Oral Answers to Questions

Debate between Lord Johnson of Marylebone and Gordon Marsden

Monday 11th December 2017 Commons Chamber

[Gordon Marsden (Blackpool South) (Lab)]

Friday’s National Audit Office report on the higher education market is hugely damaging. It says that the market is failing students and that such practice anywhere else would raise questions of mis-selling. Meanwhile, the Student Loans Company is in crisis. This is all under the watch of the Minister for Universities, Science, Research and Innovation. What does he say now to the NAO?

[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

The National Audit Office rightly pointed out that students want value for money, which has been the guiding objective of our entire suite of HE reform programmes. That is why we have set up the Office for Students, which will ensure that universities are held to account for the teaching quality and value for money that they deliver to our students.

Student Loans Company

Debate between Lord Johnson of Marylebone and Gordon Marsden

Monday 20th November 2017 Commons Chamber

[Gordon Marsden (Blackpool South) (Lab)]

(Urgent Question): To ask the Secretary of State for Education if she will make a statement on the management and operation of the Student Loans Company.

[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

The Student Loans Company’s performance has improved year on year for the past six years. SLC services account for about 1.8 million applications per year. It responds to about 4.5 million phone calls from borrowers and has more than 6 million repaying or due-to-repay customers, with loans totalling over £100 billion. In addition, it has delivered a range of new products for the Government on time and successfully, including postgraduate loans and simplified advanced learner loans.

This year, the SLC has processed more than 1.4 million applications for student funding, and so far this academic year it has paid out approximately £2.5 billion in maintenance funding and £2 billion in tuition fee payments to providers. Customer satisfaction remains high, at about 85%, and, for borrowers in repayment, at about 72%. It receives complaints from just 0.1% of its 4.7 million customers. The SLC is, of course, constantly looking to learn lessons from this low level of complaints and to use these complaints to improve the quality of its services.

The Department for Education is also working closely with the SLC on a range of initiatives that will further improve the user experience for the SLC’s borrowers and in respect of staff engagement. Proposals currently being developed include greater digitisation of the student loan application and repayment processes and investment in more efficient SLC systems.

Following two independent investigations into allegations about aspects of his management and leadership, the SLC has terminated Steve Lamey’s contract as chief executive officer of the SLC. The SLC and its shareholders expect the highest standards of management and leadership and, having taken into account the findings of the investigations, have concluded that these were not being upheld by Mr Lamey during his time in his role. The SLC board acted swiftly and has appointed the current chief executive of the Education and Skills Funding Agency and of the Institute for Apprenticeships, Peter Lauener, as interim CEO, with effect from 27 November. He will remain in post at SLC until a permanent appointment is made.

Mr Lauener was formerly chief executive of the Institute for Apprenticeships and the Education and Skills Funding Agency. He has had a long and successful career in a number of senior leadership positions in the Department and its partner organisations, and I have every confidence that he will provide the drive and stability the SLC requires at this time, as we recruit a permanent chief executive.

[Gordon Marsden]

This announcement was snuck out over the November recess on the same day as the Secretary of State for International Development resigned. Since last Monday, two articles in The Times have raised severe questions about the process. Why, in the Minister’s letter to me on 17 October, sent six weeks after I wrote to him about the SLC, did he refer to the suspension of the chief executive as a neutral act that did not imply wrongdoing, when he was actually made fully aware of the allegations against Steve Lamey in June, as his written reply has told me?

Will the Minister publish the findings of the performance review of the SLC, issued two months before the suspension, in which, as The Times says, Steve Lamey was rated “outstanding”? Was the Minister aware at the time that Mr Jenkins’s report on Mr Lamey had concluded that he was

“making a real and positive difference”

to the Student Loans Company, and was a popular and effective leader who staff found supportive, before the decision was made to sack him? Will he also publish the findings of the internal investigation, in which 52 of 58 allegations against Mr Lamey were dismissed, so that all Members can understand the issues at the SLC?

Who appointed the chair and the other three board members of the SLC, and what were the criteria and processes for those appointments? Can the Minister confirm that Simon Devonshire, the board member who heard and dismissed Mr Lamey’s appeal, and David Gravells are also members of the same venture capital trust?

The lack of proper co-operation between the SLC and HMRC has led to significant overpayment of debts. Can the Minister tell us how many overpayments amounting to more than £10,000 have been made since 2015-16? I have just been told that the Government have tacitly admitted their failure in this regard by saying that from 2019 onwards, HMRC and the SLC will co-operate on these matters. However, that does not address the fact that Mr Lamey and the HMRC’s permanent secretary have blamed each other for the issue. Mr Lamey has claimed that he asked for real-time updates that HMRC would not share. Who is telling the truth?

The BBC’s “Panorama” has raised questions about private providers of courses in which students have fraudulently enrolled in order to claim loans. How much has been paid to students of private higher education providers who were subsequently determined to be ineligible in the last five full financial years, and what mechanisms are there to enable the misused taxpayer money to be reclaimed? In the light of all that, will the Government now suspend the sale of a further chunk of the student loan book?

The Minister recently admitted that changes in interest rate thresholds on student debt would cost £175 million by 2020. Can he tell us where the money will come from? Given that tens of thousands of graduates are footing the bill for SLC failures, what confidence can Parliament have in the competence of this Minister, who is the key shareholder in the Student Loans Company?

[Joseph Johnson]

I would encourage the hon. Gentleman not to denigrate the hard work of the dedicated public servants at the Student Loans Company, who are undertaking a vital task in securing the finance that young people and learners in this country need to pursue higher education and who, as I have said, are doing so in a successful way: fewer than 0.1% of the SLC’s 4.7 million customers complain each year. They are delivering an important service, and the hon. Gentleman should support them rather than running them down.

The hon. Gentleman asked about a number of matters. He asked about the investigations that led to the dismissal of Mr Lamey from his position as chief executive of the SLC. The concerns were brought to the board’s attention in May, and to the attention of the Department for Education.

[Gordon Marsden]

When did you learn about it?

[Joseph Johnson]

We learnt about it in May.

[Gordon Marsden]

But when did you learn about it?

[Joseph Johnson]

I learnt about it in May, as I have just said. The two investigations were immediately set in motion to get to the bottom of the allegations received by the SLC board. One was led by the Government Internal Audit Agency, and the other by Sir Paul Jenkins, former Treasury Solicitor and head of the Government’s legal services. They concluded that Mr Lamey had not shown the leadership which would be expected of someone in that role, and accordingly the board decided that he should no longer continue in the role. As a consequence of the SLC’s decision, the Department decided to relieve him of his responsibilities as accounting officer of the SLC.

The hon. Gentleman asked about ineligible payments, some of which were highlighted by the “Panorama” programme that was broadcast a few days ago. I am sure he will be interested to know that the level of ineligible payments made to alternative providers has been falling sharply in recent years. In fact, it has fallen by over 80% since 2012-13, from about 4% of all payments to 0.5% of all payments in 2015-16. This rate is low; of course we want to eliminate fraud wherever we can identify it, but this is a low rate of ineligible payments to these providers. Indeed, the rate is now no higher than the average across the HEFCE-funded higher education system. So if I were the hon. Gentleman, I would not use this as a means of running down the newer entrants to our higher education system—which he often does from the Dispatch Box—because it cannot be used to support that sort of attack. This reduction in the level of ineligible payments is the direct consequence of the controls that previously the Department for Business, Innovation and Skills and now the Department for Education have been putting in place to ensure that public money is not abused.

We take the issue of overpayments extremely seriously, and the hon. Gentleman mentioned some of the steps we are taking. We want close and effective co-operation between HMRC and the SLC so we avoid the risk, to the extent that we possibly can, of students overpaying when they repay. I understand that the Chancellor will be considering this issue further in the Budget later this week, so the hon. Gentleman might want to wait to see the contents of the Budget for further details. We are committed to improving the interface between HMRC and the SLC. We ensure that all borrowers, as they enter the last two years of their repayments, are given the opportunity to move directly to a direct debit system of repayment, so that they eliminate almost all the risk of overpayment.

Higher Education and Research Bill

Debate between Lord Johnson of Marylebone and Gordon Marsden

Wednesday 26th April 2017 Commons Chamber

[Joseph Johnson]

We can certainly say that visa applications have risen by around 10% since 2011, although there might be fluctuations from year to year. That has been the case for many periods in the history of international students coming to study in this country. There has not been a story of continued growth; there have been ups and downs. Since 2010, which is a longer timeframe, we have seen applications up by around 10%.

Lords amendment 156 could do real damage. For example, it would prevent international students being treated as long-term migrants. The internationally recognised definition of a long-term migrant is anyone moving countries for a period of more than a year. If we were not able to apply to international students the key features of our work immigration regime, such as the need to obtain a time-limited visa that specifies the terms on which the migrant can come and a requirement to return home upon expiry of the visa, that could undermine our whole student migration system. I cannot advise the House to agree to that amendment.

Secondly, the Lords amendment would prohibit any change to the future student migration regime that could be interpreted as more restrictive than that in force when the Bill is passed. Any future changes—even minor technical changes—would require fresh primary legislation rather than being made by immigration rules laid before Parliament. I do not believe that that would be sensible or helpful, particularly given how crowded the forthcoming legislative programme is likely to be.

That said, I recognise the strength of feeling on the issue, so I am pleased to ask the House to support amendments (a) to (c) in lieu of Lords amendment 156. The Bill already creates for the first time a requirement for information on higher education providers to be published. It also puts in place a statutory duty to consider what would be helpful to students on higher education courses here, prospective students and higher education providers. Our amendments expressly extend that important new duty to cover what information would be useful to current or prospective international students in higher education and to the providers that recruit them or are thinking of doing so. They will also specifically require a consideration of the publication of international student numbers. All this is designed to help to ensure that as much information as possible is available about the UK’s offer to international students. We have a good story to tell and the Government are keen to ensure that it is told.

The Bill is long overdue. It will streamline the higher education system’s regulatory architecture. It will give students more choice and opportunity. It will strengthen our world-class research and innovation capabilities, and it will enhance the competitiveness and productivity of our economy. I thank all Members for their constructive engagement throughout the Bill’s passage.

[Gordon Marsden (Blackpool South) (Lab)]

It is a great pleasure and privilege to speak on these amendments this afternoon. I join the Minister in thanking the various teams of drafters and Clerks for all the work they have done. He and I have had some intense discussions in the past three to four days, and they must have put great pressure on the Clerks to produce the substantial amendments that are before us today. I want to give special thanks to the Public Bill Office. Most people who have been in opposition, of whatever party, know that it is very much, in terms of resources, a David and Goliath process and we are enormously grateful for the professional work of the Public Bill Office in assisting us.

I want to place on record, because we are talking about Lords amendments, my gratitude and that of many in the House for the robust exercise by the House of Lords of its historic privilege, which is to revise, to remind and to warn. It has done all three things with this raft of amendments, which, combined with the intense pressure that was applied across the sector by numerous groups, the work that we have put in and the Minister’s co-operation in recent days, has brought us to where we are today.

I am sorry that the Minister, in his measured presentation, did not find time to talk about the contribution of the people who work in universities. Their contribution is just as important as that of students and teachers, because without them we would not have universities or other higher education institutions. I place on the record also my thanks to the various sector groups who have assisted us: the National Union of Students, which delivered thoughtful and trenchant critiques that helped us get to where we are today, as did the other unions involved—the University and College Union and Unison—and the Council for British Universities, as well as the whole range of universities, modern and traditional. I must not forget the submissions from the further education sector and the Association of Colleges, because as I frequently remind the Minister, 12% and rising of higher education in this country is provided by further education colleges.

This process has been about the dialogue with university vice-chancellors and junior lecturers. We are in a much better place because of the specialist critique and the Lords amendments that the Minister has accepted on UK Research and Innovation, and on research. As the hon. Member for Glasgow North West (Carol Monaghan) is in the Chamber, I pay tribute to her and her team for the points they made about the importance of the devolved Administrations.

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[Gordon Marsden]

My hon. Friend knows that I cannot be responsible for the Minister’s mood music. I can only respond to what he has committed to do in the Bill, and its commitment to an independent review is very important. A whole raft of people, not just the Lords, are concerned. The combined efforts of an outside challenge, the wisdom of the Lords, who constrained the Minister by inserting the original amendment, and our determination have resulted in welcome concessions.

[Joseph Johnson]

To reiterate what I said in my speech, I am happy to confirm that the Secretary of State will take account of the review and, if he or she considers it appropriate, will provide guidance to the OFS accordingly, including on any changes to the scheme that the review suggests are needed, whether they be in relation to the metrics or any of the other items that the review will look at.

[Gordon Marsden]

I am grateful to the Minister for that important clarification. It is also important that all fee regulations under the Bill that were previously subject to negative procedure will now be subject to affirmative procedure. That puts daylight on issues related to rocketing fees, and I believe that it will be entirely possible that the Secretary of State, whoever it will be, will have to listen to a dogged independent statutory review that says, “This ain’t working. Either it won’t ever work, or it certainly won’t work for the time being.” It is in all of our interests to make sure that that statutory review is as potent as we wish it to be.

I welcome the Government’s electoral registration amendment, which strengthens the current position to some extent. We would have preferred a full commitment to ensuring block registration, but nevertheless we wholeheartedly welcome anything that will facilitate greater student interest in and awareness of political affairs. I pay tribute to the fantastic work of my hon. Friend the Member for Sheffield Central and to the pilot work undertaken at the University of Sheffield and the University of Bath. I also praise my fellow member of the Bill Committee, my hon. Friend the Member for Ilford North, and my hon. Friends the Members for Ealing Central and Acton (Dr Huq) and for West Bromwich West (Mr Bailey), all of whom have concerns about students and feel very strongly about the matter. It is important to note that we are not just relying on nudges. The Minister was kind enough to refer to the involvement of the Cabinet Office in this regard, and there will be specific powers to impose an electoral registration commitment to deal with HE providers not doing enough.

Finally, let me turn to the amendments on international students. I praise and welcome the doggedness with which Lord Hannay pursued this matter with the coalition that worked across Parliament to insert the original amendment. I hoped and thought that the strength of that coalition might have moved the Government, but unfortunately it is not a question of the warm words, values and welcomes which the Minister talked about and to which, I am sure, he signs up—he was a dedicated remainer before the election. Unfortunately, he has a Prime Minister who has been at best curmudgeonly and at worst obstructive on this issue. The sharp questions from the hon. Member for Bedford (Richard Fuller) and the contribution of the Chair of the Select Committee on Education, the hon. Member for Stroud (Neil Carmichael), show where we are on this matter.

At a time when Brexit is throwing up fresh problems for the higher education sector, the Government’s stance is threatening both the sector and our reputation worldwide. Those new issues are about whether we will be able to stay in Erasmus or get funding for beyond Horizon 2020, and about European structural funding, but the university and HE sector has enough to contend with without having a Prime Minister who appears to wrinkle her nose and, sometimes, attach manacles to her colleagues in Cabinet every time they suggest a different path.

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[Joseph Johnson]

With the leave of the House, I wish to say a few words of thanks to Members and others for their contribution to the development of the Bill and, most pertinently for this afternoon’s purposes, for the insightful points made during this debate. We have heard agreement that the Bill is an important one that has been carefully developed through dialogue on the Floor of the House, in Committee and in the other place, as well as through the extensive consultations dating back to the initial Green Paper in November 2015. It has benefited tremendously from thoughtful input from experts, reviews and independent reports. It was introduced right at the beginning of this parliamentary Session—perhaps even on its very first day—and it will still be going strong on its last day, so it is fair to say that no opportunity to scrutinise it has been missed. I am pleased that both sides of the House recognise that today’s amendments will strengthen the legislation still further.

I shall address briefly some of the questions asked during the debate. The hon. Member for Glasgow North West (Carol Monaghan) asked about the role of the independent review with respect to the TEF. The independent reviewer will consider the devolved Administration providers as part of the review. The Bill will allow the devolved Administrations to continue to decide whether they wish to allow their providers to participate. She also asked about UKRI’s executive committee. As UKRI is established, we will work closely with the devolved Administrations to ensure that the UK’s research and innovation base remains one of the most productive in the world. I can confirm that we amended the Bill on Report to require the Secretary of State to have regard to experience of working in the devolved Administrations when appointing the UKRI board. The executive committee is, though, an internal management committee for UKRI.

The hon. Lady also asked about post-study work for international students, a subject on which many Members focused. I reiterate that there is no limit to the number of international students graduating from UK universities who can move into skilled jobs in the UK. They do not count against the tier-2 limit and, actually, numbers have been rising year on year for the past three years.

The hon. Member for Sheffield Central (Paul Blomfield) asked about the transfer of ownership of degree-awarding powers. The answer is that, yes, should a provider with no track record buy a provider with degree-awarding powers, a full review of the provider’s continuing eligibility for degree-awarding powers would be undertaken.

I thank the Members who have given such time and so much energy during the many hours of debate we have had. I particularly thank the members of the public Bill Committee, which sat in the autumn, and pay tribute to the Opposition Members involved, especially the hon. Member for Blackpool South (Gordon Marsden).

[Gordon Marsden]

The Minister will recognise that on such occasions certain things have to be said, and said forcefully, but I put on record how courteous he has been to me and the rest of our team.

[Joseph Johnson]

I am grateful for that. It has been a pleasure to work with the hon. Gentleman and his colleagues, including the hon. Member for Ashton-under-Lyne (Angela Rayner). I also pay tribute to the devolved Administrations who have played a full part in the scrutiny of this Bill, especially the members of the Scottish National party, including the hon. Member for Glasgow North West who has been tireless in her scrutiny of the measures.

The other place has excelled itself, with extensive and very thoughtful debate on this legislation. I thank all those who have given their time and energy to this Bill, including the very large number of highly distinguished academics, former Ministers and those who have extensive experience of the university and research sectors in the other place. Their passion for the sector has been clear to all those who have followed these proceedings.

I also add my thanks to those more widely in the sector, including the two main representative bodies, Universities UK and GuildHE, which have given their time in abundance to ensure that the sector’s views have been fully heard and understood and reflected in this legislation. That explains why they have repeatedly expressed their support for passing this Bill into legislation.

