Question to the Department for Education:

To ask the Secretary of State for Education, what assessment her Department has made of the potential merits of a review of the governance of higher education.

The Office for Students (OfS), the independent regulator of English higher education (HE) providers, collects and analyses providers’ financial data to ensure they have an up to date understanding of the sustainability of the sector.

The OfS’ May 2024 report set out their assessment of the HE sector’s financial health for the 2022/23 financial year and forecasts for the next four financial years. On 15 November, the OfS published an update to this report, which found that the financial context for the HE sector has become more challenging since the May report. The government works closely with the OfS to understand the financial landscape in the sector.

While the sector is autonomous and independent, the government is determined to secure the future of our world-leading HE sector. That is why we have taken decisive action to support providers in moving towards a more stable financial footing.

In March, Professor Edward Peck was appointed as substantive Chair of the OfS. Professor Peck will continue the work of interim Chair, Sir David Behan, focusing on the sector’s financial sustainability and increasing opportunities in HE.

Moreover, in November, my right hon. Friend, the Secretary of State for Education announced the difficult decision to increase tuition fee limits in line with forecast inflation. The maximum fee for a standard full-time undergraduate course in the 2025/26 academic year will increase by 3.1%, from £9,250 to £9,535. In return for the increased investment we are asking students to make, the department expects the sector to deliver the very best outcomes, both for those students and for the country.

The department is clear that HE providers need to ensure their governance arrangements are robust and facilitate prudent, transparent and strategic financial planning. Providers must also ensure they are fit for purpose more widely, including upholding academic freedom, freedom of speech and ensuring good quality of provision. The OfS has recently consulted on proposals to strengthen the conditions related to management and governance for providers that wish to join its register.

The government also recognises the impact that financial pressures are having on the HE workforce. We are aware that some providers are making difficult decisions around staffing in order to safeguard their financial sustainability. Given universities are independent, they are responsible for pay and provision of staff and the government does not have a role in intervening. However, we expect providers to work with staff, using their knowledge and experience to help identify how best to operate efficiently. All efficiency measures taken by the sector should provide a better long-term future for staff, students and the country.

This government is determined to build a HE system fit for the future. Ministers and departmental officials remain dedicated to engaging with the OfS, the employer body, HE unions and the wider sector. Regular discussions are being held to gain a deeper understanding of the issues impacting HE providers, students and staff. This collaborative effort will contribute to the development of the department’s plan for HE reform, which we will publish in the summer.