New inquiry launched into the work of the Office for Students

• Call for evidence
• Inquiry: The work of the Office for Students
• Industry and Regulators Committee

Background

The Industry and Regulators Committee has launched an inquiry into the Office for Students (OfS)—the regulator of higher education in England.

The inquiry will consider whether the statutory duties of the OfS are clear and examine its performance against those duties since its establishment. It will look at how the OfS’ regulatory framework has developed since its inception, its independence from and relationship with the Government, and whether it has the necessary expertise and resources to carry out its functions.

The inquiry will also examine the OfS’ work in relation to the financial sustainability of the higher education sector. This will include consideration of the extent of systemic financial risks in the sector, such as the reliance of some universities on overseas students, how the OfS considers and manages these risks, and the potential consequences of and processes for the failure of providers.

Chair's comments

Lord Hollick, Chair of the Industry and Regulators Committee, commented:

“As the regulator for higher education in England, the Office for Students has an important role in ensuring our universities and higher education providers are high-quality institutions which serve their students. The Office for Students is a relatively new regulator, having only become fully operational in 2019. However, since then, the way in which it oversees higher education providers has changed. We therefore feel an inquiry to scrutinise its work is both necessary and timely. The focus of our inquiry will be the suitability of the OfS’ remit and its statutory duties, as well as its role in relation to the financial sustainability of the higher education sector.”

Questions

1. Are the OfS’ statutory duties clear and appropriate? How successful has the OfS been in performing these duties, and have some duties been prioritised over others?
2. How closely does the OfS’ regulatory framework adhere to its statutory duties? How has this framework developed over time, and what impacts has this had on higher education providers?
3. What is the nature of the relationship between the OfS and the Government? Does this strike the right balance between providing guidance and maintaining regulatory independence?
4. Does the OfS have sufficient powers, resources and expertise to meet its duties? How has its expertise been affected by the Quality Assurance Agency for Higher Education’s decision not to continue as the OfS’ Designated Quality Body?
5. How does the OfS measure value for money for students? How can this be measured in an objective, tangible way that is not based on economic or political judgements about the value of subject areas or types of institution?
6. How does the OfS engage with students? To what extent does input from students drive the OfS’ view of their interests and its regulatory actions to protect those interests?
7. What is the nature of the OfS’ relationship with universities? Does the OfS strike the right balance between working collaboratively with universities and providing robust challenge?
8. What systemic financial risks are present in the higher education sector? Is there the potential for significant provider failures if these risks crystallise, for example through an unexpected reduction in numbers of overseas students or an unexpected increase in pension costs? Are these risks limited to particular groups of providers or are they widespread or systemic in nature?
9. What business models are present in the UK higher education sector? Are these models resilient to the financial risks of the sector, and are universities focusing sufficiently on having a viable business model?
10. How does the OfS oversee the financial sustainability of higher education providers and the higher education sector? Is its approach clear, and is its oversight sufficient to spot potential risks early on and take action accordingly?
11. What is the OfS’ tolerance for the failure of higher education providers, and what processes are in place to manage provider failure? Would the failure of a large provider follow a clear regulatory process or is there the potential for political considerations to play a role in such decisions?
12. To what extent is the financial sustainability of providers determined by government policy and funding rather than the OfS’ regulation? Is there a need for policy change or further clarity to ensure the sustainability of the sector?

Timeline

The Committee invites written contributions to its inquiry by Friday 7 April 2023.