Regulatory Framework consultation: How will the OfS make decisions about whether a provider meets baseline regulatory requirements?

I am just back from another really good consultation event on the Regulatory Framework, organised by the Department for Education on behalf of the Office for Students (OfS) at Bournemouth University. It was well-attended, and contributions were thoughtful, constructive and (rightly) challenging. The views expressed were all recorded and will be taken into account when we review all the submissions.

I’ve written previously to reflect on some of the issues that at that point had been raised during the course of the consultation. Things have moved on since then and there is one point that is coming up repeatedly. The question is this: How will the OfS make decisions about whether a provider meets the baseline regulatory requirements? By way of follow-up I am often asked how providers will know what ‘good enough’ looks like, especially if indicators are not benchmarked.

Clearly we are still in the consultation stage so this is all tentative and subject to change. However, this is my understanding of how the consultation document at least approaches those two questions.

When the OfS looks at a provider’s financial information to decide whether it meets the financial viability and sustainability condition, it is likely to be interested in a range of indicators: liquidity, cash flow, operating surplus, net total assets, financial commitments, and so on. But it will not say that there are a particular number of liquidity days that represents ‘good enough’. That is because the OfS would be looking to form a judgement about the provider’s financial performance that takes into account relative strengths and weaknesses, the interplay between different indicators, and the steps the provider is taking to improve its financial circumstances if it thinks it needs to do so.

It would be wrong and unhelpful if the OfS were to try to tick a box for the right number of liquidity days, or for the right percentage surplus. Instead, the OfS will seek to make a judgement about whether the provider’s performance as a whole allows it to say that it satisfies this condition, in the interests of its students.

The same has to be true for the indicators that will be used for the student outcomes condition. The OfS will not want to be a regulator that mechanically ticks boxes. So it is not envisaged that there will be a specific ‘good enough’ number for student retention, or for satisfaction, or for employment outcomes. Instead the OfS is likely to want to understand the provider’s performance across a range of indicators, for all of its students. It will need to understand the provider’s mission and context to do this well: what sort of students does it recruit and what support do they need to succeed? Where more information is needed to make a good regulatory decision, the OfS will probably want to talk to the provider. Again, the point is that the OfS will be seeking to make a judgement about whether the pattern of student outcomes as a whole, and the provider’s response to this, allows the OfS to say that the provider satisfies this condition.

If the OfS takes the view that a provider needs to make more progress for its students, we will have a range of regulatory tools — increased monitoring, or the use of specific conditions of registration — to focus attention on these areas. Of course, the OfS will need to think very carefully about whether it should register a provider that is delivering very poor outcomes for its students. Weaknesses in the design, delivery and assessment of the curriculum, or in the support provided to students, may well be significant contributory factors here. But it is unlikely that a provider will fail to satisfy the condition just because its performance on one of its indicators looks weak.

I completely understand why we are being asked by some people to pin down what ‘good enough’ looks like. But surely setting and publishing numerical thresholds would risk the OfS becoming a crude and narrowly-focused regulator rather than the intelligent data-informed regulator that our diverse higher education sector needs.

All of this is of course subject to consultation. Do let us have your views. The deadline for submissions is 22 December 2017.