Written evidence from The University of Southampton (WOS0025)

The University of Southampton is a research, knowledge exchange and enterprise intensive university and member of the Russell Group.  We are ranked 12th in the UK (Times Higher Education World University Rankings 2023) and 78th globally (QA World University Rankings 2023).  We have a diverse community with 25,000 students from over 130 countries.

Overall, whilst we appreciate the need for regulation to ensure student and taxpayers interests are protected, providers are delivering consistently against quality baseline thresholds, and that we maintain a strong international reputation for the sector, we question whether the Office for Students (OfS) has a good understanding of the burden it places on providers through its regulatory framework and how this diverts resources away from supporting the university’s mission to provide a high-quality education for all students.  We also question the OfS’s interpretation and application of its statutory duties.

1. The OfS’ statutory duties as laid down in HERA 2017 are clear and appropriate. When carrying out these functions, the OfS should have regard to protecting institutional autonomy and academic freedom. 

We question some areas that the OfS is considering regulating; freedom of speech, mental health and wellbeing, harassment and sexual misconduct, and whether these are appropriate or supported by robust statutory underpinnings. These relate to the conduct of providers and therefore should be matters for providers to address rather than the OfS.   

Commenting on how successful the OfS has been in performing its duties is not straightforward. The register of providers is available to view, there are communications regarding providers granted degree awarding powers and the university title, and providers Access and Participation Plans and TEF ratings are publicly available. However, these are only some measures of success. There is little public transparency, for good reasons, on the interventions taken by the OfS to ensure providers are meeting their ongoing conditions of registration, therefore the assessment of success may only be concluded from further information gathered through this inquiry.  

2.              The OfS’ regulatory framework supports its statutory duties.  The regulatory framework was implemented in April 2018 and until November 2022 it remained static. From November 2022 to the current date, there have been seven amendments to the regulatory framework, not all following consultation with providers.

              Providers are in the frontline of delivering higher education, research and enterprise, working in partnership with their students, and therefore have a wealth of knowledge, experience and expertise to offer the OfS through consultations responses. To date the outcomes from most consultations have seen few, if any, changes to the original proposals. There is a view that decisions have already been made (especially if there is existing press coverage, such as the current consultation on harassment and sexual misconduct), and that feedback will not have any influence on decision making. Given the significant resourcing implications in providing consultation responses, this is disappointing.

The OfS publish the outcomes from consultations but, much like the consultations themselves, these documents can be long and unnecessarily complex resulting in the providers having to wait for any amendments to the regulatory framework to be clarified by the OfS. Upon receipt of the amendments, there is usually significant work to be undertaken to re-assure our governing body that we remain compliant with the revised Conditions of Registration. For example, the revision to the B conditions required us to map revisions to our Quality, Monitoring and Enhancement Framework, identify any gaps, revisions or enhancement requirements, produce a report and accompanying action plan (if required) which was then submitted to University Senate and Council (governing body) for review and approval. 

We do not dispute the requirement for and the importance of proportionate, evidence-based regulation. However, we are becoming increasingly concerned that the OfS is not implementing a fully risk-based approach, that it is not genuinely independent, that the levels of bureaucracy associated with the ongoing Conditions of Registration are increasing, and that it is failing to meet the standards we would expect from the Regulators’ Code. An example of this includes the matter that Government is preparing to give the OfS wide-ranging regulatory powers regarding freedom of speech, which have the potential to create a significant amount of unnecessary bureaucracy. The resources required to undertake the levels of bureaucracy associated with ever growing Conditions of Registration means that resources are not being utilised to support the university’s mission to provide a high-quality education for all students. Another example of where the OfS’ operation does not align with the Code is the absence of mechanisms for the Regulator to gain structured feedback from providers on its own performance (as highlighted in a recent report by the National Audit Office).

3. Although it is acknowledged that there is a requirement for a relationship between the OfS and the Government, the OfS is not perceived as independent of Government. This perception is exacerbated by communications from ministers and from the OfS often appearing conflated. It is usual for the OfS to receive an annual letter from the Government setting out its priorities for the year.  Should the Government change its focus or ministers, further letters may be received to which is it felt the OfS sometimes respond in haste. Further Government changes to priorities may elicit a different response, especially with regards to whether the matter falls within their responsibilities.
4. The requirement for an independent body to assess quality and standards was stressed by the Lords during the passage of HERA, and ultimately resulted in the Government amendment to introduce the Designated Quality Body (DQB) function. 

The statutory responsibilities of the OfS are wide ranging. The breadth of these responsibilities means that it may not have the necessary resources or depth of expertise to undertake the work itself, hence a further supporting reason for implementation of a Designated Quality Body (DQB).

With the QAA demitting as the OfS’ DQB, the OfS will be undertaking the DQB responsibilities itself, and currently it is undetermined as to whether this will be a permanent arrangement or whether a new, independent DQB will be sought. To support its DQB responsibilities, the OfS is seeking to expand its pool of academic experts, which indicates that the OfS does not currently have sufficient resources or expertise to meet the DQB duties. 