There is absolute agreement on the importance of our world class HE sector and our globally leading research. I am pleased that we in this House have agreed a Bill that finally fits this important sector for the 21st century, putting students, choice, value for money and global competitiveness centre stage.

Lords amendment 1 disagreed to.

Government amendments (a) to (d) made in lieu of Lords amendment 1.

Lords amendments 2 to 11 agreed to.

Lords amendments 12, 209 and 210 disagreed to.

Government amendments (a) to (g) made in lieu of Lords amendments 12, 209 and 210.

Lords amendments 13 and 14 agreed to.

Lords amendment 15 disagreed to.

Government amendments (a) and (b) made in lieu of Lords amendment 15.

Lords amendments 16 to 22 agreed to.

Lords amendment 23 disagreed to.

Government amendments (a) to (c) made in lieu of Lords amendment 23.

Lords amendments 24 to 70 agreed to.

Lords amendment 71 disagreed to.

Government amendment (a) made in lieu of Lords amendment 71.

Lords amendments 72 to 77 agreed to.

Lords amendments 78 and 106 disagreed to.

Government amendments (a) to (h) made in lieu of Lords amendments 78 and 106.

Lords amendments 79 to 105 and 107 to 155 agreed to, with Commons financial privilege waived in respect of Lords amendments 138 and 139.

Lords amendment 156 disagreed to.

Government amendments (a) to (c) made in lieu of Lords amendment 156.

Lords amendments 157 to 182 agreed to.

Lords amendments 183 to 185 disagreed to.

Lords amendments 186 to 208 and 211 to 244 agreed to.

Motion made, and Question put forthwith (Standing Order No. 83H(2)), That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments 183 to 185.

That Jo Churchill, Chris Heaton-Harris, Joseph Johnson, Gordon Marsden, Carol Monaghan, Wendy Morton and Karl Turner be members of the Committee.

That Joseph Johnson be the Chair of the Committee.

That three be the quorum of the Committee.

That the Committee do withdraw immediately.—(Andrew Griffiths.)

Question agreed to.

Committee to withdraw immediately; reasons to be reported and communicated to the Lords.

Higher Education and Research Bill

Debate between Lord Johnson of Marylebone and Gordon Marsden

3rd reading: House of Commons & Legislative Grand Committee: House of Commons & Report stage: House of Commons
Monday 21st November 2016 Commons Chamber

[Gordon Marsden]

I entirely accept the Minister’s bona fides and commitments on this issue, but is it true that Home Office officials accompanying the Prime Minister on her visit to India were openly talking to people about using the bronze element of the TEF as a way of reducing the migration numbers for students?

[Joseph Johnson]

The visit to India, which I was honoured to be part of, was a big success in that it gave us numerous opportunities to reiterate our strong message that we welcome genuine students. There is no limit on the number of genuine students who can come and study at our world-class institutions, and there is no better place than the UK to receive a higher education. We want to see more such students coming to study here.

--- Later in debate ---

[Joseph Johnson]

I urge the hon. Lady to wait for the consultation document. She will be able to assess the Government’s proposals in due course when the Home Office is ready to publish them.

Amendments 46 and 47 would require greater parliamentary scrutiny of the TEF, but I do not believe that the content of the amendments is either necessary or proportionate. As I have said, the development of the TEF has been, and will continue to be, an iterative process—as the research excellence framework was before it. Requiring Parliament to agree each and every change to the framework would stifle its healthy development. The REF scheme is not subject to that level of oversight by Parliament, and nor should it be.

Hon. Members have talked about the “gold”, “silver” and “bronze” descriptors as though they were new inventions from this Government. They are in fact familiar to the sector through their use in other areas. Such terminology is already used, for example, in the Athena SWAN awards and by Investors in People in many universities. In every case, bronze is still recognised as a high-quality award, while gold is reserved for the highest quality.

Amendment 49 would not add any value to the TEF framework that we have developed. Changing the TEF ratings would fundamentally undermine the purpose of the TEF by preventing students from being able to determine which providers were offering the best teaching and achieving the best outcomes. It would simply allow for a pass/fail assessment. The teaching excellence framework assesses excellence over and above a baseline assessment of quality, and our proposed descriptors will allow students, parents, schools and employers to distinguish clearly between providers. We have consulted on the proposed metrics and considered the evidence, and we still feel that these metrics represent the best measurements for assessing teaching. They are widely used across the sector.

Turning to amendment 50, we have consulted extensively on the metrics, as I have said, and made significant improvements. Setting out the requirement to consult in legislation would be unnecessarily burdensome. We have taken, and will continue to take, a reasoned approach to the metrics. Given the co-regulatory approach I have described, we would expect the OFS to take a similar approach.

I shall now address the points made on degree-awarding powers and university title. Let me be clear that only those providers that can prove they can meet the high standards associated with the values and reputation of the English HE system can obtain degree awarding powers. If a higher education provider can demonstrate their ability to deliver high-quality provision, we want to make it easier for them to start awarding their own degrees, rather than needing to have the degrees for their courses awarded by a competing incumbent. Maddalaine Ansell, the chief executive of the University Alliance, has said:

“These plans strike a healthy balance between protecting the quality and global reputation of our country’s universities, whilst also encouraging innovation.”

[Gordon Marsden]

The Minister might wish to comment specifically on new clause 4, but will he tell us why the Government are so reluctant to allow a process that has served the HE sector well since 1992 to be read across into the new arrangements for the OFS? I refer to the degree-awarding powers committee proposed in the new clause.

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[Joseph Johnson]

We plan to put out guidance in the coming months. The hon. Lady will be the first to receive it when it is ready.

Turning to amendment 58, we are absolutely committed to protecting the quality and reputation of our universities. We are not changing the core concept of what a university is and are not planning any wide-ranging changes to the criteria for university title. As now, we want only those providers with full degree-awarding powers to be eligible. Students make the choice where to study based on many factors—not only the qualification they will receive, but the cultural and social opportunities—and one size does not fit all. As independent and autonomous organisations, higher education providers are best placed to decide what experiences they want to offer to students and the local community. Like now, we intend to set out the detailed criteria and processes for gaining university title in guidance, not in legislation. We plan to consult on the detail prior to publication.

Several interesting points have been made in the debate on this group of amendments. Let me conclude by thanking hon. Members for their responses to the amendments that we have brought forward to enshrine the OFS’s duty to monitor and report on financial sustainability, to ensure there is always an OFS board member to represent or promote the student interest, to promote institutional autonomy further, and to compel providers to publish student protection plans.

[Gordon Marsden]

I think the Minister is coming to his peroration, so I just wondered whether he will be able to make any comment on new clause 15 and lifelong learning.

[Joseph Johnson]

I touched on that at the start of my remarks. The Opposition proposed a commission for lifelong learning in new clause 15. The Government are obviously strongly committed to lifelong education, in which the Secretary of State and I have taken a close interest. Studying part-time and later in life brings enormous benefits for individuals, employers and the general economy. Alongside our higher education reforms, we are reforming further education, including implementing the skills plan that was published earlier this year and through the recent introduction of the Technical and Further Education Bill, which had its Second Reading last week.

As the hon. Member for Blackpool South is well aware, the Government committed in the last Budget to review the gaps and support for lifetime learning, including part-time flexible study. That review is ongoing. Higher education already offers flexible options for the thousands of mature students who want to study each year. In addition, much work is under way to expand access to lifelong learning through a variety of routes to suit learners. I am confident that those reforms, like others in the Bill, will continue to have a positive impact on learning—lifelong or otherwise.

Question put and agreed to.

New clause 1 accordingly read a Second time, and added to the Bill.

New Clause 2

Student support: restricted modification of repayment terms

“(1) Section 22 of the Teaching and Higher Education Act 1998 (power to give financial support to students) is amended in accordance with subsections (2) to (4).

(2) In subsection (2)(g) at the beginning insert ‘Subject to subsections (3)(A) and (3)(B),’.

(3) In subsection (2)(g) leave out from ‘section’ to the end of subsection (2)(g).

(4) After subsection (3) insert—

‘(3A) Other than in accordance with subsection (3B), no provision may be made under subsection (2)(g) relating to the repayment of a loan that has been made available under this section once the parties to that loan (including the borrower) have agreed the terms and conditions of repayment, including during—

(a) the period of enrolment on a course specified under subsection (1)(a) or (1)(b), and

(b) the period of repayment.

(3B) Any modification to any requirement or other provision relating to the repayment of a loan made available under this section and during the periods specified in subsection (3A) shall only be made if approved by an independent panel.

(3C) The independent panel shall approve modifications under subsection (3B) if such modifications meet conditions to be determined by the panel.

(3D) The approval conditions under subsection (3C) must include that—

(a) the modification is subject to consultation with representatives of the borrowers,

(b) the majority of the representative group consider the modification to be favourable to the majority of students and graduates who have entered loans, and

(c) there is evidence that those on low incomes will be protected.

(3E) The independent panel shall consist of three people appointed by the Secretary of State, who (between them) must have experience of—

(a) consumer protection,

(b) loan modification and mediation,

(c) the higher education sector, and

(d) student finance.’”—(Wes Streeting.)

Brought up, and read the First time.

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[Joseph Johnson]

We as a Government can only reiterate that we fully appreciate and value their presence in our institutions. We welcome them and think their work crucial, and we want them to stay and to continue doing that work. We cannot be more categorical than that.

On amendments 43, 44, 45, 57 and 59, I absolutely agree that co-operation between the OFS and UKRI is critical. Clauses 105 and 106 provide for this. It is counterproductive, however, either to restrict the areas or to be too prescriptive about how and where UKRI and the OFS should work together through legislation as required by these amendments. We have recently set out in a factsheet published on 15 November further details of where we expect both bodies to work together. One key area explained in the factsheet where we believe that the OFS and UKRI should work in close co-operation is in the assessment of applications for research degree awarding powers. The provisions in the Bill will facilitate this.

Another important area of joint working between UKRI and the OFS is postgraduate training. In turning, therefore, to amendment 17, I would like to thank the hon. Member for Sheffield Central (Paul Blomfield) for raising this important issue in Committee. While the functions of UKRI, as drafted in the Bill, do enable this, the Government have tabled the amendment to provide absolute clarity that UKRI will continue to support postgraduate training. The hon. Member for City of Durham (Dr Blackman-Woods) has proposed an amendment to our amendment to ensure that it includes “social sciences”. I can assure her that this is already the case, because clause 104 ensures that all references to science or the humanities include social science and the arts. Our support for postgraduate training will be across the spectrum of disciplines. The OFS will be responsible for protecting the interests of all students, including all postgraduate students. The two bodies will work together and share understanding to support their respective functions, and the Bill makes clear provision for this.

I hope that hon. Members recognise the considerable progress made in ensuring that the Bill meets the needs of the research and innovation communities. I believe that UKRI will catalyse a more strategic, agile and interdisciplinary approach to addressing global challenges and developing the UK’s research and innovation capability. This is fundamental to strengthening UK competitiveness as part of the new industrial strategy. I therefore ask hon. Members not to press their amendments.

[Gordon Marsden]

Our amendments 43 to 45 are on collaboration between the OFS and UKRI. I will come to those and the Minister’s comments on them in a moment, but shall start with amendment 42.

Amendment 42 would allow Research England to co-ordinate with its devolved counterparts. Labour considers this an important principle to establish in the Bill. The Committee did not include members from Wales or, obviously, from Northern Ireland, yet, in both Wales and Northern Ireland, universities and higher education institutions will be significantly affected by the process. They will also be affected if the process with the new bodies is not universally seen, at this important time for our university system, to be fair in sharing out its attentions. Not to consider including such provisions in the Bill is a great mistake. Surely we should consider those interests when setting up a new research body.

This is highly relevant to the future of those research bodies. The Minister will be well aware that research bodies are generally still not entirely mollified by the various blandishments and reassurances given, particularly on the role of research councils. I am sure he will hear more about that when the Bill goes to the other place. While we have not pressed further any of the amendments that were proposed in Committee, because of time pressures, I assure him that our noble Friends in another place will want to scrutinise in detail what he has said and what he is planning to do.

These are not arcane arguments about technical details. One of the problems the Government face is that they have overlooked a vital factor. There is little sense of what the knock-on effects of all this will be on the importance of what I describe as the brand UK plc in HE—particularly so, in view of the further uncertainties that have arisen since the advent of Brexit. I am not the only person to make that observation; other commentators and academics have also done so.

Higher Education and Research Bill (Fourteenth sitting)

Debate between Lord Johnson of Marylebone and Gordon Marsden

Committee Debate: 14th sitting: House of Commons
Tuesday 18th October 2016 Public Bill Committees

[Gordon Marsden]

I beg to move amendment 324, in clause 88, page 54, line 8, after “relate” insert

“to maintain its focus on assisting businesses and”.

This amendment seeks clarification that Innovate UK is intended to maintain its business facing focus as a Council of UKRI.

The clause is relatively brief on the exercise of functions by Innovate UK. Brevity is not always a bad thing, but we have tabled the amendment because we seek strong clarification of whether Innovate UK is intended to maintain its business-facing focus as a council of UKRI. I remind the Committee that the White Paper stated that its

“business facing focus would be enshrined in future legislation, which would replicate the functions in Innovate UK’s current charter.”

I am not a betting man, but if I were I would put money on the likelihood that, when I sit down and the Minister rises, he will look at me more in sorrow than in anger and refer me to the note published this month, “Higher Education and Research Bill: Innovate UK”, with its sub-heading, “What do the reforms mean for Innovate UK?” I shall not deprive him of the pleasure of reading substantial chunks of it to us, but I will just quote it. I do not know whether the Minister wrote it himself.

The end of the first paragraph states:

“We are very clear that Innovate UK will retain its current business-facing focus. Innovate UK will not become just the commercialisation arm of the Research Councils.”

Those are fine words, but you will know, Mr Hanson, that, in the words of the old proverb, fine words butter no parsnips. If I were to continue that metaphor I should say that, if I were a cynical person, which I am not, the mere emphasis given in the note would remind me of another old saying, that “the louder they protested their honour, the faster we counted the spoons”. On this occasion we should like to examine some of the cutlery, if I may pursue the analogy.

I refer the Minister back to the evidence session with the chief executive of Innovate UK. I thought that what she said was revealing. Her evidence was measured and confident and she was overall in favour of what was going ahead, but she put down some substantial caveats. I will remind the Minister of what she said. I asked her whether there were things with Bill that concerned her about the the financial tools. She said:

“There are three areas in particular on which we need to be absolutely sure that the intent and what was in the White Paper is still there in the Bill. The first of those is the business experience of the board and the Innovate UK champion, which is very clear in the White Paper. As I understand it, that is possible and enabled through the Bill, but I think that the balance of business and research experience is very broad and could be tightened up a bit.”

She then said, about the financial tools:

“We are keen to be able to use things such as seed loans and equity, and other councils within UKRI have dipped a toe into that.”

She went on:

“We need to be absolutely clear, in how the Bill is finalised”—

whether this is the finalised version remains to be seen—

“that we ensure we have as much flexibility as the research councils have had and some of our enterprise partners have. We work very closely with Scottish Enterprise, which uses more financial tools than we currently have, and Enterprise Northern Ireland. We want to move at speed and to empower companies to grow in scale and be really competitive, but we must ensure we have the flexibility to do that and not slow down our clock speed. I think there is a bit of work to do looking at that in more detail.”

Then when talking about institutes and research, she again said:

The Bill gives us the great opportunity to look across the whole spectrum…At the moment, as I understand it, if Innovate UK wanted to create an institute and employ researchers to do the work that businesses need, we absolutely could. I am not sure, within the letter of the Bill, that we are still going to be able to do that. I think that probably needs to be looked at.”––[Official Report, Higher Education and Research Public Bill Committee, 8 September 2016; c. 80-81, Q125.]

When I looked again at the transcript of that session and at what Ruth McKernan, the chief executive, said on that occasion, it reminded me of a little exchange between the Minister and I in the following session when we had the opportunity to put him in the box. In fact, he volunteered himself to the box for some cross-examination by the Committee. On that occasion, I pressed him rather strongly—he was not best pleased to be pressed and certainly gave a spirited response—on the subject of the reports of the House of Lords Science and Technology Committee. At the risk of inflaming the Minister further and perhaps getting him removed him from Lord Selborne’s Christmas card list, I will repeat a summary of the findings, but not the lot because I do not want the Minister to blow a gasket:

“We have serious concerns about the integration of Innovate UK into UK Research and Innovation. With the exception of the Government itself, none of our witnesses gave an unqualified welcome to the proposals. We do not believe that the Government has consulted effectively with Innovate UK’s stakeholders to achieve buy in for this proposal. The Government’s case for integration appears to be based on a flawed linear model of innovation where Innovate UK functions as the commercialisation arm of the Research Councils.”

The Minister has, of course, been keen to address and refute that.

There was a long letter from Lord Selborne and a reply from the Minister that was not as long but was substantial, and I think they probably agreed to disagree. The fact remains, however, that those concerns also remain. The Minister must do a slightly better and specifically more focused job if he is to reassure not just members of this Committee but the range of people he has prayed in aid during other sittings of this Committee—new providers, funds coming in, private equity and all the rest of it.

These other names will not easily go away and I want to quote three or four from the evidence session to which Lord Selborne referred. He quoted Dr Virginia Acha of the Association of the British Pharmaceutical Industry, who said:

“I would be concerned if Innovate UK were brought under the same decision-making approach that a research council would be brought under, because they are making very different decisions.”

Professor Luke Georghiou said:

“There is real concern about the huge disparity between the size of the budget between the existing research councils and Innovate UK, summed up by concern that Innovate UK’s influence would be dwarfed and its impact distorted. That was how members summed up the risks to us.”

Mr David Eyton, who spoke to the Lords Committee, said:

“Effectively”—

Innovate UK

“is the start-up in the context of”

the research councils.

“It is 10% of it; the other 90% is very stable. It is comparatively new and needs to really motor. Will it get the management attention and focus, which requires the quite different skills for governing innovation ecosystems from governing science? That is also the question for that body: the balance of skills on the governing body.”

