England’s OfS plans compulsory TEF and to charge up to £120K fees

England’s new Office for Students wants to make entry into the teaching excellence framework compulsory, will require universities to pay up to £120,000 a year to register with it, and might award its own degrees to students.

The consultation on the OfS’ powers, published on 19 October, spells out once again that the new market regulator will be hugely powerful, with a multifaceted role ranging far beyond that of the Higher Education Funding Council for England, the current regulator.

The OfS will regulate institutions and the sector, grant degree-awarding powers and university title, award teaching grant to institutions and, potentially, award its own degrees if it sees gaps in provision.

The OfS officially comes into existence on 1 January 2018, under the Higher Education and Research Act passed earlier this year.

The consultation document, “Securing student success: risk-based regulation for teaching excellence, social mobility and informed choice in higher education”, was published by the Department for Education on behalf of the OfS.

The consultation emphasises that the OfS “will be a market regulator”, at sector level focused on “creating the conditions for competition, continuous improvement and informed choice within the sector, supplemented by tools to encourage and support activity that addresses market failure”.

The OfS regime “will be a marked shift from the current approach to regulation”, the consultation adds.

A separate consultation outlines proposed fees to be imposed on institutions, which will be required to register with the OfS if they wish to access public funding, including student loan funding (conditions attached to allowing institutions to be on the register of providers are the source of the OfS’ powers). For institutions with more than 10,000 students, the proposed fee is £92,000 a year; for those with more than 20,000 students, it is £119,700 a year.

• On the TEF, the main consultation says: “From the launch of the OfS regulatory framework in August 2019, participation in TEF will be an ongoing registration condition for all approved and approved (fee cap) [those charging the basic fee and the maximum fee] providers with more than 500 undergraduate higher education students.” This follows the suggestion that the government’s decision to freeze fees at £9,250 would remove the incentive for universities to enter the TEF. The OfS has now resolved that uncertainty.
• On access (the director for fair access will be merged into the OfS), the consultation document says that if institutions are not making progress on access, “the OfS will not hesitate to use sanctions where appropriate”.
• On freedom of speech, the OfS says: “If a provider fails to comply with the freedom of speech principle then, as with all public interest principles, this would breach the registration condition. The OfS has a range of interventions at its disposal, such as imposing specific conditions or formal sanctions against the provider including monetary penalties, suspension from the register or deregistration. The OfS can also publicly call out providers who fail to comply with this principle and protect freedom of speech.”
• The OfS will require institutions to publish “value for money” statements. “Providers should design this statement to allow students to see how their money is spent, following examples from other sectors, such as local authorities publishing breakdowns of how council tax is spent…Where there are substantial concerns the OfS may carry out an efficiency study to scrutinise whether a provider is providing value for money to both its students and the taxpayer,” the consultation says.
• The consultation confirms that new providers will be allowed to award their own degrees from the start of their operations on a probationary basis, replacing a current system in which they must first establish a four-year record of teaching under a validation agreement with a university. The OfS will “put in place arrangements for a new provider to seek powers to award its own degrees as soon as it is registered”, says the consultation. “Granting such awarding powers on a probationary basis means that OfS can ensure that risk to students is properly mitigated whilst providing opportunities for fair competition to new high quality providers.” 
• The OfS will award teaching grant “strategically, taking into account government priorities”.
• On institutions closing down, the consultation says that the OfS “will not prop up failing providers: there is nothing wrong, in and of itself, with a provider closing down. Indeed, it is a sign of a healthy, functioning market.”
• The OfS “may, in some circumstances, use its powers of entry and search as set out in [HERA] to investigate suspected serious breaches of a provider’s OfS ongoing registration conditions, its OfS funding or student support funding conditions, such as financial irregularity”. It is “envisaged” that the OfS “would exercise these powers rarely and only in exceptional circumstances”.
• The OfS will have the power to remove an institution from the register of higher education providers that it maintains, thus removing its access to public funding, including student loans. “An example of when deregistration might be appropriate would be where a whistle-blower lets the OfS know a provider has been supplying inaccurate information to the OfS deliberately to conceal poor student outcomes,” says the consultation.
• The consultation also notes that the act gives the OfS powers “to vary or revoke degree-awarding powers, and revoke university title. This is regardless of how these powers were obtained [including by Royal Charter], and applies whether or not providers are registered.”
• The act also gives the OfS powers to validate degrees if approved by the secretary of state. The consultation cites the example of covering “more niche, specialist subject areas and/or innovative delivery models” as cases where the OfS could do so. Students will be taught by their providers, but “as the OfS will act as the degree-awarding body it will be responsible for the academic standards of any awards granted in its name, and for the quality of the learning programme”.

john.morgan@timeshighereducation.com