Written evidence from National Union of Students, NUS-UK (WOS0015)

About NUS

Through a confederation of over 500 students’ unions, the National Union of Students represents the interests of around seven million students, learners and apprentices in post-16 education and training across the UK.  

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?

In 2017, students’ unions and NUS fed into the Higher Education & Research Act, which resulted in the formation of the Office for Students with four organisational objectives, consulted on with the higher education sector.
The statutory duties of the regulator were agreed over the course of lengthy consultation, and remain clearly set out from the Act.
Of the core statutory duties, NUS would argue that the functions of OfS appear and are experienced very differently by students and students’ unions to the way that they are laid out in the Act: while all of the duties are clear, many students and students’ union officers will experience only part of the OfS’ work over their time at an HE provider.
For example, over the past twelve months there has been a greater focus on TEF and therefore quality regulation, due to the first year of the TEF student submission.
Furthermore, the perception of OfS in the media – where students would get their primary information from – would lead them to believe that OfS prioritised work on freedom of speech.

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?

The regulatory framework has grown over time to encompass a wider variety of areas in the category of student experience.
While it is vital that there is work done in the higher education sector to address the Black Awarding Gap, sexual misconduct and harassment, and student mental health provision, the regulator may not always be the best body to deliver this, and we would like to see greater thought given to the benefit to students of the expansion of regulation.

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?

We observe that the relationship between OfS and government has changed since its foundation.
While it was initially perceived as an arms-length body, with an independent Chair, students’ unions and NUS have raised concerns that the current Chair’s position in the Lords, and his continued taking of a partisan Whip there, has damaged the perception and reputation of independence.
Guidance letters are sent from DfE to OfS to lay out the priorities for grant funding. It is appropriate that these letters touch on the broad range of work that OfS can undertake, there should be consideration from government as to whether OfS is the best body to deliver the specified work – as referenced in Question 2. Furthermore, we notice that the frequency of government grant letters has grown, and OfS now receives considerably more stringent direction from government, leaving it with limited strategic freedom.
Similarly, we observe that the guidance letters have become more directive, for example 2022’s expectation and prioritisation of a significant number of investigations into established providers. We are concerned that, if the regulator is to be an arms-length regulator, it is allowed to be as such.
We are also concerned that OfS is shortly to be asked to weigh in and regulate Freedom of Speech, already a contested area within the HE sector, and could be asked to regulate students’ unions, in addition to its already significant duties and its new plans to take on the work previously delivered by the QAA.

4. Does the OfS have sufficient powers, resources and expertise to meet its duties? How will its expertise be affected by the Quality Assurance Agency for Higher Education’s decision not to continue as the OfS’ Designated Quality Body?

We are concerned by the impact that QAA’s decision not to continue as the DQB will have on the education sector.
A strength of the QAA’s approach to quality assurance has always been to pioneer and champion student engagement in their work to enhance and protect quality education, both as part of their assurance work and as part of promoting enhancement across the sector.
Indeed, one of the reasons that the QAA no longer met the European standards for quality regulation was that the OfS’s quality regulation did not sufficiently involve students.
We are deeply concerned that the baseline, risk-based regulatory model of OfS, where intervention is only considered at a point where risk crystallises, is antithetical to enhancement, and to partnership working with students as a meaningful part of the quality process.

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?

OfS currently measures value for money through a series of proxies: students’ perceptions, graduate outcomes, retention and completion, and through the good governance registration conditions which promote transparency.
It is vital to note here that value for money is a contested area in higher education: OfS’ own 2019-2021 showed that they would measure student perception of value for money, while previous research by Universities UK [cited, footnote 65] has shown that students who believe themselves to have a high quality, robust relationship with academic staff and their institution believe themselves to have received value for money
When equating value for money to graduate salaries, OfS has made concessions for “socially useful” professions which draw lower or regulated salaries – what we would now call frontline professions – to count as equal to those which draw higher salaries. This in itself illustrates perfectly that equating value for money to graduate salaries is flawed and cannot be used as a blunt metric to judge value for money.
NUS advocates for a separation of value for money from regulation. Education benefits society as a whole, as well as the individual, and each individual will draw from it a sense of their own benefit based on their own motivations; there is no way to measure this free of political, economic or value judgements.
Rather than judging proxies for a contested concept, regulation could focus on student experience, on equality of opportunity and on student experience.

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?

