What is to be done about the Office for Students?

Regulation is usually dry. With the Office for Students, the dry is combustible.

The OfS, envisioned by ministers as a student-centred market regulator for English higher education, began its operations in April 2018. Five years on, in the wake of recent tough talk from the regulator about cracking down on government bugbears such as “low-quality” courses and a supposed erosion of free speech, things are getting heated.

The concerns of sector leaders have already generated an ongoing House of Lords committee inquiry into the OfS, covering areas including “its independence from and relationship with the government”. And the flames of contention are only likely to rise higher when the regulator starts announcing results from its government-ordered “boots-on-the-ground” investigations of providers – amid suggestions that some of the institutions being investigated have taken legal action to challenge the investigations.

One vice-chancellor describes leadership at the OfS as “lamentable”. But the bigger issue relates to structural issues with the regulator, which are allegedly creating a situation that “existentially threatens the quality and health of the English system of HE, which is a major national asset”, the vice-chancellor says.

Another vice-chancellor sees the regulator as “much too close to government”, taking a flawed approach that leaves every institution feeling “one slip on one condition of regulation away from an OfS intervention”.

Meanwhile, Sir David Bell, the University of Sunderland vice-chancellor and former permanent secretary in the Department for Education (DfE), sees the OfS as having “started life with a very naive, unsophisticated and one-dimensional view of regulation, which, as they perceived it, required removing themselves entirely from relationship management when it came to individual institutions”.

Perhaps there’s a bigger force than the OfS behind the problems. A series of unstable Brexit-era Conservative governments – on economic grounds often sceptical of the value of expanded higher education, on cultural aspects downright hostile – is the source of an appetite for heavy-handed regulation that the OfS has taken as its cue, many in the sector argue. 

Vivienne Stern, chief executive of Universities UK, describes the OfS as “a bit of a teenage regulator, occasionally rude and a lot of hard work, but also being leaned on really hard by its parent”.

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But when exactly will the OfS mature? Will the sector be able to get on better with it when it does? And who would it benefit if it was killed off before it even reaches adulthood?

Some of the friction comes back to the fact that the OfS is a very different kind of organisation from its predecessor, the Higher Education Funding Council for England. The chief executives of Hefce, which was created by the 1992 Further and Higher Education Act, were all vice-chancellors, who saw their role as acting as a “buffer” between universities and government, sometimes pushing back against ministers’ directives and building relationships with the sector to gain early intelligence of any problems.

Hefce exercised authority by virtue of its allocation of teaching grants, which formerly provided the bulk of higher education funding. But when the coalition government slashed the teaching grant in 2012 and tripled student loans to compensate, ministers felt a new system of regulation was needed.

The OfS exercises authority by virtue of the fact that institutions must meet a range of conditions if they wish to be included on its register of providers whose students are able to access the public student loans system. And the protagonists in the body’s genesis and early operation insist that the change of approach has been successful.

Sir Michael Barber, the public services delivery expert who served as founding chair of the OfS until April 2021, has previously conceded the difficulties of getting a new regulator up and running at a time of political turmoil and public health emergency, but insisted that the OfS has made major improvements in access and participation for disadvantaged students. Nicola Dandridge, the former UUK chief executive who served as the OfS’ first chief executive until April 2022, told Times Higher Education earlier this year that in a system largely funded by student loans, it is “completely essential there is a regulator looking out for the interests of students”. And Lord Johnson of Marylebone, who oversaw the 2017 legislation that brought the OfS into being during his first stint as universities minister between 2015 and 2018, insists that the new regulator has been an “extraordinarily successful creation”.

But Justine Greening, who was education secretary at the time the legislation, the Higher Education and Research Act (Hera), was passed, questions whether the OfS is “really representing students, in the sense of being a voice of students in a helpful way. Or is it actually following what it is interested in, in an unaccountable way?”

Many of the problems between universities and the OfS stem from the turbulent political times in which the regulator was formed. The Hera was introduced in Parliament before the Brexit vote of June 2016, but it was pushed through in a hurry in April 2017, ahead of June’s snap general election, meaning that “no shared view” of how the OfS should work was developed between the DfE, the regulator and the sector, says Chris Millward, who was director of fair access at the OfS before exiting in December 2021.

