Proposals for a revised approach to assessing and rating quality

Key points of this proposal

• We would phase the implementation of student recruitment limits, and there would be different limits for providers with Requires improvement and Bronze ratings, and the equivalent outcomes from assessments of minimum requirements.
• Providers with a Requires improvement TEF rating, or an Unsatisfactory outcome through an assessment of minimum requirements would be required to reduce student recruitment by 10 per cent each year until their next assessment.
• These recruitment reductions would apply from the first cycle of assessments.
• Providers awarded Bronze ratings in all, or their only assessed aspect, or a Satisfactory outcome, would normally be prevented from increasing student recruitment.
• Recruitment limits associated with certain Bronze ratings and Satisfactory outcomes would not take effect until the second cycle of assessments from 2030-31 onwards.
• Providers with mixed aspect ratings of Bronze and either Silver or Gold would not normally be subject to student recruitment limits.
• We propose to implement the recruitment limits associated with TEF ratings through condition B6.
• We are also seeking views on an alternative approach under which recruitment limits for providers with Bronze ratings would be applied on a case-by-case basis through a specific ongoing condition of registration.

Explanation

487. Following stage one, we decided we will limit growth in student numbers at providers with a Requires improvement aspect rating, and we said we would consider further how student recruitment limits should apply to Bronze ratings. We have considered the approach to recruitment limits further and now propose a revised approach for providers that apply for TEF ratings. This would differentiate more between Requires improvement and Bronze ratings.
488. Throughout this proposal, references to Bronze, Silver, Gold and Requires improvement ratings relate to TEF assessments, while references to Satisfactory and Unsatisfactory outcomes relate to assessments of only the minimum requirements. The proposed student recruitment limits would apply across both parts of the quality system, using equivalent consequences for equivalent levels of performance.
489. In developing our proposals, we have been guided by two principles:
• where quality is unsatisfactory, future students should be protected from exposure to that provision while improvements are made
• where provision meets minimum requirements but has not demonstrated high quality, providers should normally demonstrate improvement before being able to expand.
490. We have therefore developed a more differentiated approach that reflects the different levels of risk associated with Requires improvement and Bronze ratings in the TEF and with the equivalent outcomes of Unsatisfactory and Satisfactory from minimum requirements assessments.
491. The key distinction between the nature of the student recruitment limits is that Requires improvement ratings or Unsatisfactory outcomes would require providers to reduce their level of recruitment from the first cycle. Bronze ratings or Satisfactory outcomes would limit providers from increasing their level of recruitment, from the second cycle of assessments. Our proposals reflect the higher level of risk to students associated with a Requires improvement rating or Unsatisfactory outcome.
492. We consider our proposed approach to recruitment limits better reflects the different levels of risk. It does this through the different recruitment limits, phased implementation of the limits associated with Bronze ratings and Satisfactory outcomes, and the proposal not to apply them to providers with mixed aspect ratings or outcomes. The proposals address feedback from the stage one consultation and give providers time and incentive to improve. Our intention is that Requires improvement ratings and Unsatisfactory outcomes should trigger a recruitment reduction focused on protecting students from poor quality and the need for rapid improvement. Bronze ratings and Satisfactory outcomes should trigger a restriction focused primarily on incentivising improvement beyond the minimum quality requirements and enabling more students to access high-quality provision and managing the risk that growth would create.
493. For providers that demonstrate satisfactory quality and are not intending to grow, our view is that the system creates other incentives for those providers to improve quality beyond the minimum requirements. For example, the requirement to publicise the Bronze rating or Satisfactory outcome would provide a reputational incentive to improve, and other restrictions or incentives may also apply, such as those linked to eligibility to apply for or extend DAPs, eligibility for funding (depending on the outcomes of our consultation on Strategic Priorities Grant (SPG) funding) or tuition fee uplifts and limits (depending on DfE decisions about this).