Finally, but obviously not least, we have what Dr McKernan said to the House of Lords Committee on that occasion. She might have used slightly different terminology—not least because the Minister was there and in courtesy to him—but she said:

“There are also risks that I have not gone into.”

She was talking about the possibility of funding from other Departments being diminished. She continued:

“There are some other areas of mitigation where I still have concerns…We manage about £300 million of funds in partnership with other government departments, for example the Aerospace Technology Institute through BIS”—

with which I am familiar, because there is a BAE Systems site at Warton near my constituency in Blackpool. I am familiar with the work that BAE Systems has done previously with Innovate UK and the Aerospace Technology Institute. Dr McKernan went on to say that Innovate UK does a lot of work with the Department of Energy and Climate Change and the Department for Culture, Media and Sport. She continued:

“It is really important to safeguard those relationships and not feel the need to create something else because we have created”—

these are her words, not mine—

“a fracture in putting Innovate UK within UKRI.”

The Minister may feel that that is slightly overstating it and overegging the pudding, but I hope that I have done enough to show him that that succession of concerns, considerations, worries and so on will not easily be assuaged simply with a paragraph saying that the Government will allow Innovate UK to retain its current business focus. I think that people out there in the groups that I have described want something a little more substantial.

The Royal Society’s position statement on this subject sums up the issue. It says:

“There has been considerable debate about whether or not Innovate UK should be part of UKRI. On balance, the Society believes the potential benefits of creating an organisation with an integrated overview of UK research and innovation infrastructure, assets and expertise outweigh the risks of a more fragmented structure, and that Innovate UK should be part of UKRI. It is essential that in creating UKRI, however, that Innovate UK’s unique business-facing focus and links to its customer base are not put at risk.”

That is where we stand today. The jury is still out on that and on the assertions with which the Minister hoped to placate Lord Selborne, and we would be interested to hear a little more chapter and verse to assuage our concerns.

[Joseph Johnson]

I thank the hon. Gentleman for the opportunity to comment on Innovate UK. We need to ensure that research and innovation come together at the heart of our industrial strategy. I set that out in my letter to Lord Selborne, which the hon. Gentleman referred to, about Innovate UK’s future inside UKRI, and again in the factsheet that we published for the benefit of the Committee on 12 October.

To fully realise our potential, we need to respond to a changing world, anticipate future requirements and ensure that we have the structures in place to exploit for the benefit of the whole country the knowledge and expertise that we have. I believe that we can do that most effectively by bringing Innovate UK into UKRI. That view is now shared by bodies such as the Royal Academy of Engineering and the Royal Society, which have recognised, as the hon. Gentleman rightly said, that the benefits of integrating Innovate UK into UKRI outweigh the risks.

Those two bodies are not alone. In other parts of her testimony, Ruth McKernan herself said:

“The establishment of UK Research and Innovation, including the research councils and Innovate UK, recognises the vital role innovation plays and further strengthens the UK’s ability to turn scientific excellence into economic impact.”

Alternatively, I can again point hon. Members towards the evidence given by Professor Sir Leszek Borysiewicz of Cambridge University, who said:

“The addition of Innovate UK is welcome, because it means that industry and the translation to industry has skin in the game at the very basic level.”––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 22, Q30.]

I recognise that the hon. Member for Blackpool South raised additional concerns in his remarks and with his amendment, which I will come to now.

--- Later in debate ---

[Gordon Marsden]

I wanted to pick up the point that Dr McKernan made, which is highly relevant in the context of the debate we have just had about devolved areas. She made the point—her view was challenged by others, I think—that Scottish Enterprise and Enterprise Northern Ireland had “more financial tools” than Innovate UK had. Does the Minister share her concerns about that? If he does, what capacity is there in this new structure for Innovate UK to be able to match the flexibility she referred to?

[Joseph Johnson]

We want Innovate UK to have significant flexibility in the range of financial mechanisms and financial tools it has at its disposal. That is one of the reasons why we are developing the new non-grant innovation finance products at the moment, to complement the important and popular grant finance products that it has at its disposal. The Bill sets out the activities that UKRI as a whole can pursue, and activities where it needs advance permission from the Secretary of State, such as establishing a joint venture. All these restrictions and activities will apply equally to all councils in UKRI, not just to Innovate UK. The restrictions replicate the current situation that applies to Innovate UK and to the research councils. We are not looking at placing undue restrictions on the councils once UKRI is created, but the Secretary of State will need to be assured that certain activities are in line with HM Treasury rules and delegations, as I am sure he will understand, such as the “Managing public money” guidance issued by the Treasury. Once it comes into being, UKRI will be managing a budget of more than £6 billion, so we need to ensure that those kinds of control are in place.

The Bill already makes clear Innovate UK’s business-facing role, not only through directing its focus on increasing economic growth, as set out in clause 88, but through specifically ensuring that it has regard to benefiting persons carrying on business in the UK. Although I agree with the sentiment behind amendment 324, I believe that its aims are already addressed in the Bill and I therefore ask the hon. Gentleman to withdraw it.

--- Later in debate ---

[Gordon Marsden]

I beg to move amendment 325, in clause 89, page 54, line 13, at end insert—

‘(1) Research England may—

(a) provide non-hypothecated funding to eligible higher education providers for the purpose of supporting basic, strategic and applied research; and

(b) support knowledge exchange and skills provision.”

This amendment would allow Research England to fund eligible higher education providers to support basic, strategic and applied research and to support knowledge exchange and skills provision.

This, too, is a probing amendment. We have spoken slightly in brackets, in the context of its implications for the devolved Administrations, about Research England, but this is an important clause because it starts to spell out—obviously, in the Bill there is a limit to the amount that Ministers might wish or be able to spell out—some of the issues and concerns about how funding will be separated, assessed and actioned. We tabled the amendment in an attempt to tease out just what some of the things in clause 89 might mean.

The particular set of emphases in the amendment is one that the representations that I have had from members of the scientific community and various societies show they are keen on and anxious about. The Minister referred earlier to the various types of research assessment, and of course that will include taking on quality-related research assessment for the UK and funding for England. QR funding is generally highly valued because it can provide stable levels of funding over the period between research assessment exercises in a way that means the university can deploy it at its discretion. Of course, there is always a balance to be achieved in this respect. In the original debates about the research assessment exercises in the late 2000s, the issues of QR, how micromanaged it should be and how flexible it should be were hotly debated, and no doubt they will continue to be hotly debated in the future. However, I think that there is a general acceptance and general view that QR funding provides a valuable baseline of support for facilities and research operations.

Without wishing to sound like a Jeremiah, I might say that the mixture of factors that HE institutions in this country will have to face over the next three to four years—highly variable factors to do with the implications of Brexit and what does or does not come out of that —and the general financial climate in Government make it important that there should be an element of funding to provide a baseline of support for facilities and research operations. QR gives universities the opportunity to support emerging research areas and new appointees.

I remember debating these issues in Select Committee in respect of the REF, and this was always the discussion. Which came first: the chicken or the egg? The point was made that, certainly under the old research assessment exercise, it was difficult for new, cutting-edge disciplines that had genuine merit and genuine academic reference, and all the rest of it, to break into the structure. QR still plays a valuable role in that respect. Supporting emerging research areas and new appointees is important as well, because there was a time not that long ago—perhaps five, 10 or 15 years ago—when it was extremely difficult for young academics in their 30s or 40s to come through in new research areas and to develop institutes and things of that nature, particularly but not exclusively on the science side, in universities.

For all those reasons, most people out there in the HE environment believe, like I do, that QR is an important element of funding, and it would help to enshrine that purpose in law. We have suggested a mechanism. Again, this is a probing amendment. If the Minister is minded to consider it and does not like the terminology, we would be happy for him to take it away. It is important to give reassurance to the academic community about the role of QR, on which there is relatively little in the Bill.

[Joseph Johnson]

I thank the hon. Gentleman for the opportunity to explain further the key role that Research England will play within UKRI. Research England’s function of providing funding for research within higher education institutions will form one part of the dual support system in England. It will take on HEFCE’s responsibility for issuing block grants to universities for the purposes of research, based on the research quality of those institutions.

The integration of HEFCE’s research and knowledge exchange function within UKRI is also critical to achieving greater strategic co-ordination across the research funding landscape. Professor Quintin McKellar, vice-chancellor of the University of Hertfordshire, said:

“I am very comfortable with the creation of UKRI. It seems that bringing together the major funders for what you might call blue-sky research with those that have responsibility for innovation and knowledge transfer is a good thing.”––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 24-25, Q36.]

UKRI will ensure a more joined-up approach in areas such as skills and UK-wide capital investment, where both HEFCE and the research councils have pioneered innovative funding approaches. For example, HEFCE’s UK research partnership investment fund has allocated more than £500 million to 34 projects running between 2014 and 2017, attracting £1.4 billion of investment from businesses and charities.

An amendment is not needed to assure the unhypothecated nature of the funding that will be provided by Research England, as clause 93(2) already provides such protections. In addition I would be cautious about placing any conditions on the funding beyond the conditions currently in place, such as the amendment suggests by referring to basic, strategic and applied research, which may inadvertently restrict what universities can do with this block grant funding. The Government believe in institutional autonomy, as the Bill demonstrates, and we do not want to place conditions on our universities that limit their freedom to undertake their missions as they see fit.

Research England will retain HEFCE’s research and knowledge exchange functions, including the higher education innovation fund. Research England and the new office for students will act together to deliver HEIF, as an example of the joint working between the two bodies and their shared remit to support business-university collaboration.

[Gordon Marsden]

The Minister is moving on to paragraph (b) of the amendment, which prods me to return to a subject I touched on the other day. As this process goes along and HEFCE is, in the words of the White Paper, dissolved, there is the difficult question of the transition period. I think we agree that this is likely to be a two to three-year process. Will the Minister give any indication of the point at which Research England will become the active player in this new architecture?

[Joseph Johnson]

As I said in answer to the hon. Gentleman’s earlier question on a similar theme, we expect the office for students and UKRI to become operational in 2018-19. They will take on functions including HEIF during that period and from that day onwards. HEFCE’s knowledge exchange functions will transfer with its research functions to Research England. That includes support for the research elements of HEIF. The reforms offer significant potential to build coherence with the knowledge exchange programmes currently operated by the research councils and Innovate UK.

Knowledge exchange is an essential mechanism to support universities in effectively contributing to UK growth, as evidenced by the Chancellor’s recent announcement of £120 million of additional funding for university collaboration on technology transfer and knowledge exchange. However, as the provisions of the Bill are sufficient to allow Research England to undertake these activities, I ask the hon. Gentleman to withdraw amendment 325.

[Gordon Marsden]

I thank the Minister for his response and the further detail. It is particularly helpful that he has said a little more about the situation with HEIF and the timescale, which is similar to what we discussed the other day. With those assurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 89 ordered to stand part of the Bill.

Clause 90

Exercise of functions by the Councils: supplementary

[Joseph Johnson]

I beg to move amendment 261, in clause 90, page 54, line 39, at end insert—

‘( ) Arrangements under subsection (1) may result in a function of UKRI being exercisable by more than one Council.”

This amendment and amendment 262 make it clear that arrangements under clause 90(1) may result in a function of UKRI being exercisable by more than one Council and that functions of UKRI which are exercisable by a Council on UKRI’s behalf under arrangements under clauses 87 to 89 or 90(1) may also be exercised by UKRI. This enables Councils and UKRI to engage in cross-cutting activities.

--- Later in debate ---

[Joseph Johnson]

Multidisciplinary research is of increasing importance in tackling complex challenges such as the impact of climate change. Currently, councils may hold and spend funds only for activity within their own remit. That means it is not within the remit of any of the research councils to manage and distribute inter and multidisciplinary funds such as the new £1.5 billion global challenges research fund.

Amendments 261 and 262 clarify clause 90 to enable UKRI and the councils to engage in multidisciplinary work more effectively. Amendment 261 makes it clear in the Bill that UKRI will enable councils to collaborate on funding multidisciplinary research. Amendment 262 proposes leaving out “in other ways” from the end of subsubsection (2), which provides further clarification that enables collaboration between UKRI and a council carrying out specific functions of UKRI.

As I have explained, these are technical drafting amendments that make it clear that UKRI and the councils are able to both continue with existing joint working and collaborate even more effectively in funding multidisciplinary research.

Amendment 261 agreed to.

Amendment made: 262, in clause 90, page 54, line 42, leave out “in other ways”—(Joseph Johnson.)

See the explanatory statement for amendment 261.

Clause 90, as amended, ordered to stand part of the Bill.

Clause 91

UKRI’s research and innovation strategy

[Gordon Marsden]

I beg to move amendment 327, in clause 91, page 55, line 8, after “approval” insert—

“(c) consult with a Committee of Executive Chairs of Councils in the development of UKRI’s strategy.”

This amendment would ensure UKRI’s governance structure includes a Committee of the Executive Chairs of the Councils who are consulted with as part of UKRI’s strategy.

Although the amendment is probing, it is important, not only in terms of the practical arrangements that must characterise the relationship between UKRI and its nine councils but in terms of the signal—or lack of signal, if the Government do not move down this road—that it is in danger of sending to the academic community and the learned societies and institutions, which have already spoken strongly about the measure. That is why we, with the advice and opinions of many of those people, have tabled the amendment, which would ensure that

“UKRI’s governance structure includes a Committee of the Executive Chairs of the Councils who are consulted with as part of UKRI’s strategy.”

I read that out carefully, because I want to engage with the paper to which the Minister referred this morning, which Committee members should have seen: “UKRI: Vision, Principles and Governance”. Produced at the beginning of this month, it is a joint paper between the Department for Education and the new Department for Business, Energy and Industrial Strategy. The White Paper and the Bill have outlined the Government’s arrangements for UKRI and its nine councils.

The board will consist of the chief executive officer, chief financial officer and chair of UKRI, as well as between nine and 12 representatives of academia and industry. We really need a huge organogram, perhaps overlaying a large 19th-century painting, on the wall at this point to understand it, but I will do my best. Each of the councils will be headed by an executive chair with five to nine ordinary council members, but—this is the crux of the matter and of this discussion—the executive chairs of the councils do not sit on the UKRI board.

The Nurse review recommended that there should be a committee of the executive chairs of the councils that includes the CEO of UKRI and provides a continuing link to UKRI’s governing board, but the governance arrangements proposed in the White Paper and the Bill do not include an executive committee, although the Bill provides UKRI with the power to establish one. The factsheet published by the Government, which I have just quoted, makes that point. It says:

“It will be critical for the Board to work closely with the Executive Chairs and ensure highly effective co-ordination across UKRI and its key partners. Therefore, our policy intent is for the Executive Chairs of the Councils—along with the CEO, CFO and other senior directors of UKRI—to sit together on an Executive Committee, to support engagement with the Board and cross-council working. This is in line with good practice on organisational governance and Sir Paul Nurse’s recommendations.”

Some people might query the definition of Sir Paul’s recommendation that the Government have chosen to incorporate into the factsheet, but even if they do not, the fact remains that it does not go as far as the Royal Society or many others have called for by making it a statutory requirement on the face of the Bill.

I return to what I have said previously: I am not questioning the current Minister’s enthusiasm or bona fides for this arrangement, simply noting an observable fact. We must legislate for all sorts of Ministers, good, bad and indifferent, over a period of time, and regulation is needed on the face of the Bill to assure people that they can survive the occasional—dare I say it—bad Minister, autocratic Minister or whatever.

The Royal Society believes that it is essential that UKRI’s

“strategy and operation is not driven only by the priorities of the Government or the Board—”

which it describes as “top down”—

“but also by the research and innovation community (bottom up).”

I see the eyes of the hon. Member for Kirkcaldy and Cowdenbeath lighting up at the reference to “bottom”; that is an in-joke related to a revelation that the hon. Gentleman made earlier in proceedings, Mr Hanson. We will not get into that now.

In his review of the research councils, Sir Paul Nurse

“envisaged this being realised through the establishment of an Executive Committee…Under the proposed reforms, the analogous Committee would include the Executive Chairs of the Research Councils, Innovate UK and Research England.”

The Royal Society believes that UKRI’s governance arrangements

“should include an Executive Committee of the Councils’ Executive Chairs”.

Just in case members of the Committee are beginning to think this resembles one of those medieval theological debates about how many angels could dance on the end of a pin, I think it is important to understand the issues and concerns at stake here. For that, I refer to the excellent speech by Lord Rees in the Queen’s Speech debate earlier this year, in which he discussed the proposals of the White Paper. The Minister will be pleased to note I do not intend to quote all of the speech, but I will quote a little bit of it. Lord Rees, who is a highly respected figure in academia, has strong concerns about the White Paper. He said:

“There are widely-voiced anxieties that the changes are needlessly drastic. It is proposed that all seven research councils will lose their royal charter—even the Medical Research Council, which has a global reputation and a century-old history.”

He then talked of the various things that will happen, saying:

“After any reorganisation, there are transitional hassles before the new structure beds down… When the research councils set up the so-called shared research service in 2008, the overheads went up, not down. The Government’s proposals are based on a review by Sir Paul Nurse, who accepted that the current research support system worked fairly well but aspired to improve it. It is seductive to believe that reshuffling the administrative structure will achieve this, but it may not prove either necessary or sufficient and may indeed be counterproductive. Moreover, it is already proving hard to attract people with the stature expected as heads of research councils. That may be harder still if the posts are downgraded.”

He concludes:

“It is plainly important that the existing research councils mesh together and collaborate when necessary…these aims can surely be achieved with good will and capable management within the present structure by strengthening high-level input from the CST and—”

here is the rub—

“reviving a body resembling the old advisory board for the research councils to play the role envisaged for UKRI’s board. When there are so many distracting pressures in the educational and research world—

bear in mind Lord Rees made the speech on the Queen’s Speech, before the outcome of the referendum was known and before Brexit—

“surely we should avoid risky upheaval in a system that is working reasonably well and which really needs no more than some fine-tuning.”—[Official Report, House of Lords, 19 May 2016; Vol. 773, c. 79.]

