Jo Johnson fears OfS register pause will block university mergers

By Pune Media On Jan 28, 2025 11

The Office for Students’ “shockingly poor” decision to pause much of its work to focus on English sector finances puts potential institutional mergers at risk, according to a former universities minister.

In a withering blog on the Higher Education Policy Institute website, Jo Johnson – architect of the regulator in his first spell as minister, from 2015 to 2018 – says the decision to close the OfS register and applications for degree-awarding powers for new entrants at least until August “will probably worsen financial sustainability rather than promote it”.

He says in restricting competition and choice, the decision goes against one of the most important duties handed to the regulator by parliament and was made with such “embarrassingly weak justification” that “I cannot imagine the pause would withstand legal challenge if tested”.

Last month the OfS said that it needed to free up its resources to focus on helping universities in financial difficulty after its modelling revealed that three-quarters of providers were potentially facing deficits.

Ahead of the move being debated in the House of Lords on 30 January, Johnson calls for the decision to be reversed or says the OfS “must at the very least during this period of pause make clear that it will be open for business for mergers and acquisitions”.

Although not seen as a short-term fix, merging has been repeatedly put forward as one option for helping universities at risk of collapse, most recently during the launch of a new Universities UK “efficiency task force”.

The risk, Johnson says, is that institutions at risk of failure will need to transfer their degree-awarding powers or university title to “white knights that want to come to their rescue”, but this would require timely OfS approval.

There is reason to fear, he adds, that the pause in registrations will become “semi-permanent”.

“There is no sign that financial pressures on institutions will have abated by August, when the OfS says it will start to gradually re-open the window for applications for registration and [degree-awarding powers],” Johnson writes.

“Indeed, there is every chance, unless the government commits to annual inflationary increases in tuition fees, that a number of providers will be much further up the creek by then than they are now.”

He also worries that the move sends out the wrong signals. “Telling the world that the regulator is so snowed under with handling institutional failure that it can’t do the rest of its job sends a dismal message to international students, to the institutions bringing diversity to the sector and to investors interested in supporting English higher education,” he writes.

Johnson has been one of the biggest backers of “challenger” institutions in the English higher education sector and sits on the council of the Dyson Institute of Engineering and Technology, one of the few new providers that has successfully launched and obtained its own powers in recent years.

He served as universities minister in the governments of David Cameron, Theresa May and Boris Johnson and, in 2017, passed the Higher Education and Research Act that created the OfS.

But he says the regulator has always found a “ready excuse” not to focus on innovation and “deprioritise” this part of its statutory duties; from the initial task of getting existing providers onto the register, through the Covid pandemic and now “the need to deal with the financial troubles of some providers paying the price for weak financial management and poor governance”.

Processes for registration and degree-awarding powers have “long been lamentable”, says Johnson, and the pause, followed by what has been described as a “staggered” reopening, “represents a new low”.

He says the regulator should have first deprioritised “some of the newer headline-grabbing conditions of registration it has imposed in response to ministerial whims du jour”.

And the decision, according to Johnson, “raises real questions” about the OfS taking on the role of “designated quality body” from the Quality Assurance Agency in March 2023.

“If the OfS can’t promptly resume one of the most important duties given to it in HERA, it should run a quick process to find a new designated quality body, so that some other organisation can get on with it”, Johnson concludes.

Philippa Pickford, the OfS director of regulation, said: “The decision to pause the assessment of new registration and degree awarding powers applications was not taken lightly. But our view remains that the scale of the pressures on the sector demanded additional OfS resource. We recognise that the decision has a direct impact on a small number of institutions, and we are keeping it under review. The decisions we took are firmly grounded in protecting the interests of students at what remains a challenging time.”

tom.williams@timeshighereducation.com

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