Following the article in the Times Higher Educational Supplement, Franchising: widening access or wounding the English sector? (08 February 2024), it was suggested that some of England’s universities have been linked, albeit indirectly, with organised crime.
An investigation by the UK’s public spending watchdog, The National Audit Office (NAO) into franchised higher education provision produced some interesting reading:
- The National Audit Office investigation came partly in response to the Student Loans Company detecting fraud in franchised provision.
- Franchised provision accounted for 53 per cent of the value of the total £4.1 million in fraud detected by the SLC in 2022-23.
- One case of fraud at a franchised provider was cited as “potentially associated with organised crime”.
- The investigation responded to The New York Times article on the Slough-based for-profit Oxford Business College.
Independent Higher Education, whose membership of 77 institutions includes new providers, is concerned by references to organised crime and fraud, but added: this element is particularly exclusive to franchised provision, it could happen at any institution without necessary controls in place.
Further analysis of the Office for Students data by Times Higher Education shows four institutions with more than 10,000 students on courses subcontracted to other providers:
- Buckinghamshire New University (partnered with Oxford Business College), had 12,320 franchised students in 2021-22 – up from 4,100 three years earlier.
- Leeds Trinity University, in fifth spot, had 7,350 franchised students – up from none three years earlier, according to the OfS data.
Sector-wide, the number of franchised students doubled from 50,440 in 2018-19 to 108,600 in 2021-22.
- This is 4.7 per cent of the total student population.
- Just eight ‘lead’ providers were responsible for 91 per cent of this growth.
A major factor cited in the rise of this issue, is that franchised providers are not required to be directly registered with the OfS.
- In 2021-22, 229 (65 per cent) of the 355 franchised providers were not registered.
- This is a regulatory gap in which abuse is taking root says NAO.
- The “direction of travel” on franchising is clear, with universities becoming increasingly risk-averse from franchise models from a regulatory perspective. If things go wrong, universities are ultimately responsible and will be the focus of any investigation – potentially risking their own OfS registration.
WonkHE analysis of OfS-registered for-profit colleges.
- Of 108,600 students on franchised courses in 2021-22, 58 per cent were enrolled on business and management-related courses.
- For-Profit institutions were faring worse on the regulator’s B3 student outcomes measures on continuation, completion, and progression.
- Several London for-profit colleges had their designation for student loan funding suspended.
Not all bad news
Before the sector looks at turning its back on franchise and partnership models, it is good to remember the DfE has repeatedly stated that it considers franchising helps widen access to higher education – a key OfS Condition of Registration, says the NAO report.
- In 2021-22, 57,47 out of 97,000 (59 per cent) students from England studying at franchised providers were from neighbourhoods classed as high deprivation, compared with 40 per cent of students at all providers.
What happens now?
In a hearing on 26 February 2024, MPs on the Public Accounts Committee, will examine the NAO’s findings and the questions it raises:
- Risks from substandard franchising.
- failure to learn from previous scandals over for-profit providers.
- the potential loss of benefits from franchising if universities withdraw under greater scrutiny.
- the political and policy context as a factor fuelling these concerns.
- The Department for Education’s suggestion to explore the possibility of introducing “additional controls” on franchising.
Basic steps universities entering partnerships must do:
- Conduct thorough due diligence on the partner.
- Carefully prepare contracts.
- Ensure information flows are in place.
- Prepare “provisions to take action” if there are quality or other problems.
The NAO has called for the DfE and OfS to work more closely together with the SLC on tackling fraud.
Universities UK will have an important role to play in setting guidelines that raise universities’ standards on partnerships.
Final Thoughts: Franchised provision can be a powerful tool in a university’s strategy towards access and participation of students, diversification of provision, flexibility of meeting employment needs and should not be dismissed out-of-hand because of the current concerns over potential misuse.
The message is clear – franchising is good for business, provided it is managed in a considered and risk-based way with the relevant resources in place to ensure ongoing quality and compliance.
Stephen Smith: CEO
Stephen Smith CEO Illuminare Education Ltd, February 9, 2024