University leaders have urged England’s higher education regulator to rethink its priorities, saying that smaller institutions will be financially harmed by increasing costs of its bureaucracy.
The Office for Students (OfS) already charges smaller institutions such as the Royal College of Music up to 20 times more for each student in registration fees than it charges larger universities, with vice-chancellors fearing that the costs of meeting the regulator’s demands will continue to balloon.
Universities UK (UUK), which represents vice-chancellors, is objecting to the OfS’s strategic plans for the next five years. It argues that universities have had to hire 18 extra staff on average to meet the current regulations, with the OfS’s plans to expand its powers creating further expenses during the financial crisis within higher education.
Vivienne Stern, UUK’s chief executive, said: “The regulator should bear in mind that increasing regulatory burden means increasing the amount of time and money that universities have to spend on regulatory demands, rather than frontline teaching and support for students.
“We need a streamlined and efficient regulator, which works to support universities to manage the pressures they face. You can’t regulate your way out of a financial crisis.”
Josh Fleming, the OfS’s director of strategy and delivery, said: “Our proposed new strategy sharpens the OfS’s focus on the quality of higher education and the financial resilience of the sector. It also prioritises the non-academic features of higher education – such as the prevention of harassment and sexual misconduct – which can have a significant impact on students’ experiences.
“We’ve worked with students and the sector to form these proposals, through events, focus groups and polling. We’re now consulting on them to test our thinking and make sure we end up with a strategy that supports a higher education sector that enables students to thrive while studying and beyond.”
The OfS was founded in 2017 and regulates more than 400 higher education providers in England. OfS registration is needed to qualify for student loans, and for universities to receive teaching grants, award degrees and sponsor international student visas.
In 2023 the OfS was criticised by the House of Lords industry and regulators committee for its “burdensome” data requirements, lack of focus and a “distant and combative” relationship with universities.
An independent review last year by David Behan – later appointed as the OfS’s interim chair by the education secretary, Bridget Phillipson – echoed vice-chancellors’ concerns over the “disproportionate” fee structure that made OfS membership far cheaper by student for larger providers.
OfS annual fees are based on bands of student numbers. A small provider, such as the National Film and Television School, pays £100 for each of its more than 400 full-time students, while the Courtauld Institute of Art pays £92 and the Royal College of Music £62 a student. But large institutions such as the University of Manchester and University College London pay less than £5 a student.
UUK said: “Given the potential increase in regulatory burden implied by a strategy in which no current activity is set to be stopped but more activity introduced, smaller and specialist providers may be particularly at risk of having to absorb additional costs.”
The OfS said its registration fees were “a matter for government”.
A Department for Education spokesperson said it was committed to “reviewing the fee structure to ensure fairness and sustainability, while upholding robust protections for students and taxpayers.
“All providers pay a minimum fee to cover the cost of regulation, with larger providers paying significantly more than small providers, and very small providers are fully subsidised. This means per-head calculations are misleading.”
The OfS strategy document widens the regulator’s powers to include oversight of overseas campuses. But university leaders who spoke to the Guardian said the OfS “can barely manage effective regulation in England, let alone the rest of the world”, as well as taking responsibility for new laws over free speech on campus.
The OfS also wants to create a new “quality risk register” for individual institutions, which sector leaders say is ill-defined and could be better achieved using existing structures.
Since December the OfS has suspended work on vetting new providers in order to concentrate on financial oversight, a move derided by the former universities minister Jo Johnson, who said the OfS “should be able to walk and chew gum”.
UUK welcomed the OfS’s greater priority on financial oversight but added: “We are not convinced the financial reality is sufficiently reflected in the detail of the proposed strategy and in OfS’s planned activity. It needs to prioritise its work, be reasonable in its expectations, and minimise any additional regulatory costs.”
