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Introduction and aim
This briefing note focuses on the statutory and regulatory requirements that higher education institutions (HEIs) need to comply with. The role of governors and governing bodies is to ensure that the institution is successfully meeting these requirements, and if this is not the case to ensure appropriate action is taken.
The legal frame
The legal context to higher education comprises largely of two elements: the specific body of law applying to higher education institutions (HEIs), and those parts of the general law that affect their operation and activities. Collectively, the two form the ‘legal frame of reference’ by which HEIs operate.1 Governors need to be aware of the specific body of law applying to HEIs, as the application of general statue law.
Although their precise legal form varies, HEIs are generally constituted as a separate legal personality, distinct from the individuals who are their employees. This enables them to enter into contracts or engage in litigation. ‘Public’ HEIs in the UK are independent entities operating for public benefit. In addition to ‘public’ HEIs there are also ‘alternative providers’ constituted by a variety of legal forms.
Legislation and HEIs
There is a plethora of legislation applying to HEIs. This has developed in some areas over a long period time and for a variety of reasons.
A. Statue law specific to higher education – eg the Further and Higher Education Act 1992. The specific laws relating to higher education has led to:
B. General statute law, for example, influences all of the following areas:
Consumer protection law
Consumer protection law (CPL) applies to the relationship between HEIs and prospective or current (undergraduate) students. It sets minimum standards that apply to various aspects of the relationship – notably provision of information, terms and conditions and complaints handling – and sits alongside more sector-specific regulatory obligations.4
Institutions who do meet the minimum standards of CPL are likely to be in breach of the law and at risk of prosecution. Governing bodies need to assure themselves that the institution is compliant with the most recent guidance produced by the Competition and Market Authority, whose role is to promote competition for the benefit of consumers.
There continues to be speculation that, particularly in England following the introduction of the new fee regime in 2012/13, students will increasingly seek legal redress if they believe they have been mislead as to the nature or the quality of the learning they receive. Future students may be more likely to see themselves as consumers of higher education, rather than co-producers of learning. Certainly government policy has been focused on helping prospective students make better informed choices between courses and institutions as part of their desire to create a higher education ‘market place’. Consequently, higher education providers need to be increasingly mindful of their legal responsibilities and the potential actions that students could take. Governors should seek assurance from the executive that, for instance, prospective students are not receiving misleading information at Open Days, as a result of marketing literature and from information on the institution’s website.
Managing legal risks
The law affects for example, the HEI’s relations with its staff, students, contractors, funding council and collaborative partners. In each case it is important that the institution identifies the risks and takes appropriate action to manage these risks. Specifically, governors need to assure themselves that the institution:
Avoiding legal action
Attention should focus on having in place appropriate policies and procedures, which reduce the risk of the institution being the subject of legal action, or having to purse litigation in order to seek redress as a result of, for example, a supplier failing to honour a contract. Should legal action occur not only are there the financial costs to consider, but frequently there are ‘hidden’ costs in relation to management time and not infrequently employee stress. There may also be significant reputational risks, even in situations where the institution’s position is ultimately vindicated.
Regardless of the outcome to any legal action, governors should ensure the institution has thoroughly reviewed the circumstances that led to the issue arising and such lessons as might be learned have been absorbed, and that any required changes to institutional policies and processes to prevent a reoccurrence of the issue in the future have been adopted.
A key element to managing potential legal risks is to ensure there is widespread awareness and understanding throughout the organisation, and appropriate practice is embedded within the HEI. This is can be a challenging task, requiring often, amongst other things, staff training and persistent reminders. It may, in some circumstances require traditional forms of practice to be replaced by new ways of working. In large, and frequently devolved, HEIs effecting change can be a challenge.
Obligations detailed in higher education codes
The Higher Education Code of Governance requires the governing body to ‘seek assurance that the institution meets all its legal and statutory requirements imposed on it as a corporate body, including through instruments of governance such as statutes, ordinances and articles.’ The code recognises regulatory and legal requirements vary according to the institution’s constitutional form, and that most members of governing bodies are also charitable trustees.5 Similarly, the Scottish Code of Good Higher Education Governance states ‘the governing body shall ensure compliance with governing instruments of the institution, as well as other appropriate legal obligations including any arising in connection with its charitable status.’6 Further, the governing body should regularly review the action taken to ensure compliance to be sure the institution is conforming to good practice.
The governing body’s role in relation to meeting its statutory and regulatory requirements is one of gaining assurance (ie. being confident) that the institution is meeting all of the requirements placed upon it. These include those requirements placed on the HEI by its funders – as detailed, for example, in the financial memoranda of its funding council, including, for example, the management and quality assurance of data returns.
The number and breath of requirements placed on institutions raises the question of how can governors feel confident that the institution’s statutory and regulatory requirements have been met?
Oversight of institutional returns
In an attempt for the governing body to feel confident that the institution is meeting the statutory and regulatory requirements placed on it, increasing numbers of institutions are undertaking ‘assurance mapping’ by drawing up a list of the returns made by the institution. Typically lists include the name of the return, its purpose, which area of the institution is responsible for compiling the return, who signs-off the return, the receiving organisation and the date of submission. In addition, the list is often made ‘live’ by adding further columns to allow information to be added as to whether the return has been accepted by the receiving body, and if any issues relating to the data submitted have been raised. The list allows the governing body, often delegated to the Audit Committee, to have an oversight of the totality of returns made by the institution. Monitoring the list also provides the opportunity for Audit to identify returns its wishes to examine in detail. As a result Audit may, for example, request that the institution’s Internal Auditors audit a specific return.
Questions to consider
End notes and further reading
Associate Director, Governance
Aaron Porter was appointed as Associate Director, Governance at the Leadership Foundation (LF) in January 2014. He is also a higher education consultant and a freelance journalist, having previously been president of the National Union of Students (NUS) in 2010 – 2011. He is also an associate for the LF and the Higher Education Academy (HEA), on the advisory network for the Office for Fair Access (OFFA) and CFE research and consultancy alongside a number of other portfolio roles.
During his high profile term at NUS, he was the first NUS President to be invited as an observer to the board of the Higher Education Funding Council for England (Hefce) and to address the annual Universities UK Conference in September 2010. In addition he served as a non-executive director on the boards of UCAS, the HEA and Endsleigh Insurance. He also co-chaired the Beer/Porter Student Charter group which reported to Higher Education Minister David Willetts in January 2011, and was a member of the Hefce Online Learning Taskforce and the review of External Examiners chaired by Dame Janet Finch both conducted in 2010/11.
Previous to his term as NUS President, Aaron served two successful terms as NUS Vice-President (Higher Education), helping to build NUS’ reputation with the sector. He also served as a non-executive board member for the Office of the Independent Adjudicator (OIA) and on the board of the European Students’ Union (ESU). He was also a member of the Burgess Implementation Steering Group and the National Student Survey Steering Group. In 2009, he was part of the UK delegation to the European higher education ministerial summit in Leuven, Belgium.
Aaron studied BA English at the University of Leicester and graduated in 2006. He then spent two years as a sabbatical and trustee of the students’ union, he was also the founding chair of Unions94 (the students’ unions of the 1994 Group). As a student he was editor of the student newspaper, ‘The Ripple’.
Governance Web Editor
David Williams is Governance Editor for the LF website. He has over 25 years experience of working in higher education, as both as an academic and senior manager. During this time he has worked closely with governing bodies, contributing to, and supporting their work
in a variety of ways.
As Governance Editor, David works with the wider LF community and its members to ensure the governance website offers a repository of information and signposts recent developments in the field on governance.