Decision-making, for regulators

How does the Office for Students decide when and where to intervene?

The regulatory framework tells us that providers on the register are monitored using lead indicators, reportable events (things that the provider has done that it needs to tell OfS about), and other intelligence such as complaints.

But when an investigation is announced (sometimes substantially after it has begun, and sometimes alongside the publication of findings) it is not often clear what in particular has sparked the interest of the OfS team responsible. And when regulatory action is taken, it is sometimes difficult to determine why the regulator decided on that particular investigation.

If you are under investigation, or hit with a condition of registration or fine, this is a huge deal. There has been a lot of pushback from institutional leaders (Dave Phoenix at South Bank to give one notable example) not understanding why their provider has been “singled out” for an intervention or precisely what they are looking for in an investigation. It all plays into a sense that the OfS regulatory approach is “adverserial” and “distant” – something that shone through in the review conducted by the House of Lords’ Industry and Regulators Committee, and has cropped up again in the judicial review brought by the University of Sussex.

Fundamentally, effective regulation is based on trust and the perception of fairness. Indeed, Part 6 of the regulator’s code sets out:

Regulators should ensure that their approach to their regulatory activities is transparent.

Without this transparency – including on how regulatory actions and investigations are decided upon and carried out – regulation can appear arbitrary, and risk management rather than good or innovative practice becomes paramount. If actions are not seen to be fair, regulation becomes less effective: to the detriment of the sector and nation. Suggesting that OfS should be a bit more open about what it is doing, to whom, and why is a moral argument based in fairness: but it is also the key to more effective regulation.

What should we be told?

Initially this lack of information was a policy choice – informed at least partially by the legal risk inherent in publishing information about potential breaches before a detailed investigation has even begun. This state of affairs changed in 2022 when section 33 of the Skills and Post-16 Education Act gave OfS specific protection from claims of defamation.

It’s not quite watertight – OfS has to consider the interests of students, applicants, providers, the public interest and:

the need for excluding from publication, so far as practicable, any information which relates to the affairs of a particular body or individual, where publication of that information would or might, in the opinion of the OfS, seriously and prejudicially affect the interests of that body or individual.

OfS has consulted about this as well – there is a handy table of “information it would normally expect to publish” at Annex B. For an investigation into non-compliance with a condition of registration we would, therefore, usually expect to see at various points:

• The identity of the provider involved
• A summary of what is being investigated
• The progress of an investigation
• A provisional decision, when available, or the decision to close the investigation
• An assessment report, including the underlying evidence considered

And for making a specific condition of registration or fine:

• The decision itself, the content of the condition, and the reasons for it

Decision time

It feels reasonable to expect that the considerations underpinning the decision to intervene would be published as a part of the summary.

Paragraph 167 of the regulatory framework explains that factors that OfS may consider as a part of these decisions, with respect to breaches of conditions or a risk of a breach, include:

• The likelihood and severity of the breach, or the likelihood of a repeat of the breach
• The impact of the intervention on students, and on confidence in the sector
• Whether the proposed intervention would mitigate the risk or remedy the breach
• How OfS became aware of the breach (it prefers to be told by the provider), how long the underlying causes have existed, and the steps a provider had already taken to address the issue
• The providers co-operation with an investigation, and overall behaviour (including whether the provider has made a material gain from the breach.
• Whether OfS has taken action in similar cases previously, and whether another regulator has already taken action

All of these considerations should be underpinned by evidence. For example, if OfS is thinking about the likelihood and severity of a breach of a condition of registration, it needs to have good reason to determine that an issue has – say – a medium likelihood and high severity. This feels straightforward but when you start to try to apply it to existing cases, you quickly realise that these judgements are necessarily subjective.

The (surprisingly complex 23-page) OfS scheme of delegation allow a broad range of staff to make decisions about specific conditions of registration or fines (“monetary penalties”): the Chief Executive, the Director of Regulation, and in some cases the deputy Director of Regulation (with written permission from the chief executive – this extends to “any other director” for final decisions on fines). The Director of Freedom of Speech and Academic Freedom is also allowed to make decisions relating to freedom of speech or the Prevent duty.

This makes sense on an administrative level (not everything can go across the Chief Executive’s desk in a timely manner) but it does mean that similar decisions are being made by different people at different levels of the organisation: and there is a chance that different people could interpret the same circumstances in different ways.

Checking what condition the conditions are in

Under section 6 of HERA, a condition of registration can be imposed (or varied) on any provider, although as per subparagraph 4 OfS must specify its reasons for taking this step. As regulatory actions go, specific conditions do not have the impact of a fine (and the subsequent blaze of publicity) but sit above the behind-the-scenes measures that deal with less serious – or more potentially inflammatory, as regards to financial health – concerns. They put regulatory concerns on the record, in a way that a formal letter does not.

At the time of writing, the Office for Students has 24 active conditions of registration in force – with a further 31 that have been made and since removed. I’m not counting here the proposed conditions relating to governance at the University of Sussex which are the subject of a judicial review.