The Minister and others may well dispute that, but the concerns Lord Rees articulated are not restricted to him. Others, perhaps less forcefully, have said similar things. Only today, an article has appeared in The Guardian by Stephen Curry, who is a professor of structural biology at Imperial College and a member of the Campaign for Science and Engineering. He repeats the points others have made by querying the efficacy of the Bill and suggesting, in this respect, that it is not necessarily going to do the business. He says:

“The bill does not even provide for the creation of an executive forum that would allow the heads of the new research committee to communicate the views of their researcher communities to the CEO of UKRI. Although a supplementary document published just last week by the Department of Business, Energy and Industrial Strategy (BEIS)”—

—by which I assume he means the joint publication of BEIS and the Department for Education—

“now envisages such a committee, the system of governance is significantly more top-down than before.”

That is the point.

--- Later in debate ---

[Joseph Johnson]

I am glad to have the opportunity to give assurances on UKRI governance. First, I would like to address the proposition of a committee of executive chairs. I hope hon. Members were reassured by the fact sheet we published on 12 October, to which the hon. Gentleman referred on a number of occasions. As he said, the fact sheet states clearly that it will be critical for the UKRI board to work closely with the executive chairs and ensure highly effective co-ordination across UKRI and its key partners. Our policy intent is for the executive chairs of the councils, along with the CEO, CFO and other senior directors of UKRI, to sit together on an executive committee to support engagement with the board and cross-council working.

The hon. Gentleman asked why the Bill does not set that out. I refer him to the general response I have given to these sorts of request for more information on the face of the Bill, which is that the Bill is a legal framework for these reforms. In drafting it, we are trying to find the right balance between providing enough detail appropriate for a piece of primary legislation and the need to allow flexibility for UKRI to develop the right governance structures, so that it can evolve swiftly in response to changes in the science and innovation landscape.

[Gordon Marsden]

I entirely accept that point. I said at an earlier stage that I welcome the fact that the Bill has moved away from the tradition of some preceding Bills—not in this area—of just producing a box that everything comes through. I appreciate there is a balance to be struck, but on this particular point, to which so many people in the academic and research communities are sensitive, does the Minister not understand it is important to do the maximum that can be done, even if it is not on the face of the Bill, to reassure those people?

[Joseph Johnson]

I thank the hon. Gentleman for his point. We understand the desire for clarity in respect of the committee. At this stage, the detailed design of UKRI will be developed in conjunction with UKRI leadership and existing partner organisations and in line with Government guidance for non-departmental bodies. The fact sheet we have published shows, I hope, that our overarching approach on governance is clear in that respect. Further details will be captured in a framework document, which we have discussed. That will be published once agreed with UKRI’s CEO and board as per the usual practice with non-departmental public bodies. I am glad, though, that the hon. Gentleman was not pressing for the executive chairs themselves to sit on the main UKRI board—that is how I understood his remarks. That is a point on which he and I are in agreement. We do not believe that that would serve the purposes of the organisation.

The second aspect of the amendment is that it would require the committee, to which we have formally committed in the fact sheet, to be consulted on UKRI strategy. It will be for UKRI itself to define the detailed process for developing the strategy. However, I assure the Committee that we would expect it to be an iterative process involving the councils and executive chairs, and informed by engagement with the relevant stakeholder communities. The executive committee, on which the hon. Gentleman is keen and about which I am enthusiastic, seems to me to be a sensible instrument to achieve that aim. I hope the Committee will agree that this is simply a matter of good organisational governance. I do not think it would be appropriate to write it into primary legislation, so I ask that the amendment be withdrawn.

[Gordon Marsden]

Again, I am grateful to the Minister for taking some time to spell out the Government’s motivation, and I heard what he had to say. I am sure there will opportunities for further questioning. As he says, it is an iterative process. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 91 ordered to stand part of the Bill.

Clause 92 ordered to stand part of the Bill.

Clause 93

Grants to UKRI from the Secretary of State

[Joseph Johnson]

I beg to move amendment 263, in clause 93, page 56, line 6, at end insert—

‘( ) Where a grant is made in respect of functions exercisable by Research England pursuant to arrangements under section 89, terms and conditions under subsection (1) may be imposed only if—

(a) they are requirements to be met before financial support of a specified amount or of a specified description is given by Research England in respect of activities carried on by an institution, and

(b) they apply to every institution, or every institution within a specified description, in respect of whose activities that support may be provided.”

This amendment provides that where the Secretary of State makes a grant to UKRI in respect of the functions exercisable by Research England (i.e. the giving of financial support to eligible higher education providers (see clause 89)), terms and conditions can only be imposed if they are requirements to be met before the financial support is given and if they apply to all institutions or institutions of a particular description.

--- Later in debate ---

[Joseph Johnson]

I thank the hon. Member for Blackpool South for the opportunity to discuss Haldane. Let me reassure the Committee that this Government are fully committed to the fundamental principle that funding decisions should be taken by experts in their relevant areas. As my predecessor in this role, David Willetts, said in 2010:

“excellence is and must remain the driver of funding decisions, and it is only by funding excellent research that the maximum benefits will be secured for the nation.”—[Official Report, 20 December 2010; Vol. 520, c. 139WS.]

We have ensured that that principle is reflected in the design of UKRI.

The provisions in the Bill contain several measures to protect the Haldane principle, including that UKRI will be established as an arm’s length body independent of Whitehall; that UKRI will be required to devolve functions within specified fields of activity to its constituent councils, ensuring that individual funding decisions are made by relevant experts; and that subsidiarity in the design of UKRI will ensure that the councils take all scientific and other decisions in their area where expert knowledge is essential to driving excellence.

As hon. Members know, I published a fact sheet on 12 October that sets out more details of how the Bill protects the Haldane principle, which I hope has been helpful. I do not agree that the amendment would strengthen the Haldane principle in the Bill. I believe the unintended consequence would be to weaken significantly the safeguards on public funding within the legislative framework. The Secretary of State currently has an equivalent power of direction over research councils in section 2 of the Science and Technology Act 1965, and our proposals in clause 94 are intended to mirror that.

The rationale for this power relating to the money given to UKRI, which is at present upwards of £6 billion per annum, is that the Secretary of State can deal swiftly with any financial issues arising from, for example, mismanagement. That ensures the most effective safeguard for public finances. Such powers of direction are rarely used, but given the very large sums of public money for which UKRI will be accountable, they are proportionate. On that basis, I ask the hon. Gentleman to withdraw amendment 328.

[Gordon Marsden]

Again, I thank the Minister for using the opportunity of our probing amendment to say a little more about how he envisages the Haldane principle being enshrined in the Bill. That has been helpful. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: 265, in clause 94, page 56, line 25, at end insert—

‘( ) The Secretary of State may give a direction under this section in respect of functions exercisable by Research England pursuant to arrangements under section 89, only if —

(a) it relates to requirements to be met before financial support of a specified amount or of a specified description is given by Research England in respect of activities carried on by an institution, and

(b) it relates to every institution, or every institution within a specified description, in respect of whose activities that support may be provided.”—(Joseph Johnson.)

This amendment provides that the Secretary of State can only give a direction about the allocation of grants to UKRI in respect of the functions exercisable by Research England if the direction relates to requirements to be met before the financial support is given and if it relates to all institutions or institutions of a particular description.

--- Later in debate ---

[Joseph Johnson]

I am pleased to have the opportunity to share with the Committee more detail about how the Government are setting out in legislation for the first time the dual support system for research and introducing, in legislation, the concept that the balance between the two funding streams is important. That is a significant enshrinement in law of one of the key features underpinning the success of our research system. Up until now, pretty much with the stroke of a pen at any fiscal event the dual support system could be done away with, and that will not be possible once the Bill receives Royal Assent.

Lord Stern’s recent review of the research excellence framework described the two strands of the dual support system as

“essential, intertwined and mutually supportive”

drivers of the UK’s success in research. Dual support combines project funding for excellent research proposals, which is forward looking, with formula-based block grant funding that rewards performance retrospectively. So one element is forward looking and the other is backward looking. In his report, Sir Paul Nurse described the system as

“one of the bedrocks of UK research”

that was identified as critical to the UK’s world-leading reputation. The legislation ensures that in the future it will be mandatory to provide support for the block grant provided by Research England, and for the funding provided by the research councils.

Clause 95 introduces an additional obligation to provide proportionate funding for each of the two parts of dual support, first to ensure that what constitutes a reasonable balance for dual support is considered carefully by the Secretary of State before grants to UKRI are made.

[Gordon Marsden]

Will the Minister give way?

[Joseph Johnson]

I am just coming to the hon. Gentleman’s point—I am going to anticipate his question. Secondly, the Secretary of State must consider any advice from UKRI about what that reasonable balance may be.

[Gordon Marsden]

The Minister is semi-telepathic. I was going to touch on that point, but I was also going to touch on how he envisages the assessment being made. Ultimately, this is about sums of money and the balance between retrospective and prospective funding. Who, in that scenario, would make those sorts of decisions?

[Joseph Johnson]

The Secretary of State will be required to consider UKRI’s advice on the balance of funding. The new legal protections will apply to future Governments as much as to this one. We have already shown in our two previous spending reviews our consistent support for science funding and the dual support system, but we want the legislation to be sufficiently flexible for Governments to respond to the circumstances at the time, which is why we do not seek to fix a specific proportion for dual support in the Bill.

When considering what the balance of funding should be, we expect that the Secretary of State will, as now, consider issues such as the strategic priorities of the research base, the sustainability of higher education institutions, research capability and other research facilities supported through the UKRI budget. So balanced means taking into account the balance of those kinds of interests, which will determine how the Secretary of State will support the dual support system in his allocation decisions.

The Secretary of State will continue to allocate the councils’ budgets separately through an annual grant letter to UKRI. The allocations of the research councils on the one hand and Research England on the other will, as now, make up that dual support system.

Legislation must be sufficiently flexible for Governments to respond to circumstances at the time, but they will have to consider the balance of dual funding, unlike now, where no such protection exists. As the hon. Gentleman mentioned, this provision has been warmly welcomed by a huge number of key stakeholders across the sector. We have heard enough from several of them already, so I will not give them another outing; we do not need to rest on our laurels in that respect. To ensure that the new protection for dual support that is so welcomed by the research community is delivered through this legislation, I ask the hon. Gentleman to withdraw his amendment.

[Gordon Marsden]

I thank the Minister for his remarks. I only pause to reflect that in politics, there can never be too much gilding of the lily. I take the points he has made. His remarks are a helpful contribution to what I am sure will be a continuing discussion. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 95 ordered stand part of the Bill.

Clauses 96 to 98 ordered to stand part of the Bill.

Clause 99

Provision of research services

Amendment made: 268, in clause 99, page 58, line 5, leave out “in relation to” and insert “into”.—(Joseph Johnson.)

This is a drafting amendment to ensure that clause 99 is more consistent with other clauses in Part 3.

Clause 99, as amended, ordered to stand part of the Bill.

Clauses 100 and 101 ordered to stand part of the Bill.

Clause 102

Definitions

Amendment made: 269, in clause 102, page 59, line 4, leave out “social science” and insert “social sciences”.—(Joseph Johnson.)

This amendment amends the definition of “science” in Part 3 so that it includes social sciences and so ensures consistency with the language used in clause 87(1).

Clause 102, as amended, ordered to stand part of the Bill.

Clauses 103 and 104 ordered to stand part of the Bill.

Schedule 10

Transfer schemes

[Joseph Johnson]

I beg to move amendment 270, in schedule 10, page 98, line 13, after “means” insert “the Secretary of State or”.

This amendment enables the Secretary of State to be a “permitted transferor” for the purposes of a property transfer scheme or staff transfer scheme made under Schedule 10.

[Joseph Johnson]

These amendments provide additional, complementary powers to those already in the Bill, to enable an orderly and efficient transfer of staff, property and assets. We have reflected further on the Bill’s provisions as we prepare for transition, and the amendments are intended to help make the transition planning more straightforward.

Amendment 270 empowers the Secretary of State to be a permitted transferor alongside HEFCE, OFFA, Innovate UK and the research councils. That will mean, for example, that when the Department for Education stops regulating what are currently known as alternative providers and the OFS becomes responsible for regulating all providers, there will be an option to transfer DFE resources to the OFS to support that where appropriate.

Amendment 271 creates a standard provision consistent with precedent transfer scheme powers in other legislation, such as the Public Bodies Act 2011. It enables modifications to be made to transfer schemes so that the changes have effect as if they had been in place at the original date of the scheme. That is the most efficient way to enable tidying-up exercises where, for example, the destination or arrangements relating to staff or assets might for legitimate reasons be reassessed during the transition process.

Amendment 270 agreed to.

Amendment made: 271, in schedule 10, page 99, line 14, leave out from “provide” to end of line 15 and insert—

“(a) for the scheme to be modified by agreement after it comes into effect, and

(b) for any such modifications to have effect from the date when the original scheme comes into effect.”—(Joseph Johnson.)

This amendment makes it clear that modifications to a property transfer scheme or staff transfer scheme under Schedule 10 can be made so as to have effect from the date on which the scheme came into effect.

Schedule 10, as amended, agreed to.

Clause 105

Power to make consequential provision etc

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

[Gordon Marsden]

I am sorry if I have delayed a bundling up of clauses.

The power to make consequential provision of one sort or another often appears in Bills. It is a phrase that slips off the tongue and sometimes down the gullet rather too easily. I want to draw the Committee’s attention to the implications of subsection (2), which reads:

“(2) The power conferred by subsection (1) includes power to amend, repeal, revoke or otherwise modify—

(a) primary or secondary legislation passed or made before this Act or in the same Session as this Act, or

(b) subject to subsection (3), a Royal Charter granted before this Act is passed or in the same Session as this Act.”

Those anodyne phrases, which have been polished over many years by parliamentary draftspeople, can often pass by unnoticed, but in this context it is worth debating for a few moments the propriety of the Secretary of State being given such powers when we are told that they will involve, for good or ill—people can make their own decision—the overturning of not 100 years but several centuries of custom and practice with royal charters. Some people believe that the Bill will also cause a major shift in the relationship between the higher education sector and the state—a relationship that anyone who is of an antiquarian disposition, or even just knows their history, will know goes back nearly 800 years. That is why several organisations have called for changes to be made to the Bill.

I am particularly unhappy about the complete removal of the powers of royal charters. We have debated that issue previously, and I do not intend to go over it again, but this clause is the practical expression of that airbrushing out of royal charters and a long-stop to the development of powers for the Office for Students. That is why Universities UK has called for a higher threshold of evidence to be required of the OFS before it can take sanctions against an institution. The University of Cambridge said in its evidence that the revocation of degree-awarding powers or university title

“is not a decision to be made without a high level of scrutiny and proper accountability.”

This is not simply an arcane argument among academics, because as the Opposition have endeavoured to emphasise, what affects universities, particularly in the 21st century, is not just what affects their students and academics but what affects the people who work in them, the local economies that are affected by them and so on. It is therefore not arcane or antiquarian to discuss whether the Government are going too far in this issue.

As it happens, two articles in the last couple of weeks—an editorial in Nature and an article in the Financial Times—have made the point that the Government need to be challenged closely on these issues, in a way that frankly we were not able to do on Second Reading. We have endeavoured to begin that process in Committee, but I suspect it will have to continue in another place. There is a fundamental question to be asked. If the Government answer it satisfactorily, with the right assurances that the powers that the clause gives the Secretary of State will be exercised judiciously and reasonably, perhaps everybody will close their books and say, “Well, there we are. We don’t have to worry about keeping royal charters and all the rest of it.” The onus is on the Government to make that demonstration, and I submit that they have not made that case very strongly so far in Committee.

--- Later in debate ---

[Joseph Johnson]

On a point of order, Mr Hanson. My Department has today provided the Committee with an assessment of the implications of amendments made during Committee for the territorial extent and application of the Bill and for how it relates to the legislative competence of the devolved Administrations.

I also want to say that I am very pleased that the Bill has been scrutinised so thoroughly and in such a collegiate and generally good-humoured fashion. We sat a little late on Tuesday 11 October but adjourned early on Thursday 13 October and we have now completed the proceedings with four or five minutes to spare.

I thank Committee members personally for giving so much of their time and energy to the scrutiny of the Bill and for the constructive way in which they have engaged in debate. We have been listening carefully to all the points made during the Bill’s passage through Committee and are grateful for all the observations, comments and proposed amendments, even if we were not able to accept all of them—

[Gordon Marsden]

Any!

[Joseph Johnson]

Or indeed any.

We have had a robust and well informed consideration of every part of the Bill, and the Committee has been admirably steered by you, Mr Hanson, and by the other Chairs, particularly Sir Edward Leigh. I pay tribute to the usual channels for the way in which they have co-ordinated our work and ensured that there was proper time for us to scrutinise all the Bill’s provisions fully and carefully.

Lastly, I thank and recognise the hard work of Hansard in recording our deliberations; the Clerks for their advice throughout the Committee stage; and my very hard-working and brilliant officials in the Department for Education and the Department for Business, Energy and Industrial Strategy. Last, but by no means least, I thank the Doorkeepers for helping to keep us all in good order.

[Gordon Marsden]

Further to that point of order, Mr Hanson. I associate myself and my hon. Friends with, if not all the Minister’s comments, certainly those in respect of you and your fellow Chairs. We had an appearance from Mr Christopher Chope as well as seeing Sir Edward, of course.

I pay tribute to the Public Bill Office. Members will know—or might want to take note, because one of these days they might be on the Opposition Benches—that, for the Opposition and Government, the progress of Bill Committees is often like David versus Goliath in terms of the resources available. The Public Bill Office have been scrupulously fair and helpful in that respect, so I pay tribute to its staff.

I also pay tribute to the fantastic contribution of all my hon. Friends among the Opposition and, indeed, to the contribution of the Scottish National party Members, which has been important. We have endeavoured to scrutinise you—not you, Mr Hanson, but the Government, within an inch of their nine lives. We will continue to do so as the Bill progresses through Parliament.

I associate myself with what the Minister said about the efficiency and efficacy of the usual channels. I will not be quoting Enoch Powell’s statement about the Whips. I particularly thank our colleagues from Hansard and the Doorkeepers.

