This article is taken from the June 2026 issue of The Critic. To get the full magazine why not subscribe? Find our subscription offers here.
The May issue’s University Challenged column set out several problems posed by the rapid expansion of overseas student numbers in recent years. Yet there is an important aspect which needs tackling head-on: the so-called university franchise.
A simple question first. How many universities are there in UK higher education? Depending on precisely how you count, you might offer a plausible number of 169.
To that we might respond, yes, and very much, no: for there is a whole subcategory, involving hundreds of other institutions, who award degrees in all but the letter of the law.
To be more precise, it is currently possible for any British university to subcontract its authority to others: it can serve as a “lead provider” — the official enroller of students and formal awarder of degrees — whilst a completely separate institution takes on the franchise of actually engaging with the students by admitting, teaching, housing and examining them.
In a sector that is often criticised for being excessively regulated, it is striking that these “delivery partners” neither need external approval to start operating in this manner, nor is their performance subject to oversight by the Office for Students (OfS).
This has become a strikingly popular practice across Britain. In 2023, 65 per cent of universities subcontracted their services in this way, with approximately 140,000 students (about 6 per cent of the UK student cohort) attending 365 different franchisees.
Perhaps a yet more remarkable statistic is that two thirds of those franchisees were not registered with the OfS and thus had no external oversight outside the university taking a fee for this arrangement.
The appeal of launching a franchising model has proved too tempting to resist for many universities which have been under grave financial pressures.
The profit margin for most franchisees falls between a third and half, which allows the lead provider to take up to 30 per cent of tuition fees — not for tuition, of course, but for hosting this special relationship.
Unsurprisingly, the clear majority of subcontracted courses concern business, management and related subjects. And money talks: an institution such as Global Banking School Limited managed to increase its number of franchised students by more than 15 times over four years: from 2,140 in 2019/20 to 32,110 in 2023/24.
This may seem perfectly fair, and even a welcome expansion of higher education. Yet do universities have the resources and the will to monitor what is happening in their name?
It would appear not: when fraud within higher education was analysed in 2023, the majority of cases (53 per cent) were found to be occurring within franchisees, despite their relatively small size.
Chief issues included improper modes of student recruitment, the acquisition of student visas by those with no serious intent of being students and bogus enrolments for student loans; in franchised institutions, one in four students fails to complete their degree.
Some problems with this model came to light recently at Leeds Trinity University, which increased its cohort of students taught by franchisees from 3,600 students in 2020/21 to 9,400 in 2022/23.
Last year LTU was fined £115,000 by the OfS for failures in administering its subcontracted relationships: there was “inadequate oversight” of “admissions practices, academic assessments and academic misconduct”.
Rather tellingly, the report continues:
The university did not properly consider the impact of a decision it took to pilot lowering the English language requirement for students who applied to study at some of its subcontractual partners or ensure arrangements were in place to enable these students to succeed.
Perhaps unexpectedly, the current government has seen the need to act. Last December, Education Secretary Bridget Phillipson set out her “Plan for Change” to limit the risks of the franchising model:
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.
As the accompanying press release clarified:
These measures will crack down on courses where there are clear signs of exploitation, such as admitting students who are unlikely to succeed — for example, those with very poor English language skills or students who have low attendance rates and those who are using their place at the provider purely to access public money.
The crucial detail in this proposal is one of increased regulation: delivery partners with more than 300 students will have to register under OfS by 2028/29. Those that fail to meet this target will no longer be eligible to receive funding for student loans.
The mood does seem to be changing, with shifts visible in the right direction. For instance, Buckingham New University chose last year to end its partnerships with three major franchisees. Though this lost it some £20 million in income, it was a clear gesture to remove the financial and reputational risks of this practice. Now more of the same, please.
