Higher Education and Research Bill (Eighth sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateThursday 15th September 2016
(7 years, 7 months ago)
Public Bill CommitteesHigher Education and Research Act 2017 View all Higher Education and Research Act 2017 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 15 September 2016 - (15 Sep 2016)
Dr Blackman-Woods
Absolutely. My hon. Friend makes an excellent point about the way in which the wider experience of university contributes to the overall student experience. Indeed, a necessary part of that student experience is universities ensuring that there is adequate student support and a range of wellbeing services, and that specialist learning or special needs are met through the university learning support system. It seems a little odd, to put it mildly, that in the list of “other initial and ongoing registration conditions” in clause 13, there is absolutely nothing about the range of services that an institution should provide; it is all about regulation. It is important that the sector is properly regulated, but that is not sufficient.
A few months ago, I was standing where my hon. Friend the Member for Blackpool South is sitting now, questioning the Housing Minister about starter homes. I made the point to him—this is directly relevant—that a starter home was not affordable housing just because the Government legislated for it to be affordable housing or thought that it was affordable housing. Clearly, a £450,000 house in London, or a £250,000 house outside London, is simply not affordable. Alas, that Minister did not take my advice and went ahead with legislation that said that such houses were affordable, when clearly they are not. Now, of course, the Government are having to revisit that legislation and what they are doing on starter homes, because it was absolutely obvious that they could not simply legislate for something to be what it is not. I fear that the same will happen with the Bill, and the Government will say about a college or specialist provider, “It is a university if it meets these regulation conditions,” when in any other context it would be considered not a university but a specialist provider.
I am trying to help the Minister to avoid falling into the same trap of legislating for something that clearly is not what the Government try to make it out to be by suggesting that it would help us all in our deliberations—indeed, it would help some of us to negotiate our way through the clauses dealing with registration conditions—if the Minister clarified what he thought a university should be and the range of services that an institution should provide before it is able to use “university” in its title. We really do not want students to think that an institution provides a certain range of services when it clearly does not and has no intention of ever providing the range of services or opportunities that one would normally associate with a university.
It would be helpful to hear what the Minister thinks a university is and what range of services he would like to see universities normally provide. Can he reassure us that no institution will be able to call itself a university when it clearly is not one?
The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
It is a pleasure to be back under your chairmanship, Sir Edward. I do not want to delay the Committee for long with what might risk turning into an abstract and philosophical conversation about what a university is. After all, that question has occupied theoreticians of education through many books and learned articles. At its most literal, a university can be described as a provider of predominantly higher education that has got degree-awarding powers and has been given the right to use the university title. That is the most limited and literal sense. If we want a broader definition, we can say that a university is also expected to be an institution that brings together a body of scholars to form a cohesive and self-critical academic community that provides excellent learning opportunities for people, the majority of whom are studying to degree level or above. We expect teaching at such an institution to be informed by a combination of research, scholarship and professional practice. To distinguish it from what we conventionally understand the school’s role to be, we can say that a university is a place where students are developing higher analytical capacities—critical thinking, curiosity about the world and higher levels of abstract capacity in their thinking. In brief, that is my answer to what a university is.
Let me turn to the nitty-gritty of the hon. Lady’s amendment and her suggestions for how we can improve the registration conditions. Her amendment highlights the breadth of opportunities offered by participation in an HE course, and it is welcome in doing so. However, I do not believe that putting that into legislation would be desirable. There are many excellent examples of extracurricular activities and experiences offered by higher education institutions—sporting groups, arts groups, associations of all kinds and exchange opportunities. I agree that, in many cases, those activities contribute greatly to a student’s learning and personal and professional development. As the hon. Lady said, they can be as much a part of a student’s education as traditional lectures.
When a student is deciding which institution to study at, their decision is based on many factors, including the qualification they will receive, the cultural and social opportunities presented to them, the student organisations they can join and the support available. Higher education institutions think very carefully about the range of extracurricular activities they offer and the additional opportunities for students on or around campus. They are tailored to the specific characteristics and needs of their particular student bodies. One size does not necessarily fit all, and student populations vary hugely in their requirements. As independent and autonomous organisations, higher education institutions are best placed to decide what experiences to offer without prescription from the Government.
Dr Blackman-Woods
In our deliberations, we have heard, particularly from the possible new entrants into the sector, that they wish to have a level playing field. Part of the point of this amendment is to genuinely make it a level playing field. We do not want to take diversity out of the sector; we just want to ensure that all institutions that could become a university provide a basic level of services.
Joseph Johnson
There may be high-quality institutions based in, for example, urban locations that cannot offer the broad range of services that campus-based, big institutions can. That does not mean they are lesser institutions; it just means that their student populations have their own purposes in coming to that particular institution and want their needs to be met in a way that is relevant to their institution. For those reasons, I do not believe that a one-size-fits-all, prescriptive approach is the best way to achieve the hon. Lady’s goals.
The Chair
I am sure we are all grateful for the Minister’s definition of a university. He said it is about high levels of abstract thinking—I learned a lot about that in the union bar.
Gordon Marsden (Blackpool South) (Lab)
I beg to move amendment 190, in clause 13, page 8, line 17, at end insert—
“( ) The OfS may strengthen the registration conditions for new providers depending on the assessment of that new provider’s previous track record and future sustainability.”.
This amendment would enable the OfS to set stricter entry requirements for new providers by considering previous history and future forecasts.
It remains a pleasure to serve under your chairmanship, Sir Edward, even under these heated circumstances. There appears to be a little more of a draft coming through; if we dissipate some of our hot air it may become even greater.
I thank my hon. Friend the Member for City of Durham for what she said because it is germane to this amendment, which is in the name of my hon. Friend the Member for Ashton-under-Lyne and myself. The amendment tries to define what new providers that might wish to become a university have to do, and I think it is incumbent on us to think a little harder than is perhaps sometimes the case about a new provider’s
“previous track record and future sustainability.”
The Minister was quite right not to engage in a “philosophical discussion”— I suspect if he had not said that, the Lord Commissioner of Her Majesty’s Treasury, the right hon. Member for Bexleyheath and Crayford, would have perfectly reasonably bashed him on the head—but there is a balance between that and simply saying, “This is what a university does.” That is particularly true when talking about new providers. In earlier exchanges, the Minister referred to Lord Mandelson, whose grandfather, Herbert Morrison, when asked what the definition of socialism was, famously replied:
“Socialism is what a Labour Government does.”
That is a reductionist argument with which I am sure the Minister would not agree, but we need to ask some serious questions about what guarantees and provisions we would require from new providers.
As I said on Second Reading, the Bill
“places immense faith in the magic of the market”—[Official Report, 19 July 2016; Vol. 613, c. 720.]
to produce new providers and to take them on board. It is philosophically consistent, if I may be so grand, with the paean to competition and the markets in the White Paper, which says:
“With greater diversity in the sector…our primary goal is to raise the overall level of quality. But we must accept that there may be some providers who do not rise to the challenge, and who therefore…choose to close some or all of their courses, or to exit the market completely. The possibility of exit is a natural part of a healthy, competitive, well-functioning market and the Government will not, as a matter of policy, seek to prevent this from happening. The Government should not be in the business of rescuing failing institutions—decisions about restructuring, sustainability, and possible closure are for those institutions’ leaders and governing bodies.”
That is all very well as a paean to free-market Friedmanism, and perhaps those who had drafted it had had a good lunch at the time, but the truth of the matter is that it is not the people who draft such things who have to deal with the consequences, but the people on the receiving end, who are not just students—although students are a key part of that process—but everyone who works with, is sponsored by or supplies those new providers. Therefore, it is important that we talk about that—we will do so in more detail when we reach clause 40, which deals with some of the issues to do with awarding powers, so I will be careful not to step into that territory.
