Government aims to crack down on rogue higher education operators
Source: gov.uk (2025-01-30)

Proposed reforms to tighten rules around franchising and crack down on fraud in the student finance system that cost taxpayers £2m in 2022/23.

Tough new reforms proposed by the Department for Education would tighten controls on university franchising arrangements in England to safeguard public money and shore up the reputation of our world class higher education sector.

Franchising enables universities to subcontract courses to external providers. When done right, it makes it easier for more students to access higher education, especially in areas where options are limited, or when people such as mature students are balancing study around work and life.

The number of students studying at franchised providers has more than doubled in recent years, with over 130,000 using their services. But an investigation by the National Audit Office (NAO) raised concerns about franchising arrangements, with fraud in the sector costing the public purse £2m in 2022/23.

More than half of 341 franchised institutions are currently unregistered with the Office for Students (OfS), meaning they are not directly regulated. In some cases, students are offered poor-quality courses that fail to justify their cost, showing a clear need for reform.

Under new government plans published for consultation today (30 January), delivery partners with 300 or more students would be required to register with the OfS to ensure their courses meet rigorous quality standards, in order to be eligible to access to student finance.

If the OfS finds that a provider is not meeting the standards required of registered providers, they will be publicly held to account and could risk facing fines and the suspension of their registration, in the most extreme circumstances. The OfS will also publish student outcome data for all subcontracted partnerships every year.

The move comes ahead of a significant package of higher education reforms due to be announced this summer that will put students first and cement universities’ status as engines of growth in their communities, as the government delivers its Plan for Change to drive economic growth and raise living standards.

Education Secretary Bridget Phillipson said:

We are committed to cracking down on rogue operators who misuse public money and damage the reputation of our world-class universities.

Franchising can be a valuable tool to widen access to higher education, and these proposals will ensure students can trust the quality of their courses, no matter where or how they choose to study.

The credibility of our universities is at stake, but these proposals seek to protect students and safeguard taxpayer’s money, as part of our work to drive growth through our Plan for Change.

Franchising allows courses to be adapted to suit different needs and circumstances. It also helps colleges and universities work more closely together and gives new, innovative education providers a chance to get started.

Providers such as London South Bank University, which partners with some of the city’s top NHS teaching Trusts to help students’ studying midwifery and other front-line services, demonstrate the real-world benefits of franchising – with students achieving their qualifications alongside invaluable workplace experience, helping to address the critical shortage of healthcare professionals.

Universities and colleges whose names and brands are being used by franchises will remain responsible for ensuring their subcontracted arrangements meet quality and standards requirements. New regulations could come into effect as soon as spring next year, depending on the outcome of the consultation.

These reforms would protect the high standards of the UK’s higher education sector, which contributes around £265bn to the UK economy, ensuring it continues to drive economic growth and benefit both students and the wider economy.

These proposals would strengthen the OfS’s ability to protect the public money that goes into franchising. The consultation aligns with the OfS’s work to strengthen conditions of registration related to governance and student interests.

The OfS will shortly be consulting on changes to requirements for providers that wish to join its register to ensure they are all managed and governed effectively.

The OfS has currently paused registration of new higher education providers to support the sector with financial sustainability concerns, after finding 72 per cent of providers could be operating in deficit by next year.

They expect the pause to stay in place until August 2025 but will review the decision every three months, meaning the registration process should be open again by the time the government’s proposed changes would take effect.

The Department for Education’s consultation (https://consult.education.gov.uk/higher-education-quality-and-regulation/franchising-in-higher-education/) will be open from 30 January to 4 April 2024. After the consultation closes, the Department for Education will review the responses and aims to publish its official response in the summer.

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