The Secretary of State for Education (Gillian Keegan)

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I beg to move, That the Bill be now read a Second time.

Everyone has a different reason for being passionate about education, but most of us can point to that time in our lives which changed our lives: the excitement when maths began to make sense, the thrill when we found a subject that we really loved and were good at, or the pride that came when a life-changing teacher showed that he or she believed in us. I have spoken in this place before about my first moment of that kind, when my teacher, Mr Ashcroft, stayed late after school to help me take extra O-levels in engineering and technical drawing, which he continued to do for two years. His belief in me changed my life. Thanks to Mr Ashcroft, I was able to be accepted for an apprenticeship in a car factory, which was the golden ticket to a different life. But I have spoken less here about the second moment, and the third, and the fourth. I was lucky in that my education started there, but did not end there.

I have been lucky enough to benefit from truly lifetime learning throughout my jobs. I was able to go back and study in both my 30s and my 40s. From that, I have learnt a simple truth: offer people a hand up, and they will take it. However, while we excel at educating people in their younger years, too often we do not offer the same support once they are off the beaten track. Education is an opportunity—it is the ultimate levelling-up tool, the closest thing that we have to a silver bullet when it comes to improving lives—and it is always good to have more than one shot, as many things will change throughout our working lives. We have pledged to level up the country so that everyone gets the education that will enable them to seize the opportunities that come their way. I take that pledge extremely seriously, and that is why I am so proud to present this Bill to Parliament today.

Gillian Keegan

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Absolutely. I can assure the hon. Gentleman of that, as someone who went to a comprehensive school in Knowsley, a deprived white working-class area. Most of my schoolmates did leave school without many qualifications, and this is exactly the kind of opportunity that will be there for them many years later. They will be given that helping hand and, hopefully, take it.

Gillian Keegan

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Absolutely. It is important that lifelong learning continues to be accessible to many people. Sadly, we have heard of cases where people are not diagnosed during their time in school, and it is even more important that those opportunities are always there for them.

The Lifelong Learning (Higher Education Fee Limits) Bill is one step further in our mission to revolutionise access to higher and further education with the introduction of a lifelong loan entitlement, otherwise known as the LLE. As the Minister for Skills, Apprenticeships and Higher Education, my right hon. Friend the Member for Harlow (Robert Halfon), says, the LLE will ensure that everybody has a flexible travel card to jump on and off their learning journey, as opposed to being confined to a single ticket. It is hard to overestimate the transformative effect that this legislation could have. Through the Government’s wider skills agenda, we have built the engine to help to transform our technical education system. We are doing this by expanding the number and quality of apprenticeships, by growing technical routes into work and by creating innovations such as boot camps. These reforms mean that the engine is ready, but it needs accelerator fuel and that is what the LLE is. It is the way we will deliver on a simple promise: if you back yourself, we will back you.

The Bill will adapt the student finance framework, making different types of study more accessible and more flexible. This is chiefly because it will enable meaningful fee limits to be set on periods of study shorter than a year. It will no longer be the case that the only ticket to further or higher education is through a three-year degree. Money talks, and there is often talk about parity of esteem. This system delivers parity of esteem. What this means in practice is that modules and short courses, as well as traditional degree courses, will be priced according to the amount of learning they contain. This will create a fair, more flexible system and go a long way to encourage more people into post-18 education.

Gillian Keegan

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Subject to the consultation, there will be. I think that there are some age limits at the top end in the student loan scheme today.

Gillian Keegan

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Yes, there have been occasions when some people may have felt that the value of the course they were on did not match the aspirations or expectations they had on their way into it. Obviously it can help if courses are shorter in length and there are more options to get to the career routes that many people are seeking.

As someone who studied part-time at college and at university I really appreciated the flexibility, but too often the system today tries to fit people into a box rather than adapting to their needs. That is why this legislation and the flexibility it brings will be of special benefit to students who need flexible study options—for example, those from disadvantaged groups or those who have caring responsibilities. Let me give some extremely practical examples. Take Alice, who is ambitious and wants to move into management but has not yet got the skills to do so. By using the lifelong loan entitlement, Alice can fund a module of learning to take that important next step, studying part-time so that she can stay in her job, earning while she is learning.

What about Ed? He has worked for the same company for 20 years and feels as though he is stuck in a rut and going nowhere. Luckily, Ed can use his LLE to enrol on a course that focuses on a growth area of the company he works for. He hops in and out of the training when he can and he is eventually able to break out of his rut and get himself promoted. Finally, Amy uses her LLE to study for a three-year degree to build a career in engineering, but because after 10 years in work, new technologies mean that she is not as skilled as she needs to be, she uses her remaining LLE entitlement to do a module that refreshes her skillset. She is then able to get a better job that makes use of that.

Gillian Keegan

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I am afraid my hon. Friend is a little ahead of me. This is a subject of the consultation, to which we will respond before Report.

Our education system should have this kind of flexibility at its heart, and through the LLE it will. The fee limits for all courses are currently set per academic year of a full course. Without action, the fees for modules or short courses could be set too high, which would put anyone who wants to study flexibly at a disadvantage, wasting our golden opportunity. It is the polar opposite of what the LLE should be trying to encourage.

This Bill addresses the lack of fairness in how learners choose to study, by introducing a new method for calculating fee limits. This Bill will do three key things. First, it will enable tuition fee limits to be based on credits, which are already a popular measure of learner time and will enable fee limits for all types of courses to be set consistently and appropriately.

Secondly, this Bill will introduce the concept of a course year, rather than an academic year. This will allow charges for short courses and modules to be set with greater accuracy. Finally, this Bill will allow the Secretary of State to set a cap on the total number of credits that can be charged for each type of course. This will prevent modules from being premium-priced.

Ultimately, this Bill will help to ensure that everyone, no matter their background or career stage, will have access to life-changing skills and training. The LLE will transform access to post-18 education and skills, and it will provide learners with a loan entitlement equivalent to four years of post-18 education, which is £37,000 in today’s fees. Learners will be able to use the LLE over their working lives. It will be available for both modules and full courses in colleges, universities and institutes of technology.

Gillian Keegan

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Yes, absolutely. That is why we sometimes see people take a level 4 or 5 apprenticeship course after completing their degree to get the skills that are useful in the workplace. Both full-time and modular options will be available.

The LLE will help people to get the skills they need for the jobs of the future, to build the energy resources, to lay the broadband fibre, to deliver the high-quality social care and to train the teachers and nurses we need. Some of us were fortunate enough to have the right opportunities at the right time, but others were not so lucky. That is what I want to change, because everyone should get that opportunity, regardless of where they are from, the decisions they have taken or even the courses they have chosen in the past.

We believe that the LLE will create a more streamlined lifelong funding system that benefits everyone—learners, employers and the economy. It is estimated that at least 80% of the workforce of 2030 are already in work today. They will need the opportunity to upskill and reskill over their career to progress and adapt to changing skills, needs and employment patterns. The LLE presents everyone with life-changing opportunities to get the skills training they need to retrain, upskill and progress.

I assure my hon. and right hon. Friends that we have consulted widely on how the LLE will work, who is eligible and how to support them. We are considering the contributions to this consultation, and we intend to publish a full response ahead of Report on the wider policy and design of the LLE. My hon. Friend the Member for Meon Valley (Mrs Drummond) has a great interest in this, I am sure.

As we move forward to delivery from 2025, we will continue to talk to representatives from across the education sector, as well as key delivery bodies, such as the Student Loans Company, to create a flexible and streamlined system that responds to the needs of the economy.

Too many businesses are struggling to find people with the right skills for their job vacancies, while school leavers and learners are often baffled by a skills system that is complex and bureaucratic. That means that companies cannot find the workers they need, people cannot progress and the country is stuck in a productivity quagmire. We have people who want to work and companies that want to hire them, but we need the LLE to ensure that the workers of today have the skills for tomorrow. We need learners to be able to upskill and retrain flexibly throughout their working lives as their circumstances and needs change. By offering funding for shorter periods of study, the LLE will help those who may have been put off studying because they thought the fees were too high or the living costs would be too expensive.

This legislation supports the Government’s pledge to introduce the LLE from 2025, building on the Skills and Post-16 Education Act 2022. It also furthers Sir Philip Augar’s independent review of post-18 education in 2019, which included the recommendation that the Government introduce a lifelong learning allowance. Through the LLE, we aim to introduce a more streamlined, efficient and flexible learning system that is fit for the future and brings further and higher education providers closer together. The LLE will transform access to post-18 education, presenting opportunities to retrain, progress and excel throughout an individual’s working life.

This Bill may seem small and technical, but its impact will be far-reaching. We need more coders, doctors, nurses, teachers, technicians and builders—more of most things—and I am certain the British people will answer the call, if only we give them the tools and training to do so. Establishing the LLE may be one small piece of legislation, but it is one great step for life chances and social justice. I am a Conservative because I believe in equality of opportunity—because I believe that what matters is where someone is going, not where they have come from. For that reason, I commend this Bill to the House.

Mr Robin Walker (Worcester) (Con)

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I very much welcome the Second Reading of this important legislation and the broad principle of extending the Government’s support for further and higher education to more people through a lifelong learning entitlement. It is a pleasure to follow the thoughtful and constructive contribution from the hon. Member for Warwick and Leamington (Matt Western), who raised some genuinely valid questions. I am grateful to my right hon. Friend the Minister for Skills, Apprenticeships and Higher Education for the briefing he provided ahead of the debate to members of the Education Committee, which I chair.

The Bill is an important step in the journey to create what my right hon. Friend has often described as the ladder of opportunity, and it should benefit people across our country and at every stage in life. Making level 4, 5 and 6 qualifications more widely available, and encouraging HE institutions to offer greater flexibility to those pursuing them, are both worthwhile aims. This legislation, if done right, should stimulate greater competition and innovation in the market for lifelong learning. It has been welcomed by the Open University, which has been a pioneer in this space, and it has long-term potential to transform the skills landscape for learning through life.

I generally make it a rule not to bang on too much in this House about my predecessor but two as Member for Worcester—my late father—but I will make an exception in this debate. My late father, who never had the opportunity to pursue his studies beyond what we would now describe as level 2, set out an ambition in his Macmillan lecture about 40 years ago for people to be able to pursue education through their lifetimes. He envisaged a society in which people would be freed by the technological revolution then getting under way to pursue opportunities for education and advancement at any stage in their career. He summarised that opportunity under the heading “Athens without the slaves”—a piece of hyperbole that was much ridiculed at the time and that is commemorated in a lovely Times cartoon we have in the downstairs loo at my mother’s house—which I think recognises the intrinsic value of pursuing education.

