
Table of contents
Approximate read time: 10 minutes
On 30 January 2025 the House of Lords is due to consider the following question for short debate:
Lord Willetts (Conservative) to ask His Majesty’s government what discussions they have had with the Office for Students about (1) its strategy for 2025 to 2030, and (2) its decision to pause applications regarding registering institutions, degree-awarding powers and university titles to allow greater focus on the financial sustainability of the sector.
1. Office for Students and its proposed strategy
1.1 Background to the Office for Students
The Office for Students (OfS) is a non-departmental public body of the Department for Education which acts as the regulator and competition authority for the higher education sector in England.[1]. The OfS was established by the Higher Education and Research Act 2017 and came into existence on 1 January 2018.[2]
1.2 Office for Students strategy for 2025 to 2030
On 12 December 2024, the OfS published proposals for a new strategy for the period 2025 to 2030. According to the OfS, the proposals will ensure “that students from all backgrounds benefit from high quality higher education, delivered by a diverse, sustainable sector that continues to improve”.[3]
The strategy is structured around three main priorities:[4]
- Quality: The OfS plans to change its approach to regulating quality by developing an integrated system that promotes continuous improvement across the higher education sector. This will include ensuring that students receive education with a significant and lasting positive impact on their lives and careers, and that prospective students have access to a range of high-quality options, enabling informed choices about their studies.
- Wider student interest: The strategy emphasises that students should receive the higher education experiences they were promised and benefit from enriching environments that enhance their time in higher education. The OfS intends to gather and analyse data to understand student experiences, enhance and protect students’ rights, and address barriers that prevent students from fully benefiting from their education.
- Sector resilience: Recognising financial sustainability as a significant challenge, the OfS plans to work with universities and colleges to understand and address financial pressures. This includes collecting financial data more frequently, engaging with institutions facing financial difficulties, and ensuring credible plans are in place to protect students in case of institutional risks.
A consultation on the strategy began on 12 December 2024 and will end on 20 February 2025.[5]
2. Decision to pause applications regarding registering institutions, degree-awarding powers and university titles
2.1 Details of decision to pause applications
On 2 December 2024, the OfS announced temporary changes to its approach to registering institutions, granting degree awarding powers and applications for university title.[6]
The changes were:
- No new registration applications would be accepted and all registration cases in the early stages of assessment would be paused.
- No new applications for degree awarding powers would be accepted and applications that have been received, but where assessment has not yet started, would be paused.
- No new applications for university title, or for a change in an institution’s name where it already held university title or university college title, would be accepted. Those already submitted would be completed.[7]
The OfS said the temporary changes will “allow a greater focus on the financial sustainability of the sector and individual institutions”. This would enable “the OfS to work more closely with institutions under significant financial pressure in order to protect the interests of students”.[8] The OfS expects the changes to be in place until August 2025, although they will be reviewed regularly in the interim.
2.2 Background to decision to pause applications
Financial analysis published by the OfS in November 2024 indicated a rise in the number of higher education providers at increasing financial risk. While the OfS did not expect a significant number of providers to fail in the short term, the number facing significant challenges in the next two or three years was judged to be increasing.[9]
The OfS analysis was based on financial data compiled by most providers in 2023 and returned to the OfS in early 2024. According to the analysis:
- by 2025–26, based on current trends and not taking into account significant mitigating action, the sector’s net income would be lower by £3.4bn compared to previous forecasts and in deficit by £1.6bn
- this would equate to up to 72% of providers being in deficit, and 40% having low liquidity
- UK and non-UK student recruitment were significantly below the sector’s previous expectations
- providers’ financial forecasts were based on predictions of student recruitment that were too optimistic
According to the OfS, temporarily pausing work on applications would allow the regulator to apply its “finite resources to managing risks for the students already in the system, over the benefits that new providers, or those seeking the ability to award qualifications, will bring”.[10]
In the OfS’s view, continuing with registrations ran the risk that the regulator would be unable to meet its published timelines for resolving registration applications. In that event, starting cases and then having to stop them to take up urgent work would cause uncertainty for providers.[11]
2.3 Reaction to the Office for Students’ decision
2.3.1 Reaction in Parliament
In a debate on the higher education sector in the House of Lords on 4 December 2024, shadow minister for education Baroness Barran was critical of the OfS’s decision. In her view, it sent “the most terrible message to students both in this country and overseas, and risks undermining the financial sustainability it seeks to achieve”.[12]
