Source · Select Committees · Public Accounts Committee
Recommendation 20
20
The Department told us it had not modelled the impact on providers of grade inflation...
Conclusion
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
Government Response
Not Addressed
HM Government
Not Addressed
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.