Then there was the change in character of the Conservative Party triggered by the Brexit vote, particularly when Lord Johnson’s brother, Boris, replaced Theresa May as prime minister in 2019. That change saw Lord Johnson return as universities minister, but the strongly pro-remain figure – who took a liberal, pro-expansion view of higher education – promptly resigned as an MP in September 2019 amid “unresolvable tension” between “family loyalty and the national interest”. In the interim between Lord Johnson’s two terms, the pro-remain Sam Gyimah had railed against universities’ supposed left-wing bias before himself resigning over Brexit, while the pro-remain Chris Skidmore, who had initially been moved aside for Lord Johnson, was sacked as the latter’s successor in February 2020 after opposing government plans to end student loan access for university applicants with lower grades.

Skidmore, in turn, was replaced by Michelle Donelan, who adopted Gyimah’s “culture wars” approach to the job and was eventually appointed to the more senior post of education secretary, one of eight incumbents in six years following the Brexit vote.

The longest-serving of those was Gavin Williamson. Like Donelan and the adviser who worked for them both, Iain Mansfield, Williamson often questioned the value of higher education expansion and criticised universities for supposedly suppressing free speech and right-wing viewpoints. Their tenures saw a spate of ministerial guidance letters to the OfS calling for crackdowns on an array of issues, including grade inflation, free speech restrictions and online learning. In five years, 25 such letters were sent – often accompanied by hostile coverage of those issues in right-wing newspapers.

Millward, now professor of practice in education policy at the University of Birmingham, observes that the Boris Johnson government was “elected to deliver Brexit”. But “universities had opposed Brexit” and the government was conscious that its electoral success was in part down to “people and places with lower proportions of graduates, with a different set of values to universities”.

Sunderland’s Bell also emphasises that the OfS “emerged during a period when the zeitgeist was, undoubtedly, anti-universities”. In his view, this “unduly influenced those who were leading the OfS as they wanted to ‘talk tough’, seeing that as being in line with the prevailing political opinion”. This had the consequence of “immediately casting doubt on their supposed independence”.

Some would argue there has been a decline in the quality of leadership at the OfS since the initial incumbents left. Susan Lapworth, the current OfS chief executive and a former Hefce staffer, does not have the same experience of dealing with politics and politicians as Dandridge inherited from her UUK role, while Barber’s successor, Lord Wharton, had no previous involvement in higher education when he was appointed by Boris Johnson (whose Tory leadership campaign he led) and has had little visibility in the role. Moreover, the fact that the Conservative peer has continued to take the Tory whip in the House of Lords has deepened existing doubts about the OfS’ independence from government.

“The appointment of a chair who was taking the government whip – and was appointed for that reason, really, rather than for expertise on higher education – was a way of making sure the government could get its way,” Millward believes.

Another key problem with the OfS is “how much unnecessary regulatory burden we’ve seen”, according to Sarah Stevens, director of policy at the Russell Group of large research-intensive universities. A statutory “Regulators’ Code” requires such bodies to “carry out their activities in a way that supports those they regulate to comply and grow”, adopt “simple and straightforward ways to engage with those they regulate and hear their views” and “base their regulatory activities on risk”. But the OfS is “not really meeting many of the requirements”, in Stevens’ view.

It is a frequent lament from the sector that, far from adopting a risk-based approach, the OfS imposes the same onerous data reporting requirements on all universities, regardless of their type or profile. And there is a widespread view among vice-chancellors that the OfS is indifferent to sector concerns.

Following the 2019 Conservative manifesto’s pledge to take action on “low-quality courses”, for instance, the OfS implemented a new condition of registration on quality. This involves judging universities and their courses on the basis of numerical thresholds for proportions of students continuing and completing their courses, and for graduate outcomes – where the expectation is that 60 per cent of students will go on to further study or “professional or managerial” jobs within 15 months of graduating.

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That system has been created despite concerns voiced by universities during the consultation that such baselines will potentially deter universities from recruiting disadvantaged students and fail to take account of huge variations in regional labour markets. And the OfS’ pledge to consider institutions’ “context” if they fall below baselines appears not to have assuaged concerns.

In addition, the current regulatory system requires all institutions to produce reams of outcomes data on all of their courses – and the OfS to take in all of that data and monitor it. Such a blanket, untargeted approach is “replicated in a lot of things” the OfS does, says Stevens. “It’s not the best use of their resources – because they have got to have teams of people to assess all this data and make decisions and do the investigations – and it’s also taking up lots of time across the sector for providers, where it might not be necessary.”

Enforcement is another area where the OfS takes flak. Last year, following yet another letter of ministerial guidance asking for investigations, the regulator announced it had “launched eight new investigations designed to tackle poor quality courses”. These are looking “specifically at business and management courses, including an examination of whether poor quality online learning has replaced face to face teaching to the detriment of students’ academic experience”.

