Consultation on proposals to change how the Office for Students regulates further education colleges in England

Introduction

1. This consultation sets out our proposals to disapply some of the OfS conditions of registration that apply to providers of higher education that are also providers in the statutory further education sector.
2. For the purpose of this document, a provider in the statutory further education sector refers to a further education corporation, a sixth-form college corporation, or a Designated Institution established or designated under the Further and Higher Education Act 1992.⁶ Collectively, these are referred to as further education college/s unless otherwise specified in this document.
3. In England, the Secretary of State for Education is the principal regulator for further education and sixth form colleges. When a further education provider offers higher education courses and is registered with the OfS, it is subject to oversight by both the DfE and the OfS. This dual regulation can sometimes create additional regulatory burden, as providers must comply with separate sets of requirements. Navigating these overlapping regulatory expectations can be resource-intensive and may lead to duplication of effort.
4. We are proposing that the changes set out in this consultation relating to the access and participation statement (proposal 1) would apply, if introduced, to all further education colleges. The other proposed changes would apply only to further education colleges that do not hold or are not applying for DAPs. Providers with DAPs have wider responsibilities and are subject to different risks, which is why we propose to retain a wider set of OfS regulatory requirements for them.

What we are consulting on

5. The conditions of registration we propose to disapply are included in table 1.

6. The OfS has a power to impose specific ongoing conditions of registration. This would include if we subsequently have regulatory concerns about an individual higher education provider that is subject to these proposals, allowing us to intervene directly if necessary to manage risk. This power would not be changed if we implemented the proposals set out in this consultation.⁷
7. This consultation is not a comprehensive review of all regulatory requirements affecting providers in the statutory further education sector. Instead, it concentrates on areas of regulation where there is current overlap of regulation between the DfE’s and the OfS’s regulatory requirements. We set out in more detail below why we are proposing to disapply the above conditions on this basis.
8. This consultation is published in accordance with sections 5(5) and 75(8) of the Higher Education and Research Act 2017 (HERA).⁸ In formulating these proposals, we have had regard to a range of relevant statutory and regulatory considerations including:
   1. Our general duties under section 2 of HERA.⁹
   2. The Public Sector Equality Duty.¹⁰
   3. Statutory guidance issued by the Secretary of State.¹¹
   4. The principles set out in the Regulators’ Code.¹²
9. A full explanation of matters to which we have had regard is set out in Annex C.

Why are we making these proposals?

Regulation of the statutory further education sector

10. This consultation focuses on providers in the statutory further education sector because the DfE regulates these providers in a distinct way. This reflects their statutory prescribed legal status,¹³ their funding arrangements and governance structures. This means that further education colleges are subject to governance and accountability requirements that reflect their status and public responsibilities.¹⁴
11. The DfE provides an overarching framework for implementation of effective financial governance, management and other controls for further education colleges via the ‘College financial handbook’.¹⁵ In addition, in November 2022, the Office for National Statistics (ONS) reclassified the statutory further education sector in England into the central government sector.¹¹ The reclassification covered further education corporations (colleges), sixth form corporations and designated institutions. While those bodies remain independent organisations, reclassification has implications for the way that colleges manage their finances, and therefore for the monitoring and oversight undertaken by the DfE. Following reclassification, colleges are required to comply with the principles and practices of the ‘Managing public money’ governance framework,¹⁷ as set out in the ‘College financial handbook’, which includes requirements of accountability, transparency, value for money, ethical conduct, and that a college is managed in the public interest.
12. The Secretary of State for Education, acting through the DfE, supports colleges to succeed and intervenes where necessary to protect learners and public funds.¹⁸ The DfE’s approach includes intervention or targeted action such as notices to improve, extensive financial monitoring, alongside mechanisms such as:

• funding to support long-term changes as a result of intervention¹⁹
• the further education insolvency regime²⁰
• the statutory intervention powers available to the Secretary of State for Education.²¹

