OfS fees set to rise by 18 per cent

That's quite the rise - but does it represent value for money?

David Kernohan is Deputy Editor of Wonkhe

If you love the work of the Office for Students, you’ll surely be delighted to pay an extra 18.5 per cent for it next year.

There’s been rumours, and even questions in parliament, for months now – but today saw the release of the statutory instrument that determines Office for Students registration, the snappily titled Higher Education (Registration Fees) (England) (Amendment) Regulations 2023.

For a sector facing a freeze in fee income it does feel a little tone deaf to be seeking an increase substantially above the rate of inflation. The explanatory memorandum notes that the increase covers the new designated quality body role that OfS has taken on after the QAA decision to demit. It is suggested that some of the subscription increase is offset by the removal of the need to pay DQB subscriptions.

Historically, extra work done by OfS has been covered by government spending – and indeed, we see an extra £1.5m coming from DfE next year which is apparently designed to limit the required increase.

The numbers

First up, here’s how the fee increase looks compared with last year. You’ll note that very small providers, with under 25 students, could enjoy a 19.5 per cent increase in fees – though a lot of these are likely to attract the “new provider” and “micro-provider” discounts.

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The group each provider is in, and thus the fee amount chargeable, is determined by full time equivalent higher education student numbers. If we feed the most recent available OfS numbers into these bands, we can look at fee increases (and the very occasional fee decrease) by provider.

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You’ll note I’ve dropped in a composite 2022-23 column including DQB registration fees; this doesn’t include the rebates but is based solely on the “sticker” price. The default view for this chart shows the whole sector – you’ll see last year’s OfS fee income at around £26m, the OfS plus DQB arrangement at around £29m, and next years’ fee income edging up towards £32m.

Neither the OfS nor DQB figures include ad hoc fees for investigations and reports – this is another substantial income stream, though it is limited to the actual cost of undertaking such work.

The politics

To a sector struggling with soaring inflation, rising costs, and income streams that are at best stable this will be a difficult pill to swallow. The Office for Students is taking on more work – it notes the DQB role, and there are also costs associated with the new freedom of speech responsibilities too. Plus, it is fair to assume that the hard working public servants in the organisation deserve at least some kind of pay increase given the rising cost of living – though senior staff strata may well choose to waive this.

There were always limitations to farming the cost of regulation to providers that receive large amounts of their funding from the public purse – it is an inefficient model and one that has never met the running costs of the OfS. Announcing this in the current financial climate pours petrol onto the already flammable state of relations between the regulator and the sector it manages.

One response to “OfS fees set to rise by 18 per cent

  1. Could you collect “a sector facing a real terms freeze in fee income”? That’s very far from correct – it’s a freeze in cash, not in real terms.

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