But its approach to investigations illustrates the OfS’ “complete lack of transparency”, argues Diana Beech, chief executive of London Higher and a former adviser to Conservative universities ministers, including Lord Johnson. “It was very clear that affected providers didn’t know why they had been put under investigation…and I still believe they are none the wiser to this day,” says Beech, who was previously the DfE programme manager responsible for establishing the OfS. “There’s a clear sense of nervousness across the sector that anybody could be picked up [for investigation] – and they [wouldn’t] know why.”

The scent of political direction is also present around the OfS’ activities on free speech, a hot button issue for many Conservative MPs. The Higher Education (Freedom of Speech) Bill, currently completing its passage through Parliament, will assign the regulator an additional set of responsibilities: a new director of freedom of speech and academic freedom within the OfS will investigate universities and students’ unions over alleged breaches of duties to ensure free speech. But a December OfS paper on free speech criticising universities and citing right-wing newspaper and thinktank coverage of the issue brought a stern rebuke from the Russell Group. The mission group, not noted for anti-establishment positions, urged the regulator to maintain “its independence and ability to make impartial judgements” and to regulate on the basis of “accurate data rather than partial analysis or inflammatory stories”.

Yet another concern arises from the OfS’ recent appointment as England’s “designated quality body” (DQB), taking over from the Quality Assurance Agency. Some feel the OfS effectively forced out the QAA by taking a regulatory approach that conflicts with standard international practice, as set out in the European Standards and Guidelines. Given the concerns about the OfS’ independence from government, one vice-chancellor considers the current situation as effective “state control” of quality assurance.

The extra duties the OfS is taking on also mean that its operating costs, which were already nearly £30 million in 2021-22, are set to rise further. To a chorus of dismay in an era of high inflation and frozen tuition fees, the DfE told universities in January that it was planning to raise their registration fees by 13 per cent next year – which for the largest universities would amount to a £23,530 rise, taking their total fee to £204,530.

These rising fees are also a major concern for the smaller institutions making up GuildHE, says its chief executive, Gordon McKenzie, a former senior civil servant responsible for higher education. “Ministers promised the OfS would not be ‘big, bossy and bureaucratic’. I’m afraid it is all three,” he says.

And its “accretion of additional responsibilities” is “diluting the effectiveness of the organisation, as well as creating a colossal bureaucratic burden in the sector”, adds UUK’s Stern.

For all the suggestions that the OfS is too close to government, it hasn’t always made Whitehall very happy either.

“I think it needs to improve,” says Mansfield, the former special adviser to Williamson and Donelan, when asked how he thinks the OfS is doing. One key problem is that “it’s not actually risk-based” despite “consistent pressure” from government to be so, continues Mansfield, who is now director of research and head of education at the Policy Exchange thinktank. And despite last year’s announcement on quality investigations, he points out that the OfS hasn’t completed one yet. This all adds up to a “massive burden on everyone and no effective action on anyone”, amounting to “the worst of both worlds”, he says.

All this raises serious doubts about the OfS’ future, he adds. “Is the whole premise of regulating by conditions of regulation fundamentally flawed? Does it come down to the fact that it doesn’t work as a means of regulating a mass public service? It’s at the stage where you have to start asking those questions.”

In an article in THE in February, Mansfield compared the OfS unfavourably with an array of other UK regulators, and his verdict is that the body is “on its last chance to prove itself”.

But the OfS’ creator, Lord Johnson, does not recognise this portrait of a struggling or failing entity. Universities should “count their lucky stars they’ve had people as capable as Michael Barber, Nicola Dandridge and Susan Lapworth regulating them”, he says.

He also warns that sector leaders criticising the OfS are acting in a “tone deaf” way, “as if they are completely unsympathetic to public concerns around value for money, the student experience, quality of teaching”. And he wonders what endgame they envisage. There will be no “move back to a world where [universities] have a totally captured little pussy cat that just hands out money and acts as a buffer between them and the sources of funding”, he says. “We’re in a different world now…I don’t see any sign we’re going back to grant-funded higher education.”

Nor, Johnson points out, do most sector leaders want to return to such a system. So they “need to be a bit careful” in mounting a “guerrilla campaign” against the OfS. “What is all this in aid of?” he asks. “A cause which is completely unattainable and which [university leaders] actually don’t want. So ‘wake up’ would be my overall message.”