In response, minister of state for education Baroness Smith of Malvern said:
[T]he message that [the OfS’s decision] sends is that this government, unlike the last, are determined to ensure that we put universities on a firmer financial footing. We are not willing to sit by, as the last government did, while universities face considerable financial pressure. That is why we asked the Office for Students to refocus on the issue of financial sustainability, to help to create a secure future for our world-leading universities.[13]
The government’s position was reiterated in a debate on the financial sustainability of higher education in the House of Commons on 5 December 2024. According to parliamentary under secretary at the Department for Education Janet Daby, the OfS’s decision “reflects the government’s determination to move our providers towards a firmer financial footing”.[14]
In the same House of Commons debate, shadow minister for education Neil O’Brien raised concerns about the OfS’s pause on applications. According to Mr O’Brien, this would be:
[…] a block to brilliant new entrants such as the New Model Institute for Technology and Engineering in Hereford, Dyson and other places that have come in and been brilliant additions to the higher education sector. It also potentially locks very large numbers of young people out of student support.[15]
2.3.2 Reaction from others
Writing in FE Week (which specialises in journalism for the further education, skills and apprenticeship sector), Smita Jamdar, partner and head of education at the law firm Shakespeare Martineau, questioned the legality of the OfS’s decision. In her view, pausing registrations will “undermine the mandatory nature of the [OfS’s] duty”.[16]
Ms Jamdar argued that the OfS’s pause also carried three wider, and potentially problematic, implications:
First, it does not exactly inspire confidence in registered providers as a group that the regulator has declared itself unable to carry out its statutory duties and functions because it is overwhelmed by its work in managing financial risks […]
Second, the Public Accounts Committee considered the risks associated with fraud through franchised providers earlier this year. One of its recommendations was requiring such providers to register with the OfS as a means of safeguarding student and taxpayer interests. It appears that this important recommendation cannot now be pursued until at least August 2025.
Third, the OfS currently has several, possibly dozens, of open investigations into concerns about quality and standards and other matters […] It is difficult to see how it can direct appropriate resources to these given how all-encompassing its work on financial sustainability appears to be.
Alex Proudfoot, chief executive of Independent Higher Education (a membership organisation and national representative body for independent providers of higher education), was also critical of the OfS’s decision, including the lack of assessment of the potential impact on students. According to Mr Proudfoot:
The decision to suspend registration and [degree awarding power] processes until late in 2025 is a clear enough dereliction of [the OfS’s] statutory duty. But to extend this to providers already in the process, effectively backdating this decision to the spring of 2024, is completely unjustifiable.
In taking this step, what the OfS is actually doing is picking winners and losers: deciding which providers are worth prioritising for financial sustainability, which students are deserving of the protection of the regulator and the funding to support their studies, and which are not. There has been no discussion about how to protect these students from the consequences of this decision. No evaluation of the impact on students at all.[17]
3. Read more
- Rachel Rees et al, ‘Severance spending at top UK universities surges’, Financial Times (£), 19 January 2025
- Shane Chowen, ‘Dismay and delay as OfS wrecks higher ed plans’, FE Week, 6 December 2024
- House of Commons Library, ‘Higher education finances and funding in England’, 3 December 2024
- Telegraph (£), ‘Three out of four universities will be in deficit next year, forecast shows’, 15 November 2024
- House of Lords Industry and Regulators Committee, ‘Must do better: the Office for Students and the looming crisis facing higher education’, 13 September 2023, HL Paper 246 of session 2022–23
Cover image by Changbok Ko on Unsplash.
References
- Department for Education and Office for Students, ‘Office for Students framework document’, 28 March 2018. Return to text
- Higher Education and Research Act 2017, s 1. Return to text
- Office for Students, ‘OfS sets out its vision for the next five years with new strategy proposals’, 12 December 2024. Return to text
- Office for Students, ‘Consultation on OfS strategy for 2025 to 2030’, 12 December 2024. Return to text
- As above. Return to text
- Office for Students, ‘OfS announces temporary changes to allow greater focus on financial sustainability’, 2 December 2024. Return to text
- As above. Return to text
- As above. Return to text
- Office for Students, ‘Financial sustainability of higher education providers in England: November 2024 update’, 15 November 2024. Return to text
- Office for Students, ‘Temporary changes to registration and other applications’, 2 December 2024. Return to text
- As above. Return to text
- HL Hansard, 4 December 2024, col 1145. Return to text
- HL Hansard, 4 December 2024, col 1145. Return to text
- HC Hansard, 5 December 2024, col 189WH. Return to text
- HC Hansard, 5 December 2024, col 184WH. Return to text
- Smeta Jamdar, ‘The implications of a pause in OfS regulatory functions’, FE Week, 6 December 2024. Return to text
- Alex Proudfoot, ‘Hate to say we told you so’, Wonkhe, 3 December 2024. Return to text