Registration of new higher education providers in England is being paused for the next eight months after the sector regulator announced it was prioritising its “finite resources” on addressing the financial health of the sector.
Applications to register with the Office for Students (OfS) have been put on hold to allow the body to “work more closely with institutions under significant financial pressure in order to protect the interests of students”, it was announced on 2 December.
The changes also affect applications to gain degree-awarding powers and university titles, while any institution wishing to change its name will also have to wait for approval.
Some recently filed applications have been affected by the measures but those that have reached an advanced stage will be completed, the OfS said. The suspension is expected to be in place until August 2025.
Philippa Pickford, the director of regulation at the OfS, said the “extremely difficult decisions” had not been “taken lightly”.
She pointed to a recent financial sustainability update that predicted almost three-quarters of providers could end up in deficit next year as evidence of the “severe pressures facing the sector” and the need to “prioritise our finite resources on this important issue”.
Any higher education provider must be registered with the regulator in order to recruit students who can access government-backed loans. It is also necessary for applying for a sponsor licence from the Home Office to recruit international students.
All registration processes were brought in house at the OfS after the exit of the Quality Assurance Agency for Higher Education, which previously conducted inspections of providers applying for degree-awarding powers, but quit in 2023 amid concerns about non-compliance with European standards.
This added to the workload of what is seen by many as an overburdened regulator. Stripping back its activities to focus on key challenges for the sector was one of the key findings of a report by Sir David Behan, now the OfS’ interim chair, published in July.
But the move appeared to undermine the regulator’s commitment to streamlining the registration process, which has been a key priority for governments over the past decade as part of efforts to encourage “challenger” institutions to launch and compete with established providers for students.
Former universities minister Lord Johnson of Marylebone changed the law to allow applications for degree-awarding powers from the launch of a provider, attempting to break what he called a “cartel” in the sector, but many have complained the process remains too onerous.
The OfS has also faced a slew of name change applications in recent months, with both the University of Bolton and the University of Central Lancashire still awaiting the outcome of their applications after neighbouring universities objected to their plans.
Brooke Storer-Church, chief executive of the mission group GuildHE, said the activities being shut down were used by institutions to “evolve their business models and reshape their identities” and the OfS move would “introduce additional barriers to finding a secure and sustainable footing”.
“While we understand some pragmatism, this represents a further challenge to our institutions who are working tirelessly to consider how to mould themselves into increasingly tight notions of what a fit-for-purpose institution looks like in 2024,” she added.
Ms Pickford said early intervention was key when dealing with institutions in financial trouble and “delaying this work would mean we miss a crucial window of opportunity to get ahead of a worsening financial situation for some institutions”.
She conceded a “small number of institutions” will be affected “but we must prioritise managing risks for students already in the system, ahead of the benefits that new institutions, or institutions with the ability to award their own qualifications, bring”.
