Proposals for reforms to OfS registration requirements

1. In formulating these proposals, the OfS has had regard to its general duties as set out in section 2 of HERA. These are:
   1. the need to protect the institutional autonomy of English higher education providers,
   2. the need to promote quality, and greater choice and opportunities for students, in the provision of higher education by English higher education providers,
   3. the need to encourage competition between English higher education providers in connection with the provision of higher education where that competition is in the interests of students and employers, while also having regard to the benefits for students and employers resulting from collaboration between such providers,
   4. the need to promote value for money in the provision of higher education by English higher education providers,
   5. the need to promote equality of opportunity in connection with access to and participation in higher education provided by English higher education providers,
   6. the need to use the OfS's resources in an efficient, effective and economic way, and
   7. so far as relevant, the principles of best regulatory practice, including the principles that regulatory activities should be—
      1. transparent, accountable, proportionate and consistent, and
      2. targeted only at cases in which action is needed.
2. In formulating these proposals, we have given particular weight to (b), (d), (e), (f) and (g).

Quality, choice and opportunities

3. These proposals seek to ensure that students can choose from a range of providers that are able to deliver a high quality higher education by setting out proposed minimum requirements that providers must meet (at the point of registration) with respect to consumer protection and management and governance if they are to be successfully registered. We consider that strong management and governance at a provider underpin effective delivery of its higher education provision as a whole, including ensuring that the courses delivered to students are of high quality. This is because a provider’s management and governance determine its culture and decision-making throughout all levels of its organisation and the effectiveness of the delivery of its business objectives or mission. To have a positive overall experience of higher education, students must also be treated fairly as consumers. They should receive the higher education experience they are promised, delivered by a provider that takes consumer protection seriously.
4. Where a provider seeking registration is not meeting these minimum requirements for its students, it is important that the OfS can intervene to ensure that current and future students are not exposed to unacceptable risks by not registering that provider. Students making choices about what and where to study need to be confident that the regulatory system ensures that they can choose from a range of providers that can comply with minimum regulatory standards. Opportunities for study are not meaningful if a student is able to choose, or continue on, courses which will result in a poor overall experience of higher education, because the regulatory system has permitted such performance, or if a student’s course or provider closes because of financial pressures in the sector. Our provisional view is that these proposals will have a positive effect on the quality of higher education options available for students to choose, because providers offering poor quality are less likely to become registered under these proposals.

Value for money

5. Value for money in the provision of higher education is important for both students and the taxpayer. Students normally pay significant sums for their higher education and incur debt for tuition fees and maintenance costs, and student loans are taxpayer-backed. The investment of students and taxpayers in higher education is less likely to represent value for money where providers do not have effective governance arrangements that underpin delivery of high quality education or do not deliver the higher education experience that it promises to students. Our proposals also require providers to have effective arrangements for detecting and preventing the inappropriate use of public funds and enable the OfS to test these arrangements at registration to ensure that students’ and taxpayers’ monies are used appropriately by any provider that is registered.

Equality of opportunity

6. The OfS’s overall approach to regulation is designed to promote equality of opportunity in connection with access to, and participation in, higher education. This means that we are concerned with ensuring that students from disadvantaged or underrepresented backgrounds can access higher education, and succeed on and beyond their courses.
7. Our proposed conditions of registration seek to ensure that students from all backgrounds can choose to study at a range of registered providers that deliver high quality higher education and are effectively governed. Effective governance that enables providers to successfully navigate the challenges facing the sector protects students from potential risks to their study.
8. The OfS’s Equality of Opportunity Risk Register¹⁴ identifies the risk that students may not have equal opportunity to access a sufficiently wide variety of higher education course types. This may result in restricted choice for students with certain characteristics, and subsequently to lower rates of progression to higher education, as well as lower continuation rates and lower course attainment for these students. It is therefore important that providers that can increase the types of higher education courses or the mode of course delivery delivered in a particular region, where this provision will be of high quality and effectively governed, can register without delay to expand the range of positive higher education choices for students. Our proposals seek to ensure this.
9. The government’s proposals to require some delivery providers in subcontractual arrangements to register may increase the number of such providers seeking registration in future. Students studying through subcontractual arrangements are more likely to be mature, from the most deprived areas of the UK, or living locally before entering higher education. They are somewhat more likely to be from a minority ethnic background or from an area of England where fewer young people go on to higher education.¹⁵ Although subcontractual arrangements can offer alternative routes into higher education for students from disadvantaged or underrepresented backgrounds, such routes only aid equality of opportunity where these students receive a high quality education, and are supported to engage in it fully. The proposals in this consultation will help the OfS to explicitly assess a provider’s ability to effectively manage, oversee and deliver higher education within subcontractual arrangements and to comply with regulatory requirements designed to protect students’ interests once registered. In refusing registration to providers that cannot do these things, we seek to limit the growth of providers that would represent poor choices for students.
10. We also think it is particularly important to champion the consumer rights of students from disadvantaged and underrepresented backgrounds. Students from these backgrounds may have fewer choices available to them, may not have access to the information, advice and guidance needed to make the right choice for them and may be targeted by unscrupulous providers seeking to recruit students for financial gain rather than because it is in the students’ best interests. The cost to a student in financial and personal terms of being recruited to a course which is unsuitable for them is significant. It may particularly affect students from disadvantaged or underrepresented backgrounds who may stand to lose more and experience a greater opportunity cost by making the wrong choice of higher education course. For this reason, we have deliberately set a high bar in our proposed requirements for providers to treat students fairly and in some cases our proposals go further than the requirements of consumer law to attempt to better balance the consumer dynamic between students and providers.