Higher Education and Research Bill (Thirteenth sitting)

Debate between Lord Johnson of Marylebone and Gordon Marsden

Committee Debate: 13th sitting: House of Commons
Tuesday 18th October 2016 Public Bill Committees

[Joseph Johnson]

It is good to have you in the Chair for the last day of our Committee’s proceedings, Sir Edward, to see us safely through to the end.

Amendment 246 is a minor amendment that places the Welsh language name for UK Research and Innovation on the face of the Bill. Amendments 274 to 276 are consequential and update the English and Welsh language versions of the Welsh Language (Wales) Measure 2011 to acknowledge the establishment of UKRI.

Amendment 246 agreed to.

Clause 83, as amended, ordered to stand part of the Bill.

Schedule 9

United Kingdom Research and Innovation

[Gordon Marsden (Blackpool South) (Lab)]

I beg to move amendment 330, in schedule 9, page 92, line 11 after “members” insert—

“(e) at least one member of the OfS Board with at least observer status”.

This amendment would ensure an interface between research and teaching.

[Gordon Marsden]

It is a pleasure to serve under your chairmanship on this last day, Sir Edward.

Because of the mysteries of grouping, these amendments are fairly far apart on the Order Paper, but fortunately they hang together. The amendments focus on co-operation and collaboration between research and teaching, specifically the relationship between the office for students and UKRI, which we have touched on previously. They spell out what the interface should be between teaching and research.

This question is probably as old as the hills. Ever since universities have been established, no doubt, people have been saying, “What on earth is he or she doing, doing all this teaching and no research?” and vice versa. The issue comes into particular focus after our lengthy discussions about the teaching excellence framework. In that process, reference is made to assessment of the research process. We are moving forward in general terms as well as in this Committee, and I think there is consensus across the Committee not only that research and teaching are of equal value, but that it is a mistake to put either into a silo. We would not previously have said that, even five or 10 years ago, but in general that is the position in the sector now.

The amendments draw on a wide series of comments that have been made about part 3 of the Bill by learned societies and the research and higher education communities. To be pedantic, we are considering the splitting not of the Higher Education Funding Council for England but of its responsibilities. As the Minister pointed out when we discussed this previously, HEFCE will be dissolved under the Bill. However, there is concern that the process of separating teaching and research—in this context, the Research England body—will mean that issues and activities at the interface of teaching and research, such as the health of disciplines, the awarding of research degrees, postgraduate training, the sharing of facilities, knowledge exchange and skills development, might not be effectively identified and supported.

There is no sense of a secret agenda; it is just a case of what can sometimes fall out if there are unintended consequences from perfectly reasonable regulation. I go back to what I and others have said about the weakness of the Bill, which was conceived entirely before the referendum and does not reflect changes since it took place. That is especially true in terms of the issues thrown up by Brexit. Of course one consequence of the referendum, as we all know very well, was a change of Government, a change of Prime Minister and, indeed, a change of Departments—the machinery of Government —that is almost but not quite as significant as the machinery of Government changes introduced in 2007 by Prime Minister Gordon Brown, when he split, largely on an age basis, responsibilities for apprenticeships and other elements between the Department for Education and the Department for Business, Innovation and Skills. That produced a situation, which continues after the latest changes, in which Ministers and shadow Ministers sit in two separate departmental and Opposition teams. The Minister sits in two teams. I sit more in one team than the other, but have to have a strong connection with the Department for Business, Energy and Industrial Strategy because of the research issue.

The concerns about the lack of effective identification and support for the list of things that I have mentioned have been intensified by the machinery of Government changes, in particular the division of teaching and research responsibilities between the Department for Education and the new or expanded Department for Business, Energy and Industrial Strategy. We cannot have an industrial strategy without skills or without higher education, or further education for that matter, so there will have to be that element of co-operation between the two Departments. Our concern, which is reflected in the amendments, is how that will translate and transfer into a strong interface between research and teaching, although what we are talking about will primarily be the responsibility of the Department for Education. I imagine that the Minister will comment on that. In amendment 333, we make specific suggestions about how the process might be accomplished. We do not claim copyright; the Royal Society and many other learned bodies and institutions made suggestions, but they are ones that we are happy to share with the Committee today as they probably cover the most important functions.

We have talked about the OFS and UKRI co-operating with each other on the health of disciplines, the awarding of research degrees and postgraduate training. I am sure that my hon. Friend the Member for Sheffield Central agrees with me that postgraduate training and indeed, the whole position of postgraduates and their future in detailed terms, have received relatively short shrift in the Bill. I hope that that will not be the case in the advice and guidance that will come. Postgraduates too, of course, will be keenly affected by the inter- connectedness of teaching and research, not least because many of them, in order to do research, end up having to do some teaching, although that is probably less prevalent here than in the United States. As someone who was doing postgraduate research and teaching at the same time, I do not think that is a bad thing. The ability to do both activities at the same time, provided they do not impinge on the postgraduate study, is very useful, not least in preserving some clarity of English when writing one’s thesis—but that is another matter.

The amendment proposes a mechanism by which this collaboration could be achieved. The Royal Society, as I am sure the Minister will be aware, has suggested that a committee on teaching and research should be established. I am sure the Minister will say it is not for us to dictate to UKRI, but it would be helpful to probe whether the Government are minded to say to the new body, its new chairman, chief executive and board members that this is something that ought to be high up in their in-tray. We also seek assurance that the requirement for the OFS and UKRI to co-operate will be included in governance documents for both organisations. Again, I am not expecting the Minister to give chapter and verse on that today, but we have in mind things such as operating frameworks, strategic plans and other relevant documents. No doubt that all sounds a little dry for breakfast on a Tuesday morning, but heavy fibre is good for us and that is why I am including it at this point in the proceedings.

The Wellcome Institute, which I am sure hon. Members are familiar with, has also offered thoughts in this area. Teaching and research are intrinsically linked, but that intrinsic link would be lost from higher education if the bond between them were broken. Clause 103 sets out the interactions between OFS and UKRI. Amendment 335 would ensure co-operation and information sharing between OFS and UKRI, strengthening the clause by replacing “may” with “must”—we are back to the old “may” and “must” scenario.

We see positive interactions between teaching and research responsibilities in many institutions, often most clearly in research-led undergraduate projects and modules, not least in the sciences. The Royal Society of Chemistry says:

“Bringing cutting edge research ideas into teaching helps ensure a dynamic and relevant curriculum. Close interactions with researchers can motivate students when considering their future in the chemical sciences. There is a risk that the separation of teaching and research in the new HE architecture will mean that the benefits of research informing teaching and learning practices could be lost. The current draft of the Bill allows for information sharing between the OfS and UKRI. It does not, however, require their cooperation unless directed by the Secretary of State”.

Other learned bodies and societies have contacted me and probably other members of the Committee to make similar points.

This issue is made more pressing because of the new machinery of Government structure and the shared responsibilities across the two Departments. That is why we suggest that the Bill be amended to provide that the OFS and UKRI must co-operate without being required to do so by the Secretary of State. Apart from anything else, the Secretary of State is going to have a hell of a lot in her in-tray—I am thinking of some of the other ground-breaking Government initiatives such as grammar schools and other measures that, by depute, would then fall to the Minister. I am sure the Minister would like to feel that this sort of thing can go ahead freely without him having to sign things off every other week. That is the principle, in a nutshell—a rather large nutshell—of our amendments to schedule 9.

[Joseph Johnson]

I thank the hon. Gentleman for giving me the opportunity to explain further how the OFS and UKRI will work together on a range of issues relating to their respective remits. I appreciate the considered tone of his comments and observations. We understand that these matters are important and we have taken considerable care to try to address them when crafting the reforms and the Bill. I am happy to try to give some further clarification now as to how we see those two bodies working.

I assure the Committee that the Government are committed to the continued integration of teaching and research within the HE system. We believe the Bill reflects that and proposes safeguards to ensure joint working, co-operation and the sharing of information between the OFS and UKRI. Both organisations also have a statutory duty to use their resources in an efficient and effective way, meaning they will look for all opportunities to collaborate and share information.

On the specific points made by the hon. Gentleman, I will start with those relating to changes to the machinery of Government in July. We understand his concern about the potential impact of those changes, with the Department for Education now having responsibility for higher education but research policy remaining the responsibility of the Department for Business, Energy and Industrial Strategy. For my part, I am committed to my role across the two Departments and will be working closely with the two Secretaries of State and the heads of the two new organisations coming into existence through the Bill, UKRI and the OFS, to ensure a coherent approach and to maintain the continuity of day-to-day business.

As the Committee has seen, the Bill is supported by me, a shared Minister across the two Departments, and as the hon. Gentleman will see on the back page of the Bill, it also has important support from senior members of the Government. That provides significant continuity across the two Administrations we have seen since the general election, including the current Prime Minister, who supported the Bill in her former capacity as Home Secretary, and the current Secretary of State for Business, Energy and Industrial Strategy in his former capacity as Secretary of State for Communities and Local Government, and so on and so forth. There is significant continuity.

[Gordon Marsden]

We entirely welcome not only that instrumental move across, but the move across of the individual concerned. I have always found the right hon. Member for Tunbridge Wells (Greg Clark) to be very forward thinking, and I think he will bring strength and hopefully some strategic vision to the Department for Business, Energy and Industrial Strategy.

[Joseph Johnson]

I will not comment on any absence of strategic vision prior to my right hon. Friend’s arrival, which I would not deem to be a fair comment, but he will take the Department to further great heights.

The hon. Gentleman asked about postgraduates and postgraduate study and why there is not more on that in the Bill. The OFS and UKRI will work closely together to ensure there are no gaps between their respective roles. In a way, that is no different to the current situation in which an institution receives funding from a research council but is still subject to HEFCE’s regulatory oversight of the sector. Individual students will have little if any exposure to either body, as interactions primarily take place at an institutional level.

Turning to the hon. Gentleman’s questions around teaching and research and the so-called split, we see the research excellence framework, administered by Research England within UKRI, and the teaching excellence framework, overseen by the office for students, as mutually reinforcing quality processes. We will ask institutions to consider how they promote research-led teaching in their TEF submissions. Lord Stern’s recent review of the REF recommended that academics be rewarded for the impact of excellent research on teaching. We will ensure that deadlines and timescales have the flexibility to enable institutions to plan and schedule the demands of the two systems.

--- Later in debate ---

[Gordon Marsden]

I am listening carefully to what the hon. Gentleman has to say, because this is a complex issue for both him and me. Obviously, I will want to reflect on this when I see the Hansard report. The hon. Gentleman has been positive in thinking about having an observer on the two boards, but I wonder why even at this stage the Government appear to be relatively timid about the joint committee. A whole range of organisations have said similar things. MillionPlus stated in its evidence to the Committee that a committee and an annual report which referenced the areas and activities outlined in the amendment would help to achieve that symbiosis and provide greater public oversight and parliamentary scrutiny. I am a little surprised that at this stage the Minister is not considering a mechanism which might make some of these things easier and more automatic.

[Joseph Johnson]

I am glad that the hon. Gentleman is pressing this point, because it gives me a further opportunity to say that I am reflecting carefully on his amendments and thinking of ways in which we can address the points he has raised. I reiterate our willingness to think very carefully about what he has said. In the event that the OFS and UKRI were not working together, the Bill provides an important safeguard. It gives a power to the Secretary of State to require the two bodies to work together. Of course, that does not mean that they cannot work together without his explicitly asking them to do so. They can do so, and that is what clause 103 makes clear.

Amendment 333 proposes a specific list of activities on which both organisations would be required to work together. I believe that it is undesirable and unnecessary to be prescriptive in the Bill. I wholeheartedly agree that it will be important for the OFS and UKRI to work together on those areas, but we would not want to restrict the areas on which they should work together by providing a list of that sort. Although it details many important areas for joint working that have been raised by the community, the list is not comprehensive, and it is not likely to be so in future. An example would be ensuring efficient interaction between the teaching excellence and research excellence frameworks. On that basis I ask the hon. Gentleman to withdraw his amendment.

[Gordon Marsden]

I thank the Minister for his positive and proactive response to the amendments which, as he knows, are probing amendments. I am encouraged by his recognition of the importance of getting such things right at the beginning. No list, in any Bill, whether drawn up by a university body or by Opposition Members, could possibly compete with the perfect list for ever and a day, for the next 20 years. However, if I may use a term that I often use, such lists are points of entry to provoke further discussion. I am encouraged by the Minister’s focus on the issues. There will be other opportunities in other places to discuss the matter further, and on that basis I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Paul Blomfield (Sheffield Central) (Lab)]

I beg to move amendment 304, page 92, line 16, after “chair” insert “and the House of Commons Select Committees”.

This amendment would ensure that the relevant House of Commons Select Committees are consulted before any appointments are made.

It is a pleasure to serve under your chairmanship, Sir Edward. My hon. Friend the Member for City of Durham took the initiative in drafting the amendment, but she cannot be here today because she is leading for the Front Bench in another Bill Committee. [Interruption.] We multitask.

The amendment goes with the flow of the Government’s intention in other areas. It is intended to ensure that before appointing the chief executive, chief finance officer and other members of UKRI the Secretary of State should consult not only its chair but the relevant House of Commons Select Committees. That would be consistent with the approach suggested by the Minister to OFS appointments.

In the Committee’s oral evidence sessions, the vice-chancellor of the University of Cambridge and former chief executive of the Medical Research Council, Professor Borysiewicz, told us that

“the choice of members of that committee will be absolutely vital.”––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 26, Q40.]

It is therefore important that the Secretary of State should consult with others to make sure that the membership is the best possible.

Such broad consultation would enhance the scrutiny of the choices that were made, and therefore improve the likelihood of the best person being appointed, because it would require the Secretary of State to make a clear, strong case for choosing particular candidates. We saw the importance of that during the evidence sessions, because a number of witnesses made forceful points about who should be on the board of UKRI. Alastair Sim, director of Universities Scotland, suggested that membership should be

“expertise-based but it should also be based on geographic balance so as to have people with experience from across the UK sitting on UKRI and on the councils within it.”––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 68, Q106.]

Professor Borysiewicz suggested that UKRI should be made up of

“individuals who are broadly respected across the devolved Administrations, the different elements of research across industry and the different players”.––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 26, Q40.]

It is important to take into account those and other perspectives on appointments. We would all have confidence and agree across the House that consultation with Select Committees would make it more likely that a full and diverse range of opinions is taken into account before appointments are made.

In relation to appointments with the OFS, the Minister assured us that

“we fully intend to actively involve the Select Committee or Select Committees, as appropriate, in the appointment process”.––[Official Report, Higher Education and Research Public Bill Committee, 8 September 2016; c. 75.]

If that is good for the OFS, given the critical importance of UKRI, I assume it would be good in that case too and I am confident the Minister will be able to reassure me of that.

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[Gordon Marsden]

I rise to make some observations on the amendments tabled by SNP Members. I have mentioned Hamlet without the prince once, so I will not do it again, but I entirely share the puzzlement of the hon. Member for Kirkcaldy and Cowdenbeath that the Bill, and indeed the White Paper, have been drafted with scant recognition of the knock-on effect and implications of what may be extremely valuable new structures on the devolved Administrations. At the risk of being tediously repetitive, I will simply remark that this is yet another example of why the Bill should have been looked at again after 23 June.

I add in passing, since we are talking about traditions in universities, that Scottish universities have historical traditions and strengths that could match many, if not all, of those in England. I am surprised that the Minister, being cut from that cloth, should not think that the legacy of the Scottish enlightenment—Adam Smith and other entrepreneurial characters who have flitted through Conservative party pamphlets—worth consideration in this process.

The hon. Member for Kirkcaldy and Cowdenbeath has done the Committee a service. Looking around, I can see no Members from Wales, and obviously none from Northern Ireland. Yet in both Wales and Northern Ireland, universities and higher education institutions will be significantly affected by this process. They will also be affected if the process with the new bodies is not universally seen to be fair in sharing out its attentions at an important time for our university system. I speak as a Unionist; the Labour party believes in the Union. Not to consider including such provisions in the Bill is a great mistake. The Minister and I will probably agree that one should not put people on committees and bodies simply on a symbolic basis, on which so many matters are often discussed and organised. Surely we should consider those interests in the context of a new research body.

What I have to say is highly relevant to the future of those research bodies. As I have said previously, the Government’s White Paper has overlooked a vital factor. There is little sense of the knock-on effects on what I describe as the brand of UK plc. I am not the only one to make that observation; other commentators and academics have also done so.

HE providers across England and the devolved nations are internationally competitive because of a trusted UK brand. If we are to have a trusted UK brand, it is important that all the integral parts of the UK feel that they have a say at the table. If they do not feel that and there is dissension and disgruntlement, then at a time that the UK Government need to be doing everything they can in the Brexit negotiations to safeguard that UK brand, there will be a weak link.

There needs to be a proper UK-wide strategy to safeguard the position of our researchers. We will talk about that in later clauses. For now, the amendments tabled by the SNP, whatever one’s views on the future of Scotland, are doing a valuable service to the Government by waking them up to some of the implications and pitfalls of having a body, though not what they wished, that might appear too Anglocentric. On that basis, we support the amendments.

[Joseph Johnson]

I thank the hon. Member for Kirkcaldy and Cowdenbeath for his amendments and the opportunity to discuss the important role that UKRI will play in representing science and research across all of the United Kingdom.

I agree with him that Scottish institutions are a vital part of our vibrant research base. I am sure he will be aware that they gain more than a proportionate share of competitive funding from the research councils due to the excellence of their research under the current arrangements. The research councils and Innovate UK serve, and will continue to serve, the research and innovation communities across the UK.

Our reforms have been deliberately developed with the needs of all the devolved Administrations in mind, going all the way back to the Green Paper in November. The White Paper is clear that it is our policy intent to ensure that Research England, as part of UKRI, can work jointly with devolved funders. We have tabled a Government amendment to the Bill that supports this policy intent, which the hon. Gentleman will have seen. This will mirror HEFCE’s current effective working relationship with the devolved Administrations’ funding bodies, for example, with respect to the research excellence framework.

