Source · Select Committees · Public Accounts Committee
Recommendation 21
21
Acknowledged
Detected fraud value at franchised providers increased disproportionately despite stable student numbers.
Conclusion
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
Government Response Summary
The government acknowledges the increase in detected fraud at franchised providers and highlights existing collaborations and protocols between DfE, SLC, and OfS, including data sharing and incident response plans, while considering further improvements.
Government Response
Acknowledged
HM Government
Acknowledged
4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 The department, the Student Loans Company (SLC) and the OfS all share a low-risk appetite with respect to protecting student funding from fraud and misuse. The OfS is an independent body and must set its own risk appetite, in line with its requirements to act proportionately, but, like all public bodies, has a low-risk appetite for fraud and misuse of public money. All three organisations are committed to agreeing protocols for identifying and mitigating risk in the Higher Education (HE) system, working together but each playing their individual role in addressing providers of concern. 4.3 A data sharing protocol among DfE, OfS and SLC, and a joint incident response plan, are now in place. 4.4 The department and SLC already collaborate on setting risk appetite and on risk management arrangements. DfE attend SLC Audit & Risk Committee (ARC) and Board. SLC provides reports on fraud prevention and reduction to ARC and works with the DfE to consolidate quarterly fraud reports to the Cabinet Office, the Public Sector Fraud Authority (PFSA) and DfE ARC. Additionally, SLC agrees its fraud savings target annually with the DfE / PFSA. 4.5 The OfS has a strategic risk on its risk register, relating to potential concerns that providers do not have adequate internal controls over the data they supply to the SLC and the OfS, leading to risks to public funding and compliance with OfS’ conditions of registration. Through its own fraud risk arrangements, the OfS has identified and manages risks relating to fraud for the grant funding for which the OfS itself is responsible. The OfS will continue to undertake regulatory work in relation to registered providers, focusing on quality and management and governance; and will do so on the basis of the risk appetite set by the OfS board. 4.6 The department is considering the need for further improvements, including legislative changes to roles and responsibilities, if required.