PARTIALLY ACCEPT The Government recognises the Committee’s concerns regarding the potential financial risks associated with reliance on franchising arrangements, particularly where changes to these relationships could have a material impact on an institution’s financial position. We welcome the Committee’s acknowledgement of the steps already taken to strengthen oversight in this area, including the introduction of mandatory regulation for larger franchise delivery arrangements and improved data collection. These reforms are designed to ensure that risks associated with partnership delivery models are better understood, and that appropriate safeguards are in place to protect students and public funding. This approach is consistent with the Government’s wider reform agenda as set out in the Post-16 Education and Skills White Paper, which emphasises the importance of a high-quality, accountable post-16 system. The White Paper highlights the need for stronger oversight of provision, including franchised delivery, and supports the Office for Students having the powers to intervene where quality or other risks arise, in order to protect students and public funding and maintain confidence in the sector. In addition, the Independent Review of the Office for Students, led by Sir David Behan, concluded that the regulator should take a more focused and risk-based approach, with greater emphasis on financial sustainability and the management of systemic risks within the sector. While the Government does not direct the operational guidance issued by the Office for Students, we support the principle that providers should have access to clear and proportionate regulatory expectations in areas of material financial risk. Decisions on whether to issue specific guidance, and its form, are a matter for the Office for Students as an independent regulator. We will continue to work closely with the Office for Students to ensure that the regulatory framework supports a financially sustainable sector, while protecting students and maintaining confidence in the quality and integrity of higher education provision.