Source · Select Committees · Public Accounts Committee
Recommendation 19
19
As most degree courses last three or four years, there is an ongoing negative impact...
Conclusion
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
Government Response
Not Addressed
HM Government
Not Addressed
6: PAC conclusion: The Department failed to adequately assess the current and future financial impacts on providers of disruption to A-level assessments. 6.: PAC recommendation: Learning from the disruption to the higher education market during the COVID-19 pandemic, the Department 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. 6.1 The government agrees with the Committee’s recommendation. Target implementation date: September 2022 6.2 The department has undertaken careful monitoring of applications and providers’ offer- making in the 2022 admissions cycle. Ahead of the 2022 cycle, the department engaged extensively with key higher education stakeholders, including undertaking scenario planning around the interaction between A-level grades and higher education capacity. Planning early in the cycle and building resilience into offer-making strategies is a vital part of contingency planning for higher education providers. The department has encouraged providers to be thoughtful when setting offer requirements and to consider any additional measures which would allow them to plan as effectively as possible, communicating openly with students in the process. 6.3 The impact of changes in student recruitment on the finances of higher education providers is a key feature of the OfS’s regular monitoring of provider financial sustainability. It closely monitors the data from the University and Colleges Admissions Service (UCAS), along with other information, through the recruitment cycle. It models the potential implications on income to guide its understanding of the capacity of providers to manage such change in the short term. 6.4 The OfS, the department and other interested government departments meet regularly to discuss risk factors and trends related to the medium- and long-term financial sustainability of the higher education sector. Additional data sharing, analysis and scenario planning is undertaken as appropriate.