Sometimes students really are consumers

There’s been a lot of focus on tuition fees and whether the loss of access to campus services and facilities gives students legal rights to partial refunds.

Much commentary has stressed that home undergraduates might not benefit from a partial refund anyway – a point that Martin “Money Saving Expert” Lewis makes a lot and that the IfS has fleshed out.

But one of the central issues of contention in a number of the student rent strikes around the country is shared facilities in halls. Many university halls have these sorts of facilities – small computer rooms, common rooms, music rooms, libraries, pantries and launderette facilities.

In privately run halls, these types of facilities are often lavish and very highly specced. I’m looking at a place in Tottenham now boasting of a games room, cinema, bowling alley, communal study room, a roof top terrace, an on-site gym and communal lounges on every floor.

I have another tab open with student housing that boasts of space to hold dinner parties and craft events, with facilities that give students a place to share their cuisine and culture in an environment “engineered to enhance social exchange”. There’s also a “Vinyl Bothy”, a space for large-scale events and talks, a space with table football, pool, and table tennis, and a gym kitted with “high-tech exercise machines” and a “specially curated soundtrack”.

Let’s assume for a minute that the vast majority of these expensive sounding communal facilities are closed or very heavily restricted for the pandemic. Students have paid for both their room and access to these shared facilities. So in a lot of cases, they’re simply not getting what they paid for.

In both universities and the private sector, accommodation providers are often making vast profits from student rents. And unlike the case with home undergraduates, (partial) refunds would go into students’ pockets.

From what I can see there are three potential legal issues here for license holders (students aren’t “tenants” in this type of housing). Before I go any further – I’m not a legal expert and so if there are any reading this that think I have any of this wrong, do feel free to comment below.

First – does any Force Majeure clause allow a provider to suddenly not provide what’s been promised. The answer to that is probably “yes” back in April/May, but probably not now – because what’s going on this term has been predictable.

The second is whether students were misled? Was it clear to (new) students that this stuff might not be available when they signed up? That depends on when they signed up – although we should note that student accommodation providers of all stripes are notorious for using scarcity (or perceptions of scarcity) to lock in students disproportionately early. If they were misled in theory they can wind up the contract with no penalty, or get a discount on it.

The third is that if they’re paying full price and not getting the full services they’ve paid for, they appear to be entitled to proportionate refunds/discounts. How you would calculate that is unclear. For the best read across see this piece on Caravan Parks on the Money Saving Expert site. The Competition and Markets Authority says that consumers will normally be entitled to a refund for any services they have already paid for but that are not provided by the business, or which the consumer is not allowed to use because of lockdown laws (this may be a partial refund of the total amount the consumer has already paid, to reflect the value of the services already provided).

I don’t, by the way, think that the “Student Travel Window” would assist a residential student in arguing they’ve been prevented from using their accommodation. Legally they’re only prevented from using it because they’re choosing to go home.

So generally, CMA says consumers will normally be entitled to withhold payment for services that are not provided by the business or which the consumer is not allowed to use because of lockdown laws. So in principle, if not in practice, it looks like students are entitled to partial discounts or refunds for any lack of services that may have been advertised – but it will be hard to enforce and hard to calculate the appropriate share.

Just briefly on scale and regulators. Despite a million people signing petitions on fees and refunds, we’ve not heard anything out of the CMA on tuition fees. Maybe they figure that the Office for Students has this covered, although we are STILL waiting for student facing advice.

But OfS is England only, and repeatedly at pains to stress that it doesn’t regulate student accommodation issues. The Office of the Independent Adjudicator would handle complaints but only about provider run stuff, not private PBSA. Some institutional and privately run accommodation is subject to codes and complaints regimes – but not all. There’s a major hole here.

Well over half a million student consumers in purpose built student accommodation need clear advice on their rights. And so arguably it’s high time that the CMA stepped up to the plate. Have its officials not seen the photos of students trapped behind windows of post-it notes – or do they think they’re another regulator’s problem?

One response to “Sometimes students really are consumers

  1. Love the Caravan Site analogy!

    A forensic analysis of the management accounts for a provider’s accommodation block should show the assumed budget for managing the communal facilities as opposed to the core cost of each flat/corridor and its six or so bedrooms. Thus, a rough calculation could be made for the variable costs being saved – as opposed to the fixed costs still being incurred (debt on the building, business rates, security, management, whatever)? So, a bit saved on utilities, on cleaning, on wear and tear? – but doubt a student would be getting back more than 10% of the weekly rent? Analogous with the c£125 pw the OIA awarded where a S lost a full week’s teaching to UCU strike action over USS pensions – not a simple one-thirtieth of £9250 at c£300 pw.

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