Cutting corners in the process of becoming a higher education provider can pose a serious risk to staff and students, and it can increase the risk of public money being misused. If we are in any doubt about that, I would refer to the Public Accounts Committee report on alternative providers published in February 2015. The Committee was fair about the potential benefits of alternative providers, but hard on some of the things that had happened in the preceding period. It stated:
“The Department pressed ahead with the expansion of the alternative provider sector without a robust legislative framework to protect public money…and…failed to identify and act quickly on known risks associated with the rapid introduction of schemes to widen access to learning…The Department does not know how much public money may have been wasted…and…should report back to us urgently with an assessment of how much public money is at risk of being wasted”,
and so on. I appreciate that the Minister was not in place at the time, but the report was a fairly comprehensive slap on the wrist for the Department for Education about how the matter had been treated.
No doubt the Minister will come back and say, “Ah, but that was then, and this is now. We have done lots of other new things”, but the trouble is that that argument does not solve the problem. As a result the University and College Union, among other organisations, submitted a detailed paper to Committee members, including a number of specific examples of where things had gone wrong. It argued that to allow commercial providers a quick, low-quality route into establishing universities and awarding degrees would mean that those studying and working in the sector were seriously vulnerable to the threat of for-profit organisations moving into the market for financial gain, rather than from any desire to provide students with a high-quality education or teaching experience.
The University and College Union also quoted figures from the Department for Business, Innovation and Skills: between 2010 and 2014-15 the number of alternative providers rose from 94 to 122. Furthermore, the matter is one that concerns the public purse, as well as the protection of students, because student support for those alternative providers rose from £43 million to more than £600 million. Also, in 2014 the National Audit Office reported concerns about abuses of the student loan system by for-profit providers. It mentioned that drop-out rates at nine of them had been higher than 20% in 2012-13, compared with 4% across the sector in general.
As I have mentioned, the Public Accounts Committee published its report in February 2015. If the Minister therefore says, “Ah, well, we don’t want to put more obstacles in the way of potential new providers. We don’t want to make it overly onerous for them”, all I can say is that we have to look at the track record up until now. That is not to disparage any of the new providers who might come forward or the evidence that was given in our sessions. It is merely to say that the precautionary principle is often a wise one to proceed on. It is not often I quote President Reagan with approval. He was famously asked, during SALT negotiations with the Soviets, whether he trusted them. He said he worked on the principle of “trust but verify”. Trusting but verifying is the thrust of the amendments.
In case the Minister is tempted to say that we are digging up old history, it is not that old. Since he referred to something I said in 2002, I think I am being generous in only digging up recent history. Only this year the West London Vocational Training College had its designation for student support funding revoked following a Quality Assurance Agency for Higher Education report that said that it had failed to establish the authenticity of applicants’ academic qualifications, admitted some students who were demonstrably not qualified to enter their course, included some students who had not met the English language proficiency requirement and admitted some students after qualifications awarding body Pearson—which is for profit and has been there for a long time—had blocked it from registering new entrants.
Before the Minister either personally or corporately allows some of his officials to write more paeans to the benefits of the market and competition, perhaps he would indulge us by considering the amendment. It is important that the registration conditions for new providers consider previous track record and future sustainability. Of course, not all new providers will have a track record and I think one of the witnesses mentioned that at the evidence session. If that is the case, the presumption should be to look more stringently at their future sustainability.
The proposal is not that they must have both but they certainly must have one. It is on that basis that I put the amendment forward for consideration.
Joseph Johnson
I start by reassuring the hon. Gentleman that there will be no cutting of corners to allow an easy route into the sector for providers who would not pass our exceptionally robust thresholds in terms of financial sustainability, management, governance and quality. The single gateway into the sector that we are putting into place through the Bill and the robustness of its processes are of key importance to the success of our reforms. The hon. Gentleman and the Government are at one on that question.
I explained when debating earlier clauses and amendments that risk-based and proportionate regulation is the basis on which the office for students will operate. “Trust but verify”, as the hon. Gentleman put it, might be a good way to describe it. It will protect the interests of students and the taxpayer while providing a regulatory system appropriate for all providers.
Clause 5 requires the OFS to consult on and publish initial and ongoing registration conditions. Different conditions will be applied to different categories of providers. Although it is for the OFS to determine those conditions, we expect that they will reflect those first set out in the Green Paper and subsequently confirmed in the White Paper. We expect they will include academic track record, as demonstrated by meeting stringent quality standards, checks on financial sustainability, including requiring financial forecasts from providers, and other important issues, such as the provider’s management and governance arrangements.
In addition, clause 6 provides the OFS with the power to apply specific ongoing registration conditions based on the OFS’s assessment of the degree of regulatory risk that each provider represents.
Joseph Johnson
As set out in our technical note on market entry and quality assurance, which was sent to the Committee, although not necessarily successfully received by some Members, we have given a clear indication that OFS will be consulting representative bodies in the sector to establish answers to that sort of question. I encourage the hon. Gentleman to feed into that consultation when it is under way.
Clause 6 provides the OFS with the power to apply specific ongoing registration conditions, based on the OFS’s assessment of the regulatory risk that each provider represents. Where the OFS determines that a new provider represents a higher level risk it may, under the powers already included in the Bill, apply more stringent conditions. Moreover, the OFS may also adjust the level of regulation at any time, should there be a change in a provider’s circumstances or performance. That may be appropriate if a provider’s financial forecasts, as supplied when the provider first applied to join the register, eventually prove perhaps to be have been over-optimistic.
While I understand fully the reasons for the amendments and agree with the need for the OFS to take such matters into account, I believe that the Bill already provides the OFS with the powers necessary to take a wide range of issues into account.
Gordon Marsden
Before the Minister sits down, I would say that all of that is welcome. The paper to which he refers and the student protection plan, which I have now looked at, are welcome. The student protection plan is strong in direction of travel but weak on detail and we can come to that on another occasion. The Minister is perfectly reasonably laying a number of onerous requirements on the OFS, particularly as regards the forecasts that his Department has produced on the potential for new providers to want to take on charges, university title and licence. Is the Minister at all concerned about what resources the OFS will have to carry out this process? If there is going to be a rush of new providers there will be substantial requirements of it, given what the Minister has just said.
Joseph Johnson
The hon. Gentleman will have read the impact assessment, which goes into some detail about the future cost projections for the OFS. That will give him and the Committee a sense of the OFS’s resources to deal with the anticipated new providers in the sector. In addition, the Higher Education Funding Council for England is a very competent funding council and we want to maintain all the excellent capabilities that it has, including the people who undertake the important roles relating to quality in the system.
As I was saying, although I agree with the reasons for the amendments, I believe they are unnecessary, given the provisions we are making in the Bill in respect of safeguards for quality in the system and, therefore, I ask the hon. Gentleman to consider withdrawing his amendment.
Gordon Marsden
I have heard what the Minister has to say and am reassured by his commitments. As always, the devil will be in the detail and we will want to probe further but at this point I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 13 ordered to stand part of the Bill.
Clause 14
Public interest governance condition
Wes Streeting
The hon. Gentleman is right to refer to the gender pay gap in higher education. There is something like an £8,000 difference in the pay awarded to male and female academic staff. My amendments do not deal specifically with the gender pay gap, but instead address the inequality between pay at the top and at the bottom.
