Plugging a few regulatory gaps

On 15 September BIS issued a tranche of documents relevant to HE regulation and the ongoing desire to create a level-playing field for new entrants to the HE “market”. These were:

 The first is that it appears that for-profit providers offering novel or innovative provision/delivery can now be designated as eligible for HEFCE funding. Given how reduced the scope of HEFCE funding for teaching now is, you could be forgiven for wondering why anyone would bother applying for designation. However, there could be some significant ancillary benefits that address some of the inequalities such providers believe the current system imposes on them. As a consequence of designation, it appears that these providers will be:

  1. Automatically designated for student support, rather than on a course by course basis as currently;
  2. Subject to entering into an access agreement with OFFA, able to access £9,000 fee loans, rather than £6,000 as currently;
  3. No longer able to charge more than £9,000 per eligible course.
  4. Subject to the “voluntary” agreement around Institutional Designation, rather than the mandatory conditions of designation that apply to the current rules for designation for alternative providers.
  5. No longer subject to student number controls as currently some alternative providers are.

These significant freedoms are offset by greater regulation by HEFCE who will have to be vigilant to guard against some of the difficulties that have beset BIS’s own control and enforcement of alternative provider access to public funds (as described here).

The second is that it appears that alternative providers who secure HEFCE designation will be eligible for indefinite degree-awarding powers, rather than renewable DAPs as currently. This is because the guidance indicates that institutions in the “publicly funded higher education sector” will be given indefinite DAPs. The definition of publicly funded HE sector is that set out in the Further and Higher Education Act 1992 which includes institutions designated as eligible for HEFCE funding. This will raise questions about what quality assurance arrangements are appropriate for these “newly indefinite” providers (unclear in the context of the ongoing QA Review), and also whether becoming a designated institution after securing DAPs should convert renewable DAPs into indefinite ones.

For those providers who remain the holders of renewable DAPs, there is express reference to the need to have a student-focussed exit strategy in the event these are not renewed. This is however entirely dependent on finding another degree awarding body willing to take on students who are part way through their studies.

Finally, the new guidance on the criteria for applying for university title provides further information about what should happen in cases of change of ownership or control, addressing a regulatory gap I considered in this blog. There is a now a requirement to discuss plans with HEFCE at an early stage, and a process for tailored scrutiny post-change of ownership to ensure that criteria are still met. However, these remain reactive checks, which in my view leave open the possibility of risks for students if the new owners do not meet the required standards.


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