Johnson: OfS hasn’t stopped universities ‘operating like cartel’

The Office for Students has neglected one of its original aims by failing to reform the “nightmarish” system that prevents alternative higher education providers competing with established institutions, according to the former universities minister who created the English regulator.

Lord Johnson of Marylebone, the architect of the Higher Education Reform Act 2017, said not tackling the problems with validating new providers was one of his biggest frustrations with the OfS because it allowed universities to operate as “gatekeepers” and prevent competitors from offering different models.

Appearing in front of the House of Lords’ Industry and Regulators Committee – which is investigating the OfS’ work following intense criticism from universities – Lord Johnson said the processes in place to get going as a provider, including achieving degree-awarding powers, involved “unbelievable bureaucracy”.

He said a key aim of HERA was to accelerate this, but “it hasn’t” and the agenda has been neglected recently, partly because government ministers have not been pushing it.

Lord Johnson said new providers still face having to be validated by existing providers, but “that system is fundamentally broken because it means that new entrants have to conform to the mould of the party that validates them. It is an inherent brake on innovation and competition in the system.”

He said the OfS should be looking at alternative models because direct entry into the market had proven too lengthy a process and the Quality Assurance Agency – the body responsible for assessing new providers – still requires them to “show they are much like a university in every single possible respect.”

“New providers who want to do something different end up having to conform to the classic model. The system is broken and I wish the OfS would address that seriously,” Lord Johnson said.

Later in the hearing he said it was also “very healthy” to have a system in which providers exited the market if they were not delivering value or finding enough students to fill their spaces.

Charles Clarke, a former Labour education minister appearing at the committee alongside Lord Johnson, agreed that a key aim for the regulator should be ensuring a diversity of providers operating in the system.

Mr Clarke – who introduced the system of top-up fees for universities in 2003 – said institutions operate in a way that is akin to a “cartel”, a term Lord Johnson agreed with, in ensuring provision continues to be dominated by the traditional model of three-year undergraduate degrees, with fees all set at the same level.

But Mr Clarke – who left parliament in 2010 to take on a series of visiting professorships – disagreed with Lord Johnson that the OfS represented a proportionate level of regulation for the sector, saying much of its work on harassment, free speech and mental health could be handled by other agencies, including law enforcement. As large organisations, universities were also well equipped to take responsibility for these issues themselves, he added.

“There is a real concern that the OfS is looking at things it need not be looking at, and not looking at things it should be looking at.” Mr Clarke told the committee. 

He said the OfS had been too “knee jerk” in reacting to negative media stories about the sector that were a “distraction” from pursuing an overarching strategy to address the more fundamental issues. 

The appointment of Lord Wharton, a Conservative Party peer, to replace Sir Michael Barber as the OfS’ chair was a “core” part of the problem, Mr Clarke said, as it was “bound to build perceptions across the sector that a political agenda was being set on the supposedly independent body.”

Lord Johnson said there had been too much “sniping” at the OfS from the sector and providers should accept that there will be no return to the system of self-regulation that existed before it.

“The idea that we don’t need regulation for a sector of this importance to our economy is to my mind fanciful,” he added.

In its first years of operation, the OfS needed to make clear it is regulating in the student interest, not in the provider interest, Lord Johnson said. That may have felt “unpleasant and heavy handed” at times, he added, and there was now scope to take a more collegiate approach.

tom.williams@timeshighereducation.com