4 Lord Willetts debates involving the Department for International Trade

Wed 21st Jul 2021
Mon 19th Jul 2021
Thu 15th Jul 2021
Tue 15th Jun 2021

Skills and Post-16 Education Bill [HL]

Lord Willetts Excerpts
Moved by
90: After Clause 25, insert the following new Clause—
“Review of student loans
(1) The Secretary of State must review and update all the terms of—(a) student loans, and(b) graduate payments,every five years.(2) The outcome of the review under subsection (1) must be published within six months of its completion.”Member’s explanatory statement
The purpose of this amendment is to ensure that there is a regular review of the student loan system so that can any problems can be identified and changes made.
Lord Willetts Portrait Lord Willetts (Con) [V]
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My Lords, I wish to move Amendment 90 in my name, which proposes a new clause to provide for the review and updating of the terms of higher education loans and repayments every five years. Before I briefly turn to that, I just say to the House and to the Minister that it is much appreciated that the Government have set aside four days for consideration of this important Bill in Committee. This is the last amendment I will move, so this is the right moment to thank the Minister for her engagement with the issues. I assure her that all the amendments I have brought forward are aimed at improving the Bill and helping the Government achieve their policy objectives.

I realise that there may well be a very understandable reaction to this amendment: that higher education finance is so difficult and controversial that the last thing we need is a provision to look at it every five years. But, in reality, because the system is so important in the public finances and so politically charged, it is being changed, and it has been changed, in an ad hoc way, from time to time. In this amendment, I have tried to provide a framework so that it can be reviewed and updated systematically, looking at the system and the interactions between its parts as a whole.

This proposed new clause would also tackle a belief—I think it is misconceived, but there are people who hold it—that somehow the system cannot be changed at all. The terms on which the Student Loans Company deals with students, and then graduates, makes it clear from the beginning that regulations for the terms of repayment can be amended from time to time. Of course, there are advocates of a graduate tax. This current repayment scheme is, in many ways, rather close to a graduate tax—a 9% tax on earnings above a certain threshold but with a cap on the total amount. A graduate tax would clearly come with adjustable rates, so this establishes the reality that the terms of the scheme can be adjusted and altered, and that this should be done with a proper systematic overview from time to time.

It would also enable the system to take account of legitimate political debate about the balance between the amount we expect graduates to pay back for the cost of their education and the amount we expect taxpayers to pay by virtue of writing off unpaid student loans. There is genuine and legitimate debate about what that balance should be. Different people of different political persuasions can take different views on what the balance is, and it is also affected by things such as the performance of graduate earnings. I do not think it is now breaking any confidences to say that, when we set the graduate repayment threshold of £21,000, when we brought in the £9,000 fees, it was based on a rather different forecast of graduate earnings than actually happened. So as earnings overall grew by less, the repayment threshold ended up being higher in real terms than had been envisaged. Those are the types of economic scenarios which Ministers rightly should be able to consider, and they should be able to change the system in the light of them.

In the last few years, we have had a range of ad hoc changes, of which the most significant—and, I have to say, I think the most egregious—was the one in 2017, with a very big increase in the graduate repayment threshold and, therefore, a sudden and large increase in the cost to taxpayers from loans that were being written off. It was introduced with no consultation and no wider consideration for the system as a whole. In fact, I have to say that it was a case study in the perils of policy-making by conference speech crisis, which is not a good way to decide how our higher education should be funded.

I very much hope that this approach—which provides that there should be an overall review every five years in which, clearly, the terms of the loan scheme can be looked at in the light of economic and political considerations—provides some kind of framework. The Augar review—a serious piece of work, a lot of which I agree with—is one example of how that could be done, and the Minister might cite it. But circumstances change; debates change. Rather than having a one-off specific exercise like that, I think that, every five years, being able to look at what has happened to the so-called RAB charge, loan repayments and graduate earnings, and adjusting the system in the light of public spending pressures and other issues, makes sense, and it does not stop people doing anything else.

There will be some people in this House who believe that the whole system should be swept away. That is their view, and nothing in this provision changes their capacity to do that if they bring in primary legislation. Equally, Ministers may still want to make changes, from time to time. But this just provides, rather as in the historic social security system, for a systematic overview every five years, with the opportunity to look at all the evidence and decide in a structured way how the system could be recalibrated. I think it legitimises the absolute necessity of keeping the scheme adjusted, and provides a framework for doing so, and I hope it will improve the quality of our ability to scrutinise and improve our higher education financing system as it goes forward. That is why I propose this new clause.

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Baroness Berridge Portrait The Parliamentary Under-Secretary of State, Department for Education and Department for International Trade (Baroness Berridge) (Con)
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My Lords, I am grateful for the amendment tabled by my noble friend Lord Willetts, and for his thanks. It is a pleasure to engage with noble Lords. This is my first piece of legislation in your Lordships’ House, and I hope that this is the shape of things to come in terms of the tone and the reaction to this legislation.

