HEPI UK: The implications of not having an independent Designated Quality Body – and lessons from abroad

Context

Over the past three decades, since the Further and Higher Education Act (1992) there has been a considerable expansion of the higher education sector in England, with a categorisation of ‘recruiters’ and ‘selectors’ emerging. This expansion was initially a response by universities to student demand, not always funded by increased teaching grants and with student number caps in place. The resultant pressures on university funding were addressed to some extent by the introduction of tuition fees for undergraduate students in 1998, accompanied by a system of student loans, administered by the Student Loans Company (SLC). 

Undergraduate fees were subsequently increased substantially in 2006 and again in 2012, when the teaching grant was removed for all but strategically important subjects. The move to a marketisation of the sector, with the ability to access student tuition fee payments from the SLC, encouraged a growth in the number of so-called ‘alternative’ providers. In 2015/16, the cap on the number of undergraduate students that could be recruited was removed.

The Higher Education and Research Act (2017) was an attempt to encourage more diversity and innovation in provision, by creating ‘a level playing field’ in terms of funding and regulation for higher education providers. However, fewer numbers of providers are now registered than initially expected and it should also be noted that many unregistered providers are also in operation.

Where are we now?

HERA created the OfS as the new regulatory body for higher education, which became operational in 2018, at which point all existing and new higher education providers in England that wished to be part of the regulated system had to apply for registration. There are now over 400 providers on the Register but there is no public record of how many applications for registration are under consideration at any point in time. According to data from the Higher Education Statistics Agency (HESA), the total number of HE students enrolled in England in the academic year 2021/22 was 2.9 million (over two million undergraduates and over 800,000 postgraduates).

The home element of this student population is funded by loans subject to income-contingent repayments (based upon earnings after graduation) and concerns that insufficient numbers of graduates would repay their loans in full has led to some tightening up of the repayment regime for those entering higher education from 2023/24 – recently described as ‘seismic changes’ by the financial expert Martin Lewis. These concerns, together with government comments about the value of some degree subjects and the incidence of grade inflation resulting in higher numbers of Firsts and 2.1 degrees being awarded, has prompted a view that the OfS (encouraged by Ministers) may be looking to shrink the sector in terms of the number of providers and the number of students and that quality assurance measures based on performance metrics, could be harnessed for such a purpose. With this possible policy objective in mind, the future role of a Designated Quality Body is significant.

The future role of the DQB?

We know that the QAA will no longer operate as the DQB for England with effect from the end of March, and that the OfS will need to undertake the assessment activities that are currently delivered by the Designated Quality Body – for example, relating to institutions which have applied to join the OfS Register and higher education providers that have already registered for the purposes of determining whether they satisfy any regular registration conditions on quality and standards.

This announcement reinforces the recent direction of travel of the OfS in relation to its involvement in quality matters, namely:

1. assuming ownership of investigations into concerns about grade inflation at (as yet) un-named providers;
2. a new system of metric-based monitoring, known as the B3 conditions, on graduate outcomes, drop-out rates and success rates; and
3. further work related to implementation of the revised Teaching Excellence Framework (TEF), for which institutional submissions have recently gone in.

Implications for quality assurance in England

The perceived lack of independent scrutiny of providers could raise potential problems for the reputation of academic standards and the quality of the student experience in English higher education, especially as the QAA will continue to exercise official functions in the other parts of the UK. This may be of significant interest to international students and the relevant authorities in overseas jurisdictions where English universities operate campuses. 

The changes to the regulatory landscape in England represent a significant shift in the approach to regulation and quality assurance. It can be regarded as a part of a move from institutional autonomy to an imposition of regulatory standards using regulatory tools. This approach, which does not explicitly include any review or enhancement activity, may – as in the Australian experience described below – create a demand for an external and independent review process.

Australia

There are some parallels with, and perhaps useful insights, that can be gained from the Australian experiment of the last decade. 

Transition from quality enhancement to regulation

From the late 1990s, Australia had a national quality agency funded and located within the Department of Education but regarded as ‘of the sector’. The Australian Universities Quality Agency (AUQA) was formally disestablished in 2011 and its staff and functions transferred to Tertiary Education Quality & Standards Agency (TEQSA). TEQSA also absorbed the functions of State and Territory ‘government accrediting agencies’, which had handled – some for decades – the entry and accreditation of providers without university title. 

Universities were ‘self-accrediting’ and defending university autonomy was one of the most hard-fought aspects of the TEQSA proposal. In the end, this was not realised. However, a compromise was agreed that existing universities would transition to TEQSA’s jurisdiction and have self-accrediting ‘authority’ (as distinct from ‘status’) which authority TEQSA could potentially restrict or remove if justified. TEQSA has the ultimate regulatory decision about which institutions should have university title, after consulting with relevant Ministers.

TEQSA is also the designated agency (under delegation from the Minister) for registering higher education institutions to enrol international students on a visa. In effect, TEQSA registers providers, lists courses and sets number controls for international students under separate legislation (Education Services for Overseas Students [ESOS] Act).

TEQSA operates a Commission model, and its commissioners are the statutory regulatory body independent of the Minister. Yet TEQSA, the administrative agency, provides staff led by a chief executive to support the Commission. The Commission may also delegate some, but not its major decisions (such as registration, university title, self-accrediting authority). To keep lines of responsibility clear, TEQSA typically does not delegate its regulatory decision-making powers to the chief executive but rather to experienced regulatory staff within the Agency. 

