The Office for Students annual review 2023

Chief executive's commentary

• Overview of the year
• Quality and standards
• Equality of opportunity
• Financial sustainability

Overview of the year

In my commentary for this Annual review, I reflect on some of the key issues facing students and the higher education sector in England over the past year, and present a summary of the work of the Office for Students in 2023.

Regulation, and specifically the work of the OfS, has come under scrutiny in 2023. The House of Lords Industry and Regulators Committee ran an inquiry which identified areas in which the OfS could improve, such as student engagement and our relationship with higher education providers, and highlighted concerns about the financial sustainability of the sector more generally.¹⁰ We thank the committee for its work on this inquiry and welcome its report as an important learning tool. Our response, published in November, considers the recommendations in detail and sets out how we are taking them on board.¹¹

In this commentary I am particularly concerned with three of the themes identified by the report. One of these is the committee’s understandable concern about the current and long-term financial sustainability of the higher education sector in England. The view we expressed in May was that the aggregated data indicated that the sector was currently in good financial shape, but we were concerned about the financial fragility of the system in the future. Six months on from that publication, we see many of the risks we had identified persisting, and continuing to place pressure on institutions.¹²

The report also discussed our continuing engagement with universities and colleges, and with students. We value the perspectives we hear through our engagement, and have been revisiting our approach to ensure we are better able to understand the views of those directly involved in the day-to-day experience of higher education. We are planning a wide-ranging review to consider more fully the nature of students’ experiences and their interests in higher education, and to identify where regulation can address the greatest risks they face.

The report also correctly argues that improving quality and standards across the sector for all students is of fundamental importance, not only to ensure value for money for students and taxpayers but to protect the international reputation of English higher education. We continue to learn from our work in this area, with the hope that we can enable all the universities and colleges we regulate to do likewise.

Students, and the higher education sector more generally, have faced considerable challenges in 2023. Rises in the cost of living continue to have an impact. The Insight brief we published on this topic in March 2023 cited research showing that almost one-fifth of the 4,021 students who responded had considered dropping out of university or college because of cost of living increases. This was particularly the case among postgraduate students and disabled students.¹³

Students have also had to deal with continued disruption from industrial action taken by university and college staff. Although this has now largely been resolved, it has included a boycott of marking and assessment, which has been a major concern for many. We wrote to universities and colleges in June 2023 about protecting the interests of students during periods of industrial action and setting out our expectation that providers affected by the boycott would be working to ensure that students were not disadvantaged, and could graduate or progress on time where this was appropriate in academic terms. We also reinforced the need for any degrees awarded to be an accurate reflection of students’ academic achievement.¹⁴

As 2023 draws to a close, a personal highlight has been the chance to meet students and staff during visits to higher education providers and to hear first-hand their perspectives on the benefits and challenges of higher education. I have also enjoyed engaging with senior staff from universities and colleges through our new series of online briefings. These visits and briefings are part of an ongoing, refreshed approach to our engagement with the universities and colleges we regulate, which we intend to continue to build on into 2024.¹⁵

Quality and standards

It is fundamental to a world-leading higher education sector that students should receive a high quality academic experience and positive outcomes. The OfS has worked to achieve this objective in a number of ways over the past year. Below I highlight four thematic areas. Students need the courses delivered to them to be of high quality. They need to be sure that the qualifications they receive will continue to inspire confidence in employers and others in the future. They must leave university or college equipped with the skills that employers need from them, including technical skills. And they must be able to study in an environment that secures freedom of speech within the law.

Ensuring high quality and achieving excellence

At the OfS, we are proud to regulate one of the most respected higher education sectors in the world, where the vast majority of courses continue to be of high quality. This is evidenced through our monitoring of student outcomes data and the results from the National Student Survey (NSS).¹⁸ The statistical overview section has details on student outcomes and NSS data.

This year, we have completed our first assessments of the quality of courses at certain higher education providers. In September, October and November 2023, we published the first quality assessment reports, looking at some business and management courses and computing courses.¹⁹ The published reports set out the findings of the impartial and rigorous assessments by teams of academic experts. These include details of any concerns identified during the assessments.

We are considering whether any regulatory action is appropriate for any of these cases. Meanwhile, we have published the reports to enable all universities and colleges to consider any implications of the findings for the quality of their courses, including those where delivery is subcontracted to other providers, and to make any necessary improvements.

Completing and publishing these assessments was an important milestone in our regulation of quality in higher education and is building an important resource for learning across the sector.