With £19.1 billion paid out in student loans in the financial year 2020-21, and further increases forecast for future years, it is essential that the Government keep careful control of the student finance system. It is also important that they retain the ability to review and make changes to the student finance system as and when needed, without the potential delays, or the focus on process, that a requirement for a review every five years could impose. I appreciate my noble friend’s comments, but inadvertently, a process may, as the noble Baroness, Lady Sherlock, outlined, become constraining, even if it was introduced with the best of intentions.

We must ensure that the system can remain responsive to the needs of the labour market and the wider economy, and thus continue to deliver good value for students and the taxpayer. We agree that, as the noble Baroness said, there is a need for transparency. A wide range of data on student loans and repayments are regularly produced and made publicly available, which enables the Government, and other interested parties, to monitor the student loans system. These include regular publications from the Student Loans Company and the Higher Education Statistics Agency.

As the noble Baroness, Lady Sherlock, outlined, the Government have updated the student loan offer in recent years, with the introduction of several new loan products, including loans to support postgraduate and doctoral study, and we will continue to make changes as and when necessary. Through the Bill, the Government are also introducing a lifelong loan entitlement that will open up new routes for people to retrain and upskill flexibly throughout their lives.

In relation to some of the questions raised by the noble Baroness, Lady Bennett, the fees cap of £9,250 is frozen for this year and the next academic year. She talked about the burden, and the responsibility, obviously, is to repay a loan, but 30 years is at the moment akin to many of the mortgage products available on the commercial market.

As the noble Lord, Lord Willetts, correctly predicted, I shall take this opportunity to remind noble Lords of the recommendations regarding higher education, including on student loans and graduate repayments, that were made by the independent panel appointed to provide input to the review of post-18 education and funding. The Government are carefully considering these recommendations before setting out a response to the review, along with the comprehensive spending review.

In conclusion, while I am sorry to disappoint my noble friend for the second time in recent days, I hope that my remarks have reassured him, as I know this has been an issue of concern to him for many years. I hope that he will feel comfortable in withdrawing his amendment.

Lord Willetts Portrait Lord Willetts (Con) [V]
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I am grateful to the Minister for her courtesy, as always. I do not think my score on the amendments that I have tabled to the Bill has been very high—and I will, of course, withdraw this amendment. However, I hope that it will be possible to come back and consider this matter further.

I shall comment briefly on what has been said. The noble Baroness, Lady Bennett, came to this from her own perspective, which was interesting. I much appreciated the fact that she too made the case for some kind of structure involving a review every five years. I can assure the noble Baroness, Lady Sherlock, and the Minister, that there is nothing in the amendment that would stop specific changes at specific times. We have had a lot of those, and that may well carry on.

What I am trying to provide for is something more systematic every few years. I am trying to avoid the need for something like Augar—the setting up of a special inquiry—when it should just be natural that every five years we look at what has happened to graduate earnings, at how much of the graduate loan book is likely to be repaid, and at the terms of maintenance support, and we decide whether there should be any changes in the light of changing circumstances—or, indeed, changing political priorities. Providing that kind of health check on the system as a whole every five years would not deprive Ministers of power; it would actually provide an opportunity for a sensible wider public debate on a subject that is often seen as obscure and difficult but should not be because it is of such public interest.

As I said, I will not press the amendment to a vote today, but I hope that perhaps, over the summer, it might be possible to meet the Minister and consider with her not only this but some other amendments that I have tabled, in case we can find a way forward that takes account of the legitimate concerns that she has expressed. I also hope that she recognises that my amendments are aimed at improving the system in line with the Government’s own policy objectives.

Skills and Post-16 Education Bill [HL]

Lord Willetts Excerpts
Moved by
88: After Clause 25, insert the following new Clause—
“The Student Loans Company communication with graduates
(1) The Secretary of State must by regulations provide that the Student Loans Company must—(a) provide universities with anonymised information about their graduates’ incomes;(b) facilitate universities’ communication through the Student Loans Company with their graduates without passing any personal data to any university, unless a graduate has specifically opted out; and(c) facilitate National Employment Savings Trust (NEST) communication through the Student Loans Company with graduates at the earlier of—(i) the two years preceding the predicted completion of their graduate repayments, or(ii) between the 28th and 30th year of their graduate repayments without passing any personal data to NEST,unless a graduate has specifically opted out. (2) Regulations under this section are to be made by statutory instrument, and a statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”Member’s explanatory statement
This amendment enables universities to use the SLC to communicate with their graduates to encourage greater uptake of lifelong learning opportunities. Anonymised SLC data about graduates’ earnings may also be provided to universities to enable them to improve graduate outcomes. It also could nudge graduates into greater pensions investment through NEST.
Lord Willetts Portrait Lord Willetts (Con) [V]
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My Lords, the background to this amendment is that the Student Loans Company has close contact with many graduates, which provides an opportunity to fulfil some of the Government’s objectives that lie behind the Bill. I indicate in the amendment three possible uses of that information.

