Most English providers to be unregulated after OfS rules redrawn

Regulator bows to pressure to scrap ‘basic’ regulation status but stands firm on senior pay reporting rules

March 2, 2018
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The Office for Students has dropped plans for a “basic” category of regulation for English education providers whose students cannot claim state-backed loans, despite concerns that it will leave thousands of students unprotected.

At the launch of its new regulatory framework in Westminster on 28 February, the sector’s new regulator confirmed that it had abandoned its idea of charging some alternative providers just £1,000 a year for accreditation to the OfS.

Under plans proposed in October, these institutions would not have gained access to government funding or a Tier 4 Home Office licence, but would have met certain minimal regulatory requirements. The move was designed to bring many of the hundreds of legal, but unregulated, small providers of tertiary education into the UK’s regulatory system.

However, Nicola Dandridge, chief executive of the OfS, told delegates that many of the 297 consultation responses had raised concerns that the basic category could be “seen as some kind of kitemark so it would be misleading…for students”.

“We have committed to work with these providers to work out how we can support these students,” added Ms Dandridge.

According to the OfS’ summary of consultation responses, there had been “widespread calls” for “additional conditions to protect students’ interests, such as transparency, student protection plans [and relating to] student transfer”, while some had argued that degree-awarding powers should never be available to registered basic providers.

However, Nick Hillman, director of the Higher Education Policy Institute, said the cancellation of the basic category will mean “there will now be more unregulated than regulated providers” – with an estimated 602 providers likely to stay outside the system compared with 531 included within it by 2019-20.

Dropping the basic category was “likely to increase the number that opt to be entirely unregulated” because they do not want to be subject to a “costly and bureaucratic process” of regulation, added Mr Hillman in a Hepi blog. Having more unregulated providers would run contrary to the original intention of last year’s legislation, which was to deliver “a level playing field for higher education providers of all types”, he added.

Speaking at the OfS launch conference, Ms Dandridge also explained that the OfS had not acceded to requests by universities to row back on its proposals for senior pay reporting, saying that it had adopted a “robust but flexible response” to these complaints.

Almost half of the 103 higher education institutions that responded to the consultation said that they disagreed on plans that would allow the OfS to fine universities which failed to disclose full details of the remuneration packages of all staff earning above £150,000, which would include their job title, the size of any bonuses and their pension arrangements.

However, a justification for higher salaries would be required only for the “head of the provider and the provider’s most senior staff”, rather than all highly paid staff, such as professors, explains the OfS’ new framework.

Some universities raised concerns that the reporting conditions “might threaten institutional autonomy”, and complained that the £150,000 threshold was “arbitrary” and would increase the administrative burden on universities, according to the response summary – but Ms Dandridge pointed out that “over 80 per cent of student representatives” backed the plans.

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