When will OfS show its working?

At the instigation of the Department for Education, the Office for Students modified the way it allocated recurrent funding this year – and in particular removed funding allocations relating to “franchised students” where the teaching partner was not registered (in the Approved (fee cap) category).

Funding for high-cost subjects and the student premium is calculated (like nearly everything else OfS allocates) on the basis of student numbers, collected via the higher education student early statistics (HESES) collection. We like HESES here at Wonkhe for a number of reasons, and there is a lot in it, but one thing it doesn’t have is data on where students are taught.

To get that information, you need to wait for the end-of-year returns (HESA Student, to all intents and purposes). And because we don’t have the 2024-25 returns yet, OfS used the 2023-24 return to figure out the proportion of students from that year that were franchised and then calculated moderating factors to help estimate the proportion of students (by price group, mode of study, level of study) that would not be fundable within the 2024-25 HESES data.

To put that simply, the regulator:

• Worked out the proportion of students in varying groups that were franchised outside of Approved (fee cap) providers, based on 2023-24 data
• Applied factors derived from these proportions to the number of students in the same groups in 2024-25.
• Used these modified numbers to calculate indicative allocations for 2025-26.

If you work in a provider, and your allocation is lower than you might have expected, you might have an interest in knowing a bit more about how these “factors” were generated and applied. The issue is very much glossed over in the Decisions and Allocations document, and there’s not much more in the Guide to Funding. And the letter sent to Accountable Officers on 24 July had even less.

Why is this important? Providers are used to checking their allocations against published data in order to be sure that the Office for Students has calculated them correctly, to identify where one of the inevitable small errors in data submissions has had an outsize impact, and to model the impact of planned institutional changes on allocations. There is a (deliberately?) unwieldy process that can be used to address data issues, and providers get a contact to inform OfS of planned changes to provision (including, I guess the end of or changes to a franchise arrangement) for the year in question.

Like what? Well, imagine that you have a franchise arrangement with a local hospital or a local FE college to support healthcare students. There’s a general sense that healthcare training is important, and offering it in the areas where there is a shortage of healthcare professionals is important. If high cost funding (and student premium funding) is not available to support these students such provision might not be viable in its current form – so the registering provider may need to urgently rethink how it is done.

In the past, OfS have generated individual grant tables for each provider – showing the calculations (and the numbers!) used to arrive at the allocation. This hasn’t happened this year. Various providers have written to OfS to ask for more (or any) details, with little avail.

In effect, OfS thought of a number and then used it to modify your funding allocations. And as things stand, providers are not allowed to know that number or how it was arrived at. All of which does not feel like a good way of allocating more than a billion pounds of public funds.