The DQB successor body needs to be independent and command the confidence of providers, students and employers. The DQB has responsibilities to advise the OfS on degree awarding powers and on degree apprenticeships, so as DQB the OfS is essentially advising itself which leads to questions around independent scrutiny.

The QAA engenders a great deal of UK and international respect for the quality of its work. With the QAA demitting as DQB, significant expertise and esteem built up by them will be lost.  Of course, it will take time for the OfS to build its reputation should it remain as the DQB, but it is possible that it will not be held in the same regard as a truly independent body.

Degree programmes in England now sit outside any internationally recognised system of quality assurance; the United Kingdom (England) is no longer fully aligned with the European Standards and Guidelines (ESG). With Northern Ireland, Wales and Scotland being fully aligned, this will have an impact on the high esteem our programmes are held in, as well as on future recruitment.  We cannot rely on the reputation of English higher education to cover this standards gap.

Students should be involved in quality assurance, but the OfS seems reluctant to involve students in quality assurance matters (a contributing factor to the QAA demitting as DQB and our degree programmes no longer being aligned to ESG).

If the OfS were to take on DQB responsibilities permanently it could lead to a loss of independent oversight of quality assurance in England and go against international standards.

5. The OfS states that it measures value for money for students in terms of student participation, experience and outcomes, high continuation rates and good degrees which hold their value over time. 

The value of a degree could be seen to be a mix of academic expertise, excellent teaching and feedback, the development of transferable skills through curricula and non-curricula activities, careers support and job opportunities, cultural capital and institutional reputation, but how do you measure those directly?  It is at all possible to measure these directly?

The OfS measures these through the Conditions of Registration, especially the B Conditions Quality and Standards, and proxies such as continuation, completion and progression data, through the National Student Survey, and through the Teaching Excellence Framework (TEF). How do you measure the value of teaching, as finding an appropriate metric is difficult?  In our opinion, the TEF still does not measure the value of teaching excellence.

The value for money metric is difficult to determine. What we have is a set of measures on areas which stimulates discussion on improvements and enhancements to the student experience and outcomes.

6. Our Students’ Union are partners in all our work. They are co-designers of our student-facing services, providers of much of our co-curricular offer and resources, and custodians of our student rep system and a source of both challenge and support as we make key decisions about our University. The impact of this successful partnership is evidenced in a wide range of co-created improvements and innovations.

The OfS should look at sector best-practice in co-creation with students and with a view to implementing similar within their own work. The work of the OfS Student Panel in representing student views and to challenge the OfS to develop policy in the interest of all students is not transparent or visible – there is a section on the OfS website but regular updates or communications on the work of the Student Panel or what they have achieved are do not appear frequently. 

The OfS may also view their engagement with students through the National Student Survey, but this and the Student Panel does not go far enough. OfS should share with the sector the insight they have gained from students about the issues which challenge them, their requirements, their interests and what they are endeavouring to achieve from their experience.

One of the reasons the QAA is demitting as DQB in England is the work they undertake on behalf of the OfS, is no longer compliant with European Standards and Guidelines (ESG) as monitored by the European Quality Assurance Register for Higher Education (EQAR). The contributing factors to this include:

“A. the lack of students on the review panels for Quality and Standards Review (QSR), Quality and Standards Review Monitoring and Intervention (QSRMI) and New Degree Awarding Powers Test (New DAP’s Test), and

B. the lack of publication of review reports for external QA reviews carried out in England for QSRMI and DAP.” (https://backend.deqar.eu/reports/EQAR/C74_QAA_ExtraordinaryRevisionOfRegistration.pdf)

Assuring quality and standards, leading to an award that holds its value, is a statutory duty of the OfS and is at the heart of the student experience. Students must be included in this critical aspect of the regulatory framework.  

7. The OfS is clear that it is a Regulator and to be effective in this role their relationship with providers must be different to that experienced with the former Higher Education Funding Council for England (HEFCE). Whilst we accept that position, there are occasions when collaboration with providers could/would be advantageous. We would welcome a more collaborative, transparent, consultative, and sometimes advisory, approach and relationship with the OfS, with a shared focus on student outcomes which includes opportunities to share good practice. We feel that genuine sector involvement in the design and implementation of regulation for the benefit of students in helping to improve their experiences and outcomes has been lost. The OfS may point to the consultations which have been undertaken on various changes to its regulatory framework. Although consultation is welcomed, to date the outcomes from most of the consultations have seen few, if any, changes to the original proposals. There is a view that decisions have already been made (and that feedback on consultations will not have any influence on decision making. Providers have a wealth of knowledge, experience and expertise to offer and share with the OfS. There is a reluctance to utilise this offering, which could be perceived to be the OfS struggling with how it upholds its regulatory body responsibilities with how it can usefully work with the HE sector.