13. Intervention or targeted action may also involve a ‘Letter to improve’, which may include targeted action and mandate targeted support.
14. The Secretary of State’s intervention powers that apply to further education colleges and designated institutions are set out in section 56A of the Further and Higher Education Act 1992 (FHEA 1992),²² as amended by the Skills and Post-16 Education Act 2022.²³ The Secretary of State may exercise statutory intervention powers if satisfied that any of the following matters are met:
    1. ‘that the institution’s affairs have been or are being mismanaged by the governing body;
    2. that the institution’s governing body have failed to discharge any duty imposed on them by or for the purposes of any Act;
    3. that the institution’s governing body have acted or are proposing to act unreasonably with respect to the exercise of any power conferred or the performance of any duty imposed by or under any Act;
    4. that the institution is performing significantly less well than it might in all the circumstances reasonably be expected to perform or is failing or likely to fail to give an acceptable standard of education or training.
    5. that the education or training provided by an institution did not, or does not, adequately meet local needs.’
15. Where one or more of the above matters apply, the Secretary of State may take the following actions:
    1. ‘remove all or any members of the institution’s governing body.
    2. appoint new members to the governing body if there are vacancies (however arising).
    3. give to that body such directions as the Secretary of State thinks expedient as to the exercise of their powers and performance of their duties.’
16. The directions that may be given to a governing body by the Secretary of State may include:
    1. a direction requiring a governing body to make collaboration arrangements with such bodies and on such terms as may be specified in the direction.²⁴
    2. a direction requiring a governing body to make a resolution or take such other steps specified in the direction as may be required, for the body to be dissolved on a date specified in the direction.²⁵
    3. a direction requiring a governing body to transfer property, rights or liabilities specified in the direction, and take any other specified steps in the direction in connection with the transfer in relation to property, rights or liabilities so specified.
17. Following any exercise of the statutory intervention powers, the DfE will put in place arrangements for the oversight, monitoring and support for both administrative interventions and statutory interventions.
18. As noted in the introduction to this consultation, a further education college that offers higher education and is registered by the OfS is subject to dual regulation, which can sometimes create additional regulatory burden. In particular in relation to financial viability and sustainability, and management and governance, OfS registration imposes some requirements that overlap with those of the DfE.
19. Our initial view is that the college oversight, support and intervention framework for further education colleges set out from paragraph 11 is sufficient to justify reducing regulatory burden for further education colleges without DAPs and that do not intend to seek DAPs, while allowing us to operate more efficiently and continue to protect the interests of students and public funds. Our view is that the statutory intervention powers afforded to the DfE in regulating further education colleges manage risk to the extent that continuing to apply the OfS conditions of registration in relation to financial viability and sustainability, and management and governance may no longer be appropriate and proportionate to risk.
20. In relation to our proposals on access and participation, our view is that the requirement on further education colleges may be duplication of regulation.
21. We are therefore proposing to make changes to remove this duplication of regulation under section 5(2) of HERA, which empowers the OfS to apply different conditions of registration to different descriptions of provider.
22. As noted at paragraph 6, we would also retain the ability to intervene if we had regulatory concerns in these areas by imposing one or more specific ongoing conditions of registration on the basis of risk. For example, we may do this if we assess that there is increased risk where a further education college without DAPs is extensively subcontracting the teaching of higher education courses that are validated by awarding organisations regulated by Ofqual.

Minimising regulatory burden

23. This consultation forms part of our broader commitment to minimise unnecessary regulatory burden while protecting the interests of students and public funding. The independent review of the OfS published in July 2024 included recommendations that the DfE and the OfS are to engage the sector in an ongoing, constructive dialogue with a view to reducing unnecessary regulatory burden. It also recommended that the OfS worked more collaboratively with other regulators to understand their collective requirements and identify opportunities to reduce areas of regulatory overlap and duplication.²⁶

