It’s true that there was a fair bit going on last week, but OfS let slip a potentially important one that deserves further attention.

The Office for Students annual assessment of English higher education providers’ financial sustainability is based on a bespoke data submission called the Annual Financial Return (AFR). There’s no fancy-pants Data Futures style platform here, the AFR is a resolutely old-school Excel template that each provider is required to submit each year – each provider completes a bespoke template (based in part on previous HESA submissions, and including forecasts for the current year and four years into the future). This is sent along with an externally audited set of accounts and various other documentation.

This data itself underpins parts of the venerable HESA Finance collection – but the really juicy bits (the forecasts) are used to produce the aggregated forecasts that OfS has historically used to claim that the financial position of the sector is healthy overall, but providers are being over-optimistic in their recruitment forecasts. The fact that you can predict that conclusion without even seeing the data indicates that we may not be getting the greatest public value for what is a pretty complex submission.

So everyone’s favourite regulator wheeled in PwC to review the AFR and related data – asking for pointers as to:

• What risks to provider finances OfS needs to be aware of,
• What information it needs to assess these risks,
• What information OfS currently collects, and where the gaps are,
• and what “good practice” looks like relative to the work of other regulators.

The report trickled out on Friday 24 May, with OfS seemingly having sat on it since December last year. In a nutshell, it concludes that OfS is on top of most of the risks currently being faced, but it could do better if it had more data. Specifically:

• Forecast student domicile by country (so OfS can spot where there is an over-reliance on a single market)
• Information on repairs and maintenance backlogs
• Information on income generated from partnership arrangements
• Expenditure analysis, and detail on cost reduction or efficiency programmes

Alongside this, PwC recommends that OfS makes it easier to compare information, and makes better use of the commentaries providers submit alongside the spreadsheet. It appears OfS collects more forecast information than other similar regulators, but with less frequency (there’s no in year submissions) and on a less targeted basis.

The OfS response comes in the form of a blog post from Deputy Director of Enabling Regulation David Smy, who takes the opportunity to announce changes to the 2024 AFR. The big additions run fairly close to the PwC recommendations and are mostly sensible.

• Providers will need to state the investment needed to bring or maintain the estate to a “good” (as per the AUDE definitions, I guess) standard.
• There’s a requirement to submit information on financial flows associated with transnational education
• And one to provide similar information on financial flows associated with acting as “lead provider” with subcontracted provision

For student numbers, the old distinction between EU and non-EU domiciles for non-UK students will disappear. Providers will instead break down international student numbers for key domiciles (China, India, Nigeria, Pakistan, USA, Bangladesh, “Other”) – and this is for year 3 and year 4 only.

There will be a slight ramping up of the free-text questions on risks and mitigations in the commentary, and there will be a reduction in the financial (not student numbers) detail needed for the later years (years 5,6, and 7) of forecasts – as OfS says:

This detail was useful but it became less reliable over the longer term forecast

Technical details are already out for the collection due in four months after the end of the financial year.