'Substantial restructuring' of English higher education set out in government paper

Its new paper, 'Success as a Knowledge Economy', contains plans for a new economic regulator, the Office for Students (OfS), and more details about the proposed 'Teaching Excellence Framework' (TEF), which will encourage universities to raise standards and make it easier for potential students to compare different institutions. The best-performing universities against the TEF will also be able to raise tuition fees in line with inflation, starting in autumn 2017, universities minister Jo Johnson announced.

Universities would also be required to publish detailed information, broken down by ethnicity, gender and socio-economic background, about their application, offer and progression rates under plans to address poor social mobility, the government has announced. Students from "the most advantaged backgrounds" are still around six times more likely to go to the most selective universities than those from disadvantaged backgrounds, the government said.

Universities expert Nicola Hart of Pinsent Masons, the law firm behind Out-Law.com, said that the paper signalled a "substantial restructuring" of the higher education sector in England.

"The legislation we expect to follow shortly will have to be thoroughly thought through and critically examined because it will fundamentally change the landscape laid down as long ago as 1992, when the former polytechnics became universities," she said. "The impact of such major changes to the framework of English higher education on institutions in the devolved administrations is also likely to be considerable."

"It seems inevitable that the government's emphasis on competition will lead to the breakdown of traditional structures and linkages, which is no doubt intended. For example, the new approach to teaching excellence  and the support for entry into the sector of high quality, new (primarily teaching) institutions looks likely to create more of a separation between 'teaching' and 'research' universities. Social mobility and access by disadvantaged students to the most selective institutions has proved a very hard nut to crack, and so constructive proposals to help address inequality of opportunity, along with increased transparency on admissions data, should be welcomed," she said.

The government has also published a 'call for evidence' seeking views on whether students should be able to switch university courses more easily, if they are unhappy with their course or their circumstances change. Nicola Hart said that although the introduction of credit transfers could be a "game changer" for increasing competition, any concrete policy proposals would not be published until "further down the road".

The government has proposed replacing the existing, multiple routes of entry to the higher education sector with a single, simpler process, overseen by the new OfS. Institutions would be able to register as 'basic' providers, which do not wish to access government funding or student support; 'approved' providers, able to set their fees at any level; and 'approved (fee cap)' providers.The latter would be subject to more stringent financial sustainability, management and governance requirements, and in return would be able to access student loan funding above the basic cap of £6000 per year, up to the higher cap of £9000 per year, as well as government grant funding, subject to agreeing an access and participation agreement with the OfS.

Both types of approved provider would have to demonstrate sufficient quality assurance and financial sustainability standards, would have to meet the requirements of the Competition and Markets Authority (CMA) regarding students' rights as consumers and would be required to publish a statement setting out what they are doing to promote widening participation, according to the report. They would also be subject to a new requirement to have a student protection plan in place, to ensure that students would be able to continue their studies if the institution went out of business.

The new OfS would take over responsibility for granting degree-awarding powers and university title for English institutions from the Privy Council under the plans set out in the paper. However, the criteria and guidance for these awards would continue to be overseen at government level by the Department for Business, Innovation and Skills (BIS). New institutions with approved status and that meet financial stability and governance requirements would be able to award degrees on a probationary basis for three years without first having to demonstrate a lengthy track record or meet additional criteria, while the probationary period could also be counted as track record for full degree-awarding powers, according to the paper.

The paper also confirms plans to deliver the TEF as set out in the Conservative Party manifesto, which will assess universities based on different aspects of teaching including student experience and the job prospects of graduates. The TEF will be introduced over the next four years, although institutions which meet the high standards set by the framework will be permitted to raise their annual tuition fees in line with inflation from next autumn, according to the paper.

The government also intends to abolish the existing regulatory framework for higher education, replacing the 10 arms-length bodies currently in operation with two: the new OfS, responsible for competition, choice and representing students' interests; and UK Research and Innovation (UKRI). The Higher Education Funding Council for England (HEFCE) and Office for Fair Access (OFFA) would be abolished; and the Research Councils' and HEFCE research function merged into UKRI, according to the report.

"HEFCE's powers and remit have weakened significantly since the introduction of the student fee regime, so this development is not unexpected," said universities expert Gayle Ditchburn of Pinsent Masons.

"Details of how the transfer of approval of degree-awarding powers and university title from the Privy Council to the OfS will operate in practice need to be seen, particularly how this will operate in conjunction with the deregulation of amendments to governing documents. No specific detail is provided about how the government intends to remove the requirement for Privy Council to approve amendments to university governing documents. It is unclear how this will work for universities established by Royal charter, which would effectively become subject to a different regime than that for other chartered bodies if this was to happen," she said.

Gayle Ditchburn also pointed out that the government had backtracked on its plans to remove all higher education providers from the scope of freedom of information (FOI) legislation - something that had been suggested as part a discussion paper published last year. The current approach, under which providers eligible for direct grant funding come within the scope of the FOI Act while those not eligible for such funding will not be will be retained, according to the new paper.

"The suggestion that funded providers could fall outside the FOI Act provisions had been a surprise in the Green Paper in November and was treated with some scepticism. Thisu-turn is not therefore unexpected," she said.