Searching for value for money – OfS’s new powers

The Higher Education & Research Bill creates a new regulator (OfS) who need different powers than the old regulator (HEFCE).  I think there is a realisation that a lot of regulation was done through the funding system, and where a provider isn’t funded, this breaks down.

The Bill creates the power for OfS to ask for a search warrant of a provider. It says:

A justice of the peace who is satisfied that the requirements in sub-paragraph (3) are met in relation to relevant higher education premises may issue a warrant under this paragraph (a “search warrant”) in respect of the premises.

The grounds for asking for a warrant (Sub-paragraph 3) are stated as there are reasonable grounds for suspecting that there is, or has been, a breach of a registration condition or funding condition of the provider.

HEFCE do not have this power.  Clearly, if they thought that fraud was being committed, then they could involve a body who do have this power (the police for example).  It was interesting to hear the reasons given by Lord Young (who has been Viscount Younger’s wingman in report stage) when Labour proposed limiting these powers to just fraud.

“However, narrowing the powers in the way proposed could affect our ability to investigate effectively certain cases where value for public money, quality, and the student interest was at risk, but where these might not clearly constitute fraud, or serious or wilful mismanagement of public funds at the time of the application for the warrant.

As an example, the OfS could put in place a condition to limit the number of students a provider with high drop-out and low qualification rates was able to recruit: for instance if the OfS considered that those performance issues are related to the provider recruiting more students than it can properly cater for.” Lord Young, Hansard 8 March 2017

The ‘probing’ amendment had done it’s job.  The Government wants search powers of universities when the OfS is worried about ‘value for money’.  Furthermore, the example of providers taking on too many students – one wonders which providers Government is worrying about there? Lord Young explained further:

If the OfS has grounds to suspect that the provider is in any case undertaking an aggressive student enrolment campaign, it is important that evidence can be found swiftly to confirm this, and to prevent over-recruitment. Lord Young, Hansard 8 March 2017

It seems a bit rich to complain, now that the Government is getting the powers to stop some of the things that happened in the bad old days of alternative provider growth (2011-2014), but that seems to be exactly what they’re doing.  Lord Watson, for Labour, made that point.  Lord Young agreed: the NAO had criticised the lack of these powers in their report on alternative providers – which made it harder to ‘tackle rogue providers’. Clearly these aren’t the same alternative providers that the Government wanted to give ‘probationary’ degree powers to. Those are the different class of ‘Challenger Institutions’ – the respectable ones based in Hereford or Malmsbury.

It’s likely that this power will remain, so officers from OfS will be able to get a warrant and come round with the police and check your student marketing strategy.

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