit student numbers rather than ensuring students enrol on the most suitable courses. Universities UK has developed a quality framework, that it has now committed to review and update as needed. Recommendation 2a) Within the next 12 months, OfS should publish a more systematic overview for the higher education sector sharing its insights on where providers have adapted their delivery models, and the emerging risks providers then need to manage. b) OfS should also set out what proportion of tuition fees lead providers could be seen as reasonably retaining in relation to the student services they remain responsible for, and consider these financial arrangements in the scope of any investigations it carries out into the quality of franchised provision.
3Strengthen direct and indirect oversight of franchised higher education providers to ensure standards.
Recommended (the committee's words)
The current regulatory system does not ensure sufficient oversight over franchised providers. OfS publishes conditions that registered providers must meet, and continue to meet. These are designed to protect students, assure quality, and ensure 6 Student loans issued to those studying at franchised higher education providers good governance. But only lead providers need to be registered with OfS, and two-thirds of franchised providers are unregistered. A few lead providers became franchisees after having been refused registration or withdrawing from the process, raising concerns about whether they would meet the conditions. Teaching quality and welfare for students at franchised providers remain the responsibility of lead providers, but we are not convinced that all providers fulfil these responsibilities equally well. DfE and OfS insist that they are reiterating to lead providers their responsibilities for franchisees, and Universities UK is developing a new framework to encourage improvements and consistency. Until recently, OfS has not explicitly considered franchise agreements, or the robustness of lead providers’ oversight of franchisees, when assessing compliance with registration conditions. It will now consider whether a provider has a franchise arrangement when selecting providers for review. DfE says it is actively considering whether franchised providers should be registered, and that it hopes to decide before summer this year. Recommendation 3: DfE should set out what it will do to strengthen direct and indirect oversight of franchised providers to ensure they meet the standards expected for an organisation receiving taxpayers’ money. This could include requiring all providers to register with the OfS in some form or strengthening the powers of OfS and SLC where they have concerns.
4Agree a shared risk culture and appetite for student funding across DfE, OfS and SLC.
Concluded (the committee's words)
DfE, OfS and SLC recognise they have a shared responsibility to tackle fraud and abuse of student funding although this is not yet fully embedded in their ways of working. In our July 2023report on tackling fraud and corruption across government, we concluded that tackling fraud cannot be left to counter-fraud technical experts. Senior officials across government must demonstrate leadership, set the tone, and build in preventative approaches. DfE, OfS and SLC acknowledge that they missed an opportunity to intervene early for one of the case studies cited in the C&AG’s report. With better information sharing and awareness of the risks, DfE might have acted differently. DfE, OfS and SLC now meet regularly in a newly created group to share intelligence and consider risk. Recommendation 4: DfE, OfS and SLC should agree a shared risk culture and risk appetite, supported by a formal reporting framework (including targets for fraud prevention and reduction), and write this into each organisation’s risk register.
5Clearly articulate DfE, OfS, SLC roles and responsibilities for student funding fraud prevention.
Concluded (the committee's words)
Despite the complex regulatory system, roles and responsibilities for fraud prevention, detection and intervention are undefined. The system for paying loan monies and overseeing providers is complicated, involving multiple bodies. The Government Internal Audit Agency (GIAA) and C&AG both found that there were gaps between DfE, OfS and SLC responsibilities, that the boundaries between bodies were unclear, and that bodies had different interpretations about where the boundaries lay. OfS has a general responsibility for protecting public funds, but no explicit responsibility in respect of student loan fraud. SLC says that it has good information to tackle individual level fraud, which has been enhanced by membership of the National Economic Crime, but acknowledges that it has less knowledge, and can intervene less, with providers. SLC also has limited power to suspend payments, even where fraud suspected, without clear direction from DfE. Student loans issued to those studying at franchised higher education providers 7 Recommendation 5: DfE, OfS, SLC’s roles and responsibilities should be clearly articulated and written into organisational system statements and operating protocols.
6Clarify definitions of student attendance and meaningful course engagement, publishing guidance swiftly.
Concluded (the committee's words)
Although SLC uses data on attendance to show student’s course engagement, and therefore pay loans, there remains no agreed definition of what constitutes attendance or engagement. SLC requires providers to confirm that students are attending their courses before it will make tuition fee and maintenance payments. However, DfE, SLC, OfS and providers have no commonly agreed definition of what constitutes student attendance or engagement, or how it should be evidenced. The NAO recommended that DfE should develop guidance for providers explaining what constitutes meaningful student engagement and how it expects providers to self-assure data. Higher education relies heavily on self-directed learning, and DfE recognises that attendance might mean different things, at different institutions or for different courses. Universities UK has nonetheless recognised the need to revisit the definition of attendance and engagement, and recommended DfE engage with the sector to take this forward. DfE accepts the need to develop guidance, and hopes this will be introduced before summer this year. Recommendation 6: DfE should work quickly to clarify what constitutes student attendance and meaningful engagement with courses, ensuring sufficient engagement with providers, and publish guidance as soon as possible. 8 Student loans issued to those studying at franchised higher education providers 1 Achieving student outcomes through franchised provision
1Committee took evidence on student loans for franchised higher education providers.