The amendments would address those issues in two ways. The first is to require universities to publish the pay ratio between the highest-paid staff and the lowest-paid staff and the median rate of pay. That would get remuneration committees to think hard, when telling front-line staff that they cannot afford pay rises, about whether they are applying the same principle to staff at the top. According to the Times higher education survey, one in 10 universities paid their leaders 10% more in 2014-15 than the previous year, while average staff pay rose by just 2%. It is incredibly demoralising for university staff, academic staff and support staff when they feel they are exercising pay restraint but see university leaders not leading by example.
Publishing the pay ratio would bring about greater equity and a greater focus on low pay. I do not see any good reason why any university in this country should not be an accredited living wage employer. I hope that one outcome of the amendments would be to reinforce many of the campaigns led by students unions and trade unions to persuade universities to become accredited living wage employers.
As well as proposing publishing information to push for transparency, the amendments would strengthen accountability by including staff and student representatives on remuneration committees. That is important for two reasons. One is that staff representatives, through the University and College Union and other trade unions, and student representatives, through their students unions, bring a degree of independence from the process. They have a legitimate interest in ensuring fair pay from a staff perspective and also from a student perspective, in terms of ensuring that their fees are well spent.
There is also a broader point, which ties into the interesting exchange earlier about the idea of a university being, as well as all the things that the Minister set out in his response to my hon. Friend the Member for City of Durham, a community. An important part of a university is the academic community in the university. It is not made up just of university leaders and staff; students are also part of it, and I think that it is important to include them in the decision-making process.
I therefore hope that the Minister looks favourably on the amendments. They would reinforce the signal that he has already sent through the HEFCE grant letter. They would help to concentrate more effectively the minds of remuneration committees, as well as bringing about a wider range of perspectives to ensure that they are reaching the right conclusion, to the benefit of students, staff and the taxpayer. I hope that the Minister supports the amendments.
Joseph Johnson
I thank the hon. Member for Ilford North for his amendments, to which we are giving some thought. However, I emphasise that the public interest governance condition that the clause contains is a vital component of the new regulatory framework and is designed to ensure that providers are governed appropriately, as he wants them to be. That is in recognition that some providers’ governing documents—in particular, those of providers accessing Government grant funding—are of public interest.
Let me first explain how we envisage the public interest governance condition working. Clause 14 explains what the condition allowed for by clause 13 is. It will be a condition requiring certain providers’ governing documents to be consistent with a set of principles relating to governance. The principles will be those that the OFS thinks will help ensure that the relevant higher education provider has suitable governance arrangements in place. That is not new. Legislation currently requires the governing documents of certain providers—broadly, those that have been in receipt of HEFCE funding—to be subject to Privy Council oversight. That is the backdrop.
Let me deal with the amendments. I do not believe that amendment 25 is necessary, and it could be confusing. The arrangements are already set out and designed for the primary purpose of ensuring that appropriate governance arrangements are in place and that best practice is observed. The introduction of the term “practices” through the amendment would risk changing the scope of the public interest governance condition to give it a much wider and more subjective application and imposing a significant and ambiguous regulatory burden on the OFS. That would stray outside our stated policy objective and beyond the OFS’s regulatory remit.
The suggestion in amendments 26 and 27 is to include principles relating to transparency of remuneration as being helpful for potential inclusion within the consultation process. We resist those also. We do not think that it would be helpful at this stage to make them mandatory components in clause 14. That is because, as I am sure the hon. Gentleman will appreciate, higher education institutions are autonomous institutions and the Government cannot lightly dictate what autonomous institutions pay their staff. As the hon. Gentleman said, we have already as a Government recently expressed concern about what appears to be an upward drift in senior salaries. The previous Secretary of State in the Department for Business, Innovation and Skills and I put this explicitly, as the hon. Gentleman said, in our most recent HEFCE grant letter. We clearly stated that we want to see sector leaders show greater restraint. The hon. Gentleman will also know, as a seasoned veteran of the HE sector, that higher education institutions are now obliged to publish the salaries of their vice-chancellors anyway, but as I said, we are watching this issue very closely and doing everything we can to urge the sector to exercise restraint, without crossing the line and interfering in the practices of autonomous institutions.
Ben Howlett
Will my hon. Friend give assurances, however—I agree this should not be put in the Bill—that he will work with the new OFS to ask them to look at remuneration, and also make sure that transparency is at the very heart of the OFS in relation to remuneration?
Joseph Johnson
Yes, I can certainly give my hon. Friend that assurance. Transparency is a big feature of the reforms in other respects and it is important we continue to ensure that the OFS is attentive to the issues around remuneration in the future, as we have asked HEFCE to be in our last grant letter.
To make sure we get this list of principles absolutely right, clause 14 requires the OFS to consult on its contents. This is because we wish to ensure a transparent and full re-evaluation of the current and any subsequent lists, and to provide all interested parties with a full opportunity to make their own representations and help shape the terms of the list in a positive way. For those reasons, I respectfully ask the hon. Member for Ilford North to consider withdrawing his amendment.
Wes Streeting
I am grateful to the Minister for his reply, particularly his initial remark that these amendments are on issues that the Government are carefully considering. I hope that the Minister will take the exchange we have had this afternoon on board and think about more precise amendments. I note that he made a technical objection to amendment 25, and hope that he will therefore reflect on whether a better form of wording would achieve the objectives.
There are a couple of issues I want to pick up, in terms of the Minister’s principal objections. He talked about university autonomy and of course that is an important principle, but he has also conceded that universities are already required to publish the pay of the highest paid members of staff in an institution. The amendments propose a very simple and relatively minor extension to make sure there is transparency about the lowest paid. There are issues within institutions where some staff, particularly support staff, are paid at frankly unacceptable levels—in particular if they are contractor staff. I do not think it would be a gross intrusion into university autonomy to proceed with the principles outlined in the amendments. There is certainly not the threat to university autonomy that universities have been audibly whingeing about in the last few days. I hope the Minister will go away and think carefully about that.
Having said that, the Minister has raised a particular technical concern and I am mindful of the crack hand of the Whip—even when he is not in his place he is very effective at marshalling the troops—so conscious of the numbers, and the practical issues the Minister has put forward, I am content and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Gordon Marsden
I beg to move amendment 169, in clause 14, page 8, line 34, leave out “English higher education providers” and insert “Higher education providers in England”.
This amendment would ensure higher education providers which operate in other UK nations are not excluded.
The Whip returns just as I am moving an amendment that, if he did not look at it carefully, he might think was a piece of pure pedantry—
The Lord Commissioner of Her Majesty's Treasury (David Evennett)
Perish the thought.
Gordon Marsden
But it is not, and I will explain why. Clause 14 deals with a public interest governance condition. The need, or concern, for the amendment has been brought to my attention, and possibly to the attention of other members of the Committee, by the Open University because it is alert—as the Minister and I always are— to the unintended consequences of legislation. I am also alert to the fact—as I hope the Minister will be, because he will want the successful completion of the Bill, if not on his tombstone, on his CV—that Bills like this one do not come along that often. Therefore, we need to try, without having a crystal ball, to look at where higher education is going in the next 20 years. The Open University, of course, is particularly concerned because it also operates, as the explanatory notes say, in other UK nations. It is therefore important that the Open University is not unintentionally removed from those provisions.
The Open University has been going for more than 40 years, but other potential providers, groups and conglomerates will increasingly want to operate across other UK nations through different mechanisms and in different media. We therefore have to try to future-proof the Bill for the development of online and other sorts of learning, as well as for the traditional campus-based learning that we all know and love—that is true in your case, Sir Edward, and possibly in other people’s cases, too.
