Counting the cost of the Office for Students

Every time we write about Office for Students subscription fees it’s to tell your institution will pay more than you were expecting.

There’s some more news on registration fees buried in January’s OfS Board minutes – and guess what – they’re going up again! The relevant section Nicola Dandridge’s Chief Executive’s report is worth going over in detail.

Paying for your registration

The Higher Education and Research Act sets out that the OfS can charge registration fees to the providers it lists. It has the ability to charge for other things too, and to levy fines for bad behavior.

But the registration fees are different as the they will be set by secondary legislation – the Board were told that the statutory instrument in question will be laid before 28 February. This is a hard deadline in that if it comes in after that, the OfS will not be able to charge fees from August, which is the current plan. Don’t worry, there’s a contingency plan linked to that which I will come to.

You’ll recall that the level of fee charged to an institution is set by a number of bands, based on the size of the institution (in student FTE). It’s the numbers linked to these bands – to be set in the SI -that will be consumed most eagerly by those following this story. The Board paper also sets out two new categories for subsidy – “Micro Providers” will be excused 100% of their fees and “New Providers” will not have to pay 75% of their fees in year one of registration, tapering to a full fee payment after three years.

But the killer is:

Due to changes in some of the assumptions made, the final fee levels are likely to be higher than providers had anticipated. [Exempt from publication.] Whilst the OfS has no decision making role in the fee levels there is a risk of a negative reaction from providers on this issue once known at the end of February.”

I’m sure there will be.

Dandridge notes, diplomatically, that although they will issue an official invoice 30 days before payment is due (so, late June) “providers will be able to work out their likely fee once the secondary legislation has been approved”. Indeed they will – not least because once again we’ll set out the data clearly on Wonkhe.

About that contingency plan

The Board paper doesn’t spell it out – but the “contingency plan” agreed with DfE and the Treasury is almost certainly that the cost of running OfS next year will come directly from government. After all, that’s how OfS has been funded this year – and even if fees are charged the Treasury still chucks in an extra £6.6m to supplement income.

Which, frankly, is what should be happening anyway. There are few good reasons why OfS should be funded by subscription – the best idea we can think up is some imagined parallel with OfCom or OfGem. But creaming off some of the profit made by privatised utilities is hardly the same as charging money from much smaller HE providers who are already – through no fault of their own – facing financial uncertainty via Brexit and and Augar.

It’s this kind of misguided sense of sector ownership that runs through the discussions that led up to HERA s28. The sector is already required to subscribe to HESA and the QAA, institutions are also almost certain to subscribe to Jisc and Advance HE, plus a number of smaller specialist bodies. Adding yet another subscription is hardly the way for our emerging English regulator to win hearts and minds.

3 responses to “Counting the cost of the Office for Students

  1. Do we think that in this part:

    “Due to changes in some of the assumptions made, the final fee levels are likely to be higher than providers had anticipated. [Exempt from publication.] ”

    It’s the assumption as to how many providers there would be that’s so different? Wasn’t there supposed to be 495 providers? And yet the CEO’s report talks of 300 on the register and 100 to go. That means they’re short of c100 providers that DfE thought would be approved. That’s an issue for fees – but that’s also an issue for who’s regulating them…

  2. Good to see that they’ve gone for market friendly model of forcing low-risk providers to fund high-risk start ups, with significant discounts for new entrants to HE (who may or may not take up a larger amount of the regulator’s time…).

  3. We covered this in the earlier article – it is almost certainly the lack of providers (specifically the 90ish large HEIs that DfE arbitrarily decided would come into being when they revised the impact analysis) that will lead to higher fees. We’ve been saying this since 2017 and it gives me no pleasure at all to be proven correct on this issue – it’s an utterly avoidable error on the part of DfE.

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