Eighth Report - Financial sustainability of the higher education sector in England
Select Committee
Public Accounts Committee
HC 257
15 June 2022
Recommendations
2 results
4
Acknowledged
We are concerned that the financial sustainability of some providers is being put at risk...
Recommendation
We are concerned that the financial sustainability of some providers is being put at risk by their heavy dependence on their ability to continue growing overseas student numbers. Many providers are already highly dependent on cross-subsidy to make up deficits …
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Government Response Summary
The government agrees with the Committee’s recommendation and states the financial sustainability of the higher education sector depends on the continuing contribution made by income from overseas students.
HM Treasury
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6
Acknowledged
The Department failed to adequately assess the current and future financial impacts on providers of...
Recommendation
The Department failed to adequately assess the current and future financial impacts on providers of disruption to A-level assessments. The use of locally assessed grades in place of A-level exams during the COVID-19 pandemic led to substantial grade inflation in …
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Government Response Summary
The government agrees with the Committee’s recommendation and has undertaken careful monitoring of applications and providers’ offer- making in the 2022 admissions cycle.
HM Treasury
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Conclusions (7) Observations and findings — click to expand
1
Conclusion
Acknowledged
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Education (the Department) and the Office for Students (the OfS) on the financial sustainability of the higher education sector in England.1
Government Response Summary
The government acknowledges the report and states that the response is the government’s response to the Committee’s report.
10
Conclusion
Acknowledged
In addition to setting higher education policy, the Department is responsible for the overall regulatory framework for the sector.19 It holds the OfS to account through quarterly performance reviews with the OfS’s leaders and has regular discussions about the performance indicators which the OfS uses to measures its own performance.20
Government Response Summary
The government agrees with the Committee’s recommendation, with the OfS concluding the review of its key performance measures, with a view to these being published by September 2022.
14
Conclusion
Acknowledged
The medium- and long-term financial sustainability of some providers is heavily dependent on continued growth in student numbers, particularly overseas students. In 2018, providers forecasted that the number of non-EU students would grow by 29% between the 2019/20 and 2024/25 academic years, compared with a 17% increase in UK student …
Government Response Summary
The government agrees with the Committee’s recommendation and states the financial sustainability of the higher education sector depends on the continuing contribution made by income from overseas students.
18
Conclusion
Acknowledged
During the COVID-19 pandemic, the government moved to a system of locally- assessed grades in place of the usual A-level examinations. This led to significant grade inflation in 2020 and 2021 and meant that many more students than expected were able to take up places at their first-choice providers and …
Government Response Summary
The government agrees with the Committee’s recommendation and has undertaken careful monitoring of applications and providers’ offer- making in the 2022 admissions cycle.
19
Conclusion
Acknowledged
As most degree courses last three or four years, there is an ongoing negative impact on the income of providers who are unable to recruit enough students to match their forecast numbers.35 Oversubscribed providers can also face adverse financial consequences from exceeding their planned recruitment as domestic students are, overall, …
Government Response Summary
The government agrees with the Committee’s recommendation and has undertaken careful monitoring of applications and providers’ offer- making in the 2022 admissions cycle.
20
Conclusion
Acknowledged
The Department told us it had not modelled the impact on providers of grade inflation in 2020 because nobody had anticipated the last-minute decision to use locally assessed grades. For the 2020/21 academic year, it provided an additional £10 million to support oversubscribed providers that were teaching high-cost subjects, and …
Government Response Summary
The government agrees with the Committee’s recommendation and has undertaken careful monitoring of applications and providers’ offer- making in the 2022 admissions cycle.
21
Conclusion
Acknowledged
As a condition of registration, the OfS requires each higher education provider to have in place and publish a student protection plan setting out what it would do to safeguard students’ interests—such as by making arrangements for continuity of study— if it, as an institution, were in difficulty.40 The OfS …
Government Response Summary
The OfS introduced a new registration condition in April 2021 to strengthen its ability to ensure the rigour of a provider’s plans to protect students against the risk of the provider ceasing to deliver higher education and intends to begin discussions with the sector to update requirements where appropriate.