Sharpening the Focus

This post is a slightly updated version of one which appeared on the blog back in January. Apologies for the repetition but it is my favourite subject.

Speaking to Radio 4’s Today programme on 22 July, Bridget Phillipson said there was an expectation universities should “manage their budgets”, as independent institutions. The education secretary also highlighted a number of positive benefits of international students and stressed that she would change the mood, noting that the previous government picked fights with the sector in a way which was “completely needless, just using universities as a source of cheap headlines. That is now at an end.”

She also said there would be a sharper focus on regulation and we can expect announcements imminently, including on the appointment of an interim chair of the board of the Office for Students.

The regulatory burden has grown consistently over the past 30 or so years and this trend has accelerated since the 2017 Higher Education and Research Act (HERA). At a time of relative financial health these costs could be absorbed by universities but this is no longer sustainable given current economic challenges.

Earlier this year I wrote that there was unlikely to be any more money forthcoming for the sector from government and that one way in which savings could be made was by reducing the excessive burden of regulation. In England the bulk of unnecessary regulation is principally, but not exclusively, managed by the Office for Students (OfS). There are other burdensome regulatory activities at play too though, including some self-imposed ones, which do need to be considered.

Some initial steps

I wrote a piece for HEPI in 2023 on how the burden could be reduced which included a list of what I think continue to look like pretty reasonable ideas for addressing the problem. The following list features those proposals included in the HEPI piece together with a couple of extras.

• Setting aside the OfS requirement, often called the B4 condition, for the retention of all assessed work (or an “appropriate” sample) for all students for five years post-graduation. This has yet to be fully implemented in England but represents a huge new burden for institutions. My crude estimate is that this will cost the English sector significantly more than £500m in terms of start up and ongoing implementation over the next five years. This Wonkhe article proposes a way forward on this particularly  costly regulation. 

• End the Teaching Excellence Framework (TEF). The TEF is in reality of next to no interest to prospective students, very few of whom ever cite it as a factor in their decision-making. Additionally, unlike the original TEF proposals, it carries no funding implications but rather it is a costly and unnecessary exercise both for institutions and the regulator. Whilst some argue that the TEF serves as an incentive to institutions to improve quality – and those with Gold ratings think it is really rather good – it is a crude, blunt and costly instrument to achieve limited enhancements which should happen anyway.

• There is a need to reduce government interference in the routine operation of the framework and return to the previous norm of just a single letter a year from the Secretary of State setting out priorities for the regulator. Between 2018 and 2023 the OfS received 25 letters from the Secretaries of State, conveying a range of instructions, which have undoubtably contributed to the changing priorities of the regulator and added to the regulatory burden. This should be easy for a new government to address.

• The OfS should follow the Regulators’ Code more closely rather than merely having ‘regard to’ it for policy matters. The agency should aim to follow the best practice set out in the Regulators’ Code for both policy and procedures, and seek to operate in line with best practice for effective regulation.

• In approaching regulation, the presumption should be a positive one of assumed compliance based on previous positive engagement and a consistent track record. We need a complete revamp to enable a genuinely risk-based model which recognises quality and accepts the means by which academic standards are best assured. Additionally, there has to be real transparency and straightforward routes for handling concerns and complaints from students and those regulated.

• New legislation on free speech and academic freedom (the Higher Education (Freedom of Speech) Act 2023) has resulted in the development of a new swathe of OfS regulations. Initial requirements relate to establishing a complaints procedure and a code of practice from August 2024 with further compliance arrangements to follow. Whilst all universities already have some of these procedures in place in order to comply with the 1986 and 1994 Acts the new requirements go significantly further and will entail significant additional burden. It is hard to quantify this impact exactly but given the scale of the demands my crude estimate is that the approximate financial impact across HE in England once fully implemented will be of a similar scale to the B4 requirements, ie £500m over five years.

• In terms of sector-developed self-regulation it really is time to call a halt to the External Examiner system. Whilst external examining has served the sector well over more than a century, it is no longer fit for purpose for our kind of mass system. Institutions cling to it but external examining is an anomaly internationally and has limited efficacy and value in terms of assuring standards in a very different HE system.

That’s a decent set of changes to be starting with I think. These would be helpful steps and would enable universities to save money to invest in core activities at a time of significant financial challenge for the sector.

