Regulating higher education institutions as charities

On 1 June 2010 HEFCE became the principal regulator of those higher education institutions (HEIs) in England that are exempt charities. All but 19 HEIs fall into this category. This is a new legal obligation, and our existing functions as the main funder of higher education in England are not affected.

This new responsibility results from the Charities Act 2006, which implements a government decision that all charities should be subject to regulation. Although they were expected to comply with charity law, exempt charities were outside the scope of the Charity Commission's regulatory powers. From 1 June 2010, the exempt charity regulation provisions of the 2006 Act came into effect for HEIs, and they are now subject to the Charity Commission's powers.

HEFCE is one of several principal regulators, some yet to be appointed. All principal regulators have the duty, as far as they reasonably can, to promote compliance with charity law by the exempt charities for which they are responsible. This will require regular monitoring and occasional more detailed work, including liaison with the Charity Commission on complex issues that might need the use of its powers.

Memorandum of Understanding with the Charity Commission

HEFCE has agreed a memorandum of understanding with the Charity Commission. Its main purpose is to describe how the two organisations will work together. It includes a table setting out the Charity Commission's protection and support powers, and lists all of the exempt charity HEIs which fall within HEFCE's role as principal regulator. To prevent confusion the memorandum also lists the HEIs that are registered charities and that will continue to be regulated by the Charity Commission.

Memorandum of Understanding

[ Download Memorandum of Understanding with the Charity Commission as Adobe PDF 119K ]

HEFCE's information requirements as principal regulator

The consultation about our information requirements as principal regulator closed on 12 March. A report on the consultation outcomes will be published shortly.

We have incorporated our decisions about information required from the HEIs that are exempt charities into the 2010 version of the Financial Memorandum between HEFCE and the institutions it funds, which will be published on 1 July. Most of the new requirements will apply to 2009-10 reporting, so before the end of June we will also issue a revised Accounts Direction for that year. Over the coming weeks we will be publishing additional guidance on this web-site, along with answers to frequently asked questions.

We have incorporated most of the new information-gathering and review into our existing processes; we do not expect the new regulatory regime to be onerous for HEIs.

Further information

This part of HEFCE’s web-site provides information about our new role and about related topics, as listed below. By 2011 it will be expanded to provide information about HEIs as charities, similar to that published by the Charity Commission in respect of the charities that it regulates.

Charities Act 2006
Aspects of charity law and regulation of most direct interest to the higher education (HE) sector
HEFCE as principal regulator
Powers, functions and processes for the new role; guidance on reporting requirements; FAQs
Good practice guidance
Links to guidance on charity law and good practice relevant to the HE sector, published by HEFCE, the Charity Commission and others

We have established a mail group which we will use to communicate news about developments directly to subscribing HEIs and their advisers.

The index to this section provides a full list of topics covered.

Sector impact assessment

In developing our role as charity regulator for HEIs, we have undertaken a formal assessment of the impact it will have on the HE sector in terms of regulatory burden, equality and diversity, and sustainable development.

Sector impact assessment: HEFCE as charity regulator

[ Download Sector impact assessment: HEFCE as charity regulator as Adobe PDF 26K | Download Sector impact assessment: HEFCE as charity regulator as MS Word 107K ]

Last updated 1 June 2010