The first is to give information back to the universities about how their graduates are doing. Everyone wants to see graduates doing well, but evidence is often cited about the difficulties that some graduates from some universities are having. The more information that is fed back to universities about the performance of their graduates—properly protected and anonymised, of course, with any confidentiality requirements that are necessary—the more that universities will have to shoulder their responsibility to do better.

That is communication back to universities, but—secondly—I also think there is a fantastic opportunity for the Student Loans Company to be a kind of post office, enabling universities to communicate with their graduates. That is surprisingly hard at the moment. Very few universities have anything like a database of their graduates, and most lose contact with most of them. But there are good reasons why universities should be able to communicate with their graduates, and it would be fantastic if our universities could match the performance of the American universities in communicating with them. I hope it is not too frivolous if I cite the American remark that “If only Osama bin Laden had been to Harvard, the Americans would have found him within a fortnight”. They are very good at tracking down their graduates, but we do not do that.

A particular reason why it would be great if universities could communicate with their graduates is to enable the universities to offer them lifelong learning opportunities, a cause that is rightly close to Ministers’ hearts. I make it clear that this post office function would not require the universities being given actual email addresses or other data; they would simply provide a message to the Student Loans Company that the company would then communicate to their graduates. There would of course need to be some process for agreeing that the messages were appropriate and approved of.

Still, imagine a university that said, “We completely take to heart Ministers’ strictures. We are very worried that too many of our graduates are not earning what they may have hoped to earn. Here is a message that we would like to send to all our graduates earning less than the following amount of money saying, ‘If you get in touch with us, we will investigate what we can do to provide you with extra skills and training so that you can boost your earnings.’” That kind of engagement with graduates over their working lives should be part of a university offer, and the lack of university information to enable them to communicate with their graduates is a barrier to that.

The third purpose identified in my amendment is rather beyond the scope of education but fulfils another purpose for which there is strong cross-party support. Auto-enrolment in pensions is a great British success, and it is a policy that all parties in their time in government have supported. The problem with auto-enrolment is that the amount of money that people are actually building up in their personal pension pots is very modest. If you look at the opportunities to get people to save more, you see that one opportunity is that, as people advance through their careers and perhaps begin to earn a bit more, they might be able to save more. A crucial moment is when they stop paying back the cost of their higher education, when their graduate repayments cease. I think it would be a reasonable use of public policy—again, without any data actually being handed on—for NEST, the body that currently auto-enrols people in pensions, to be able to communicate through the Student Loans Company to graduates when they are reaching a point when they are likely to have finished repaying their loans, saying, “You have been used to paying 9% of your earnings to pay back your loan. Before you start blowing the money on other things, here is a simple mechanism whereby you can divert it in future into a pensions pot.”

I see these as three practical ways where improved communication with graduates, both by universities and by a government body backing auto-enrolment, could harness a resource without harm to anyone and with proper protections for confidentiality. I very much hope that Ministers will look at this sympathetically. I beg to move.

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Baroness Berridge Portrait Baroness Berridge (Con)
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My Lords, I shall first resist the temptation to respond to the noble Baroness’s comment that she has been in opposition too long. I pay tribute to all noble Lords who have outlined the role of the Student Loans Company. It has no statutory functions of its own but exists as the student loan delivery arm of the Secretary of State, exercising powers delegated by him or her. The noble Baroness, Lady Sherlock, is correct that my noble friend Lord Willetts is suggesting a fundamental change of role for the Student Loans Company, whether as a post box, a communications agent or a marketing agent. While I thank my noble friend for his amendment, I do not believe it is necessary or wise.

The Government already publish a wide range of data, including earnings information by higher education provider and subject of study up to five years post graduation. It comes from the longitudinal education outcomes database, commonly known as LEO. The database has a wider coverage than the Student Loans Company, as it considers all graduates rather than just those who take out a student loan. Secure access to this data is granted to accredited researchers through the Office for National Statistics, to answer research questions. So while HE providers, although they do some of the best research themselves, cannot access LEO data to look at individual graduate outcomes, the data that is already published is sufficient to meet those research needs. On the point made by the noble Baroness, Lady Sherlock, the LEO database holds data by subject, provider, gender and region—so it does provide good access.

In relation to the comments made by the noble Baroness, Lady Garden, obviously the data that I have outlined is only one factor in the value of a higher-education qualification. I hope that all noble Lords will agree that we see the value immensely of her education, and the roles that some people undertake for very modest salaries are incredibly valuable. We have seen that a lot during the pandemic.

