Who suffers if leading universities opt out of the TEF?

One issue is that people seem to assume that because TEF includes the words 'teaching' and 'excellence' that it has anything specifically to do with either. It is a governmental bureaucracy's characterization of teaching excellence just as the REF is a bureaucratic definition of research excellence. I grew up in the US system and only taught MBAs, Executive MBAs and Executive Programmes and I can say without a doubt that TEF would measure none of the things that mattered to whether teaching was 'excellent' and there is little or no value in making comparisons across institutions that are in no way shape or form either in competition for students or would provide valid comparators when it comes to any single institution's calibration of its performance. It also assumes that if the government does not ensure that students get 'value for money' in a regulatory sense that the market will fail them, when there is every incentive for the best institutions to reveal just how good they are. When I taught at Chicago, Vanderbilt and UCLA we had teaching ratings long before they became normal outside the US and there was no government regulator defining what teaching excellence was. You hired good teachers, you promoted people who taught well (conditional of course on their being excellent scholars as well) and you allowed institutions to use the measures that mattered most to their specific cohort of students to do it in a manner that was best. In other words, you trusted those responsible for the students to do well by them knowing that failing to do so had market consequences. What TEF does is say to institutions, "we do not trust you" just as REF says the same about research. I jokingly ask periodically why we don't have AMEF (Academic Management Excellence Framework) where some agency measures not just REF and TEF but how well academic managers and administrators manage REF and TEF. One of the real problems with all of these systems is that they are designed by bureaucracies and executed by administrators/managers (and invariably those that do neither research or teaching or did it in the far reaches of time gone by) who believe that they know more than those doing the research/teaching about what excellence implies. A second issue with these systems is that there is very little line of sight from the measures to specific actions that are meaningful other than to mindlessly try and push the numbers (e.g., putting in reward systems that give something to those that help the administrators hit the numbers or hiring in categories that the framework measures), invariably leading to whole new internal bureaucracies focused on generating what the REF or TEF appears to want to demand. It is good that universities are pushing back on this to some degree. Every £ spent on the systems and every hour of time wasted on these exercises is money and time not being devoted to what matters. For example, despite the REF and equivalent exercises elsewhere, the institutions involved have not risen in terms of their excellence. The best institutions draw the best scholars and students and continue to do so regardless of how they are measured because they compete in a clear market for excellence. Those institutions lower down the food chain simply remain lower down the food chain but now with additional administrative burdens that help no one other than the bureaucracies they create.