Written evidence from The Cathedrals Group of Universities (WOS0022)
1. This evidence is submitted by the Cathedrals Group of Universities in response to the Committee’s inquiry into the work of the Office for Students.
The Cathedrals Group
2. The Cathedrals Group is composed of fifteen universities, fourteen of which are in England. Located throughout the country from Cumbria to Chichester our universities are variously linked with the Churches, Church Foundations and include others which support a commitment to widening opportunities and qualifications which benefit and contribute to local communities and public services including teacher education, health, and social work. Cathedral Group universities are diverse and distinguished universities which also offer a wide range of other courses including new medical schools, degree apprenticeships and attract students from less advantaged communities.
3. Cathedral Group Universities are smaller institutions, the majority of which have turn-overs of less that £100m per annum. We should be pleased to appear before the Committee to give evidence in person.
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?
4. The need for, and benefits of, good regulation are accepted and welcomed by our members. Good regulation provides reassurance for students, government, and taxpayers that quality is being maintained and poor performance addressed and can assist in the overall achievement of improved quality and successful outcomes. HERA 2017 identifies general and specific duties for OfS as a regulator of higher education. The Act clearly specifies that the OfS should act in a way that is proportionate and makes clear that both the OfS and the Secretary of State in issuing guidance to the latter, have responsibilities to protect the institutional autonomy of English higher education providers.
5. It is questionable whether the OfS has taken sufficient regard of its duty to protect institutional autonomy in applying the detail of the regulatory framework and acting in ways which are proportionate in terms of their impact upon universities and especially upon smaller institutions such as those which are members of the Cathedrals Group. In fact, the impact on smaller institutions of OfS’s approach to regulation has been even more disproportionate than on larger institutions because all the same obligations must be completed but by institutions with fewer resources at their disposal.
6. Moreover, the OFS does not seem to pay due regard to the flow of an academic year and the challenges (sometimes impossibilities) of making changes in the timeframes that are set out without disrupting the learning of students that has already been set out clearly for them and to which institutions are bound by the Competition and Markets Authority.
7. One example of OfS overreach into institutional autonomy and academic freedom, and its failing to give due regard to the burden or proportionality of compliance with its regulatory framework, is condition B4. This condition includes an expectation for retention of student assessed work for a period of five years after a student’s graduation. This is not routine practice in the sector and constitutes a considerable additional burden for most institutions far out of proportion to any regulatory benefit. In addition, the reason for requiring institutions to retain assessed work is so that an independent academic expert appointed by the OfS could assess the work and reach a judgement about whether the marks which had been awarded were appropriate. This is a fundamental assault on institutional autonomy and academic freedom.
8. There appears to be a continual flow of either new or reprised obligations that need to be met; in terms of smaller institutions, the burden of review, implementation, and monitoring (when compared to the risk, within the context of proportionately smaller student numbers) is entirely disproportionate. The number of consultations is a stark indication of constant flux.
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?
9. The regulatory framework issued by OfS in 2018 reaffirmed the principles of institutional autonomy and academic freedom but also referenced a risk-based approach. This 2018 regulatory framework made clear that ‘Once the regulatory framework is established, its implementation will reduce bureaucracy and unnecessary regulatory burden for individual providers and, as a consequence, for the academic and professional staff whose work is essential to successful outcomes for students.’
10. The experience of Cathedrals Group Universities is that since 2020/21 the opposite has been the case.
11. The OfS’s website provides a summary of the seven amendments and notices issued since 2021 leading to the publication of a consolidated version of the framework in November 2022. This latest version of the framework is a 222-page document. While the July 2020 amendment was time-limited because of the pandemic, the other amendments represent significant adjustments to the conditions of registration and were preceded by consultations which required universities to respond over short periods of time (often 4-8 weeks). Appendix 1 provides further detail of the scale and extent of OfS notices to institutions.
12. The impact on institutional resources and management time of the OfS’s changed approach to quality and standards and condition of registration B3 cannot be underestimated. Essentially ‘quality’ is now defined via metrics with OfS stating that it “is not acceptable for providers to use the proportion of students from disadvantaged backgrounds they have as an excuse for poor outcomes”.
13. Such an approach discounts robust evidence that, for example, age at entry, caring responsibilities, lower prior attainment, and disadvantage can affect outcomes notwithstanding universities’ best efforts. Moreover, the response from OfS to the submissions of universities and higher education providers to these consultations, have often ignored significant concerns. This was the case in respect of the consultation on quality and standards and on the B3 condition of registration.