Providers with a Requires improvement rating or Unsatisfactory outcome

494. Following stage one, we decided that student recruitment limits will apply to providers with a Requires improvement aspect rating. We now propose that providers awarded a Requires improvement rating or an Unsatisfactory outcome for one or both aspects would be subject to a provider-level reduction in the number of students they can recruit. This would apply from the first cycle of assessments under the proposed future system.
495. These outcomes would indicate unsatisfactory quality or student outcomes. We think that requiring a reduction in the number of students a provider can recruit, rather than preventing any increase in numbers, would offer greater protection for future students while creating a stronger incentive for rapid improvement. We consider that reducing the provider’s recruitment would protect students by ensuring that the provider limits or suspends enrolments to poor-quality courses and it would be strongly incentivised to make improvements for future years.
496. In developing the details of the approach, we now consider that a restriction on growth (not allowing any increase in the number of students a provider can recruit) would not sufficiently reflect the seriousness of a Requires improvement or Unsatisfactory outcome. A provider could continue to recruit the same number of students to provision that does not meet minimum requirements. We therefore now consider that a reduction in recruitment is a more appropriate response.
497. Our view is that providers receiving a Requires improvement or Unsatisfactory outcome should focus their efforts on addressing the identified concerns before recruiting additional cohorts of students. A reduction in recruitment would lower the number of future students exposed to provision that has been judged to be unsatisfactory and would enable providers to concentrate managerial, academic and financial resources on improvement activity for existing and future students.
498. We have considered what level of reduction would likely achieve the intention and remain proportionate. We consider it should be meaningful enough to protect students from being enrolled onto poor-quality courses and act as an incentive for improvement while avoiding undue negative impact on a provider’s financial viability. We propose a year-on-year reduction in student recruitment of 10 per cent would provide an appropriate balance. A lower level, such as 5 per cent, would be less likely to provide sufficient incentive to make rapid improvements to quality, while a higher level such as 15 or 20 per cent may be less manageable for providers in terms of their admissions process or impact on their financial viability.
499. We also note that under Proposal 2, we would reassess providers with Requires improvement or Unsatisfactory outcomes more quickly than providers with other outcomes. Providers facing recruitment reductions would have the opportunity to remove those restrictions relatively quickly, by improving their ratings or outcomes.
500. We propose that we would apply the limit according to the number of entrants in the academic year in which we award the rating. We would then require the provider to reduce student recruitment by 10 per cent year-on-year until its next assessment has concluded. For example, if a provider has a final outcome of Requires improvement in January 2029 (academic year 2028-29) and in that year it has 1,000 entrants to undergraduate courses, it would be limited to recruiting no more than 900 undergraduate students in academic year 2029-30 and no more than 810 in 2030-31.
501. Under this proposal, we would require a provider to reduce its student intake with less than 12 months’ notice ahead of those reductions coming into force. We have considered whether this may cause providers difficulties with managing upcoming recruitment activities as well as any plans for future growth and associated financial modelling. We take the view that despite these potential issues for some providers, on balance the need to protect the interests of students by reducing enrolment onto poor-quality courses outweighs the potential negative impacts on those providers. We also consider that because providers would be aware of their provisional outcomes of Requires improvement with more than 12 months’ notice, they could make plans to mitigate any potential impact that this may have on students, particularly in relation to making binding offers to students for study that they may not be able to fulfil due to restrictions on recruitment.

