left to my own devices – occasional thoughts on higher education

It’s a big week for UK universities, nervously waiting for publication of the Migration Advisory Committee’s (MAC) review of the Graduate Route visa; the government response to this; and to see the impact of this government policy response (through the effect of these things on international student recruitment) on an HE sector already in a financial storm. Universities are nervous for very good reasons.

Less consequentially, but coincidentally and perhaps still interestingly, it’s also a year ago this week since OfS published its last report on the financial sustainability of the English sector.

must do better

This annual report from OfS stems from its obligation, under Section 68 of the Higher Education and Research Act, to monitor the financial sustainability of registered Higher Education Providers (HEPs) and to publish an annual report setting out ‘relevant patterns, trends or other matters which it has identified’ from its monitoring.

When the House of Lords’ Industry and Regulators Committee looked at OfS last year its report addressed issues around financial sustainability, both in their substance and in terms of how financial sustainability was monitored.  The Committee didn’t pull its punches, referring to ‘the insufficient attention the OfS has paid to the financial risks facing the sector’ [p.88].

please God, make me good

As part of dodging the question of the financial sustainability of the higher education sector, the government’s response to this report threw OfS what might be seen as a bit of a hospital pass – pointing out that ‘assess[ing] strategic risks to the financial position of the HE sector … is the responsibility of OfS’ [p.14].

In its own response to the House of Lords’ report, OfS said that:

We agree that the sector is facing growing risks and we are retesting our approach to financial regulation in this context, including developing the sophistication of our approach to stress-testing the sector’s finances.

The combination of the current financial storms in the sector, and the need to respond to criticism that OfS has been asleep at the wheel in this area, means that this year’s financial sustainability report from OfS should make for interesting reading.

When we get it.

but not just yet?

There has been a bit of variation in when OfS has published their report on the financial sustainability of the sector.  The December publication of the 2020 report is an outlier, for very obvious reasons.  Otherwise we’ve seen these reports in April (2019); May (2023); and June (2021 and 2022).

Universities are nervous about what will happen with the report of MAC review of the Graduate Route visa.  To a lesser extent they might be a little nervous about what OfS ‘retesting’ and ‘developing the sophistication’ of its monitoring HEPs’ financial sustainability may mean. If they aren’t, perhaps they should be.

At the same time, perhaps OfS may also be a bit nervous of launching their latest financial sustainability report into the even stormier financial waters many fear the sector will experience when the MAC review is published this week.