My father’s was a generation in which higher education was a luxury withheld from the vast majority of the population.

Mr Walker

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My hon. Friend is absolutely right: there are those who perhaps did not relish being in the classroom at the time. There are also those who go through their whole lives regretting not having had the opportunity to pursue further studies and feeling that they have somehow missed out on something. This Bill should provide a solution for both groups.

As I was saying, in my father’s generation, higher education was available to the few; it was a luxury withheld from the vast majority of the population. However, his generation also recognised that there should be no limits to where aspiration and hard work could take an individual. In his case, they took the lad who left school at 16 and who took his insurance exams while doing his national service to success in finance, politics, the Cabinet and eventually the House of Lords. However, he always recognised that, in missing out on the higher studies and university education that so many of his peers had enjoyed, he and many of his generation lost out on something of real value. He wanted to create the opportunity for people to study later in life, and to keep open the offer of vocational and academic study to adults throughout their lives.

Mr Walker

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I do, and I think that that point has been well made from both sides of the House. With the fourth industrial revolution, there are opportunities for people to reskill—something that the Bill can well support.

The Bill has the potential to be an important step in recognising the vision my late father set out, ensuring that people like him in future generations have educational opportunities that were simply not available in previous generations. Allowing universities to spread the cost of a degree over more units and to have more flexible start dates should allow more people to pursue high-level studies flexibly and on a part-time basis. That, in turn, will help to meet the clearly expressed requirement from employers for more qualified people at level 4 and above.

Making the low-interest loans that are currently available to undergraduates accessible to more people in later life, and for a greater range of courses, should ensure that many more people have the opportunity to pursue studies at a stage in their career that might suit them. That would help people wanting to skill up in order to return to work, and also those for whom the only option for higher study is part time alongside continuing to work. Allowing units of progress on qualifications to be retained and transferred should allow more people to achieve higher qualifications over time than has been the case, and enable learners for the first time to lock in progress with their studies, in a way that was not possible under an all-or-nothing approach. My right hon. Friend the Secretary of State’s analogy of a travelcard, rather than a one-way ticket, is a very good one in that regard.

I recognise the broader range of skills challenges that we face—I perhaps expected to hear more from the Opposition on that topic. My Committee will shortly be publishing our report on post-16 qualifications, and I am also looking forward to supporting the work of the all-party parliamentary group for students on the cost of living for students, which is undoubtedly a matter of significant concern. However, I am strongly in support of what this legislation sets out to do, and of the drivers behind it. I do have a few queries, though, which I hope the Minister can answer fully in his closing remarks.

First, my Committee has recently heard from a range of organisations across the university sector with concerns about the burden of regulation they face from the OfS. I hope the Minister can reassure us that the requirements of the Bill will not be overly onerous and that, rather than increasing the burden of regulation, it will set out to create new freedoms for an independent sector to innovate and compete. Secondly, given that the scope of the legislation covers qualifications at levels 4, 5 and 6, what roles do Ministers envisage for the FE sector, and for partnerships between higher education and FE, as providers for lifelong learning under the new arrangements?

Thirdly and perhaps most importantly, given that the Government have consulted on the details of their proposals but have not yet responded to their own consultation, when can we expect to see the Government’s full response? I join the hon. Member for Warwick and Leamington in urging Ministers to bring that response forward before Committee stage, if at all possible. It would be very helpful for the House’s scrutiny of the Bill if it were able to see the details of that response and how the Bill will operate, rather than the framework itself.

However, the legislation is very welcome in its intent, and I look forward to the Minister’s responses to my questions. As Chair of the cross-party Education Select Committee, I welcome the Government’s intention to support lifelong learning by extending the benefits of student finance to more people. I look forward to supporting the Bill’s Second Reading.

Mr Robin Walker

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My right hon. Friend is making an excellent speech. I could not resist the opportunity to welcome the progress being made on new science and tech labs at Worcester Sixth Form College, which I visited just the other day. The college has been transformed by successive small investments under this Government, while under the Labour Government it got the promise of a complete rebuild under Building Colleges for the Future, which then got cancelled when they ran out of money for their programme. Is that not an example of how we can invest more effectively and productively for our college estate?

The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)

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I thank the shadow spokesman for the Labour party, the hon. Member for Warwick and Leamington (Matt Western), for the constructive way in which he has approached the Bill, and the shadow spokesman for the Liberal Democrats, the hon. Member for Twickenham (Munira Wilson). I knew Gordon Marsden well—he was my opposite number when I last held this post a few years ago. He is a good man and he knows the subject inside out.

The hon. Member for Warwick and Leamington asked about the consultation response. We have said that we will publish it before Report stage. He will know that it is not specifically aligned to the measures in the Bill, but about the wider policy of the LLE. He wants us to introduce the LLE at speed, which is exactly what we are trying to do, but we want to do it carefully and to make sure that we respond to the consultation following all the submissions that we had. As I say, it will be published by Report stage, if not before.

Robert Halfon

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I repeat that the consultation will definitely be ready by Report stage, if not before; I guarantee to the hon. Gentleman that it will be ready by Report.

The hon. Gentleman asked about fee limits. He will know that the Secretary of State can set fee limits as a result of the Higher Education Act 2004. The Skills and Post-16 Education Act 2022 built on that and allowed for flexible and modular learning. That legislation has long roots in the Augar report as well, so the Government have clearly set the direction of travel.

We will be having regular consultation with stakeholders as well. The hon. Members for Warwick and Leamington and for Twickenham asked about the hourly value of credits in the Bill. The Government feel that the number of learning hours in a credit is an area that should continue to be governed from a quality standards perspective, rather than from a fee limits perspective, and we have legislated accordingly. In the Bill, the credits are used to signify the total amount of learning time that a student would ordinarily be expected to spend to complete a particular course or part of a course. However, I can assure both spokespeople that further details on the number of learning hours associated with credits will be set out in the regulations. Where providers choose not to use credits in this way for certain courses, these courses will have the fee limit determined using a default credit value, but they will face no penalty or reduction overall as a result.

To turn to my successor as Chair of the Education Committee, my hon. Friend the Member for Worcester (Mr Walker) spoke quite interestingly about his father. I have read a book about his father, who was a very good man. My hon. Friend talked about the burden of regulation, and our intention is to simplify regulation, not to add to it. Of course, those institutions that offer the LLE will be registered with the OfS. He talked about partnerships between further education and higher education. I absolutely agree, and I think this policy will rocket-boost that. There are already examples, and I can give him the great example of Nottingham Trent University and the college in Mansfield. I repeat that the consultation will be ready by Report.

I have answered some of the questions of the hon. Member for Twickenham, but on the point about the equivalent learner qualification, I can only say that we will be able to tell her when the consultation has been published. However, I hope she will not be unhappy with that, and I appreciate her support. Again, on maintenance, I envisage a similar system to what exists now for the current student loan system, but the full details will be in the consultation on that.

My hon. Friend the Member for Waveney (Peter Aldous) made a very important speech, and he is passionate about further education and about championing it. He is absolutely right about employer investment. That is why we introduced the apprenticeship levy—it is not part of the Bill and it is separate, but it is very important—so that we would have business investment in skills. He talked about the disadvantaged, and he is absolutely right. They will be able to do modules and flexible learning, and they will have more access to courses they want to do than they otherwise would have had. One of the reasons for the decline in part-time learning is the three-year loan, and they will be able to do short courses or modules of courses. [Interruption.] Of course, I will give way. Sorry, I thought somebody was asking me to give way, but it was just my hon. Friend the Member for Lichfield (Michael Fabricant) being very noisy, as usual. I used to work for him many years ago, so I can say that. This will be published in the consultation, but the LLE, as has been highlighted, will concentrate on levels 4 to 6 and it will have a phased approach.

My hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) talked powerfully and spoke about good outcomes for students. Of course I will meet his new college group. On local business involvement in qualifications, that is entirely why we have the local skills improvement plans.

My hon. Friend the Member for Wantage (David Johnston) made a brilliant speech, as is his wont. He will know that we have introduced UCAS for apprenticeships and hope to expand that over the coming months and years. He is right that we should not just have been saying, “University, university, university”, but “Skills, skills, skills”.

I am delighted, as I say, by the positive response to the Bill. Universities UK has said that it is a welcome step with a more flexible system of opportunity at its heart, and I thank all Members who have spoken. As my right hon. Friend the Secretary of State mentioned, the Bill is a major step forward in our mission to revolutionise access to post-18 education and skills through the introduction of the lifelong loan entitlement.

I want to respond to an additional point about the number of adult learners. That number has increased by 4.3% from 2021-22 to 2022-23, and the hon. Member for Warwick and Leamington will know that many adults are now doing apprenticeships and different kinds of adult learning skills.

The Bill has just three clauses, but in supporting the LLE it will transform lives. It will transform the lives of working people on low incomes, it will transform the lives of carers who need to balance their commitments alongside study, and it will transform the lives of anyone who wants to upskill in their existing career or propel themselves into a new one. The LLE will enable access to modules and courses in a way that has not been possible before. It will provide individuals with a loan entitlement equivalent to four years of post-18 education to use over their working life. Regardless of background, income or circumstance, people will have access to a flexi-travelcard to jump on and off their learning as opposed to being confined to a single advance ticket. This is not just a train journey; it is a life journey.

The Lifelong Learning (Higher Education Fee Limits) Bill brings in the next piece of legislation to support delivery of the LLE from 2025. As my right hon. Friend the Secretary of State set out, the Bill has three core elements. First, it will enable limits for tuition fees to be based on credits. Currently, tuition fees are set for complete years of full courses only. This change means that short courses and modules will be priced appropriately in comparison with and alongside longer courses—for example, degree programmes.

Secondly, as was highlighted by my hon. Friend the Member for Wantage, this Bill introduces the concept of a course year. Currently, tuition fee limits are based on academic years of study. This change will allow fee limits to be applied more accurately to courses that are not aligned with traditional academic years.

Finally, this Bill allows for an overall maximum chargeable number of credits for each type of course. Currently, a maximum can only be set in relation to an academic year. This will prevent students being charged excessively for their studies. In sum, the Bill will lay the groundwork to ensure that fee limits are the same for a learner who completes a qualification by studying each individual module at their own pace as it would be for them to study a typical full-time course across three academic years.

