Colleges will have to fork out a disproportionately high proportion of subscriptions for the Office for Students (OfS), according to the Association of Colleges (AoC).

The AoC has calculated that the fees charged to colleges for 2019-20 by the higher education regulator will cover more than 25 per cent of the total - despite the fact that fewer than 10 per cent of HE students are in colleges.

The association’s deputy chief executive, Julian Gravatt, said in a blog that “a number of colleges have queried their OfS subscription invoices”. There was a risk that some colleges could withdraw from the OfS to avoid incurring these costs, he added.

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Office for Students: disparity?

The AoC said that colleges will pay £6.5 million - an average £39,900 bill for the 164 colleges offering HE, amounting to £74 per full-time equivalent (FTE) student.

In comparison, universities and higher education institutions will pay £16.8 million, equating to £128,300 per institution - but just £10 per FTE student.

Mr Gravatt said that there were three reasons behind the difference:

• The subscription bandings used by OfS mean that institutions with larger numbers pay less per student than smaller institutions. 
• Level 4 and 5 students (on non-prescribed courses regulated by Education and Skills Funding Agency and Ofsted) are included.
• The policy to include students that OfS doesn’t fund (including international students) “makes no difference to universities, because subscription bandings are very wide at the highest level”.

OfS fees: ‘Serious for colleges’

He added: “The university sector in England has its financial challenges but the sector’s surplus exceeds £1 billion a year in most years. OfS subscriptions of £100,000 to £150,000 are a major irritant for universities but they have multi-million pound operating cashflows.

“The position is more serious for colleges who have wafer-thin margins and who have found out very late that they have bills of £40,000 or more. OfS was slow to add some colleges to the register so the size of the bill hasn’t become apparent until late in their budget-setting process.

“There is a risk that some colleges will decide - for financial reasons - that they should withdraw their OfS registration to avoid these fees. Individual colleges can do this by transferring all of their courses to a university partner. If this happens, then the college will both be vulnerable to changes in policy (for example from a new vice-chancellor) and might miss out on opportunities to expand higher technical courses for the benefit of their students, employers and communities.”

An OfS spokesperson said: “There are many benefits to registration with the Office for Students. In common with many regulators, we require those higher education providers we register to pay registration fees. The level of fees, and the various exemptions that apply, were widely consulted on by the Department for Education. We will continue to work as an effective and efficient regulator, ensuring that all funding we receive is well spent.”

In May, Tes revealed that 19 colleges offering higher education courses were still waiting to be registered with the OfS, only months ahead of the new term.