Part 1 – Tell Me About That Hard Rain

And it’s a hard, it’s a hard, it’s a hard, it’s a hard
It’s a hard rain’s a-gonna fall

…

And what will you do now, my blue-eyed son?
And what’ll you do now, my darling young one?

From A Hard Rain’s A-Gonna Fall by Bob Dylan

According to this recent story in The Times,  some inclement weather is incoming and universities can expect there will be new league tables and naming and shaming:

A Whitehall source said the league tables would “name and shame” those universities that failed to deliver for students.

The source said: “A hard rain is going to fall on universities that continue to be so blasé about executive pay increases while letting down students. This government is determined to deliver greater value for money and better prospects for graduates as part of its plan for change.

“The days of the unaccountable ivory tower are over. Funding for universities will only come with the promise of major reform. We’re going to ensure degrees deliver good jobs and opportunities, that teaching is high quality, that universities offer good opportunities for people and help to drive up economic growth.”

It sounds from this that the government wishes to be more interventionist in terms of directing the priorities of universities but the ambitions in terms of (a) quality, (b) graduate outcomes and opportunities and (c) supporting economic growth are all already shared by every institution. If government is serious about introducing significant higher education reform as part of its post-16 plans due to be unveiled in the summer then part of the package will need to be some radical changes to the regulatory framework established less than a decade ago by the previous administration. 

Universities cannot do any of this if they go bust though and the need to address the funding crisis in the sector has to be a core element of the government’s higher education reset. Balancing the legitimate requirements for accountability and regulation against the need to reduce the cost of unnecessary intervention and the maintenance of an appropriate level of autonomy (required to ensure the most effective delivery of (a), (b) and (c)) is the baseline for a revised system required to get things on an even footing.

The current financial challenges in the sector have also exposed the limited capacity of regulators to deal with what is actually going on and the inadequacies of the higher education funding and regulatory model in trying to cope with the current situation.

Right up to date, June has seen the publication of the report of the Universities UK’s Transformation and Efficiency Taskforce. Much of the focus here is on identifying the nature and scale of the current financial challenge before exploring how institutions are finding new ways to collaborate and share ideas and infrastructure but also explore restructuring and merger opportunities. Some of that is in the hands of universities themselves but there is also a need for government to act in a supportive and enabling way. The recommendations directed at government in the report are broad: 

Action for government:

Government should work collaboratively with the sector to create a funding and regulatory framework that is more supportive of collaboration, addresses gaps in sector stewardship and creates a cohesive system in which higher education and research, policy and funding levers are better aligned. This should include the collaborative development of a holistic and long-term vision and strategy for the sector.

Government should look to relieve cost pressures on the sector, where these are outside the sector’s own control, for instance by reducing regulatory burden and the expectation that universities carry out unfunded activities, and by increasing the flexibility to offer alternatives to the Teachers’ Pension Scheme (TPS). Government should avoid adding additional cost pressures on the system through new, unfunded expectations or levies.

There are also some general aspirations in the Taskforce report to support universities at risk of disorderly exit. As previously noted here  the Office for Students (OfS), the principal regulator, is also asking government to act and introduce a Special Administration Regime.  This also shows though how few levers the OfS is able to pull under the current regulatory framework. Whilst it can offer some support to institutions on the brink, in reality the agency is, like many, just observing the long, drawn out higher education car crash (albeit with a better view than everyone else).

Do We Need Another Great Big HE Review?

As I’ve written before the consequences of the disorderly failure of a significant university are huge and the collapse of one or more institutions would be hugely challenging, messy and expensive to manage. The consequences of any failure like this for students, employees, alumni, stakeholders, the economy and the towns in which they are anchor institutions and indeed the sector as a whole would be enormous. 

The customary approach to the kind of situation we are in now would be for government to commission another major review of the higher education funding model and broader organisation. But things really are too pressing to allow for the extended process such a review would entail. And, you have to say, the enduring impact of such reviews (the HE Review half-life as it were) has declined over time with Augar having less bearing than Browne who in turn was a lot less significant than Dearing. It is hard to imagine that trend being reversed by what would undoubtedly be a hastily assembled panel and a frenetic rush to produce a meaningful report which would inevitably mean less engagement and reduced background research activity. So, whilst in principle this makes sense in terms of delivering a credible new model, it really feels like some more rapid action is required first. The sector needs some emergency treatment from the paramedics before we start looking at the longer term lifestyle changes which a proper review might offer.

Right Here, Right Now

Assuming therefore a grand review is someway off, and is recognised by all not to be a solution to the immediate challenges facing higher education, we do need some speedy movement. This needs to go beyond advisory notices regarding significant precipitation and crude exhortations to avoid ivory tower behaviours.

Whatever ambitions the government has for the sector, part of that package has to be regulatory reform. Reducing the burden of regulation and balancing accountability and autonomy are crucial elements of a new settlement, both in the short and longer term. This has some big advantages for government: first, it would be cheering for the troops in what is a fairly demoralised sector; secondly, it would save some money which could be spent on other more useful things including, say, delivery of government priorities; and thirdly, it would lay the path for a more rational structural realignment in the longer term, which would balance autonomy and accountability in a more beneficial way than at present. I therefore want to look broadly at what a new framework might entail before going into some of the detail about what it could comprise in Part 2 of this blog.

A New Framework

The higher education regulatory burden is already too great and yet it is still growing. At a time of limited funding for universities and colleges and a declining unit of resource, the sector can ill afford the growing cost of regulation. Change is needed rapidly therefore and, whilst some changes to legislation are possible and indeed may be desirable in due course, the immediate aim should be to enable as much revision to the regulatory framework as can be achieved as quickly as possible based on the Secretary of State’s direction. 