14. One further example is the removal of the summative question in the National Student Survey (NSS). In the consultation response the OfS reported that ‘around a tenth of comments supported the proposal to remove the question in England’ and yet the question was still removed. This significantly dented sector confidence in survey results having any meaningful impact on subsequent decisions.
15. As a result, a view has developed that the OfS will implement its original proposals with, at best, only minor changes to the latter, and little regard to sector concerns, the implications for increased bureaucracy, institutional cost, and autonomy or indeed, the risk-based approach which was originally promised.
Access and Participation Plans (APPs), TEF and NSS
16. The OfS’s changing approach to APPs is evidenced by the following:
17. These changes have required and continue to require excessive senior management time, resources and the employment of additional staff. These changes have also increased the expectations on universities, for example in relation to work with schools, comprehensive analysis, and more demanding targets, at a time when the resources available to universities are rapidly declining.
Retention of assessments
18. As previously noted, the OfS has introduced a requirement that universities retain student assessments for 5 years after graduation linked with the B4 condition of registration. This compares with institutional policies which are normally no longer than 12 months. The regulator’s approach is again raising major issues including re systems, space, intellectual property of students, other regulatory requirements such as GDPR, and assessments related to performance and arts courses and cost (for a smaller institution estimated to be £270,000). We regard this as another example of the OfS ignoring impact and increasing bureaucracy and costs in ways which are entirely disproportionate.
19. The OfS also controls the Teaching Excellence Framework (TEF) and the National Student Survey (NES) with the former requiring submission in January 2023 and the annual NSS subject to consultation and further change.
20. During the passage of HERA, the House of Lords pressed for the Bill to be amended to include reference to institutional autonomy – a reference which was eventually included in the Act. The Committee may wish to consider whether OfS has been in breach of the duty to have due regard to institutional autonomy in its approach to regulation.
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?
21. HERA provides the Secretary of State with powers to issue wide-ranging guidance to the OfS. We accept that the Secretary of State will wish to ensure that the policies and priorities of the government are supported by the OfS. However, the guidance issued by Ministers since 2018 may not itself have taken sufficient account of the government’s own duties under HERA to pay due regard to institutional autonomy and proportionality.
22. For its part, the wording of OfS consultations has given the impression that the OfS is simply repeating government guidance and that little consideration has been given to different options to address the guidance or take into account its own obligations to consider institutional autonomy, proportionality, and its (initial) commitment to reduce bureaucracy.
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?
23. The OfS has sufficient powers and should be able to match its existing resources to carry out its duties. However, since its establishment in 2018 the government has increased OfS fees with a 13% increase proposed for 2023 alone - a percentage which Cathedral Group Universities consider to be excessive, and which ignores the fact that the value of tuition fee income has fallen by a third since 2012.
24. Despite levying increased fees, OfS is proposing to charge institutions for the cost of their investigations in the future. As it stands it appears that OfS wishes to charge additional fees for requiring universities to provide additional information. Given the cost of the base fee and the requirement for OfS to operate efficiently and effectively, it is difficult to see what justification there is for this. The increases in OfS fees and proposed charges for investigations are ultimately taking money from the fee paid by students and will harm the student experience and student outcomes by taking resources away from activities which benefit them.
25. The fee issue is pertinent in other ways. There is a conflation of interests with the regulator potentially able to raise income through investigation, whilst also supposedly maintaining an unbiased approach to initiation. This would seem to be a conflict of interests.
26. The OfS does not appear to have adequate senior higher education expertise to ensure that it has a sound appreciation of the impact of its changing requirements upon institutions, including smaller universities.
27. The OfS has commenced a series of investigations under B3 in specific subject and course programmes based on its analysis of (historic) metrics. Beyond a metrics approach, it is not clear that OfS investigators will have experience relevant to higher education and / or the subject areas and issues under investigation.
28. In general terms, the OfS appears to work by written communications rather than to engage in other ways and the key contacts system formerly used by Hefce and which has been adopted by UKRI, is weak. Senior higher education experience would also help the regulator to work more collaboratively to resolve issues and concerns where such an approach is appropriate.
Designated Quality Body (DQB)
29. The decision of the Quality Assurance Agency to withdraw as the DQB in England is indicative of the issues which have arisen in respect of the regulatory framework in England. The QAA is a highly respected agency which works in Wales, Scotland, Northern Ireland and in many other countries.
