The Office for Students (OfS) has welcomed the publication of a
National Audit Office (NAO) report into regulating the financial
sustainability of universities and other higher education
providers in England. The report praises the OfS’s use of the
financial data it collects and makes recommendations about how
the OfS could develop its engagement with individual providers in
relation to their financial position.
Commenting, Nicola Dandridge, chief executive of the OfS,
said:
“We welcome the focus of the NAO on the financial sustainability
of higher education providers. This is an issue of significant
importance to students and the wider communities that
universities and colleges serve, as well as to
taxpayers.
“When the pandemic began, we made regulating the financial
sustainability of universities and other higher education
providers a priority. We streamlined our requirements, and
required universities and colleges to report to us if they
believed their liquidity would drop below 30 days expenditure. We
engaged with the vast majority of them during the early stages of
the pandemic to test their plans to manage the impact of the
pandemic on their financial position. We also used an interim
data return to build an early picture of the impact of the
pandemic across the sector as a whole.
“We have worked closely with a small number of providers who have
reported concerns about their financial position.
“We welcome the NAO’s acknowledgement of the OfS’s good use of
financial data.
“There is – as the report rightly notes and as we have made clear
– considerable variation in financial performance and outlook
between individual providers. However, the predictions by others
that dozens of providers would fall victim to the financial
pressures of the pandemic have not materialised. Providers
generally entered the pandemic in good financial shape, adjusted
their financial strategies appropriately, and made prudent use of
borrowing to protect financial viability. Student recruitment
remained buoyant.
“Universities and other higher education providers are
responsible for running their businesses, and the OfS has always
been clear that it is not our role to bail out those that would
otherwise fail. Where a provider is facing financial challenges,
we will intervene to ensure that it takes action to enable
students to continue their studies. The data and other
intelligence we routinely collect ensures we stay alert to risks
and challenges for individual providers and the sector as a
whole.
“We are carefully reflecting on the NAO’s recommendations on
where we could do more in our engagement with universities,
colleges and other providers. So, for example, we are currently
taking forward work to capture providers’ perspectives on a range
of issues, including financial sustainability, and we will take
the NAO’s views into account in that context.”
