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The Higher Education and Research Act 2017: issues and implications

Posted: 31/01/2018


The Higher Education and Research Act 2017 shakes up the long-established architecture of the sector, introducing a number of fundamental changes with which institutions will need to become familiar. Here we focus on the key issues which will affect longstanding and new providers of higher education and research.

The Office for Students

The most high-profile reform in the Act is the establishment of the Office for Students (OfS) in place of HEFCE. The OfS is likely to be a significantly different type of regulator from its predecessor, and this is made clear in the general duties it has been given, which are to promote:

  • institutional autonomy and academic freedom
  • equality
  • choice for students
  • competition (or collaboration if that is likely to better serve the needs of students)
  • value for money
  • equality of access
  • participation

The OfS has been designed to place the student at the centre of everything it does, and its focus is almost exclusively on student interest. This is an extension of the already changing emphasis within the sector where the student is now, both legally and in practice, regarded as a consumer and subject to consumer law. The OfS has the ‘student as a consumer’ at the heart of its duties.

The establishment of the OfS also signals the Government’s desire to open up the higher education market to new providers, bringing increased competition and potentially innovation. New providers with different needs and interests might be prioritised over existing institutions. If so, the regulatory bias may cease to favour existing providers, broadening and opening the market to the disrupters within the education field. The idea is to create a more level playing field, but time will tell whether this will be feasible or possible, and whether the intention to open the market up will eventually shift the balance away from older existing institutions.

The establishment of the OfS, and the appointment of its board members, who have a wide range of interests and expertise, has not been without controversy. The OfS will start to exercise its functions, and become fully operational, in April 2018.

Degree awarding powers

The OfS will be the body which grants degree awarding powers (DAP). The Government has undertaken a consultation entitled Simplifying access to the market: Degree awarding powers and university title, setting out the proposed new process for education providers to gain DAP. This is designed to promote the entry of new higher education providers into the market and thereby increase student choice, innovation and competition. The consultation closed in December 2017, and formal guidance on applying for DAP is expected to be issued in spring 2018.

For further information, see our DAP note.

Compliance

The Act permits the OfS to set up conditions of registration, which may apply to all providers or to all providers of a particular type, and it can impose specific conditions on individual institutions. There will also be a risk register and institutions need to consider how they can mitigate these risks.

The OfS will govern the actions to be taken in the event of compliance breaches. There may be enforcement action and sanctions which range from, at the extreme end, deregistration - which is a basis for removal of university title - through to suspension; or at the lesser end, imposition of fines. This is a further tightening in the compliance culture which universities and HEIs are obliged to observe, additional to the compliance obligations in respect of immigration and Tier 4, consumer protection under the CMA, GDPR compliance, health and safety and Prevent. The intention is clearly to create and engender a compliance culture throughout institutions and some may find this to be challenging. Compliance with registration conditions is only one factor that needs to be taken into account.

Institutions will therefore need to consider their own particular situation and arrangements, and ensure that they can plan for and deal with any eventuality. Plans should include how to deal with the potentially catastrophic risk of losing degree awarding powers or university title, and also how to address the risks which may arise in respect of collaborations with other providers, particularly as the market is likely to be more fluid than in the past, such as what might happen if a collaborating institution exits or joins the market? Whilst the OfS will seek to ensure that any exits from the university market will be orderly, this cannot be guaranteed.

Focus on teaching

The OfS’ main focus will be teaching and UK Research and Innovation (UKRI) will focus on research. Although the Act requires the OfS and UKRI to communicate with each other, institutions may in practice find it more difficult to deal with two external bodies, particularly where the OfS is explicitly a regulator (with a range of sanctions for non-compliance) but where the UKRI is likely to be strategic. Where institutions carry out both teaching and research, this can potentially lead to conflict, as different priorities may arise and potentially conflict. In time this may mean new entrants to the sector, which have typically been set up to focus on teaching and not research, may have an advantage in respect of their dealings with the OfS over more traditional institutions which split their resources between teaching and research.

Appeals from OfS decisions

The Act gives institutions the right of appeal to the First Tier Tribunal if they are unhappy with the regulatory activity of the OfS. This could include appeals which historically might have fallen to be considered as questions of academic judgement and therefore non-judicable. The issue may arise, for example, in respect of conditions relating to the quality of higher education and the revocation of degree awarding powers, or university title. In turn, this may lead to an increase in litigation with courts potentially left dealing with matters which have traditionally been regarded as outside their jurisdiction.


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