Surveying the cost

Recently Moorhouse Consulting produced an extremely insightful report for Universities UK which included a substantial sector survey of the cost and burden of different aspects of the OfS regulatory regime. Among other things the report noted that the resources required to understand and meet regulatory requirements were significant as were the opportunity costs of the regulatory burden for universities. The report noted a desire amongst respondents for a risk-based approach to regulation, which they felt was currently lacking. Those responding were also concerned about the lack of nuance or recognition of institutional diversity in a one-size-fits all approach to regulation. 

In terms of assessing the direct cost of the OfS regulatory regime Moorhouse collected data on the number of staff involved. Their estimates of the total numbers dedicated to regulatory matters show that the institutional investment in addressing such matters really is not trivial:

We estimate that this would be 128 FTE at Executive level, 638 FTE at Manager/Director Level and 1,288 at Officer/Coordinator level dedicated solely to regulatory compliance across all 116 UUK members in England. Universities typically do not have dedicated regulatory teams; this resource is incorporated as part of existing roles. 

So this is over 2,000 senior and very senior staff FTE across England’s universities. The total cost of this will be of the order of £150-200m per annum and represents a significant impact on university operations, not to mention the opportunity cost. Aside from this dedicated resource, the wider activities dictated by the framework are pervasive and impact all parts of universities.

Trusting the professionals

In looking to save money through the reduction of the regulatory burden we need to rebuild trust in those most closely involved in the delivery of high quality education. A revised approach needs to feature renewed recognition of the professionalism of academic staff involved in teaching, learning and assessment. This professionalism is the foundation on which the quality and standards of higher education is built. Allied to this is the reinforcement of the importance of academic freedom. Over-regulation undermines academic freedom which is cornerstone of quality. Greater institutional autonomy is another key anchor of the approach here, again emphasising the need for more trust in those involved in actual delivery.

In establishing a higher trust environment an appropriate aggregation of measures and assessment in combination will be explicitly identified as being sufficient to assure that standards are being properly set by institutions and achieved by students and that the educational offer is providing the right quality of learning and student experience. 

First Steps

Whatever steps the new government wishes to take in relation to sharpening the OfS regulatory regime, reducing the burden to enable universities to save money will surely be a necessary undertaking. In addition to the measures outlined above there are a few other suggestions which go beyond the OfS remit which might be considered, all of which would deliver further savings to universities:

• The recommendations of the Tickell report on reducing the burden of research should be implemented and will bring valuable savings. Beyond this there are other significant opportunities in the research domain, including the potential major financial benefits if the REF were to be postponed for several years.
• The burden of excessive and overlapping data collection from universities has to be addressed. This spans every aspect of university operations from estates to research and from student numbers to spin outs making it an extremely complicated and confusing landscape. Attempts have been made to rationalise this before with limited success. We therefore need an expansive and empowered task force with a bold target, ideally to reduce the cost of the data burden on institutions by a significant proportion.

• Removing universities from the requirements of the Freedom of Information Act would reduce the excessive burden this imposes across institutions and would certainly deliver some savings of note. There would have to be a quid pro quo for this though in terms of an expanded obligation on universities to publish annually a more extensive data set on information of most interest to government and stakeholders.
• One other area of excessive self-generated internal regulation relates to implementation of Competition and Markets Authority (CMA) rules relating to course changes where some parts of university systems have become completely paralysed by a reluctance to make any changes at all to provision for fear of falling foul of the rules.
• The sector too needs actively to reconsider where it has gold-plated its own processes, starting with the external examiner system as noted above, before moving onto other areas of excessive self-generated internal regulation.

Taking the Opportunity 

The work on reducing the burden, which would free up at least some resource across the sector, can start at once. It does not require new legislation, no new regulations have to be drafted. Rather it is about an attitude which recognises the importance of trust, institutional autonomy, the professionalism of staff and a determination to be open and transparent where faults are found. All of this will save money, desperately needed resource for institutions, and help to re-establish the confidence of all stakeholders in the quality of the UK’s higher education.

Higher trust and lower costs mean that everyone gains. And in the absence of new government funds it is likely to be just about the only resource opportunity available for universities which are doing their best to manage their budgets.

 This article represents the personal views of the author