Higher Education Partnership Delivery: Strengthening Oversight

My right hon. Friend, the Minister of State, Minister for Skills (Baroness Smith of Malvern) has made the following statement.

I am today announcing the publication of a consultation which sets out the Government proposals to strengthen oversight of partnership delivery in higher education. This consultation is one of the actions the Government are taking to protect public money. It was developed in response to the recommendations made by the National Audit Office and the Public Accounts Committee last year about the regulatory oversight of student loan funding for study at franchised providers.

English higher education providers are amongst the most highly regarded in the world, supporting learners to succeed for themselves, their communities and our country, and driving the economic growth we need. They also play a key role in this Government’s missions to break down barriers to opportunity and to drive economic growth. Higher education can open the door to opportunity for many, but only where that education is good quality and subject to effective management and governance.

The Office for Students (OfS) is the regulator responsible for higher education in England. Higher education providers must register with the OfS for their courses to be designated for publicly funded student finance. Some registered providers subcontract or “franchise” delivery of courses to partners that are not subject to the same regulatory requirements. Whilst there are many good examples of franchised provision being used to expand access and participation and deliver high quality provision, franchised higher education is one area where we have seen too many examples of abuse of public money in recent years and some concerning indicators of poor quality.

Students make a significant investment in higher education and they deserve to have confidence that in return they will receive excellent teaching, strong support and value for money. Taxpayers too deserve to know that the public money invested in student loans to help students access higher education is properly protected from fraud and misuse.

The proposals we are consulting on aim to bring franchised providers under greater scrutiny to help safeguard against the risks of misuse of public money and low-quality provision. This consultation proposes a requirement that franchised providers with 300 or more students should be directly regulated by the Office for Students if they want their students to access student loan funding.

The Government are committed to supporting innovation and competition. We recognise that franchising can provide smaller, innovative providers with the opportunity to enter the higher education sector. Setting a size threshold will still allow new and smaller providers who may find registration disproportionately burdensome to access the higher education market.

Whilst the OfS has currently paused registration of new higher education providers to support the sector with financial sustainability concerns, we expect this pause to cease before the Department’s proposed changes would come into effect.

The Office for Students announced last September that it had opened formal investigations into some universities’ and colleges’ subcontractual arrangements and that their next cycle of quality assessments would largely focus on the academic experiences of students studying through subcontractual arrangements. The Office for Students is consulting on proposals to strengthen expectations on providers wishing to join its register. This includes strengthening requirements that protect student interests and ensure effective governance and management of higher education. It has also communicated plans to publish student outcomes for all subcontractual partnerships on an annual basis from this year.

As a whole, I believe that these proposals will bring about the changes that are necessary to ensure that student loan funding is protected from misuse and students studying at franchised providers can have confidence that their courses are subject to rigorous quality requirements.

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