The second part of my noble friend’s amendment includes a duty to facilitate universities’ communication with their graduates through the Student Loans Company, without passing on any personal data, unless a graduate has specifically opted out. I noticed the Member’s explanatory statement states:

“This amendment enables universities to use the SLC to communicate with their graduates to encourage greater uptake of lifelong learning opportunities.”

As I have outlined, the SLC is not really there to be used by the universities. It is there for the students and to ensure that there is proper finance. The Student Loans Company should hold data only on students who own or are repaying a loan, so not all graduates are captured. Again, the onus is on the graduate to ensure that the Student Loans Company has their most recent contact data after they complete their studies. It will not surprise noble Lords that, unfortunately, not all graduates do this.

To answer my noble friend’s question, are we really looking now to place a duty on SLC to chase down the graduates for contact information when it does not have it? Such a system, as outlined in the amendment, to facilitate communication between the universities and the Student Loans Company, unfortunately would incur up-front and ongoing costs, plus potential data implications, as the noble Baroness, Lady Sherlock, highlighted. The roles suggested would involve a considerable burden on the Student Loans Company. It is best left to universities to reach out to their alumni directly through existing communication channels. As I mentioned in relation to the Member’s explanatory statement, if the Student Loans Company were to take on a role of communicating about lifelong loan entitlements, would it be after just one university, or three institutions, as the noble Baroness, Lady Sherlock, outlined? This is a considerable administrative, communication or marketing task that we would be asking of the SLC.

The final part of the amendment proposes facilitating the National Employment Savings Trust to communicate through the Student Loans Company, effectively encouraging students to consider saving into the NEST pension scheme once they get towards paying off their student loans. Automatic enrolment has achieved a quiet revolution through getting employees into the habit of pension savings, reversing the previous decline in workplace pension participation seen in the decade before the start of the reforms. As my noble friend Lord Willetts mentioned, it has succeeded in transforming pension saving for millions of workers. Since 2012, workplace pension participation rates for eligible employees aged 22 to 29 increased from 35% to 86% in 2019.

While encouraging graduates to work towards future financial resilience is right, the Government do not agree that this amendment is the right means to do so. A graduate or postgraduate would not be able to join the NEST pension scheme directly. NEST was established to support automatic enrolment and operates under a public service obligation to accept any employer who wishes to use the scheme to meet their automatic enrolment duties. Given that NEST is a workplace pension scheme, this means that most people typically would join through their employer but, in some cases such as self-employment, people can enrol themselves. In addition to operating under a public service obligation, NEST also receives a government loan to cover its running costs. This amendment would be seen as giving NEST an unfair advantage in a competitive pensions market. I am sorry to inform my noble friend Lord Willetts that this too would not be possible.

I have to say that I also agree with the noble Baroness, Lady Sherlock, that this would also take away from the core role. Like any organisation, the Student Loans Company has a limit on what it can deliver at any one time and there is already an ambitious reform programme, including the delivery of the lifelong loan entitlement, which I assure noble Lords will keep all those employees, mainly in Darlington, very busy over the next few years.

Laudable though the aims of this amendment are, the Government’s position is that changing the role of the SLC is not the vehicle to deliver this. It is unfortunately not a treasure trove, as my noble friend Lord Lucas outlined. I thank my noble friend Lord Willetts for his amendment but hope that, having considered these points, he will withdraw it.

Lord Willetts Portrait Lord Willetts (Con) [V]
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My Lords, I am grateful to noble Lords for a very interesting debate. I particularly agree, of course, with the points made by the noble Lord, Lord Adonis, and my noble friend Lord Lucas. I assure the noble Baroness, Lady Garden, that—although it was fascinating to hear her personal biography, which is indeed a reminder that there is more to universities than subsequent earnings—there is nothing in this amendment that says that is the be-all and end-all of universities. It simply recognises that we have this organisation, the Student Loans Company, in place and that we have a problem, which I very much regret was not acknowledged by the Minister: most universities have no means of communicating with most of their graduates. That is a real barrier to the Government’s own objective of promoting lifelong learning, although there are other objectives as well and the point made by the noble Lord, Lord Adonis, about mentoring seemed to me very relevant.

Meanwhile, a separate government agency is communicating with graduates—namely, the Student Loans Company. Of course it is correct that, at the moment, it is simply collecting money from them, but I do not see why that is not also an opportunity to do something additional. I am very much aware of the practical operational problems of the Student Loans Company, having wrestled with them myself for several years, but this request would be under ministerial guidance; Ministers and the Department for Education, together with the Student Loans Company, would have the ultimate say on what messages were communicated. It seems to me that the Minister is in danger of missing out on a really important opportunity to achieve one of her own objectives.

This is the kind of debate that we might have had about NHS data 15 or 20 years ago, when some Health Minister turned out to say, “No, it wouldn’t be acceptable for hospitals to communicate with people who have had appointments or been at the hospital”. The fact is that data and communication matter. We have to be imaginative in harnessing the opportunities that we have to communicate.