Robert Halfon

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My right hon. Friend, who made a brilliant speech, is absolutely right. We will also be resourcing this in the way that my hon. Friend the Member for Stroud (Siobhan Baillie) wanted with our extra spending on skills and further education colleges. I also thank her for her important speech.

Robert Halfon

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I just want to answer some other questions that the Labour spokesman asked first.

To be clear, as part of the pathway towards the LLE, the Government will stimulate the provision of high-quality technical education at levels 4 and 5 through the HE short-course trial that he talked about, with 22 providers. [Interruption.]

Robert Halfon

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We will keep the student finance system under review to ensure it is delivering value for money both for students and the taxpayer. The forecast costs for the LLE, which the hon. Member for Warwick and Leamington asked about, will be outlined in a future spending review. He also asked about the QAA. It released a public statement in July 2022 requesting to step down from its position as the designated quality body. We are currently consulting on the de-designation of the QAA as required by the Higher Education and Research Act 2017. That consultation closes on 3 March.

Robert Halfon

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My right hon. Friend makes an important point. We will be able to explain further once the consultation paper has been published, before Report.

Mr Robin Walker

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My right hon. Friend will know that the difference between the Report and Committee stages can often be a few days. Sometimes in this House it can even be a few hours. I am sure he will recognise that it would benefit the House enormously in its scrutiny if Members could have sight of the Government’s response to the consultation ahead of Committee, when we will debate the detail of the Bill. I know he cannot make that commitment right now, and I appreciate the commitment he has made to bring it forward before Report, but will he give every consideration to whether that response could be brought forward any faster in the passage of the Bill, so that the House can give the most effective and positive scrutiny to what, as we have heard today, is a good idea in principle? [Interruption.]

Robert Halfon

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Of course I will consider the representations made by my hon. Friend the Member for Worcester and others across the House. We will try to get the consultation out speedily, but it will be published by Report.

Robert Halfon

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That is exactly what the Government’s programme is doing. We are investing in employer-led qualifications—that is exactly what this is about—and the LLE will enable many millions more people to have access to get on the skills ladder of opportunity.

Robert Halfon

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The beauty of the Bill is that it will enable anyone to retrain and do long courses, short courses or modules at a time of their own choosing, building up credits along the way. Those who leave the Army will be able to do that kind of skilled retraining.

Robert Halfon

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I absolutely agree with my hon. Friend the Member for Birmingham, Northfield (Gary Sambrook). He has hit the nail on the head. On the point of order, it is never quiet when my hon. Friend the Member for Lichfield is in the House.

Finally, let me respond to one of the questions from the hon. Member for Twickenham regarding how the student loan repayment mechanism will work compared with now. We are building the LLE on a proven system, consciously designed both to support students pursuing higher education, and share the cost fairly with the taxpayer. Like the current student loan system, repayments will be linked to income not interest rates or the amount borrowed.

I am grateful to hon. Members for their contributions today, and I hope to have addressed as many points as possible. I reiterate the significance of this Bill. It is a further piece of the jigsaw of the transformative reforms that will improve our skills system and revolutionise how and when people can and do access study. That sentiment is echoed by the sector. Professor Tom Bewick of the Federation of Awarding Bodies emphasised the Bill’s

“potential to be the most radical entitlement to adult education, skills training and retraining (delivered at the point of need), ever introduced.”

The reforms are a step forward, providing everyone with a ladder of opportunity to get the skills, security and prosperity they need.

The Government are not only expanding high-quality opportunities, the rungs of the ladder, which encompass careers, quality qualifications, skills and lifelong learning, but through the Bill and the LLE we are building the top rung of the ladder—social justice—by expanding access to quality lifelong educational opportunities that for the most disadvantaged pupils will mean levelling up productivity and employment, improving the skills pipeline and supporting people into fulfilling and lasting careers. I know hon. Members will join me in supporting that greater flexibility in our post-18 education and skills system, removing barriers to ensure that everyone is empowered to access further and higher education when and how it suits them. The Bill will promote equality and access to education, whether students are undertaking a degree or a module of a degree, and I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Lifelong Learning (Higher Education Fee Limits) Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Lifelong Learning (Higher Education Fee Limits) Bill:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 28 March 2023.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(Mike Wood.)

Question put and agreed to.

The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)

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Q Good morning, Professor Press. Thank you for being a witness. The chief executive of Universities UK said:

“A more flexible approach to higher education funding is right for learners, right for employers and right for providers.”

In what ways would greater flexibility in the student finance system be beneficial to students? How do you think the lifelong loan entitlement will encourage more part-time students to take up learning?

Professor Press: The flexibility is welcome. It will help people to align their study with the other demands on their life, both their personal life and their professional career journey. It will make a big difference. For part-time learners in particular, the maintenance elements are very welcome, and the removal of the ELQ—the equivalent or lower qualification—rule will also be helpful, since for some people that has been a barrier to learning, particularly later on in life.

Robert Halfon

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Q What will be the impact on universities? Obviously, it is hard to know how behaviours will change, but once level 6 is introduced under the lifelong loan entitlement, how do you think universities will respond?

Professor Press: The response of universities is not just dependent on level 6 being introduced; it is dependent on programmes that are not HTQs—higher technical qualifications—being opened up. That will be the key thing. At the moment, you will find that universities that want to offer HTQs will do so, and we very much welcome that, but the majority of students at the majority of universities are not doing HTQs, so the long-term success of this will depend on opening up flexibility for regular degree programmes. That is where the big transformation will come.

Robert Halfon

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Q Given what you say about HTQs, and level 4 and 5, do you foresee much greater collaboration between universities and further education colleges once the lifelong loan entitlement is up and running?

Professor Press: There will have to be, otherwise people will leave just with a series of certificates. The challenge is that employers will find it difficult to understand what those things mean. The lifelong loan entitlement provides an opportunity to build up micro-credentials and to stack them into qualifications, and that really matters. That will require collaboration between institutions, whether they are further education or higher education.

Robert Halfon

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Q I will start with Alun Francis. It was good to visit Oldham College recently—thank you. What do you think will be the impact on your most disadvantaged students of their now having access to the lifelong loan entitlement?

Alun Francis: I am really sorry; I cannot hear the question. The sound is really poor.

Robert Halfon

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Q I will turn to Ellen. Good morning and thank you again for coming today. Which students do you think will stand to benefit most from the lifelong loan entitlement and from being able to do fairly priced short courses and modules?

Ellen Thinnesen: Ideally, if this works and drives forward a cultural change, it would certainly allow greater upskilling and retraining. For example, I know a young student who left the forces and wanted to get into the renewable energy sector. He was not able to gain any higher technical qualification experience and balance the demands of his job at the same time.

On the one hand, this will bring great benefit to students, whether they are from a disadvantaged background or not, but I am concerned about the ability about some of the students my college teaches and supports—64% are from disadvantaged backgrounds—who will need substantial careers advice and guidance to understand, for example, how you would stack credits in order to achieve a full qualification.

We also need to understand how employers will respond to this. Over a number of years there has been a significant decline in employer investment in delivery. I am concerned about how employers will be held to account to ensure that they do not continue to pass that cost on to employees who, through a credit-based system, would be entitled to their loan. I hope that helps.

Robert Halfon

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Q Absolutely. Careers guidance will be essential to ensure that the lifelong loan entitlement works properly for students. Do you think the personal accounts that students will be given will make a difference? Each student will have a personal account, which will give them all the information in terms of what course they have done, how many credits they have left and what loan entitlement they have. We also very much hope that UCAS will take a significant role in that as well. Do you think that will make a difference in terms of the things you just discussed?

Ellen Thinnesen: I think there is a significant amount of benefit to having what will essentially be a portal for students to log on to and see what their account is showing, and for them to be able to utilise that account over the years they have available. Some thought needs to be given to quite a significant number of people who do not have easy access to the internet, phones and IT equipment. Therefore, I take you back to the importance of strong, comprehensive investment in careers advice and guidance.

Robert Halfon

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Q I think there will be a one-to-one service for those students, which is part of the Government service that exists already, but absolutely. I very much hope that not just UCAS but the National Careers Service, which we are doing a lot on, will have an important role in directing students to the training and retraining options that they might want to consider.

Do you not think that good employers will welcome this? We know that there is often not as much investment in training as they would like, but now students will be able to access short courses and modules, rather than having to do long courses. As you know, they will also have 12 entry points, rather than just four, throughout the year, which will make a difference. It may actually be that employers think this is a good idea and that a lot more employees are trained and retrained in the skills that employers need.

Ellen Thinnesen: I agree with you, actually. I think, from both an employer perspective and a further education college perspective, that it will allow greater agility to be able to meet the changing skills needs that are required. In Sunderland College, for example, we are evolving quite rapidly into electrification, but it is currently incredibly difficult to respond with agility and at pace in relation to the technical skills training needs that are required.

I do think we should be very careful, because the devil is always in the detail. We know that the Learning and Work Institute reported that employer investment in skills has fallen by 28% in real terms since 2005. We need to be really careful, as we culturally drive this change, that factors such as that are taken into account.

Robert Halfon

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Q Could I start with Alun Francis? It was good to visit your college a few weeks ago; I had a wonderful visit. What do you think, in terms of FE, about the impact of the LLE encouraging disadvantaged students—particularly those from low-income backgrounds—to take up the LLE? What impact will it have on colleges such as yours?

Alun Francis: Thank you, and thank you for coming to visit us; it was a very enjoyable visit. We see this as part of a package of reforms. Just to give the context, Oldham is an extremely deprived area. Nearly 80% of our learners come from the bottom 20% of deprived boroughs. The level of English and maths on entry is one of the lowest in the country. We do not have a big private sector economy. That all sets the context in which we work, and different colleges will have different contexts. It is important to say that.

I think that we see this as part of a set of reforms that help to rebuild the opportunities for those who do not want to, or cannot, follow the route to university at 18 or 19, which has almost become the default route for higher skills. What we have seen is the collapse in that period of part-time learning and the old HNC/HND route. These are all parts of the process of rebuilding that.

There are issues. The point was made very well about where the balance will lie in whether the learner or the employer will pay for higher skills, but we see this as an important way of opening up people’s choice when coming back into learning. There is an issue about the balance between these routes and the workplace routes of apprenticeships and the levy—for SMEs funded through other means. We believe that a significant number of adults want the choice to come back into learning—perhaps after having a family or other gap, or having done some low-skilled work and now wanting to improve their skills—and traditionally we have offered them foundation degrees or degrees. This allows us to offer them a wider variety of choices, and we think there is demand for that.

