The Queen (on the application of Bloomsbury Institute Ltd) v The Office for Students
| Jurisdiction | England & Wales |
| Judge | Lord Justice Bean,Lord Justice Males,Lady Justice Simler |
| Judgment Date | 14 August 2020 |
| Neutral Citation | [2020] EWCA Civ 1074 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: C1/2020/0664 |
| Date | 14 August 2020 |
[2020] EWCA Civ 1074
Lord Justice Bean
Lord Justice Males
and
Lady Justice Simler
Case No: C1/2020/0664
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
THE HON MR JUSTICE CAVANAGH
Royal Courts of Justice
Strand, London, WC2A 2LL
Jessica Simor QC, Chris Buttler and Eleanor Mitchell (instructed by Ronald Fletcher Baker LLP) for the Appellant
Monica Carss-Frisk QC, Tristan Jones and Tom Coates (instructed by Paul Huffer, Head of Legal Services, Office for Students) for the Respondent
Hearing dates: 28–29 July 2020 (via Skype for Business)
Approved Judgment
This is an appeal from the order of Cavanagh J dated 12 March 2020. By that order, the judge held that the Office for Students (“OfS”) was entitled to refuse Bloomsbury's application to be registered with the OfS. If Bloomsbury is not registered with the OfS, its courses cannot ordinarily be “designated”, its students cannot ordinarily obtain student loans and Bloomsbury will be unlikely to survive as a higher education provider.
Bloomsbury challenged the OfS' decision by way of an application for judicial review on a large number of grounds before Cavanagh J, who rejected them all in a judgment of great clarity and thoroughness running to 343 paragraphs. On 21 May 2020, Lewison LJ granted Bloomsbury permission to appeal on three grounds only. The issues before us have accordingly been far more focussed than those which were aired at first instance. No complaint is made of the judge's narrative of the background, and I adopt with gratitude much of what he said.
Factual and procedural background
Bloomsbury was founded in 2002. It is a private educational establishment but its profits are reinvested in the college. It has approximately 2,000 students, many of whom are from disadvantaged backgrounds: approximately 85% are mature, 66% are BAME, 16% are disabled and 90% come from families earning less than £25,000 per annum. Many of them have come to higher education from a non-traditional route. In 2018/19, 88% were enrolled on four-year courses which included a “foundation year”, so that they could embark on degree-level programmes if they did not have A-levels.
Bloomsbury is an “Alternative Provider” (“AP”) of education because it does not receive direct grant funding from funding councils, as do traditional universities. In order to survive financially, APs need to be “designated” to enable their students to access student loans. Bloomsbury's courses were first designated by the Secretary of State in 2010 or 2011. Bloomsbury received some positive appraisals in 2015, 2016 and 2017, but in February 2016 and August 2018 it was issued with “improvement notices” in relation to the continuation rates of its students, that is to say the percentage who proceed from year one of their courses to year two.
Responsibility for designation was transferred from the Department for Education to the Respondent (the OfS), which was created by the Higher Education and Research Act 2017 (“HERA”) to act as a single regulator for higher education providers. On 30 April 2018, Bloomsbury applied to the OfS for registration. OfS staff assessed Bloomsbury's application. On 19 November 2018 the OfS' Provider Risk Committee (“PRC”) decided that Bloomsbury should be issued with an “intention to refuse registration letter”. On 29 January 2019 the OfS issued its provisional decision to refuse registration.
One of the most important conditions of registration laid down by the OfS (though it seems to me to be almost impossible for any institution to achieve in practice) is Condition B3, that of the institution “securing successful outcomes for all its students”. The OfS did not consider that Bloomsbury had performed sufficiently well in relation to two criteria or “indicators” relevant to Condition B3, namely continuation rates from year 1 to year 2 (“continuation rates”), and rates of progression to professional employment or post-graduate study (“progression rates”). The provisional decision letter contained an Annex explaining the OfS' methodology. This stated that the OfS relied on three data indicators – continuation and completion rates, degree and other outcomes, and progression rates – and used “split metrics” to assess performance within each indicator for students from different demographic groups. The Annex stated that each of the three data indicators was considered by reference to “baselines” which had been determined by the OfS for that indicator, but did not say what the baselines were.
