Written evidence from the University of Bolton (WOS0045)

Contents

University of Bolton - Socioeconomic Profile

Responses to the Questions of the Enquiry

1. Are the OfS’ statutory duties clear and appropriate?

2. How closely does the OfS’ regulatory framework adhere to its statutory duties?

3. What is the nature of the relationship between the OfS and the Government?

4. Does the OfS have sufficient powers, resources and expertise to meet its duties?

5. How does the OfS measure value for money for students?

6. How does the OfS engage with students?

7. What is the nature of the OfS’ relationship with universities?

8. What systemic financial risks are present in the higher education sector?

9. What business models are present in the UK higher education sector?

10. How does the OfS oversee the financial sustainability of higher education providers and the 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?

12. To what extent is the financial sustainability of providers determined by government policy and funding rather than the OfS’ regulation?

Summary

This submission responds to the 12 questions in the call for evidence, drawing upon our experience as a medium-size institution in an area of structural economic disadvantage. We highlight ways in which, going forward, the OfS can successfully engage with the higher education sector. We note that there may be benefits to students, the sector and the taxpayer to draw together the expertise of the Quality Assurance Agency and Ofsted linked to OfS functions and close working with the Department of Education. We respond in particular as follows:

1a. The OfS Statutory duties are clearly set out in legislation. The University is aware that the OfS is currently addressing issues.

1b. As a relatively new regulator, the OfS has needed to produce extensive publications.

2a. Certain university activities do not easily fit reporting arrangements.

2b. The University welcomes any reforms which enhance value for money for students.

3a. The University would welcome the OfS Board having greater student representation.

4a. Best value should be considered in relation to the extensive duties undertaken by the OfS.

4b. Retaining the QAA to support the OfS could be beneficial.

5a. In a market system, students should be credited with making rational decisions in respect of the choice of their institution.

5b. Attending university is excellent value for money for society.

5c. Graduate outcomes are incredibly complex to measure and a regulatory framework which recognises rich cultural diversity would be beneficial.

6a. Student representation on the OfS Board could be increased.

6b. The OfS would benefit from closer engagement with the NUS.

7a. Simplified arrangements would assist institutions in responding appropriately to the regulator.

7b. An OfS annual conversation with institutions should be considered.

7c. The University would welcome working collaboratively with the regulator.

7d. The University would welcome regular engagement between VCs and the regulator of the OfS.

8.1-7 The Sector faces significant principle risks articulated in our full response noting however that the university sector is remarkably robust.

9a. Business models are varied.

9b. Sustainable overseas student post-study work would help the sector.

9c. Extending the LLE to postgraduate would help.

9d. OfS quality oversight of 30 credit modules would be counterproductive.

10a. Financial projections are in place.

10b. Institutional interventions are ongoing.

11a. Student protection plans exist.

11b. Institutional failure could be highly political.

12a. Government policy significantly affects funding.

12b. We recommend reviewing the tuition fees and considering an ongoing role for the QAA working alongside the OfS.

University of Bolton - Socioeconomic Profile

We are a locally recruiting university in one of the most deprived parts of the country. The socioeconomic profile of our students indicates a highly inclusive institution which seeks to provide opportunity for all. The University takes 99.2% of its students from state schools against a national average of 90.3% and a benchmark of 96.2%. Similarly, the University takes 17.4% of its students from Low Participation Neighbourhoods against a national average of 12.1% and a benchmark of 15.1% (Source HESA: 2020/21 year of entry). The University had 8.7% of its students in receipt of the Disabled Students' Allowance (DSA) against a national average of 7% and a benchmark of 7.2% (Source: HESA). More broadly we have historically had large numbers of students from POLAR4 quintiles Q1-Q3 with 69% of our students falling into this group compared to a national average of 47%. The proportion of the University’s full-time BAME students in 2018-19 was 36.2% compared to 31.3% nationally. A key focus of the University over the last decade has been an emphasis on vocational programmes such as Nursing, Midwifery, Law, Engineering, Creative Technologies, Social Work and Accountancy. These programmes support social mobility.

Bolton has low levels of economically active people (71.9%) compared to the North West (76.6%) and GB (78.6%) averages. Similarly for unemployment (5.3% Bolton/ 4.2% NW / 3.8% GB). It has higher proportions of Long-Term Sick (30.8%) than the North West (28%) or nationally (25.4%). It has a higher percentage of households that are workless at 18.8% (15.5%, NW; 13.6% GB) (Source: Office of National Statistics Labour Market Profile, June 2022). In terms of level of occupation in the Major Group 1-3 (Managers, Directors And Senior Officials, Professional Occupations, and Associate Professional Occupations) Bolton at 41.1% trails very significantly behind the North West (48.9%) and GB (51.4%) (Source ONS Jul 21 -Jun 2022). Bolton is also a low-wage economy with weekly earnings for a full-time employee (£528) significantly less than across the North West (£578) or nationally (£613). Job density (the ratio of total jobs to population aged 16-64) is low in Bolton at 0.76, compared to the North West (0.82) or nationally (0.84) (Source: Office of National Statistics Labour Market Profile, June 2022).