I do not want to labour the point, but new forms of teaching are rapidly developing, such as massive open online courses. The Open University has come together with a number of other organisations on the FutureLearn programme. Groups of organisations that have not historically put their material out for formal or informal learning, particularly in the arts and cultural sector, might see the potential to do so and to produce largely online degrees that are quite specific to the stuff they put out, which is welcome. I do not know whether we will quite reach the nirvana on which the Minister mused. If he has been misquoted, I will let him correct me, but I think at one stage he speculated as to whether Google or Facebook might want to enter from the wings.
As for today, this is principally and specifically something about which the Open University is concerned. I am sure that the devolved Administrations will also be concerned, because they do not want to have different levels of regulation for institutions that operate across the United Kingdom, let alone across other jurisdictions outside the United Kingdom.
This is a probing amendment in the sense that I am presenting the Minister with a difficulty. If, by any chance, what I have suggested is technically inadequate, I would be more than happy for him to propose an alternative.
Joseph Johnson
I thank the hon. Gentleman for tabling the amendment, which we have carefully examined. The amendment would change a reference in clause 14 from “English higher education providers” to “Higher education providers in England”. The term “English higher education provider” is defined in clause 75 as one
“whose activities are carried on, or principally carried on, in England”.
In practice, that means any higher education provider that carries out the majority of its activities in England. In that sense it replicates the definition in the Further and Higher Education Act 1992. It is important to note that that wording is capable of including a provider that carries out activities outside England. The only proviso is that the provider must carry out most of its activities in England.
Clause 14 relates to the public interest governance condition that can be set as an initial or an ongoing condition of registration of any registered higher education provider. A provider that has such a condition will be required to ensure that its governing documents are consistent with a set of principles relating to governance. We intend that the OFS will monitor compliance with those principles upon a provider’s registration and as part of its annual monitoring of a provider’s governing documents.
The public interest governance condition is an essential aspect of the new regulatory framework. It is right that the condition should be applied to all registered higher education providers but that it should not apply more widely. To apply the public interest governance condition to any institution that happens to provide some HE in England would extend the OFS’s regulatory reach beyond that which is appropriate and would expose some HE institutions to double regulation.
Joseph Johnson
I will press on because this is a complicated set of arguments.
Such double regulation does not seem right, and it would not respect existing devolution arrangements in cases where an institution is already providing higher education across the nations of the UK. To make it a bit less abstract, let me give an example of HEFCE and the Higher Education Funding Council for Wales. At present HEFCE regulates all HEFCE funded providers who carry on activities wholly or principally in England. Likewise, HEFCW regulates providers whose activities are wholly or principally in Wales. HEFCE regulates activities outside English borders—for example, the Welsh activities of a provider that principally operates in England—and HEFCW regulates the English activities of a provider that principally operates in Wales. Those arrangements ensure that there is neither a regulatory gap, nor double regulation, across the UK.
Giving the OFS the ability to regulate providers involved in providing any HE in England at all, no matter how limited, would upset the current balanced devolution arrangements. Even if the amendment of the hon. Member for Blackpool South were applied only to the public interest governance condition, it would expose Welsh, Scottish and Northern Irish providers, which might have only a minimal presence in England, to additional regulation from the OFS for their activities in England.
Gordon Marsden
I appreciate that it is a complicated situation—I often use the example of a Rubik’s cube—and this is obviously part and parcel of that process. The Minister prayed in aid the arrangements made in the 1992 Act. There is a world of difference between the way people operate in higher education in 2016 and how they operated in 1992, hence the various references I made to online providers and all the rest of it. I am concerned to capture in the legislation what the situation would be for people who operate as an online provider, as the Open University increasingly does. How can the structure the Minister describes, which was principally set up for an analogue world, cope with a digital one?
Joseph Johnson
The Bill is designed to cope with the growth of online HE providers. Providers of distance learning or online HE courses will be covered by the definition in clause 75 if the majority of their activities take place in England. If that is not the case, they can bring themselves into scope by setting up their presence in England as a separate institution and meeting the OFS’s registration conditions. Considerable thought has been given to the future-proofing of the legislation to take into account the growth of online and distance provision.
The hon. Gentleman asked about foreign institutions wanting to set up in England. Providers of HE courses will be covered by the definition in clause 75 if the majority of their activities take place in England. If a foreign university wished to set up base here, to appear on the register, and to hold English degree-awarding powers and a university title, it would need to set up its presence in England as a separate institution and meet the OFS’s registration conditions.
The hon. Gentleman specifically mentioned the Open University. I reassure him that we believe that the Open University will count as an English HE provider. According to published data from July 2015, the majority of its students are in England, and most of its income is from English sources. Like the hon. Gentleman, I recognise that the Open University plays a valuable role in HE provision right across the four nations of the UK and it is rightly proud of its status as a four-nation university. Its status as an English HE provider under the Bill should not be seen to detract from that in any sense. I hope that I have reassured the hon. Gentleman and I ask him to withdraw his amendment.
Gordon Marsden
I am reassured by the Minister’s explanation. It was important to have that exchange, because what he said and the implications of it for future-proofing are important. It is important to get it on the record at this stage. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Gordon Marsden
I always bow to the Clerks’ superior knowledge, but I confess I was slightly mystified about why amendments 170 and 171 are yoked because they cover different issues. I will have to keep them within the scope of the one clause.
My hon. Friend the Member for Ilford North asked the Minister about definitions of “university” and wisely constrained himself to talking in fairly straightforward terms and did not become too philosophical. I will try to do the same in the context of this amendment.
We had a debate about what should and should not be in the Bill. Clause 14, to my surprise when I first saw the Bill, refers to
“the principle that academic staff at an English higher education provider have freedom within the law”.
In my judgment, it is unusual to see that in a Bill and I was so bold as to table the amendment because the one group of people the academic staff did not seem to be protected from were Government or other relevant stakeholders. It talks about ways in which they might be protected against, presumably—perhaps the Minister will amplify this—being affected by their provider. One can think of all sorts of situations without naming individual universities. Hypothetically, for example, a university might depend heavily on funding or support from companies promoting genetically modified foods and so on.
I will not mention a particular university although I will mention a particular controversy. In future, a university might, for example, receive funding from the proponents of fracking and find that a member of its staff who was not keen on fracking had all sorts of legitimate academic arguments against it. Such examples, which I believe will be covered by the clause, are well understood. The amendment is about how the Government or other relevant stakeholders might also constrain that because that will arise in any Government. I think back to when Baroness Thatcher was deprived of an honorary degree from Oxford because of the views of the congregation at that time—not that she was moved to be punitive or, as far as I am aware, to be terribly concerned about the matter. Nevertheless, circumstances may arise in which a university might put itself against the view of a Government Department, Minister or something else.
If we are going to have all these others things in the Bill, the amendment would not be a bad idea, although it is a probing amendment, obviously. I tabled it partly from curiosity because I want to tease out why these specific things have been put in the Bill when in other circumstances I would expect them to be in guidance or whatever.
My only other point relates more to the whole of clause 14 and putting forward new ideas and controversial and unpopular opinions. I do not want to set a hare running, but there is a fine line between controversial or unpopular opinions, or sometimes perceived opinions, and things we now take for granted should not come under the purview of the academics promoting them. Some may remember the furore around Professor Eysenck and his supposed research about the abilities of certain races to perform better at sports, for example. Some will remember a time when university academics pontificated about the origins of homosexuality and so on. These are not hypothetical issues. Getting the balance right between being allowed to put forward
“ideas and controversial or unpopular opinions”
and those things that we in an evolving society now regard as unacceptable is always difficult. That is why I was curious to see this proposal in the Bill. I urge the Minister to think about the issues in terms of the Government and other stakeholders and to respond.
