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Preparing for the Regulatory Challenges to Come

by John Britton | Mar 9, 2023 | Governance & Policy

The Office for Students (OfS) is under pressure to take a more robust approach to regulation, yet it has faced threats of legal challenge from institutions when it has considered intervening in the sector. With the development of the B3 regulations (and their associated suite of academic quality measures with absolute benchmarks) and the reintroduction of a revamped Teaching Excellence Framework (TEF), it now has in place the tools to help it regulate. The tools may be blunt and inaccurate, but it’s hard to argue with a sledgehammer.

One of the things that Ewart Wooldridge and I identified in our September 2022 summary of the learnings from Halpin’s governance work in the sector is the changing role of the governing body in terms of academic assurance. Halpin’s reviews have found ‘a pronounced uncertainty by independent Council members as to whether they were certain enough to sign off the assurances on quality and standards as required by the OfS’. A second concern was that ‘the Senate or Academic Board has itself not got the robust processes to carry out the detailed assessment of these matters’. The direct link now between academic outcomes and intervention by the OfS raises the stakes for institutions and governing bodies considerably.

Specific targets relating to ‘quality, reliable standards and positive outcomes for all students’ are now a part of the English higher education regulatory framework. Last autumn, the OfS published its B3 dashboards. These contain specific thresholds relating to outcomes for students, which, if breached, could trigger an OfS investigation. So the sector faces the combination of a regulator that has created the narrative about when interventions might occur, and that is also keen to look tough. This should be a concern to university boards and executive teams alike.

A further challenge is that by the time this data appears in OfS’s dashboards, it is too late. Institutions require their own analytics to predict outcomes and intervene earlier. Wholesome in itself – we all want to keep students in the system and help them be successful – but do governing bodies have the oversight and skills to know if effective management of the student experience and outcomes is in place? Ewart and I discussed this in some detail in our report, with suggested solutions including board briefings and discussions around these issues, and use of a skills matrix to ensure that there are board members who can test and challenge in this area.

The OfS has stated that TEF assessments will only take place every four years, so that institutions with a bronze or ‘Requires Improvement’ rating will hold that for the period through until after the next assessment in 2027. Given the OfS intends that TEF ratings will place ‘a spotlight on the quality of providers’ courses, influencing providers’ reputations and informing student choice’, it is clear that the regulator sees TEF ratings as an essential part of a university’s reputation, and will be promoting them as such. Put most simply, the TEF outcomes will tell OfS where to look, and prospective students where not to look.

It is expected that, in line with current practice, institutions with a ‘Requires Improvement’ rating in TEF 2023 will have a lower maximum fee limit than those with a gold, silver or bronze, with a consequent effect on the bottom line.

The student submission element of the TEF process was new this cycle. Students were encouraged to create the submission with a degree of independence from the university, and could submit it without the university seeing the document. There is clear peril here, with the potential for university boards and executives to be wrongfooted when the results are released to providers in July 2023. A university could have a student submission that paints a very different picture to the provider submission, and could need to explain itself to the regulator.

In these circumstances, a governance review is a line of defence for governing bodies, providing an evaluation, through a risk-based approach, of the effectiveness of governance, risk management, and internal controls to the organisation’s governing body and senior management.

The external regulatory environment is constantly changing. By reviewing their governance and taking proactive steps, institutions can give assurance to sector regulators and external auditors that appropriate controls and processes are in place, and that these are operating effectively.

Halpin is the home of experts in higher education and works across Strategy, Fundraising, Governance, and People and Culture. The Halpin team has worked in and with higher education institutions extensively and understands the difficulties in consulting with institutional communities. If you would like to learn more about how we can support you, get in touch. Or join the conversation with us on LinkedIn or Twitter.