Bloomsbury made representations about the provisional decision but, on 23 May 2019, the OfS wrote to Bloomsbury refusing its application for registration. The effect of the decision was that Bloomsbury could not take on any new UK students, unless they were wholly self-funded, and, as the judge put it, if the decision stands, “in all probability, Bloomsbury will have to close”.
The statutory and regulatory framework
Section 1 of HERA establishes the OfS as the body responsible for regulating all higher education in England. Section 2 sets out its general duties. Section 3 requires the OfS to establish and maintain a register of higher education providers; the OfS must register an institution if it satisfies the initial registration conditions. Section 4 requires the OfS to notify a provider before taking a final decision declining to register it, and give the provider the opportunity to make representations.
Section 5 requires the OfS to determine and publish the initial and ongoing registration conditions. Section 5(5) provides:
“(5) Before determining or revising the conditions, the OfS must, if it appears to it appropriate to do so, consult bodies representing the interests of English higher education providers which appear to the OfS to be concerned.”
Section 7 requires that initial registration conditions are proportionate to the risk posed by the provider. Section 23 requires the OfS to assess the quality of (and standards applied to) higher education provided by institutions which have applied for registration.
Section 75 requires the OfS to prepare, consult on and publish a “Regulatory Framework” (“RF”), providing as follows:
“(1) The OfS must, from time to time, prepare and publish a regulatory framework.
(2) The OfS must have regard to it when exercising its functions.
(3) The regulatory framework is to consist of—
(a) a statement of how it intends to perform its functions, and
(b) guidance for registered higher education providers on the general ongoing registration conditions.
(4) The statement under subsection (3)(a) must set out how the OfS intends to perform its functions in relation to a registered higher education provider in proportion to the OfS's assessment of the regulatory risk posed by the provider.
(5) “Regulatory risk” means the risk of a breach of the provider's ongoing registration conditions.
(6) Guidance under subsection (3)(b) must include guidance for the purpose of helping to determine whether or not behaviour complies with the general ongoing registration conditions.
(7) The guidance may in particular specify—
(a) descriptions of behaviour which the OfS considers compliant with, or not compliant with, a general ongoing registration condition;
(b) factors which the OfS will take into account in determining whether or not behaviour is compliant with a general ongoing registration condition.
(8) Before publishing a regulatory framework under this section the OfS must consult—
(a) bodies representing the interests of English higher education providers,
(b) bodies representing the interests of students on higher education courses provided by English higher education providers, and
(c) such other persons as it considers appropriate.
(9) Where a regulatory framework is published, the OfS must send a copy of it to the Secretary of State who must lay it before Parliament.”
The Regulatory Framework
Pursuant to its obligations under s 75, the OfS published the RF in February 2018 after consulting the bodies listed in s 75(8). The RF was approved by the OfS Board. It contains the initial registration conditions with which higher education providers must comply if they are to be registered, grouped into Categories A to E. Category B conditions concern quality, reliable standards and positive outcomes for all students. Only Condition B3 is relevant to the present appeal.
The following paragraphs of the RF describe the OfS' general approach to assessing higher education providers:
“8. The regulatory approach is designed to be principle-based because the higher education sector is complex, and the imposition of a narrow rules-based approach would risk leading to a compliance culture that stifles diversity and innovation and prevents the sector from flourishing. This regulatory framework does not therefore set out numerical performance targets, or lists of detailed requirements for providers to meet. Instead it sets out the approach that the OfS will take as it makes judgements about individual providers on the basis of data and contextual evidence.
…
13. The OfS is committed to adopting and contributing to best regulatory practice. It will comply with the Regulators' Code, and in developing this regulatory framework the OfS has consulted widely, drawn on best practice, and sought to learn from the latest in regulatory theory.
14. The OfS's approach to regulation puts informed student choice and institutional autonomy at its heart. It sees the dynamic of providers responding to informed student choice as the best mechanism for driving quality and improvement, and will regulate at the sector level to...
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