Can one size fit all? OfS and the future of regulation

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Specialist institutions, alternative providers, and further education colleges – which make up a significant proportion of higher education in the UK are often forgotten by policymakers.

Set against that context, the Higher Education Commission has launched a new report – ‘One size won’t fit all: The challenges facing the Office for Students’ – to investigate the impact current HE policy has had on the diversity of sector provision and offer recommendations for the newly established OfS. The report argues that the changes to funding regime and student number controls have failed to encourage a diversity of HE offerings, instead increasing the standard three year, full time’model.

The HEC has identified three strategic challenges for the OfS:

  • The ability for HE to act as an engine for social mobility
  • The funding regime as a barrier to diversity
  • The ability of the sector deliver more on the Industrial Strategy

Wither social mobility?

One of the strongest criticisms in the report concerns attempts to get the market in HE working to encourage diversity and innovation. It argues that policy reforms – such as the lifting of the cap on student numbers and changes to fees – have not encouraged new types of provision, but made it easier for more providers to enter the market to offer the standard three-year, full-time, campus-based degree. The report notes a fall in the number of specialist providers of higher education over time, and the huge drop in part time and mature learners since the 2012 reforms. The Commission argue that the introduction of a more competitive market has created a homogenising effect on HE provision, which consequently has failed to increase student choice.

OfS has been tasked with kick-starting a ‘transparency revolution’ to help prospective students make more informed choices about HE. The report identifies students from low participation backgrounds as the worst hit by information imbalances, with no access to well-informed school and family networks. Furthermore, it rejects a consumer-driven model that encourages price variation to drive student choice.

As anxiously anticipated by many universities when the tuition fee cap rose to £9,000 in 2012, applicants’ perceptions of the quality of a degree course do not tend to be positively influenced by its price. If a university charges less for a degree than another, applicants may believe that the cheaper option is of lower quality. As Michael Barber has also suggested, more research should be undertaken to understand how students use sources of information to select courses and institutions. 

The report flags the ‘non-continuation’ metric in TEF and the difficulty faced in attempts to foster diversity. If student retention is seen to boost an institution’s performance, it can work to discourage providers from taking on students that might lower their retention rates, which in turn acts as a drawback to recruiting students with a non-standard profile.

The Commission recommends that OfS be held accountable for the diversity of provision within the sector, proposing that the regulator should map diversity across higher education and produce a yearly report for Parliament. With former Equality Challenge Unit chief executive Nicola Dandridge at the helm, it is reasonable to hope that the issue will be given priority.

Flex that funding muscle

The Commission argues that the current funding regime does not incentivise universities to diversify their provision of higher education. The combination of ELQ restrictions for part-time funding, fee limits for accelerated courses and the additional cost incurred in delivering more diverse provision makes it less financially sustainable for HE providers.

The report states that planned amendments to the Higher Education and Research Act to set higher fee limits do not go far enough to offset the disadvantage experienced by providers of accelerated degrees, part-time study; and that allocating tuition fees based on academic credit – rather than time studied – would better solve the issue. Erasing the disincentive to provide accelerated courses could help sustain the portion of HE with close links to industry.

Another recommendation suggests the DfE and the Education and Skills Funding Agency investigate allowing employers to use the apprenticeship levy to fund HE level part-time training where relevant to work. It’s true that SMEs and micro-enterprise are not often likely to have the resources to contribute to degree apprenticeships – and the arrival of a credit – rather than course-based funding model would enable a huge expansion in industry-linked provision. 

But disaggregating too far poses regulatory issues in monitoring how taxpayers money is spent: retention and completion would be hard to monitor, and last time the genie of funding non-qualification bearing training escaped the bottle of regulatory oversight we got the expensive mess that was Individual Learner Accounts.

Pracademics in industry

Also worth noting is the Commission’s enthusiasm for building sector links with industry. It argues that pressure to perform in REF has driven HEIs towards prioritising research outcomes. Instead, the sector would benefit from the scaling up of education and training provided to higher education institutions by industrial partners, and delivery of education by practitioner-lecturers to build closer ties with the world of employment.

The Commission suggests that OfS develop ways to incentivise industry practitioners to play a bigger role in universities. It is an advocate of sandwich courses to link universities with SMEs, something that degree apprenticeships have struggled to do because of the heavy cost to firms running them. Among its recommendations is a review of degree apprenticeships and their impact on the uptake of sandwich years.

The Industrial Strategy provides the potential for an impetus for all universities to get their employer links together. A well (and appropriately) educated workforce was pillar two in the government’s consultation, though said pillar bears more than its fair share of the load. We’ll know more about the way that the sector can contribute to this when the government publishes its next steps for Industrial Strategy.

Supply and demand

Throughout the report, there is little mention of where the demand for diverse provision would come from, and no evidence is demonstrated that there is unmet demand at all. That is probably the Commission’s largest oversight, and a concern echoed at the report’s launch event on Thursday. New provision with no proven demand will be unsustainable. It is arguable that the supply may have to come first for the demand to materialise, but a lack of focus on the issue is still a concern for the proposals.

What happens now?

An assumption informing the report is that putting in place factors that allow for better market competition will lead to a drive in innovation. Putting aside concerns about how universities should be encouraged to cooperate rather than to compete, it’s possible that the idea of a competitive higher education market with OfS playing the role of regulator could have unintended consequences. Policies to encourage the market have thus far tended to reward a standard model that narrows institutions’ offerings, rather than diversifies them. In the same way, the Commission’s reliance on market competition to drive innovation runs the risk of doing the opposite. 

The report can be read in full here.

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