I very much regret the Minister’s approach. I will, of course, withdraw my amendment now, but I hope it might be possible to consider further ways in which some version of this thoroughly innocuous amendment can be used to achieve an objective that is shared across the House. It should be done only within the capacities of the Student Loans Company, and only for purposes of which Ministers approve but I think that, if Ministers do not take this chance, there will be a moment in the future when they say, “Why on earth didn’t we do this? It would have been so useful”. We could be providing universities with more information about their graduates; we could be enabling graduates to have more information about what their universities can do for them and what they can do for their university. In the light of the debate so far, however, I beg leave to withdraw this specific amendment now.

Amendment 88 withdrawn.
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Moved by
89A: After Clause 25, insert the following new Clause—
“Access to learner data for research
(1) Key learner data must be shared for research purposes, including longitudinal studies, in accordance with Part 5, Chapter 5 of the Digital Economy Act 2017, or equivalent legislation concerning data not covered by the 2017 Act.(2) What constitutes “key learner data” must be reasonably defined by researchers on a case-by-case basis and may be taken to include, but not be confined to, graduates’ employment and income data. (3) Organisations controlling key learner data must take all reasonable endeavours to make the data available for research in line with subsection (1).”Member’s explanatory statement
The purpose of this amendment is to ensure that administrative data is available for research and longitudinal studies that will inform, and improve, public policymaking.
Lord Willetts Portrait Lord Willetts (Con) [V]
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I will refer to this amendment briefly as well, although it overlaps to some extent with the debate that we have just had. I begin by declaring some specific interests. I am on the board of UKRI, the public agency responsible for funding social science research and administrative data, and I am the president of a think tank, the Resolution Foundation, which has an interest in using and accessing research data.

The background to this is the battle on LEO data, which has already been referred to. I assure the Minister that I am very proud of having fought long and hard to get the LEO data made available—incidentally, in the course of it, overcoming objections rather similar to the ones she just made to my previous amendment. After battles with HMRC, we got LEO data, and it has improved the debate on universities—although, as the noble Baroness, Lady Garden, said in our previous debate, we should never think that earnings data are the be-all and end-all.

After long and difficult battles with HMRC, that data was made available to a small group of accredited researchers, and is now analysed closely by, above all, the Institute for Fiscal Studies. However, a lot of weight is placed on the LEO data, and there are other datasets about learner outcomes, not all of which are covered by the Digital Economy Act. I am worried that the debate on graduate outcomes is in the hands of a very small number of researchers with access to the LEO data. Researchers as a whole find it difficult to access data not covered by the Digital Economy Act. For example, health data is not covered by it. It would be very interesting to know—there is a lively debate about this—the extent to which going to university boosts health outcomes and life expectancy, for example.

Of course there must be rigorous standards for the researchers accessing such data: confidentiality, anonymity and a whole host of other requirements all need to be in place. However, we would have a better-quality and more wide-ranging debate about higher education if there were a wide range of perspectives informed by a wider range of empirical data about what is actually happening. After I successfully fought for the LEO data, I never expected that it would become the be-all and end-all. I see it as part of a much wider set of data types and a much wider range of researchers, properly regulated, analysing what happens in education.

The parallel with the previous amendment is that data matters. This Government are bold on science and technology. They understand the importance of data in good public policy. The DfE is not the worst offender when it comes to providing researchers with access to data, but there are certainly clear constraints at the moment on that access, going way beyond the necessary requirements of confidentiality and anonymity. I hope that, in the light of that, the Minister will consider undertaking that there should be a greater range of researchers with greater access to key learner data, so that we can all debate it with more information at our disposal. That is why I move the amendment.

Earl of Kinnoull Portrait The Principal Deputy Chairman of Committees (The Earl of Kinnoull) (CB)
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My Lords, the noble Lords, Lord Aberdare, Lord Adonis and Lord Lucas, have withdrawn, so I call the noble Lord, Lord Watson of Invergowrie.

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Lord Willetts Portrait Lord Willetts (Con) [V]
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I am grateful to the Opposition Front Bench and the Minister for their interventions on my amendment. I was slightly surprised by the approach of the Opposition Front Bench on this occasion, because this is intended to inform debates on outcomes for higher education.

On the Minister’s point, first, the initiative on 7 July is very helpful for broadening access to LEO data. One of the aims of this amendment was to promote that broadening of access, so I am very grateful for what has happened. My one disagreement, if I may say so, with what she said is that, being very familiar with the Digital Economy Act 2017, which had a long gestation and undoubtedly has moved things forward a lot, I can say that the Digital Economy Act does not cover all sets of data that are relevant to educational outcomes. This amendment is therefore deliberately broader to enable, for example, health data to be used for educational research; clearly, as the Minister rightly said, with proper security to ensure protection of confidentiality, anonymity where appropriate, and suchlike.

