Whoever will be sitting at the higher education minister’s desk after the election is going to have plenty in their in tray. Amongst other things vying for attention will be a pile of reports titled ‘HE regulation’. This week that pile grew higher, with the publication of a policy report from the Competition and Markets Authority (CMA). This follows Universities UK’s report last month and earlier contributions from the Higher Education Commission and HEPI. We’ve also had reports from the National Audit Office and the Public Accounts Committee highlighting particular concerns on controls around access to student support. That growing pile is becoming increasingly difficult to ignore.
The CMA’s report builds on the outcomes of the OFT’s 2014 call for evidence paper and is well considered. The issues are looked at through the lens of competition and choice, which will sit uneasily with some in the sector. There is also much in it that chimes with the Universities UK report. It includes, for example, an increasingly familiar diagnosis of the problems with higher education regulation. Looking at this together with other reports on the issue, it would seem that all broadly agree that:
The current HE regulatory framework, linked principally to public funding conditions and a legislation designed over 20 years ago, is no longer fit for purpose
There are gaps and inconsistencies emerging in regulatory oversight that create risks for students
Student protection, particularly in the context of a provider failing, is a growing concern
The CMA report also raises concerns over the lack of external oversight for validation arrangements. It suggests that without reform, validating providers may see this as too risky, thus closing off this route for provision and limiting choice.
The CMA’s main solution is the introduction of a baseline level of quality that all providers should be able to demonstrate they meet in order to operate in the sector. This is not inconsistent with the Universities UK proposal for an enhanced higher education register. We suggest an entry level ‘tier’ that brings all institutions wishing to provide higher education into a clearer regulatory scope. It would also act to streamline a myriad of requirements making it easier for students and their families to understand.
Where the Universities UK and CMA proposals perhaps differ is that we suggest further tiers that provide additional reassurances around the use of public funds and access to student support. The CMA are concerned about the signals this might send out about quality above the threshold and therefore suggest keeping public funding conditions separate and focused on due process. Given the scale of public investment in higher education, and that a large slug of this is subsidised loans, this does raise the question of whether it is reasonable to expect tighter assurances for this investment above a minimal baseline. There is also the point that even if public accountability was dealt with separately, it is difficult to see how this wouldn’t be interpreted as a reputational signal.
The other big issue flagged in the CMA report is market exit and student protection. The CMA’s view is that the threat of exit is desirable to ensure the sector remains competitive, but such exit needs to be managed in ways which protects student interest. Our view is that student protection is best served primarily by ensuring high expectations on, for example, quality, sustainability and good governance. This should be promoted and reinforced through the regulatory system to guard against institutions failing and to protect the reputation of the sector.
We do, however, agree that when things do go wrong, protections for students should be in place. The proposals in our report suggest a suite of actions that are proportionate and risk based, and underpinned by co-regulation (i.e. institutions sharing responsibility with regulators), with the primary focus being very much on securing continuity of study for students
Many of these changes (and others, such as our suggestion for a new lead regulator) will need new legislation. The CMA report hints at this, but the big question is whether it is realistic to expect legislation in the next parliament. Much will depend on the outcomes of the election, but the odds are probably currently against it (certainly in the first year) unless of course there is a major crisis to spur this. Given the strong consensus on the need for reform it is still worth making a proactive case for this (and surely that is better than waiting for a crisis). At a meeting hosted by the Higher Education Commission recently, it was suggested by Nick Hillman of HEPI that we should make a more positive case for legislation and the benefits that will come from this. This is good advice and the next big challenge for the sector. It is encouraging, at least, that it seems most can agree on the problems and at least some of the solutions.
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