Background to Franchise Arrangements in UK Higher Education

Franchise arrangements, also known as subcontractual or partnership delivery, allow students to be registered with one higher education provider while the majority of their teaching is delivered by another. These models have expanded significantly in recent years, often reaching students in areas with limited access to traditional university campuses and supporting widening participation goals. Lead providers, typically universities registered with the Office for Students (OfS), oversee quality and standards, while delivery partners handle much of the day-to-day teaching.

Recent scrutiny has focused on risks within some arrangements, including potential misuse of student loan funding and concerns over student outcomes. Government and regulatory responses aim to strengthen oversight without stifling legitimate provision that serves diverse learners, including mature students and those from deprived backgrounds.

Government and Regulatory Responses to Concerns

In December 2025, the Department for Education announced measures requiring franchised providers with 300 or more students to register directly with the OfS. This registration becomes a condition for courses to remain eligible for student finance from the 2028/29 academic year. The changes target exploitation, such as recruiting students unlikely to succeed due to very poor English language skills or low attendance rates.

The OfS has introduced condition E10 for lead providers, applying where 100 or more students are on subcontracted courses. This requires clear strategic rationales for partnerships, risk identification, and publication of income from franchising arrangements. Regulations enabling these shifts were laid before Parliament in spring 2026.

These steps build on earlier OfS insight work highlighting differences in student profiles between franchised and mainstream provision. Data shows franchised undergraduates are far more likely to have no, unknown, or other entry qualifications.

Sector Views on Minimum Entry Standards

Proposals around minimum entry standards, including language requirements, have drawn criticism from universities and representative bodies. GuildHE and others argue that blanket measures risk acting as a blunt instrument, potentially undermining the government's widening access objectives by limiting opportunities for students who may need additional support to succeed.

Universities emphasise that entry criteria should remain contextual, allowing providers to assess individual potential alongside qualifications. Introducing sector-wide language thresholds could disproportionately affect mature and local students who benefit most from accessible provision in underserved regions.

Stakeholders note that while robust standards are essential, overly prescriptive rules may not address root causes such as governance weaknesses or inadequate monitoring in specific partnerships.

Characteristics of Students in Franchised Provision

Analysis of 2022/23 data reveals distinct patterns. Around 54 per cent of undergraduates in subcontractual arrangements had no, unknown, or other entry qualifications, compared with 11 per cent across the broader sector. Franchised students are also more likely to be mature, come from deprived areas, and study locally.

These profiles align with widening participation aims but highlight the need for tailored support. Providers stress that lower entry points do not equate to lower expectations; instead, they require enhanced resources for academic success.

Lead institutions maintain that they apply equivalent entry standards to franchised programmes as to their own directly taught courses, with ongoing monitoring and improvement plans.

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Role of the Office for Students and Quality Assurance

The OfS continues to strengthen its framework, including tougher initial registration conditions on governance and public money management. Annual publication of outcomes data for franchised students will increase transparency.

Consultations have explored requirements for universities to demonstrate effective oversight of partners. This includes addressing risks to students and taxpayers through robust due diligence and performance monitoring.

Direct regulation of larger delivery partners aims to close gaps where unregistered providers operated with limited accountability, while preserving flexibility for smaller-scale arrangements.

Perspectives from Representative Bodies

Universities UK, GuildHE, and the Committee of University Chairs have collaborated on a franchise governance framework to support good practice. This emphasises clear responsibilities, risk management, and alignment with institutional strategies.

HEPI analysis suggests franchising itself is not inherently problematic; rather, regulatory gaps and isolated rogue actors have allowed abuse. Calls persist for faster registration routes for legitimate providers and better distinction between high-quality partnerships and exploitative models.

The sector advocates balanced reforms that protect public funds while sustaining provision that reaches non-traditional learners.

Implications for Universities, Students and Taxpayers

For universities acting as lead providers, enhanced oversight brings administrative demands but also opportunities to demonstrate value through transparent reporting. Delivery partners face registration costs and compliance requirements, potentially consolidating the market toward larger, more established operators.

Students may benefit from stronger safeguards against poor-quality experiences, though concerns remain that stricter entry rules could reduce access for capable individuals from underrepresented groups.

Taxpayers gain from reduced fraud risks, with cross-government efforts involving the Public Sector Fraud Authority complementing OfS work.

Future Outlook and Potential Developments

Implementation timelines see applications for OfS registration due by July 2026 for affected providers. Outcomes will shape the 2028/29 funding landscape.

Ongoing monitoring will assess whether measures effectively target abuse without unintended consequences for access and participation. Further consultations on specific requirements for partnership oversight are anticipated.

The sector continues to engage constructively, stressing the importance of proportionate regulation that supports innovation in delivery models.

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Practical Steps for Institutions

Universities and partners are advised to review existing agreements against new conditions, strengthen due diligence processes, and prepare robust evidence of student support mechanisms.

Investment in English language and academic skills provision can help ensure learners with diverse entry profiles achieve positive outcomes.

Collaboration through bodies such as UUK and GuildHE offers shared resources for governance improvements.

Balancing Regulation with Access Goals

The debate underscores tensions between protecting standards and maintaining inclusive pathways. Minimum entry standards alone may not resolve complex issues around recruitment practices or partnership management.

Targeted interventions, combined with better data and accountability, offer a more nuanced approach. The coming years will test whether these reforms deliver sustainable improvements across UK higher education.