I will turn to the entirely separate matter of amendment 171, which is more straightforward and far less philosophical. In line with everything the Opposition have said and will continue to say—and on which my hon. Friend the Member for Ilford North sallied forth today—this concerns the position of students. Surely it makes sense to require the OFS to consult students, the academic workforce or their representatives before revision of the list.
Again, that would need to be proportionate. We had this argument on an earlier clause but I am not suggesting that every small item of detail that requires a revision of the list should be consulted on. Fundamentals that perhaps change the pattern of work in a university or the closing of a campus should surely require students and academic staff to be consulted and to put forward their opinions to the OFS. That is the basis of amendment 171.
Joseph Johnson
The governance condition is a vital component of the new regulatory framework. It is designed to ensure providers are governed appropriately. Taking amendment 170 first, academic freedom is one of the fundamental strengths of our system and I want to reassure the Committee that the Government are fully committed to protecting it. We absolutely agree that academic staff must be able to teach and research without interference.
The OFS is obliged to consult on a list of principles that can make up this governance condition. The Bill, therefore, rightly does not prescribe what should be included in that list, with the one notable exception that the hon. Gentleman has identified, which is the principle of freedom for academic staff
“(a) to question and test received wisdom, and
(b) to put forward new ideas and controversial…opinions”
without losing their jobs or privileges. The amendment relates directly to that wording, which has been highlighted in consultation with the sector as being of great importance. That is why clause 14 ensures that that important principle remains included in legislation for the future.
The hon. Gentleman asked where the exact wording comes from. It is from the Education Reform Act 1988, which now cross-references to freedom of speech and academic freedom provisions in the Counter-Terrorism and Security Act 2015, in relation to actions of governing bodies in preventing people being drawn into terrorism. The wording is also the same as specified in the Committee of University Chairs’ higher education code of governance. This is a tried and tested definition of academic freedom, widely valued and understood by the sector.
The Bill includes a comprehensive range of protections for academic freedom, of which this is just one. It defines for the first time all the ways in which the Secretary of State may influence the OFS by issuing guidance, in terms of setting conditions of grant and giving specific directions to the OFS. In each case, the Bill places an explicit and specific statutory duty on the Secretary of State to have regard to the need to protect academic freedom, and it lists the areas in which the Secretary of State may not interfere.
While I can reassure hon. Members of our commitment to academic freedom, I do not believe that the amendment adds anything to what are already extensive protections from Government interference in academic freedom, specified in multiple places in the Bill. As I mentioned earlier, the OFS will need to consult prior to determining and publishing a new list of these public interest conditions.
I turn to amendment 171 and the issue of who the OFS needs to consult, on which I am glad to be able to provide some reassurance. I fully believe that the list of principles on which the governance condition will be based should be as proportionate as possible and consulted on widely. I therefore welcome and sympathise with the suggestion that student bodies and academic staff should be included. In fact, I firmly expect those groups to be covered under subsection (8)(c), which states:
“such other persons as the OfS considers appropriate”.
It would be inappropriate, however, to attempt to list all parties the OFS needs to consult on the face of the Bill. That approach would risk drawing up what could be seen as an exhaustive list, thus excluding anyone else from such an important consultation.
I assure hon. Members that I firmly expect the OFS to conduct a fully open consultation, inviting the views of anyone with an interest, including students and staff. The Bill as drafted fully allows for that to happen. In the light of all those assurances, I ask the hon. Gentleman to withdraw his amendment.
Gordon Marsden
Taking amendment 171 first, I entirely accept and am reassured by what the Minister said, which will be welcomed. There is always an argument about not wanting to list everything under the sun because we might miss something, and that is fair.
I will not press the amendment to a vote, which the Minister will be pleased to hear. Without us spending half an hour going through the various bits and pieces of statute— we are obviously not going to resolve it this afternoon—if we stopped people in the street and asked, “What is one of the most important things that a new office for students, preserving academic freedom, would want to do?” I would not be surprised if they said something like, “Well, Government shouldn’t be allowed to interfere.”
These are not hypothetical issues; they are real ones—for example, universities or colleges that get support in the area of fracking. Those are real issues, but we are saying, “Oh, well, it’s all covered somewhere else.” I am not knocking the specific examples on the face of the Bill, but I do not understand why things like questioning and testing received wisdom and new ideas need to go on the face of the Bill but something as fundamental as saying, “You can’t be done for challenging Government policy or Government Ministers” is not.
Joseph Johnson
I will continue to reflect on the points raised by the hon. Gentleman. He makes some interesting suggestions, and we will take them away and have a think.
Gordon Marsden
On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 14 ordered to stand part of the Bill.
Clause 15
Power to impose monetary penalties
Joseph Johnson
I thank the hon. Lady for tabling her amendments. They would require that evidence must first be provided to the OFS that a provider has breached its registration conditions before a sanction may be imposed, such as a monetary penalty or removal from the register, or a suspension placed on the provider’s registration.
The Bill as drafted states that the OFS may take such actions if it appears to the OFS that a breach of conditions has occurred. The test of “it appears” needs to be read alongside the rest of the clause and schedule 3. Regulations will set out the factors to which the OFS must or must not have regard when deciding whether to impose a monetary penalty. They will be subject to consultation and targeted at ensuring that the OFS can impose a monetary penalty only when there is good reason to do so. In addition, the hon. Lady will be aware that the OFS, as a public body, must act reasonably and proportionately in accordance with general public law principles.
I recognise the spirit in which the amendments were tabled. Although I understand and respect the intentions behind them, the OFS will be a public body acting in accordance with public law. It is clearly the case that
“if it appears to the OFS”
requires the OFS to make a judgment and take responsibility for its decisions, which seems to me to be the right approach. If we accepted the amendment, the changed wording
“where evidence is provided”
would be more passive, almost implying that, provided the OFS has received some evidence, it could trigger the sanction without applying a rigorous approach. We surely want a more engaged OFS than that, applying its judgment flexibly, sensibly and proportionately.
Clause 2 is clear on that point, too, making it clear that the OFS must follow the principles of best regulatory practice, including that its regulatory activities should be transparent, accountable, proportionate and consistent, and targeted only at cases in which action is needed. The hon. Lady might take further assurance from the fact that any intention to impose a suspension or monetary penalty or to remove a provider from the register must have clear processes, described in the Bill, that allow for a minimum period of 28 days for providers to make representations to the OFS. The only exception to that rule is where the OFS considers that a suspension should take effect immediately because of an urgent need to protect public money. Those provisions create important safeguards for providers. I am clear that any compliance action proposed by the OFS must be based on well founded concerns, and I am confident that the Bill as drafted makes the necessary provisions.
I add that clause 2 requires that the OFS, when performing its functions and duties, must have regard to guidance given to it by the Secretary of State. I assure Members that if the OFS is not acting in a reasonable and proportionate manner in respect of the issues raised by the amendments, such guidance will be given. On that basis, I ask that the hon. Lady withdraw the amendment.
Dr Blackman-Woods
I have listened carefully to the Minister’s response. If I have got it right, although “appears to” might be rather loose language, subsection (3) means that regulations will set out the types of evidence that the OFS might consider. In addition, if the regulations are not considered to be sufficient or have not been adopted properly by the OFS, additional guidance will be given by the Secretary of State to assist the OFS in its decision making. With that in mind, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Joseph Johnson
I beg to move amendment 32, in clause 15, page 9, line 22, after “interest” insert
“, and
(d) the retention of sums received”.