After more than a decade, TEQSA has established bipartisan support across the political spectrum and evolved its operating approach to be firmly embedded as an assurance approach, accepted nationally and internationally. Importantly, TEQSA has a constitutional basis for its authority. Its legislation over-rides university enabling Acts and its powers go well beyond conditions which may be attached to grant funding. 

It is also relevant that the Threshold Standards against which most of TEQSA’s work revolves, are made as a legislative instrument laid before Parliament by the Minister after being developed by the Minister’s Higher Education Standards Panel. The current standards were developed following extensive work and consultation across 2013 to 2015 and these have been important in settling TEQSA’s approach. 

The Australian experience over the last decade provides some insights for any system introducing higher education regulation, namely under the TEQSA framework:

• the role of a regulator was established under legislation to make regulatory decisions, according to the law (a legal threshold);
• decisions had to be defensible, evidence-based and made after affording full procedural fairness;
• almost all of TEQSA’s regulatory decisions are reviewable in the Commonwealth Administrative Appeals Tribunal, a jurisdiction that re-hears the case on its merits, at the date of the hearing.

This all means providers have significant appeal rights and TEQSA is forced to develop particular approaches, including the use of external expertise, in arriving at its decisions. In addition, its commissioners are drawn from senior higher education sector ranks. 

Use of external expertise as part of assurance

TEQSA’s decision-making processes draw upon considerable expertise and experience, including established external experts from the sector and TEQSA Threshold Standards, which require cyclic independent review of corporate governance and of academic governance.

TEQSA accredits courses for non-self-accrediting institutions (in England the equivalent is those without degree-awarding powers). This is an interesting point of departure from England, where the alternative has generally been franchising. Such institutions are registered with courses accredited by TEQSA – indeed registration only proceeds if at least one course is accredited. TEQSA has made it clear that its own consideration will be assisted if an institution itself, prior to submission to TEQSA, engages its own independent cognate reviewers to report on the course to its Academic Board. Responses to such a review are then carefully considered. 

It is now quite common in areas of critical issue between the regulator and a provider that both sides may engage experts to assist them. Indeed, in anticipation of concerns by TEQSA, an institution may often engage assistance to provide it with critical review. Such review may, of course, be embedded within its own internal audit processes and reported and considered by the Audit & Risk Committee. Managing high-stakes regulatory risk is a natural consequence of the regulatory approach. This approach has often seen a strengthening relationship between the Academic Board (dealing with academic risk) and the Audit & Risk Committee, advising Council / Governors on corporate risk.

While TEQSA employs a metrics-based approach for reviewing and rating each provider’s risk profile (annually), this process is deliberately designed to establish a basis for escalating or de-escalating regulatory attention and pointing to areas of focus. It is not designed to substitute for regulatory analysis. This is because under appeal, regulatory decisions made purely upon metrics would be highly unlikely to be sustained in such a nuanced area as higher education. Metrics do, however, give TEQSA a basis of rating risk and, on that basis, of deciding to go hard after a high-risk provider when primary evidence points to failure to meet standards. 

What is interesting for quality assurance advocates is that the reviews and expertise mentioned above are not so very different to enhancement reviews. However, a key yardstick is whether threshold compliance has been met. While regulation will mean this is in accordance with the minimum legal standard, the threshold standards used by TEQSA are by no means ‘low’ and embed quality assurance processes as a threshold in and of itself.

A difference in the Australian approach is that sector experts do not determine the outcome. They inform it. This is regulation, not quality assurance. Yet should the regulator’s decision come to be challenged, which it may well be, evidence of sector benchmarks, of quality assurance processes and ultimately proper governance, will usually stand the provider in a strong position in relation to the regulatory decision. These approaches are not all-or-nothing. The Australian experience points to ways in which they can work together, and certainly shows quality enhancement has a place even in a new regulatory world.

Conclusion

When the DQB role is taken in-house at OfS, it is likely that (as in the case of the Australian system) there will be a clear need for sector expertise to help assist the regulator, and to support institutions in meeting the regulator’s expectations, at all stages of the process. In this process, there is a significant difference in style and approach to quality assurance fora, and therefore those assisting institutions and indeed the OfS need to shift gears. It becomes less about site visits and qualitative process reviews, and more about developing a system which produces the evidence required for a particular context.

This reaches far into governance as much as management. Indeed, where quality enhancement sat almost exclusively with academic leadership and the academic governance system, regulation (not least the license to operate) means that governance inevitably will be more drawn into this space. Who stands up and gives assurance to governance that the institution definitively meets the regulatory requirements? This is a significant shift in the self-perceived role of academic governance committees. The role of external reviewers then finds a comparatively big role in this framework, for both the institution and its regulator.

This system of a principles-based approach to regulation, based upon indicators of predictive risk, requires higher education providers to have robust, accurate and timely data-management systems, together with appropriate mechanisms of report, review and responsibility within the management and governance structure. This will enable institutions to identify and manage their own particular risks and take mitigating action as appropriate, to ensure the confidence of all stakeholders in their academic standards and student experience.

Such an approach could benefit from expert consultancy, as in the Australian system, to provide targeted support and objective external advice in support of submissions to the regulator. This type of independent review, provided by a team of experts with extensive knowledge and experience of the sector, rather than a solitary adviser, could also be beneficial to institutions operating in overseas jurisdictions, where some form of independent quality assurance is frequently required by governments or professional bodies.

This is an abbreviated version of an article published by the Higher Education Policy Institute (UK).