‘Cool heads needed’ as ministers mull further franchising rules

UK ministers have been urged to act with caution as they consider further regulation of university franchise partnerships, amid fears that a crackdown could harm the already-struggling higher education sector and opportunities for non-traditional students.

Education minister Bridget Phillipson has pledged new legislation “at the first available opportunity”, saying it is necessary to “restore trust in our universities” after further evidence emerged of fraud in the sector, including some faux students claiming government loans despite having no intention of studying.

Phillipson said the Office for Students (OfS) needed “tough new powers to intervene quickly and robustly to protect public money” in response to an investigation by The Sunday Times that placed renewed scrutiny on franchise arrangements, which see universities subcontract their degree programmes to private providers.

“Cool heads are needed right now,” warned Nick Braisby, emeritus professor and former vice-chancellor of Buckinghamshire New University, who led the development of several franchise partnerships during his time in charge of the university.

“I think there is a danger that the rhetoric and proposed solution gets out of proportion to the problem. The challenge is if the government gives OfS new powers it will come under intense pressure to use them regardless of whether it is the right thing to do,” said Braisby, who stressed that he was speaking in a personal capacity.

“In the long run, it won’t benefit the government or the sector if an overreaction leads to this being closed down,” he added.

Any further regulation would come on top of new rules proposed by the Department for Education earlier this year that will require franchised higher education providers with more than 300 students to register with the OfS – an initial attempt to police the mostly unregulated sector.

A consultation on the plans ends next week and, while the idea has been broadly welcomed, it has been warned that the regulator’s capacity to deal with an influx of registrations may cause delays that could prove catastrophic for many legitimate providers. All new applications to the OfS register are currently paused until August so the body can focus on the financial concerns facing universities.

“Broadly speaking, I think the government is doing the right thing,” said Nick Hillman, director of the Higher Education Policy Institute. However, he warned that widening the OfS’ remit may not be the best approach.

“Most people’s view of the Office for Students is not that it has too few powers,” he said, referencing concerns within the sector that the body “throws its weight around a bit too much and that it already has too many jobs”.

This week the OfS issued its largest fine on record after finding the University of Sussex had breached its free speech duties.

Despite the growing reputational risks, many in the sector continue to advocate for franchises, which are seen as important in widening participation. In 2021-22, the DfE found 59 per cent of students from England studying at franchised providers were from neighbourhoods classed as high deprivation, compared with 40 per cent of students at all providers.

Alex Proudfoot, chief executive at Independent Higher Education, said his organisation supported “universal regulation that is proportionate, flexible and efficient” but added that OfS registration “will not in itself be a panacea”.

“There are significant technical hurdles in the regulatory framework to overcome first – it simply isn’t designed for franchised providers and there is a real risk of overregulation, duplication of effort and a lack of clarity on which partner is responsible for what. The answer cannot simply be ‘both’ and ‘everything’,” he said.

For now, government rhetoric on franchising looks to be adding to the uncertainty universities face. “On the one hand, universities are told by policymakers: ‘Be innovative, look for new income streams because we’re not going to raise tuition fees’,” said Hillman.

“And when they do that, they either recruit more international students or they do more franchise provisions, [and] they get nailed by policymakers and regulators.”

helen.packer@timeshighereducation.com