This amendment is consequential on amendment 33.
The Chair
With this it will be convenient to discuss Government amendments 33, 102 and 103.
Joseph Johnson
The Bill grants the office for students the necessary powers to impose penalties on higher education providers and recover costs and interest related to unpaid penalties and costs. As drafted, the Bill provides only that those sums will be paid into the consolidated fund. On reflection, that is too blunt an approach and is not in line with best practice elsewhere. We think it should be possible for the OFS to retain some of these costs, but only in certain cases in which the Secretary of State agrees to it with the explicit consent of the Treasury. We are clear that the OFS should be allowed to retain income only when it relates to its costs, not when it is imposed as a penalty or deterrent.
For the avoidance of doubt, Government amendments 32, 33, 102 and 103 align the legislation with standard Treasury guidance. They make it clear that OFS income is to be remitted to the Secretary of State unless the Secretary of State, with the consent of the Treasury, directs otherwise.
Gordon Marsden
I have no wish to detain the Committee over Government amendments that seem to me entirely sensible and proportionate. However, I have a question for the Minister that is not merely hypothetical, because significant sums of money that were extracted under the previous Government, for example in LIBOR fines, found their way into curious parts of the Consolidated Fund, enabling the Chancellor to stand up and produce rabbits out of hats in the various Budgets. That is another matter and we will not go into it, but it leads me to my point, which is that I am entirely happy and relaxed for the money to go to the OFS or even to the Secretary of State, but I would be rather less relaxed if I thought it would disappear into the Treasury without trace. Will the Minister give me an assurance that this money will be ring-fenced for the Department and will not simply go back into the Treasury?
Joseph Johnson
I thank the hon. Gentleman for that further line of questioning, which I will reflect on. I cannot give him that assurance now, but I will reflect and hopefully provide some further assurance in due course. In the meantime, I reiterate that the amendments are to bring the treatment of OFS income in line with best practice by allowing the OFS to retain some of its income, but only where the Secretary of State so directs, with the explicit consent of the Treasury.
Amendment 32 agreed to.
Clause 15, as amended, ordered to stand part of the Bill.
Schedule 3
Monetary penalties: procedure, appeals and recovery
Amendment made: 33, page 72, line 34, leave out sub-paragraph (5) and insert—
“Retention of sums received
5 The OfS must pay the sums received by it by way of a penalty under section 15 or interest under paragraph 4 to the Secretary of State.”.—(Joseph Johnson.)
Schedule 3, as amended, agreed to.
Clause 16
Suspension of registration
Joseph Johnson
I beg to move amendment 34, in clause 16, page 10, line 11, after “ends” insert
“otherwise than when the provider is removed from the register”.
This amendment provides that the OfS’s duty to enter the date on which a provider’s suspension ends in the register does not apply where it ends with the provider’s removal from the register.
The amendment removes the requirement for the OFS to enter the date of the end of the suspension of a provider in instances when the provider has been removed from the register. Given that, in the event of deregistration, there will no longer be any entry in the register to enter a date against, it is a sensible clarification of the OFS’s duties in such cases.
Amendment 34 agreed to.
Gordon Marsden
I beg to move amendment 172, in clause 16, page 10, line 12, at end insert—
“(10) A suspension must not exceed 365 days.”.
This amendment would ensure suspension of a provider’s registration cannot exceed more than one year.
Joseph Johnson
I thank the hon. Gentleman for raising these issues, which I agree are important, and that is why we have given them very careful thought at every stage in the development of our reform proposals.
The Bill provides important enforcement tools for the OFS, including a power to suspend a provider’s registration if it appears to the OFS that there has been a breach of the provider’s registration conditions. This imposes a powerful incentive for providers to adhere to the OFS’s conditions, and is therefore critical to safeguarding the quality and reputation of our HE sector, and to protecting students.
Amendment 172 seeks to ensure that any suspension imposed on a provider’s registration cannot exceed a period of more than 365 days. Imposing a limit of that nature to a provider’s suspension seems arbitrary and may be unhelpful, for example, when a suspension has been imposed in cases where a provider is “teaching out” students during a period that could exceed 365 days. I hope that gives the hon. Gentleman just one very quick example of why we would not want to have a limit of that kind.
Clause 17 puts in place a clear process for dealing with suspension, including setting out to providers the reasons for imposing a suspension and any remedial actions that may be required of them. We envisage that such remedial action requirements will not only state clearly what needs to be done but set out clearly the date by which such actions need to be taken.
The OFS will treat any breach of conditions as a serious matter and will require providers to put matters right promptly. Indeed, clause 18 allows the OFS to deregister a provider if its powers to suspend are insufficient to deal with a breach of a provider’s conditions. That will provide a clear safeguard for students, as it will avoid unnecessarily lengthy—even unduly protracted—periods of suspension.
I turn to amendment 174. The Committee has already discussed student protection plans, which the OFS can impose under clause 13. As the Committee has heard, we want the basic principles for having a student protection plan to be applied to any and every situation where a material change may potentially affect students’ continued participation on a course or at an institution. Such situations could include an event where a provider’s registration has been suspended.
We would expect providers to set out to students clear arrangements as to how student protection plans would handle material changes that might occur, including suspension. Information to students should include a clear process and provide clarity about options and mitigating actions, and the objective is to minimise any potential negative impact on students. The Bill also gives the OFS the ability to specify what transitional financial support students may receive if they are at a provider that has been deregistered by the OFS, resulting in designation for student support being removed.
On that basis, therefore, although I fully agree with the hon. Gentleman’s concern about the importance of having a robust regulatory framework and tough threshold conditions for entry for high-quality providers, I do not believe that the amendment is necessary as I strongly believe that the Bill already contains the necessary provisions to safeguard students’ interests.
Gordon Marsden
The Minister has quoted chapter and verse as to what the OFS might or might not be able to do, but what he has not been able to do is address the specific circumstances that I have listed, and I press him on this point about the differences between accommodation and all the rest of it. If he does not want to make this particular change to the Bill, how does he intend to ensure that the OFS considers all of those matters?
Joseph Johnson
We published an explanatory guide to the student protection plans, which was made available to the Committee yesterday, and that was an early provision of information to assist the Committee. Of course, the OFS will properly consult relevant bodies when it comes to drawing up the finer detail of how student protection plans should work.
Members of the Committee will have seen the kinds of measures that we expect student protection plans to include to assist students in those circumstances, such as suspension. We have listed four examples. The plans should include:
“provision to teach out a course for existing students; offering students an alternative course at the same institution”—
if it is just a programme or a department that is closing—
“making arrangements for affected students to switch to a different provider without having to start their course from scratch; measures to compensate affected students financially”.
Those are the kinds of things that we expect the consultation to flush out.
Gordon Marsden
I know the Minister is trying to be helpful. As I have said before, I am not dissing, to use a colloquialism, the student protection plans paper that has come forward, but it is very much a first stab at this. In particular, I want to ask him about the section on market exit at the end. Paragraph 35 states:
“Instances of a provider suddenly and without warning exiting the market completely are likely to remain extremely rare.”
I am sorry, but that is not historically accurate. We have had examples where providers have collapsed. The paragraph also states that
“the OfS will be able to work with students who want to transfer to alternative institutions”.
Say an institution was teaching law in a confined area and it was suddenly suspended for whatever reason and it had 1,000 students. Can the Minister tell me what alternative institutions would be available to pick up that tab and that group of students at that point? Just as importantly, what support—
The Chair
Mr Marsden, I can allow you to intervene as many times as you like—I am very easy-going on that—but we have to keep interventions brief, otherwise it is not fair on other people.