Research councils and Innovate UK as part of UKRI will continue to operate throughout the UK. We will work closely with the devolved nations as UKRI is established to ensure the UK’s research and innovation base remains one of the most productive in the world. The hon. Gentleman will have seen that we have tabled a series of amendments in recent days to ensure UKRI can work effectively across all four nations. We have been working closely with the Scottish Government in developing these clauses.

To deliver our integrated and strategic ambitions for UKRI, the body must have a proper understanding of the systems operating in all parts of the UK. It will need a detailed insight into not just the research environment but innovation strengths and business needs across the UK. That should include regional differences across England as well as the devolved Administrations.

In relation to the UKRI board and the composition of the councils, we have two primary objectives: first, that we attract and appoint the best people wherever they come from; and, secondly, that the board and councils are of a size that allows them to function effectively. As Professor Sir Leszek Borysiewicz said when he appeared before this Committee a few weeks ago,

“the choice of members of that committee will be absolutely vital. These will have to be individuals who are broadly respected across the devolved Administrations.”––[Official Report, Higher Education and Research Bill Public Bill Committee, 6 September 2016; c. 26, Q40.].

I agree with him completely on both counts. We must seek the highest quality individuals with a broad range of experience, not necessarily limited to the UK research community or UK higher education institutions. We need to learn from and bring in the best individuals nationally and internationally. They will be recognised for their experience and expertise spanning research and business-led innovation and their ability to represent the full range of interests of the UK’s research and innovation system.

We are very fortunate in the UK in the quality and extent of our research base. It is common for members of the research community to move around the UK or, indeed, abroad over the course of their careers. It is also common for researchers to collaborate extensively within the UK and abroad. As it is likely the members appointed on merit will have worked and will have extensive links across the UK research community, I ask the hon. Gentleman to withdraw his amendment.

--- Later in debate ---

[Joseph Johnson]

Clause 85 sets out the functions of UKRI in broad terms. Among its key functions, UKRI will be responsible for facilitating, encouraging and supporting

“the development and exploitation of research and technology.”

It is intended that UKRI may also support the exploitation of advancements in the humanities, including the arts. However, this is not currently explicit in the provision made in clause 85(1)(c). Amendment 247 is a technical Government amendment that addresses that. For the avoidance of doubt, I should clarify that for drafting purposes, references to humanities in this Bill are defined as including the arts and references to sciences include social sciences. These definitions are given in clause 102.

In addition, amendment 256 seeks to amend paragraph 2 of schedule 9 which sets out the areas of experience that the Secretary of State should have regard to in appointing the board of UKRI. The consideration of the development and exploitation of advancements in humanities should form part of this consideration; the amendment enables this. As Professor Sir Leszek Borysiewicz, from whom we have already heard today, said:

“There is a lot of sense in having a body that will scrutinise and ensure that we can take a wider purview of the UK R and D effort.”––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 22, Q30.]

[Gordon Marsden]

If I can find them in this bagatelle list which sends one diving across the paper, I rise to speak in support of our amendments, which are amendment 315, 317, 316, 318, 319, 320, 321 and 322.

Let me start by welcoming the technical amendments tabled by the Minister. As someone who has taught humanities, I was interested in his clarification that the arts were included in the humanities. I do not propose to have an etymological discussion about it, but I was also interested that social sciences— if I understand the Minister rightly—are included under the definition of sciences. I pause to think for a moment about the Minister’s first degree. Perhaps he might like to comment on whether he thought at the time that he was doing a science degree or a humanities degree. That is a little jeu d’esprit but nevertheless, it illustrates that this is a hazy area. Without being too pedantic, it is of merit to try to get some of the clarifications right so I welcome what the Minister has said.

Our amendments 317 and 318 would insert “social sciences” and “the arts” after “humanities”. I appreciate that there might be some overlap between what we have tabled and what the Government have tabled but obviously we did not necessarily consult them. The principle is straightforward: first, to ensure that UKRI’s functions extend across the whole breadth of research; and, secondly and not unimportantly given that this is a major change—this comes back to what I have said previously—to give reassurance to those in those areas that their interests are being properly and carefully catered for.

Amendment 319 is part and parcel of the same process although this time, after “technology”, we are inserting the words “humanities”, “social sciences” and “arts”. The amendments we tabled to clause 85, which include the words “basic”, “applied” and “strategic”, are intended also to reflect concerns expressed by both the Royal Society of Chemistry and the Royal Society of Edinburgh and probably other bodies too that basic science is essential for a good research system—often laying the ground for future applications — and that its funding should be a core function for UKRI. The royal charters of the research councils protected such fundamental research by requiring that basic strategic and applied research were all funded, hence their use in our amendments, but there is no commitment as such in the Bill, hence the suggestion that these amendments should be moved to include a commitment to supporting those issues.

Amendments 320 to 322 follow the same argument, inserting the words “social sciences” and “arts” after “the humanities”. Likewise, amendments to clause 87 insert a reference to social and cultural wellbeing after the word “life”, ensuring that the Bill includes a focus on the full breadth of research and innovation and their benefits for humanity. Without starting a philosophical discussion, I wish to be clear that we understand that much research and innovation does not always have an immediate practical application. Indeed that is not required, and that should not be the case. That is one of the elements of tension in this Bill between the effects of various changes, which we will be discussing later in terms of their structure and architecture.

At a time when people are bombarded—not least in the popular media—by sometimes highly contentious claims for research, it is important that we place in the Bill a recognition that research and innovation significantly benefits the man and woman in the street, either by the words suggested here or by other appropriate mechanisms. At a time of continued austerity and continued arguments over funding, which no doubt will tighten up during the Brexit process, it is important that that is made clear in the corridors of Government, not just to the general public.

[Paul Blomfield]

I will speak to amendment 336, recognising and welcoming the fact that Government amendment 256 covers a significant part of what we were trying to achieve with this amendment. I wanted to probe a little further on going beyond reference to the humanities, and looking at arts and social sciences. That is covered in the footnote, but I would like further clarification on the Government’s view of their inclusion more generally. The Minister will recognise the value of the creative industries and social sciences to the economy and to our culture, and this amendment seeks to recognise arts and social sciences within the legislation.

A number of organisations submitting evidence to us, including MillionPlus and Goldsmiths College—part of the University of London—have raised concerns about the Bill’s lack of provision for the arts, emphasising that the legislation must work for all subjects. In their written evidence, Goldsmiths College made the point that,

“we also believe excluding the words ‘arts’ from the description of the UKRI remit could jeopardise future funding for arts research. We believe this also to be the case for the social sciences, which could be overlooked in favour of more traditional science subjects. As well as signalling a commitment to these important disciplines, this would also fully reflect the objectives of the research council’s reporting into the UKRI.”

The point on which I am seeking reassurance is that the Government do regard the arts and social sciences as being of important academic worth.

--- Later in debate ---

[Gordon Marsden]

I beg to move amendment 331, in schedule 9, page 95, line 26, leave out “any” and insert “some”.

This amendment seeks to clarify which functions UKRI intends to delegate to its Councils.

This amendment relates to paragraph 12 of the schedule, “The delegation of functions by UKRI”. This probing amendment raised a metaphorical eyebrow when we— and, I think, others—were looking through the Bill. Paragraph 12(1) of the schedule states:

“UKRI may delegate any of its functions to—

(a) a member of UKRI,

(b) an employee authorised for that purpose,

(c) a Council or a Council sub-committee, or

(d) a general committee.”

I am fairly confident that this is not designed to confer—to borrow a phrase from another context—Henry VIII-type powers—on UKRI to delegate. And I am fairly confident that when the Minister responds he will probably say that it replicates—I do not want to be so unkind as to use the word “boilerplate”—things that normally appear in Bills at this point in the proceedings. However, I think it is worth probing because in this instance it is not simply that the Government are setting up a new body in UKRI, but that the relationship between that body and its research councils, for example, is one that has inevitably provoked a lot of comment and some concern as to how that process will be taken forward.

This probing amendment seeks to clarify the division of responsibilities between UKRI and its councils and, at least, to elicit from the Minister some sense—I appreciate this is an evolving conversation—of whether that particular subparagraph of the schedule is intended to be a passe-partout, if I may put it that way, for this process.

I also say that because we had the interim chairman, Sir John Kingdom, before us in our somewhat attenuated evidence session. He has also very recently appeared before the Science and Technology Committee. I confess that I have only scanned the minutes of that meeting; I presume the Minister has read them from cover to cover. It seemed to me that in the best traditions of the civil service, from which he emanates, Sir John had skipped rather lightly on some of those questions to the Committee thus far; but that is for members of the Science and Technology Committee to judge.

It is important that we try to get some greater clarification before the Bill goes to the other place, not least because the Government will undoubtedly be peppered with questions and observations by Members of the House of Lords. I am actually trying to give the Minister a little assistance.

To be fair, the factsheet published by the Government, “Higher Education and Research Bill: UKRI Vision, Principles & Governance”, makes the point that there is much detail still to come. It states:

“The government is working with Sir John, our existing Partner Organisations and key stakeholders to explore detailed organisation design options…This will inform the final design which will be refined and agreed in partnership with the UKRI Chief Executive and Board once appointed.”

I appreciate that that will not necessarily happen anytime soon. The factsheet then says:

“Further detail will be set out in guidance including the framework document between BEIS and UKRI, which will be published once agreed.”

I have already referred to, and the Minister has commented on, the evolving implications of the machinery-of-Government division of research in that fashion. Therefore, as well as moving the amendment, which, as I have said, is a probing amendment designed to reflect the concerns, may I ask the Minister—I will do so in a constructive way—how he sees that framework document developing and at what stage he thinks it might be available to be considered? Does he think that it will be available before the Bill leaves this House, or when it goes to the other place?

[Joseph Johnson]

I thank hon. Members for the opportunity to explain in more detail what functions UKRI intends to delegate to the councils within it. As we have set out in the White Paper and the factsheet that we published on 12 October, our intention is that UKRI will delegate decisions on scientific, research and innovation matters to the nine councils. That will include, but is not limited to, the leadership of their area of expertise, including prioritisation of budgets and the development of delivery plans; ensuring the future of skilled researchers and other specialists essential to the sustainability of the UK’s research and innovation capacity; engaging with their community to develop ideas, raise awareness and disseminate strategic outputs; and appointing and setting terms and conditions of academic, specialist and research staff in the relevant council and any associated institutes.

As Sir Alan Langlands, vice-chancellor of the University of Leeds, told the Bill Committee, in his view the new overarching research funding body, UKRI,

“has the potential to retain the best of the current individual research councils, while bringing greater strategic oversight and direction.”

Of course, some functions will be retained at the centre of UKRI. Those include a lean but highly effective strategic brain, which will facilitate development of the overall direction, ensuring that we invest every pound wisely; the management of funds with cross-disciplinary impact; and responsibility for administrative and back-office functions across the organisation, such as procurement, human resources and grant administration. The Bill does not seek to set out the detail of all that, as that would be—

--- Later in debate ---

[Gordon Marsden]

I do not want to interrupt the Minister’s flow unduly. I am still slightly struggling to digest, at this time of the morning, the concept of a “lean” brain, as opposed to possibly a fatty one or another type of one. The serious point that I want to make is this. How lean is this brain—to continue the analogy—likely to be? I ask that because throughout the Bill, not the elephant in the room but certainly the discussion in the antechamber is about what resources Government can bring to the administration of this area. It would therefore be helpful if the Minister, even if not today, gave some indication of that. Are we talking about dozens of people, hundreds of people or what?

[Joseph Johnson]

I thank the hon. Gentleman for his question and draw his attention back to the impact assessment that we made at the start of the Bill Committee process, which gives a feel for the resources to be allocated to UKRI and the savings likely to be generated from the back-office efficiencies that will be enabled through its creation. It will be no bigger than is necessary to undertake its core functions, which, as I have described, are to provide a strategic vision for the sector, to ensure it can operate a cross-disciplinary fund in a way that the current research councils cannot and so on. The Bill does not seek to set out the details of all this, because we will put out a framework document in due course. The hon. Gentleman asked when that will be published. I assure him that it will be published before the formal launch of UKRI.

[Gordon Marsden]

Again, I am not trying to tie the Minister down unduly, but can he give any indication of whether the document will be available when discussion of this matter goes to the House of Lords?

[Joseph Johnson]

We have provided, as I said a few minutes ago, quite a detailed factsheet that outlines our policy thinking with respect to the creation of UKRI and the general principles that will guide its approach to its functions. That goes into some detail about the broad approach that UKRI will take—for example, its recognition of the fundamental importance of Haldane with respect to how it will operate funding for science and its fundamental support for the dual support system and balanced funding.

The factsheet also goes into considerable detail about the governance arrangements that will apply to the work of the chair, executive chair and councils within UKRI, as well as the way the board and senior management team will relate to each other and the leadership and autonomy of the nine councils. I believe that hon. Members in the other place have a considerable body of material to consider as they deliberate on our proposals to create UKRI.

This approach allows UKRI or another council to carry out certain functions normally exercised by a particular council. That will enable existing collaborative working across councils to continue and for UKRI to deliver one of its key aims: improving the UK’s support for inter and multidisciplinary research. Details of which UKRI functions will be delegated to the councils will be captured in guidance included in the framework document between the Department for Business, Energy and Industrial Strategy and UKRI. That will be published in due course, once agreed with UKRI’s future leadership.

I agree with hon. Members that it is important to have clarity on the functions of UKRI that will be delegated to the councils. However, it is not necessary to put that on the face of the Bill. I therefore ask the hon. Gentleman to withdraw his amendment.

[Gordon Marsden]

The Minister’s observations and the detailed examples he has given are a helpful move along this road. There will be further discussion in other forums, and on that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Joseph Johnson]

I welcome the opportunity to set out how we expect UKRI to work with the private sector. Paragraph 16 of schedule 9 provides flexibility in how UKRI performs its functions, balanced by controls that safeguard public funding and guard against large, high-risk commitments being made against future public spending. The research councils currently possess significant flexibilities, and it is our intention that UKRI should retain those freedoms. We have, however, balanced that with the need to safeguard public funding.

To ensure appropriate use of public money, a number of activities have been made conditional on approval from the Secretary of State. Those include entering into joint ventures and borrowing money—namely, areas that could build up commitments and risks against future public spending. This mirrors current practice, where research councils are already required to seek approvals for such activities. That is in line with the principles of managing public money, by which all public bodies need to abide.

The amendment would inadvertently make it impossible for UKRI to do any of those things. We are saying that it can do these activities, subject to approval by the Secretary of State, in the same way as before. In practice, the details of those approvals will be set out in guidance from the Department to UKRI. That may, for example, include a de minimis level for an activity below which the Secretary of State grants approval without further process. That is in line with current arrangements for the research councils.

The amendment would unduly restrict the scope of UKRI and limit its flexibilities, putting at risk its capacity to fulfil the ambitious remit we have set for it and make best use of its resources. Specific details of how UKRI will work with the private sector will be developed by UKRI and the councils themselves, in consultation with the Government. However, we expect UKRI to build on the relationships that the legacy bodies currently enjoy with the private sector, and I ask the hon. Gentleman to withdraw the amendment.

[Gordon Marsden]

I thank the Minister for that additional information and helpful explanation. As I said at the start, the amendment was a probing one, simply designed to facilitate further discussion. We have had that discussion and the Minister has given us more useful information, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 9, as amended, agreed to.

Clause 84

The Councils of UKRI

--- Later in debate ---

[Gordon Marsden]

We now move on to some of the meat of an area which has developed quite a head of steam: the relationship between UKRI and the councils. We have previously talked today about some of the ways in which UKRI might devolve its powers, and the Minister has been helpful regarding the councils, but the devil is always in the detail of parliamentary scrutiny.

There is considerable disquiet about some of the blanket powers that the new body UKRI may have and, indeed, that the Secretary of State may give him or herself. This is not a comment on any particular Secretary of State, or any particular universities Minister. If we are to make good legislation, we need to work to the potential scenarios that are most difficult rather than to the simplest ones. If everything went simply in government we probably would not need to think about this, but of course things do not always go simply.

I come back to the reputational issue, which I touched upon earlier when commenting on the amendments tabled by the hon. Member for Kirkcaldy and Cowdenbeath. We are at a critical period in our higher education history because of the big question marks over Brexit, and the lesser—although still significant—question marks over the machinery of Government changes. We should be doing everything we can to reassure the academic community and indeed the broader business community. We should not propose changes, potential changes or potential shutdowns that will cause problems. It is all very well for Ministers to say, “Well, this would never happen,” or, “It would be dealt with in guidance,” or whatever, but I am sure that we can all think of examples over the years where changes in legislation have set off great concern and scepticism, and in some cases had very bad financial and economic consequences involving overseas investors and overseas academic institutions.

We are debating this Bill at a time when our researchers, our research institutions and research bodies in our universities are being put under severe pressure and are concerned about their future relationship with organisations within the EU. It is highly relevant to changes that might be made to the councils of UKRI that changes in the EU or changes in our relationship with our EU partners do not necessarily have an adverse effect only on relationships with the EU, of course. They have, or can have, an adverse effect on relationships with other international institutions. At a Royal Society fringe meeting at our party conference last month at which I was present, comments were made by Professor Hemingway to the effect that when we think about these sorts of things, we also need to think about the implications for research in francophone Africa or lusophone Latin America, for instance, in terms of what we need to do to maintain our relationships there.

All these things are connected and related. That is why apparently arcane issues around the Secretary of State being allowed to change the name or responsibility of the council by issuing a statutory instrument subject to the affirmative procedure are important. Behind that dry statement lie some of the issues that I have described. As far as I can see, the Bill does not require the Secretary of State to undertake any public consultation before changing the name or responsibilities of a council. We have already had some discussion about the merits or otherwise of automatically deleting references to the Privy Council from the structures and architecture of the Bill, and the OFS in particular. The Government declined to think creatively about ways in which the Privy Council might be a backstop.

The Royal Society is particularly concerned about this, as are most of the major research-intensive university groups. It is worth the Committee reflecting on the Royal Society’s position statement.