Responses to the Questions of the Enquiry

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?

The OfS’ statutory duties are set out clearly in legislation. It is sometimes not wholly clear to the sector as to how these functions could be effectively discharged, although we would welcome active ongoing dialogue. The University is aware that the OfS is working to remedy these issues. There is evidence in some areas where the OfS needs to strengthen its expertise, which it is striving to do. In relation to the supervision of research students (B Condition 1 May 2022 (31e), it would be beneficial for the OfS to adopt the QAA guidance (UK Quality Code for Higher Education Advice and Guidance Research Degrees, 2018). This would have the confidence of the sector.
As a new regulator, one of the difficulties the OfS has encountered is the volume of regulatory and related publications, which it has needed to produce. This has placed a significant burden upon institutions in assimilating the regulations. In many cases, simplicity would assist universities in effectively responding to the proper regulation which the OfS is attempting to implement. By way of illustration, in 2019-20 the regulatory statements and supporting documentation amounted to 420,721 words. For 2020-21, this increased to 596,852 words of regulation. Any reasonable assessment of transparency must include the accessibility of the texts of regulation. The volume of regulation documentation means that it is difficult to keep a clear picture of requirements in a way that can be translated into priorities for institutions or practical action for staff. On occasions, the University finds it difficult to justify to students the percentage of resources allocated to regulatory response rather than the quality of education.

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?

On occasions, one could be forgiven for suggesting that the OfS’ regulatory framework is operating at the limits of its statutory duties. For example, the area around Regulatory advice 16: Reportable events, has been complex (most recent guidance effective from 1 January 2022). Terminology used can be difficult to interpret. For example “A provider is required to report an event within five working days of the date that the event is identified”. However, many activities within universities, such as iterative planning projects, are processes not events making appropriate reporting problematic.
The ongoing evolution of the regulatory framework and the impact of its requirements is burdensome for the University as a higher education provider. The University always attempts to comply with the requirements of the regulatory framework but this can be very resource intensive and distracting from our core business of delivering high quality education to students. The University would welcome any adjustments the OfS wishes to make which would enhance the value for money for students.

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?

The nature of the relationship can occasionally appear blurred. The University would welcome additional high level independent appointments to strengthen the existing expertise, particularly if those appointments were drawn from regulatory bodies in other sectors where good practice could be shared. Additionally, stronger student representation on the Board of the OfS would be beneficial. The NUS may also have something to add to this. These two additional aspects would further inspire confidence in the rigorous and independent nature of the regulator.

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?

The OfS has extensive powers as set out by legislation. The regulator has needed to appoint significant numbers of staff to exercise its responsibilities and, whilst undoubtedly well intended, this may not be best value in achieving the statutory objectives.
The OfS does not benefit from the QAA’s decision to cease as the OfS’ Designated Quality Body. The credibility, independence and expertise of the QAA has been an essential part of the sector level governance for 30 years. Additionally, any potentially cultural benefits of the QAA’s more student-centered, inclusive and enhancement-focused approach to quality assurance will now be lost.

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?

In a market system no regulator can make a more rational assessment of value for money than students themselves can. It is difficult to see how students can take advantage of OfS protections in a manner which provides remedies beyond those set out in Consumer Rights legislation or the Office for Independent Adjudication for Higher Education (the ‘OIA’).
Attending university is value for money for students, society and the education infrastructure nationally. Beyond this, investing in the higher education of students, ensures there is a vibrant culture of learning, a modern infrastructure and a visible national commitment to progress which advertises to the world that the UK is the best location globally to study.[1]
The measurement of value for money in the context of a diverse student population in a deprived area, where graduate outcomes are outside the control of the education institution and may relate to other factors such as the availability of graduate jobs or discrimination by employers in the workplace of those from disadvantaged groups, is incredibly complex to measure. The regulatory framework is not sensitive enough by design to such complex issues (one illustration being the fact that datasets may well represent ethnicity but do not represent religious alignments – a fact which may affect graduate capability to undertake employment based upon valid cultural norms within a particular religious group). The University of Bolton is proud to educate a large proportion of local Muslim women whose graduate outcomes in the employment field can be affected by valuable and important cultural norms. A regulatory framework which recognises rich cultural diversity would be a beneficial addition to the outcome of this review.

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?

Student representation on the OfS Board remains limited.
The OfS would benefit from engaging more with the National Union of Students. The University of Bolton enjoys a very positive relationship with its Students’ Union. The University would recommend that the National Student Survey is given more priority within the Quality Assessments by the regulator as this is the only nationally administered dataset which independently represents student views about their institutions and their course. The University is convinced, from discussions with its Students’ Union, that student interests could be best driven by the regulator by reference to such student datasets. It would be a pity if this opportunity were lost.

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?