It will take time for the market to grow. It is not a quick hit. It needs good information, advice and guidance. People need to know with confidence that what they are paying for is worth the loan. That is why sorting out the credits and engaging employers, so they know they are getting qualifications that are worth it, is of absolute importance. Addressing those three issues will make this work best, but I do think there is demand. We have a significant number of adults who do not want to or cannot go back to university for the full three years. Without this approach, opportunities will not be open to them. It is much more difficult than we imagine. While this approach will not solve the whole problem, it will help to solve a considerable part of it.

Robert Halfon

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Q May I ask the other two witnesses, in relation to your institutions, about the impact on disadvantaged students? We know that more disadvantaged students than ever before are going into HE, but at some institutions more than at others, there are issues with their completing courses. What impact do you think this approach will have on disadvantaged students in terms of module starts and higher completion rates? Would all three of you give us your views on the phased approach we are taking? We are starting with levels 4 and 5 in higher technical qualifications and employer-led qualifications, and moving on to level 6 later, so that we bring this through slowly and cautiously?

Robert Halfon

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Q Good morning. Do you expect students to respond favourably to the new system of limits per credit, instead of limits per year?

Julie Charge: The terminology of credit is something that is familiar to students in terms of understanding credits, but there is probably more work that we would need to do to link credits to what they might see as an overall course. Generally, when students are thinking about their degree, they are thinking about a period of time and the content of it, and not necessarily the link between the work effort and the credits themselves.

Robert Halfon

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Q What work needs to be done, apart from careers guidance, to get students more familiar with the new system and the fact that they can do modules or short courses as well as long courses?

Julie Charge: It is the connectivity. Students will be familiar with modules as part of something that, when they are applying, they see described to them in a range of different ways. There is therefore some work that we as a university would need to do to make it easy for them to understand the relationship between the module of the course that they want to participate in and the credits.

I think there is another aspect here, which is that, again, as a university, we link hours to credits. If we can link all those things in a way that gives much more clarity for a student, by saying, “This is the undertaking in hours, which equates to number of credits, which is therefore part of a module, and the module then builds up your course,” that clarity will help with that sort of common understanding.

Robert Halfon

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Q I should declare that I am an honorary professor of Nottingham Trent University. Good morning to you, Professor Edward Peck. You have written about the short course trial. Obviously, the numbers have been small at the moment, although the purpose of the trial is not about numbers. You said that focusing on the numbers taking the short course trial is missing the point. Could you explain why, and why you think there will be significant take-up of the LLE?

Professor Peck: Yes; thank you. I am happy to do that, Minister. The short course is only in its first year so far. It was trying to do something relatively quickly and it did not get as many students registering as you might have hoped, but I think it is premature to judge what might happen in years two and three of that pilot. There are other things we are trying to learn from that pilot about the regulatory regime and the capacity of the Student Loans Company to deal with a new form of loan for modules. There is a lot of learning coming out of the pilot.

In terms of demand, if you look at the stabilisation of foundation degrees—the two-year degrees—the demand for HNCs, HNDs or HTQs, and the number of advanced learner loan level 4 and 5 courses being run, there is a lot of evidence for sub full-degree level technical and vocational education. What the LLE will do is open up a whole new range of people who either want to do a particular module of that provision, or want to do it in bitesize chunks rather than commit to the whole programme at the outset. I think the numbers at levels 4 and 5 are already significant, and the LLE will increase those numbers even more.

Robert Halfon

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Q You have talked about the advanced learner loan as well, and the numbers taking that up. Could you expand on that a bit?

Professor Peck: Yes, about 9,000 to 10,000 students each year are doing the advanced learner loans. There are programmes such as the diploma in social care and the diploma in construction site management, which are level 4 or 5 programmes. You will be able to take modules of those on the lifelong loan entitlement. There are some technical questions about how you work out the credit arrangements for advanced learner loans, but I know that the DfE is doing a lot more thinking about that. There will be further guidance and consultation on how advanced learner loans are integrated into the LLE in due course. I understand that is work in progress.

Robert Halfon

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Q You have a close relationship with the Mansfield college. I want to understand how you think the LLE will impact both on HE and FE and also in terms of franchising to other institutions, as in the way that you are doing.

Professor Peck: We have a very close relationship, whereby we do all the training and education for level 4 and above for the people of Mansfield and Ashfield and the college does level 3 and below. That means we can design the programmes in the college to have really easy pathways of progression from level 3 to level 4 and, in future, we will start promoting the options around modular provision in the programmes we already run at Mansfield, in things like computing, construction management and those sorts of areas, where there is a real demand for skills.

If I can give you one example, we are seeing really high uptake in a level 4 course we are running in retrofit green construction. There is a massive demand. Eighty per cent. of the houses that we will live in in 2050 are already built, and the challenge is to retrofit them to be greener and more energy efficient. We do not have a workforce to do that. We now have a level 4 course in Mansfield where you can study that particular skill and, in future, you will be able to study it on a modular basis, which will open it up to a greater range of people who do not want to study that particular course full-time.

Robert Halfon

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Q Rachel, do you agree that without these measures, students who want to learn flexibly could be disproportionately affected by significant fee limits?

Rachel Sandby-Thomas: They could be. I think this measure is very helpful; we welcome it and the flexibility it introduces. I absolutely understand the rationale behind the Bill, which is to make sure that, financially, students will not be disadvantaged by adopting a modular approach.

Robert Halfon

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Q We are introducing this in a phased way, starting off with levels 4 and 5 and then level 6. We want to get it right. It will be hard to predict behaviour change, although I think it will be very positive. What is your view of the phased approach and starting off with levels 4 and 5, particularly HTQs and employer-led qualifications?

Rachel Sandby-Thomas: I think it is really sensible, because we want to get this right. I welcome the fact that there has been a pilot, and I heard from a previous witness that lessons are already being learned from that, which is great. It is very sensible. Levels 4 and 5 lend themselves well to the modular and flexible approach, and then we can learn the lessons for level 6. At Warwick, we are very keen for it to be extended to level 7 at some stage, because we think that the postgraduate year could easily be subject to a modular approach too.

Robert Halfon

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Q Do you imagine yourselves offering level 4 and 5 courses under the LLE to begin with?

Rachel Sandby-Thomas: We tend not to; we tend to offer levels 6 and 7. In conjunction with Jaguar Land Rover, we have done some apprenticeships where we do not do the level 4 and level 5, but we are the end of a pathway with one of our local college groups.

Sir David Bell: There are two good reasons for doing this in a phased way. One is to do with technical matters—I think we all accept that there is quite a bit of technical work to be done to get us to the point of implementation in the higher education sector in particular.

The second goes to your point about behaviours and trying to inform people about a new system. I know from my experience, and I am sure you know from yours, that people do not always behave the way that policymakers and Ministers would like them to behave. There will be quite a big communications job here. Others have already commented on the need for high-quality careers information, advice and guidance support, particularly for those who might be beyond school and college at the age of 18, are thinking of coming back into education, and want to understand how this opportunity sits alongside others.

Robert Halfon

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Q I want to ask you both about credit transfer. It will obviously be for the institution to decide on this—where people move their courses if they decide to transfer. There are good examples of this taking place already, as you well know. How will this work in practice? Will it be embraced by colleges and HE institutions?

Rachel Sandby-Thomas: As you rightly say, we do credit transfer sometimes, but it tends to be in the minority of students. The 2+2 course is a good example of that—generally students will do two years at a college and come to us for the final two years—but we know that college well, we know what they are teaching and we know the standards the students get to at the end of their two years at college, and that makes for an easy progression to us. That makes it much easier. There will be a lot more work if this really takes off, because we will have to get to know, assess and understand that prior learning in order to be able to recognise it. It would be a short-sighted kindness to allow a student who is not properly prepared to come on to a module if they have not reached the standard needed for that module. It might seem a kindness, but it does them no favours at all.

Sir David Bell: Making credit transfer work is a very important requirement if the lifelong loan entitlement is to work, because people will want to move between institutions. If we hold the mirror up to ourselves, I think universities also have to be a bit more liberal in this regard; we can at times be a bit sniffy when it comes to the qualifications that have been accrued in another institution. As Rachel said, there are a lot of good examples of this happening where you know your partner institutions. As a sector, we have to show that we are engaged in this by having better credit transfer arrangements without putting enormous bureaucratic hurdles in the way of students, who think, “Why can’t I transfer from this place to that place?”

The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)

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Q76 Thank you for coming today. Thank you also for the CBI’s constructive support for the principles of the lifelong loan entitlement. How do you think employers will respond to the LLE? There was some discussion about that in this morning’s sitting. Do you think they will respond positively and work with employees to make sure that they have the benefits? Some of them will actually support the cost of the LLE courses.

Matthew Percival: We are obviously in a situation that is very well documented at the moment—the extent of skills shortages combined with labour shortages in the economy. The topic is right up there in terms of the labour market as a business issue. One reason we have been strongly supportive of the principles that are looking to be embedded into the LLE is that they go with the grain of a number of the changes we see in the economy—in the nature of learning, in who learners are and what their needs are.

The way we see technology changing jobs now is more often evolving a job rather than replacing a job. The stock of learning needs in our economy is increasingly adults rather than just young people, and it is increasingly about incremental changes in a role rather than a fundamental retraining to shift occupation. There will still be people who fall into that category, but an element that we are particularly welcoming in the approach of the LLE is that it is taking a broader understanding of what quality is—that it is not just about whole qualifications but can be about keeping your learning topped up as well.

You asked about how employers will respond. We have a lot of work to do to improve employer awareness about the scheme. When we surveyed on it last year, 80% of businesses said that they were not aware of it. There is an extent to which that is not so surprising because it is largely a policy that considers the interaction between the state and the individual learner, rather than the employer being an integral component. We are all thinking about how we design the policy—not what is on the face of the Bill, but the policy—to minimise the risk that this becomes a transfer of things that employers used to pay for and now get funded through the LLE. We then need to have a positive vision for how this can leverage more business investment.

