Question to the Department for Education:

To ask the Secretary of State for Education, what contingency plans he has in place in the event that a higher education provider should financially fail.

The Office for Students (OfS) is the independent regulator of higher education in England. The OfS monitors the financial viability and sustainability of providers registered with them and their primary contingency against the impact on students in the event that a higher education provider should financially fail is the Student Protection Plan which must be agreed with OfS by each provider.

From 1 April 2021 the OfS introduced a new registration condition (Condition C4) that requires compliance with student protection directions issued by the OfS where the OfS reasonably considers that there is a material risk the provider will exit the English higher education market or cease trading or delivering higher education.

In the event of institutional financial failure leading to market exit, the department would assist the OfS in collaborating cross-government action on the wider consequences, to mitigate the impacts on those employed directly and indirectly by the provider, the local economy, research, innovation and knowledge exchange.

The OfS report dated December 2021 shows that despite the many operational and financial challenges arising from the COVID-19 outbreak, the overall financial position of universities, colleges and other providers registered with the OfS across the higher education sector has remained sound over the course of the last year, with generally reasonable financial resilience.

Providers were able to manage COVID-19 impacts better than originally expected, with student numbers holding up, and through careful management of cash and costs. Government support measures have served to help universities navigate those challenges.

Department for Education officials work closely with the OfS who continuously monitor provider financial sustainability, engaging more closely with those where it considers there to be increased financial risk. It is important to note that universities are autonomous businesses and continue to remain responsible for the decisions they make in regard to their business model and sustainability.