The former journalist and free school advocate Toby Young is among a group of business executives who are to help head the government’s drive to apply market forces to higher education in England, as new laws come into force that will regulate universities in the same way as water or gas utilities, according to ministers.

Jo Johnson, the minister for higher education, hailed the new Office for Students (OfS) – which comes into legal existence on Monday – as the answer to concerns over students receiving value for money for their degrees while taking on increasing debt, and opening the sector up to increased competition.

Johnson, who piloted the laws establishing the OfS through parliament, told the Guardian that the demands of consumers and taxpayers needed a heavyweight market regulator that would actively intervene in the same way as Ofwat or Ofcom in water or telecoms.

“It’s a fundamentally different way of looking at how the sector is regulated. It’s a classic marketing regulator, rather than a funding council whose principle job up until now has been to ensure the sector was suitably funded and the financial sustainability of the sector was assured,” Johnson said in an interview to mark the OfS’s launch.

“This is a regulator that is going to be driving value for money in the provision of higher education. That’s a core concern right now for students who are bearing the cost or a significant part of the cost of their higher education.”

The change is the biggest overhaul in how universities have been regulated in 100 years, and will see Young – an enthusiastic supporter of the government’s education reforms – join the OfS’s board, alongside a former executive of HSBC bank and a managing director of Boots.

Critics leapt on Young’s appointment as a sign that the government was not serious about ensuring that students are at the forefront of the OfS’s role.

“If this organisation was to have any credibility it needed a robust board looking out for students’ interests. Instead we have this announcement sneaked out at new year with Tory cheerleader Toby Young dressed up as the voice of teachers and no actual representation from staff or students,” said Sally Hunt, general secretary of the University and College Union.

The Department for Education defended Young’s appointment. “Toby Young’s diverse experience includes posts at Harvard and Cambridge as well as co-founding the successful West London free school. He will provide vital insight in ensuring universities are working for young people from all backgrounds,” a DfE spokesperson said.

Young is best known in recent years for his successful efforts in opening a free school in west London. He is head of the New Schools Network, an organisation contracted by the Department for Education to promote the opening of new free schools. By joining the OfS’s board, Young is now helping to run the government’s two flagship education policies.

Aside from Young, the new members include Katja Hall, a previous head of public relations for HSBC, Elizabeth Fagan of Boots and Simon Levine, chief executive of the international law firm DLA Piper.

They will join a board chaired by Sir Michael Barber, a former policy adviser to Tony Blair and former executive of Pearson and the management consultancy McKinsey.

The new board appointees include Ruth Carlson, a student at Surrey University, but no representatives from the National Union of Students, which has campaigned for the OfS to have greater student representation.

The education secretary, Justine Greening, welcomed the new OfS board members, saying: “Their experience and skill will be key in ensuring the OfS achieves its ambitions.”

According to Johnson the new regulator is needed to restore public confidence over how universities receiving public funds operate, including restraining high levels of pay among vice-chancellors, freedom of speech on campus, grade inflation and “inconsistent performance” among institutions.

“The sector has expanded very rapidly over the past two or three decades. We are now in the position where almost half of people under 30 are going through higher education. It is entirely right that the sector is accountable for the investment they and the government – on behalf of taxpayers – are making in it,” Johnson said.

The OfS is enshrined in the Higher Education and Research Act, which passed into law after two and a half years of debate, a marathon effort that survived two general elections, changes of government, prime minister and even departments, as well as opposition in the House of Lords.

By April this year the new super-regulator will have fully replaced the Higher Education Funding Council for England (Hefce), the most recent version of the funding bodies that have existed since 1918. Its powers will not apply to institutions in Scotland, Wales or Northern Ireland.



The new regulator’s launch is timely for the government, after discontent emerged during the last election over the size of student debt, ballooning to close to £50,000 for the average student in England since undergraduate fees rose to £9,000 a year in 2012.

Critics such as the Labour peer Andrew Adonis have berated the sector over costs and high pay for university leaders, while a recent report by the National Audit Office (NAO) issued strong criticism over value for money and argued that some universities were guilty of mis-selling their courses.

But both critics and supporters of the new regime wonder how effective the OfS can be, as its remit fails to cover several hundred unregulated private providers operating in England, and only provides minimal oversight to a further 100 “basic” institutions paying the minimum £1,000 to register with the OfS.

The Russell Group of leading research universities has complained that the toughest OfS regulations will apply to the most stable institutions, such as the universities of Cambridge or Manchester, which are the least likely to cause problems.

Others worry the OfS will be vulnerable to political pressures from the government similar to those seen in the National Health Service. One previous administrator, asked what the OfS would focus on, replied: “Whatever issues are current in six months’ time.”

Nick Hillman, head of the Higher Education Policy Institute and a former government special adviser on higher education, said his biggest concern was the OfS’s ability to supervise the hundreds of unregulated and basic providers.