Nicola Dandridge writes in the Times about financial sustainability and the OfS's registration process.
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With more people studying for a degree than ever before, the financial health of England’s universities is rightly in the spotlight. New analysis today provides a health check on the 387 universities, colleges and more specialist providers that registered with the Office for Students — England’s higher education regulator — over the last 18 months.
Universities and colleges must register for their students to access loans or visas. We require them to meet clear conditions, including on teaching quality, career outcomes, and access and support for disadvantaged students. We also expect them to be able to demonstrate that they are financially viable for at least three years and sustainable for at least five.
Overall, the higher education sector is in reasonable financial health. However, there are many financial pressures – increased competition, rising pension costs, and uncertainty over international recruitment after Brexit. It is in everybody’s interest that universities and colleges meet our financial tests and plan realistically.
That’s why we said that we would not bail out a financially failing university. It is not just that as a regulator we can’t finance them to meet our own conditions. It is also because we want universities facing such problems to find solutions early.
Such financial scrutiny is therefore essential. Students lose out if their university or college collapses before they can get their degree. Of course, we can and will help them find alternatives where that happens but it would be far better had it been sustainable from the start.
The taxpayer loses out too. With nearly half of all student loans being subsidised by the public purse, this means that if students can’t complete their course public money is wasted.
Diversity in providers can bring real benefits for students and the economy, not least through greater innovation. But the collapse of dozens of for-profit colleges in the US over the last decade provides a lesson in the dangers of weak regulation. A sustainable business model is therefore crucial for any new university or college.
Today’s analysis demonstrates that too many universities and colleges relied on over-ambitious projections for student recruitment when making financial plans, with 71 under 'enhanced monitoring', giving us early warning if, for example, their financial forecasts look likely to be missed.
Overall, we have turned down eight applicants and have told a further 13 that we are minded not to register them, giving them a chance to respond. These decisions reflect concerns about quality and other issues, but financial weakness is a continuing theme. Almost two thirds of those on the register have been told that we will monitor them more frequently than usual, requiring more regular reporting. For some, we expect specific changes too. We can also fine or even remove a provider from the register in the most serious cases.
Through our clear registration conditions and this continued vigilance, we are determined to ensure that our universities and colleges remain financially healthy.