Joseph Johnson
Again, Sir Edward, I respond to the hon. Gentleman by reminding him that student protection plans are an existing feature of our higher education system, but the problem is that they are patchy and not systematic. The Bill will ensure that the OFS has the power to request student information plans systematically from categories of provider so that more students can benefit from the kinds of protections that are currently available only on a piecemeal basis. Those protections have helped institutions cope with the closure of courses or programmes, and we want to make systematic the existing best practice framework in the sector. That is our objective.
The hon. Gentleman is trying to conjure up this image of a sector that will suddenly be confronting the need to develop student protection plans, but they exist already. We are making them more widespread and on that basis, having given way a couple of times, I ask him to withdraw the amendment and agree that we are defending the student interest with this provision and putting in place something that the NUS has welcomed.
Gordon Marsden
Right—okay. I hear what the Minister has said. It is not my interpretation of what the NUS has said, which is why I am quoting chapter and verse from it, but the NUS can speak for itself. The problem with what the Minister has said—I accept his bona fides, his intentions and the rest of it, and I can see his frustration that I am not prepared to accept the broad assurances, but that is what they are—is that they are broad assurances that do not address some practical issues.
I go back to this point: the Minister cannot put a paper out to the Committee and not expect to be questioned on it in the course of the consideration of an amendment. I take him back to paragraph 35, which says that
“the OfS will be able to work with students who want to transfer to alternative institutions, with the aim”—
this is the additional thing—
“of their having banked credit for study already completed.”
The Minister knows as well as me, because he has made a big thing of the fact that he wants to do more about it in the future, that that situation of being able to transfer banked credit for study already completed does not exist in many institutions. That is one of the things that needs to be changed, but he wants to introduce a system that will make market exit much easier.
The Minister is blithely saying in the paper, “Of course they will be able to transfer to an alternative institution”, but he cannot give me any idea of what would happen in the particular example I gave him, or where the inducements would be. The paper also talks about the aim of students transferring with banked credit for study already completed, but the Minister knows perfectly well that is very fragmentary and very uncertain in the process that we currently have. Particularly in a crisis, hundreds of students could be transferred from one institution to another. Who will fund them? Will the Government stump up money? Will the university that takes them on board automatically have all those courses?
Joseph Johnson
I beg to move amendment 35, in clause 17, page 10, line 42, at end insert—
“( ) section 85 in the exercise of UKRI’s power under that section to give financial support, or”.
Clause 17(8) provides for an expedited suspension procedure where there is an urgent need to protect public money. This amendment adds financial support given by or on behalf of UKRI in the exercise of its power under clause 85 to the list of examples of public money for the purposes of that provision.
Subsection (8) provides the OFS with the power to suspend a provider with immediate effect where the OFS considers that there is an urgent need to protect public money. The clause lists particular examples of payments in the HE field that the OFS may want to protect and the amendment simply adds to that list payments made by UK Research and Innovation using the powers given to it by the Bill. The amendment provides a clear signal that the OFS will specifically take into account the need to protect UKRI funding when considering the suspension of a provider.
Amendment 35 agreed to.
Clause 17, as amended, ordered to stand part of the Bill.
Clause 18
De-registration by the OfS
Joseph Johnson
I beg to move amendment 36, in clause 18, page 11, leave out line 26 and insert
“breach (whether or not they have been, are being or are to be, exercised in relation to it).”
This amendment clarifies that the requirement in one of the pre-conditions for de-registration of a provider that the OfS’s powers to impose monetary penalties or suspend registration are insufficient to deal with the breach does not prevent those powers being exercised in relation to the breach.
Clause 18 sets out two types of case in which the OFS must deregister a provider. The first is when a provider, having previously been suspended or fined for breach of an ongoing registration condition, breaches the same condition or another of its conditions. The second case is when the breach of an ongoing registration condition is so serious that neither the imposition of a monetary penalty nor a suspension will be sufficient to deal with it. The amendment simply makes it clear that the OFS can come to a view that a fine or suspension would be insufficient to deal with a breach and then move to deregistration without first having had to take any action to impose those sanctions. That allows for appropriately speedy action in particularly serious cases—for example, cases of large-scale fraud. Of course, it will always be the case that the OFS could take such an approach only if the facts of the case justified it.
Amendment 36 agreed to.
Gordon Marsden
I beg to move amendment 175, in clause 18, page 11, line 37, at end insert—
“(8) The OfS must submit any list produced under subsection (7) to the Secretary of State who shall lay it before Parliament.”
This amendment would ensure the list of providers removed from the register is laid before Parliament.
Joseph Johnson
I do not want expectations to rise too high.
I welcome this opportunity to discuss the deregistration of providers. The OFS list of deregistered providers will be a single, comprehensive record of English HE providers that have been removed from the register. As such, it will be updated in real time as and when additions are made to it. The list and the information in it will be publicly available and hosted on the OFS website. In that sense, there appears to be little value in placing a duty on the Secretary of State to make available information that the OFS will place in the public domain. The OFS will take steps to ensure that the register and the list of deregistered providers is well publicised.
On new clause 5, the powers that the OFS is given in the Bill to impose sanctions, suspend a provider’s registration and, ultimately, to deregister a provider are a powerful incentive for providers to adhere to their registration conditions. When the OFS proposes to suspend or deregister a provider, or to refuse to renew a provider’s access and participation plan, this is primarily a compliance measure to ensure that providers take necessary steps to comply with the conditions of registration that have been placed upon them. Providers are given time either to take corrective action or to make further representations to the OFS before any sanctions are imposed.
I understand the reasons for the new clause, but it would not be right for there to be widespread publicity when the OFS has yet to decide to take action, and when discussions, representations and evidence gathering may still be ongoing. Such publicity may cause reputational damage that would not easily be repaired, even if the provider addresses the OFS’s concerns and no action is ultimately taken. It may also dissuade those giving evidence from doing so and lead to the provider not being fully co-operative. That is not desirable, given that our aim is, whenever possible, to work with providers to improve their performance, and for them to continue to provide high-quality higher education.
Let me be clear: when a decision has been taken, if the OFS considers it appropriate that students should be informed of the actions taken, it already has the power when appropriate to compel a provider’s governing body to ensure that students are properly and promptly informed.
Gordon Marsden
The Minister is being characteristically generous in giving way. We have already expressed our concern about the phrase “if the OFS considers it to be appropriate”. I am sure that my hon. Friend the Member for City of Durham does not want to place huge burdens on the OFS, but I do not think “if the OFS considers it to be appropriate” is the right phrase. If an institution is in that situation, it should not be a question of whether the OFS considers it appropriate to notify students; it must do so. If I were the new chief executive of the OFS, I would consider it a dereliction of my duty not to do so. I see no reason, therefore, why we are not talking about “must”, rather than whether it is appropriate.
Joseph Johnson
I understand the hon. Gentleman’s point but, as I have said on previous occasions, the OFS will be a public body that has to respect general public law principles and will need to act reasonably and proportionately in everything it does. I assure him that it is certainly our expectation that the OFS will act in the interests of students and will consider making it a specific condition of registration that a provider’s governing body advises students promptly and accurately of OFS proposals to take action against it. Where a provider applies to the OFS to be voluntarily removed from the register and students are still on such a provider’s courses, they will be notified through actions set out in the provider’s student protection plan. On this basis, I ask the hon. Gentleman to consider withdrawing the amendment.