The Office for Students set up a student panel from the first year of its work. This panel is convened as a consultative group, and appointments are made through an annual recruitment process.
A place on the OfS Board is reserved for an appointed student, who will also chair the Student Panel.
While NUS’ has always welcomed the student place on the OfS Board, it cannot be denied that the student panel does not function to represent the mass and variation of student opinion – rather it and the student board place are a consultative focus group.
While this is valuable for internal work, it cannot replace the need for external, representative student input. We note that the OfS’ predecessor, HEFCE, and the current and future regulator in Wales, CTER, allow an NUS observer to their Board, and we would welcome the same in England.
When the OfS seeks broader, situational input from students, this has often been done in partnership with NUS, due to NUS’ reach and influence among student officers and their ability to engage in policy discussion. Recent examples of this include roundtables on the review of the NSS, on Access and Participation Plans and most recently on the Cost of Living Crisis, and NUS’ early role in developing the TEF Student Submission with OfS.
In the initial foundation of the OfS it was clear that student input drove the initial organisational objectives, evidenced by removal of a sole focus on consumer rights in line with NUS’ priorities, however it is now more difficult to evidence a clear impact of student engagement. More recently, NUS and students’ unions argued for a TEF student submission – and this was put into effect this academic year.
NUS also welcomes regular information sharing meetings with OfS leaders to update on mutual priorities and areas of concern.
The broader impact of student engagement and students’ priorities is difficult to quantify. While it is undoubtedly true that the presence of a student panel and a student on the Board informs the work of OfS, clarity is needed on the role of the panel as an internal sounding board or as an internal lobbying group on behalf of students; similarly there is a need for OfS to communicate back to students the impact of engagement.

7. What is the nature of the OfS’ relationship with higher education providers? Does the OfS strike the right balance between working collaboratively with universities and providing robust challenge?

We believe provider representatives are best-placed to answer this.

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?

There are considerable financial risks in the higher education sector.
Currently, international students’ fees are used to cross-subsidise other areas of education spending, including ambitious research targets which are vital for the health and innovation of both education and society. Each international student in the UK pays on average £5,100 more than the cost of their education (Source: HEPI Report 127.)
A funding freeze from Westminster means that higher education providers now see recruiting international students as a way to subsidise their other areas of work. It is both immoral that international students are seen as ‘cash cows’ for the UK university sector, and also unsustainable as an institutional need to recruit meets a cost of living crisis and a hostile environment, making the UK a less welcome and desirable option for international students.
NUS believes that our international student friends and colleagues across the sector should be welcomed to the UK, because they are students coming to learn, not because of the fees that they bring with them.
Were there to be a dramatic downturn in international student numbers, or were large providers to lose their Tier IV license, this could cause the risk to financial sustainability to crystallise and for providers to take remedial action, whether through teaching out departments and schools, or through wholescale closure.
Through raising tuition fees in 2012, the then-government made Higher Education almost entirely reliant on the income which follows the student. This model forces HE providers to compete for students based on their income. Where it was thought this would inspire a race to the top, it has in fact done the opposite. It created powerful incentives to invest in the superficial, and caused further separation in the HRE sector between those research-intensive institutions whose reputation will always ensure a stable income, and those who must work harder to recruit, and these latter institutions undoubtedly do the heavy lifting in terms of widening access to higher education.
In 2022, the Westminster government then consulted on plans to cap the numbers of home students who would attend higher education based on a uniform minimum entry requirement, not only artificially limiting the pool from which recruiter institutions can recruit, and thus threatening their fee income, but also attacking the opportunity of those students who enter education through non-traditional routes.
There is therefore a significant concern that, should this risk crystallise, it is lower tariff, recruiter institutions which will be more significantly impacted -and indeed according to OfS’ annual financial sustainability report, they are the part of the education sector with larger deficits.

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?

We believe provider representatives are best-placed to answer this.

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?

The OfS’ risk-based model appears to students to be designed to act once risk is crystallised, rather than to prevent market exit, teach out or student transfer.
While it reports annually on the financial sustainability of the higher education sector, there was significant debate over whether early warning signs of individual provider instability and therefore student protection plans should be published over fears of causing a “run on the bank” for student recruitment and thus worsening a potential problem.
While OfS concluded that they would judge if the publication of a plan was in the public interest, rather than only when risk was ‘reasonably likely,’ it remains concerning that the regulatory system appears designed to act when risk is apparent, rather than to prevent provider failure and enhance the quality of the UK’s world-leading higher education sector.

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?

There have been two ‘test cases’ of a reasonably-sized provider failure: Greenwich School of Management (GSM) in 2018 and the Academy of Live and Recorded Arts (ALRA) in 2022.
GSM was not regulated by the Office for Students at the time of its closure, however OfS was involved in the multi-agency closedown procedure, and worked with NUS UK to support the students’ unions at those providers who took on GSM students, following a period of work of the Summer where students were given transfer options.
The closedown procedure of ALRA appeared to be much more sudden, with OfS allegedly intervening with only a week to the close date, and students and staff alleging that they found out through social media.
These two contrasting examples of provider failure show that there does not appear to be a uniform process for provider close down, and this leaves us deeply concerned that, if Student Protection Plans are not delivered well, the interests and concerns of students could easily become lost in a complex process.

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?

The financial sustainability of providers is extremely dependent on government policy, from reliance on tuition fees and recruitment, to government setting strict parameters of OfS’ funding allocation capability.
We would advocate that the policy change needed here is for a sustainable education sector, where the costs of education are not solely born by the student, and students themselves are funded to be able to live while they study.

04 April 2023