There is complexity within some of the OfS processes, communications and consultations and related tasks which require high levels of resource by providers. Communications can be too legalistic and non-collegiate, especially frustrating for established, low-risk providers. The OfS is not perceived as independent of Government and communications from ministers and the OfS can appear to be conflated, which exacerbates this perception.

8. There is a view that there may be some over-reliance on international students in UK higher education business models, which could lead to failure should there be a reduction in the numbers of international students. Given that UK student fee has been capped at £9,250 since 2017 and is set to remain at this level until 2025, UK undergraduate education is currently funded at 85% of full economic cost (FEC). To cover the FEC of delivering higher education programmes, providers must finely balance the numbers of UK students, international students and postgraduates.

It should be noted that the government has just published a revised estimate for the value of the UK’s education exports, which is £24.5bn, up from £23bn in 2019. This figure includes international students living expenditure and education provided by UK foreign affiliates such as overseas campuses. Any revision to providers business models in respect of international students would have a direct impact on the future value of the UK’s education exports.  

9. There are various business models present in the UK higher education sector, which include but are not limited to the inclusion of international students, online courses/education, a focus on specific subject areas (smaller providers), or a more broad-based approach (larger providers).

As stated previously, the UK student fee has been capped at £9,250 since 2017 and it is set to remain at this level until 2025. To cover the FEC of delivering higher education programmes providers give significant consideration to their business model, endeavouring to achieve efficiencies where possible, but there is a limit to the efficiencies that can be gained over a sustained period.

Education-related business modelling does not happen in isolation; there is a necessary cross-coupling of research, enterprise and education financial sustainability. We suggest OfS should work more closely with DfE, DSIT, other government departments and UKRI, to understand and respond to the overall pressures facing universities and the necessary policy and financial interventions required to support the sector’s overall financial health and sustainability.

10. Condition D Financial sustainability of the Regulatory Framework states that a provider must be financially viable, financially sustainable, have the necessary financial resources to provide and fully deliver the higher education courses it has advertised and contracted to deliver, and have the necessary financial resources to continue to comply with all conditions of registration. The OfS monitor these requirements through various data returns from providers and information from other stakeholders, i.e., HESA student records returns, financial and student forecasts, annual financial return, annual fee limits, Transparent Approach to Costing (TRAC), Transparency return, UCAS data, Student Loans Company information, notifications, reportable events, and other intelligence.

The OfS produces an annual report providing a summary of its initial analysis of financial data returned to it by providers in England. The analysis draws on audited financial data and forecasts and identifies trends in current financial performance and forecasts over the next four years, covering the sector overall and specific groups of providers. The OfS provides an overall aggregate financial position of registered providers but indicates that this may not reflect the picture for individual providers.

We consider this approach clear, and the oversight by the OfS sufficient to spot potential risks early on and to act accordingly.

11. To our knowledge there have been no providers who have been de-registered by the OfS, therefore we are unable to comment on the tolerance for failure. 

All registered providers must have a student protection plan in place, which has been approved by the OfS. It must be easily available to current and prospective students, and it must be reviewed and refreshed on a regular basis. The plan must address specific risks to the continuation of study for that provider’s students in a proportionate way, i.e. ensuring that existing students can complete their course and continue to access student finance, or transfer to other providers. Should a provider notify the OfS of a significant course closure or the closure of a campus, then the OfS will work closely with the provider and its students to ensure that the students’ interests continue to be protected through any changes.

Regulatory condition C4: Student protection directions was implemented on 1 April 2021. The condition enables the OfS to intervene more quickly and in a targeted way when they consider there to be a material risk that a registered provider may cease the provision of higher education. A Student Protection Direction would require a provider to have a plan, approved by the OfS, setting out Student Protection Measures (teach out; student transfer; exit awards; information, advice and guidance for students; complaints; refunds and compensation; archiving arrangements) which they would implement plus any further Student Protection Measures specified by the OfS and any other consequential, ancillary or incidental actions the OfS considers reasonably necessary.

We assume that the failure of a large provider would see them work with the OfS to implement their student protection plan and any Student Protection Direction received from the OfS. Part of the mitigation for providers being de-registered by the OfS cannot be an assumption that students could be moved to other institutions as this would result in negative financial consequences. The OfS has been very clear that it is not set up to bail out providers who find themselves in a position of failure. 

With regards to the potential for political considerations to play a role in such decisions, no doubt it would be for the DfE or the Treasury to decide whether to act and support a bail out of a failing provider. 

12. The financial sustainability of providers is directly linked to government policy and funding.  There has been no increase in UK student fees since 2017 therefore to cover the FEC of delivering higher education programmes, HE providers have had to give significant consideration to their business model, endeavouring to achieve efficiencies where possible, but there is a limit to the efficiencies that can be gained over a sustained period. 

With regards to the OfS regulations, should the OfS perceive there to be an increased risk of a provider breaching its ongoing conditions of registration, formal sanctions such as monetary penalties, suspension from the register or deregistration may be imposed, all of which would have an impact on the financial sustainability of a provider.

05 April 2023