Efficient, effective and economic use of the OfS’s resources

11. We have considered the need to use the OfS’s resources in an efficient and effective way. We are currently spending too long assessing registration applications that are not adequately prepared. This leads to inefficiency as providers frequently need to submit updated information to the OfS where the assessment of their applications lasts for an extended period. This can result in lengthy delays to the registration process that negatively impact providers that have met our application requirements and delay the provision of higher education by innovative well-prepared providers. We consider that our proposals would enable the OfS to use its resources more efficiently and effectively by incentivising all providers, not just some, to submit well-prepared registration applications and reduce the number that are poorly prepared.

The principle that regulatory activities should be proportionate

12. We have considered the principles of best regulatory practice, in particular of proportionality. Our proposals seek to ensure that the OfS can protect the interests of students while balancing this with the interests of providers. We have aimed to propose requirements that would be relatively straightforward for well-prepared providers to comply with but that enable us to identify and refuse providers that present risks to students and taxpayers. We have considered carefully whether less intrusive options would achieve our regulatory aims. Where we propose universal requirements for all providers to submit information as part of their registration applications, our initial view is that this information would be necessary in all cases for the OfS to accurately assess providers against the existing and proposed initial conditions of registration. However, we recognise that there will be a cost to providers in terms of staff time to understand the OfS’s regulatory requirements and prepare registration applications accordingly.
13. As part of our general consideration of proportionality, we have considered the impact of our proposals on small providers, or those with small numbers of higher education students. We recognise that smaller providers would have a smaller number of staff available to consider and address the OfS’s regulatory requirements. This means that such providers may experience a disproportionate regulatory burden when compared to larger providers.
14. We currently take the view that it is necessary to require all providers to comply with minimum requirements in relation to consumer protection and management and governance arrangements, regardless of their size. This ensures a minimum level of regulatory protection for all students, notwithstanding that it may be more burdensome for some providers to comply than others.
15. We are proposing to impose new initial conditions of registration, at the same time as imposing new requirements to submit information as part of a provider’s registration application and in parallel with increasing the potential consequences for providers that do not submit required information (because their application may be refused). We think this could most impact providers that have been considering submitting registration applications for some time, including those that have not been able to submit applications in light of the OfS’s decision not to allow new registration applications between December 2024 and August 2025. We have set out proposals to help mitigate this possibility of delay.

The principle that regulatory activities should be transparent

16. We have considered the need for our requirements and approach to be transparent, another principle of best regulatory practice. The proposals in the current consultation seek to be transparent by including definitions of key terms in the proposed conditions and setting out detailed guidance for how they will be assessed, including where relevant the particular factors or circumstances the OfS will place weight on its assessment. We also think this will ensure consistency in the approaches taken by providers and decisions made by the OfS.

14 See Risk 5, Equality of Opportunity Risk Register.

15 See Subcontractual arrangements in higher education.

17. We have had due regard to the public sector equality duty set out in section 149 of the Equality Act 2010. This requires the OfS to have due regard to the need to eliminate unlawful discrimination, foster good relations between groups and advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it.
18. We consider that the proposals in this consultation may particularly impact current and prospective students of unregistered providers that may in future seek to register with the OfS. In general, we have sought to design our proposed regulatory requirements to have a positive impact on all students, including students with protected characteristics. We propose they would secure minimum requirements at the point of registration for consumer protection and management and governance at providers that are successfully registered. We consider that these proposals will increase the range of positive higher education choices for students by enabling effectively governed providers whose higher education provision is of high quality to register without delay, while limiting the growth of providers that would represent poor choices for students.
19. This will have positive impacts for some groups of students with protected characteristics¹⁶ because we know that at a national level these students may not have equal opportunity to access a sufficiently wide variety of higher education course types and may be less likely to succeed on courses where the course type or delivery style is not suited to their situation.
20. Students studying through subcontractual arrangements are more likely than students in general to be mature and somewhat more likely to be from a minority ethnic background.¹⁷ We consider that our proposals would over time increase the likelihood that these students are enrolled at providers that can effectively manage, oversee and deliver higher education within subcontractual arrangements.
21. This consultation gives stakeholders an opportunity to inform the development of our proposals. Through this consultation we are seeking views on any unintended consequences of our proposals, for example for particular types of provider or student, or for individuals on the basis of their protected characteristics. Responses to this consultation will inform our assessment of the impact of our proposals on different groups.

