The franchising debate has often been shaped less by evidence than by headlines – a cycle of media exposés and political anxiety about public money has encouraged broad-brush, catch-all interventions.
But the Office for Students’ (OfS) data releases have enabled us to take a closer look – and a more specific picture emerges.
The risks of franchising are not evenly distributed across the system; they correlate overwhelmingly with one factor: rapid, large-scale growth.
The case for focus
Drawing on this data, as well as insights gained from a series of forums and roundtable events, and from our own enhancement review work, a new QAA report – Is growth outpacing quality? The changing shape of franchised higher education – challenges the assumption that franchising requires intervention across the board. Instead, policy and regulatory intervention should be focused more on where the data shows the greatest risk to quality and where intervention can be justifiably more robust.
Different franchise arrangements are delivering significantly different outcomes. Small-scale partnerships (often involving specialist providers or local colleges) generally produce positive outcomes for students. In this respect, there is significant evidence to demonstrate that franchising can help to extend a provider’s geographic reach, widen participation and diversify subject offerings.
But our analysis shows a clear pattern: large-scale partnerships which have grown rapidly over a short period of time are disproportionately failing to meet the baseline thresholds set out by the OfS. Perhaps this isn’t rocket science. Many may nod sagely and say they knew it all along. Yet, in the stark reality exposed by the data, the clear correlation between the highest speeds of provider growth and student outcomes that fail to meet regulatory thresholds is hard to ignore. For the learners caught in high-growth, low-outcome arrangements, the consequences are not abstract.
Growth changes everything
Let’s break down the data. Overall, between 2019-20 and 2023-24, UK domiciled student numbers in full-time, first-degree franchised provision increased by 343 per cent, compared with just 2 per cent growth in student numbers on courses delivered directly by awarding institutions. Business and management programmes – for which costs are relatively low and demand reliably high – account for 78 per cent of the growth in franchising, and, by 2023-24, 72 per cent of franchise students were studying business and management – representing 37 per cent of all those studying business and management in the UK.
In 2017-18, no franchised delivery providers were larger than 1,000 students. By 2023-24, two had over 7,000 students. In some instances, these delivery providers have begun to outgrow their awarding partners.
In franchising partnerships that grew by over 1,000 students between 2020-21 and 2023-24, 32 per cent met or exceeded the continuation threshold set by the Office for Students. For those that still grew, but at a slower rate of between 100 and 1,000 students, that rises to 59 per cent.
Most worryingly, all partnership arrangements serving more than 5,000 students fell below the OfS’s continuation, completion and progression thresholds.
In profile
The largest partnerships all have similar student characteristic profiles. At least half of their student body is mature and from the most deprived areas. Their students are almost exclusively UK-domiciled, with most studying on first degrees with an integrated foundation year and holding no or unknown entry qualifications.
This speaks to the arguments often advanced about the widening participation benefits of franchising. But student characteristics are often also used to explain poorer outcomes, and this is not borne out in the evidence. While older students and students from the most deprived areas do typically have poorer outcomes than younger students and those from less deprived areas, none of the outcomes for these groups are below OfS thresholds at a sector level.
Interestingly, these students return more positive responses to the National Student Survey. It is one of the more confounding findings that, despite poorer outcomes, franchise students are more satisfied (according to the NSS data that is available). But this should trigger further exploration rather than absolve a poor outcomes performance.
Getting regulation back in proportion
As big as this problem can seem, it’s confined to a minority (albeit a significant minority) of the sector. Just above a quarter of OfS-registered providers have some franchise provision. Data released just last week by the OfS shows that 85 per cent of delivery partners are working with a sole lead provider. And 68 per cent of full-time, undergraduate franchised provision is concentrated in just nine awarding providers.
The number of franchise partnerships growing by more than 1,000 students in recent years? Only 20.
These findings are not intended to blame individual institutions. It would be remiss of us not to acknowledge the number of lead providers who are now working to rationalise their provision – indeed the latest data shows signs of change, with some of the big providers reducing franchised numbers. Similarly, it is clear that financial, regulatory and policy conditions have contributed to this growth in franchising as much as the actions of individual providers.
What these findings enable us to do is identify where the greatest risks to quality are and intervene accordingly. In other words, data-informed decision-making.
Better regulation
Any policy or regulatory intervention must meet three tests:
- Does it address, or at least acknowledge, the incentives for providers to rapidly grow any franchise provision (e.g. under-resourcing in higher education)?
- Is it targeted at areas or characteristics where risk has been identified?
- Are the consequences of non-compliance sufficiently robust to raise quality, deter poor practice and protect students?
Existing interventions fall short on at least one of these.
If we want sustainable partnerships to be developed on the basis of rigorous research and robust evidence-based rationales, built around the interests of students, graduates and employers as their core concern, the policy and regulatory environment must enable that.
The data give us the tools to deliver on this – it’s time we started using them.
Could the NSS disconnect possibly be caused by the fact that students that drop out aren’t included in the NSS, with much higher drop out the filtering caused by a final year only population could add bias.
On the wider findings I don’t think these will be surprising to many although I would posit rapid growth of any type is a cause for the the regulator to have concerns about risks to quality, it’s just amplified when the responsible provider is operating at arms length.
This could be one reason for the disconnect. The other could be interference in completing the survey, I’m sure a provider which is less than scrupulous in some aspects of their provision wouldn’t be beyond coaching students in how they should be completing the NSS.
While there may be interference, mature and WP students are more likely to be realistic about their expectations of university, and therefore more satisfied with what they get. One of the problems with the NSS is that it is effectively measuring a provider against the student’s expectations of what the university experience would be like (and not against other providers, of which the average student has no experience). Students who attend franchised provision tend to have fewer illusions about what the experience will be like, and to be more pragmatic in understanding what they are signed up for.
Its a big problem because- as noted- the relevant providers now represent a large majority of provision in the sector on a student (and cost) basis- which would seem the most appropriate metrics; I don’t think calling it a minority issue is really quite right.
Providers are simply responding to incentives, blame is irrelevant; moral suasion is not a useful tool with the sums of money involved.
Is franchising a valid and useful tool for provision for providers of this scale and size? Is this the most effective way of delivering good educational outcomes? Is spending over a billion pounds a year delivering- here demonstrably- subpar provision in office blocks at arms length a good idea when the sector is in financial crisis?
Apparently, the answers must be yes as explosive growth continues.
*Nods sagely and says he knew it all along*
It’s really, really good to see the QAA doing this kind of valuable quality-related data analysis – which, even if it does reinforce what I thought, also provides a useful evidence-based contribution to the discussion about franchising. Something the OfS haven’t really done.