OfS issues new guidance on reportable events

There is exciting new guidance out for providers about the events or matters they are required to report to the Office for Students (OfS).

Because it doesn’t turn up at dawn at random with a bunch of clipboards, to undertake its regulatory function the Office for Students (OfS) needs other ways to know what’s going on inside providers.

That intel comes from a few sources. There’s “indicators” that come from routine data collections like gathering everyone’s accounts. There’s something called “notifications” where people like students or whistleblowers tell it something. Sometimes OfS requests additional information from a provider because it’s chasing down a concern. And then there’s events, dear boy, events.

Just about two years ago to the day now, OfS cheered us all up with a couple of “regulatory advice notes” – one covering monitoring and intervention, and one explaining “reportable events”.

They were, by all accounts, astonishing documents – a viscous 16,000 word soup of legalese and passive aggressive, kafkaesque “guidance” that I thought at the time probably represented a kind of apotheosis of preposterousness – all to cover the fact that OfS’ interventions frequently felt furtive and inconsistent, it was ditching “random sampling” as a way of finding out what was happening on the ground, and it had never to be OfS’ fault for not spotting a scandal in higher education that ministers or the media wanted answers on.

At the time, I described it as follows:

So to sum up – there’s a regulator that assures baseline quality not by looking at what you do, but the outcomes from it – like selling clothes and judging the quality not on whether they survive a wash, but on whether people think you’re stylish or whether your “interview tie” gets you a swish job. Most of the outcome judgements are deeply contextual, and we don’t know what the minimum outcomes are. If something makes you think you might not meet the minimum outcomes that you don’t know about, you have to tell OfS – but if you tell them when you didn’t need to, you’ll be in trouble. If you don’t tell them when you did need to, you’re in trouble too. And don’t you dare ask if you should or shouldn’t tell them, because not knowing whether an event means your outcomes are close to getting you into trouble will get you into trouble.

The “guidance” on reportable events went down so badly that Chief Executive Nicola Dandridge, writing on Wonkhe just before the pandemic struck under the headline “improving the regulatory relationship with HE providers”, made this explicit commitment:

We will shortly be publishing new guidance on an area that I know has caused frustration to some universities and colleges – reportable events. The guidance will set out in clear terms the things providers need to tell the OfS about, and explain how we will deal with those reports. I hope this will provide greater clarity about our expectations and the reasons for these because it is important that universities and colleges understand what we expect from them, as well as what they can expect from us.

Of course everything then had to be put on hold for a while – although just in time for Christmas 2020, as promised we were treated to a consultation on the definition of and guidance surrounding reportable events, which was framed as seeking an “open and trusting” relationship with the providers it regulates based on “mutual respect”.

You know. That kind of “mutual respect” you show by publishing regulatory consultation documents on December 15 in the middle of a pandemic.

Despite an extension on the February deadline being granted, just 78 providers responded (there are 418 on the register), the sector representative bodies and/or mission groups all had a stab, 8 responses were marked “anonymous” and the total number of students’ unions/student representatives that fed in was… 1.

Now, ten months on and we have the results of this process – and the question is whether those promises on clarity and tone have been met.

Walk on through a red parade and refuse to make amends

Let’s dive into definitions first. If you know what a “reportable event” is, you’ll know to report one, right? At paragraph 494 of the OfS regulatory framework, a reportable event used to be defined as:

any event or circumstance that, in the judgement of the OfS, materially affects or could materially affect the provider’s legal form or business model, and/or its willingness or ability to comply with its conditions of registration”

Then underneath, reportable events were further defined as including but not limited to:

• A change in the provider’s circumstances, (things like a merger of the provider with another entity or an acquisition by the provider of another entity);
• A change of ownership (principally, but not exclusively, in situations where 50 per cent or more in the shareholding of the registered provider are, or may be, in common ownership);
• A change of control (which has the meaning given by section 1124 of the Corporation Tax Act 2010); and
• Any other material events with possible financial viability or sustainability implications – things like a material change in actual or forecast financial performance and/or position, a material change in student numbers that was not included in the provider’s financial forecasts, or “significant” redundancy programmes.

To deliver that much craved clarity, OfS consulted on a new definition:

any event or matter that, in the reasonable judgement of the OfS, negatively affects or could negatively affect the provider’s eligibility for registration with the OfS; the provider’s ability to comply with its conditions of registration; the provider’s eligibility for degree awarding powers, or its ability to comply with the criteria for degree awarding powers, where the provider holds degree awarding powers or has submitted an application for degree awarding powers to the OfS, and for which the OfS has yet to reach a final decision; the provider’s eligibility for university title, where the provider holds university title or has submitted an application for university title to the OfS, and for which the OfS has yet to reach a final decision.”

In interpreting “the reasonable judgement of the OfS”, it will:

as a matter of policy, consider whether a reasonable provider intent on complying with all of its conditions of registration and acting in the interests of students and taxpayers (rather than in its own commercial, reputational or other interests) would consider the event or matter to be material.”

And:

OfS will set out in separate guidance from time to time further information about how it will apply this definition of a reportable event, including illustrative factors to assist a provider in reaching decisions about reporting. The OfS may also provide further clarification about reportable events in the drafting of Notices issued to providers under condition of registration F3.

It perhaps won’t surprise you to learn that OfS has decided to adopt the revised definition on which it consulted – it’s very much in “say it slower and they’ll understand” mode. The problem is that two years on and that big change in clarity we were promised is that the word “material” has moved a few paragraphs down, it’s added the word “negative”, and it has now moved examples and illustrations of the application of the definition to a separate document that it no longer has a proper duty to consult on.

