Skills and Post-16 Education Bill [HL]

Lord Johnson of Marylebone Excerpts

Committee stage
Wednesday 21st July 2021 Lords Chamber

[Baroness Berridge (Con)]

My Lords, I beg to move Government Amendment 91A and speak to Amendments 91B, 91C, 99C and 99D in my name. These are primarily aimed at amending Clause 15, which in turn amends the definition of “higher education course” in the Higher Education and Research Act 2017, to make express provision for the regulation of modules and to make clear what a module of a higher education course is as distinct from a full course.

The current student finance system does not offer funding for modules, nor is there any fee maximum for such modules or a specific corresponding regulatory system. The lifelong loan entitlement will transform student finance by supporting more flexible and modular provision. This legislative change is needed to ensure that we can deliver modular provision. Taken with the amendments that we have previously laid, this clause makes specific provision for modules in Part 1 of HERA 2017, which relates to the regulatory regime under the Office for Students. The amendments also relieve higher education providers, the OfS and the designated quality body of certain additional burdens which would otherwise arise from the addition of the concept of modules under HERA. These relate to certain requirements to provide or publish information—for example, under Sections 9, 11 and 65 of that Act. We want to reduce bureaucratic burden on providers, and these changes will ensure that the introduction of funding for modules through the LLE will not add to this.

Clause 26 sets out the territorial extent of the provisions in the Bill. This is a standard clause for all legislation. In essence, and with minor technical exceptions, the LLE provisions extend to England and Wales but apply in relation to England, because we are making amendments to the English student finance system. Overall, these changes will help to pave the way for more flexible study and for greater parity between further and higher education. As noble Lords will be aware, we will be consulting on the detail and scope of the lifelong loan entitlement this year. Our commitment to supporting students through the LLE is a key consideration in the public consultation which we will launch in due course. This will include seeking views on specifics of our regulatory system.

[Lord Johnson of Marylebone (Con) [V]]

My Lords, I speak to Amendment 92 in my name and draw attention to my interests in the register, as chair of TES, the education software and information group, and of Access Creative College, an independent provider of training for the digital and creative industries.

Amendment 92 is a probing amendment, to test the Government’s ambitions for the lifelong loan entitlement and to probe their assumptions about what provision is worthy of funding under it. We do not yet have critical details on the LLE, for which the Bill provides the legislative underpinning. That will emerge only following the consultations that the Minister has just mentioned, and then in secondary legislation due in 2024, ahead of the LLE’s actual introduction in 2025. In theory, the combination of the LLE and the introduction of the system of modular funding that the Minister has just mentioned, for sub-degree chunks of study, will make it easier for adults and young people to access learning in a more flexible way, to space out their studies and to earn while they learn if they wish.

Since 2012-13, English HE students have been eligible for loans only if they are studying at an intensity of 25% or more of a full-time equivalent course and are following a full course for a specified qualification, hence students studying individual modules or shorter courses of less intensity have not been eligible for loans. This has been an important factor in the decline of part-time adult learners. The LLE will, in theory, help to address this problem—therefore so far, so good, and I very much welcome it.

However, there is real complexity involved in the introduction of the lifelong loan entitlement, and a danger that theory and practice might diverge in crucial ways in certain respects. One of the main sources of danger is that the Treasury, partly out of its desire for quick savings from higher education in the spending review, may water down the promised skills revolution by insisting on retaining the so-called equivalent or lower qualification rule. Indeed, I expect that the Treasury will put up a valiant attempt to keep the ELQ rule whatever the consultations on the LLE say when they are eventually produced.

The traditional rationale for the ELQ restriction is that funding available for student support is finite and that it is necessary to put in place limits to ensure that all eligible students who wish to enter HE for the first time can do so. Accordingly, the ELQ rule prevents those studying a second HE course, at an equivalent or lower level, from receiving tuition fee loans or maintenance support for the course. For example, if you study classics for an undergraduate degree in your 20s at UCL, you could not then reskill in your 30s by undertaking a diploma in graphic design at UAL.

Restrictions apply even to those who previously followed privately funded courses which they self-financed. These ELQ restrictions seem complex and very unusual, when you look across the global HE landscape. For example, they do not exist in Canada, Australia, or New Zealand, whose HE systems are quite similar to England’s. The obvious trouble is that the ELQ rule not only constrains student choice about how best to retrain if they already have a qualification but treats tertiary education—post-18 education—as a one-off event, rather than as part of a process of lifelong learning in a world in which people can expect to have multiple careers over their working lives. Keeping it will therefore make a nonsense of the entire lifelong loan entitlement.

