Hand OfS powers to block risky franchise deals, report says
“High-risk” franchising agreements would need to be approved by the English regulator as part of a proposed new “accountability framework” for university partnerships.
The growth in franchising and other collaborative models has “collided” with “financial fragility” and “uneven regulatory oversight” to pose a “threat” to “academic standards, student protection and public confidence”, argues a new paper published by the Higher Education Policy Institute (Hepi) on 6 August.
Authored by Vicki Stott, who spent six years as chief executive of the Quality Assurance Agency (QAA), it argues for a new operational model that can better manage partnerships in a harsher financial climate.
It says while concerns about franchising – in which a university authorises another provider to deliver its programmes or modules – have taken much of the focus, criticisms including a lack of accountability and failures to manage risk extend to other partnerships such as validation arrangements and some forms of transnational education.
The proposed new framework emphasises the need for “clear partnership lifecycles”; an “accountability matrix” to measure and record how partnerships are faring, a model for failure and recovery with “intervention triggers”; and a regulatory mapping layer that links partnerships’ functions to the OfS’ conditions of registration for providers, devolved national regimes, and student sponsor rules.
Analysis has shown continuation and progression outcomes are lower for franchised students, with particular concern about the quality of larger partnerships.
Stott says for franchising, it may be necessary to “start again” rather than strengthen existing rules because the “evidence on scale, opacity and fraud is serious enough that guidance alone is unlikely to restore confidence”.
Large-scale partnerships should be subject to an approval regime run by the Office for Students, with proposals required to explicitly justify their formation, abide by limits on intakes and be subject to “clear powers of suspension” if they risk endangering students’ access to quality education.
She cites figures that show that student numbers in franchised higher education more than doubled in three years to 108,600 by 2021-22, increasing again to 135,850 in 2022-23.
Most such students were not taught by organisations registered with the OfS while 53 per cent of Student Loans Company fraud in 2022-23 occurred in franchised provision.
“Those figures should not be read as an argument against partnerships as such,” Stott writes.
“Collaborative provision remains vital for widening participation, local access, specialist delivery and flexible routes into higher education. But [the figures] do show that the sector can no longer treat partnership governance as a niche matter delegated to part of the quality function.”
The paper warns that as policymakers in England look at “much tighter controls” over the area, the sector must demonstrate its commitment to designing and operating a “comprehensive partnership framework that protects students, upholds standards and limits excessive risk-taking”.
Another recommendation is that in any partnership with a “high-growth franchisee”, the lead provider should take an “early decision” on the maximum figure in income it will aim to generate, and a maximum proportion of student numbers.
“In a harsher financial and regulatory climate, partnership governance is no longer a niche technical concern – it is part of the sector’s front‑line duty of care to students, standards and public trust,” Stott said.
“This paper argues for a sector-owned framework to enable providers to translate guidance into operational discipline, so that growth through partnerships strengthens resilience instead of amplifying risk.”
Rose Stephenson, Hepi’s director of policy and strategy, added: “As partnership models become more complex, the sector needs practical solutions rather than another round of abstract principles.”
georgia.luckhurst@timeshighereducation.com