English providers voice concerns over Office for Students regime

English universities fear that they will be forced to subsidise the cost of regulating new entrants to the sector under the Office for Students regime.

The new sector watchdog, which was launched on 1 January, is set to give new providers a discount on their registration fees for their first three years of operation.

The Department for Education also proposes to introduce a new “basic” registration category that would give an institution official recognition for a flat fee, possibly as low as £1,000 a year.

In contrast, established universities face having to pay registration fees of up to £120,000 a year, depending on their student numbers.

The Office for Students is tasked by the government with bringing new providers into the English higher education sector, leading to increased competition.

In an online article for Times Higher Education, Alistair Jarvis, the chief executive of Universities UK, warns that the DfE’s document setting out the role of the OfS is, “in places, confrontational, and appears preoccupied by short-term political concerns rather than the larger long-term task of creating a credible, independent regulator”.

In responses to a series of consultations on the role of the OfS, universities argue that registration costs should reflect not only the size of an institution but also the expected level of monitoring required.

“It is essential that low-risk providers that have low levels of engagement with the OfS, as proposed by the regulatory framework, do not subsidise the costs of regulating high-risk providers,” says UUK.

One of the organisation’s responses adds: “The OfS should not be waiving the fees for new entrants: if the provider’s business model can’t support the cost of registration with the OfS, it is unlikely the provider will represent a viable proposition.”

In one of its responses, MillionPlus, which represents modern universities, says that a £1,000 flat fee for registered basic providers “does not seem proportionate” when compared with the fees set to be levied on established universities.

MillionPlus also raises concerns about the level of tapering in OfS fees for universities in different size bands, claiming that “it would seem that such a banding model has been skewed in favour of smaller providers, in order to accommodate them, without any acknowledgement of the increased risk that they may bring”. Newer, smaller providers are “likely to require more regulatory effort and carry a greater risk of sustained oversight even if they are financially secure”, the mission group adds.

Elsewhere in their responses, universities raise concerns about the proposal to make participation in the teaching excellence framework a condition of OfS registration, highlighting that the audit of educational quality had been introduced as a voluntary exercise and arguing that participation in the TEF should certainly not be a requirement until an independent review of the exercise has been completed.

There is also widespread concern about the proposal for the OfS to act as a “validator of last resort” if a provider collapses or is unable to find a partner to accredit its degrees. In its response, MillionPlus argues that “a lack of a validation partner is a comment on the quality of provision in the provider seeking validation, rather than a reflection of market barriers”.

MillionPlus questions whether the OfS would have the “skills or credibility” to validate degrees, arguing that such a move would also represent a significant conflict of interest with the organisation’s regulatory responsibilities.

chris.havergal@timeshighereducation.com