Condition E10: OfS Introduces New Subcontracting Rules for Higher Education Courses

Why the OfS has introduced Condition E10

In Autumn 2025, the Office for Students (OfS) undertook a consultation on subcontractual arrangements in higher education, usually known as franchising, in response to concern about some of these operations and about the quality of some of the courses on offer.

As a result, the OfS decided to consult on a proposal to introduce a new condition of registration.

We published our response to the consultation in September 2025 – our overall view was that there were elements of the proposals which went too far in seeking to formalise arrangements to mitigate the identified risks.

What the OfS decided after the consultation

The OfS has now published the results of its consultation and it is pressing ahead, much as planned, with the new condition coming into force at the end of March 2026.

New Condition of Registration, E10: Subcontracting is very much as per the original consultation with the only significant change being the decision not to proceed with the creation of a specific OfS direction, a “subcontractual arrangement direction” or SCD.

As we had observed in our response, such a move would have been unnecessary as the OfS already held the necessary powers.

Practical steps for complying with Condition E10

Lead providers have an overarching obligation to ensure that any risks to the interests of students and/or taxpayers posed by its subcontractual arrangements are effectively identified and addressed.

In particular, the OfS requires providers to develop and maintain a single Subcontracting Information Source (SIS) setting out how such arrangements are governed and monitored, and ensure operational practices align with the SIS.

Providers generally have until 30 June 2026 to develop and implement their SIS. However, the OfS guidance indicates that where a provider enters into a new subcontracting arrangement or materially amends an existing arrangement after 31 March 2026, it should already have a developed SIS in place and ensure that the contractual arrangements are capable of operating in accordance with it.

This means providers considering new subcontracting activity (or varying existing arrangements) may need to bring forward their development of the SIS.

Scope and Strategy – Determining how Condition E10 applies to your institution

A useful early step for providers is to establish whether they fall within the scope of the new condition.

The condition applies to registered providers that have or expect to have 100 or more students studying through existing or future subcontractual arrangements in a given academic year. This requires providers to take a clear view of what constitutes subcontracted delivery.

Providers should therefore undertake a fresh mapping exercise to identify:

• all partnership arrangements involving third-party delivery of their courses;
• the number of students studying through each arrangement; and
• the contractual structure underpinning those partnerships.

Executives and governing bodies are likely to take this opportunity to step back and consider the bigger picture too. Do all of these partnerships serve the long-term strategic interest of the institution? Are the quality assurance arrangements sufficiently robust to ensure compliance with the new condition or has the risk level increased unacceptably?

It is important to note here that the new condition does not apply to all subcontractual arrangements, and some are explicitly excluded, including:

• FE Colleges;
• NHS providers;
• local authorities;
• the police service;
• government departments; and
• activities overseas.

Review and update contractual arrangements with delivery partners

Institutions should review the contractual framework governing their subcontractual arrangements. Contracts with delivery partners should, as a minimum:

• enable the lead provider to monitor the quality of teaching and assessment;
• assess recruitment practices;
• access and verify relevant data relating to student performance;
• conduct audits of the partner’s operations; and
• intervene or terminate where standards or compliance requirements are not being met.

Contracts may also permit the provider to publish certain financial information in their accounts as prescribed in the updated Regulatory Advice 9.

Where contractual terms do not clearly support the level of oversight expected by the OfS, institutions may need to consider amending existing contracts or strengthening governance arrangements within such partnership frameworks.

Review governance and oversight structures

Executive teams may wish to explore whether their current arrangements provide sufficient visibility and oversight of subcontracting arrangements by reviewing:

• how subcontracting arrangements are reported to their governing bodies;
• whether appropriate committees oversee subcontracting arrangements to ensure quality and standards; and
• how risks relating to subcontracted delivery are captured within institutional risk management frameworks.

Review recruitment practices and incentives

It’s important for institutions to review how students are recruited by delivery partners, including the:

• use of recruitment agents,
• associated financial incentives and;
• level of oversight exercised by the lead provider over such recruitment practices.

Monitor student outcomes

In reviewing all these activities institutions should compare the continuation, completion and progression outcomes of students across subcontracting arrangements with outcomes they deliver directly and address any material discrepancies.

What your Subcontracting Information Source should include

The central element of Condition E10 is the requirement for lead providers to develop and maintain the SIS, which must provide a clear description of how subcontracted delivery is governed and overseen by the lead provider.

OfS’ publication on ‘Subcontracting Information source minimum content requirements’ sets out the core areas the SIS will need to address.

• the strategic rationale for subcontracting, including how student needs are prioritised over financial considerations;
• the vetting processes used to approve delivery partners; and
• policies and procedures relating to matters such as admissions, use of recruitment agents, complaints, whistleblowing, conflicts of interest, teach out arrangements and student protection plans.

Compiling the SIS will require input from many parts of an institution. Therefore teams should begin coordinating this work early to ensure that the document can be completed and approved in time.

As noted above, the deadline for this is 30 June 2026 for existing arrangements, with new activities from 31 March 2026 onwards having to be compliant from the outset.

Updated OfS reportable events guidance for subcontracting

In addition to the new E10 Condition, the OfS has also revised its guidance on reportable events as prescribed in the updated Regulatory Advice 16.

Essentially this update adds a new section to the reportable events advice (although to be clear this is much more direction than simply advice) covering subcontractual arrangements. This section comprises 10 examples of circumstances relating to subcontractual matters where changes would constitute events reportable to the OfS.

These range from the launch of new subcontractual activities to significant alterations in scale or major changes to existing contracts to a range of problematic issues such as fraud, academic misconduct or negative audit findings.

Planning your approach to the new requirements

The specific work necessary to address the full requirements set out in the 18 pages covering the new condition and associated guidance is not insubstantial. But it is also important that leadership teams take this opportunity to reflect on their strategic goals in relation to subcontracting and to review their risk appetite in the light of the new regulation.

If you are reviewing your subcontracting arrangements or preparing your Subcontracting Information Source, our experienced education team can help you work through the practical and regulatory considerations.

Early advice can be particularly valuable if you are entering into new partnerships, updating contracts or planning a strategic review of franchising activity.

Please get in touch if you would like to discuss your institution’s position or need support with the steps required under Condition E10.

This content is provided for general informational purposes only and does not constitute legal advice. It is not intended to address the circumstances of any individual or entity, nor should it be relied upon as a substitute for specific advice from a qualified solicitor. The information reflects the legal position as at the date specified and may be subject to change. If you require advice on a specific matter, please contact us directly.