16 See Risk 5: Limited choice of course type and delivery mode.

17 See OfS Insight Brief Subcontractual arrangements in higher education.

22. We have had regard to guidance issued to the OfS by the Secretary of State¹⁸ under section 2(3) of HERA, including the following guidance:
    1. Guidance to the OfS on strategic priorities for FY22-23 (31 March 2022).
    2. Guidance to the OfS on the future of access and participation (23 November 2021).
23. In the March 2022 guidance the Secretary of State sets out the need to ‘ensure that the LLE is supported by an appropriate regulatory regime, fully equipped to support radically different, flexible arrangements’. In introducing these initial conditions now, we aim to ensure that future expansion is supported by a regulatory regime which remains rigorous, while being designed to test arrangements at the point of registration for management and governance and student protection that take account of the diverse types of providers seeking registration. Our regulatory requirements are designed so that providers with different governance structures and models can meet them. However, we recognise that these proposals set out at the registration stage a greater degree of prescriptiveness in the governance arrangements that would be required to ensure compliance with the OfS’s conditions of registration, and we welcome comments about these proposals from providers that may in future seek to register to access LLE funding.
24. The same guidance notes that to address potential ‘cold spots’ in higher education provision, the OfS should ‘explore ways of encouraging the expansion of HE provision into new areas, while ensuring that high quality provision is maintained’. We believe that our proposals will make the registration process simpler for well-prepared providers that will increase choice and opportunity in new areas, while improving our ability to identify and refuse applications from providers that are not ready.
25. From the same guidance, we continue to have regard to the need to reduce regulatory burden, including the comments from the Secretary of State and the Minister of State to consider what more can be done to ‘reduce the burden on providers of responding to the OfS’s requirements. In particular… ways [the OfS] can work with the sector to communicate more clearly its expectations’. The section on proportionality above sets out how we have sought to reduce burden for well-prepared providers through these proposals. We have also proposed where possible to reduce ongoing regulatory requirements on providers (such as proposing to remove ongoing condition C3) where these are effectively replaced by compliance with the new proposed initial condition. We have sought in some proposals to refer to existing legislation and guidance rather than creating our own parallel requirements, to avoid duplication. And we have included guidance on the proposed conditions and how they would be assessed to try and give providers as much clarity as possible about how to comply with the requirements, to reduce the potential for misunderstanding or wasted work. From the guidance on ‘the future of access and participation’ issued on 23 November 2021, we have given regard to the Secretary of State’s view that ‘there should be a shift away from marketing activities which serve to benefit the institutions and not students’. Our focus on setting a higher bar for protecting students as consumers includes ensuring that, in marketing their higher education courses, providers supply clear and accurate information and do not mislead students about the benefits of studying with that provider.
26. The same guidance states that ‘Providers should not be incentivised, nor rewarded, for recruiting disadvantaged students onto courses where too many students drop out or that do not offer good graduate outcomes.’ 60.6 per cent of students studying in subcontractual arrangements – where registered lead providers have subcontracted the delivery of provision to either registered or unregistered delivery providers – live in areas in the bottom two quintiles of the Index of Multiple Deprivation (the most deprived), compared with 33.9 per cent of full-time taught or registered undergraduate students at the same providers.¹⁹ We know from our recent published data dashboard on subcontractual provision that the continuation rates for students studying in subcontractual partnerships are below the OfS’s threshold.²⁰ We therefore consider that the aim of strengthening regulatory requirements to address the risks in relation to subcontractual provision, and ensuring that delivery providers in subcontractual partnerships that do not meet our proposed higher bar for entry, means that such providers will not able to access the benefits of registration and therefore will not be able to recruit students, including disadvantaged students, onto courses where too many students drop out.

18 All statutory guidance cited is available at Guidance from government.

19 See Size and shape of provision data dashboard: Data dashboard.

20 Based on 2021-22 data, see Subcontractual partnership student outcomes dashboard: Data dashboard.

27. We have had regard to the Regulators’ Code.²¹ Section 3 of the code is particularly relevant, which discusses the need to base regulatory activities on risk. Paragraph 3.1 provides for regulators to use an evidence-based approach to determine priority risks and allocate resources where most effective while paragraph 3.5 provides for regulators to review the effectiveness of their activities and make necessary adjustments accordingly. We have reflected on the effectiveness of our arrangements for assessing, at the point of registration, providers’ ability to deliver a high quality higher education experience for students underpinned by effective management and governance arrangements and an approach that treats students fairly. We have proposed the changes in this consultation in light of our experiences, in particular in light of the evidence of increased risks posed by the growth of subcontractual provision, and to introduce elements of a more prescriptive approach to achieve greater regulatory certainty at the registration stage for providers.
28. Section 5 of the code is also relevant, in that it discusses the need for regulators to ensure that clear information, guidance and advice is available to help those they regulate meet their responsibilities to comply. Our general approach in all three parts of the consultation is to set out in detail what providers must do to meet the requirements of the new proposed initial conditions, or the requirements of a registration application. We have included templates and checklists where appropriate, such as templates for relevant declarations in relation to the new proposed initial conditions. Paragraph 5.2 provides for regulators to publish guidance, and information in a clear, accessible and concise format. We have developed the quick reference guide to this consultation to facilitate understanding our proposals.

21 See Regulators' Code - GOV.UK