Strengthened Office for Students could fine universities up to £500,000

Universities that fail to deliver in the best interests of students could now face financial penalties of up to £500,000 from the Office for Students (OfS), the government has warned.

As Jo Johnson, the new universities minister, called for students to be “at the heart of the system”, the OfS received a new set of powers on 1 August which will come into force in the 2019/20 academic year.

It will be able to impose financial penalties of either 2% of a university’s income or £500,000 – depending on which figure is higher – in order to ensure high standards of education.

Mr Johnson said: “Our vision for the OfS was for it to be a regulator with teeth and it has already made a significant impact on the sector.

“Now I expect it to use its full range of powers to ensure students up and down the country are at the heart of the system and receive value for money from our universities.”

Fines will be imposed on universities that fail to tackle grade inflation, high vice-chancellor pay or the rising number of unconditional offers.

Fines will be imposed on universities that fail to tackle grade inflation, high vice-chancellor pay or the rising number of unconditional offers

Recent reports show that almost two-fifths of university applicants received an unconditional offer this year, despite a government crackdown.

The government has also criticised institutions for handing out a rising number of first-class degrees, which former Education Secretary Damian Hinds described as “disappointing”.

Universities that fail to admit enough students from disadvantaged backgrounds could also be forced to lower their fees.

Any universities found to be damaging students’ interests also face extra conditions on their registration and lose their right to award degrees in the most serious cases.

Sir Michael Barber, who chairs the OfS, said: “We are now able to impose substantial financial penalties where universities are evidently not acting in the best interests of students and taxpayers short, medium and long-term.

“We have been clear from the outset that we would much prefer to resolve problems such as grade inflation or unconditional offers without using our formal powers; but also that we will not hesitate to use them if necessary.”

A spokesman for Universities UK (UUK) commented: “Universities in the UK have a world-leading reputation for quality and we are committed to working with the OfS to ensure effective regulation which allows universities to continue to deliver the levels of teaching, research and overall experience that students have rightly come to expect.”