The Teaching Excellence Framework (TEF) encourages universities and colleges to deliver excellent teaching, learning and student outcomes.²⁰ The TEF is a cyclical peer review process taking place every four years, and students’ submissions provide important evidence for the review. In September we published the final ratings of the TEF 2023 for 175 higher education providers, and in December the ratings for an additional 53 providers were published. In a change from previous TEF cycles, higher education providers taking part receive an overall rating and two ‘aspect’ ratings: one for the ‘student experience’ and one for ‘student outcomes’.

The TEF 2023 ratings demonstrate the outstanding quality of higher education in England, which is being delivered by a wide range of higher education providers. Most of the providers whose ratings were published in 2023 are performing well above the OfS’s regulatory baseline for high quality. 51 of them were rated Gold for delivering an outstanding experience and outcomes for their students. 125 providers were rated Silver and 48 were rated Bronze (overall ratings).²¹ See the statistical overview section for more information on the TEF 2023 ratings.

Ensuring the continuing credibility of qualifications

Ensuring the credibility of higher education qualifications over time is an important element of our quality and standards work. We have a strategic goal that students should be rigorously assessed, and the qualifications they are awarded should be credible and comparable with those granted previously.²² For example, a first class degree awarded in 2023 should hold the same value as a first in the same subject awarded ten or 20 years ago.

Our KPM 3 measures the proportion of students who graduate with first class degrees.²³ Analysis we published in July 2023 suggests that some progress has been made in tackling ‘grade inflation’, but signals to higher education providers that there is still work to be done. 32.8 per cent of students were awarded a first class degree in 2021-22. Half of this attainment (16.4 percentage points) was not statistically explained when compared with 2010-11, after our analysis accounted for various observable factors that might affect students’ attainment.

This figure represents a decrease since 2020-21 of 4.8 percentage points in unexplained attainment for first class degrees across the higher education sector. In 2021-22, 56.2 per cent of students who entered higher education with A-level grades of AAA and above received a first, compared with 60.7 per cent in 2020-21 and 33.6 per cent in 2010-11.²⁴ (See also the information on attainment rates in the statistical overview section.)

Equipping students with higher technical skills

Higher Technical Qualifications (HTQs) are Level 4 or 5 qualifications approved by the Institute for Apprenticeships and Technical Education. They were first introduced in September 2022 and are designed to equip students with the skills to meet employment needs. In 2023, two more sector areas were added to the range of HTQs: construction, design and build; and health and science.²⁵

In July 2023, we launched a consultation proposing to separate HTQs from other Level 4 and 5 qualifications in our student outcomes measures. We held two roundtable events on this consultation in October. The proposed change would allow the OfS, the higher education sector and the government to assess how far these new qualifications are delivering positive outcomes for students, employers and taxpayers.²⁶

In 2023, seven more further education colleges joined the Open University’s validation project (set up by the OfS in 2022). This enables the Open University to validate qualifications gained on courses offered by further education colleges. The aims are to provide more choice to students, boost participation in higher education in areas where it is low, and deliver courses that produce a workforce that can meet local skills needs.²⁷

Securing free speech within the law

Ensuring that higher education providers are environments where free speech within the law is valued and upheld is fundamental to a high quality education for students.

There have been significant legislative developments in relation to freedom of speech in 2023, with the Higher Education (Freedom of Speech) Act 2023 becoming law in May.²⁸ The Act will place further responsibilities on registered universities and colleges and relevant students’ unions to take steps to ensure lawful free speech. The legislation introduces an expanded role for the OfS and, since the Act became law, one of our main areas of focus has been setting up a new free speech complaints scheme for higher education in England.

Understanding students' experiences of freedom of speech is an important part of our new role. We began this work in a number of ways in 2023. This included incorporating a new question in this year’s NSS on freedom of expression: ‘During your studies, how free did you feel to express your ideas, opinions, and beliefs?’ We also hosted roundtables with students and with students’ unions and launched a consultation on how we should approach the regulation of students’ unions in this area.²⁹ We have set out our priorities for this work and have been undertaking engagement work to support higher education providers to prepare for the legislation when it comes into force from August 2024.³⁰

Equality of opportunity

Our work on promoting equality of opportunity is closely linked with our work on quality and standards. We want all students, from all backgrounds, with the ability and desire to undertake higher education, to be supported to access high quality courses and achieve qualifications that are valued by students, employers, and society.

