Part 3: Proposals for changes to registration application requirements

112. We want to understand at the beginning of our assessment of a provider’s application for registration whether a provider is, or has been, subject to any recent investigation by other regulators, funding, public or enforcement bodies. The fact of an investigation having taken place does not necessarily mean that a provider will not meet one or more initial conditions of registration. However, the outcomes of many types of investigatory activity could be relevant to the OfS’s assessment.
113. We have encountered occasional situations during the registration process where a provider has not transparently disclosed historical or ongoing investigations that were relevant to our assessment of the provider’s compliance with initial or ongoing conditions of registration. Part 3 of this consultation seeks views on whether this proposal would help address this issue.
114. Our experience is that when this information has subsequently come to light, it has delayed our assessment of the provider’s registration application. Either it has conflicted with previous evidence we have gathered and assessed, or it has necessitated further enquiries and additional information and evidence from the provider. Most importantly, this information can have an impact on our decision to register a provider or not.
115. The aim of our proposal is to ensure we have all information which is relevant to our assessment of a provider’s registration application when it submits its application. We need this information because:
     1. The subject matter of an investigation and its findings may be relevant to our own assessment of one of the initial conditions (and if this is the case, we may consider, based on the circumstances of the investigation, that we may lack some information necessary for us to make an informed judgement about whether the provider satisfies one or more initial conditions of registration).
     2. Information about the outcomes of historical investigations into a provider could be relevant to the assessment of a provider’s application because it may inform our understanding of any historical patterns of non-compliance or systemic risks, as well as the effectiveness of the provider’s governance. It would also help determine whether the provider has taken sufficient corrective action to address identified risks, or if those risks are likely to persist. Additionally, this information could assist in evaluating whether the provider’s current management and governance arrangements are sufficient to ensure compliance with regulatory requirements.
     3. Information about an investigation into any ‘relevant individual’ at a provider could be relevant to our assessment of whether that individual was fit and proper, as set out in proposed initial condition E7.
116. We are concerned that if we do not fully understand the findings of any relevant investigation into a provider applying for registration, or relevant individuals at that provider, the OfS is at risk of making incomplete judgements about the regulatory risks that provider poses. In particular, we are concerned about situations in which another regulator has found poor practice or wrongdoing at a provider. Such findings may be relevant to our assessment of a provider’s compliance with OfS conditions of registration, but the OfS may not take them into account because we are not aware of them. This could have serious negative consequences for the protection of the interests of current and future students and of taxpayers.

117. The proposed requirement is for a provider applying for registration to inform the OfS of any investigation it has been subject to, or ‘relevant individuals’ at the provider have been subject to, during the 60 months preceding its registration application. This would include:
     1. Any investigation that was opened more than 60 months before the application for registration, but which concluded during the 60 months before the application for registration.
     2. Any investigation that had been opened within the 60 months preceding the application for registration and was not yet concluded, that is, was still open or where the outcomes were still pending.
118. This requirement would be imposed through the section 3(5) Notice, suggested in Proposal 1 and set out at Annex A of Part 3 of this consultation. The proposed section 3(5) Notice would state that the submission of this information is a mandatory component of a registration application. This means that if a provider did not submit this information, the OfS could provisionally refuse its application, as described in paragraph 31.
119. The proposed information required to be submitted would be: a brief description of the investigation; the organisation or body that carried it out and when; and the outcomes or findings, including situations in which investigations were closed with no findings having been made.
120. In this proposal, ‘relevant individuals’ is defined in the same way as it is in proposed initial condition E7, meaning:
     1. Any member of the provider’s governing body.
     2. The individual proposed as the accountable officer for the purposes of ongoing condition E3.
     3. The individual(s) proposed to hold overarching responsibility for the management of the provider’s financial affairs.
     4. Any company director of the provider.
     5. Any company secretary of the provider.
     6. Any individual who holds more than 25 per cent of the shares in the provider.
     7. Where the provider has a parent company, any individual who holds more than 25 per cent of the shares in that parent company.
     8. Any individual who would have significant overarching responsibility for ensuring that the provider complies with the ongoing conditions of registration (if registered).
121. Once the provider had submitted this summary information as part of its registration application, we would determine whether we need additional information to inform our assessment. Additional information may include further explanation or the full investigation findings, for example. The factors we would be likely to consider in determining whether we need additional information about an investigation, including the outcomes of any investigation that is still ongoing, would include:
     1. The scope of the investigation or the issues to which it relates and whether these are directly or indirectly linked to OfS regulatory requirements (for example, in accordance with proposed condition E7, or compliance with the requirements of awarding bodies for the higher education qualifications a provider delivers).
     2. Whether the investigation led to formal findings, sanctions, or other actions against the provider or relevant individuals, and whether such outcomes raise concerns about the provider’s eligibility for registration or ability to meet registration conditions (for example outcomes such as sanctions or actions could highlight risks or weaknesses in governance as part of our assessment of a provider in accordance with proposed initial condition E7).
     3. How recently the investigation occurred or concluded, and how relevant the outcomes are likely to be to recent or ongoing practices at the provider.
122. We would write to the provider setting out our reasoning for requiring more information with a requirement to submit the information set out in a bespoke section 3(5) Notice.
123. If we did not require any further information, we would confirm this to the provider and proceed with our assessment of the provider’s registration application.