Providers with Bronze ratings or Satisfactory outcomes

502. Following stage one, we decided that student recruitment limits would also apply to providers with Bronze ratings, and that we would consult further on the approach.
503. A Bronze rating or Satisfactory outcome indicates that a provider is meeting minimum quality requirements but has not demonstrated consistently high quality. Our view is that future growth in the sector should be concentrated primarily in providers that have demonstrated high quality through Silver or Gold ratings. We also think that the quality system should protect students from risks that arise where rapid or significant growth places pressure on staffing, learning resources and student support. For these reasons, we propose that providers with Bronze or Satisfactory outcomes would normally be prevented from increasing student recruitment until they demonstrate high-quality provision through a subsequent assessment.
504. Unlike providers with Requires improvement or Unsatisfactory outcomes, these providers would not be required to reduce recruitment. They would be able to continue recruiting at their existing levels but we would not permit them to increase the number of students they recruit. This proposed change is in recognition that meeting minimum requirements represents a fundamentally different level of risk from a Requires improvement rating or Unsatisfactory outcomes.
505. We consider that restricting growth until a provider has demonstrated high quality provides a clear and transparent safeguard for students over the lifetime of the assessment outcome. It also avoids the need for us to undertake repeated reassessments or interventions solely to determine whether growth is creating additional quality risks or concerns about compliance with our regulatory conditions. In our view, this is a more proportionate and efficient approach to managing the risks to quality than allowing growth in student numbers and then seeking to address any resulting deterioration in quality after it has occurred.
506. We appreciate that concerns were raised about restricting recruitment for Bronze-rated providers, given that they meet minimum quality requirements, and the potential effect on providers’ finances and their ability to invest in improvement. We considered and responded fully to these concerns in the stage one outcomes.⁹ We concluded that unrestricted expansion at providers that have not yet demonstrated high quality would not be in students’ interests. We concluded that restricting growth for providers demonstrating satisfactory quality would:
• enable more students in future to experience high-quality education, through a combination of driving up quality to this level and concentrating growth at providers that already offer consistently high quality
• be proportionate because we would not reduce existing student numbers or remove current benefits, but instead limit future growth until a provider demonstrates high quality through a subsequent TEF assessment.
507. In stage one we consulted on the factors associated with increased risks to quality that we would include in our risk monitoring tool. Growth in student numbers is one of those factors. Our previous quality assessment work has shown that significant growth, if not managed appropriately and underpinned by suitable investment, can result in poorer quality and outcomes for students. We also set out our view that the risk is likely to be more significant when combined with other risk factors such as growing partnership provision or recruiting more students onto foundation years or with low entry qualifications, as these students are more likely to have additional support needs. The link between rapid student number growth and risks to quality has also been explored in a recent HEPI report, including in relation to growth in franchised provision.¹⁰
508. We recognise that growth is a common strategy to generate additional income, but this should not take precedence over improving quality. Providers have a range of options available to manage financial challenges and support improvement activity, including reprioritisation of expenditure, operational efficiencies, changes to other activities, use of reserves and targeted investment. The appropriate approach will differ between providers. We therefore consider that it is reasonable to expect providers to identify routes to improvement that do not depend on expanding provision.
509. We propose the limit on growth in student numbers would apply at a provider level and would normally apply where:
• both assessed aspects are rated Bronze or found Satisfactory; or
• only one aspect is assessed and that aspect is rated Bronze or found Satisfactory.
510. We propose that providers with mixed aspect ratings, that is a Bronze rating alongside either a Silver or Gold rating, would not normally be subject to a recruitment limit. In these circumstances the provider would have demonstrated high quality in at least one aspect and we consider that this provides greater assurance about the quality of provision and presents a different level of risk. Although in stage one we said that restrictions would be linked to the lowest or only aspect rating, we now take the view that for a provider with high quality in at least one aspect, there is more positive assurance of quality and a recruitment restriction would not normally be appropriate.
511. Where a provider is rated Bronze for an aspect and that is the only aspect that is assessed, the provider would not have demonstrated high-quality provision. Although the provider would not have been rated for both aspects, it is our view that the risk to future students is too great to allow the provider to increase its student entrant numbers until it receives a Silver or Gold rating for an aspect.
512. We propose to implement recruitment restrictions linked to Bronze ratings from the second TEF cycle (2030-31) or from a provider’s second assessment, whichever comes first. This means that:
• for most providers, recruitment limits would apply to Bronze ratings awarded in their second TEF assessment, which would take place in the second quality assessment cycle, from 2030-31 onwards
• in some cases, recruitment limits would apply to Bronze ratings awarded in a provider’s second TEF assessment, which could be in 2029-30, and this could occur where a provider receives a Requires improvement rating in 2027-28
• for providers that register with us after the introduction of the future TEF and have their first assessment from 2030-31 onwards, recruitment limits would apply to Bronze ratings awarded in that first assessment.
513. This approach to implementation for providers with Bronze ratings would give them time to take action and improve above this rating (or maintain a higher rating) before being subject to a limit on student recruitment.
514. In the case of providers that register after the introduction of the future TEF, we consider it appropriate for the student recruitment limits associated with Bronze ratings to apply to their first assessment. This is because those providers would have been assessed against our minimum quality requirements as part of the registration process, and our approach to scheduling assessments (taking into account whether they have sufficient data to apply for a TEF rating and how recent their other OfS assessments have been) would typically mean that new providers are expected to be assessed later in a cycle. This means by the time of their first assessment, they would equally have had a reasonable timeframe in which to improve to their level of quality.
515. We have also considered the extent to which student recruitment limits for providers with Bronze ratings should apply automatically or more flexibly. We are seeking views on two approaches:
     1. Preferred approach: a predefined student recruitment limit would apply automatically through revised condition B6, to providers that have not demonstrated high quality in either aspect. This would mean providers rated Bronze in both assessed aspects, or where a provider’s only assessed aspect is rated Bronze.
     2. Alternative approach: we would expect to impose a student recruitment limit on providers with a Bronze rating, on a case-by-case basis implemented through a specific ongoing condition of registration.