I will of course withdraw the amendment today, but I hope that the Minister will accept that, if we can provide practical examples of any gaps in the current legal and regulatory framework which mean that we are falling short of the objective—the admirable objective she set out: that there should be proper access for all researchers to data relevant to researching learner outcomes—perhaps it might be possible to return to this issue at a later date.

Amendment 89A withdrawn.

Skills and Post-16 Education Bill [HL]

Lord Willetts Excerpts
My obsession is yes, to have A-levels and T-levels as an important standard, but anyone who thinks that we should do away with BTEC national diplomas has not been in a factory or a workplace for a very long time, if at all. My experience goes back quite a long way to my time in the department in 1997 to 2001. We had some brilliant people—there are some extremely able people in the department now—struggling to do the job. However, I did not find too many who had been anywhere near the factories I went into in my constituency in Sheffield at that time. You cannot beat knowing what you are talking about because of hands-on experience. Let us try to clarify this; otherwise I hope that the noble Lord, Lord Willetts, along with my noble friend and the noble Lord, Lord Baker, who spoke eloquently at Second Reading on these matters, will join forces.
Lord Willetts Portrait Lord Willetts (Con) [V]
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I will speak to Amendment 54 in my name. I reflect some of the concerns that have already been expressed by the noble Lords, Lord Watson and Lord Blunkett. It goes back to the very significant powers being provided to IfATE in the Bill, especially the simple and stark statement:

“The Institute may withdraw approval of a technical education qualification.”

I understand the need for that power. I would not justify every technical qualification currently in existence, but it is a significant power and I think we all want to know how it will be exercised and under what constraints. My anxiety is that power may be exercised in a way that does not serve the long-term interests of the economy or individual learners. For example, the Government have invested a lot in T-levels. I very much hope that T-levels will succeed. However, it would be tempting, if T-levels were not quite achieving lift off at the speed that was hoped. to close down the alternatives in order to drive people, not through personal choice, into T-levels. That would be very regrettable.

We also know that the Government believe in trying to divide young people into the sheep and the goats—the two routes. They are either going for a qualification that leads directly to skilled employment or one that leads to further study. Sadly, life is not that tidy, nor is the modern economy. There are enormous overlaps between the paths and there are qualifications that straddle that divide of which the BTEC—already referred to by the noble Lord, Lord Blunkett—is a conspicuous example. It would be a great pity if BTECs lost out simply because they have an employment value as well as being accepted by universities.

I say to Ministers that expecting young people to give up on the option of university if they go for T-levels seems to me the wrong way of trying to promote them. In reality, young people do not want to close off their options. Of course they have a subsequent decision to take, and I agree with the noble Lord, Lord Flight, that they must have vocational options in apprenticeships, but expecting them to take a course that explicitly makes that impossible for them will not improve and encourage the take-up of T-levels.

Finally, we have to think of employers. Those of us who are veterans of these education and skills debates know how frustrated employers are by frequent changes in qualifications and frequent changes in the systems. Some qualifications, such as BTECs, have gradually achieved acceptance over decades. Employers are familiar with them and it would be very dangerous for IfATE simply to defund them when employers have become familiar with them and trust them.

All my amendment really does is ask the Minister to set out a process of consultation to be followed. The Minister has on several occasions during this Committee stage—and I commend her on what she has been saying—made it very clear how keen she is on a role for employer representative bodies. Would it not be a natural, logical result of the Government’s own approach that employer representative bodies should be consulted before IfATE exercises the powers that are being given to it?

I hope that as well as the designated employer representative bodies, the public consultation might also involve others, such as LEPs. I am not totally clear why LEPs appear to have fallen out of favour; they have a good understanding of the local economy and would be an obvious group to consult. There are also colleges—it is noticeable how the Association of Colleges has expressed some of its concerns about these powers—and students, whose choices we must trust. I very much hope that the Minister will accept that these powers need to be used in a way that reflects the needs of employers and the choices and preferences of individuals and that therefore the framework for consultation is entirely consistent with the underlying philosophy which she has been expounding.

Lord Russell of Liverpool Portrait The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
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The noble Lord, Lord Adonis, has withdrawn, so I call the noble Lord, Lord Baker of Dorking.

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Lord Lucas Portrait Lord Lucas (Con) [V]
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My Lords, I welcome Clause 17. There has long been a lack of satisfactory information available to prospective students on the outcomes of a degree. What happens afterwards, other than a degree, first, second or even third class, as in my case, awarded on obscure criteria—although no doubt correct in my case—but with no indication to a prospective student of what comes afterwards? How do students who have been through the degree course look back on their time at university? Are they appreciative of what was done for them? Have they suggestions about what could have been done better? What sort of careers have they secured?