We launched a new approach to regulating equality of opportunity in March 2023. Informed by the outcomes of a consultation, we published the Equality of Opportunity Risk Register (EORR) and updated guidance on access and participation plans.³¹ The EORR identifies 12 sector-wide risks that may affect a student’s opportunity to access and succeed in higher education. These risks are grouped across the three main stages of a student’s higher education journey: access, on course, and progression. We ask universities and colleges registered with us to consider the EORR when writing their access and participation plans.³² A first wave of higher education providers submitted access and participation plans in line with our new guidance in summer 2023.³³

Access to higher education

Risks 1 to 5 of the EORR address barriers to accessing higher education. Our regulatory guidance on access and participation plans includes the expectation that most higher education providers will consider risks to access to higher education, including knowledge, skill and attainment differences, by making ‘meaningful and effective contributions to supporting schools to raise pre-16 attainment for students who do not have equal opportunity to develop the knowledge and skills required for higher education.’³⁴

Annual statistics published by the government highlight that some student groups face particular barriers to accessing higher education. For example, the disparity in rates for progression into higher education by the age of 19 between those eligible for free school meals at age 15 and those who were not increased to 20.2 percentage points in 2021-22. This is the highest level since 2005-06. White male British pupils who were eligible for free school meals at age 15 are among the groups least likely to go on to higher education by age 19. 13.4 per cent of such pupils went on to study in higher education in 2021-22 (this is down from 13.6 per cent in the previous academic year). Black Caribbean pupils were among the groups least likely to go on to study in high-tariff higher education providers by age 19 in 2021-22: 6.7 per cent. This compares with an overall national figure of 13.4 per cent of pupils going on to study in such providers.³⁵

Data analysed for the OfS’s KPM 5 shows the number of ‘significantly disadvantaged’ students entering higher education in England. In 2021-22, approximately 286,700 young, full-time, England-domiciled students (who could be linked to their school record in their GCSE year) entered undergraduate higher education. Of these, 49,600 are categorised as ‘significantly disadvantaged’ (a decrease from 51,100 in the previous academic year).³⁶

The statistical overview section gives more details about entrants to higher education.

Diversity of pathways into and through higher education

The OfS’s work on encouraging providers to develop more diverse pathways into and through higher education continued in 2023. Our updated regulatory guidance on access and participation plans includes the expectation that higher education providers should be ‘expanding and promoting pathways for study at Levels 4 and 5, and on higher apprenticeships and degree apprenticeships.’³⁷

In 2021-22, 25,240 apprentices entered higher education at undergraduate level (an increase from 21,290 in 2020-21).³⁸ We have set out our plans to fund up to £40 million worth of projects at registered providers that will increase capacity within the sector to deliver degree apprenticeships. We expect that this expansion will increase both the number of providers offering degree apprenticeships and the number of students studying Level 6 degree apprenticeships.

The Lifelong Learning (Higher Education Fee Limits) Act 2023 received royal assent in September.³⁹ The Act supports the government’s lifelong learning entitlement (LLE) policy, which plans to introduce a more flexible approach to studying in higher education.⁴⁰ When it is introduced, people up to the age of 60 will have access to a loan to cover the costs of the equivalent of four years of post-18 study. This loan may be used over their lifetime, on different courses and at different higher education providers. It is likely to lead to an increase in the modular provision of study. This introduction of greater flexibility in learning is also likely to have a positive impact on expanding who has access to higher education.

The OfS will regulate all providers offering courses funded through the Lifelong Learning Entitlement, and we are preparing for this role. We issued a call for evidence earlier this year on how we should understand and regulate outcomes for students studying on a modular basis, and are now reviewing the feedback we received.⁴¹

On-course experiences

The Equality of Opportunity Risk Register (risks 6 to 11) recognises the importance of positive on-course experiences and access to strong academic and pastoral support. The overall continuation rate for undergraduate students entering full-time first degrees in 2020-21 was 88.9 per cent, and the equivalent completion rate (for entrants in 2017-18) was 88.5 per cent: in both cases a decrease compared with the previous three academic years.⁴² This is the latest data available. Continuation and completion rates are often lower for disadvantaged groups (see the statistical overview section). This is why work to support students from all backgrounds to succeed in higher education is so important.

Risk 8 of the EORR highlights the risk to equality of opportunity if students do not experience an environment that is conducive to good mental health and wellbeing. There has been a lot of positive and innovative work to address mental health in universities and colleges in 2023, including work tailored to the needs of specific student groups.⁴³ The 18 projects funded by our latest Mental Health Funding Competition have been completed this year. We are in the process of sharing their outputs and findings.⁴⁴ In October 2023, the Centre for Transforming Access and Student Outcomes launched the Student Mental Health Evidence Hub. Funded by the OfS, this digital hub brings together evidence, evaluation, examples of practice and resources for what works in supporting mental health among students.⁴⁵ And we commissioned a project to encourage improved collaboration and relationships between higher education and NHS providers on student mental health. ⁴⁶

We announced a new disabled students’ panel, the Disability in Higher Education Advisory Panel, in June 2023.⁴⁷ The panel will review how universities and colleges currently support disabled students.

