Former ministers weigh in for OfS inquiry

The Office for Students inquiry at the Lord’s Industry and Regulators Committee is rapidly becoming the seasons most compelling box set for higher education regulatory policy nerds.

The first episode brought back some fan favourites in founding OfS chair Michael Barber and first chief executive Nicola Dandridge, revealing that letters of direction to the regulator from the Department of Education were “overly prescriptive”, and that there was a battle behind the scenes to save the National Student Survey.

But episode two, which dropped today, went in hard from the start. In the hot seats this time round were Jo Johnson (the higher education minister who set up the OfS in the first place) and Charles Clarke (former secretary of state and architect of the 2004 Higher Education Act). Both now very active peers, each had played a key role in shaping the sector we now have.

It’s worth characterising Clarke’s contributions as bemused. Overall, he didn’t feel that the case for a regulator had been made before OfS was established – and while if a regulator needed to exist he liked the idea of a commitment to avoid unnecessary burden, this did not appear to have happened in practice.

This gave Johnson, in his own words, “flashbacks to 2017”. The sheer scale of the sector meant for him the idea of an unregulated sector was “fanciful”, and took the opportunity to push back on what he described as mission group calls for a return to self-regulation.

The condition of OfS

It’s worth a little pushback to both – the idea that HEFCE was not a regulator is a fanciful one as anyone who worked in an English provider during that period would tell you. And the idea that it is the scale of public money going to the sector (half a trillion pounds by 2040 according on Johnson) that demands regulation is faintly ludicrous. If the government is procuring services in other sectors it uses tools like funding agreements to ensure that everything works out as planned. But no matter.

How good a job has the OfS been doing? – “reasonable but not perfect” according to the man who did more than anyone to establish it. Specifically, he felt that the next phase of OfS activity needed to be “more collegiate” within the market regulation framework – there was a need for OfS to offer more advice and guidance rather than going in studs up all the time.

Clarke, as the skeptic, accepted the value of having an independent agency to publish data and even offer commentary, but shied away from it requiring universities to do specific things. This was the same Charles Clarke who set up OFFA, which spent a fair amount of time ensuring universities did specific things. There was a real sense from both speakers that the dream of light-touch risk-based regulation was a long way from the realities of what government wanted to ensure students and others got from universities

Regulators (according to Clarke) need a reputation for having a high level of expertise to be effective, and the sheer breadth of what OfS needs to regulate means it will always struggle to be in this position. Johnson concurred that the decision of the QAA to demit was “an unhappy episode” and offered his clear preference that this quality assurance function should to be undertaken outside of the OfS, either via a reformed QAA or another body resourced by the sector – it is not his long-term wish for OfS to be responsible. On the QAA itself – the former minister felt that it is an impressive organisation but that it embodies a legacy of co-regulation that could not last in a market regulated system.

An independent love song?

We spent a long time on the idea of an independent regulator and if we actually had one – Charles Clarke got in the early (and entirely appropriate) dig about the explicitly political appointment of James Wharton as chair, but also made wider point that there is a danger that without care the idea of the student interest could quickly become a matter of what ministers deem it to be. Certainly, in Clarke’s day, an annual letter to an arms length body sufficed as direction for that year, and OfS get a lot more than that.

Again, we were back to the idea of the imagined simplicity of regulation and the reality of nervous “box-ticking” (the bureaucracy faced by new sector entrants was cited as an area of legislative responsibility in which OfS had failed, according to Johnson). It’s difficult to get to the position where a regulator has teeth enough to deal with pressing issues like grade inflation, while allowing provider leadership – it was notable that Johnson spoke of the (400+) providers and Clarke of the (c130) universities – to be proactive and innovative within clear and reliable parameters.

The Lifelong Loan Entitlement brings all of this into focus – both men professed to be fans of the policy (Johnson even proposing a name change to the Office for Lifelong Learning!) but held significant reservations. Johnson felt that the 30 credit limit was too long, that the focus on level 4 to level 6 was too narrow, and the pool of eligible providers should be wider. Clarke argued – convincingly to many members – that the initiative needed to sit within a coherent government strategy on access to tertiary education.

There was lots more – particularly on the political realities of the university “bail out” that would come from DfE or the Treasury rather than the regulator – but overall it did rather feel like OfS was neither one thing nor the other. Really, it is ministers that need to decide whether the sector needs an independent market regulator or an instrument of government – as both is clearly not an option.