Where are all the new providers?

There is no level playing field. There is no reduction in burden for new providers. And this is proving to be a real problem.

Think back to part B of the 2015 Green Paper, and you’ll see a whole chapter devoted to “opening the sector to new providers”. It was a big part of Jo Johnson’s vision for higher education – new providers would “stimulate competition and innovation, increase choice for students, and help to deliver better value for money”. The presumption would be for a level playing field, and to create this registration, degree awarding powers, and university title processes would be combined, streamlined and condensed.

This hasn’t happened. You won’t see it in the OfS report on year one of the registration process, but the recruitment of new providers has been far below expectations. From an initial projection (back in July 2018) of 508 providers with Approved or Approved (Fee Cap) Status on the register, at the time of writing we are stuck at 389.

Why? The suggestion from the regulator is of a low quality of applications – needing longer to iterate and process. Providers don’t understand value for money, are sketchy on student protection, and unaccountable over outcomes. There’s a sensation that new (and existing providers) are not “ready to be regulated”. It’s not our fault – basically.

Or is it?

If you speak to those who work with providers in their “start-up” stage, you hear a very different story – one about unclear requirements, changing advice, long delays, and bureaucratic inertia.

Independent HE Chief Executive Alex Proudfoot expressed this in typically elegant fashion the representative body’s response to the OfS registration report:

“The fact that the transitional phase of registering established providers is still ongoing more than a year after it was meant to conclude is testament to the very real complexities involved in regulating such a diverse sector. But the fact that these delays have disproportionately affected newer, smaller and independent providers is a situation which could and should have been foreseen and mitigated against.”

With such vital decisions hanging in the balance those involved in the registration process at providers are understandably reluctant to speak out. Over the past weeks I’ve been listening to what they have been saying in private.

Money talks

The journey from a blank piece of paper to the first day of term is a long one, and an expensive one. Where a for-profit configuration is preferred, there can be a long wait before investors see a return on what they put in.

Part of the attraction of entering the sector is the marketing benefit from being a university and awarding degrees. Some of the ministerial commentary around the changes, especially in the early days, suggested that it would be straightforward for entrepreneurs to enter the sector on an equal basis. Many high-profile early attempts have been scrapped, delayed, or paused as reality has become apparent.

Even those understanding the scope of what was being undertaken have been taken outside of their comfortable financial envelopes. Some people have had the impression that a decision was taken at the OfS to process the registrations of existing providers before starting on newer entrants – if you are looking to sustain a fledgling organisation through registration, TDAPs, and university title an extra six months at the start of the journey can be six months too long.

The hybrid

You’ll struggle to find it documented in the advice offered to new providers, but there is a hybrid route to registration that includes the TDAP process alongside registration. This, it seems, came about at the request of DfE, after lobbying by numerous market entrants eager to get started. As you are asked for very similar information in both processes it feels like a very obvious efficiency. If you’ve told QAA and the OfS about all about your quality processes (say) for registrations surely you should not have to tell them again for TDAPs.

Despite a running start, I heard that the sensation was that many wrinkles remained in registration processes as new providers hit it. In a way, this is to be expected with any new process – for example the HESA liaison team deals issues around new data collection processes, and feeds directly into refinements and additions to them as they run. I hear that the OfS equivalent contact centre could not have been more welcoming and supportive – although clearly under-resourced it was good to hear (unprompted) that they understood the problems faced by very new providers.

But in new exercises like this, the least comforting sensation is the one that major decisions are being made on the fly. I spoke to people who felt this way – where earlier advice was contradicted, where parts of the process doesn’t seem to join up with others, where delays dragged on without explanation.

Make my dreams come true

If you’d aimed to come in with a blank slate at the start of registration and have a university within six years, you now know this is not the case. Those supported by venture capital are beginning to fade away – some non-profit attempts are hanging on in there.

The trick, apparently, is to look as much like an established provider as possible. The catch to this is that appointing academic staff, and leasing real estate, is expensive – and tricky to justify unless you know you can recoup costs. And, of course, you can’t recoup costs until you are registered – and you can’t start recruiting at scale until you have your university title and degree awarding powers.

Many initially thought you could use policies and processes off the peg, adapt them from those published by established providers and to meet local needs. This has proved not to be the case – even brand new providers have existing preconceptions that mean nearly everything must be written from scratch.

Validation has been another problem – perhaps with an eye on a possible student protection plan some start-ups are working with existing providers to be able to offer courses leading to other qualifications if TDAPs are delayed. But existing provider validation processes are (perhaps understandably) nervous about validating processes that have never run before, and of students being taught on a campus that doesn’t yet exist. Cautiously negative feedback from potential validators has since been used in sector entry processes – an unwanted surprise to many

Investors – often very experienced investors with a history in starting businesses – are increasingly questioning whether higher education is a viable proposition. Companies with large workforces are beginning to doubt whether the training they offer employees and new starters really needs the “HE” badging.

Parts of this are a function of a more modular approach. There are now more points where institutions can leave the process – and more destinations on offer. But this has perhaps been at the expense of clarity and reliability.

The waxing and waning of government opinions has also proved concerning. We’ve had a lot of ministers and a lot of secretaries of state since 2015. Some have been keen on new providers (especially for-profit providers) some less so.

All for the best

Registration, for all the data-driven trappings, is a principles driven process. Providers that would not work in the interests of students (in terms of the quality of what is on offer, or on the likely outcomes for graduates) should not be and are not on the register. You may see the lower than expected registration figures as evidence that things are working as they should be.

Many observers are against the principle of sector entry on ideological grounds – whatever the reason is, they might argue, it is a good thing that the sanctity of higher education is preserved – and other educational needs are best served in other sectors. This is a harder position to defend – similar arguments were made about the entry of the civic universities into the system at the turn of the twentieth century, about the entry of “new” providers in the fifties and sixties, at the abolition of the binary divide in the nineties, and are still made today. Higher education is more vital and vibrant than it ever has been, and diversity is a part of that.

The benefits arising from new HE providers are clear – they can serve new groups of students, teach new courses in new ways, and bring higher education to communities that have never seen the benefit. Students – and staff following a career in the university sector – have more choice.

But – fundamentally – this is a promise that has not been kept. Can we complain about the increasing distance between universities, business, and society while walls are built around the existing sector?