Should universities and courses at risk of failure be kept a secret?

Jim Dickinson reviews the commentary around the edges of today’s Institute for Fiscal Studies (IfS) report.

Jim is an Associate Editor at Wonkhe

The commentary around the edges of today’s Institute for Fiscal Studies (IfS) report “Will universities need a bailout to survive the COVID-19 crisis?” reminds us of all sorts of problems with the way regulation right now is set up to supposedly protect students.

First, there’s the general assessment of the finances of the sector. So far we’ve had reports from IfS and London Economics on the subject, and both have to hedge various bets based on the information they have. Meanwhile the actual regulator hasn’t published a word. It has a legal duty under the Higher Education and Research Act to monitor and report on financial sustainability but so far hasn’t even given us the delayed assessment of last year’s accounts, let alone where it thinks the sector is at now. What is the point of it again?

Then there’s the actual headline claim that thirteen universities are at risk of insolvency. If you are a student making choices now about which course or which institution to enrol into, you’d definitely want to know if it was on this list of “unlucky 13”. We’ve rehearsed before the “run on the bank” dilemma facing OfS here, but the pandemic brings the problem into sharp focus.

Of course if a university did fall over, or was forced to close a course that a student enrolled on, both the IfS – and Universities UK – highlight Student Protection Plans as a solution to the problem. Both make the mistake of suggesting that the requirement to have one is universal – when the requirement is England only. But more worryingly, both assume that those plans are fit for purpose – when we know from OfS itself that right now they are anything but.

There are wider explanations on why SPPs can’t do the job that is expected of them here and here, but where all this comes together is as follows. Being on the OfS register at all is supposed to assure students that OfS has made an assessment that their university of choice is both financially viable (“no reason to suppose the provider is at material risk of insolvency within a period of three years”) and sustainable (“the provider’s plans and protections show that it has sufficient financial resources to fulfil its promises for five years”).

So If LE or IfS are right, there must be some universities either about to be thrown off the register in the interests of students, or hit with public conditions of registration in the interests of students. But neither has happened.

In his press quote, UUK’s Alistair Jarvis basically predicts that a university in trouble may have to close things to swerve closure and survive: “Course closures and occasionally campus closures are something many universities will have experience in managing and all registered universities have student protection plans in place for this scenario”.

OfS says that SPPs should be “live”, “routinely updated”, and be “transparent for applicants and students about the risks” so an applicant can make “an informed choice about study”. It specifically says SPPs must evaluate the risk of course or campus closure “in the next three years”, and the Consumer Rights Act (which OfS is supposed to be making sure providers look at) prevents “misleading omissions” like internal assessments of course or institutional risk that are hidden. But instead of enforcing all that, it has told providers not to bother updating their SPPs – so their now hugely intensified risks and unsatisfactory plans for if they “crystallise” are completely hidden from students. Is that secrecy really in their interests?

One response to “Should universities and courses at risk of failure be kept a secret?

  1. Question is, if a University does take extreme measures and it turns out OfS knew but did not report (as per the statutary duty) does that leave them open to a liability?

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