Tertiary Education and Research (Wales) Act 2022 (Consequential Amendments) Order 2026
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, this draft order was laid before the House on 2 February and is needed following the passage of the Senedd’s Tertiary Education and Research (Wales) Act 2022. The Act provides a new statutory framework for what is now known as tertiary education and research in Wales, which encompasses higher education, further education and training, apprenticeships, sixth forms, and adult community learning. The Act established the Commission for Tertiary Education and Research in Wales to regulate and fund the sector; I will refer to this body as the commission.
The Act provides the commission and Welsh Ministers with powers to fund the tertiary education sector in Wales. It repeals corresponding functions that were previously in place, including powers in the Learning and Skills Act 2000. Various pieces of UK legislation therefore currently reflect the previous system, in which the Welsh Ministers regulated and funded the sector through powers that are now being repealed.
The amendments in the order ensure that UK legislation is updated by making amendments that account for the changes introduced by the Senedd’s 2022 Act. It mainly does that by removing any references to the repealed powers and replacing them with references to the corresponding powers in the 2022 Act. These consequential amendments ensure that the legislation being amended will continue to operate in largely the same way as it does now, but with the commission integrated into the legislative framework.
Article 2 of the order updates the list of exemptions in the Value Added Tax Act 1994. It ensures that education and vocational training provision funded through powers in the 2022 Act will be an exempt supply for the purpose of value added tax. The order also amends the Income Tax (Earnings and Pensions) Act 2003. This Act makes provision about the tax treatment derived from shares in research institution spin-out companies. Article 3 of this order ensures that the definition of “research institution” in that Act includes any university or other educational institution receiving funding under powers in the 2022 Act.
Section 113 of the Higher Education and Research Act 2017 allows educational regulators across the UK to work jointly, where doing so would make delivery more efficient or effective. Article 4 of the order amends this provision to enable Welsh Ministers to exercise functions in the 2022 Act jointly with other public authorities, including the Office for Students and UK Research and Innovation.
As noble Lords may be aware, some charities are exempt from registering with the Charity Commission. The compliance of these charities with the relevant laws is instead overseen by their principal regulator. Article 5 of the order amends the Charities Act 2011 (Principal Regulators of Exempt Charities) Regulations 2013, to designate the Commission for Tertiary Education and Research as the principal regulator for specific charities in Wales. This reflects the fact that the commission will now be responsible for regulating further education and training in Wales under the 2022 Act, whereas previously Welsh Ministers were responsible. Article 5 also ensures that existing restrictions on principal charity regulators relating to the onward sharing of HMRC information are applied to the commission.
Article 6 of the order amends the Seafarers’ Wages Regulations 2024. The amendment ensures that the apprenticeship rate for seafarers can apply to those carrying out apprenticeships funded by the commission under powers in the 2022 Act.
The amendments to UK legislation in this draft order fall outside the legislative competence of the Senedd, as they relate to reserved matters such as tax, charities and employment. Taken together, these amendments ensure that existing legislation will continue to operate as intended by taking account of the changes made by the 2022 Act. The order needs to be in force by 1 April, to coincide with the Welsh Government’s commencement plan for the 2022 Act.
I welcome the continued implementation of the Senedd’s Tertiary Education and Research (Wales) Act and the positive impact that the commission is already making in Wales. This draft order will make the consequential amendments necessary to keep UK legislation up to date in light of the new legislative framework for tertiary education in Wales introduced by the 2022 Act. I beg to move.
Baroness Humphreys (LD)
My Lords, it is a pleasure to speak in the debate on this SI, which I hope is the final stage of the formation of the Commission for Tertiary Education and Research in Wales. As the draft Explanatory Memorandum to this SI explains, this consequential amendment order is made under Section 150 of the Government of Wales Act 2006, which allows the Secretary of State to make provision in consequence of Acts of Senedd Cymru. In this case, the SI makes permission in consequence of the Tertiary Education and Research (Wales) Act 2022 and of two other orders that followed the 2022 Act.