30. The withdrawal by QAA is damaging to the international reputation of English HE, given that the English regulatory system is no longer compliant with international quality assurance standards. Closer to home, the withdrawal of England from the UK-wide frameworks overseen by QAA is damaging to one of the important ways in which the four countries of the UK have been bound together. Although OfS has claimed that it has recruited senior academics to support a quality assurance role, it is difficult to see how OfS has the general competence, expertise or independence of QAA e.g. in respect of the assessment of applications to go on the OfS register. Moreover, unlike QAA, students are not involved and the former collaborative approach to quality has been lost.
31. As clearly intended by HERA, the DQB should be independent, and it is clearly inappropriate for the OfS to undertake this role.
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?
32. Cathedrals Group Universities are focused work on supporting students to meet their aspirations, which often includes a graduate job. However, achievement of the latter may go beyond the 15-month timeframe currently used. Significantly, the OfS ‘value for money’ measures discount the non-monetised benefits of higher education and ignore robust evidence that progression to higher education has cross-generational and wider community benefits. Only private, individual benefit is recognised, with no acknowledgement of higher education’s public benefits.
33. The focus on graduate / professional outcomes ignore the trajectory of early career graduates in the arts and humanities, graduates who wish to work in the not-for-profit sector where remuneration is often lower, take no account of regional variations in employment opportunities, the impact of family networks on graduate opportunities or the fact that older students with caring responsibilities may not immediately be in a position to take up wider employment opportunities by moving elsewhere.
34. The OfS’s measures are also biased against some students from minority ethnic backgrounds who return to work in family businesses after they have graduated.
35. The OfS insistence that university courses should achieve a certain percentage outcome in terms of graduate employment otherwise universities are ‘letting students down’ ignores the wider issues which affect outcomes. It will lead to the closure of courses which would otherwise have offered students opportunities to study in areas that interested them.
36. Moreover, the measures simply will not fit the learning pathways which will be encouraged and supported by the Lifelong Loan Entitlement (LLE) – a key plank of the government’s education policy – since they are based on the model of three years’ continuous undergraduate education.
37. The OfS’s approach takes no account of the fact that descriptors as to what constitutes a graduate job consistently lag behind reality and employer requirements. They also ignore the fact that some students choose to study courses because they are interested and want to pursue learning for its own sake rather than to achieve a particular graduate career.
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?
38. While the OfS includes student representatives on its main student panel, the latter does not include students from Cathedrals Group or smaller universities. Indeed, it is unclear whether the OfS understands the diversity of the student experience fully, and whether its efforts are focussed in a way which allow it to consider the breadth of students in the sector.
39. It is not always clear whether initiatives such as the reprised Freedom of Speech obligations are a true reflection of student feeling or simply represent a political agenda. There seems to be a lack of quantitative or qualitative, data/information in this respect and no prior assessment of the costs (direct and indirect) to OfS or the sector of introducing these and similar initiatives.
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?
40. There have often been long delays in individual institutions hearing back from the OfS. Engagement has appeared to be contentious at times with universities too often seemingly treated as untrustworthy. While there appears to have been some improvement in tone when engaging with senior officers at universities, consultations from the OfS are written very combatively (the recent fees one being a very good example). Communications are dense, long, and difficult to navigate and are heavily dependent on the granular analysis of historic metrics which are often challenging to understand.
41. It is very possible to have a regulator that engages appropriately with the sector whilst remaining independent. More collaboration and an approach to regulation that is not simply driven by complex data algorithms would help.
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?
42. Some universities may be more susceptible than others to specific risks and the latter would be likely to increase pressure on others e.g. a reduction of overseas recruitment precipitating an increase in competition for home students.
43. The higher education funding system in England is no longer fit for purpose. Apart from one increase for 2017/18, regulated fees for home students have been capped since 2012/13 and will remain capped at least until 2024/25. Estimates now indicate the fee is worth around £6,300 in 2012 terms, having lost a third of its value since first being introduced. This reduction in value has had a cumulative and detrimental impact on the unit of resource. At the same time, mostly in the past 1-2 years, costs have rapidly increased due to inflation as well as increasing expectations on universities. This means that funding for the education of students from the UK in some English universities has been supported by charging higher fees to international students whose fees are not capped. This is an untenable position.
See also response to Q12.
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?
44. Universities are operating in a challenging policy and funding environment which is not restricted to the reduction in the value of home tuition fees. As such they are consistently reviewing the financial impacts of adjustments or possible adjustments in several different policy and funding areas.
