The High Court has thrown out the Office for Students’ attempt to fine the University of Sussex £585,000, delivering a stinging rebuke that has left England’s embattled higher education regulator facing questions over its competence and its motives.
Mrs Justice Lieven ruled that the OfS’s decision to impose the fine – the largest it had ever attempted – was “vitiated by bias” and that the regulator approached the matter with a “closed mind”, having “unlawfully predetermined the decision”. The judge found that the OfS misapplied concepts of freedom of speech and academic freedom, exceeded its regulatory powers, and refused to consider changes that Sussex had already made. Crucially, the case did not examine the substance of what happened to Professor Kathleen Stock; it focused solely on the legality and fairness of the OfS’s process.
An attempt to use Sussex as a ‘tool’ for the sector
The court’s ruling exposed the OfS’s eagerness to make an example of the University of Sussex. The judgment indicated that Susan Lapworth, the OfS’s then chief executive, wished to use Sussex as a “tool to incentivise the rest of the sector” and to send a “strong signal about the importance of freedom of speech”. This ambition backfired spectacularly. Instead of teaching Sussex a lesson, the regulator ended up with a bloody nose and a humiliating court defeat.
The University of Sussex welcomed the ruling as vindication and called for urgent talks with the Education Secretary, stating that England’s universities needed a regulator that works “with the sector, not against it”. Professor Kathleen Stock had resigned from Sussex in October 2021 after protests and controversy over her views on gender identity and transgender rights. She said she felt ostracised and targeted. Student protests, posters and graffiti calling for her dismissal preceded her resignation, and the University and College Union’s Sussex branch called for an investigation into institutional transphobia. Stock, who was awarded an OBE in December 2020 for services to higher education, maintained that gender identity should not outweigh biological sex in law and policy.
Systemic failures beyond the Sussex case
The OfS’s problems, however, go far deeper than a single lost case. Critics argue that the regulator has been “asleep at the wheel” for years, failing to act proactively or promptly on a series of serious issues affecting students. In 2023, The New York Times exposed a number of profitable higher education colleges in England that offered students with few qualifications access to student loans, with numbers enrolled having rocketed in recent years. The OfS’s response at the time was that it was “working to improve partnership data to help improve regulation”.
Perhaps the most damning example of the OfS’s slowness concerns the University of Greater Manchester, formerly known as the University of Bolton. Phil Brickell, the Labour MP for Bolton West, went public at the end of last year accusing the OfS of being “asleep at the wheel” in its regulation of the institution. The Manchester Mill, a local news outlet, began reporting in February last year on allegations of bullying, financial irregularities and attempts to divert tuition fees. Greater Manchester Police began investigating “suspected fraud and bribery” in March, and the vice-chancellor, Sir George Holmes, was suspended by the university’s board in May. It was not until December that the OfS announced its own investigation. Brickell questioned why a police investigation was needed to trigger regulatory action and how many students were left exposed during the OfS’s hesitation.
Meanwhile, the entire higher education sector in England is in financial turmoil. Departments are closing, academics are being made redundant, and undergraduate tuition fees have been frozen since 2018, creating an unsustainable reliance on international student fees. The OfS’s response has been to make vague and disturbing statements about scores of institutions being at risk of “exiting the market”, leaving current and future students in the dark. In recent years, the government has refocused the OfS’s efforts on monitoring financial sustainability, and the regulator has embedded a rigorous approach to identifying and intervening with institutions at significant risk. But the OfS is not a funding body in the same way its predecessor, HEFCE, was, and critics say it lacks the tools – and the will – to tackle the sector’s core problems.
A 2023 report found that while the OfS’s duties are generally clear, it has significant freedom to prioritise them, leading to uncertainty. Concerns have been raised about regulatory duplication, a lack of independence from the government, and a “controlling and arbitrary approach to regulation”. There is also a perception that the OfS’s definition of “the student interest” aligns with ministerial political priorities rather than genuine student needs. The regulator has been accused of micro-managing issues like freedom of speech and sexual harassment, which could be better handled through effective governance review and best practice dissemination.
New leadership, same old challenges
The OfS’s bumbling largely took place under previous management. Susan Lapworth, the chief executive who initiated the Sussex investigation and whose tenure saw the OfS develop its regulatory approach and expand its powers, stepped down at Easter 2026. Josh Fleming served as interim chief executive from April 2026. From June 2026, the regulator will be led by Ruth Hannant and Polly Payne as joint chief executives. Both have extensive senior experience in government, including as directors general and directors of higher education, and have a long history of job-sharing in senior civil service roles. Their challenge will be to do some regulating where it is needed and to rebuild the OfS’s relationship with the sector.
For the University of Sussex itself, the financial picture is mixed. For the financial year ending 31 July 2024, the university had total income of £379.6 million and total expenditure of £291.3 million, giving it an operating surplus. Its income is primarily from tuition fees, which totalled £224.6 million. However, a report by Sussex UCU in April 2024 raised concerns about the University Executive Group’s strategy of “debt-driven expansionism over academic vision, the welfare of its employees and students, and the long-term sustainability of the institution”. In 2017, the university took out £100 million in loans, with restrictive contracts requiring a cash surplus until 2044. In November 2024, Sussex was reportedly planning to make around 300 staff redundant as part of cost-saving measures, exacerbated by falling student numbers – particularly international students – and inflation, alongside “ineffective, and at times incompetent, institutional management”.