What would be extremely unhelpful though at this point is introducing further new regulation, as has been floated in The Times in relation to Vice-Chancellor pay and graduate outcomes. The suggestion that universities have been ‘ivory towers’ has some legitimacy in relation to community engagement but is evidently not the case in terms of accountability and regulation. We’ve already seen a consultation followed by the introduction of a new OfS Condition of Registration on Harassment and Sexual Misconduct which comes into force in August 2025. Whilst these are really important issues it remains unclear why there is the need for additional regulation rather than guidance to address them.

Although the 2023 Free Speech Act has been amended and no longer includes the provision for civil claims – the statutory tort – or the separate impositions on students’ unions, the additional regulation will nevertheless impact on universities in the years ahead and cost everyone more money. The recent national review of student suicide deaths has also prompted calls for further regulation to be developed for the sector. Given the seriousness of this issue the desire for regulatory intervention is understandable but this would add yet more layers of regulation. Government has though helpfully indicated that at this stage it is asking universities to take action but not developing new regulation.

This is a relief. But the broader concern remains that regulation continues to expand as government expects institutions to cope with a major funding squeeze, ranging from the continuing decline in the real-terms value of the UK undergraduate tuition fee to inflationary and economic pressures on operating costs to the pressures on the international student market.

The UUK Taskforce rightly asks government to relieve some of those cost pressures including reducing the regulatory burden and not adding new expectations. However, it does not go into detail about how this could happen. I therefore want to propose some actions which can be taken now to address the cost and scale of the regulatory burden, to set out some principles for the assurance of quality and standards and to address some wider regulatory demands. Ideally this would be undertaken on a UK-wide basis (this is also the aspiration of the UUK Taskforce) with a single regulatory agency established covering all the nations but this would in all likelihood be really time-consuming and complicated to implement and therefore the proposals which follow relate only to England. If implemented, these changes would save the English sector several hundreds of millions of pounds each year.

Where We Are Now

England’s Higher Education and Research Act 2017 (HERA) has not worked; the implementation of the legislation has been unhelpfully focused on expanding the diversity of HE providers and has not delivered, as was promised, proportional and risk-based regulation of an over-burdened sector. 

Since 2017 the regulatory regime has fostered a lower trust environment, one which is very expensive and does little to improve the quality of provision, help students, support graduate achievement or enhance the international reputation of one of the country’s outstanding export success stories. Reform is required to regulation if the quality and standard of England’s higher education is to be sustained not undermined and significant efficiencies delivered. 

The regulatory burden on English universities and colleges has grown consistently over the past 30 or so years and this trend has accelerated since HERA. Sustaining educational quality is critical and the quality assurance and wider regulatory regime has to be trusted by all stakeholders; at present it does not have the confidence of the sector plus the cost and burden are excessive and can no longer simply be absorbed by universities. 

The approach taken by the OfS since its creation after HERA represented a fundamental change for the sector: it felt very much like a ‘one size fits all’ model with limited acknowledgement of institutional history or track record of successful delivery of high quality education. The promised proportionality and risk-based regulation were not greatly in evidence and a consumer-driven view of the world appeared to dominate.

Reforming the Regime

The post-HERA regime has not worked, is not fit for purpose and requires significant overhaul. As part of this, aspects of OfS operations, including elements of governance, approach and relationship with universities and colleges, will need to be looked at. This would not only ensure that we have a more effective, productive and efficient regulatory environment but will also enable important cost savings to be made in institutions.

There will be a new chair of the OfS Board soon and the extensive sector experience which Professor Edward Peck brings will certainly be extremely helpful. However, even with one former and one current Vice-Chancellor on the Board there will still be a significant shortfall round the table both in the understanding of how higher education regulation and quality assurance works in practice and the operation of the sector in general. This really does need to be addressed in my view, ideally with the inclusion of two or more appointments drawn from the pool of current or former university Registrars, Chief Operating Officers and Secretaries or similar.

I would suggest that the Secretary of State should give the chair and the Board a new brief to oversee the development of a refreshed mission for the OfS including a focus on minimising the regulatory burden as well as continuing the implementation of the some of the more pertinent recommendations in Sir David Behan’s 2024 report. The OfS should also be explicitly charged with taking responsibility in relation to the sector overall, not just to individual ‘providers’. This gap in the regulatory landscape is identified in the UUK Taskforce report as a need for ‘sector stewardship.’

The Board should also, in my view, explore whether the agency’s culture, performance measures and approach to engaging with universities and student representatives are fit for its refreshed mission. Proportionality and risk-based regulation do need to be foregrounded and therefore a different approach will be required across the established sector on the one hand and the ‘tail’ of 300 or so much smaller and newer (and inherently riskier) institutions, many set up post-HERA, on the other. The Board will need to commit the OfS to this refreshed approach, to reducing the regulatory burden and to taking a sector-wide view.

What Next My Blue-Eyed Son?

The regulatory burden is so great on HE now it really is a cost the sector and the country can ill afford. If we were able to reduce the weight and cost of unnecessary regulation, the demands from institutions for financial support would diminish.

Better then to develop a new efficient and cost-effective regulatory framework, overseen by an OfS with a refreshed mission, which will deliver a long-term way forward that works for students, institutions and stakeholders. A new, high trust, proportionate, lower-cost regime will mean universities are more able to unleash their contribution to delivering what the country expects in terms of high quality teaching and learning, world-leading research and innovation and supporting economic growth. It is 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.

I am hoping that the work being undertaken now on the post-16 plans to be published in the summer is a lot more sophisticated than the hard rain and ivory towers bluster quoted in The Times. There is too much at stake and the sector has waited too long for the fundamental issues around funding and regulation to be addressed. 

In Part 2 I will set out some of the details of a revised regulatory framework which would deliver all of this.