The government will move ahead with plans to make franchise degree providers with more than 300 students register with the English higher education regulator but some fear institutions will attempt to stay under the threshold by splitting up their provision or starting new subsidiaries.

Earlier this year the Department for Education (DfE) launched a consultation on its plans to impose stricter rules on subcontracted degree provision following evidence of fraud in the system.��

Results of the consultation show that 87 per cent of respondents – made up of a mix of universities, professional bodies, private providers and individuals – supported the introduction of a student number threshold at which providers will be required to register with the Office for Students (OfS). Registration is currently voluntary but comes with various advantages including access to student financing.

Just over half (57 per cent) agreed with the decision to set the threshold at 300 students. The figure will include all students regardless of study mode.

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Being registered means providers will be subject to greater regulations and the OfS will have the power to fine those that fail to meet its standards.�� 

But several concerns were raised by those responding to the consultation, including about the capacity of the OfS and the potential to game the system.

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Some suggested providers would stay below the threshold by splitting up their provision through subsidiaries or that they would move to validation arrangements instead. Others might elect to merge to deal with the new rules.

There were also concerns about the impact on widening access and participation.

Supporters of franchise provision argue that it is a vital way of reaching underserved students, particularly in rural areas with limited access to higher education institutions.��

Despite this, the government has become increasingly concerned with abuse in the system, which allows traditional universities to subcontract degree programmes to private providers.��

This kind of provision has grown rapidly in recent years, with the number of students studying at a franchised provider more than doubling between 2019 and 2024 from 56,590 to 159,460.��

By 2023-24, a total of 98,470 students were enrolled with a franchised provider that was not registered with the OfS.��

The government will also proceed with its proposal to implement a “decision year”, whereby the DfE will determine each year whether a franchised provider’s courses will be eligible for student finance for the following academic year. This power will come into force from April 2026.

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In its response to the consultation results, the government states: “Too many providers have used franchise arrangements primarily as a means of generating income, without ensuring quality, adequate governance, or appropriate student support.”

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It says the OfS had found evidence of “poor practice” including “vulnerable students being recruited to courses, and applying for student loans, without any realistic prospect of being able to meaningfully engage or benefit from higher education” and “entire cohorts of students being recruited onto courses and taking out student loans where the quality of delivery is so poor that not a single student achieves their qualification”.��

In a foreword, skills minister Jacqui Smith says: “Providers must also take responsibility for ensuring the quality and governance of their partnerships, and act swiftly where standards fall short.��

“If we see poor behaviours from providers, we will not hesitate to take further action including considering further legislative changes to restrict franchising.”

Leeds Trinity University was recently fined £115,000 after an OfS investigation found the institution’s oversight of its franchise partnerships insufficient.��

The OfS has also proposed measures to make universities publish their income from franchising.

“Too many rogue operators have treated students as a route to fast cash, not as people investing in their future,” said education secretary Bridget Phillipson.

“Those days are over. If you use public money, you will be held accountable and face proper scrutiny.”

Vivienne Stern, chief executive of Universities UK (UUK), said the organisation supported the decision. “UUK’s members have been taking extensive actions to tighten controls, and we have long championed the introduction of measures requiring franchise partners to register with the OfS.”

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helen.packer@timeshighereducation.com