Franchising consultation – could lessons be learned from apprenticeships?

We’re starting to see responses to the Department for Education’s consultation on franchise provision. Its proposal for franchised providers with 300 or more students to register with the OfS has largely had a positive reaction so far.

By way of reminder, currently franchised providers can deliver courses designated for student finance without being registered with the OfS, which means they are not directly subject to its regulatory framework and reporting obligations. Readers will be familiar with the well-publicised issues and concerns that have been raised around this.

One of the consultation responses from Independent Higher Education supports the registration proposal, but puts forward a new category of registration with a rigorous due diligence process. It argues that the regulator is well suited to carry out such checks, which seems to make good sense.  

Requiring delivery providers in “subcontracting” arrangements to register is not a new idea. In the world of apprenticeships, if a provider subcontracts apprenticeship training to another body and that body is accessing apprenticeship (ie government) funding, the subcontractor has to be on the Apprenticeship Provider and Assessment Register (APAR) (unless an exemption or the de-minimis rules apply).

There are further rules in the apprenticeships space too:

• The provider must carry out its own due diligence on potential subcontractors including taking account of relevant Ofsted reports (presence on the APAR can’t be used as an indicator the entity is suitable). Of course, robust due diligence is important for any collaboration; for apprenticeship subcontracting it’s also enshrined in the funding rules.
• No sub-contracting to a second level. This is reminiscent of the QAA’s cautions against serial arrangements from old Chapter B10 and more recently its Advice and Guidance on Partnerships from the Quality Code, however in apprenticeships it is prohibited.
• Certain things must be included in agreements with subcontractors such as access and audit rights, a requirement for suitably qualified staff, co-operation if the arrangement comes to an end. Good franchise agreements will already have similar provisions, but for apprenticeships a common set of requirements for agreements is prescribed.

Various other more novel solutions to the franchising problem have been put forward over recent months, but perhaps some lessons could be taken from the apprenticeships model already in play – which will already be familiar to those universities delivering degree apprenticeships.

While we wait for the outcome of the DfE consultation (expected in the summer), and in anticipation of an increase in applications if its proposals are implemented, the OfS has been consulting on reforms to its registration requirements. This consultation closes shortly on 23 April.  

A number of publications have already been issued to help providers manage franchise arrangements such as the governance framework published by Universities UK, the QAA’s special edition of Quality Compass on franchising, and the OIA’s updated section of the Good Practice Framework on delivering learning opportunities with others. The QAA’s new edition of ‘Operating Partnerships with Other Organisations’ is expected in July. If we can assist, please do get in touch.