Concluded (the committee's words)
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Education (DfE), Office for Students (OfS) and Student Loans Company (SLC) on student loans issued to those studying at franchised higher education providers.1
7OfS lacks transparency regarding performance of unregistered franchised providers and their partnerships.
Recommended (the committee's words)
OfS publishes information on a registered provider’s performance that shows whether students have completed their course and progressed into work or further study. OfS publishes information for each lead provider and any registered franchised provider. Around two-thirds of franchised providers are not registered with OfS. While lead providers give OfS data for all students, including those at franchised providers, OfS does not currently publish information for unregistered franchised providers, and users cannot distinguish providers where a lead provider has multiple franchising partnerships.14
8Some franchised higher education providers exhibit significantly poorer student attainment and progression rates.
Concluded (the committee's words)
OfS told us that, for full-time students doing first degree subjects, it would normally expect at least 80% of students to complete their course and progress to further study or professional employment. Across the higher education sector, around 90% of students complete and progress, compared to just over 80% at franchised providers. OfS told us that there is also variation in attainment and progression for students studying at different franchised providers. Some have continuation rates well above the 80% threshold, but others are in the 60% to 70% range. We asked DfE and OfS to explain what they were doing to ensure better outcomes for students studying at franchised providers. OfS conceded that performance for franchised providers was so far below its 80% benchmark that it prompted regulatory questions. OfS told us that it will be looking in more detail at outcomes for students in particular partnerships for certain providers.15 It assured us 7 Q70 8 Q10 9 Q69, Correspondence from DfE to PAC, dated 8 March 2024 10 Qq55, 57 11 Q28 12 Universities UK (ISL0002) 13 Q55 14 C&AG’s Report, paras 1.10, 1.15 15 Qq28–29 10 Student loans issued to those studying at franchised higher education providers that it is increasing its investigatory work on quality, and that it has been posing “sharp questions” for vice-chancellors.16 It told us that it would be looking particularly hard at quality in franchised providers in the coming years.17
9Existing quality guidance for franchised higher education provision is currently undergoing review and updates.
Concluded (the committee's words)
Universities UK highlighted that, while it is no longer a regulatory requirement in England, the 2018 Quality Code for Higher Education has advice and guidance on delivering quality within franchised provision. With the Quality Assurance Agency for Higher Education, it has been informing future iterations of the guidance which is currently under review.18 The Office of the Independent Adjudicator also told us that it would shortly be publishing an updated version of its own good practice guidance.19
10Unregulated use of agents and incentives in student recruitment risks mis-selling and inadequate oversight.
Concluded (the committee's words)
Some providers use agents or offer financial incentives to recruit students, practices that are not regulated.20 DfE told us it is planning to look at the use of agents, focusing particularly on whether there is any mis-selling of courses from agents to individuals, such as promising individuals guarantees on to courses.21 It said it has started a rapid investigation into the use of agents, both domestically and internationally, to protect students’ interests and, more recently, has entered into a partnership with National Trading Standards, which is able to enforce consumer law.22 We also heard that Universities UK is reviewing the Agent Quality Framework (AQF) and making recommendations to identify and address bad practice, including a commitment to ensuring that all its members sign up to that framework.23 DfE told us weaknesses in lead providers’ controls can suggest an insufficient grip over the recruitment activity of their franchised providers, including where agents are used.24 Transparency over franchise arrangements
11Lack of transparency regarding tuition fee retention by lead providers in franchise arrangements.
Recommended (the committee's words)
The C&AG’s report indicated that some lead providers retained between 12.5% and 30% of tuition fees received for courses at their franchised providers.25 DfE confirmed that the information is not in the public domain and that students are not always made aware of these arrangements. DfE told us that it is for the lead provider to agree the arrangement they want with their franchisee, but added that it is questionable for that not to be transparent and open. DfE assured us that it is currently considering what new transparency requirements could be introduced. DfE added that it is also considering the role of the OfS within this context.26
12High tuition fee deductions by lead providers impact student spending, quality, and support access.