I would love to see adopted as an objective for the policy that we measure success also by the extent to which it leverages additional business investment. I am not sure that is an objective at the moment. This could have a really positive impact. Our last estimate work with McKinsey said that one in six people will need to retrain by 2030, but in only 25% of those instances of retraining will there be a return on investment for an individual employer to pay to get the learner from where they are today to where they need to be to make that transition. We either respond by saying the state or the individual has to step in and fund the entire gap to get somebody ready for the job, or we can be a bit more flexible, which is what I hope the LLE will allow us to do. How do we get somebody ready enough, to the point where there is now a return on investment more often for employers, and then get the employer to step in, and where we expect more of the employer—to step in and hire people with training involved?

Robert Halfon

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Q How do you think it will be distinct—going back to part of your answer—in terms both of the normal training of an employee, and of an employee separately taking out a lifelong loan entitlement?

Matthew Percival: A couple of things could go on in parallel. We could see a situation where somebody is employed full-time by their current employer, but they want to be able to switch careers. It would be unusual to expect their current employer either to be funding time off to train, or to be funding the cost of their training, so that person will be able to leave the employer and go somewhere else. But you can see how some people could use the LLE in that kind of way to help them navigate through the labour market while having a job, and that more flexible approach helps them to do it. Personally, I do not see the LLE as a massive tool for employers to upskill and evolve their current workforce for the jobs they are already doing. Normally, that is where you would be trying to create a skills environment where you could leverage the business investment into that already, rather than the LLE doing it. We are talking about quite a small amount of a large amount of investment, but, in terms of the grand cost across somebody’s lifetime—what their total training cost is likely to be—this will be a smaller element of it. You could use three quarters of it in a single undergraduate degree here.

Robert Halfon

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Q Yes. I want to put my final question to Simon. Simon, I again want to thank you for the AELP’s constructive support for the principles of the Bill. It would be helpful to understand what you think the impact of the Bill will be on your members. We have done a lot of work on further education and higher education this morning, but it would be good to understand the impact on your members and how they see it going forward.

Simon Ashworth: As you say, we are broadly in favour of the principles. We need a better mix between employer, state and individual investment in skills. For our members in the FE space, I guess awareness of the LLE is still underdeveloped. Probably the biggest impact for a lot of our members will be on those who already did not deliver advanced learner loan provision. That is a programme source that has diminished over the past few years as a result of the challenges around cost of living, and the free courses for jobs offer negating the need to take out a loan. We were particularly excited to see the move to offer a third pathway for regulation through the Office for Students. That is a really important move to ensure that our members are part of the landscape, and this does not just include an HE-provider dominated landscape; it is a true mix of FE and HE providers. Obviously, there is more work to do on what that registration process looks like, and to move more of our members to be recognised and regulated by the OfS outside the full degree-awarding powers piece.

Robert Halfon

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Q As the key architect of the lifelong loan entitlement, are you happy?

Sir Philip Augar: Thank you, Minister. I am not actually the architect. The panel that I convened were very much as one on this, and we built on the work of the Sainsbury review and the review of skills and vocational education written by Professor Alison Wolf, who was a member of the panel. I think, however, that all of us involved would indeed be very happy with the progress that has been made. There is clearly a lot of work to do to make this happen, but it has the potential to be a game changer and to address a lot of the issues raised by the previous witness and others.

Robert Halfon

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Q Are you content that the approach in the Bill—as you know, it is in essence a technical Bill with three clauses—is the right one?

Sir Philip Augar: The approach looks sensible. It is clearly important to establish a mechanism whereby learners taking modules do not end up overpaying, and this Bill sets in place the framework to ensure that a fair price is set.

Robert Halfon

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Q Finally, in terms of the phased approach, starting off at levels 4 and 5 and moving on to level 6, are you happy with the direction of travel and the timing?

Sir Philip Augar: I think this has to be an incremental approach. It would be a bad thing if this got off on the wrong foot. We have seen that with previous attempts to address the skills gap. I am very much in favour of starting small and rolling out. This may take several years to really kick in, but by the end of this decade, when the demography—the number of 18-year-olds—starts to fall away, there will be an incentive for providers to step up to the plate. By then, I think the awareness on the part of learners, schools, colleges and, indeed, employers ought to be much greater. I think we could have a real flier then.

Robert Halfon

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Thank you.

Robert Halfon

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Q Thank you. David, when I have met you in the past, you have often said, “What about the colleges?” That is the catchphrase you shout frequently, and I agree with you. The previous witness, Sir Philip Augar, said that this measure would benefit further education quite significantly. Do you agree with that? What do you think the impact of LLE will be on FE in general?

David Hughes: I was listening to Philip, and I agree with everything he said. I think it is an opportunity for colleges, but you will not be surprised to hear me say that more needs to be done. The LLE can be a real game-changer as part of a suite of changes that are needed. We need to understand what the LLE is for. It goes back to Philip Augar’s report, which said that we have a tale of two halves: half of young people are going into higher education by the age of 30, and half are not. It seems to me that the LLE is about particularly trying to help the other half who have not been into HE to have a higher education experience. That, almost always, will need to be local, will need to be flexible and will need to be affordable. The LLE helps enormously with that, and colleges should be at the forefront of delivering particularly modules at levels 4 and 5 and sometimes level 6 and beyond. We need to think about what is happening below level 4 and the investment needed to get more adults to level 3, because about 62% of 25-year-olds have a level 3, but we need more of the ones who have not to be able to get a level 3 as an adult in order to use the LLE.

Robert Halfon

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Q There is an issue that 10% of the adult population have levels 4 and 5, so there is a concentration on that. Earlier, we heard about the collaboration between Nottingham Trent University and the college in Mansfield in terms of delivering the LLE. Do you think there will be a lot more collaboration between HE and FE once the lifelong loan entitlement has come through?

David Hughes: I hope so. The Nottingham Trent and West Nottinghamshire College example is a really good one. There are others—London South Bank University has some really good work going on, and Derby University has. Around the country there are good examples, but sadly, there are also examples of colleges and universities not collaborating effectively, and there are not really the incentives to do so. I would like to see more work carried out to try to get better links, particularly to give young people the option of doing one or two years in a college, getting their level 4 and maybe their level 5 without having to go residentially to get their bachelor’s degree, but perhaps topping up with an extra year or two at university. We need to help colleges and universities to collaborate better. The system needs to help, and we need to look at the regulation and the metrics of achievement, because some of it militates against that collaboration.

Robert Halfon

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Q Finally, we have talked about credit transfer in terms of HE. What do you think the response of colleges will be to credit transfer? Do you think they will embrace it, or do you think some colleges will do it more than others?

David Hughes: Again, I think it will depend a lot on their relationships with universities in particular. There is a lot of potential for young people and adults to do some of their higher education in their local college and perhaps transfer that credit to a university somewhere else, if that is what works well for them, but that needs individual relationships to be good. In some parts of the country we will definitely see that. It would be great—wouldn’t it?—if there was a much more open sector in which those options of credit transfer became quite normal and part of what we offered to every adult of every age, but I think it will take some time to get there.

Robert Halfon

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Thank you.

Robert Halfon

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Q Do you think that introducing the fee limit method based on credits is sensible from a higher education and university perspective?

Professor Rigby: In theory, it makes lots of sense. Nearly every university uses credits, with the exception of Oxford, Cambridge and medical schools. The exceptions in the Bill allow for that. I am worried about unintended consequences, and they focus on students who may fail a course or who may need to resit.

At the moment, the failure and the resitting is bound up within the fees for a year. We have clarity from the Department for Education that, in the provisions in this Bill, students would be responsible for paying for both the course they have failed and for the resit course.

The premise of the LLE is that the minimum fee quantum will be 30 credits. Most students will fail subsets of that—we run 10s, 15s, 20s. I think there may be some unintended consequences to explore to make sure that students are not disadvantaged.

Intellectually and theoretically, this measure will work beautifully, but in practice, I would love to see a risk analysis on unintended consequences for my students.

Robert Halfon

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Q On the OfS, there will be registration for new providers. What is your view of that? Is that the right way forward?

Dr Norton: It is absolutely right that there will be a third category of registration—if a new entrant to the OfS provider system is only doing modular provision, it will need to be regulated separately—but the OfS will need to consult the sector widely on how it integrates monitoring student outcomes, progression and completion of modules to really ensure that standards, in terms of access, student experience and value for money, are maintained.

Robert Halfon

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Q What is your view on the provisions working for FE providers who are fairly new to this system?

Dr Norton: I think a lot of FE providers have already joined the OfS register. I cannot speak for them entirely—we are a university—but I think the main barrier for them, from my point of view, might be that there is a lot to be done to keep up with OfS regulation and to keep up with compliance. I worry about the amount of bandwidth that FE colleges have to do that—it is its own little cottage industry. That would be my main concern: do they have the capacity to integrate these new regulation challenges?

Robert Halfon

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Q Professor Rigby, you talked about unintended consequences. What is your view on how they should be dealt with?

Professor Rigby: Probably, in this Bill, the solution resides in that course year. If one could identify a course year with a loose allocation of credit—let’s say, plus or minus 20 or 25—that would not break the intent of the lifelong loan entitlement being a 30-credit minimum, but it allows 18-year-olds to fall over once or twice during a year and to be picked up in-year, rather than getting another £3,000 taken off their lifelong loan entitlement.

The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)

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I thank the shadow spokesman, the hon. Member for Warwick and Leamington, for tabling his amendment and for his comments on it. He talked about the timing of the consultation and he said that it came out quite late. It came out quite late because we wanted to make sure that we got it right: we were having extensive consultation with the sector and with other stakeholders, as he rightly wants, and we wanted to make sure that we responded carefully. I do not know if he has seen the recent tweet by the vice-chancellor of the Open University, who said that he welcomed the engagement with the Government. There has been an LLE roundtable with previous Ministers and officials. I attended one such meeting only a few days ago on the LLE.

Robert Halfon

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Yes, of course. I will come on to deal with some of the hon. Member’s remarks.

Robert Halfon

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The hon. Member is very kind, as always. I cannot speak for the past; I can just speak for the present and the future. My intention is to get this Bill right, which is why this Bill Committee is so important.

The hon. Member opened by saying that there was some confusion about the fixed-rate method and modules and credits. He mentioned Professor Malcolm Press. Universities UK has strongly welcomed the lifelong loan entitlement; I noted that point on Second Reading.

I will just clarify, for the benefit of the Committee, that the Government intend for all courses offered under the LLE to use the new credit-based system for calculating fee limits. That includes longer programmes, such as three-year degrees, as well as short courses or modules, regardless of whether they are studied on a full-time, part-time or accelerated basis.

