Source · Select Committees · Public Accounts Committee
Recommendation 15
15
Deferred
Inadequate governance and safeguards by lead providers over franchised institutions risk fraud and misuse.
Recommendation
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
Government Response Summary
The government is proposing to consult on proposals to strengthen oversight of partnership delivery in higher education, working closely with the OfS, and will set out these proposals by January 2025. They will also develop options for legislative change, if required, for a more robust model for protecting public money.
Government Response
Deferred
HM Government
Deferred
3.1 The government agrees with the Committee’s recommendation. Target implementation date: January 2025 3.2 Higher education is of fundamental importance to the education system. British higher education providers are amongst the most highly regarded in the world, supporting learners to achieve their potential, providing excellent opportunities and driving economic growth. 3.3 The government is committed to protecting the use of public funds in higher education. The Department for Education (the department) recognises the need to strengthen the higher education regulatory regime so there is greater oversight of franchised providers. 3.4 The government is proposing to consult on proposals to strengthen oversight of partnership delivery in higher education, working closely with the OfS, and will set out these proposals by January 2025. 3.5 In the longer term, the department is clear that work needs to be done towards a more robust model for protecting public money. The department’s view is that this is likely to involve a more substantial role for the OfS than at present. The department will be developing options for legislative change, if required.