This is more than OfS admits to on the official list published alongside the OfS register – for example specific access related registration conditions previously placed on the University of Cambridge, the University of Oxford, and the Royal Northern College of Music – indeed nearly all of the work conducted prior to 2022 that is no longer active – have been quietly airbrushed from memory. I asked OfS about this (and the ancillary issue of some conditions that are still in force not actually being visible to the public) – I managed to get a link for one further report missing from the list in the register spreadsheet.

Here’s the best that I can do as an exhaustive list – building on the fine work of Mike Ratcliffe.

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You can see that it is straightforward to split these into a few groups: early conditions on access and participation, a group of B3 conditions made at the point of registration, some others made at the point of registration that quote from a QAA quality and standards review, a later group of B3 conditions made in 2022, and a sprinkling of governance conditions.

Outcomes regulation (B3), pre-2022

The majority of regulatory actions (including 38 conditions of registration) seen so far relate to concerns around condition B3 (outcomes). B3 conditions tend to be led by outcomes data – before the advent of the B3 dashboards in 2022, conditions of registrations referred to bespoke datasets prepared by OfS and shared with the providers in question. This was the approach that landed the regulator in hot water in the Bloomsbury case – the publication of both the dashboard and (initially separately) the numeric thresholds used to identify poor performance aimed to make the decisions made by OfS more transparent and predictable.

Most of these were put in place during the initial registration process back in 2018–19, and although the majority no longer apply there are five from that period (London College of Business Studies, United Colleges Group, Bradford College, LTE Group, and the University of Greater Manchester) still in force.

In this earlier period (pre-2022) the focus was on an “increased risk” of breach, seeking the submission of an “improvement plan” setting out actions that could lead to a sustained material improvement in B3 metrics for particular groups of students. These plans were managed at provider level by a board-level oversight committee charged with providing regular reports to OfS.

A fair proportion of conditions have been placed on providers at the point of registration – and some of these stem from the work of the former Designated Quality Body (the Quality Assurance Agency) in performing Quality and Standards Reviews (QSRs). Given subsequent OfS comments about the work of the QAA, it is grimly amusing to note that some conditions currently in force relate to compliance with the Quality Code.

Outcomes regulation (B3), post-2022

Another 2022 innovation saw OfS publish prioritisation criteria for B3 assessments. These set a broad scope for investigations, which were intended to cover full-time first degree and taught masters provision across seven broad subject areas. Though we are told that up to 20 investigations would take place, in the end we got 12 that we are aware of – of which eight resulted in an “improvement notice” (published in July 2024) in the form of a condition of registration.

As you might expect the rationale here relates directly to published indicators and the relevant numerical thresholds. Despite this – which you might argue constitutes evidence of an actual breach of the condition – the conditions are framed as addressing an “increased risk of breach in the future”. While providers may well have put in place mitigating measures in the period between the initial breach and the condition, the OfS generally holds that “the actions the provider has taken have not yet led to substantial and sustained improvement in performance”. What’s changed from the earlier method is that OfS no longer specifies the submission of the required comprehensive review, or any interim reporting – there’s simply a (2028) assessment of performance to determine compliance: there is no way to have one of these conditions discharged early.

This is my plot of the B3 dashboard for 2022.

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It is not clear from this precisely how the institutions selected have been prioritised. For example, Burnley College does indeed show full-time first degree continuation around three percentage points below the numeric threshold, but there are eighteen providers that performed worse on this metric. The other cited issue, progression outcomes, shows a similarly low but unexceptional performance. Why select Burnley for intervention rather than a provider that performed worse?

You can make similar arguments about other providers selected for review. What’s never been clear is why a provider has been chosen over others for intervention – an issue that sits at the foundation of fair and transparent regulation.

In contrast to the first round, OfS was less fussy about how improvements were made, but very keen to reinspect the provider at a set date to ensure improvements had happened.

Quality regulation (B1, B2, B4)

OfS’ actions relating to the wider quality of the student experience started after the decision of the QAA to demit from the Designated Quality Body role. Since that time, OfS has published eight investigations into business and management courses, and three investigations into computing courses – all of which taking place during the 2022–23 academic year.

None of these resulted in a condition of registration being applied – though OfS will be reinspecting in one case (RTC Education) and there is one live B2 condition, placed on the London College of Business Studies based on a QAA quality and standards review against the Quality Code. In this area of regulation OfS appears to be much more impressed with the actions taken by providers since the initial issues were identified.

The initial intention was that a group of providers would be investigated each year – based on “regulatory intelligence including, but not limited to, student outcome and experience data and relevant notifications.” OfS did not share the nature of the evidence underpinning these concerns in any of the published investigations – and investigators generally have been given free reign to poke about in any corner of subject area provision that interests them within a provider. An evaluation of this area of work notes that a decision was made to focus on larger providers in the bottom quartile of performance (B3 plus NSS), and where there are third party notifications.

