Govt to tighten oversight of uni franchising under fraud crackdown

The government plans to bring university franchising arrangements under tighter oversight as part of a wider effort to curb abuse of the student finance system, which officials say cost taxpayers £2m in 2022/23.

Under the proposals, franchiser providers with 300 or more students would be required to register with the Office for Students from 2028/29 and meet the same standards as universities or lose access to public loan funding. The moves form part of the government’s Plan for Change, aimed at strengthening safeguards around public spending in higher education.

Franchising allows universities to subcontract teaching to colleges or private organisations. Ministers said inconsistent oversight in recent years has left parts of the system open to poor practice, with students on franchised courses more likely to drop out and less likely to progress into work or further study.

Education secretary Bridget Phillipson will write to all providers to outline the changes and warn that low-quality or exploitative arrangements must be reformed or closed. Regulators could face fines or suspension of registration where concerns arise about course quality, financial exploitation or fraud.

Phillipson said: “Too many rogue operators have treated students as a route to fast cash, not as people investing in their future. Those days are over. If you use public money, you will be held accountable and face proper scrutiny.

“Our higher education sector is one of Britain’s greatest strengths. Through our Plan for Change we are determined to protect its reputation, putting students first and making sure every pound from the public purse is well spent.”

Nearly 60% of students at franchised providers are taught in organisations not directly regulated by the OfS, according to the Department for Education, and the number enrolled has more than doubled in five years. Ministers said the reforms will target courses showing signs of exploitation, including those admitting students with a low chance of completion, very poor English language skills or minimal attendance.

The Department for Education has published the outcome of its consultation on higher education franchising, with regulations expected to be laid before parliament in Spring 2026. The measures will sit alongside tougher OfS conditions on governance and management, strengthened fraud controls and work led by the Public Sector Fraud Authority.

Vivienne Stern, chief executive of Universities UK, said: “It is vital that franchise provision is underpinned by high and robust standards and we support this step, which will help to protect the higher education sector’s world-renowned reputation for quality.

“UUK’s members have been taking extensive actions to tighten controls, and we have long championed the introduction of measures requiring franchise partners to register with the OfS.”

The OfS is also expanding its regulatory regime, including new registration conditions, annual data on franchised student outcomes and a consultation on strengthened requirements for universities overseeing franchise partnerships.

Philippa Pickford, director of regulation at the OfS, added: “We have been raising concerns about poor practices that have been exposed in some subcontractual arrangements for some time, and plan to announce a response to our own consultation on subcontractual arrangements in higher education in early 2026.

“This summer, we also announced reforms to our registration process that will allow us to register institutions that will deliver high quality higher education and treat their students fairly.”

Ministers also plan to legislate, when parliamentary time allows, to give the OfS stronger powers to intervene quickly where quality or public money is at risk.