How we propose to treat ongoing investigations

124. We would encourage a provider that is subject to an ongoing investigation when it is preparing to apply for registration to engage with the OfS to discuss the scope and nature of the investigation. Engagement would enable us to give a provider an indicative view of whether we would be likely to require the outcomes of the investigation before we could make a registration decision. A provider could use this information to consider any next steps, including deferring its application for registration until the ongoing investigation had been concluded and the outcomes were known.
125. If a provider subject to an ongoing investigation (or with a relevant individual subject to an ongoing investigation) did not engage with the OfS before submitting an application, our provisional view is that we would be likely to require the provider to submit the outcomes of that investigation before we could make a decision about its registration application. This would be likely to mean delaying the assessment of the provider’s application until the investigation had concluded.
126. We propose to take this approach to encourage providers to engage early and proactively about any ongoing investigation. This is to avoid potential delay and wasted work for both the provider and the OfS. This could arise from situations in which a provider might spend considerable effort preparing and submitting a registration application that is then paused for a significant period, and where the information it contains eventually becomes out of date requiring significant parts of the application to be resubmitted.
127. If a new investigation were opened into a provider (or a relevant individual at that provider) after the provider had submitted a registration application and during the course of our assessment, our provisional view is that we would be likely to require the provider to submit the outcomes of that investigation before we could make a decision about its registration application. This would be because of the recency of the investigation and the likelihood that it would be relevant to ongoing practices at the provider that the OfS was currently assessing.
128. In all cases, the OfS’s decision would depend on the scope and nature of an investigation and its relevance to our assessment of whether to register the provider, as set out in paragraph 121.
129. We are proposing a period of 60 months before the registration application for this information because:
     1. Our initial view is that 60 months provides a reasonable period to assess a provider’s historical compliance and governance. Investigations within this time may reveal patterns of behaviour, systemic issues, or recurring concerns that remain relevant to the provider’s existing governance or leadership. These could affect the OfS’s risk assessment of whether a provider satisfies the initial conditions of registration and is able to satisfy the ongoing conditions of registration if it is registered.
     2. Our initial view is that 60 months strikes an appropriate balance between us being aware of relevant information and ensuring the information remains relevant and is not overly burdensome. Older investigations may lose relevance as circumstances change (for example, a provider’s leadership changes, or it restructures parts of its operations) whereas a shorter timeframe might omit recent relevant events.
     3. Other regulatory bodies often use a five-year threshold as a standard for similar disclosures in balancing fairness with risk management, for example the Financial Conduct Authority, the Charity Commission of England and Wales, and Ofqual.
     4. Our initial view is that 60 months would incentivise ongoing accountability, encouraging providers to maintain robust governance and compliance measures over a sustained period.
     5. The lifecycle of students at a higher education provider can easily span five years, so our preliminary view is that the proposed time frame will help us understand the likely risks to student outcomes at the provider. If a provider faced significant investigations or sanctions five years ago (for example, related to governance, financial mismanagement, or quality assurance), the consequences may still affect current or recent students. For instance, loss of accreditation could affect students’ qualifications, even if the issue was later resolved.
130. Our initial view is that there are certain types of investigations that we are more likely to need detailed information about than others. These include, but are not limited to:
     1. Quality – investigations by professional, statutory and regulatory bodies (PSRBs) or awarding bodies. Ofsted inspections may be relevant to our assessment of conditions B3 (student outcomes), B7 (quality) and B8 (standards), but this is likely to depend on specific findings. For example, where Ofsted findings relate to a provider’s provision at Level 3 or below, we would also need to consider whether these findings had relevance to the provider’s higher education provision (at Level 4 or above), including the overall management and governance of the provider.