Gordon Marsden
I rise to put a couple of particular questions to the Minister about this process. Obviously the refusal to renew an access and participation plan would be of significant concern. The whole idea of access and participation plans is to take forward the process of widening participation that the Minister and all of us have committed to, so refusing to renew one is actually quite a significant step. In the text the Minister has provided, there is a lot of detail about the circumstances in which that might take place. The Bill talks about the OFS notifying
“the governing body of the provider”
about this. I was not quite clear about the implications of this particular phrase, so I would be grateful if the Minister were to expand on it, but subsection (3) says:
“The Secretary of State may by regulations make provision about… matters to which the OfS must, or must not, have regard in exercising its powers under subsection (2);”.
I would welcome some clarification, however brief, on that. That is the first point.
My second point touches on our earlier discussions. What would the position and the relationship of the director for fair access and participation be in this process? At what stage, for example, would his recommendations be reviewed? Would he have a veto—that is perhaps the wrong word—or the sole power to make that decision, which the OFS board would just rubber-stamp, or does the Minister envisage a conversation between the OFS board and the director before refusals were made clear? As I have said, this is not a power that should be used lightly. It is not a light issue for the students who will be affected by no longer having access to an access and participation plan nor for the provider who will have its plan removed and for whom it will potentially appear as a black mark on its corporate reputation.
Joseph Johnson
I am grateful to the hon. Member for Blackpool South for giving me a chance to provide some clarification. The Government believe that anyone with the talent and potential to benefit from higher education should have an opportunity to go to one of our great institutions. In the new world, the OFS will take on responsibility for agreeing access and participation plans, so that even more people can have that chance. However, it is important that the OFS has a backstop power to refuse to agree a new plan where there have been concerns with previous performance, which would be used only in circumstances where it appears that a higher education provider has failed to deliver on commitments in its access and participation plan or has exceeded the specified limits for course fees.
The process that the OFS would follow in those circumstances will be set out in regulations. The regulations will cover the matters that the office for students should or should not take into account in deciding whether to refuse to renew an access and participation plan, the procedure it should follow when giving notice of the refusal to renew a plan, the impact of a notice of refusal and provisions enabling providers to apply for a review before a decision to refuse to renew a plan becomes final. Such detailed arrangements, covering the whole process of agreeing, renewing and enforcing plans, have been set out in regulations since 2004. The hon. Gentleman asked about clause 21(3). Those provisions replicate the provisions in the Higher Education Act 2004.
The director of fair access has not used his powers to enforce compliance with access agreements under the current system. However, we want to ensure that the office for students has the necessary teeth to act where there are concerns. Such a power underlines the priority that we place on widening participation and the key role the OFS will have in ensuring that continued progress is made in that area. I recommend that this clause stands part of the Bill.
Gordon Marsden
It is extremely helpful of the Minister to lay that out. I asked a very specific question about at what point in the process the director for fair access and participation would be involved and whether he would have a full say. I accept that those are issues that can be dealt with when further guidance is put forward. They are important issues. As the Minister has just said, the current director has not yet had to use his powers in this area. If we are looking at a situation where there is going to be a significant expansion of providers over the next 10 years, which the Government’s own technical document makes very clear, we cannot assume that this process will not happen in the future. It would therefore be helpful for the Government and the OFS if some further thought were given to the relationship between the OFS and the director for fair access and participation on the important decision to refuse an access and participation plan as envisaged in clause 21.
Question put and agreed to.
Clause 21 accordingly ordered to stand part of the Bill.
Clause 22
Voluntary de-registration
Gordon Marsden
I beg to move amendment 191, in clause 22, page 14, line 5, leave out “may” and insert “must”.
This amendment would ensure transitional measures were put in place by the OfS if a provider is removed from the register.
People might say that voluntary deregistration is not as important as a compulsory one. Nevertheless, even a voluntary deregistration has consequences. Therefore, with this probing amendment, we are asking the Minister to consider requiring the transitional measures to be put in place, rather being left as “may”. I leave that for the Minister to consider in context, but it is important for us not simply to have a situation of voluntary deregistration.
Joseph Johnson
The amendment would require the OFS to put in place transitional measures when a provider has applied to be removed from the register, even if it were the case that all students had completed their studies. We expect that, in the overwhelming majority of cases, transitional measures will be appropriate and that they will be made by the OFS. It is important, however, for the OFS to retain discretion to act when necessary, rather than being forced to take action that, in some circumstances, may not be appropriate, in particular when a provider is making an orderly exit from the HE sector.
There is little value in the OFS being required to make transitional arrangements when a provider has acted reasonably, responsibly, and has remained on the register until such time as the students have completed their studies. I understand the hon. Gentleman’s intentions in moving the amendment and fully agree with the need to promote such important issues, but it is not necessary, because the Bill already makes appropriate provision. I ask him to withdraw the amendment.
Gordon Marsden
I hear what the Minister has to say. I am grateful for his explanation and, on that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 22 ordered to stand part of the Bill.
Clause 23
Assessing the quality and standards of higher education
Question proposed, That the clause stand part of the Bill.
Joseph Johnson
Yes, indeed. There have been representations and plenty of discussion about why the Government felt it necessary to make explicit reference to standards here. The words “quality” and “standards” have distinct meanings within the higher education sector, even though both are encapsulated within what a layperson might consider to be the quality of a degree. While we consider that HEFCE currently has a role in assessing standards as part of its current quality duty, the lack of an explicit mention for standards has created some uncertainty and that requires correction.
Quality refers primarily to processes, such as whether a provider has suitable academic staff or is providing appropriate levels of assessment and feedback. Standards, on the other hand, refer to the level that a student is required to meet to attain a degree or other qualification. The common expectation of standards is set out in the “Frameworks for Higher Education Qualifications”, which has the support of the sector.
It is essential that the office for students is able to ensure that providers are genuinely offering qualifications that are of a suitable standard to be considered higher education. Otherwise, we could be powerless to prevent a provider offering a qualification in, for example, mathematics which might require students to achieve no higher standards than a C at GCSE, while potentially passing it off as a degree and collecting student support from the taxpayer. This would clearly be unacceptable.
Let me be absolutely clear for the hon. Member for City of Durham and others. This is not about undermining the prerogative of providers in determining standards. It is essential that the office for students is able to ensure that providers are genuinely offering qualifications that are of a suitable standard to be considered higher education, otherwise we might be powerless to prevent a provider offering a qualification in, say, mathematics, which might require students to achieve no higher standard than a C at GCSE, perhaps while passing it off as a degree and collecting student support from the taxpayer. That would clearly be unacceptable.
Let me be absolutely clear for the hon. Member for City of Durham and others: this is not about undermining the prerogative of providers in determining standards. This is about ensuring that all providers in the system are meeting the threshold standards set out in the “Frameworks for Higher Education Qualifications”, a document endorsed and agreed by the sector.
We are clear that the Government have no role in prescribing course content or structure and that institutional autonomy, as well as the consequential diversity of content and teaching styles across the sector, are crucial to the reputation and vibrancy of UK HE. However, it is important that we can ensure that the overall quality of HE in this country is not undermined by providers offering substandard qualifications, thus ensuring that students get what they pay for and that the taxpayer receives value for money.
As we heard from Pam Tatlow of MillionPlus during the evidence sessions,
“we have got to protect quality and standards for our students. We have also got to maintain a system in which we can maintain confidence.”––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 12, Q11.]
Together with our wider reforms set out in the Bill, clause 23 is a key element of our approach to maintaining a high and rigorous bar for entry into the system and providing effective oversight—goals that I know hon. Members share—while reducing the burden of inspection on those providers that are performing well.
Question put and agreed to.
Clause 23 accordingly ordered to stand part of the Bill.
Clause 24 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(David Evennett.)