Automatic or case-by-case approach for Bronze-rated providers

516. Our view is that an automatic approach (through revised condition B6) would provide a clear, transparent and predictable approach for implementing student recruitment limits by setting out in advance the circumstances in which they apply. It would ensure that providers receiving the same TEF outcomes are subject to the same incentives and restrictions, supporting consistency and fairness across the sector. An automatic approach would also enable recruitment limits to take effect promptly following the publication of TEF outcomes, without requiring a separate case-by-case decision-making process. This would help to ensure that protections for future students are implemented without unnecessary delay. It would also strengthen incentives for providers to improve by establishing a clear and predictable relationship between TEF outcomes and recruitment restrictions.
517. For the avoidance of doubt, under this proposed approach we would maintain the ability to implement specific ongoing conditions of registration in accordance with the regulatory framework. For example, this might apply if, following a TEF assessment in the first cycle, a Bronze-rated provider was subject to a quality investigation that suggested a significant risk of a breach of conditions.
518. To further support consistency and transparency, we propose the recruitment limit linked to certain Bronze ratings would be a standard one. Recruitment would be limited to the number of student entrants in the academic year in which we award the Bronze rating. For example, if the provider has 1,000 student entrants in the year the rating is awarded, it would be set a recruitment limit of 1,000. From the following academic year, and in each of the subsequent years for the duration of the rating(s), we would permit the provider to recruit no more than 1,000 entrants.
519. We recognise that recruiting to a specific target could involve practical difficulties because of uncertainty around how many offers made to applicants will eventually be accepted. To enable providers to manage the practicalities of recruitment, we would not intend to enforce the recruitment limit where there has been a minor fluctuation in entrant numbers above the provider’s recruitment limit in a given year.
520. We propose that a minor fluctuation would be defined as no more than 3 per cent above the recruitment limit, or 15 students, whichever is greater. We consider that this approach would provide sufficient flexibility for providers to manage the practicalities of recruitment while maintaining a strong incentive to improve quality.
521. We have also considered an alternative approach under which we would determine on a case-by-case basis whether a student recruitment limit should apply to providers with Bronze ratings from the second cycle of TEF.
522. Under this approach, we would consider the TEF findings and determine whether a recruitment limit, imposed through a specific ongoing condition of registration, is appropriate in the circumstances to mitigate the regulatory risk to quality associated with growth in student numbers.
523. The proposed recruitment limit, the scope of the limit and any associated tolerance would be determined by having regard to the specific circumstances of the case. Before imposing a specific condition, we would first write to the provider, inviting it to make (that is setting out any information, evidence or reasons why a recruitment limit would not be appropriate), before we make a final decision on whether or not to impose the specific condition.
524. This alternative approach would allow greater discretion. We would take into account the particular findings of a TEF assessment, together with any other relevant information, when determining whether a student recruitment limit should be imposed and if so, the nature of the limit to be applied. This would mean a recruitment limit could be targeted at a specific subject rather than at a provider level. However, in contrast to the automatic approach, this approach may not provide the same degree of clarity for providers or the same level of consistency across the sector. It would also give a provider less autonomy in managing the limit. It would also require a more resource-intensive process with additional assessment and decision making in each case, increasing complexity, regulatory burden and cost for both providers and us.
525. We are seeking views on both an automatic and case-by-case approach to the implementation of student recruitment limits for providers with a Bronze rating. and the draft guidance sets out the automatic approach. If we decide to adopt the alternative case-by-case approach following consultation, we would revise the annex and guidance to reflect that decision.

Implementing student recruitment limits

526. For the purpose of recruitment limits we propose to calculate a provider’s student entrant numbers using the same methodology that underpins the calculation of student outcome and experience measures. This approach identifies entrant cohorts as individual students entering higher education within a defined period and applies a consistent set of coverage rules and exclusions across all providers.¹¹ Using the established entrant methodology would align the methodology used for applying recruitment limits with that used to perform the assessments on which those restrictions would be based. It would therefore provide a clear and transparent link between the way we assess performance and the way we calculate the population to which any regulatory consequence applies.
527. We consider that this approach is preferable to alternative measures based on full-time equivalent (FTE) activity. This is because recruitment restrictions are intended to limit the number of new students entering a provider, rather than the volume or intensity of study undertaken by those students. Using this methodology would also promote consistency and reduce complexity for providers. It would also make use of well established definitions and data processes that are already understood by the sector and regularly used in the publication of student outcome and experience measures.