Securing student success: Regulatory framework for higher education in England

An arrangement is ‘adequate’ if it is capable of delivering its stated or implied objective.

An arrangement is ‘effective’ if it is operated so as to deliver its stated or implied objective and those objectives are delivered as a result.

‘Governing documents’ (used below) has the meaning set out for Condition E1.

‘Operate in a way that is consistent with its governing documents’ includes that the provider seeks to achieve its objectives, that its decisions are informed by its values, and that decisions are in fact taken by the body or individual identified in the governing documents as taking those decisions, acting without direction coercion or covert influence.

‘Governing body’ (used below) has the meaning given by section 85 of HERA.

As different providers will have different levels of complexity (including size, nature of the business and legal form), different management and governance arrangements may be appropriate for different providers. Arrangements that may be appropriate for small providers might not be appropriate for large, complex providers, those with degree awarding powers, or with university title. A provider will therefore need to demonstrate that its particular management and governance arrangements are appropriate for its size, complexity and risk environment.

In judging whether a provider’s arrangements are adequate, material that the OfS may consider includes:

In judging whether a provider’s arrangements are effective, material that the OfS may consider includes:

In judging whether a provider has in place adequate and effective management and governance arrangements that operate in accordance with its governing documents, material that the OfS may consider includes:

In judging whether a provider has in place adequate and effective management and governance arrangements to deliver, in practice, the public interest governance principles that are applicable to it, material that the OfS may consider includes:

The OfS will assess the extent to which a provider’s governance arrangement are adequate and effective. The evidence required for this purpose may vary from provider to provider. When it first seeks registration each provider is required to submit a self-assessment of the adequacy and effectiveness of its management and governance arrangements. The OfS may require additional supporting evidence from the provider, and this may include but not be limited to:

• information that demonstrates that the provider is owned and controlled by fit and proper persons
• information to provide transparency of inter-relationships between companies/organisations
• membership and terms of reference of the governing body and its committees
• evidence of risk management tools and processes (e.g. a risk register)
• Audit Committee annual report (where appropriate)
• internal audit plan and annual report (where appropriate)
• the report of any recent effectiveness review of the governing body and any of its committees, and the actions taken in response to the report
• information about governor (or equivalent) recruitment and induction.

Once registered, and in order to demonstrate compliance with the general ongoing condition, the OfS will require a provider that it considers to pose no increased risk in this area, to make publicly available the minutes of the meetings of its governing body and committees, except where such material is genuinely confidential.

In addition to this minimum, providers in receipt of public grant funding subject to the additional public interest governance principles, are likely to be required to provide additional information, including but not limited to:

• an opinion by an external auditor that the provider is using the funds for the purposes given
• information about value for money for public grant funding
• an opinion from an audit committee and/or internal audit on the adequacy and effectiveness of arrangements for securing value for money from such funding.

Where the OfS considers that the risk of a provider breaching this condition is not low, it may require additional information to be provided and may put in place additional monitoring. This may include, but not be limited to, the information set out in paragraph 445 above.

The OfS may carry out an on-site review of the provider’s management and governance arrangements, where it considers this to be necessary or desirable to confirm that a provider satisfies the initial or ongoing condition. The need for, and frequency of, such reviews will be proportionate to the OfS’s assessment of risk. A provider for which the OfS determines that the risk of a breach is not low is more likely to require such a review.

The following are non-exhaustive examples of behaviours that may indicate compliance with this condition:

• the provider adopts and follows a recognised and appropriate governance code
• the provider publicly explains its approach to the remuneration of senior staff and remuneration decisions are transparent
• the provider publishes information about senior staff pay as required by the OfS’s accounts direction
• the provider follows and adheres to the principles and structures set out in its governing documents
• the provider’s actions appear to align with its objectives and values
• the provider complies with its other statutory duties
• the provider takes responsibility for its own decision making, and does so in an open and accountable way
• the provider provides timely, accurate and complete information to the OfS, a designated body, or other person nominated by the OfS, and to its students and other stakeholders
• the provider regularly reviews the adequacy and effectiveness of its own governance arrangements, with external input, particularly with regard to the public interest governance principles, and to course delivery and compliance with its conditions of registration and takes appropriate action
• governing documents, as described above, are readily and publically available
• delegations are appropriate, reserving important matters to the governing body while delegating matters that may require specialist detailed scrutiny, or that may be insufficiently important ordinarily to require governing body attention
• full reports are provided to decision making bodies within the provider to inform their work
• full minutes of decisions are kept
• reports and minutes are in the public domain, and the designation of material as confidential is kept to the minimum necessary
• the provider maintains a public register of conflicts of interest and such conflicts are appropriately managed in practice
• the provider ensures that the use to which it puts funds received from whatever source is consistent with the purposes for which those funds were given (regularity)
• the provider provides sufficient information on a regular basis to demonstrate it operates in an open and accountable way, and provides and publishes information about how it ensures value for money.

The following are non-exhaustive examples of behaviours that may indicate non-compliance with these conditions:

• the provider does not act openly, honestly, accountably and with integrity
• the provider is unable or unwilling to provide timely, accurate and complete information to the OfS, a designated body or other person nominated by the OfS, and to its students and other stakeholders
• the provider does not review the adequacy and effectiveness of its own governance arrangements, in particular with regard to the public interest governance principles and to ensure course delivery and compliance with its conditions of registration, or it carries out such a review but does not take appropriate action
• delegations are inappropriate, either delegating important matters below the governing body or retaining too much material for the governing body and so reducing its ability to scrutinise important issues
• not all governing documents, as described above, are readily and publically available
• reports to or minutes of decision making bodies are perfunctory, or designate extensive material as confidential without adequate reason
• students or staff complain that higher education courses are not delivered as advertised
• conditions of registration are breached and/or steps are not taken to mitigate an increased risk of a breach
• a provider does not engage with the OfS, obstructs the OfS regulatory activity, and/or does not notify the OfS of any reportable events and/or does not submit the required information in relation to any condition
• a provider fails to comply with its other statutory obligations, as indicated by judicial proceedings and/or steps taken by other regulators
• the provider does not have sufficient management capacity and capability to ensure that it is able to continue to meet its conditions of registration
• the provider fails to comply with legislation on equality and diversity, and does not have regard to its policies on equality and diversity
• the provider misuses funding, for example through fraud, abuse of funds, financial mismanagement or irregularity
• the provider does not comply with conditions imposed on it by or under regulations made under s22 of the Teaching and Higher Education Act 1998 (financial support for students)
• the provider seeks to abdicate responsibility for decision making, and seeks steers from the OfS
• the provider does not provide sufficient information on a regular basis to demonstrate it operates in an open and accountable way, and does not provide and publish information about how it ensures value for money
• the provider fails to abide by its own freedom of speech code.