Distinguishing between further education colleges that hold or do not hold DAPs

24. Throughout most of this consultation we draw a distinction between further education colleges with DAPs and without DAPs. This reflects a deliberate policy position: providers with DAPs are responsible for awarding qualifications that are of significant value to students, employers and the wider higher education sector. As such our view is that it is important to retain a fuller set of conditions of registration for these providers.
25. Providers with DAPs are required to comply with additional regulatory criteria, as set out in the criteria for the authorisation for DAPs in the regulatory framework.²⁷ The criteria are designed to ensure that a provider with DAPs has demonstrated a firm guardianship of academic standards, a firm and systematic approach to the assurance of the quality of the higher education that it provides, and the capacity to contribute to the continued good standing of English higher education.²⁸ To be suitable to be awarded and retain DAPs a provider must be able to demonstrate that it has understood and planned for the resources and governance necessary to set and maintain academic standards securely.
26. We assess a provider’s financial viability and sustainability, and its management and governance as an initial assessment of any application for DAPs. This is assessed again before any award for DAPs is made. The regulatory framework, at paragraphs 221 and 249, sets out that for further education colleges, where compliance with some conditions of registration is satisfied by assurances provided by the DfE, for DAPs purposes, the further education college must demonstrate that it is able to satisfy these conditions directly itself.²⁹ This means that for DAPs we have always set out an expectation that a further education college awarded DAPs, or that is applying for DAPs, can demonstrate that it meets these initial and ongoing conditions of registration.
27. Additionally, providers with DAPs operate autonomously and are not reliant on an OfS-registered validating partner for the awarding of degrees. This independence can increase risk, particularly in scenarios involving financial difficulties or potential institutional closure. In such cases, providers without DAPs typically benefit from the support of a validating partner that can assist with student transfer arrangements, the awarding of qualifications, and continuity of provision. Moreover, where a provider with DAPs faces closure this creates risks for students studying courses it validates at other providers, and potentially to the financial sustainability of those other providers as well. We recently published an Insight brief highlighting the important role that validating partners play in protecting students.³⁰
28. We have observed risks to public funding and to the interests of students arising from subcontractual partnerships that are not managed effectively by the lead provider. This can arise for a number of reasons, including where there is rapid growth in student numbers within the partnership without sufficient oversight by the lead provider. This growth has raised concerns about the effective oversight and governance of some of these arrangements and the protection of public and student interests.³¹ Against this landscape, the policy context is evolving to address emerging risk. For example, the DfE recently consulted on strengthening oversight of partnership delivery in higher education,³² and we recently consulted on new requirements for registered providers engaged in those partnerships.³³ Having DAPs is an important pre-requisite to entering into subcontractual arrangements for degree level courses and we therefore do not consider it appropriate to reduce regulatory controls relating to such providers in this context. As such, we are proposing that the potential disapplication of the conditions of registration that relate to financial viability and sustainability and to management and governance should not apply to further education colleges with DAPs or further education colleges that have applied for DAPs.
29. We recognise that further education colleges that do not have DAPs could enter into subcontracting relationships with Ofqual regulated awarding organisations in relation to certain higher education courses. This type of activity is likely to increase with the introduction of the LLE. If, following any implementation of our proposals, we have concerns about a further education college’s oversight of these type of arrangements, or indeed other regulatory concerns, we may consider imposing one or more specific ongoing conditions of registration.

Notes

6. See Further and Higher Education Act 1992.
7. See Higher Education and Research Act 2017 - Section 6. The OfS may, at the time of an institution’s registration or later, impose such conditions on its registration as the OfS may determine.
8. See Higher Education and Research Act 2017.
9. See Higher Education and Research Act 2017 - Section 2.
10. See Public Sector Equality Duty: guidance for public authorities - GOV.UK.
11. See Guidance from government - Office for Students.
12. See Regulators' Code - GOV.UK.
13. See Further and Higher Education Act 1992.
14. See College financial handbook 2025: effective from 1 August - GOV.UK; College oversight, improvement and intervention - GOV.UK.
15. See College financial handbook - GOV.UK.
16. See Further education reclassification - GOV.UK.
17. See Managing public money - GOV.UK.
18. College oversight, improvement and intervention - GOV.UK.
19. See Help and support for colleges - GOV.UK.
20. The further education insolvency regime was introduced through the Technical and Further Education Act 2017 (TFEA 2017), the Further Education Bodies (Insolvency) Regulations 2019, and the Education Administration Rules 2018 and amended in Skills and Post-16 Education Act 2022. The relevant legislation came into force on 31 January 2019.
21. See Statutory intervention powers for the FE sector - GOV.UK.
22. See Further and Higher Education Act 1992.
23. See Skills and Post-16 Education Act 2022.
24. ‘Collaboration arrangements’ are defined in Section 166 of the Education and Inspections Act 2006.
25. See Section 27A(1) at Further and Higher Education Act 1992.
26. See Fit for the Future: Independent Review of the Office for Students - GOV.UK.
27. See PART IV – Validation, degree awarding powers and university title - Office for Students.
28. See Regulatory advice 12: How to apply for degree awarding powers.
29. See Regulatory framework for higher education in England.
30. See Protecting the interests of students when universities and colleges close.
31. See Subcontractual arrangements in higher education.
32. See Franchising in higher education - GOV.UK.
33. See Consultation on new requirements for the oversight of subcontractual arrangements in English higher education.