Where there has been an identified breach this specific accusation is made within a regulatory case report based on concerns identified by the investigation team. While in a cyclical system this would make sense, only some providers – selected for unclear reasons – are at risk of regulatory censure through this mechanism. Again, without seeing the evidence, this feels arbitrary.

As far as we know these are the only investigations ever conducted on performance under the wider B conditions. We may learn more when OfS publishes key performance measure two (later this spring) which would reveal the number of investigations conducted and under what timescale. Depending on the results of the quality consultation launched last year, future activities in this area will be more closely linked to TEF.

Other conditions

There’s been a small pool of what I would term governance and finance conditions placed on providers – most in 2019 and 2020 but with a handful of later examples. Some of these were placed at the point of registration, asking for student protection plan updates or changes to governance arrangements. Two (London Interdisciplinary School, London College of Business) required out-of-cycle submissions of financial data. Leeds Trinity University was faced with a condition of registration and a fine following an investigation into academic partnership activities.

For those made immediately on registration it is not clear why these conditions were not seen as conditions of initial registration rather than ongoing conditions. If you are asked to appoint board members that OfS approves of, surely you could do so before joining the register? The condition placed on Richmond (the American International University in London) – requiring exclusive English legal jurisdiction over operations in England – is surely the kind of thing you are required to have in order to register in the first place: there may be a good reason why this was done in this way, but if there is we are not told why.

The prize for least likely condition goes to the Open University – the condition related to the OU performance of a specific funded role (as a validation partner for FE colleges) and for me should really have been a condition of funding for a discrete project rather than a condition on the whole provider.

Another fine mess

Fines are a different matter. Three of the five fines successfully levied by the Office for Students have been for financial (University of Buckingham, Raindance) or governance (Leeds Trinity University) reasons. Should the proposed University of Sussex fine be upheld it will likewise be related to governance concerns.

The other area of activity where OfS has previously been happy to fine universities is on access and participation: both the University of Hertfordshire and Writtle University College (now part of Anglia Ruskin University) were fined for “major access agreement breaches” back in 2018. The pedant in me would contend that these were clawbacks of student premium funding rather than actual fines, but OfS is apparently happy with that terminology.

Only Leeds Trinity University has faced both a fine and a condition of registration. It is not clear why OfS feels that governance or access issues are best solved with an invoice, while student experience ones are not. Certainly most of the ministerial rhetoric (remember the “up to half a million pounds” announcements, though the actual limit is two per cent of qualifying income) has been concerned with using fines in the interest of the student experience, but we have yet to see any case law on this.

At first glance the decision to levy a fine is much more expansively documented than decisions to impose a condition of registration. True – in both cases, the theory of change doesn’t really extend beyond “bad things happen if people do bad things”: conditions these days generally insist that a provider gets on and fixes things, whereas fines are seen explicitly as a signalling mechanism to deter others from bad practice.

The regulatory underpinnings for decisions to levy a fine come from The Higher Education (Monetary Penalties and Refusal to Renew Registration) Regulations 2019 – these set up seven “have regard to” considerations for setting the baseline amount followed by adjustments for aggravating and mitigating circumstances: simplified into a five-step process by OfS regulatory advice 19. While all of this is laudable, it doesn’t go as far as setting out a tariff or a predictable approach – in particular the initial quantum of the fine, and the impact of circumstances, are left largely to the discretion of those involved. The language, when it comes down to it, is simply that “OfS decided” – we don’t really get a reason that satisfies, whether the fine is £1,000 or £500,000, or on whether to impose a fine or not.

Commanding trust and respect

The report of the House of Lords’ Industry and Regulators Committee on the work of the OfS was scathing on the transparency and comprehensibility of regulatory action

Relations between the OfS and the higher education sector have been poor, to the point of adversarial. This is in part because the OfS’ approach to providers to date has been overly distant and combative, giving the impression that they are looking to punish them rather than support them towards compliance.

In contrast, the Behan review talked about a “cautious and risk adverse” approach to regulation, with OfS failing to step in moments where regulatory action could make a positive difference – linking this to a fear of litigation founded in the successful appeal of Bloomsbury college which prompted a broad rethink of regulatory mechanisms.

For me, both of these issues have the same root: it is very difficult to regulate confidently and in ways that engender compliance if the way you make the underlying decisions is opaque. While not every decision or indeed every regulatory situation can be anticipated, clearer rules and processes could help scaffold these decisions in defensible ways – with the side effect that this could speed up what can often be a slow process that fails to support current students.

It should be more straightforward to understand how qualitative information – notifications and reportable events, intelligence from other regulators, reports in the media – are used in planning investigations and interventions. There have been suspicions in the past that actions have been supported largely by the opinions or ideologies of ministers or senior staff: to be a credible regulator OfS needs to be clear how and where it uses this kind of information in directing activity, both to blunt such accusations and to offer clarity to the sector and others.

And the use of quantitative information should be more clearly documented – it is surely not enough just to publish underlying data if it is not clear how the data is used to drive decision making.