OfS shifts registration responsibility to universities in regulation push

The Office for Students (OfS) has published a consultation proposing a new registration condition for universities and colleges with franchise partners that have over 100 students, shifting the regulatory responsibility for these arrangements onto the higher education institutions themselves as lead providers.

The new condition – referred to as E8 – would apply to all universities and colleges with over 100 students taught via sub-contractual or franchise arrangements and is aimed at improving standards in student recruitment, attendance and support and a more rigorous assessment of their franchise provider arrangements.

This development follows separate moves by the Department for Education earlier this year to improve governance and bring greater oversight over higher education franchisees with 300 students or more by consulting on proposals to bring them directly under the scope of the OfS.

The consultation, which closed in April, shared proposals to require eligible franchise providers to register with the OfS to ensure their courses are designated for student finance. The outcome of the DfE’s consultation is expected later this year with the new regulations requiring franchise providers to apply for registration with the OfS proposed to come into force by April 2026.

Under the regulator’s latest proposals, institutions themselves will be required both to maintain detailed governance oversight and operational procedures for provision which they franchise and to operate in accordance with these standards. It is anticipated that they will also be required to publish information pertinent to the public, including the proportion of tuition fees retained as part of their franchising agreements and the rationale behind such subcontracting

Universities and colleges will also need to report new events or material changes in sub-contractual arrangements and comply with OfS’ directions even in the event that these conflict with existing contracts with franchisees. The regulator will also be empowered to compel changes to existing franchise arrangements, including termination, recruitment limits, or teach-out obligations.

The proposals are aimed at improving lead providers’ oversight of their franchising arrangements following a range of concerns across the sector, from reports of students receiving inadequate academic support to allegations of franchise partners misusing publics funds and facilitating students to cheat and fraudulently claim student loans.

The consultation closes on 1 October and the resulting changes for these providers are expected to be implemented from January 2026.

Commenting on this development, Gayle Ditchburn, higher education expert at Pinsent Masons, said the OfS’ proposals signalled a tougher approach to governance, transparency, and student protection in this part of the higher education sector. “By placing the onus on lead providers, the regulator is sending a clear message: institutions must have robust governance and oversight in place in relation to the management of their sub-contracting arrangements, or face direct consequences,” she said.

In light of OfS’ proposals, she said institutions will need to review their governance frameworks and existing franchise contracts carefully ahead of the new regulatory condition coming into effect mid-way through the upcoming academic year. “What’s particularly striking is the power of direction: the OfS could compel a university to terminate or amend a sub-contractual arrangement, even if the contract doesn’t allow for it,” said Ditchburn. “This creates real commercial risk and means institutions must review and refresh their franchise agreements to ensure they allow compliance with the proposed new regulatory obligations, whilst ensuring the institution would not be placing itself in breach of contract by doing so.”

Ditchburn said the consultation would allow stakeholders in the higher education sector to help “shape” the OfS’ proposals, “but the direction of travel is clear”, she added. “Universities with sub-contracting arrangements should be factoring a review of those arrangements with their partners ahead of the new regulatory requirements coming into force.”

The consultation comes ahead of the OfS reopening new registration and degree awarding applications for higher education providers from 28 August after suspending applications in December 2024 to shift its regulatory focus to cover financial sustainability concerns within the sector. The regulator has said it will prioritise processing existing applications that have been on hold since last year.