There may be some courses that are more suited to annual fee limits than credit-based fee limits, for example postgraduate certificates of education or first degrees in nursing. Where that is the case, the intention is that the Government will set fee limits using a consistent rate of 120 credits per year. That includes for Oxbridge, where there is no credit system for degrees; there will be a default credit system for those universities.

The Government intend to retain the ability to set fee limits using the current yearly fee system as well as the new credit-based system, but would use this ability only by exception. These exceptions will be set out via regulations, using the affirmative procedure.

Let me go through the amendments in a little more detail. They focus on the Government consulting with stakeholders regarding the fee limit method and credit-differentiated activities. We have engaged with a wide range of stakeholders to gather input to inform policy development and believe it is absolutely critical that we continue to engage with stakeholders all the way through. I mentioned the vice-chancellor of the Open University. He said:

“The Lifelong Loan Entitlement... has the potential to enable people at any stage of their working lives to improve their knowledge and skills and drive productivity and growth.”

The Government’s consultation on the lifelong loan entitlement included a question specifically on the issue suggested by amendment 5—whether any courses should be on the per academic year, or fixed, method of funding. We intend for all courses under the LLE to use the new credit-based method for calculating fee limits.

We understand, following the consultation and engagement with the sector, that there may be some courses that would be more suited to annual fee limits, such as nursing. In those cases, as I have said, the Government will set fee limits using a consistent rate of 120 credits per year for full-time courses. That will create parity with the current yearly fee system, but via a credit-based mechanism.

On amendment 3, I will provide some additional detail on credit-differentiated activities. A credit-differentiated activity is intended to be a period of study or other activity that has a different fee limit rate to another period of study within the same year—for example, a year containing substantial periods of taught study and time abroad. Credit-differentiated activities make it possible to set fee limits on sandwich placements and overseas study in a more flexible way.

Currently, placements and overseas study have a reduced fee limit rate, but that reduced rate can only be applied to a full year at a time. We are trying to make it possible to fee cap shorter periods of mobility in the year that they actually take place. Where I disagree with the hon. Member for Warwick and Leamington is that an explicit requirement to consult on the detail of credit-differentiated activities is not necessary and potentially burdensome.

Robert Halfon

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I thank the hon. Member for his question. As he knows, a credit is a unit of learning time. We are using the standardised system that exists already, but breaking it down into modules. As I said, the maximum will be 120 credits per year. In terms of the modules, there will be a minimum of 30 credits. If providers want to charge for more credits, that is up to them, but the student will not pay for those extra credits that they charge for. We are just breaking down the existing system to ensure that we can introduce modular and flexible learning.

Robert Halfon

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I thank the hon. Gentleman for his amendments. The standardised transcript, which is important, will be provided at the end of a module. It provides a clear record of the learner’s study in a recognisable format. It is something that courses already have in their existing certificates.

There are already qualifications for large courses, and employers know that. The standardised transcript will be given on the completion of the student’s module. It is intended to be a requirement of the regulations for loan funding purposes, but it does not necessarily need to be referred to in relation to fee limits.

Amendment 4 would require the definition of credit to align with sector-recognised standards. I emphasise that the Government fully understand the importance of that. We have introduced a definition of credit on the face of the Bill in proposed new paragraph 1A, which defines credits as units used to signify the total amount of learning time that a student would ordinarily be expected to spend in order to complete a course or part of a course. That relates to the hon. Gentleman’s question. As he said, it aligns with the definitions held by the Office for Students and Ofqual.

The Bill does not introduce a power further to define credits in regulations. However, regulations will set out that, for a course or module to be treated as credit-bearing, each credit must be equal to 10 learning hours. That mirrors existing sector practice. The Government do not intend to change regulations on the number of learning hours in a credit unless standards in the sector change. Learning hours are, and should continue to be, based on sector-led standards. I can give an assurance that regulations on learning hours will follow the affirmative resolution procedure so that Parliament will always get an opportunity to debate and formally approve any changes to regulations. As such, the amendment is not necessary.

Let me explain that a bit further. If learning hours are put into secondary legislation, rather than primary, providers that use a different number of learning hours per credit will simply have their courses treated as non-credit bearing, rather than being considered in breach of the fee limit rules as a whole. The Office for Students would have the ability to take action against the provider from a quality and standards standpoint if it deems that necessary, but the provider would not face additional consequences for breaching fee limits rules. As I say, regulations on learning hours will have to follow the affirmative resolution procedure, so Parliament will always get the chance to debate and formally approve any such number of hours before a law is made or changed.

On amendment 9, the Government fully intend to support transcripts for modules of courses. Although we encourage their use as good practice to support students for all level 4 to 6 study, we are not making transcripts mandatory for full courses. That is because modules are a novel concept in terms of designation for student finance, and do not have the fully established standards that exist for full courses. By providing transcripts for modules, the lifelong loan entitlement will enable credit transfer and boost labour market currency, allowing students to make full use of their academic achievements to progress.

Since transcripts are not mandatory for full courses, it would not be appropriate to reference them in primary legislation in the context of both courses and modules. I reiterate that employers know what courses are. Most courses come with a qualification of some kind. For those reasons, the Government will resist the amendments.

Robert Halfon

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I thank the hon. Gentleman for moving the amendments. Let me respond first to how they are worded before I address the specific issue of the 30 credits. Amendments 2 and 6 have been worded to limit the default credit value to 10 and 20 credits respectively. I completely get that the intention is to probe the extent to which the Government are prepared to loan-fund modules of fewer than 30 credits under the LLE, but the amendments would not achieve that end because that is not what the default credit values in the Bill relate to.

It is worth clarifying the purpose of the default credit value: it is intended to allow fee limits to be set on full courses if they are not credit-bearing or the course is more suited to annual fee limits than credit-based fee limits. As mentioned, such courses may include some degree programmes at Oxford and Cambridge, and other courses such as nursing. For those types of courses, the fee limit will be calculated using a default number of credits instead of any provider-assigned credits. The default values will be set at 120 credits a year for full-time courses, which aligns with the sector-recognised standard number of credits in a full year.

The default credit values are there to provide a credit value for non-credit-bearing full courses only. They will not apply to modules. As all modules under the LLE will be credit bearing, modules will always have the fee limit calculated using the actual provider-assigned number of credits, not a default number of credits.

The Government have been clear that the modules must have a minimum size of 30 credits for funding purposes. We believe this is a suitable level to attract fees and maintenance loans as it represents a substantial-enough package of learning. It is based on significant consultation with stakeholders and is much smaller and more flexible for training, retraining and upskilling opportunities than the current one-academic-year minimum-size offer.

As mentioned, modules of a smaller size can also be funded—provided that they are bundled together in a single entry from a parent course to meet the 30 credits—to allow sufficient flexibility for retraining purposes. This will mean that funding will be available for a 20-credit module and a 10-credit module of the same course combined.

The hon. Gentleman cited the Augar report. Philip Augar is the key architect of this reform, alongside the former shadow spokesman for skills and universities, Gordon Marsden, who often spoke about lifelong learning. The Augar report is clear that a 30-hour credit represents a

“a significant amount of teaching and learning, and is an appropriate minimum for upskilling or reskilling.”

Robert Halfon

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Under the current loan system, the loan would be divided up in proportion to the 30 credits that the student was taking. It would depend on whether the credit is charged at £77 or £60, which would depend on whether the provider had a teaching excellence framework or an access and participation plan. If the credit was charged at £77, it would be £77 times the 30 credits. It would then be up to the student to decide whether they wanted to do the course.

To return to amendment 2, to cap all default values at 10 credits would make them unfit for purpose, as a full-time year is 120 credits. With that in mind, the Government cannot support the amendment.

Robert Halfon

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I thank the hon. Gentleman for his amendment. On his question about the maintenance loan, I confirm that the LLE tuition loans will be available up to the age of 60. We believe that is fair to students and fair to the taxpayer. Currently, just over 3,000 people—from memory, it might be 3,500 people—aged 60 take up student loans. However, learners near retirement or in retirement are likely to repay a very small proportion of their loan and their maintenance support will be subject to taper from the age of 60. I think that is what the statement refers to, but of course I am happy to write to the hon. Gentleman with clarification if he would like.

I can confirm that the setting of the maximum credits per course year will be based on robust analysis of any impact on learners and providers. More importantly, I can confirm that there is absolutely an opportunity for the sector to provide feedback on the proposed maximum values before regulations are laid. I can also give the assurance that regulations on maximum credits will have to follow the affirmative resolution procedure, so that Parliament will always get the chance to debate and approve formally any maximum credit values before the law is made or changed.

The regulations will cap the number of credits that providers can charge for within a given course year and for the course overall. That is to prevent providers from adding unnecessary credits to courses in order to raise tuition fees. The cap ensures value for money for the student and the taxpayer. The fee limits will remain aligned with the current rates, based on standard practice. A certificate of higher education will be capped at 120 credits; a diploma of higher education will be capped at 240 credits.

Regarding the hon. Gentleman’s point about the accelerated degrees, we intend all courses offered under LLE to be used under the credit-based method. That includes accelerated courses. The limit on credits will be set at 180 a year. Providers can offer more credits than the maximum, but cannot charge for them. That is in line with the current system, where providers offering the usual number of credits have the same annual fee limit as those offering more for the same type of qualification.

The Government are already factoring in the impact of these reforms on students and providers. That is why we resist the amendment.

The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)

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It is an honour to serve under you, Mrs Cummins. I am supportive of the sentiment behind these amendments and recognise the importance of considering the impacts on providers. The Government have been fully mindful of the financial sustainability of providers during the development of the LLE, particularly of FE colleges. The Government are also mindful of the additional costs that providers may incur when offering shorter modular provision at large scale.

We engaged with a wide range of stakeholders to gather input, to inform policy development and to build awareness of the LLE. We are grateful to the stakeholders that have engaged with the Department on the LLE and, of course, we will continue to work closely with the sector on its design and delivery. It is important to note that the LLE and its ambitions have been strongly welcomed by the sector for the most part. Stakeholders responded positively to the flexibility and the keenness of a simpler finance system.

The Committee will be aware that the Government published an impact assessment for the Bill, which included a consideration of impact on the providers. The hon. Member for Warwick and Leamington and the hon. Member for Chesterfield both asked how the cost was constructed. The basis of the calculation is set out on pages 36 and 37 of the impact assessment. That sets out the estimates of the potential implementation costs to providers, which is separate to the wider assessment of the benefits of the LLE.