This can be very different in further education, where a good FE college, running a course in, say, golf course management, will have an immense network of alumni with whom it will work to improve the course and with whom it will be in correspondence about the prospects for their current students. It will be able to portray to someone who intends to take on the cost of a course exactly what the outcome will be. For such a substantial personal investment by students, universities owe prospective students a much better set of information about what their prospects are.

My interest in this clause, though, is in the opportunity to broaden it to include mental health and well-being because, in my experience, this is an area that universities have been much less good at than they ought to be. I agree that this has, to a certain extent, come up on them. It is the result of increased parental interest in university education—that is, in parents wanting to make sure that they are launching their children on a good course. I have been a champion of that for a long time. I do not think that it sits easily with universities, which have historically taken refuge in the mantra that their students are adults and therefore do not need support from home, and communication with home is inappropriate.

I sense that that is changing but, for it to change to good effect, it needs some kind of support from the Government. Universities need to know that they are being watched—that information will reach prospective students as to how good their mental health and well-being services are and how well they look after their students. This will form part of a student’s decision on which course to take. If we do not have that kind of visibility, we will see a continuation of the inaction that has been my experience of universities’ response to this over the past 10 years or so.

I am sure that we all have stories about a mental health crisis hitting a friend’s child at university, perhaps even to the point of suicide. Mine, fortunately, has a happy ending. The son of a friend of mine went to a Russell group university, found that the course they were on did not really have its own social life, went back to university accommodation, which likewise had no social life, and fell into a cycle of despair. Bar a casual acquaintance knowing someone who knew his mother and getting a message back, that might have been the end of it. Fortunately, he had a very active mother who whisked him out of university and helped him to find a course that was much better socially adapted to his needs. He flourishes still.

There are many, however, for whom the outcome has been much less good. Universities have not traditionally seen themselves as having a duty of care in looking after their students. I remember—it must be about 10 years ago—trying to tell universities that they should pay more attention to teacher recommendations, that they could use some kind of online reputation system to score the teacher recommendations in the light of their experience of the student when they arrived at university, and that this would enable them to reach through the surface of qualifications to look at the underlying person and maybe start to use that to address the inequalities of access that were very apparent then.

The answer I got from universities was, “Can’t do that. We never get to know our students well enough to know whether that teacher recommendation is accurate or not”. I contrast that with my experience of the better degree apprenticeships and the way in which a company looks after children of the same age whom it has recruited into much the same circumstances. It can be extraordinarily good. I single out JCB in that respect: the way they look after young people who arrive in the wilds where the JCB factory is set and look after them through their degree is absolutely exemplary. JCB is, however, by no means alone. It has set a standard, in the minds of parents and people like me who advise parents, for what we now expect of universities, and I would really like the Government to take a hand in moving the needle.

I am not in any way committed to the particular formula in this amendment. It is a formula that is necessarily stated by its circumstances; it has to fit in with the structure of this Bill. I am not at all convinced that having a scored measure—an outcome measure—at the end of the day for mental health and well-being is the right way to go, but we have to get to a point where universities know that they are being observed and where accurate information finds its way to prospective students.

In the Good Schools Guide, if a school is a place that is a difficult environment for the less robust, we say that. It is fine. You can happily say that you have to be pretty rumbustious to get on in this school, and students and parents know what you mean. It will absolutely suit some people. Others will be put off by it and will find a place that is better suited to them. There is no reason why all universities should be the same, but it is absolutely obvious to me that prospective students and their parents should be given the information needed to make good judgments as to the environment at the university and whether their child will flourish there.

I also hope that, by doing that, we will raise the standard of universities generally. This is a move that Universities UK talks very strongly in support of, and some individual vice-chancellors are clearly ahead of the crowd in this. We ought to be out there supporting them, helping this change to happen and helping universities generally to up their standards. At the end of the day, these are children, and it is a big transition between home and local school to university in a strange city a long way away with completely different customs. We want them to be cared for; we want them to be looked after; we want to be a part of that, where we have a relationship with our children that will support that. We want the university to be strong and active in looking after them. If we cannot do that through this amendment, I hope that the Government will confirm that they have plans in this direction. I beg to move.

Lord Willetts Portrait Lord Willetts (Con) [V]
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My Lords, I wish to speak to my Amendment 69 very much in the spirit of the powerful speech that we just heard from my noble friend Lord Lucas. We definitely need more information about student outcomes. One way in which that information can be presented is the absolute information on the absolute outcomes. I am sure that the Minister will be eloquent on that. There is nothing in my amendment that tries to suppress any of that sort of information—far from it. However, the way in which the legislation is currently drafted means that it goes out of its way to exclude a different sort of equally valuable and relevant information: how our higher education institution is doing relative to the types of students that it has. That is a measure of distance travelled; it is a measure of how a university is performing, given the students that it recruits.

