Recommendation 3

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.