Recommended (the committee's words)
We challenged DfE whether this level of deduction from tuition fees was acceptable. DfE emphasised that the fee taken by the lead provider should represent the value added by that lead provider.27 While noting that there is a range, OfS described some of the tuition fee amounts retained by lead providers as “quite shocking”. It told us it is concerned about quality since, if the lead provider is taking percentage from tuition fees, and the delivery 16 Q49 17 Q29 18 Universities UK (ISL0002) 19 Office of the Independent Adjudicator for Higher Education (ISL0003) 20 C&AG’s Report, para 1.17 21 Q34 22 Qq30, 36 23 Q34, Universities UK (ISL0002) 24 Q36 25 C&AG’s Report, para 1.7, second bullet 26 Qq48–50 27 Q47 Student loans issued to those studying at franchised higher education providers 11 provider is generating a profit or surplus, this reduces the amount spent on students.28 The Office of the Independent Adjudicator told us, in written evidence, that it has seen instances where students are not clear that the provider they are studying at, and the awarding organisation, differ. It had also seen that students and sometimes providers are not always clear what access they have to their lead provider’s students’ union and support.29 Providers’ financial sustainability
13Increasing financial pressures and varied performance affect higher education sector sustainability.
Concluded (the committee's words)
In June 2022, we reported that higher education providers face long-term, systemic, pressures on their financial sustainability and viability.30 We asked about the sector’s current financial sustainability. DfE referred to the most recent OfS report, published in May 2023, which concluded that the overall financial position of the sector is sound although there continues to be significant variation between providers. OfS added that the extent of variation has increased and that some providers are being squeezed in terms of student recruitment. Financial performance in 2022–23 was weaker than the year before, and weaker than had been seen over historic trends for the sector, but consistent with the sector’s forecast last year. For the current year a greater number of providers are forecasting deficits and weaker cash flows, suggesting a further squeeze, before a slower recovery than previously anticipated. OfS emphasised that these forecasts, including the slow recovery, are underpinned by assumptions around student numbers growing. For a small group of providers, income from franchise arrangements is material to their sustainability. DfE added that, while forecasting for the sector as a whole looked to be reasonable, there is quite a lot of variation in what it described as optimism bias in some providers.31
14Significant growth in student numbers at franchised providers concentrated in few institutions.
Concluded (the committee's words)
Between 2018/19 and 2021/22 the number of franchised providers increased 6%, but the number of students attending them more than doubled from 50,440 (2.5% of all students) to 108,600 (4.7% of all students). Some 63,680 (59%) of the 108,600 students enrolled on business and management-related courses. The increase in students was concentrated across a few providers - eight of the 114 lead providers increased their student numbers by more than 1,500, making them responsible for 91% of the four-year growth. As a result, in 2021/22, these eight providers were responsible for 58% of all students at franchised providers.32 28 Q49 29 Office of the Independent Adjudicator for Higher Education (ISL0003) 30 Committee of Public Accounts, Financial sustainability of the higher education sector in England, Eighth Report of Session 2022–23, HC 257, 15 June 2022 31 Qq42–44 32 C&AG’s Report, para 1.6 and Figure 2 12 Student loans issued to those studying at franchised higher education providers 2 Preventing and detecting fraud and abuse Oversight of franchised providers
15Inadequate governance and safeguards by lead providers over franchised institutions risk fraud and misuse.
Recommended (the committee's words)
DfE recognises that the franchising model creates risks, given it encourages providers to do new things, but accepts that some lead providers have not taken their responsibilities for governance and safeguards in their franchised providers as seriously as within their own institutions.33 The regulatory framework relies on lead providers’ controls over franchised providers. They have responsibility for ensuring franchised providers have adequate controls to mitigate the risk of student loan funding being paid out inappropriately.34 DfE emphasised to us that it has told lead providers they have a clear responsibility in respect of fraud or misuse of funds at their franchised providers. DfE added that OfS has written to them and met with the chairs of audit committees and vice-chancellors.35 OfS told us it can strengthen how it expresses its management and governance requirements, making clearer lead providers obligations for good and effective controls over franchises.36 More widely, evidence from the Office of the Independent Adjudicator is that many franchisees are not always fully aware of their responsibilities, and that there needs to be a better understanding of terminology, responsibilities and roles in franchise relationships.37
16Numerous franchised providers operate unregistered, including some previously denied OfS registration.
