Question to the Cabinet Office:

To ask His Majesty's Government, further to the classification review of universities announced by the Office for National Statistics in January 2017, what assessment they have made of the (1) fiscal, and (2) other, consequences of universities being reclassified as public bodies as a result of that review.

The information requested falls under the remit of the UK Statistics Authority.

Please see the letter attached from the National Statistician and Chief Executive of the UK Statistics Authority.

The Office for National Statistics is not responsible for making an assessment of the non-statistical impacts of classification decisions. Therefore, no such assessment has been made of other consequences.

The Lord Stevens of Birmingham

House of Lords

London

SW1A 0PW

19 January 2024

Dear Lord Stevens of Birmingham,

As National Statistician and Chief Executive of the UK Statistics Authority, I am responding to your Parliamentary Questions asking when the Office for National Statistics (ONS) will conclude its review of the classification of universities in the National Accounts, first announced in January 2017 (HL1604). And further to the classification review of universities announced by the ONS in January 2017, what assessment we have made of the (1) fiscal, and (2) other, consequences of universities being reclassified as public bodies as a result of that review (HL1606).

The ONS regularly reviews legislation and guidance relating to a number of institutions, including universities, to determine whether any changes would have a potential impact on their sector classification. As such, the classification review of universities in the UK, first announced on 31 January 2017 [1] will consider whether the substantial rise in tuition fees from 2012, and other changes in funding arrangements affect the classification of universities.

A further statement on the classification review of universities in the UK was released on 5 April 2018 [2]. This statement explained that the classification review had been paused because of the announcement of the review of post-18 education and funding, which raised the possibility that the cap for tuition fees may be altered. As this could affect the classification status of individual universities, the statement confirmed the classification review would recommence when there is more certainty in this area.

It was necessary to further postpone the classification review of universities in the UK due to new higher priority classification cases, such as support schemes initiated during the COVID-19 pandemic, and more recently, the energy support schemes introduced in 2022 and 2023.

At present, the ONS plans to begin the classification review of universities in the UK from Quarter 2 (April – June) 2024. However, classification priorities can change quickly, and the expected dates of completion are only indicative. Our forward work plan 3 is updated each month to reflect changes in priorities. Table 1 shows the expected timetable for the classification review.

Table 1: Expected timetable for the classification review of universities [3]

Source: Forward Work Plan December 2023 (19 December 2023)

The ONS has not yet made an assessment of the fiscal consequences of universities being reclassified as public bodies. Within our forward work plan, for each of the four cases involved, we have provided an indication that the impact on fiscal aggregates could be small (less than £100 million change).

The ONS is not responsible for making an assessment of the non-statistical impacts of classification decisions. Therefore, no such assessment has been made of other consequences.

Yours sincerely,

Professor Sir Ian Diamond

[1] Classification review of universities in the UK - Office for National Statistics (ons.gov.uk)

[2] Further statement on the classification review of universities in the UK - Office for National Statistics (ons.gov.uk)

[3] Economic statistics sector classification – Forward Work Plan dataset (XLSX, 128KB)