Everyone’s looking forward to the Post-16 Skills White Paper this Autumn. We don’t know what will be in it but there is plenty of informed speculation drawing on no doubt solid inside information. HEPI recently published this comprehensive set of observations and suggestions about what might be in there.

Autumn is Coming

The HEPI paper authors, Huw Morris and Richard Watermeyer, suggest the White Paper will cover five broad areas in relation to Higher Education. They speculate that the delay in its publication probably means it will coincide with the Budget in November which has the merit of offering the potential for greater clarity on funding matters. Anyway, the five areas they expect to be in the White Paper are:

Widening participation and progression

They suggest this will focus on proposals for “the development of regional education and skills pathways” linked to the Lifelong Learning Entitlement and consultation on additional bursary commitments for those failing to achieve regional widening participation targets.

International students

This is likely to entail proposals on the sector’s least favourite new idea, a 6% levy on international student fees.

Local Skills and Productivity

Most universities say they are up for this kind of thing now but the authors suggest this will be in the form of an outline

of how Local Skills Improvement Plans will be developed by Skills England to ensure that Mayoral Strategic Authorities and other regional bodies have tools to influence education provision to respond to the 10 skills priorities and 5 critical technologies while meeting the needs of local employers and communities.

Quality and Standards

Following a recent consultation on its strategic plan, the Office for Students (OfS) has said that it is still working on plans to integrate its quality assessment activities into a single system. It is also consulting on extended oversight of sub-contractual, ie franchise, arrangements. All of this would represent additional regulatory intervention and burden for institutions so would not be a welcome addition to the White Paper.

Efficiency, effectiveness and exit

It is suggested that there are likely to be some changes to Competition and Market Authority guidance to universities on collaboration including in relation to regional institutional cooperation. (I wrote about the need for changes to CMA involvement a while back.)

The authors also say the White Paper is likely to include the introduction of an insolvency regime for higher education institutions and mechanisms for access to restructuring loans (again as I wrote about here commenting on proposals along these lines from Public First).

White Paper Wishes

In this blog earlier this year I set out some of the significant problems with the current regulatory framework in English higher education and the ways in which these could be addressed. The regulatory burden on universities and colleges is far too great and has to be reduced. There is a golden opportunity to tackle this as part of the White Paper and such changes would ease some of the financial pressures institutions are currently facing and earn some real credit for government.

Towards a New Risk-Based Framework

To address the key failings of the current regulatory framework there is a need for a major reset. This piece sets out the details of what this might entail and how to develop an efficient and cost-effective regulatory framework, overseen by an Office for Students (OfS) with a refreshed mission, which will deliver a long-term way forward that works for students, institutions and stakeholders.

This new risk-based framework would make a real difference to the operation of quality assurance in the sector and would deliver much greater levels of partnership working and trust on the part of all stakeholders. Crucially though it would also ensure that there were significant reductions in the cost and effort associated with the operation of regulation.

Reducing the Burden

Unnecessary and overbearing regulation is costly and distracting and does little to enhance the quality of provision or the student experience (and especially at a time of significant financial challenge it could be argued that it risks undermining the quality of the activity it is intended to assure). Much of the unnecessary regulation is principally, but not exclusively, managed by the OfS. There are other burdensome regulatory activities at play too though, including some self-imposed ones, which do need to be considered. Part of this is about stopping things but also about the direction given to the regulator, its governance, structure, culture and operations.

The changes which I have previously set out include:

• Scrapping the B4 condition, which requires the retention of all assessed work (or an “appropriate” sample) for all students for five years post-graduation (see this on the full joy of the B4 requirements on retaining student work). 
• Ending the Teaching Excellence Framework (TEF) which is of little interest to many prospective students.
• Retiring the External Examiner system, which has long outlived its usefulness in a mass system.
• The sector reconsidering where it has ‘gold-plated’ its own processes, starting with the external examiner system, before moving onto other areas of excessive self-generated internal regulation.
• Addressing the burden of excessive and overlapping data collection from universities.
• Removing universities from the requirements of the Freedom of Information Act would reduce the excessive burden this imposes across institutions and would certainly deliver real savings.
• As already noted above, reducing the scope of the Competition and Markets Authority (CMA) to intervene in higher education. As well as the anxieties that discussions institutions want to have about collaboration, sharing provision and potential merger might fall foul of competition law (as a result of which the CMA has had to publish a an advisory blog) the CMA regime has led to excessive self-generated internal regulation around course and curriculum modifications.
• Additionally, in terms of research there are some significant savings which could be made:
  • Implementing the recommendations of the Tickell report on reducing the burden of research. Tickell identified significant unnecessary regulation around assurance bureaucracy and process duplication, complexities and waste in application processes, monitoring and contract arrangements and, significantly, institutional bureaucracy and risk-aversion.
  • Ending the Knowledge Exchange Framework (KEF). There are simpler and much more efficient ways of determining the allocation of knowledge exchange funding.
  • Postponing the next Research Excellence Framework (REF) process would potentially deliver major financial benefits(this would be one of the biggest savings prizes). Whilst it could be argued that plans are already too far advanced for the next REF and that delay would cause problems for institutions (and probably irritate the heck out of those involved in preparing for it), the reality is that little would be lost by postponing this huge and costly exercise for several years. The previous REF outcomes can continue to be used for funding allocations for the time being without causing any major difficulties. A report published by UKRI in 2023 indicated that the cost of REF in 2021 was conservatively estimated at £471m. Allowing for inflation and other cost pressures, delaying REF until the next decade would potentially save around £750m.

More Benefits of Reducing Regulation

In 2024 Moorhouse Consulting produced an insightful report for Universities UK which included a good 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. 

In 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 significant:

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. 

This adds up to over 2,000 senior and very senior staff FTE across England’s universities. The total cost of this comes to £150-200m per annum. Of course some of this will remain necessary, and it is possible that some of these roles are already being cut as part of major institutional restructurings currently underway, but there is still major scope for savings/redeployment here. 

White Paper Savings

If most of the changes set out above were to be introduced then my very rough estimate of the total savings from reduced regulation could be as follows:

Staff reductions/redeployment as per Moorhouse report:	£100m per annum
Scrapping B4 retained assessed work requirement:	£500m over 5 years
Other changes to the regulatory framework including revised conditions of registration, ending TEF and KEF, CMA changes and reducing ‘gold-plating’:	£150m per annum
Delaying REF until, say, 2033:	£750m
Total over 5 years:	£2.5 billion

So, around £500m per annum is potentially there for the saving and redeployment into core university activities.

Opportunity Knocks

The ambitions for the White Paper are obviously much broader than just reducing the cost of higher regulation and revising the regulatory regime. But if these matters were addressed as part of a broader set of changes then at least some modest resources would be released to help address other financial challenges.

The HE sector needs a much more efficient and cost-effective regulatory framework, overseen by a refocused OfS, which will deliver a long term model which works for students, institutions and other stakeholders. A high trust, proportionate lower-cost regime would mean universities are significantly better placed to make the greatest contribution to delivering the broader skills and growth agenda which will undoubtedly form the build of the White Paper. Given all of the other financial issues, saving £2.5 billion over five years seems like an opportunity worth taking.