In June 2024, the OfS annual review made some grim financial predictions for higher education in England, including presenting a worst-case scenario for providers – that a significant decline in international student numbers, coupled with no cost cutting activity, could lead to up to 80% of institutions being in deficit.
Now, the regulatory body for higher education in England is conducting a tender process to secure expertise for evaluating the financial stability of the country’s education providers.
The OfS said the move aims to protect student interests, particularly as major financial adjustments and the possibility of some providers exiting the education market could be on the cards.
“The OfS is seeking to procure capacity to undertake financial risk and transformation planning assessments of HE providers,” the tender description reads.
“The objective is to evaluate the financial health and the management and governance capability of HE providers to ensure that the interests of students are safeguarded throughout any financial adjustments or transition, including potential market exits,” it continued.
“Suppliers will be expected to deliver high quality evaluations that support the OfS in maintaining a robust and sustainable HE sector.”
Potential suppliers will be asked to set out an example roadmap and delivery plan as part of the framework tendering process, and the OfS said it intends to award a “framework of suppliers”.
The estimated value of the contract sits at £4,000,000, excluding VAT, and is set to run for 36 months, with the option of a 12-month extension period.
“The financial sustainability of the sector continues to be a high organisational priority for the OfS,” a spokesperson for the OfS told The PIE News.
We have opened this tender to seek additional resource and expertise to assist us with our financial monitoring
OfS spokesperson
“We have opened this tender to seek additional resource and expertise to assist us with our financial monitoring,” they continued.
“The selected contractors will work with us to understand the financial position of individual higher education providers and the plans they have in place as they respond to and address the wider financial challenges, as discussed in our recent annual financial report.”
In May, the 71-page report – signalled that providers should be prepared to make tough calls.
At the time, Susan Lapworth, chief executive of the OfS warned that its analysis suggested that an increasing number of providers will be forced to make significant changes to their funding model in the near future to “avoid facing a material risk of closure”.
Lapworth also said providers should be “redoubling their efforts to avoid optimism bias” and called on them to identify the actions they will be taking to ensure they remain on a “sound financial footing”.