Office for Students examines risks associated with subcontractual partnerships

Following a significant increase in the number of students taught through subcontractual partnerships in England, the Office for Students (OfS) publishes an Insight brief today on the current status of these arrangements, and what providers need to do to ensure effective management and to protect public funding. 

A subcontractual partnership is when one university or college (known as the lead provider) allows another organisation to deliver all or part of a higher education course on its behalf. They are also sometimes referred to as franchised arrangements, or franchise provision. 

The number of students taught in subcontractual partnerships has doubled

Since 2019-20, the number of students taught in subcontractual partnerships has doubled to over 138,000 in 2022-23 – over 5 per cent of students in the sector. 

This Insight brief uses the data the OfS holds as England’s higher education regulator, including sector-level student characteristics data and dashboards that show the size and shape of provision in England, which have also been published today. 

It sets out the key risks in relation to subcontractual partnerships, shares examples of practice or allegations that raise concerns, and advises on the importance of effective management and governance in maintaining a secure grip over partnership activity. It explains how the OfS’s regulatory framework applies to subcontractual partnerships and how the OfS can take regulatory action, and sets out some key considerations for effective practice.  

Examples of concerns reported to the OfS include cases where: 

• Staff managing partnerships at lead providers have been incentivised to prioritise recruitment and retention of students above course quality and holding the delivery partner to account. 
• Students with very weak English language skills have been told these are sufficient to allow them to study on a course, without the delivery partner putting in place the support they need to succeed. 
• Students have paid recruitment agents or other third parties to falsify English language tests, to allow them to enter courses without attaining the required standard of English. 

David Smy, Deputy Director for Enabling Regulation at the OfS, said: 

‘From our analysis published today we can see that many benefits can be achieved through subcontractual partnerships, for both students and higher education providers. We know that students who are disadvantaged or underrepresented in higher education are generally more represented in these arrangements. Students are more likely to be mature, from the most deprived areas of the UK, or living locally to the higher education provider before starting a course. Students are also more likely to be from a minority ethnic background or from an area of England where fewer young people go on to higher education. This shows the important role these arrangements can play in reaching disadvantaged or underrepresented students and offering an alternative route into higher education. 

‘But partnerships need robust management and oversight if they are to achieve these benefits, and deliver for students and taxpayers. In these financially challenging times for higher education providers, it’s more important than ever that they recognise that business models that rely heavily on subcontractual partnerships carry additional risks, and these risks must be effectively managed.  

‘It’s vital that all students in these arrangements, whatever their background, receive a high quality education and the support they need to succeed. Their opportunities will not be improved if they are recruited onto courses that are not well delivered and lead to weaker student outcomes and a poor return on their time and financial investment in their education.  

‘There are also serious risks to public money where these arrangements are not managed properly. This can include universities and colleges receiving public funding for students who may not be genuinely studying on the course their tuition fees are funding, and students who may be receiving other payments they’re not entitled to. We continue to work closely with the Department for Education and the Student Loans Company to ensure public funding is protected.  

‘We hope this Insight brief will be a useful resource for universities and colleges that are, or are contemplating, working through subcontractual partnerships, and a reminder of the importance of good management and effective governance. Lead universities should seriously consider whether they should offer courses in this way if they cannot manage partners and public money effectively while ensuring that courses are delivering positive outcomes for students.’