Indeed, if the OfS is seen by some as having been insufficiently responsive to government objectives, it might be argued that anyone hoping it will be scrapped should be careful what they wish for. It is possible to imagine a successor entity that is even more subject to ministerial direction.

For her part, UUK’s Stern argues for reform, not abolition. If the government were to “streamline” the regulator “so it can be efficient and effective in its core areas”, it could play a useful role in “providing public and political assurance that, frankly, we need as a sector”. The aim, she adds, should be for an OfS “version 2.0, which is more efficient and more in line with the Regulators’ Code – rather than acting as a slightly anxious policeman that wanders around trying to catch people out – and is able to stand up to government because it’s got a strong reputation”.

Both London Higher’s Beech and the Russell Group’s Stevens also call for better communication and a more collegiate, risk-based approach. “You can consider people’s views and have conversations without being captured by the sector you are regulating,” Stevens points out.

Greening, who since leaving government has founded the Social Mobility Pledge, bringing together businesses and universities, says a more “clear-sighted, sharper view of the OfS and what it is trying to achieve would not only slim it down into a more manageable size but make it far more effective on behalf of students and the sector”. For instance, she worries that the regulator’s important focus on employability risks being “ham-fisted and therefore counterproductive” because it fails to recognise the good work universities have been doing in “trying to connect their graduates up with roles, sectors and employers who have traditionally not been as open as they should be”.

Sunderland’s Bell agrees. “I don’t think that relationships with OfS will ever be right until there is far greater trust on OfS’ part because, despite its title, it is us that do the ‘heavy lifting’ day in and day out with students,” he says. “If the OfS fails to understand that, and cannot change its instincts, then I fear for its future.”

Even Lord Johnson acknowledges that the OfS is “falling short in various ways” – even if that is for “understandable reasons”, such as the challenges of setting up a new regulatory framework and the pandemic. “In this next phase, it’s important they do remember the risk-based part of their mission,” he concedes.

The OfS also needs to do “more on the competition and choice agenda”, continues Lord Johnson, who has always argued for a market vision of higher education in which new entrants raise standards by competing with traditional universities.

And given the coming of the government’s Lifelong Loan Entitlement – due to begin in 2025 – there’s a need for the OfS to “reinvent itself” and “see itself not so much as the Office for Students, but as the Office for Lifelong Learning. I think changing its name and changing its mission in that way would be a really important development for the next five years of its existence,” Johnson says.

In a statement to THE, Lapworth says the OfS was established to regulate “in the interests of students, and we are focused on ensuring students from all backgrounds can choose high quality courses which leave them well prepared for life after graduation. The OfS’s approach is necessarily different to Hefce’s, and we recognise that this shift to a regulated sector was significant for universities and colleges and to some extent still feels new.”

The regulator understands, she continues, “that our recent move to more active regulation and increased investigatory work, particularly in relation to quality and student outcomes, has put more pressure on our relationships with institutions. We recognise the importance of good, constructive relationships and effective communications with the sector we regulate.”

Improvements being implemented include “reminding institutions of their named OfS contact, creating opportunities for more direct engagement between senior OfS staff and the institutions we regulate, and regular communications with vice-chancellors and principals to give updates on our work and priorities,” says Lapworth.

Perhaps there is scope for a change of ethos at the OfS under a Conservative government led by Rishi Sunak, which seems more pragmatic than its predecessors – although repeated threats to bear down on international students have dismayed a sector that relies ever more heavily on uncapped international fees to compensate for the falling value of capped domestic fees.

Meanwhile, if the Labour Party wins the UK’s next general election, expected next year, it might want to create a regulator for all of tertiary education, joining up further and higher education. Wales’ Labour government has already created a single oversight body for the entire post-16 sector, including further education, higher education, apprenticeships, sixth forms and Welsh government-funded research and innovation.

Millward suggests that the OfS also needs to work more closely with UK Research and Innovation. While Hefce used to administer block grants for research, that function has since passed to Research England. But the political focus on levelling up – and a future Labour government’s likely focus on devolution of power to the English regions – demands “a joint approach to universities’ education and research missions. And you have to have them working with FE to enable progression,” Millward says.

Some argue that education policy in England is far more subject to abrupt changes in political direction and far less subject to long-term strategic planning than is the case in other Western nations. There’s work to do if the OfS is not to be a short-lived case study proving the reality of that perception. But regardless of who wins the next election, a situation in which the OfS has irritated both its political backers and universities themselves with its full-throttle approach to regulation is probably unsustainable. Something, it seems, will have to give.

john.morgan@timeshighereducation.com