25 unanswered questions about the collapse of ABA

Last September it emerged that the Applied Business Academy (ABA), an OfS-approved and registered provider offering business degree courses through Leeds Trinity University and the University of Buckingham, was closing all higher education courses immediately.

It also offered a Diploma in Education and Teaching (DET) course with City and Guilds and OTHM Qualifications.

That followed the opening of an OfS investigation into ABA’s compliance with registration conditions, during which the Department for Education (DfE) instructed the Student Loans Company (SLC) to suspend tuition fee payments.

At the time we were told that 300 affected students had been contacted by academic partners and offered transfer options, with support resources and avenues for complaint also made available. ABA’s website confirmed that courses were closing, and its social media accounts have been locked or deleted.

Today’s report confirms what many suspected – it ran a Diploma in Education and Training (DET) course that the regulator believes was fundamentally broken – with placements that couldn’t possibly have met requirements, assessments that weren’t properly conducted, and staff who may not have been appropriately qualified.

But this is a post-mortem, with little diagnosis and no sign of preventative medicine. OfS’ investigation began in April 2024, and by September 2024, ABA had gone into liquidation. For the students caught in the middle, the damage was already done.

The detail in the report is shocking. OfS found that only around six per cent of total placements for a cohort of 2031 students appeared capable of satisfying the requirements of the DET course.

Some were with organisations that had ceased to operate or been dissolved. Others were at small cafes, childcare providers, clothes shops, freight firms, and building firms – organisations with “no clear link to education.”

In one particularly egregious example, a placement provider with zero employees and a low turnover figure allegedly hosted 28 DET course students, with 2,800 hours of student teaching.

The regulator also found no record of staff qualifications or suitability. Some 47 staff members had just “one and three-word descriptions of their role, and no description of their qualifications or suitability.” For a course that requires qualified assessors to observe and evaluate teaching practice, this is an astonishing failure.

The assessments themselves? OfS noted concerns that “observations were not accurate, or accurately recorded, and may not have reflected the performance of each student.”

By the time ABA closed, none of the DET students had received certification from City and Guilds, which “had not received sufficient evidence that the course requirements had been met.” And it gets worse – City and Guilds undertook a thorough assessment of completed work and confirmed that “in all cases there was not sufficient evidence” to meet qualification requirements.

These students – all 2,031 of them – seem to have been left high and dry. Elsewhere on the site the Office of the Independent Adjudicator’s Charlotte Corrish raises a range of key questions re level 5 and below provision in particular.

What the report doesn’t tell us

OfS’ “summary” report is narrowly focused on the investigation findings, leaving plenty of questions unanswered.

What has happened to the HE students? Did they all transfer? Has there been any attrition? Did the student protection arrangements actually work in this case for the level 6 students?

What about the universities involved? Leeds Trinity University and the University of Buckingham were ABA’s partners, but the report offers no insight into their due diligence processes. Was Leeds Trinity actually rating the risk of partnership failure as “low to moderate” (the statement in the “live” Student Protection Plan) while OfS was engaged with ABA over compliance issues?

What about the money? How was ABA allowed to never comply with the OfS accounts direction while on the register? That direction would have revealed information like how much its head of provider was being paid. Did ABA run out of cash? The report merely states that “ABA decided it was no longer able to provide higher education” after tuition fee payments were suspended.

The company submitted “filleted” micro accounts that revealed almost nothing about its actual financial operations, income streams, or senior staff costs. And the mysterious shifting of ABA’s financial year from December to February for 2023 and 2024 raises eyebrows. Was this change examined as part of the investigation? What was the purpose of this adjustment?

The sequence of events raises interesting questions about regulatory effectiveness. ABA received a “requires improvement” Ofsted rating in 2022. Did that trigger any alarm bells at OfS over its conditions of registration? Apparently not, given a formal investigation only began in April 2024. My colleague Michael Salmon got into some of the Ofsted issues last October on the site.

By that point, DfE instructed the SLC to suspend all tuition fee payments to ABA. Was this suspension what triggered ABA’s decision to withdraw from higher education, or was it due to enhanced regulatory attention? The report doesn’t say.

OfS’ investigation identified serious concerns about the quality and standards of courses and governance at the provider. Had ABA not entered liquidation, OfS “would have been likely to consider its full range of enforcement powers, including imposing a substantial monetary penalty and potential de-registration.”

One puzzling aspect is the student numbers – from just 50 full-time students in 2019-20 to 2,360 in 2022-23. How did explosive growth escape regulatory scrutiny? The micro-filed accounts show a significant increase in ABA’s creditors between December 2021 and February 2023. Was this examined as a potential indication of financial instability?

ABA’s accounts for February 2024 were signed on 29 August 2024, less than three weeks before it announced closure. Yet these accounts still weren’t audited and claimed a “reasonable expectation” of continued operation. What accountability exists for assurances from directors?

What about compensation? If ABA has limited cash, what are the chances students will get any compensation owed to them? If ABA can’t pay, do Leeds Trinity and/or Buckingham become liable? Again, no answers.

There’s also no indication of what happens to the tuition fee debts these students have incurred. Are these debts still showing up as student debt despite payments being suspended? Is DfE considering writing off some or all of the debt incurred by affected students?

Other questions arise. Was OfS Condition C4 (student protection directions) imposed on ABA? Does this situation count as a “market exit” under the OfS framework? Why does OfS still allow some Student Protection Plans to not include information about the risk of collaborative partnerships failing? And why was ABA’s own SPP (which claimed “low” risk) the “current” published plan last summer when it had been under formal investigation since April? None of these questions are addressed.

And most importantly, what steps are being taken to ensure students are warned of enhanced risk when applying to similar providers or courses? The report’s stated aim is to ensure that providers involved in the provision of education and training courses involving significant student placements and other similar courses are aware of issues in this case and have sufficient controls in place to prevent concerns arising.

But awareness after the fact offers no comfort to the students caught up in ABA’s collapse.

And does OfS know, for example, that the sole director on collapse was involved in a very similar looking provider that published a prospectus presumably designed to attract new university lead partners?

Learning the lessons

The ABA case ought to be a key moment for higher education regulation in England. It exposes fundamental weaknesses in how we protect students from poor provision, especially when that provision is franchised or subcontracted.

The questions deserve answers – not just for the sake of understanding what happened at ABA, but for preventing similar failures in the future.

But what we have here is a narrow and strict “we were judging against X”, “here’s what we found on X” and “now it’s gone under, there’s not much more we can do”.

The press release says that in addition to the investigation at ABA, OfS has concerns about the delivery of the Diploma in Education and Training course by several other providers. The OfS “continues to examine these matters”.

If today’s report really is the extent of the learning the regulator and other providers can draw from a collapse of this sort, the sector is in serious trouble.