45. These have included and continue to include the impact of Brexit on the recruitment of students from the EU; changes or potential changes in the Home Office’s approach to international students; the changes in contracts for the education of health professional students; the market reforms applied by DfE to initial teacher education which has been a paper-based exercise and has led to the loss by 12 universities of DfE’s new condition of accreditation in spite of many of the former achieving good Ofsted inspections; Ofsted inspections of degree apprenticeships provision which has expanded significantly and varying patterns of recruitment e.g. in education and health and increased need to support the well-being of students.
46. As smaller institutions, Cathedral Group Universities maintain a close focus on their viability and make decisions to adjust programmes and restructure accordingly while exploring new opportunities e.g. the development of new medical schools and expanding degree apprenticeships.
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?
47. Strong and effective corporate governance is key to ensuring resilience, with an independent Board of Governors able to provide effective oversight.
Universities are required to submit audited financial information to OfS. Where this has not happened, the OfS has issued financial penalties. The OfS appears to exercise sufficient oversight to identify potential risks and its financial requirements, alongside other matters such as banking covenants, help to ensure universities remain focused on financial sustainability.
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?
48. All universities / providers on the register are required to have a student protection plan. Potential failure of a large provider should follow a clear regulatory process. However, the OFS's tolerance in this regard is currently unclear and untested, as are the actions and interventions it would take. It would be unsurprising if wider political considerations did not come into play to ensure that the reputation of English higher education at home and internationally was not put at risk by such a failure.
49. Given the regional context of higher education delivery, where some areas are underrepresented in both terms of provision and student participation, there should also be concerns if smaller established universities were identified as being at risk.
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?
50. Universities in England are highly dependent on tuition fee income and education contracts (53% of all income in the sector). While there is significant taxpayer investment in research and research grants, the distribution of this funding and these grants are highly skewed towards a small group of universities, 12 of which receive 80% of this funding. Smaller institutions like those in the Cathedrals Group also receive significantly less in endowment income and donations.
51. Government policy and funding in respect of tuition fees is therefore a key factor in the sustainability of the sector. As already noted, the value of tuition fees has fallen by a third since the introduction of higher fees in 2012. Moreover, universities are facing increased energy costs, wider inflationary pressures and reasonable staff demands for more pay.
52. Students are facing challenges resulting in a greater call on university hardship funds. Maintenance grants were abolished in 2015 and household income thresholds which determine the amount that students can borrow in terms of maintenance loans, have not been uplifted since 2008. Students have also been badly affected by the increased cost of living yet and the fact that maintenance loans have fallen very far behind the rate of inflation.
53. Some universities have sought to increase the recruitment of international students to offset the drop in the value of home fees. This option is not one that all universities want to pursue nor is it a sustainable approach to funding in the long term.
54. Bearing in mind that some students, especially mature students, are more debt averse, there is no demand from Cathedrals Group Universities to increase home tuition fees per se. However, a sustained increase in direct government investment for teaching and learning is essential to relieve some of the financial pressures and support the sustainability of the sector. An improved student support system is also essential to address student hardship and support continuation and completion.
55. OfS regulation while not a key determinant of sustainability for most providers is, nonetheless, increasing costs. An increasing percentage of an income stream that is declining in real terms is being taken by OfS. As such, OfS costs impact adversely on student experience and student outcomes. These costs are excessive in terms of their call on institutional resources with little, if any, gain for students.
56. For its part, the DfE should consider whether its approach to ‘value for money’ and quality adequately reflects both the wider non-monetised benefit to individuals and communities of progression to higher education and the evidence that outcomes in terms of graduate employment are influenced by a range of factors including family background. A more nuanced approach to policy and the student as ‘consumer’ by DfE would be welcome and should in turn impact on the regulatory framework of the OfS.
5 April 2023
To give some indication of the extent and scale of changes in OfS regulation since 2020, it is worth quoting the observations of Professor Dame Louise Richardson, former Vice Chancellor of the University of Oxford, in her 2022 oration.
The Office for Students (OfS) published 600,000 words in regulatory documents in 2020–21, almost double the word count of 2017–18 and 30% more than Tolkien took to write The Lord of the Rings trilogy. Last January, the OfS issued 699 pages of consultation documents with a two-month response deadline, at a time when we were planning for an Omicron-induced lockdown. The OfS Regulatory Framework runs to 166 pages. It has a further 43 pages of Updates and Amendments, 6 of explanation of the amendments, and 20 setting out national standards for higher education. To this are added 6 Regulatory Notices and 20 pieces of formal Regulatory Advice.
05 April 2023