“The landscape of Research Councils has changed over time. The Bill giving the Secretary of State the authority to change their number, name, and fields of activity through a statutory instrument is a pragmatic reflection of this. While this change is reasonable, both Parliament and the research community should be able to inform and scrutinise properly any major proposed changes to Research Councils’ form and function. The Society believes the Bill should include a duty for the Secretary of State to consult with the research community on any proposal for major Research Council reform.”

It says it should include a duty, not a possibility. I emphasise those words because I do not want the Minister to come back with the boilerplate response that if the Secretary of State had to consult on all these matters, he or she would not get anything done. We are not suggesting that and nor is the Royal Society. It is saying there should be a duty to consult on a proposal for any major research council reform.

The issue has also been taken up by MillionPlus and the Russell Group. The Russell Group specifically sought clarification that the affirmative procedure must be used to change the councils. That is not a point we have included in any amendments but it is certainly a concern that the Minister should strongly focus on.

We have tabled these amendments to emphasise the vital role of consultation, not simply because it is the right thing to do, but because if it is not done there will be negative effects on our economy, the wider world’s perception of us, the status of our research councils and the flourishing of UKRI, which we all want to develop strongly in its formative years.

[Joseph Johnson]

Again, I thank the hon. Gentleman for giving me the opportunity to reassure the Committee and to explain in more detail how the powers would be exercised. They would allow the Government to react to the evolving needs of the research landscape and to keep the UK at the forefront of global research and innovation, while ensuring that the science and humanities councils cannot be altered without legislative scrutiny and the agreement of Parliament.

The hon. Gentleman mentioned the 23 June referendum. That is an event and process that has encouraged the science and research community to understand that UKRI can add value to the community in bringing coherence and strength to the voice of science and research in this country in the months and years ahead. I would like to highlight the evidence that Dame Julia Slingo, the chief scientist at the Met Office, gave to the House of Lords Select Committee on Science and Technology in September. She said:

“So the creation of UKRI is a real opportunity at this moment when we are thinking about where we are going on Brexit.”

Her views reflect an emerging, indeed strengthening, consensus across the learned societies and science community in general that UKRI is something that they want to get behind.

--- Later in debate ---

[Joseph Johnson]

I thank the hon. Gentleman for giving me the opportunity to elaborate on how I believe we are putting in place provisions to deal with his concerns. I welcome his support for UKRI and his recognition of the contribution it can make once it is up and running.

The powers reflect similar existing powers that have been used several times in the past to merge or create new discipline councils as priorities change and evolve, as happened with the creation of the Arts and Humanities Research Council in 2005. I assure hon. Members that future changes of that sort would not be undertaken lightly. The Government would seek the views of the research community through proper consultation before putting forward any proposals. I am sure that hon. Members would not hesitate to challenge any change of that kind that did not have prior consultation, but it is not necessary to place a formal duty on the Secretary of State to do that. Under clause 107, a statutory instrument must be laid before and approved by both Houses of Parliament via the affirmative procedure. That follows the current process to change the structure and remit of the research councils under the Science and Technology Act 1965.

In any future use of the powers I am sure that hon. Members would not hesitate to challenge changes on which there had not been proper consultation with the sector. I agree with hon. Members that consultation would be essential before the exercise of the powers in question, but it is not necessary to put that on the face of the Bill. I therefore ask that the amendment be withdrawn.

[Gordon Marsden]

I thank the Minister for his response and for the opportunity to have a broader discussion of the circumstances in which UKRI would develop. I think I made it clear that on looking at the drafting of the provision we thought there was already a requirement for an affirmative resolution, but I am grateful to the Minister for confirming that, with reference to clause 107. At the end of the day, the list of people whom the Minister must satisfy includes not just the Opposition but the whole academic and scientific community. I am glad that he recognises that, and beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 84 ordered to stand part of the Bill.

Clause 85

UK research and innovation functions

Amendment made: 256, in clause 85, page 52, line 12, leave out “and new ideas” and insert

“, new ideas and advancements in humanities”.—(Joseph Johnson.)

This amendment provides that UKRI may facilitate, encourage and support the development and exploitation of advancements in humanities (including the arts), as well as the development and exploitation of science, technology and new ideas.

[Paul Blomfield]

I beg to move amendment 289, in clause 85, page 52, line 18, at end insert—

“(h) provide postgraduate training and skills development, working together with the OfS.”

This amendment would ensure UKRI reflects the current activities of the Research Councils as set out in their Royal Charters in respect of the learning experience of postgraduate research students, and would require joint working on this with the OfS.

I welcome the remarks made by my hon. Friend the Member for Blackpool South in his opening comments and I am pleased to be able to give the Minister an opportunity to clarify an area that our discussions have not so far touched on much, but which I think we will all agree is of some importance. The proposal for the office for students is at the heart of the Bill, and it deals primarily with the learning experience of undergraduates. It goes on to talk about the learning experience for postgraduate taught students, but fails to address a third, important category: postgraduate research students. Clearly they have a very different learning experience; nevertheless it is crucial for them because they are not only learners but teachers.

I am sure the Minister will agree that there is a number of issues relating to postgraduate research students, and although there is good practice across the sector, there are also areas where such students are occasionally let down. A crucial relationship for them is with their supervisor. Although there is much excellent supervision, there are also areas, such as feedback, where supervisors can get things wrong. Feedback and assessment are crucial to every student’s learning experience, but get them wrong and, given the particular intimacy of the relationship between a supervisor and a postgraduate research student, that can be quite destructive.

I recently saw comments that an early academic had written in The Guardian based on their own experience, making the point that feedback

“can take the form of constructive feedback for improvement, or demoralising sarcasm. I have experienced the full range, and it has had a direct impact on my research.”

Unfortunately there are examples of supervision being interrupted by:

“Unannounced departures for conferences, holidays and research projects.”

Those of us with experience of the sector will know about problems with the sudden retirement of supervisors. That could be halfway through a programme of work for a postgraduate research student, but I have known cases where people accepted a place based on a particular supervisor’s expertise, but found on arriving at university that that person was no longer in place. There is a whole range of issues there.

There is also the relationship between research and teaching. Two or three years ago the National Union of Students published a very useful report highlighting the challenges for postgraduate research students in taking on teaching responsibilities, the difficulty that there often is in getting the balance right between the two, and the pressure that is sometimes put on them to undertake teaching work, which can be to the detriment of their research and own learning experience.

The third area, which will be close to the Minister’s heart—I know the other two will be as well—is the issue of access and widening participation, because we need to be clear that those opportunities exist at every level of our higher education system. The initial focus was on undergraduate access and the Government have taken some welcome steps to address issues relating to postgraduate taught programmes, but we also need to have a focus on postgraduate research opportunities.

The amendment gives UKRI a clear responsibility for postgraduate training and skills development—it is phrased in a way entirely consistent with the royal charters of the current research councils—in conjunction with the office for students. As the Minister will remember, I raised this point with some of the expert witnesses at our oral evidence session. Professor Philip Nelson, the chair of Research Councils UK, agreed that this was an “important issue”. He went on to say that

“we in the research councils have three main ways of supporting PhD students across the sector. We do interact with HEFCE on that currently. I think it will be very important—the point has already been made in evidence to this Committee—that the OFS and the UKRI connection is carefully made.”

Professor Ottoline Leyser from the University of Cambridge agreed that that was an important point and went on to say that

“one of the opportunities generated by UKRI would be the possibility to have more integrated research into teaching and research training…we could develop better understanding of the most effective ways to do research training and teaching. That is one opportunity that is more difficult within a single research council.”––[Official Report, Higher Education and Research Public Bill Committee, 8 September 2016; c. 87, Q137.]

There are issues with how to address the learning experience of postgraduate research students. We are supported in the sector; there are problems that we are all aware of. Can the Minister reassure me on how he sees the roles of the two bodies? Will the OFS’s role in relation to postgraduate students include the regulation and assurance of quality, information needs for PGR students and their access to and participation in student protections? How does he see UKRI exercising its responsibility for the learning experience of PGR students, in conjunction with the OFS?

Higher Education and Research Bill (Twelfth sitting)

Debate between Lord Johnson of Marylebone and Gordon Marsden

Committee Debate: 12th sitting: House of Commons
Thursday 13th October 2016 Public Bill Committees

[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

Academic freedom is one of the fundamental strengths of our higher education system. I understand the desire of the hon. Member for Blackpool South to find the best way of protecting it, and I sympathise with the motivation behind amendments 299 and 301, which seek to enhance the protections for academic freedom already in the Bill.

The language used in the Bill is based on the protections in the Further and Higher Education Act 1992, which have successfully ensured for nearly a quarter of a century that HE institutions can develop and teach entirely free from political interference. That approach has proved to be robust over time and, in our view, it is the best way of ensuring that academic freedom is protected in the future. The Bill preserves academic freedom as a broad general principle, with specific areas of protection explicitly and unequivocally set out. By contrast, defining academic freedom too tightly would risk limiting its meaning and, by extension, limiting the Bill’s protections.

The Bill imposes the first statutory duty on the Secretary of State to

“have regard to the need to protect academic freedom”

whenever he or she issues guidance, conditions of grant or directions to the office for students. It introduces a set of protections for academic freedom that apply comprehensively to the ways in which the Government can influence how the OFS operates. It refreshes and reinforces the current protections for academic freedom, ensuring that they are fit for our HE system today and are sufficiently robust to last for decades into the future. Although I completely agree with the intention behind the amendments, I do not think that they add anything practical to the Bill’s thorough and comprehensive approach to protecting academic freedom.

The hon. Member for Blackpool South raised the question of staff. The Bill supports the academic freedom of staff at HE institutions by giving the OFS the power to impose a public interest governance condition on registered providers, as we discussed when we debated clause 14. Providers subject to such a condition will have to ensure that their governing documents include the principle that academic staff have freedom within the law to question received wisdom and to put forward new ideas and controversial opinions without fear of losing their job or their privileges. As the hon. Gentleman said, that is a vital principle, which is exactly why the Government have ensured that it must be included as a component of the condition set out in clause 14.

Amendment 162 would define academic freedom differently, by referencing section 43 of the Education (No. 2) Act 1986, which is a provision about freedom of speech and in particular about the obligation of certain HE institutions to

“take…steps…to ensure that freedom of speech…is secured for…students and employees…and for visiting speakers.”

Defining academic freedom in that way would introduce a lack of clarity and would not adequately capture what the Bill seeks to protect.

Our approach in the Bill is absolutely clear that academic freedom must be protected. It also sets out comprehensively the areas in which the Government must not interfere:

“the content of particular courses and the manner in which they are taught, supervised and assessed…the criteria for the selection, appointment and dismissal of…staff…the criteria for the admission of students”

and the application of those criteria in particular cases.

I remind the Committee what Professor Sir Leszek Borysiewicz, vice-chancellor of Cambridge, stated in his evidence on this point:

“I also particularly like the implicit and explicit recognition of autonomy”.––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 22-23, Q32.]

Amendment 162—inadvertently, I am sure—would actually weaken the protection the Bill provides for academic freedom. I ask the hon. Member for Blackpool South to withdraw his amendment.

[Gordon Marsden (Blackpool South) (Lab)]

I thank the Minister for his considered and measured response to amendment 299. It was helpful of him to elaborate some of those key issues in the way he did. As I have said previously, I am mindful of the fact that these things are extremely difficult to define comprehensively on the face of a Bill, but I welcome the direction of travel in respect of the issue we have raised. My hon. Friend the Member for City of Durham can speak for herself, but the Minister is right to say that she has raised a separate issue. As I am satisfied with the Minister’s response to my amendments, I am content to withdraw them.

[Dr Blackman-Woods]

I listened to what the Minister had to say. I am not particularly allied to that specific form of words, but, as the Bill mentions academic freedom so much, there should be something in it about what it encompasses. I leave the Minister to reflect on that.

I have one further question. The clauses that refer to academic freedom mention the courses and

“the manner in which they are taught, supervised or assessed”.

If they are taught in part through a programme of visiting lecturers, does freedom of speech apply to those lectures? The point of my question was to ascertain whether the Bill should to go beyond academic freedom to include freedom of speech. If the intention was to limit that because of other legislation, which is absolutely right and fair, there should be some clarity from the Government on that.

[Joseph Johnson]

I assure the hon. Lady that, yes, the Bill would cover the circumstances she described.

[Gordon Marsden]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: 104, in clause 66, page 39, line 29, leave out “or” and insert “and”.—(Joseph Johnson.)

This amendment and amendment 106 make the language used in clauses 66(3)(a) and 69(2)(a) consistent with that used in equivalent provision in clauses 2(3)(a) and 35(1)(a) and make clear that they cover the manner in which courses are taught, the manner in which they are supervised and the manner in which they are assessed.

Clause 66, as amended, ordered to stand part of the Bill.

Clause 67

regulatory framework

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[Joseph Johnson]

The amendment raises issues that we have previously debated in broad principle, so my arguments will not be unfamiliar to the hon. Gentleman. The clause sets out how the OFS must prepare and publish a regulatory framework, which in turn details how it will regulate higher education providers. I am grateful to the hon. Gentleman for raising the importance of ensuring that the OFS consults appropriate groups before publishing such a key document. The requirement to consult will help to ensure that the way the OFS intends to regulate and carry out its functions is transparent, proportionate and risk based.

Clause 67 already places a requirement on the OFS to consult bodies representing the interests of providers and of students on higher education courses and

“such other persons as it considers appropriate”

before publishing its regulatory framework. Although it will be for the OFS to decide who to consult and for representative bodies to decide how to respond, we expect the interests of providers—as I said in an earlier response—to encompass the interests of the staff at those providers. In addition, as clause 67 already provides for the OFS to consult any other persons as it considers appropriate, it is already drafted in such a way as to give the OFS discretion to consult HE staff. Given the wide range of issues that the OFS’s regulatory framework will cover and the requirement already in the Bill for the OFS to consult anyone it considers appropriate, I do not believe that the amendment is necessary and I ask the hon. Member for Blackpool South to withdraw it.

[Gordon Marsden]

The Minister said that since we had already been around this track, the arguments that he was going to put would not be unfamiliar to me, and he will not be unfamiliar with my response. It is a great shame, as the amendment would strengthen, rather than diminish, the Government’s position and credibility with those groups. Clearly, we are not going to agree. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: 105, in clause 67, page 41, line 4, leave out subsection (10).—(Joseph Johnson.)

This amendment removes clause 67(10) which contains a definition of a term which is not used in clause 67 and is therefore unnecessary.

Clause 67, as amended, ordered to stand part of the Bill.

[Gordon Marsden]

My question is fairly straightforward and simple. I refer the Minister to subsections (5), (6) and (7). I am assuming that those provisions give powers to the Secretary of State to restrict direct funding that would come, under normal circumstances, to a provider from the Secretary of State via the OFS, rather than supplying further money in any circumstances. Is that correct?

[Joseph Johnson]

The clause effectively replicates the powers that the Secretary of State has in relation to HEFCE at the moment under section 81 of the Further and Higher Education Act 1992, but with an important difference that I want to flag. The clause applies the same protection to issuing directions as clause 66 does in relation to conditions of grant, that is to say, in issuing general directions, Ministers must have regard for the need to protect academic freedom and cannot set directions in terms of course content, teaching methods, who HE providers employ or who they admit as students. That is a new and additional protection, compared with current legislation. As with section 81 of the 1992 Act, directions under this clause are subject to parliamentary oversight via the negative procedure. To give the hon. Gentleman a feel of how we intend use these powers, we expect they would be deployed in the most exceptional circumstances. In fact, the equivalent powers in the 1992 Act have never been used.

Those exceptional circumstances might, for example, include the OFS’s refusal to follow Ministers’ injunctions where a particular provider was involved in financial mismanagement. We believe the clause to be necessary if we are to ensure that such a situation does not arise.

[Gordon Marsden]

So the purpose of the clause, in those exceptional circumstances to which the Minister referred, is to stop the provision of further financial support.

[Joseph Johnson]

Yes, indeed. That is certainly the intention.

Question put and agreed to.

Clause 69, as amended, accordingly ordered to stand part of the Bill.

Clause 70

Power to require information or advice from the OfS

[Gordon Marsden]

I beg to move amendment 302, in clause 70, page 42, line 32, at end insert—

‘( ) Any information received by the Secretary of State under subsection (1) must be made publicly available.”

This amendment would require the Secretary of State to publish any information it receives from the OfS under section 70.

My hon. Friend the Member for City of Durham, who also put her name to this, may wish to add to my contribution. I do not want to detain the Committee for long. The amendment expresses again our sense that we need to make it clear in the Bill that there will be greater transparency and scrutiny of the sector by stakeholders and parliamentarians. I say that in support of the establishment of the office for students and its bona fides in the wider world rather than to undermine it. Any new organisation, certainly in its first years, should be as transparent as possible.

I think it was Edmund Burke who famously said that eternal vigilance is the price of liberty. The price of new institutions in the 21st century, to have credibility and be acceptable, is eternal transparency. This would be a good place to start. That is why we propose that the Bill should include the requirement that the Secretary of State publish any information received from the OFS under clause 70.

[Joseph Johnson]

I sympathise with the amendment’s intention; that is, the desire for greater openness in the policy-making process. However, I fear that, instead of promoting openness, the amendment risks inadvertently creating a more closed, less honest decision-making process, and may have further unintended consequences.

The Government will request information from the OFS to help reach policy decisions. Those decisions will inevitably require difficult judgments about how to prioritise funding. As an independent regulator, the OFS needs to have the confidence to be able to speak freely and frankly to Ministers. It will not be able to do that if all those conversations have to happen in public through this publication requirement.

Requiring all information received under this provision to be made public risks inhibiting how the OFS responds to requests for information. I believe that would have damaging consequences for how the OFS interacts with Government, making that interaction guarded and less than wholly frank. It also risks damaging the policy-making process, with decisions made on partial rather than comprehensive information.

There are parallels here with the Freedom of Information Act, which provides exemptions to ensure free and frank discussions during the policy-making process. Let me assure the Committee that the OFS, as a public authority, will be subject to the Freedom of Information Act, just as the Government are now, allowing individuals to request information subject to the statutory exemptions.

