GuildHE weighs in on the cost of regulation

Yet another group of providers think OfS could be a better regulator.

David Kernohan is Acting Editor of Wonkhe

Regulation represents both a cost and a benefit for providers.

The whole sector benefits from regulation in that it underpins claims of quality and trustworthiness.

But, while regulatory fees (as paid to the Office for Students for registration) are proportional to the size of the provider, the full cost of regulation is not as equitable.

In a new briefing, GuildHE argues that regulatory work that can be swallowed up into the work of compliance teams at larger institutions has a disproportionate effect on those without substantial existing resources. Though risk-based regulation should mean existing high-quality provision sees a reduction in regulatory burden – all small providers experience disproportionate costs whether or not they can be argued to be “high risk”.

Size matters

Alongside this disparity, the move to a data driven regulatory regimen also means that smaller providers take on – by nature only of their size – a greater regulatory risk. When the outcomes of small groups of students are examined, smaller providers see a greater proportional impact from small fluctuations of student and graduate behaviours, and are more exposed to subject- and industry-level issues.

This is compounded by the impact of regulatory overlap – many providers will have an interface with other regulators (ESFA, IfATE, Ofsted, professional bodies) each of which will have slightly different requirements in terms of data submissions. Again, at a larger provider these costs can be covered given larger overheads – though we should not let go at the idea that the best way to reduce burden would be to consolidate these demands, something that the existence of an independent designated data body should mitigate. In a smaller provider the resource may simply not be there to expand into new areas and new types of qualification.

In response to these pressures GuildHE calls for the DfE Data Reduction Taskforce (established by Michelle Donelan) to resume its work. Few would disagree.

Asymmetric communications

There’s also support for one of the major sustained criticisms of the Office for Students – what the report calls “asymmetrical regulation”. You’ll have seen recent complaints from Universities UK about the number and scope of consultations, and how this compares to the impact that responses appear to have on OfS decisions (bluntly: very little).

Coupling this with the sheer volume of material to read, respond to, and monitor the implications of and we have another sizable burden on regulatory compliance teams – again an issue that disproportionately affects smaller providers with less resources.

What’s interesting in this version of the critique is that GuildHE sees a lot of this friction between OfS and the sector as a communication problem:

Overly-legalistic language in communications, delays in meeting their own deadlines, short consultation periods, consultations’ outcomes that rarely listen to the views of those consulted and political capture are just some of the complaints that we regularly hear from our members. Furthermore, there are still a number of processes and practices which have been slow to materialise such as changes to approved provider status or in relation to regulatory investigations

Having to hit a moving target (in terms of regular changes to regulatory requirements) leads to precisely the kind of “gold plated” provider-level assurance mechanisms that OfS claims to want to reduce.

GuildHE calls for a one-in-one-out rule for new conditions of regulation, compliance with the regulatory code requirement of a measure tracking provider perceptions of the value for money they get from the OfS, and – notably – an independent review of the OfS in line with the forthcoming post-legislative review of the Higher Education and Research Act.

In other words – the call is for OfS to get better at being a regulator. Maximising the benefit that the sector sees from good regulation, while minimising the costs of compliance.

Surely no provider of any size would disagree with that?

One response to “GuildHE weighs in on the cost of regulation

  1. Here here. Wise words from GuildHE – the disconnect between the rhetoric and reality of the OFS is stark – the call for an independent review of them is well made and after 5 years of operation very timely indeed: this is a regulator desperately in need of a rethink.

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