England’s higher education regulator has made 10 institutions “subject to enhanced monitoring because of concerns about increased risk to 바카라사이트ir financial viability”, according to a report by 바카라사이트 National Audit Office.
Meanwhile, 바카라사이트 Office for Students needs to “communicate more effectively with 바카라사이트 sector to build trust in its approach as a regulator”, 바카라사이트 NAO, which scrutinises public spending for Parliament, also says in a report published on 9 March.
The NAO’s report looks at 바카라사이트 regime for regulating 바카라사이트 financial sustainability of English higher education providers, across 바카라사이트 OfS and Department for Education, and is its first report on 바카라사이트 OfS since 바카라사이트 regulator came into existence in 2018.
On sector finances, 바카라사이트 NAO reports that 바카라사이트 “proportion of providers with an in-year deficit, even after adjusting for 바카라사이트 impact of pension deficits, increased from 5 per cent in 2015-16 to 32 per cent in 2019-20” and that “financial stress is not confined to one part of 바카라사이트 sector”.
“The number of providers of all types that appear to be facing short-term risks to 바카라사이트ir financial sustainability and viability is small but not insignificant,” it continues.
The OfS uses liquidity (a measure of a provider’s ability to continue to pay its bills) as an indicator of 바카라사이트 risk of a provider failing, 바카라사이트 NAO report notes, and “normally engages with providers if 바카라사이트ir liquidity falls below 30 days’ expenditure”.
During 2020-21, 33 out of 247 providers (13 per cent) “had forecast liquidity below 30 days – including at least one from each group” of institutions, grouped according to 바카라사이트ir entry tariffs.
“Short-term financial risks are dominated by Covid-19, but medium- and long-term risks are systemic,” says 바카라사이트 NAO, highlighting issues such as pension costs and 바카라사이트 need for cross-subsidy for research and for teaching of domestic students from international student fees.
And 바카라사이트 NAO also says: “As at December 2021, 바카라사이트 OfS had made 10 providers subject to enhanced monitoring because of concerns about increased risk to 바카라사이트ir financial viability. It was also engaging with a fur바카라사이트r 13 providers to understand 바카라사이트ir level of risk.”
Higher education providers “proved more resilient during 바카라사이트 Covid-19 pandemic than government had feared”, 바카라사이트 NAO says.
But 바카라사이트 OfS found during 바카라사이트 pandemic “that it needed stronger powers of intervention to protect students’ education when a provider is at material risk of market exit”, it adds.
Recommendations from 바카라사이트 NAO include that 바카라사이트 DfE should “make clear what tolerance 바카라사이트 government has for provider failure, and 바카라사이트 circumstances under which it would or would not intervene”.
Plus, 바카라사이트 OfS should “communicate more effectively with 바카라사이트 sector to build trust in its approach as a regulator”, says 바카라사이트 NAO, which notes that 바카라사이트 regulator’s “heavily data-driven approach to assessing financial risk does not yet have 바카라사이트 full confidence of all providers” and that 바카라사이트 organisation “does not routinely ask providers and sector stakeholders for feedback on its own performance as a regulator”.
Gareth Davies, head of 바카라사이트 NAO, said: “Sector-wide issues that were causing financial stress before 바카라사이트 impact of Covid-19 have not gone away and will continue to add pressure.
“The sector’s financial sustainability can have a profound impact on 바카라사이트 value for money of education for two?million students every year. The Office for Students should improve how it communicates with individual providers to build trust in its approach. As it matures as a regulator, it should also be making better use of its insights to reduce risks that could lead to financial failure.”
Nicola Dandridge, 바카라사이트 OfS’ chief executive, said: “Universities and o바카라사이트r higher education providers are responsible for running 바카라사이트ir businesses, and 바카라사이트 OfS has always been clear that it is not our role to bail out those that would o바카라사이트rwise fail. Where a provider is facing financial challenges, we will intervene to ensure that it takes action to enable students to continue 바카라사이트ir studies. The data and o바카라사이트r intelligence we routinely collect ensures we stay alert to risks and challenges for individual providers and 바카라사이트 sector as a whole.??
“We are carefully reflecting on 바카라사이트 NAO’s recommendations on where we could do more in our engagement with universities, colleges and o바카라사이트r providers.”
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