Independent review of the OfS: key findings at a glance

An independent review of the work of the Office for Students (OfS) has finally been published, with its findings set to have a major influence on the future direction of the English regulator.

Sir David Behan – who was tasked with conducting the review by the previous government in December – has been appointed by Labour as the interim chair of the body, making his analysis all the more important.

On the back of the report, Bridget Phillipson, the education secretary, has outlined a new approach for the OfS, with a focus on its “core priorities” of restoring the sector’s financial health while pausing its incoming freedom of speech duties.

The report, Fit for the Future: Higher Education Regulation towards 2035, covers the key elements of the regulator’s work. Here, Times Higher Education summarises everything you need to know – including its 32 recommendations.

Challenges facing UK higher education

The world is “much more volatile, uncertain, complex, and ambiguous” than it was a decade ago, says Sir David, and this is having an impact on higher education. He says universities have had to deal with a global pandemic, Brexit, unprecedented political change, industrial action, a cost-of-living crisis, financial instability from rising pension costs, falling numbers of international students and frozen tuition fees.

As a result, Sir David says, many have observed that the “golden age of higher education is over”. This is the context within which the OfS operates, and the review points to what role he thinks the regulator should have.

Core priorities

As the title of the report states, Sir David’s review makes it clear how he thinks the OfS can become “fit for the future”. He wants it to work with the government to anticipate challenges and to develop a more proactive regulatory model:

• The review calls for the OfS to be a more “confident, agile, positive player”, but says the expansion of its responsibilities has “diluted its clarity of focus”
• It should focus on a smaller number of key priorities – monitoring financial sustainability, ensuring quality, protecting public money and regulating in the interests of students
• The OfS must move beyond its “safety net” approach of focusing on failing providers and evolve into one that enables improvement.

Independence

Sir David says the independence of the regulator – which is established by the government under legislation agreed by Parliament – is a “nuanced concept”, which is complicated further by the OfS’ funding relationship with the government, providers and students.

The report finds:

• A “perceived lack of independence of the OfS was a recurring theme” in interviews with the sector
• A significant majority (68 per cent) of interviewees feel that the OfS is not independent of government, with many warning that the state “exerts undue influence over the OfS to align to its policy priorities”
• Lord Wharton’s retaining the Conservative Party whip while chair of the regulator was the issue most frequently cited as evidence of a lack of independence
• Interviewees are critical of how often the OfS “readily adopted rhetoric that also featured in ministerial guidance letters”, for example, the use of the phrases “root out poor quality HE” and “boots-on-the-ground” investigations
• Sir David is satisfied that the OfS operates independently, but he says the perception of government oversight was “detrimental to the sector’s confidence, respect, and trust of the OfS”
• The report says more must be done to address this – because it is “essential” that the OfS is viewed as independent so the public and students can have respect, confidence and trust in the regulator
• It recommends that the OfS develop a more transparent style of communication to demonstrate to the sector its independence from government.

Relationships with the sector

The report says relationships between the OfS and the sector are fundamental to effective regulation:

• The sector describes “challenging” relationships with the Ofs that are often “adversarial and overly legalistic in tone”
• Issues cited included the timeliness, tone and style of OfS communications, the transparency of OfS decision-making and a lack of contact and guidance
• Respondents are critical that communications to the OfS go into a “black hole”, with many providers experiencing a significantly delayed response or receiving no response at all
• The report recommends that the OfS develop a comprehensive stakeholder strategy and that the sector engage productively and willingly with regulation.

Protecting students

Regulating to protect students is “critical to the activity of the OfS”, according to the report. It finds:

• There is a broad consensus within the sector that “student voice and perspective was noticeably absent from the OfS” and that there is a lack of meaningful engagement
• Students at focus groups reported that the regulator is “unknown” – they are unfamiliar with its brand, identity and purpose
• The OfS should be given consumer protection powers to protect students’ interests
• The regulator should engage more with students to understand their interests and priorities, and do more to involve students in its governance, leadership and regulation.

Governance

The board of the OfS is responsible for setting out strategy and ensuring that it is delivered. The review finds:

• Interviewees are concerned that the board “lacked the necessary skills, experience, and expertise to be effective and understand the diverse nature of the sector”, and that members are not sufficiently representative of the sector
• The sector warned that too many members of the board had conflicts of interest, and that stronger leadership was needed
• Sir David recommends that responsibility for appointing board members – it is the secretary of state who appoints the chair and non-executive board members, along with the chief executive and two other executive team board members – be revised
• He also recommends that the OfS commission an independent board evaluation, and that it use upcoming appointments well.

Fees

The registration fees for the OfS, which are set collaboratively with the Department for Education, also came in for criticism, particularly after recent rises:

• Smaller providers view the fees as “disproportionately burdensome” because of the fee range structure that makes OfS membership cheaper per student for larger providers
• Fee increases have caused “tension” and “outrage” in the sector – particularly when tuition fees have remained frozen for providers.

How has the OfS responded?

Susan Lapworth, chief executive of the OfS, said: “The review highlights a range of important areas – including the financial sustainability of the sector – that the OfS will continue to prioritise.

“More generally, the report will prompt reflection for government, the sector and the OfS. It sets out areas in which the OfS can, and will, continue to improve.”

Ms Lapworth said the OfS would continue to work hard to improve its engagement with the institutions it regulates, to ensure that trust-based relationships can underpin effective regulation.

“We are committed to working collaboratively with students and institutions as we develop our shared vision for the regulation of our important sector,” she added.

How has the sector responded?

Jamie Roberts, Russell Group policy manager, welcomed the report’s call for the OfS, the government and the sector to work together to mitigate risks around financial sustainability – the most significant and growing challenge.

“Moves towards a more genuinely risk-based approach to regulation would also be positive and could help cut unnecessary red tape,” he added.

“Streamlining the OfS’ approach to regulation with a renewed focus on key challenges would help stop resources being diverted away from teaching and student support.”

Rachel Hewitt, chief executive of MillionPlus, supported the report’s aim to reduce unnecessary regulatory burden, including the call for the OfS to work more collaboratively with other regulators and arm’s-length bodies.

University and College Union general secretary Jo Grady said Labour was “right to refocus the OfS on protecting the financial sustainability of the sector”. But to do this, she continued, the regulator needed new funding to support a university at risk.

patrick.jack@timeshighereducation.com