In July 2023, the Women and Equalities Committee published the report of its inquiry into ‘Attitudes towards women and girls in educational settings’. The report concluded that ‘Women students experience high levels of sexual harassment and sexual violence, both on and off the university campus.’⁴⁸ In 2023, we consulted on a new approach to regulating harassment and sexual misconduct and are currently considering the responses.⁴⁹ We are developing our own prevalence survey to establish the scale of sexual misconduct in higher education. A pilot version of this survey launched in September 2023. This is an important step in establishing a robust evidence base and improving our understanding of students’ experiences of sexual misconduct.⁵⁰

Progression from higher education

Not all students have equal opportunities to progress to an outcome that they consider positively reflects their higher education experience (see risk 12 of the EORR). Overall there is a progression rate of 73.9 per cent for full-time first degree students qualifying in 2020-21 (the latest data available).⁵¹ However, students from disadvantaged groups often have lower progression rates.

For example, students who were eligible for free school meals at key stage 4 (or any stage before that) have a progression rate of 65.3 per cent. For students with a reported disability, the rate is 70.6 per cent.⁵² For more data on progression rates, see the statistical overview section. Our updated regulatory guidance on access and participation plans includes the expectation that providers will look at multiple areas to improve graduate outcomes for disadvantaged groups, some of which are: development of the curriculum; pedagogy; learning resources; student support; employability; and opportunities such as work experience, placements and internships.⁵³

Financial sustainability 

We monitor and analyse the financial performance and forecasts of higher education providers and take steps to increase this monitoring – or make other regulatory interventions – where there are additional risks associated with a provider.

Alongside this work, we publish an annual update on the financial sustainability of the sector. Our 2023 report set out our position that, while we did not consider the short-term financial viability of most higher education providers in England to be a cause for concern at that time, there were increasing financial sustainability risks for some providers in the longer term, and some could face short-term challenges as well.⁵⁴ This was particularly the case if multiple risks were to be realised at the same time. The key risks we identified in May included:

• The impact of inflation on costs and challenges in growing income to meet increasing costs. In particular, the ‘per student’ income from tuition fees from UK undergraduates is capped and not increasing, while other costs rise.
• Increasing reliance on fees from overseas students, particularly postgraduates, in some higher education providers’ business plans.
• Challenges in meeting investment needs for facilities and environmental policies.

At the end of the year, these risks remain present in the operating environment and the pressure on institutions continues. While many universities and colleges are actively working to mitigate future financial risks, others are not fully assessing and managing these, and are having to respond reactively when they start to materialise. We also see an optimism bias in many financial returns: for example, while the projected growth in student numbers at individual providers may seem reasonable, across the higher education sector as a whole in England it may be unrealistic.

The sector as a whole continues to be reliant on the income from international students (from EU and non-EU countries) who pay increased tuition fees. The sector forecasts show that non-EU fee income as a proportion of total income is expected to increase by 52.3 per cent between 2021-22 and 2025-26. Fee income from EU-domiciled students is expected to increase by 6.0 per cent in the same time period. The sector is particularly reliant on fee income from students from China, who made up 22.3 per cent of the total number of overseas students 2021-22.⁵⁵ See the statistical overview section for more information.

In May 2023, the OfS wrote to 23 higher education providers with high levels of recruitment of students from China. We reminded them of the importance of contingency plans in case there is a sudden drop in income from international students. We asked a subset of those higher education providers most exposed to a short-term risk to provide information about their financial mitigation plans. Each of these responded with their plans, which we have considered in the context of the other financial information that providers are required to submit.⁵⁶

The risks facing the sector are of course subject to change. We will continue to monitor risks closely and are tailoring our approach to assessing the financial resilience of individual providers to reflect the changes in the overall risk context for the higher education sector. To support this risk-based approach, we have begun new engagement activity, including convening roundtable sessions with finance leaders from across the sector to discuss financial sustainability and the particular risks they are facing. This includes hearing from universities that are not experiencing financial difficulties, and using our engagement activity to set expectations about how universities should be assessing their own financial risks given the pressures they face.

In the statistical section that follows, you will find the latest data on higher education providers, students in higher education, student outcomes and the higher educational experiences of disadvantaged groups. This report puts the key numbers about higher education in England at your fingertips. I hope you find it helpful as a statistical overview of 2023.