The 2022 Act brought forward welcome changes to the tertiary education sector in Wales by bringing together the higher education and research sector, the further education sector and the training sector under the umbrella of the newly created Commission for Tertiary Education and Research. As the Minister has already explained, the commission has the responsibility for funding and regulating the tertiary education sector in Wales. The 2022 Act provided a list of provisions in existing education legislation that were to be repealed. This 2026 order seeks to replace references to the repealed legislation when they appear in pieces of UK legislation. The 2026 order also takes account of the new functions of Welsh Ministers and the commission.
I was especially pleased to see that an amendment has been included that addresses the situation regarding seafarers’ wages. The amendment ensures that the apprenticeship rate can apply to seafarers carrying out apprenticeships that are provided or funded by the commission. We welcome this added incentive for young seafarers to follow their desired careers.
On these Benches, we welcome the clarity that the order provides about the powers of Welsh Ministers. As Liberal Democrats, we support the principles of devolution and believe that decisions affecting Wales should be made by democratic Welsh institutions. The SI simply implements changes to UK legislation required by legislation passed by the Senedd, and we therefore support the instrument wholeheartedly.
The Earl of Effingham (Con)
My Lords, this is a technical but necessary instrument made under the Government of Wales Act 2006, ensuring that the statute book reflects the reforms introduced by the Tertiary Education and Research (Wales) Act 2022. That Act abolished the Higher Education Funding Council for Wales and created the new Commission for Tertiary Education and Research—Medr—which became operational in August 2025. The commission now brings together responsibility for higher education, further education, apprenticeships, sixth forms, adult learning and research under a single strategic body.
The order does not revisit that policy decision; it simply updates legislation so that it continues to function properly following the creation of Medr. It transfers certain funding powers to Welsh Ministers or the commission, updates definitions relating to research institutions, enables joint exercise of functions, confirms the commission as the principal regulator of exempt FE charities and makes related amendments to reflect the new governance structure. Both the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments have considered the order and raised no concerns.
Lord Katz (Lab)
I thank the noble Earl and the noble Baroness for their valuable contributions to our short and focused debate. I appreciate the comments from the noble Baroness, Lady Humphreys, who welcomed the SI and supported how it helps to embody and enact further the devolution settlement within Wales, specifically for education.
I also thank the noble Earl, Lord Effingham, for his comments. He asked about the process of developing the commission. I can confirm that the transition has been smooth. He will be aware that the commission has undertaken a series of consultations to ensure the steps it takes to implement the 2022 Act fully are informed by the views and experience of the tertiary education sector and other partners. We take that very seriously.
The commission has made substantial progress in its role as the national steward for raising standards, delivering for learners of all ages, and improving institutional collaboration and co-ordination. It is worth noting that this has included supporting over 1,000 employees facing an uncertain future at the Port Talbot steelworks to develop new skills through an innovative programme of local learning. It is important that the order allows the full transition to the commission and the switching-on of its powers, but it is not the case that the commission has not been up and running, active and delivering good for the tertiary education sector in Wales.
Having said that, it is worth noting that the Welsh Government have taken a phased approach, which is probably the right approach, to bringing the 2022 Act into force, to ensure a smooth transition from previous arrangements and to prevent disruptions for providers and learners. As I said, the next phase of implementation will take place on 1 April, when a number of the new functions will come into force. That is why we are debating the order today, pending which we will formally move the Motion to approve the order in a few days’ time in the Chamber, to make sure that it can come into force to coincide with the Welsh Government’s commencement timetable for these powers. I hope that that satisfies the noble Earl’s question on the transition.
The order provides for a number of changes to UK law, including amendments to tax, charities and employment legislation, that are necessary following the Senedd’s Tertiary Education and Research (Wales) Act 2022. I offer my thanks for the productive manner in which the UK and Welsh Governments have worked in preparing the order, and I commend it to the Grand Committee.