The hon. Member for Warwick and Leamington also mentioned FE reclassification. He will know that the decision was taken by the Office for National Statistics, but we are supporting colleges with a package that includes an additional allocation of £150 million over the 2023-24 period, and we have invested £300 million in the reprofiling of payments before the end of the financial year, to eliminate the current deficit.

Robert Halfon

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As well as the figures I mentioned, the DFE is working closely with colleges to try to deal with the difficulties that have come about because of the reclassification of FE colleges. I hope to be able to set out more on that in the weeks ahead.

Robert Halfon

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If the hon. Gentleman does not mind, I want to press on because I have a fair whack to get through.

On the cost to providers, the Government will publish a full and detailed impact assessment, including the qualification of expected costs and the benefits of LLE in its entirety, when we lay the necessary secondary legislation to fully implement the LLE. It is important to note that the Bill is simply three technical clauses to create the architecture to enable the LLE.

On funding, I will always champion more resources for FE and skills. There have been some steps forward: we are spending an extra £3.8 billion on skills over this Parliament; increasing 16-to-19 funding by £1.6 billion; spending £2.7 billion, I think, on apprenticeships by 2025; and spending up to £500 million on T-levels. I could go on—for example, we are spending nearly £300 million on the institute of technology colleges.

The hon. Member for Sheffield, Brightside and Hillsborough raised the issue of FE recruitment, which does concern me. I accept absolutely accept that there is an issue; I do not deny that for one minute. We have an FE teacher training bursary programme to encourage recruitment in key areas of FE that is worth up to £26,000 and will over the coming year, 2023-24. We are investing in a further education workforce package to support the sector with the recruitment, retention and development of teachers, including through a national recruitment campaign.

The hon. Lady will know about our Taking Teaching Further campaign, which supports people business and industry to move into FE part time. I am concerned about recruitment and, although I cannot give any funding commitments other than those I have mentioned, it is very close to my heart, as it is to hers. We are going to make further increases in FE rates over the academic year 2023-24, which will mean that in the relevant financial year we will invest into 16-to-19 education a further £125 million of the £1.6 billion from the spending review. We are also increasing the national funding rate by 2.2%, from £4,500 to £4,642 per student.

The hon. Member for Warwick and Leamington knows that I champion degree apprenticeships. We have spent £8 million to facilitate an increase in the number of degree apprenticeships, of which we have had 140,000 over the past few years. It is a completely new concept that we introduced. I am looking at the burden of regulation and other issues, but I am keen to champion degree apprenticeships—I have always described them as my two favourite words in the English language.

The hon. Gentleman will know that we have devolved 60% of the adult education budget. The mayoral combined authorities will be important players in the skills systems, which is why the skills for jobs White Paper makes it clear that they will be engaged in the development of the local skills improvement plans. MCAs will continue to play an important role in the development of provision that responds to a local skills gap, and they obviously have a significant say when it comes to the devolved 60% of the adult education budget. It is important to note what the impact assessment shows: that providers may see increased tuition fee revenue if the LLE encourages more people to engage with lifelong education.

Robert Halfon

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These things will be decided in future spending statements, and I have highlighted the extra money going into further education over the Parliament and over the coming Budget period.

The pilot scheme was mentioned briefly. I strongly recommend an article about the pilot scheme—the hon. Member for Warwick and Leamington has probably read it—by a witness to our Committee, the vice-chancellor of Nottingham Trent University, who says that the whole purpose of the scheme was to show the system working. It was not about quantity, even though there are 100 available courses. He writes that

“the effective administration of those received shows that SLC systems and processes are ready to support modular study.”

In the rest of the article, which I will not detain the Committee by quoting at length, he mentions all the other courses and pilots on modular learning that there have been, stating:

“The In-Work Skills pilot was also a pathway policy for the LLE. Delivered by Institutes of Technology (IoTs)…10 IoTs delivered the In-Work Skills pilot, which was a 1-year pilot that delivered high quality, higher technical short courses…The IoTs delivered a total of 59 short courses to 3,060 learners”.

He also cites other figures to show the extent of the move towards flexible and modular learning.

Importantly, as the hon. Member for Warwick and Leamington will know, the strategic priorities grant provides Government funding on an annual basis to support higher education providers’ ongoing teaching, and of course funding levels will be considered in the round at the next spending review, with the LLE in mind. Therefore, as the Government have been mindful of these concerns throughout the development of the LLE, and are confident that providers will be able to consider their own financial sustainability and costs when deciding which courses and modules to offer, we will not support the amendment.

Robert Halfon

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I congratulate the hon. Member for Middlesbrough on his amendment and his kind words. I am absolutely with him on the Open University, which many of my constituents in Harlow have had incredible value from. It is one of the great education reforms of the last century, without a shadow of a doubt. As an anoraky child, I watched some of its content on television —now it is all on the internet—late at night, because I was at home a lot, growing up. I therefore have complete sympathy with his remarks.

It is worth mentioning that the lifelong loan entitlement is intended to replace, as we have discussed throughout today, the current student finance system. As a result, from 2025 onwards, the fee limit rate and the per-credit fee rate will be exactly the same thing. It may help if I provide further detail about paragraphs 1D, 1E and 1I, which set out the fee limit calculation for credit-bearing and non-credit-bearing course years, and introduce the per-credit method into existing clauses in schedule 2 that set out how the four different fee rates are applied. Essentially, they set out how the credit-based fee limit method will work.

Robert Halfon

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I forgot to mention this but I think the hon. Gentleman asked to see me. I would, of course, be happy to meet him at any time.

Amendment negatived.

Question proposed, That the clause stand part of the Bill.

Robert Halfon

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This has been a good debate on clause 1, which enables tuition fee limits for higher education courses and modules to be calculated using a per-credit method under the Higher Education and Research Act 2017. The current tuition fee limits system, where fees are determined per academic year, cannot be applied appropriately to the short courses and modules that are integral to flexible lifelong learning and the wider LLE. If HERA is not amended, students who use the LLE to study shorter programmes could face tuition fees that are disproportionate to the size of their course. For example, a single parent studying one 30 credit module in social care could be charged £9,250 per year—the same as a student studying a full year of a degree programme.

The new per-credit method introduced by this clause will ensure that fee caps can be applied fairly to all types of learning under the LLE, whether the learner chooses to build up a qualification at their own pace or undertake the entire qualification in one go. Therefore, the single parent studying the 30 credit module will pay a proportionate amount compared to a larger programme, making it more affordable for them to space out their studies and learn at a pace that is right for them.

The principle of the credit-based method is set out in the Bill in new paragraph 1D, which is that fee limits will be set at the number of credits undertaken by the student, multiplied by the relevant per-credit limit. That is supplemented by the new powers in paragraph 1C, which ensure that the necessary numerical details can be set out in the regulations, as they are now, which Parliament will be able to scrutinise under the affirmative procedure.

To introduce the per-credit fee limit method, clause 1 includes three key measures. First, in new paragraph 1A, it introduces the concept of the credit as the basis of a new fee-limit calculation. Credits are defined in the Bill, in accordance with their current usage across further and higher education, and are already a popular measure of learner time.

Secondly, clause 1(2)(b) introduces the concept of a course year as the period to which fee limits are applied. The course year offers far more accuracy than the current academic year, as it can start on the first of any month in a year. That means fee limits for short courses and modules can be set with greater precision. Currently, if a course begins in November, its fee limits are applied from the 12 months beginning on 1 September. Under the course year system, courses will be capped from the start of whichever month they begin. That more precise approach will be needed to accurately fee cap the shorter periods of study that the LLE seeks to encourage.

Finally, as set out in new paragraph 1C, the clause enables the Secretary of State to limit the number of credits that can be charged for each type of course. Providers would not be able to charge for more than 360 credits for a three-year bachelor’s degree with honours. As in the current system, they may still offer more than 360 credits for the degree, but would not be able to charge the student extra fees, preventing students from being charged unfairly for their studies.

The clause is an integral part of the Government’s transformation of student finance, giving people a real choice in how and when they study, so that they can acquire new life-changing skills.

Robert Halfon

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I am pleased to speak to the amendment. If the Committee will permit, I will provide some background information on what proposed new subsection (7A) is intended to achieve.

Section 10(7) of the Higher Education and Research Act 2017 sets out that if fee limits are set on one type of course, they must also be set on other courses of a similar type at the same or comparable level. The Bill makes a technical change to section 10 to put beyond doubt that the Secretary of State will not be required to place fee limits on courses and modules that are not designated for student finance.

I want to make it clear that that original section does not restrict the Secretary of State from setting differential fee rates for different subjects. That ability is provided for elsewhere in the Higher Education and Research Act, specifically through the power in section 119(5)(a) and schedule 2, which allow the Secretary of State to make different provision for different purposes, cases or areas. That power means that the ability to set different fee limits for different courses is already in the primary legislation.

Section 10(7) is specifically in reference to which courses have fee limits, and which do not. The amendment therefore could result in an LLE non-funded course being subject to fee limits even if the course were not designated for loan funding at all. For example, a university summer course could be forced to comply with per-credit fee limits rules, even though students on the course are not LLE-funded and they self-finance. That scenario would not be fair on providers, which is why we cannot support the amendment.

Robert Halfon

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Clause 2 further supports clause 1 in ensuring that fee limits can be proportionate to the amount of study taken by students under the LLE. It makes further technical but necessary amendments to HERA 2017 as a result of the changes to legislation made in clause 1.

Clause 2 amends existing reporting duties on the Office for Students and providers so that the duties include the new credit-based fee limit amounts, in addition to any per-year fee limit amounts that apply. That is not intended to add any unnecessary burdens; it only adjusts the duty to reflect the new fee limit method. Subsections (2) and (4) provide explicit powers for the OFS to regulate fee limits at third-party providers, which will ensure that students cannot be charged thousands of pounds extra for choosing to study at a franchised provider.

Finally, clause 2 makes express provision in section 10 of HERA 2017 to allow the Secretary of State to set fee limits only on those courses and modules that are in scope for LLE funding. That will ensure that fee limits are not required for every single module of higher education, regardless of whether it attracts LLE funding.