Recommended (the committee's words)
There is no statutory or regulatory obligation on franchised providers to register directly with OfS. The lead provider retains responsibility for a franchised provider’s compliance with academic quality, financial sustainability, governance and accountability standards. In 2021/22, 229 (65%) of the 355 franchised providers were not registered with OfS. However, there were instances where OfS had not approved providers’ applications to become registered, but those providers subsequently went on to provide courses, as unregistered providers, through franchise arrangements.38 OfS confirmed that it had refused registration to around 20 providers, of which it could identify two now operating as franchise providers. Other franchised providers had started to seek registration but withdrew before OfS had reached a decision on their registration.39 OfS added that it is ‘very interested’ in internal management and governance controls within lead providers, particularly where delivery providers are not registered, and that it recognised it could strengthen regulatory requirements.40
17DfE considers requiring all franchised higher education providers to register with OfS.
Recommended (the committee's words)
DfE told us that even if a provider could not meet all the registration criteria it might still be a good franchisee. DfE recognised, equally, that if providers do not pass that threshold, it would be right to question them providing a service for students.41 DfE told us that it is actively considering whether to impose additional controls, such as requiring all providers to be registered with OfS.42 Universities UK, in written evidence, broadly 33 Q21 34 C&AG’s Report, para 15 35 Qq18, 53, 59 36 Q57 37 Office of the Independent Adjudicator for Higher Education (ISL0003) 38 Qq56, 71 39 Qq71–72 40 Q54 41 Q59 42 Qq37–38, 56 Student loans issued to those studying at franchised higher education providers 13 supported this proposal, saying that this additional regulatory oversight would provide further assurances, not only to students and the public, but also to universities when they are looking to identify providers to work with.43
18Universities UK develops new governance framework for providers to detect unusual or suspect behaviour.
Concluded (the committee's words)
Universities UK described how it is developing a new governance framework to support providers in identifying the ‘triggers’ (through data monitoring and/or observation) which can alert them to potentially unusual or suspect behaviour. It will set expectations that providers have robust policies and systems in place to monitor, record and act on data.44
19Current lack of clear guidance on student attendance for loan payments is unsatisfactory.
Recommended (the committee's words)
We asked why, considering that student loan payments are made based on attendance data, there is no guidance on what constitutes attendance.45 DfE noted that ‘effective’ course attendance and engagement will vary by course and institution. DfE pointed to, for example, Open University students for whom there would be very different expectations. Different courses will have different requirements that suit different students in, for example, the extent to which they need to be physically present or how frequently they must submit work. DfE nonetheless agreed that the current situation is unsatisfactory.46 It told us that it had been discussing with the higher education sector a draft definition for attendance and engagement, which took a balanced and proportionate approach. It expects to publish this before summer.47 Universities UK recommended DfE engage with the sector to understand where there might be gaps in current approaches and further guidance may be necessary.48 Clarity over responsibilities relating to potential fraud and abuse
20Fraud involving franchised providers makes up over half of all detected student loan fraud.
Concluded (the committee's words)
The value of detected fraud in 2022/23 involving franchised providers totalled £2.2 million, 53% of the total £4.1 million fraud SLC identified.49 In our July 2023report on tackling fraud and corruption across government, we concluded that tackling fraud cannot be left to counter-fraud technical experts.50 We asked DfE whether it is taking fraud and abuse of student funding sufficiently seriously. DfE assured us that it sees fraud as a collective, as well as an individual, responsibility.51 Both DfE and SLC also emphasised that organisational culture is important, beyond individual organisations’ rigidly defined responsibilities.52 OfS added that, within the constraints of its current powers, it has been working collaboratively with DfE and SLC. DfE said that it had been helpful to get a broader understanding of where risk sits in the system, both for DfE itself and to play back to the sector so the system has a shared view of the issues.53
21Detected fraud value at franchised providers increased disproportionately despite stable student numbers.
Concluded (the committee's words)
We asked why the value of detected fraud at franchised providers has increased almost sevenfold, from £329,831 in 2018/19 to £2,163,459 in 2022/23, when the number of 43 Universities UK (ISL0002) 44 Universities UK (ISL0002) 45 Qq 39–41, 74; C&AG’s Report, para 2.19 46 Q 74 47 Qq39, 41, 76 48 Universities UK (ISL0002) 49 C&AG’s Report, para 2.3 50 Committee of Public Accounts, Tackling fraud and corruption against government, Sixty-Ninth Report of Session 2022–23, HC 1230, 8 September 2023 51 Qq10, 51, 65, 77 52 Qq12, 52 53 Qq54, 77 14 Student loans issued to those studying at franchised higher education providers students at these providers has not increased at the same rate.54 SLC told us that it shared our concern at what appears to be a disproportionate increase in the franchised element of individual-level fraud detected, but emphasised that this is driven by a small number of franchised providers.55 DfE accepted that some lead providers had not taken their responsibilities for governance and safeguards in their franchised provision as seriously as within their own institutions.56
22Formal fraud enforcement roles for SLC and OfS are lacking and need clarification.