The OfS reportable events system represents one element in the regulator’s attempts to ensure that institutions advise the OfS of important strategic issues. It would be useful for heads of institutions to receive simplified arrangements for receiving similar reportable updates from the regulator in respect of changes which the regulator quite appropriately wishes to make.
Based on experience with HEFCE, the OfS may benefit in its relationship with the sector by both a scheduled annual conversation and providing a named officer for each institution to ‘sound out’ ideas. This type of relationship management would enrich all parties and help the OfS to continue to effectively achieve its objectives.
There is definitely a willingness at institutional level to work more collaboratively with the regulator and to welcome robust and well-articulated challenge. This is something the University would appreciate working on.
This review provides an opportunity for the OfS’ relationship with the sector to be enhanced. The University would welcome regular opportunities for engagement with VCs and the regulator’s CEO.

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?

The principal systemic risks are separate from the OfS - but OfS interventions in some parts of the sector make managing of those risks difficult.
The principal systemic risks are:

Continued erosion of the real value of the tuition fee which has been at £9,000-£9250 for 11 years.
Potential capping of student numbers to control the Student Loan Book, either proportionally or selectively across the sector.
Further erosion of the attractiveness of the UK offer to higher education to international students by arbitrary grading or ranking of institutions. The University does not find gold, silver or bronze labels helpful in securing international business for the UK and cannot see why this would be accepted in other sectors of the economy where export business is important for UK national income. Universities provide one of the most effective international trade opportunities and long-term soft power development across the world and thus limiting their ability to trade in these markets by arbitrary labels which are unlikely to fully represent individual parts of an organisation are unhelpful. This is more of a political than a regulatory issue but the University would welcome the OfS’ support in recognising that all British universities offer exceptionally high quality education relative to the rest of the world.
The mismanagement of pension and salary settlements. This management could come in the form unaffordable settlements, unmanageable complexity in pension FRS102 (previously FRS17) legislation or failing to provide university staff with a fair settlement which deters staff retention, accelerates rates of retirement and or creates the 3rd Brain Drain to the US, Australia and Canada where salaries, particularly in STEM areas, can be considerably higher.
Most of these risks are sector wide, but some, such as selective intervention, may disproportionately hit access institutions which make an immense contribution to social mobility, civic pride and the levelling-up agenda.
In some institutions, managed growth to offer wider opportunities to regional communities or increase international revenue, are problematised by the very significant uncertainty about whether external factors could intervene to derail such initiatives.
Socially excluded groups are choosing to take non-graduate jobs rather than attend university given the national job situation (where there are more job vacancies than people to fill them). The downturn in applications to work in NHS contexts as a result of the trauma encountered by NHS working conditions and the relatively low pay and recognition of staff will affect university places significantly – especially in the modern universities.

The University sector is remarkably robust both operationally and financially and has, for generations, provided high quality education which is the envy of the world. This situation has persisted despite changes in governments, their policies and regulatory frameworks. Our own institution celebrates the commencement of its third century of operations in 2025 having sustained itself through two global pandemics, a Great Depression and two world wars. It is unlikely that the institution will not negotiate any systematic financial risks presented to the sector.

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?

The majority of UK HE have developed business models which seek to reduce the levels of vulnerability to government policy and international mobility. These models seek to diversify income as far as possible.
Permitting sustainable numbers of overseas students to work in the UK after graduation would be beneficial to the financial stability of the sector.
Extending the lifelong loan entitlement (LLE) to level 7 (i.e., postgraduate) would help many more students and institutions than the current proposed model. While universities welcome the four years of higher education fee loan eligibility which can be used on multiple shorter courses throughout a working lifetime, it is important to make the system meet the needs of those in the workforce who are already graduates [2].
Current proposals for the regulation of the LLE system where the OfS has oversight of the quality in individual modules of 30 credits (ie just 1/12 of a full undergraduate degree) may deter both universities and private providers from becoming involved.

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 requires each institution to make detailed financial projections and then to report on variation (as a reportable event) or if the student number returns (HESES and HESA) indicate variation.
The OfS have published a condition of registration Regulatory advice 14: Guidance for providers for the Annual Financial Return (9 June 2022) which addresses this issue. However, it is difficult to answer this question fully as OfS do not publish data on their interventions with institutions in relation to their business models.

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?

The OfS has a Student Protection Plan system to ensure that in the event of a provider failure, students at that institution would be supported to continue their study at another university.
Higher Education institutions are not just providers of education to students. They are sometimes the largest employer in the area, often the only means of social mobility for many underserved communities and frequently the source of civic pride for cities. A failure of an institution like the University of Bolton, which is highly improbable given our 200-year history, would undoubtedly have political considerations especially in the context of the levelling-up agenda for disadvantaged northern towns.

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 determined by government policy and funding rather than the OfS’ regulation. It should not be forgotten that the OfS do not set the tuition fee – that is done by Ministers and managed through the Student Loan Company. The OfS is not a funding body in the same way that HEFCE was.
There is a need for policy changes to secure the quality of the student experience and appropriate resourcing for the sector.

The tuition fee should be raised to reflect inflationary costs.
The OfS, as regulator, has an important part to play in liaising with institutions to ensure that planning for student number growth in line with demographics is in place.
It would be useful to consider an ongoing role for QAA as the respected UK designated quality body.

06 April 2023