It cuts deep through our ground and makes us forget all common sense

Maybe quibbling over the semantics of the definition of a reportable event isn’t the bit that matters – maybe the guidance surrounding them is where OfS could add clarity. Maybe.

You can feel the seething rage of accountable officers oozing through the pages in paragraphs 44 to 71. Highlights include:

• Comments included that the proposed guidance was still too complicated, should be shorter and more focused “on the key issues”, and would benefit from a different layout without lengthy paragraphs of text. Tough. It is published largely as was proposed.
• Some respondents suggested that, previously, OfS’s reporting requirements had lacked clarity and caused confusion, in many cases because of providers’ difficulties in interpreting OfS’s judgement about what should be reported (or ‘materiality’), so that providers took different views to those held by OfS. Some respondents suggested that the revised guidance had not fully addressed these issues and so would not prevent over-reporting or under-reporting. Some suggested that OfS should set out more examples to illustrate the ‘reasonable judgement of the OfS’. Again, on balance, OfS hears you but it’s sticking with its proposal.

There’s reams and reams and reams of this stuff. Providers say “yes but we don’t know what to do, can you give us some examples” and OfS says says “no, you’re all different, and we have principles not rules”. Providers say “OK, but can you give us an example of how you’ll apply some of those rules”, and OfS says “no but we can tell you how we’ll approach the application of the rules”. Providers say “can you perhaps illustrate how you’ll approach the application of the rules”, and round and round it goes.

Take timeframes.

• Many respondents commented on OfS’ requirement for providers to report an event within five days – considering the timeframe to be challenging or even unreasonable and suggesting it would put considerable pressure, and increase regulatory burden, on providers. Great news! It’s now five “working” days.
• Some suggested that the timeframe may provide insufficient time for a provider to investigate a matter properly, to the extent necessary to enable a full and accurate report to be made to OfS. No budge.
• Some noted that, for a provider with a complex organisational structure, the accountable officer and other senior staff may feel pressure to report events without full understanding or knowledge, just to meet the timescales. No budge.
• Some respondents considered that, where an event is yet to happen, providers may struggle to identify materiality within such a short timeframe. These issues may, some respondents considered, increase the risk of over or under-reporting by providers. It was also suggested that meeting the five-day reporting timescale may simply divert a provider’s attention away from the more important matter of dealing with the issue itself. No budge.
• Some respondents noted the role in strategic and critical oversight played by providers’ governing bodies and suggested that the reporting timeframe may provide insufficient time for meaningful engagement with a governing body about the event or matter to be reported. No budge.

What we do get is a list of events that will be “always reportable” and a list of events that won’t always be reportable. Which is something.

Don’t speak as I try to leave ’cause we both know what we’ll choose

I don’t know. Maybe it’s the case that deep down in the bunker of Nicholson House, the view is that the changes that have been made deliver on those promises on clarity and tone. I’m not an accountable officer, and it may be that in fact the revised guidance and commentary in the consultation response help. But I doubt it.

The truth is that the regulatory framework and the wider landscape of providers is spectacularly, and probably unnecessarily, complex – and the resources to apply it rely on self-reporting. In that scenario, the more OfS tries to explain everything without supplying hostages to fortune or excuses to providers for over or under reporting, the more complex and baffling its guidance gets.

It’s a dangerous and unpleasant spiral of doom that generates endless documents that are a million miles away from practical regulation or the concerns of students. It needs, frankly, external eyes. We need to know why regulators like the Charity Commission – with 166,000 charities that have a combined annual turnover of just under £48bn – are able to be so dramatically more straightforward.

To be fair to OfS, much of the underpinning theme here surrounds the design of the so-called “level playing field”. When you’re trying to apply the same framework to both the ChickenShed Theatre Company and UCL, it probably is the case that “a reportable event for one provider may not be for a reportable event for another provider”. But in a regime where it’s still the case that OfS will look dimly on under and over-reporting, that’s hardly a help – even if the wording on chatting it all through on the phone has been somewhat softened.

One thing that would help would be for OfS to periodically publish an illustrative analysis of some of the reportable events it’s had, along with analysis on whether each of them really were reportable events. I’ve got a horrible feeling that it won’t do that because it might reveal how inconsistent its judgements have been.

Another thing that would help everyone would be to place a requirement upon providers to publicly publish all the reportable events that providers supply to OfS. If you think about the definition of a reportable event, why should it be that the information remains private between the provider and the regulator, with even the staff and student members on a governing body sworn to secrecy? That kind of radical transparency would help – but as ever OfS is much more concerned about its own power than anyone else’s.

But the biggest fail of all? Well.

If you pull, then I’ll push too deep and I’ll fall right back to you

Right now across the country, the pains of over- and under-recruitment to courses are being felt by students. For every campus where canteens are full of students watching lectures with their AirPods in because there’s no lecture theatre big enough to hold them, there’s courses with so few students that the chances of that course surviving as advertised are rare as the reaper of portfolio review comes to visit.

These are precisely the sorts of circumstances where you’d want a regime like this – because detriment caused to students by a demand-led, marketised system is exactly what OfS is really for. The problem is that frequently, not even members of governing bodies are told about what’s going on below the headline institution-wide numbers – let alone OfS.

In 2019’s guidance, an example of a reportable event given was as follows:

a substantial increase in the number of new students registering at a provider could affect the provider’s ability to satisfy condition E2 (management and governance) in the short term, and conditions B2 and B3 (quality and standards) in the longer term, where the increase raises concerns about whether such growth was effectively planned and managed, or whether the quality of student support or student outcomes will be maintained for larger numbers of students.

So has that para been amended to cover both under and over recruitment, and to cover what’s happening at departmental, faculty or school level?

No. It’s been deleted.