Concluded (the committee's words)
The C&AG’s report noted that GIAA concluded that neither SLC nor OfS have a formal fraud enforcement role and highlighted the challenges in gaining assurance over the legitimacy of funding applications.57 DfE told us that it is looking at formal roles and responsibilities, including whether aspects needed to be strengthened or where it would be good to make action easier to take. DfE told us that, for individual-level fraud SLC has adequate powers to stop and recover payments, and good information sharing arrangements. DfE said it is more concerned about misuse of student funding, where the issue and the framework are not as clear-cut. It recognised that there are places where responsibilities and obligations could be clearer.58
23OfS significantly increased regulatory activity and reporting requirements for specific higher education providers.
Concluded (the committee's words)
OfS told us that it has significantly stepped up its regulatory activity for certain providers that feature in the C&AG’s report. This includes additional independent audit to test whether lead provider’s internal controls work effectively in relation to franchise providers. OfS said it has also imposed additional mandatory reporting requirements covering, for example, changes to partnerships, whistleblowing allegations or any concerns about data provided either to OfS or SLC.59 Data sharing
24Increased investment in data analytics by SLC enhances detection of student loan fraud.
Concluded (the committee's words)
SLC told us that one reason behind increases in the value of detected fraud was its investment in using data to detect issues.60 SLC uses a range of data, not just its own. To help with identifying individual-level fraud, it is now part of the National Economic Crime Centre, so receives public and private sector intelligence, and links in with the Public Sector Fraud Authority.61
25Initial information sharing failures between OfS, DfE, and SLC hindered collective decision-making.
Concluded (the committee's words)
The C&AG’s report identified that a provider had raised concerns with OfS about a franchised provider in May 2022, but DfE was not informed of the issue at the time.62 We asked witnesses why DfE was not told. OfS said that, in looking back, this is clearly a learning case, and it would work differently in future. When the provider first notified OfS of concerns, the full extent of the issues was not yet clear. When the scale of the issues became clearer, in autumn 2022 and into spring 2023, OfS brought DfE colleagues into the loop at that time.63 DfE told us that the point in the chronology that it found most worrying was that it was unclear whether, over the summer, the OfS and SLC had the same information and understanding of the situation. DfE, SLC and OfS recognise a lost 54 Q21, C&AG’s Report, Figure 8, Figure 9 55 Qq22–23 56 Q21 57 C&AG’s Report, para 2.24 58 Qq52–53, 73 59 Q18 60 Q21 61 Qq11, 65 62 C&AG’s Report, para 2.9 63 Q13 Student loans issued to those studying at franchised higher education providers 15 opportunity to put all the information together and make a collective decision on how to manage the situation. DfE acknowledged it gave cause for concern as, with different facts, the three bodies might have made a different decision.64
26DfE established enhanced information sharing protocols and groups in response to past failures.
Concluded (the committee's words)
DfE explained that, in response, it has established more detailed information sharing protocols. DfE, SLC and OfS meet regularly to share information earlier, including information which may not have been previously shared. DfE told us it also has an intelligence and data sharing group that meets frequently, focusing on individual cases, which it had set up in response to lessons learned from the cases described in the C&AG’s report.65
27Information sharing protocols between DfE, OfS, and SLC prevent systemic fraud risks.
Concluded (the committee's words)
DfE recognised the advantages in having transparency between the three bodies, which enables them to take a collective view across an issue.66 OfS noted that there are some legal constraints on how it can share information, so it needs to work within its legal parameters. However, it now has clear information sharing protocols, from OfS to SLC and vice versa, and from both SLC and OfS into DfE. OfS concluded that all three are confident that they would not end up in the position described in the C&AG’s report again.67 SLC assured us that while it has direct accountability for detecting individual fraud, if it identifies other risks, for example within a provider, something more systemic, or concerns linked to organised crime, it has a duty of care to share that information.68 64 Qq14, 16 65 Qq16–17, 38 66 Q77 67 Q14 68 Qq11, 64 16 Student loans issued to those studying at franchised higher education providers
Evidence
Oral evidence sessions 1
- 26 Feb 2024Investigation into student loans issued to those studying at franchised higher education providers4 witnesses, listed belowparliament.uk ↗
Who gave evidence 4 witnesses
- Chris LarmerCEO, Student Loans Company
- Julia KinniburghDirector General for Skills, Department for Education
- Susan Acland-HoodPermanent Secretary, The Department for Education
- Susan LapworthChief Executive, Office for Students