We have heard several important interventions in the course of our debate about students with special educational needs. A university that recruits an unusually high proportion of students with special educational needs, within the approach set out by Ministers, will not be able to signal that it does that; it may just appear to be a less well-performing institution. To offer a second example, which I know is a source of deep frustration and shame to us all, we should look at the performance of students from ethnic minority backgrounds. For any given level of academic qualification, a graduate from an ethnic minority background may do less well in the labour market than a graduate of similar academic achievement but not from a minority ethnic background. That is shocking; it is also a description of the British labour market as it is today. This would mean that, on the approach set out by Ministers, a university that had a disproportionately high number of graduates from ethnic minority backgrounds would do less well on labour market outcomes without the university being able to display its commitment and what it was doing.

Skills and Post-16 Education Bill [HL]

Lord Willetts Excerpts
Lord Willetts Portrait Lord Willetts (Con)
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My Lords, I warmly welcome the Bill. I begin by declaring my interests as chancellor of the University of Leicester, a visiting professor at King’s College London and a member of the boards of Thames Holdings Ltd and UKRI.

The principles and objectives of the Bill are very welcome. It is absolutely right to want to do more for further education colleges, to focus on technical and vocational skills, and to try to do more on lifelong learning, but there is a lot to do to flesh out those principles in practical legislation. The Government have several important consultation exercises under way at the moment, which will help them see how they intend to apply those principles. I hope the Minister can assure the House that we will have ample opportunity to review and revise this legislation as it goes through both Houses of Parliament in the light of the outcomes of their consultations.

While I welcome the principles, the really important matter is what they mean in practice. Here, I have to say that I am concerned about a deep confusion—an artificial conflict, perhaps—between “vocational” and “academic”. In her opening speech, the Minister herself referred to parents preferring that their child should have a vocational qualification rather than a degree. I am familiar with the research, published by the Social Market Foundation, on which that statement rests. I find it very hard to make sense of the question that was put to people in that opinion survey. I talk to universities, which tell me that 70% of their students are studying on a course accredited by an employer or an employer organisation; they are doing courses that are a licence to practise. The White Paper rightly refers to the need for nurses and engineers. These courses are also delivered by universities—are they academic or vocational? It is a false distinction, which should not be used to create conflict between higher and further education when both have an important role to play. You can do academic courses in further education colleges and vocational courses in universities. If distinctions are used to create conflict between these two parts of our education system—both very important—the cause that the Minister rightly supports will be put back rather than advancing.

I have met a young man at a workbench making a bit of kit to be launched on to a satellite as part of his doctoral training. It is an old Oxbridge mindset, the belief that universities are for the liberal arts—for gentlemen—while vocational courses are for training colleges, and that if a university dares to provide vocational training it must mean that it is a bad university. That model is one of the reasons we have the skills crisis that we worry about now; it is the wrong mindset for trying to tackle this problem. I very much hope, therefore, that the Minister will be able to assure us that she fully understands that universities—especially some of the less prestigious universities, whose origins are often as colleges of advanced technology and which have not lost sight of their original mission—are one of the instruments that she can use to fulfil her objectives.

This is also very important, and will be tested, in the Minister’s admirable objective of tackling the anomalies of level 4 and 5 funding—a peculiar feature of the system, going back to provisions in the 1992 Act. Augar was right to say in his report that we need a more flexible regime for levels 4 and 5. I pay tribute to the noble Baroness, Lady Wolf, for her campaign on this. We do need a better funding arrangement for levels 4 and 5. At the moment they are niche, essentially nursing diplomas for women and engineering courses for men; I do not say that with any endorsement of the stereotypes but it seems to be the origin of the widely cited figure for earnings for some at levels 4 and 5. We need to make it easier and more flexible, but can the Minister assure the House that funding for levels 4 and 5 should be institution-blind? It should be delivered by FE colleges but could also be delivered by higher education institutions.

The new loan scheme is an exciting initiative. I confess to this House that, looking back on my record in government, one of the things I most regret is the decline in adult learning during my time as Minister. There are many complicated reasons for that. One was that we tried to apply the same funding model to adult learning as to 18 year-olds going to university. For an 18 year-old, taking on a loan when they are at a big fork in the road does not, thank heavens, put them off going to university. For adult learners, however, taking out a loan may be a very different decision and far more worrying. So, one lesson I learned from what we went through was that a single funding model may not work as well for adult learners as for younger people en route to university. I hope the Minister will reflect on that as the Government design this new single scheme.

I wished to comment further on the role of employers and the importance of individuals, but I see that time has passed. I just say to the Minister that while, of course, employers have an important voice, we should not forget the individual learner. He or she may be inspired to shape their life around a course or an occupation, and it might not be for a big industry in the area where they live; it might be in something exciting on the horizon for which there is not currently an employer. I very much hope that, in the course of our debate, the Minister will say that the individual shaping his or her destiny matters as much as the employer and the education institution.