My contention is that any savings which the Exchequer might make on the subsidy in the loan book from retaining it are outweighed by the broader economic costs incurred by making it so difficult for students to change subject and retrain for new careers. We need a serious economic impact analysis of the ELQ rule before we can consider the secondary legislation on the LLE. Indeed, since it was introduced in 2008, various Governments have already effectively acknowledged the flaws with the ELQ by peppering it with ever more complicated exceptions, such as those applying for medicine, dentistry, and initial teacher training. Part-time ELQ exemptions have been made for engineering, computer science and technology, extended to STEM courses in 2016-17. In 2018 further exceptions were made for nursing, midwifery, allied health professions, and so on.

ELQ restrictions were possibly appropriate for a restricted grant-based HE system, but, under the current loans-based system, they are anachronistic and antithetical to the broader objectives of the Government’s skills reforms. That is why the 2019 Augar report rightly recommended that the ELQ rules be scrapped entirely for those taking out loans for levels 4, 5 and 6—yet nothing has happened since.

Skills and Post-16 Education Bill [HL]

Lord Johnson of Marylebone Excerpts

2nd reading
Tuesday 15th June 2021 Lords Chamber

[Lord Johnson of Marylebone (Con)]

My Lords, I too congratulate the noble Baroness, Lady Black of Strome, on her extraordinarily fine maiden speech. I am looking forward to learning a lot from her in a lot of different areas.

I too welcome this Bill. It is an important bit of legislation, possibly the most important for the levelling-up agenda in this Parliament. I have a few reservations and would appreciate reassurance on a couple of points from the Minister. I declare my interest as a visiting professor at King’s College London, a senior fellow at Harvard Kennedy School and chair of two private education companies Tes, and Access Creative College, a provider of further education training for the creative industries.

There is a huge amount to welcome in this Bill, but for me there are two features in particular: the lifelong loan allowance, which is being put on a statutory footing; and the introduction of modular funding, which a long-overdue reform that will bring valuable flexibility into our student funding system. However, I have some concern that the Treasury may water down the rocket fuel of the promised skills revolution. A number of noble Lords have already hinted at where this might arise. One of my concerns is around the rigidity of the current system that prevents people from studying at an equivalent or lower level than an award that they already have, as the noble Lord, Lord Puttnam, said in his excellent speech. To my mind, that makes a nonsense of the lifelong loan entitlement. I appreciate that the Government are consulting on it. I hope that the results of that consultation come out the right way, because if we stick to it, it will prevent people from reskilling effectively.

My other area of concern is around what I see as the Treasury’s persistently flawed conception of how to measure value for money in post-16 education. The idea that you can measure the worth of a course by the proportion of the student loan that ends up being repaid is far too reductive. If we stick with it, it will stop us from properly funding what are socially useful and valuable but lower-earning professions and paths in life. We already see hints that this is the prevailing view and that it will continue to be the prevailing view in the list of some 400 qualifications that are eligible for funding in the lifetime skills guarantee. That list of 400 qualifications is still too restrictive. As far as I can see, it does not include any creative arts courses, for example.

My concern, as this Bill makes its way through this place and the other place, is that when the section lands on the new student finance system, the Treasury uses this legislation’s fine print to further defund those areas of provision that have lower rates of repayment associated with them, through a mix of potential policy tools, including student number controls by subject, higher minimum entry requirements by subject and a variety of others, most notably the potential for much lower fee levels for those courses.

Those are all big risks as this Bill makes its way through this place. I would appreciate any reassurance that the Minister can give on that front. I am particularly concerned about what it would do for the provision of creative education courses. It is highly likely that, if we go down that path and defund courses on that basis, it will starve the supply of talent into some of our most promising industries as an economy—performing arts, creative design, creative computing, music technology, music performance and so on. That would be a sad outcome for us as a society and it would also be an economic nonsense. These were industries that were growing at five times the rate of GDP before the crisis, and we should not do them the disservice of starving them of talent as we come out of it.

My sense is that if the Treasury wants to save money, and I understand that it wants to invest money in other areas or education systems to support catch-up elsewhere, which is entirely understandable, I recommend that it looks at lowering the repayment threshold on the student loan as a far more sensible source of much larger sums of money. The Higher Education Policy Institute, for example, has calculated that lowering the repayment threshold to just below £20,000 from the current level of £27,295 would save £3.8 billion and reduce the proportion of the student loan that is not repaid to one-third, from current levels of over one-half. That seems a very sensible and more fruitful area of reform for the Treasury to look at.

Time is running out, but I welcome this Bill. It is a really important Bill. I congratulate the Minister and the Secretary of State for bringing it to Parliament. I will certainly be supporting it. However, it is clearly something of a down payment on a much bigger set of changes that, ultimately, we will need if we are going to have a joined-up system of post-16 education and skills. We have a rather bewildering array of regulatory and funding bodies out there in the landscape: the OfS, the Education and Skills Funding Agency, the Institute for Apprenticeships and Technical Education, and so on. The time is surely coming, now that through this Bill we are introducing much more flexible systems of funding, for us to move to a joined-up system of regulation and funding for all post-16 education.