Secretary of State for Education (): Today I am setting out
the actions this government is taking to tackle concerning
evidence of abuse of public money associated with the franchised
higher education system which we inherited.
Franchising, where one higher education provider subcontracts
provision to a delivery partner, grew significantly under the
previous government, but most franchised providers were not
placed under the direct oversight of the regulator – the Office
for Students. When done well, franchised higher education can be
an important driver of inclusion, but against a backdrop of
growing financial instability within higher education, for some
institutions, it is apparent that franchising became less about
expanding access and more about maximising income.
In 2023 and 2024, the Government Internal Audit Agency, the
National Audit Office and the Public Accounts Committee all
raised concerns about abuse, unethical behaviour and fraud.
Without the necessary guardrails, or a funding settlement that
put universities on a sound financial footing, in some
institutions the system has become a breeding ground for abuse,
unethical behaviour and fraud.
Earlier this month, I was made aware that there is a
disproportionately large number of Romanian students settled in
the UK who receive student funding from the Student Loans
Company. Investigative work undertaken by the Student Loans
Company suggests organised exploitation both of Romanian students
and of the UK taxpayer.
Under this government, this abuse will end. The Department for
Education and the Office for Students already have a programme of
investigations underway related to franchised provision. Where
these investigations have found abuse of the student finance
system there will be serious consequences. I have now also asked
the Public Sector Fraud Authority to tackle this threat and take
forward this work across government.
We will also take immediate action on the use of agents to
recruit students. The government can see no legitimate role for
domestic agents in the recruitment of UK students. We are taking
urgent steps to prevent any further abuse of the system.
Since taking office in July, the government has moved at pace to
tackle the many inherited challenges in the higher education
sector, which this government believes should be treated as a
public good, not a political battleground. In November, I set out
changes to the level of tuition fees and maintenance, for the
first time in seven years, and set out the five principles for
broader reform of the sector which underpin the approach this
government will take. We have already reformed the Office for
Students, accepting the report of Sir and bringing new leadership and
a tighter focus.
I have written to Edward Peck, the incoming chair, to ask him to
make protection of public money a top priority. To support this,
I will bring forward legislation at the next available
opportunity to give the Office for Students stronger powers to
act more quickly and effectively to protect public money.
In January the Department launched a consultation on franchised
higher education. The proposals would bring much closer
regulatory scrutiny of the largest franchised providers – the
ones in which there has been significant growth in recent years –
bringing them under direct oversight by the Office for Students.
The Office for Students is also consulting to strengthen its
conditions of registration, to stop providers with weak
governance arrangements from being able to register in the first
place. We have asked them also to urgently strengthen the
requirements on the providers who subcontract provision.
Together, if implemented, these proposals would impose new and
significant controls on franchising.
Higher education providers are engines of growth and drivers of
opportunity, but these issues threaten the integrity of the
sector. With the regulator, we will set the rules, we will
enforce them and we will protect public money. However ultimately
universities must take ownership of these issues for themselves
and we will look to them to take responsibility to ensure abuse
like this is brought to an end. There can be no excuse for the
abuse of public money, and under this government there will be no
hiding place for those who perpetrate such abuse.