     2. Governance investigations by funding or public bodies, including the Department for Education (DfE) and Student Loans Company (SLC), about the appropriate use of funds. Investigations relating to a provider’s governance by the charity commission or the Education and Skills Funding Agency (ESFA). These would be particularly relevant to our assessment of condition D (financial viability and sustainability), and the E conditions (management and governance).
     3. Finance – investigations by:
        1. The Financial Conduct Authority (FCA) relating to concerns about financial management or compliance practices.
        2. Prudential Regulation Authority (PRA), if the provider is linked to entities involved in banking or financial risk management. Issues flagged by the PRA could affect a provider’s financial sustainability.
        3. The Pensions Regulator (TPR) if a provider operates a pension scheme and is non-compliant with TPR standards, this could indicate financial mismanagement.
        4. HM Revenue and Customs (HMRC), where investigations or penalties related to tax matters may indicate broader financial or operational governance concerns.
        5. Insolvency Service, for example relating to the conduct of directors or potential corporate abuse.
131. We are also proposing to require information relating to investigations into any of the relevant individuals at the provider. This would include, for example, investigations into tax or other financial probity matters. This is because our initial view is that the outcomes of such investigations may be relevant to our assessment of proposed initial condition E7, in particular, whether relevant individuals at a provider are fit and proper persons.
132. We recognise that investigations may take some time to conclude. If an investigation is ongoing when a provider applies to register, or is ready to apply to register, that provider may be delayed in proceeding with its registration application for reasons which are not, or not fully, within its control. However, where an investigation by another regulatory, statutory, enforcement or public body is relevant to the OfS’s assessment, our initial view is that we will generally not be able to make a judgement about that provider’s application for registration that is reasonable, accurate and proportionate until the outcomes of the investigation are known. The rationale behind requiring information about the outcome of investigations is rooted in ensuring that the OfS can make fully informed, evidence-based decisions when assessing the regulatory risk posed by a provider. By requiring the outcome of an investigation before making a registration decision, our initial view is that we are acting in the public interest, ensuring that only a provider that meets the required standards is granted registration.
133. It is important to note that there is a specific requirement in the proposed new initial condition E7 relating to investigations with respect to fraud and the inappropriate use of public funds (E7E). In this requirement, we are proposing that any findings that could potentially amount to a relevant fraud offence or inappropriate use of relevant public funds would be likely to result in the provider failing to satisfy initial condition E7E. For this reason, we have proposed that there would be a separate declaration from a provider to confirm whether any findings had been made in relation to a relevant fraud offence or the inappropriate use of relevant public funds. This may overlap with the requirement to submit information about any investigation opened or concluded in the last 60 months, but our initial view is that it is important to be clear and explicit about this type of finding because it may have a direct impact on a provider’s prospects of successfully being registered.
134. This proposal would apply to any application for registration submitted after the publication of our decisions following this consultation.

135. In developing this proposal, we considered the following alternative options which are set out in Annex C of Part 3 of this consultation:
     1. continuing the current arrangements
     2. requiring risk-based disclosure
     3. setting narrower requirements
     4. proposing alternative time periods
     5. an alternative to a section 3(5) Notice.

Question 3a: Do you agree or disagree with the proposal to introduce a requirement for a provider to submit information about historical or current investigations? Please give reasons for your answer.

Question 3b: Do you think there may be any unintended consequences of adopting this proposal? If so, please explain your answer.

Question 3c: Do you support any of the alternative options we have set out in Part 3, Annex C, Proposal 3 of this consultation, or do you have any other proposals? If so, please explain and provide reasons for your view.