The clause is an important part of the Government’s transformation of student finance. The LLE will give people a real choice in how and when they study so that they can acquire new life-changing skills. I commend the clause to the Committee.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clause 3

Extent, commencement and short title

Robert Halfon

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Amendment 12 would require any regulations on transitional arrangements in connection with the coming into force of the Bill to be laid before the end of January 2024.

Due to the complexity of the regulations required, and consistent with our plans to introduce the LLE from 2025, we are not intending to lay the broader suite of regulations to enable the LLE until after January 2024. Part of those regulations will include transitional and savings provisions that are needed in relation to the new powers in clauses 1 and 2.

The LLE is a long-lasting systemic reform, as we have discussed today, set to affect generations of future students. It is imperative that we get this right, and that utmost care is taken of both the nation’s finances and our future learners, giving them the consideration they deserve.

We have already published clear directions for the LLE in the consultation response and we will continue to engage closely with providers as the remaining aspects are developed. The consultation response sets out specific areas where we will engage with them in the future, such as the additional entitlement issue. That is why the Government cannot support the amendment, because we need to get this absolutely right and ensure that these regulations are done carefully.

Robert Halfon

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Clause 3 provides for the territorial extent of the Bill, its commencement and the short title. The clause outlines the territorial extent of the measures, with the Bill extending to England and Wales. However, as education is a devolved matter, the Bill applies only to England, and the amendments made by clauses 1 and 2 apply only to English higher education providers.

Commencement of clauses 1 and 2 will be confirmed by regulations made by statutory instrument. The overall reforms to the student support system, along with the changes to be made as a result of the Bill, will not start until the academic year 2025-26, and we currently anticipate making the necessary secondary legislation over the course of 2024. Once enacted, the Bill will be known as the Lifelong Learning (Higher Education Fee Limits) Act.

I thank the Opposition for the way they have approached the Bill. We have had some serious and constructive debate, and I really appreciate the way they have taken it forward from their side. Of course, I also thank my own side for all their support for the Bill. We have been discussing credits and transfers, and my firm view is that the Bill will be transformative once it comes into play in 2025. It will potentially make a huge difference to many future learners.

I also thank officials at DFE, who have done an extraordinary job in preparing for everything; my Whip; and you, Mrs Cummins, for chairing today’s session. I recommend that the clause stand part of the Bill.

The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)

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Ahead of speaking to the amendments tabled by the hon. Member for Warwick and Leamington (Matt Western), I would like to thank Members from across the Chamber for their contributions and the spirit of the amendments tabled, as well as the spirit in which they invested in the Bill and its transformational programme.

I will start with new clause 1, which seeks to require the Secretary of State to publish an ongoing annual review on the impact of the Act from academic year 2025-26. I understand the new clause intends to require the Secretary of State to conduct and publish a review on the impact of the Act, in particular covering the phased introduction of modular provision from 2025. As hon. Members will be aware, the Government published an impact assessment for the Bill, which includes a consideration of the impact of modularisation, including on providers.

If I may, I will recount to Members how the Government intend to introduce the LLE. The LLE will provide individuals with loan entitlements to the equivalent of four years of post-18 education to use over their working lives, for example £37,000 in today’s fees. The LLE will be available from 2025 for full courses at levels 4 to 6, such as degrees and higher technical qualifications. In addition, the LLE will begin a phased introduction of modular funding, starting in 2025, with modules of high-value technical courses at level 4 and 5. The Government are particularly keen to ensure a wide range of high quality level 4 and 5 modules are in scope from 2025-26. That will pave the way for expanding out new modular funding to broader level 4, 5 and 6 provision in 2027, where we can be confident of positive student outcomes.

There will be an opportunity to contribute to the approach of the expansion of modular funding. As set out in the Government’s response, we intend to launch a technical consultation next year to specify how we will determine funding for wider modules. I agree with the sentiment behind new clause 1 on the importance of monitoring the function of the LLE in line with policy intention. However, introducing an ongoing review into primary legislation before the policy has been fully implemented or had sufficient time to bed in would not be appropriate. Additionally, the Government believe a yearly report without an end date could be an undue and disproportionate burden at this stage. For that reason, the Government believe it neither necessary nor appropriate to introduce an ongoing review requirement on the face of primary legislation and that is why we cannot support new clause 1.

New clause 2 introduces a requirement to publish a revised impact assessment. It would have the effect of requiring the Secretary of State, before the laying of secondary legislation, to publish a revised impact assessment, taking into account any development of policy on the LLE. I am in full agreement with the intent behind new clause 2, which is to ensure there is adequate and ongoing analysis of the impacts of policy to inform decision making and scrutiny of legislation. As Members are aware, the Government published an impact assessment for the Bill on its introduction, on 1 February. The Government subsequently published an updated impact assessment for the LLE as a whole, alongside the publication of the consultation response, on 7 March. The impact assessment published in March contained the following commitment, on page 18:

“In accordance with the Better Regulation Framework, more detailed assessments of impacts, including quantification of expected costs and benefits of the different aspects of LLE policy, will be published in due course at the point when the government lays the necessary secondary legislation to fully implement LLE.”

I therefore reiterate and give assurance that the Government intend to publish an updated impact assessment for the LLE ahead of the laying of regulations. It is not necessary to codify that on the face of primary legislation and that is why the Government cannot support new clause 2.

On amendment 4 and the transitional measures referred to by the Opposition spokesman, the amendment requires any regulations on transitional arrangements to be made in connection with the coming into force of the Bill to be laid before the end of September 2024. Due to the complexity of the regulations required, and consistent with our plans to introduce the LLE from 2025, the Government intend to lay the broader suite of regulations to enable the LLE at the earliest in mid to late 2024. Those regulations are likely to include transitional and saving provisions needed in relation to the new powers in clauses 1 and 2. As hon. Members will be aware, the laying of regulations is subject to available parliamentary time. It would not be helpful at this point to prescribe a specific period. However, the Government agree that regulations need to be laid in a timely manner.

Robert Halfon

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I understand the intention behind the hon. Lady’s amendments. Putting the learning hours into secondary legislation rather than primary means that providers that use a different number of learning hours per credit will simply have their courses treated as non-credit-bearing, rather than being considered in breach of fee limits as a whole. The Office for Students would have the ability to take action against the provider from a quality and standards standpoint if it deems necessary, but the provider would not face additional consequences for reaching the fee limit rules.

We do not intend to change the number of learning hours in a credit unless the standards in the sector change. Learning hours are and should continue to be based on sector-led standards. Regulations on learning hours will have to follow the affirmative resolution procedure, so Parliament will always get the chance to have a say. The approach protects the existing use of credits as a standard that is owned and maintained by the sector, and ensures that the autonomy of the sector continues to be upheld but also allows a flexible approach in case standards change.

For the reasons that I have set out, and given that we are subjecting so many of our regulations to the affirmative procedure, as laid out in the delegated powers memorandum, which the hon. Member for Warwick and Leamington will have seen, there is no need for amendment 3 in primary legislation. I hope that he will be satisfied with that and will withdraw it.

Amendment 5, which stands in the names of the hon. Members for Warwick and Leamington and for Chesterfield, would require the Government to publish a written ministerial statement ahead of laying the first set of regulations under the Act, updating the House on the progress of the lifelong loan entitlement policy and how the regulations aim to support it. The Government will endeavour to publish a written ministerial statement ahead of laying regulations under this Act on both the development of regulations and the progress that the short course trial has made. However, it is not necessary to enshrine that commitment in primary legislation.

I would like to bring to the attention of the hon. Member for Warwick and Leamington that the Government’s intention is to lay the first regulation under the Act in mid to late 2024. It is possible that regulations under the Bill will be the first made. In addition, as is standard practice, explanatory memoranda will be laid alongside all regulations, which will explain the scope and purpose of the regulations. The Government will also publish those on the legislation.gov.uk website, explaining what the regulations do and why.

As I mentioned earlier, the majority of regulations under the Act—certainly, all those that go to determine the actual fee limits—will be subject to the affirmative procedure and all Members of the House will have an opportunity to debate the regulations in Committee. Members appointed to the Committee will be able to vote, once they have been referred to the Delegated Legislation Committee. As such, the amendment is not necessary and the Government cannot support it, so I hope that Members feel able to withdraw it.

Question put, That the clause be read a Second time.

Robert Halfon

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I beg to move, That the Bill be now read the Third time.

Let me start by thanking all hon. and right hon. Members for their contributions, not just today but on Second Reading and on Report. I really welcome the way in which my counterpart the Opposition spokesman, the hon. Member for Warwick and Leamington (Matt Western), has approached the debate, because we are all united in our desire to support people to access higher and further education and to learn, upskill and retrain over the course of their working lives.

I want to extend my thanks to all those who have participated in the passage of the Bill so far. My thanks go to my hon. Friends the Members for Keighley (Robbie Moore), for Beaconsfield (Joy Morrissey) and for Stourbridge (Suzanne Webb) for their support throughout the passage of the Bill, as well as to the hon. Members for Warwick and Leamington and for Chesterfield (Mr Perkins), who have engaged constructively at every stage of the Bill. I am grateful to them both for their work in challenging us to ensure that the Bill is fit for purpose.

The hon. Member for Warwick and Leamington spoke on Report about T-levels, and I am proud that the number of T-level students has gone up to 10,000. We have 16 T-level subjects in delivery, with a total of 18 from September. We are spending up to £500 million on T-levels, which have a 92% pass rate, with many students progressing to university, employment and apprenticeships, and we have invested £240 million to help providers prepare to deliver high-quality industry placements. The apprenticeship levy is important, as we have had more than 5 million apprenticeship starts since 2010. The number of apprentices increased by 8.6% in 2021-22, and the money not used by levy payers, as he knows, funds training so that smaller businesses can have more apprentices. We have just removed the 10 apprentice cap for smaller businesses. We are doing a lot of good work on apprenticeships.

On Second Reading, a range of Members voiced their support for both this legislation and the lifelong loan entitlement, and it is important for me to thank the extraordinary Clerks and officials in Parliament and the Department for Education for their diligent work in supporting the Bill’s passage through this place. None of this would have been possible without their work, and I think Members on both sides of the House express our appreciation.

It is an honour to champion this transformational Bill in this place, and I look forward to the LLE improving our skills system and supporting people into fulfilling and lasting careers. With this Bill, we are transforming lifelong learning in this country. People will now be on a train journey with an end stop at which they get their qualification, but they will be able to start and stop at various points in their life through flexible and modular learning. This Bill will be transformational, and I commend it to the House.