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Crisis, what crisis?

Last week's Federation of Awarding Bodies conference was an eye-opener. But not for the reasons you may think.

What’s the diagnosis? Ofqual, England's exam regulator, presented a paper claiming a number of UK exam owners are loss-making, their financial resilience was under pressure, and just under 50% of the regulated market expects worsening finances.

Aside from higher education, the exam sector is a UK plc success story. Qualification exports have increased by 38% in 3 years, apprenticeship assessment and English language exams are booming. UK exam owner revenue has increased 35% from £5bn to £6.8bn since 2014, with some heroes delivering mid-to-high double digit percentage revenue growth since 2014. But others have stagnated. 25% of UK exam owners have contracted in that time.

How has this happened? Apprenticeship assessment has witnessed provider failures, as small businesses grapple with regulatory demands. But other high-profile exam owners have seen common failures including: inappropriate or absent digital strategies, clinging to direct (but decreasing) government funding, mystified by exporting, muddled assessment strategies and practices, and laissez-faire attitudes towards data and exam security.

What’s the prognosis? Confidence is everything to qualifications and exams. Merger and acquisition of exam owners needs to accelerate, as does sun-setting of failed businesses. A remedy of higher quality barriers for new entrants, greater rewards for success, but also more appropriate disincentives for poor service and failure. While the average UK inflation rate since 2014 is 2.5%, the compound rate since then is 21.8%. So, if a business is not growing beyond this rate, it’s falling behind: letting down learners and the wider sector.

What should we expect? Too many undercapitalised exam owners are chasing competitors that have superior governance, systems, digital strategies, and market presence. With a handful of exceptions, this isn’t a place for disruptors. Simply, there are too many claiming to be unique, but are offering too little. With persistent UK economic turbulence, not every exam owner will improve their finances, and will expend too much management time addressing weakening resilience. We should expect rationalisation, but also success acceleration, for those who are prepared.

Gloomy predictions are often overlooked when a sector is busy cheerleading. While "Crisis, what crisis?" may hark from a bygone era, it's a harsh lesson that bears revisiting. In an era of increasing digital delivery, it was hugely ironic that it took an in-person conference to capture this critical sector moment.


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