In addition, some of the information the OFS will give to Government may be sensitive, for example, relating to its own staff or to the financial affairs of HE providers. Publishing that information may infringe people’s privacy or put a provider at a competitive disadvantage.

Clause 59 places a statutory duty on the OFS or an appropriately designated body to publish information and requires the OFS to consult students and other stakeholders about what information it should publish, when and how. We believe that that provision will ensure that all the information that students and others need will be in the public domain.

I understand and sympathise with the motivation of the hon. Member for Blackpool South in tabling the amendment, but I none the less ask him to withdraw it in the light of the explanations that I have given.

[Gordon Marsden]

I thank the Minister for his response. He gave a measured and balanced analysis of the eternal argument about the amount of real-time disclosure that there should be as opposed to other issues. I say again that perhaps staying in this place for a longish time increases one’s scepticism about the arguments for commercial sensitivity. If many of us had £1 for every time we did not get a response from a Department on the grounds of commercial sensitivity, we would be rich, but there we are. I understand the Minister’s points. I am not entirely sure that I agree that the balance is right, particularly in the first years of a new body, but it is a fine judgment and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 70 ordered to stand part of the Bill.

Clause 71

Power to require application-to-acceptance data

[Joseph Johnson]

I beg to move amendment 107, in clause 71, page 42, line 38, leave out “in” and insert “for”.

This amendment clarifies the language in relation to qualifying research.

The amendment is minor and technical. It ensures that the language in the clause reflects the clear intention to use application-to-acceptance data for the purpose of qualifying research as defined in subsection (4). That is consistent with our stated policy intention.

Amendment 107 agreed to.

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[Gordon Marsden]

I rise to support my hon. Friend’s amendment, and to try to draw out from the Minister any other comments he might wish to make specifically on the impact of clauses 71 and 72. Again, I am not implying that there are any sinister motives involved; it is the law of unintended consequences that needs to be guarded against, once again.

My hon. Friend obviously referred to the “capacity” of UCAS to deal with the implications of the two clauses, and it is not for me to comment on that. However, I will pick up on the point she made about data protection, because I have received representations from various parties. The gist of them seems to be that without some clarification of or change to these two clauses, there is a danger—I put it no more strongly than that—that these clauses would give the state access to all university applicants’ full data in perpetuity, for users who would only be defined as “researchers” and without “research” being defined at all; that might be capable of being changed under the direction of the Secretary of State.

Therefore, there are significant concerns that the safeguards need to be stronger to ensure that the clauses are not misused by others and that scope changes are not made in the future. One example that has been given to me is the suggestion that if this database is opened up, and subsequently shared via proposals in the Digital Economy Bill, there is a possibility that the entire nation’s education data from the age of two to 19 could be joined to university data, which of course is then joined to Her Majesty’s Revenue and Customs. Alternatively, it could be joined to HMRC and the Department for Work and Pensions afterwards, without there being sufficient safeguards or oversight for other uses designated by the Secretary of State.

I accept that this is a complex and difficult area and we are in real time here—the Digital Economy Bill is moving ahead. But in the context of what my hon. Friend the Member for City of Durham has said, could the Minister reflect on this? He or his officials might wish to have discussions with his colleague taking forward the Digital Economy Bill, because there is genuine concern out there. I am not necessarily saying the nightmare vision of everybody from two to 19 having all their data exposed to anybody in the way described will come to pass, but if there are genuine, legitimate concerns—my hon. Friend is very knowledgeable in these areas and has already referred to them—the precautionary principle might apply.

I would welcome any further reassurance the Minister can give; if he does not wish, or is not able, to give that reassurance today, perhaps he will be able to give more information before the end of Committee stage, or shortly subsequent to it.

[Joseph Johnson]

I am grateful for the opportunity to discuss these amendments to clause 71. As I have said before, the Government attach great importance to widening participation in higher education as a means of improving social mobility. Access to application-to-acceptance data, and a better understanding of those data, is vital if we are to have more effective policies, as commentators such as the Social Mobility and Child Poverty Commission have stated. Indeed, the director of research at the Sutton Trust has said that

“there is much more we can learn about the choices that disadvantaged young people make on higher education with better data. The Ucas database can do a lot to improve what we know about that decision-making process.”

Taking amendment 306 first, I stress that public interest is at the heart of the clause and that is why it is in the Bill. I assure the Committee that any research undertaken using the data made available under clause 71 would be into topics in the public interest, such as equality of opportunity and what drives social mobility. An example might be longitudinal studies looking at the impact of choices made during school years, through higher education, to employment outcomes. The Social Mobility and Child Poverty Commission said that the availability of UCAS data is essential to help us refine our policies to advance social mobility, which is a goal all members of this Committee share.

These data will help us build a richer picture of the impact of decisions made by prospective students, with a view to refining and improving Government policy. If merged with other datasets in the future, it will provide a broader view than we have at present. For example, we may be able to calculate more clearly the economic benefits of being a graduate. In addition, clause 72(2)(c) prohibits the publication of any report that includes information that may be regarded as commercially sensitive, and clause 72(2)(b) prevents the publication of any report that may lead to the disclosure of an individual’s identity. So there are clear constraints as to what can and cannot be published following the data being made available for research purposes. Given that, we believe the amendment is not necessary.

Turning to amendments 307 and 308, I assure the Committee that the information we are seeking to share is already routinely collected and held by bodies such as UCAS in carrying out its admissions functions. So this should not cause a significant extra burden, and restricting the Government’s ability to request data could limit the development of social mobility policies unacceptably.

However, in drafting legislation we need to consider both current developments and possible changes in the future. Although we anticipate requesting these data on only an annual basis, in standard formats, in a way that broadly reflects current admissions cycles, we already know that some parts of the sector are moving away from the annual admissions cycle, as discussed in earlier debates, towards a more flexible process with multiple admissions dates—a move I know is very much welcomed by all hon. Members.

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[Gordon Marsden]

The Minister will be relieved to know that I do not rise to oppose the principle that the Higher Education Funding Council for England should cease to exist, as that would blow a large hole in the Bill—I am sure he would not wish that to happen, and I would not necessarily wish it to happen, either—but I want to tease out some of the implications of that process.

I refer all members of the Committee back to the original White Paper, which was produced in May. Chapter 3 was intriguingly titled “Architecture”—whether it is classical or brutalist I leave for future generations to judge—and the chapter summary included a rather arresting phrase:

“The Higher Education Funding Council for England (HEFCE) and the Office for Fair Access (OFFA)”—

the Committee will be relieved to know that I am not going to talk about the Office for Fair Access—

“will be dissolved following creation of the OfS.”

Leaving aside the image of mad scientists and test tubes created by the dissolution, I want to raise a serious and practical point in the context of what the White Paper said at an earlier point, on page 51, about the teaching excellence framework.

What are the implications of what I can only describe as the interesting ménage à trois, which will continue for some time, between HEFCE, the QAA and the OFS—with OFFA being a peeping Tom, if we want to continue the metaphor? What will that mean in practical terms for the administration of these important processes?

This is for illustration—let us not reopen the debate about the TEF—but paragraph 20 states:

“In Year One, where the TEF does not involve a separate assessment process, the Government will publish a list of…eligible providers who have had a successful QA assessment and therefore have achieved a rating of Meets Expectations.”

Of course, that has now been changed. Paragraph 20 continues:

“From Year Two onwards, TEF will be delivered by HEFCE working in collaboration with QAA, until such time as the OfS is established. After this point, the OfS will deliver TEF.”

It is the process over those three years and what the relationship between all these various bodies will be in practical terms that concerns me most. The process would concern me in any case, whatever the broader political context—I am sorry if the Minister inwardly groans when I refer to Brexit again—but I am concerned about that two-and-a-half or three-year period. I assume, although he might wish to correct me, that it is expected that the OFS will deliver TEF from 2019. That is how it looks at the moment but, as has already been discussed—most people, whatever their views, recognise this—those two or three years will be a period of considerable turmoil for our institutions and the way they are regarded in the outside world in the context of the Brexit negotiations, which may very well mirror that period.

I am deeply concerned, as are others—this has been mentioned to me by numerous vice-chancellors and other people who are concerned—that if we do not have a bit more clarity about how the relationship between HEFCE and the OFS is going to work in the transition period and where the QAA stands in all of this, that will not be good for the reputation of our universities internationally or for establishing the OFS on a clear footing. I appreciate that the Minister does not want to give a long exegesis on this today, but would be helpful if he gave at least some indication of how he sees those bodies interacting in that period and, in particular, what the implications are for the staffing and the resources of those different organisations, given the conversations and discussions we had earlier.

[Joseph Johnson]

I thank the hon. Gentleman for raising those issues. We are obviously giving considerable and careful thought to the transition from HEFCE to the OFS, and we have been doing so since the start of our reform process, with the Green Paper last November and the White Paper, to which the hon. Gentleman referred.

In the White Paper, we say clearly that the OFS will be established in 2018-19, and that it will deliver the teaching excellence framework from that date. That perhaps gives the impression that it is going to be an abrupt movement of people and resources, but there will be significant continuity from HEFCE, which has excellent capabilities in many respects. We want to preserve all the quality people who are doing good work at HEFCE, so I hope that the transition will be fluid and that there will not be discontinuities that will disrupt the operation of the TEF under HEFCE and the operation of the TEF under the OFS. To a great extent, the very same people will be involved.

On the transition more generally, we are looking to transfer responsibilities from HEFCE and OFFA to the OFS in a clear and transparent manner during that period. We hope that the transition will avoid any duplication of roles, enabling us to dissolve HEFCE and OFFA quickly after the OFS formally comes into existence. In the White Paper, we say that we anticipate that happening in April 2018.

Clause 73 allows for the Higher Education Funding Council for England to cease to exist, and enables the transition of responsibilities to take place. It is quite a significant clause, because we are putting to bed a funding council model of regulation that has been in place for a very significant period. I formally want to put on the record the Government’s recognition of the extraordinarily good work it has done over the period of its existence. I also want to restate our belief that it is time, as we have discussed previously in this Committee, to put in place a new model of regulation that will keep us at the cutting edge of higher education for decades to come.

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[Gordon Marsden]

I wish to associate myself with the Minister’s comments about HEFCE. I talked earlier about the rocky road at an earlier period in its history, but I agree with his overall assessment. May I press him slightly on the issue of the Quality Assurance Agency for Higher Education?

[Joseph Johnson]

What aspect of it?

[Gordon Marsden]

The relationship that the QAA currently has with the TEF and how that will operate during the process of dissolution we are discussing.

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[Joseph Johnson]

There is always the option of raising taxation and imposing on the general taxpayer the burden of paying for—

[Gordon Marsden]

It is not the general taxpayer—it’s business.

[Joseph Johnson]

The general taxpayer or businesses. If the Opposition want to hammer business taxpayers, they can hammer business taxpayers too. Our funding system allocates a share of the cost of providing higher education to those who are going to benefit from it. It is not all of the cost, because as hon. Members well know, the Government make a deliberate and conscious investment in the skills base of this country by having an income-contingent student loan system that results in significant Government subsidy of student borrowing. The Government and the taxpayer are making a contribution but we feel that, to have a sustainable system, it is appropriate that the primary beneficiaries of higher education make a significant contribution to its cost. That is what our funding system does, and it has enabled us to lift student number controls, driving social mobility and access in a way that no previous funding system has ever managed.

New clause 8 would revoke the 2015 student support regulations. Those regulations replaced maintenance grants with loans for new full-time students starting their courses in the current 2016-17 academic year. The shadow Secretary of State made some comments about process and how we had avoided proper scrutiny of the change we made. I remind her that, in making that change, we correctly followed the parliamentary process as determined by the Teaching and Higher Education Act 1988, introduced by the last Labour Government. [Hon. Members: “No it wasn’t—1988?”] Sorry, did I say ’88? I beg your pardon; 1998, introduced by the last Labour Government.

I also note the Government’s success in expanding access to higher education. To maintain that success we need to ensure that higher education funding remains sustainable, which is why we have replaced the previous system of maintenance grants, saving £2.5 billion a year. We have replaced maintenance grants with increased maintenance loans for new full-time students starting their courses in 2016-17. The poorest students are receiving the most financial support through those subsidised loans, with an increase of up to 10.3% on the previous amount of support for eligible students.

[Gordon Marsden]

I observe in passing that the Minister keeps saying there has been a great improvement in disadvantaged student access. I would not say it is a great improvement; I would say it is an important improvement. That is true if we look at 18 to 21-year-olds, but as he has heard me say ad nauseam, it is not true of adult, mature or part-time students. On loans, it is late in the day and I do not wish to be controversial, but if I were being controversial, I could say that those are rather weasel words. A loan is not a guarantee of that money being spent. A loan is going to be used and spent only if the people who are offered it feel it is of sufficiently good value to take it up. The truth of the matter is, and we have seen this with the advanced learner loans, that when adult students in particular do not think they can afford those loans, they do not get taken up. Some 50% of the advanced learner loans did not get taken up and that money went straight back to the Treasury, so that is not money that is automatically invested, but money that is offered, and if the terms of trade are not right, people will not take them.

[Joseph Johnson]

The hon. Gentleman and I have discussed part-time and mature students as part of the bigger picture. We also went through the mature numbers in some detail on Tuesday, and from recollection, mature numbers are actually now at a record level. I am probably going to get this wrong, but I believe they are at around 83,000 in the last full year, exceeding the previous high of around 82,000 a few years ago, so we are now back on track. Mature numbers certainly took a dip but they are now back at record levels.

We acknowledge and agree that we want to address the decline in part-time numbers. The origins of that fall are complex but they certainly predate the start of the increased tuition fee era, as we discussed on Tuesday. Some of the origins of the decline can be traced back to the Labour Government’s imposition of the equivalent and lower qualification restriction, which we are now in the process of lifting.

[Gordon Marsden]

Partially.

[Joseph Johnson]

Yes, partially—as public finances permit. We are also in the process of putting in place a reformed funding scheme for part-time students so they can access maintenance loans on the same basis as full-time students. We are conscious that there has been a decline in the number of part-time students and we are determined to address it. We are putting in place significant measures to enable us to do so.

Last year, the Leader of the Opposition announced that he was keen to scrap tuition fees, a key architectural feature of our sustainable funding system, which prompted Lord Mandelson recently to describe the move as “not credible” and not “an honest promise”. It is important that we are honest when making commitments to the general public. That key point by Lord Mandelson in his interview with the Times Higher Education mirrored similar remarks by former shadow Chancellor, Ed Balls, who went even further when he described the Labour party’s failure to identify a sustainable funding mechanism for higher education as a blot on Labour’s copy book.

--- Later in debate ---

[Joseph Johnson]

The hon. Lady should look carefully at the benefits that students get from higher education. She will have seen the frequently rehearsed statistics showing that a woman who goes through higher education can expect lifetime earnings that are £250,000 higher, net of tax and the cost of university, than she would have had, with the same qualifications, if she had not gone through university, and the figure for a man is £170,000. The model is sustainable.

[Gordon Marsden]

This is nonsense.

[Joseph Johnson]

The hon. Gentleman says “nonsense”, suggesting he does not believe in—

[Gordon Marsden]

I do not believe that at this hour of the afternoon, even allowing for the Chair’s indulgence, we should get involved in trading statistics, but the Minister might like to reflect on the fact that, because there has been an expansion in the number of students—I referred to this when I talked about graduates in the north-west earning only £16,000 or £17,000—many of the figures that he and his colleagues merrily chirp about are based on past experience. None of us can say what the situation will be in 10 years, but we know, and a variety of reports show, that the graduate premium is rapidly decreasing.

[Joseph Johnson]

If the hon. Gentleman looks at the evidence from bodies such as the IFS, I think he will find that the graduate premium is holding up. Certainly there is variability across institutions and between courses, but there is still robust evidence for a graduate premium.

--- Later in debate ---

[Joseph Johnson]

It has long been a feature of our system that we have a highly subsidised student loan, offered on a universal basis by the Student Loans Company, to all borrowers who can benefit from a higher education. It is massively different from a commercial product, which can cherry-pick who to lend to and charge market rates of interest.

Our student loan product is heavily subsidised, as hon. Members described earlier. It is income contingent, so borrowers only repay when they earn £21,000. It is written off altogether after 30 years. The interest rate charged would certainly be lower than that charged by commercial organisations when faced with a similar scenario.

[Gordon Marsden]

rose—

[Joseph Johnson]

I have to make more progress.

[Gordon Marsden]

He doesn’t want to address the issues.

[Joseph Johnson]

You won’t goad me into giving way. The Chair has indicated that he wants us to make progress, and that is only fair to him after a long day.

The current procedure already allows Parliament to debate and vote on all this. New clauses 14 and 15 address the issue of the FCA. We do not believe that we need to change the arrangements, which, since the Teaching and Higher Education Act 1998, have enabled the loans to be exempt from consumer credit legislation. Parliament confirmed the exemption from regulation under consumer credit legislation in 2008, when the then Labour Government passed the Sale of Student Loans Act 2008. The factors that led Parliament to that decision remain valid today, and the current system of parliamentary oversight is the most appropriate for this statutory loan scheme.

New clause 15 relates to equal treatment for borrowers whose loans have been sold. I am glad to be able to reassure the Committee that borrowers whose loans have been sold are protected by the Sale of Student Loans Act 2008. I can also confirm that for the planned sale of pre-2012 income-contingent loans, purchasers will have no powers to change the loan terms in any way and will have no direct contact with borrowers.

New clause 15 would also require the repayment threshold for all income-contingent student loans to increase in line with average earnings. The precise value of the repayment threshold is a key factor in determining the long-term sustainability of the loan system, and in particular the extent to which taxpayers—many of whom are not graduates—subsidise loans. Any Government have to be able to balance the interests of taxpayers and graduates in the light of the prevailing economic circumstances. The decision last year to freeze the threshold was taken precisely because economic circumstances had changed, with the result that the taxpayer would have had to pay substantially more to subsidise the loans than was originally intended.

--- Later in debate ---

[Joseph Johnson]

I am glad the hon. Gentleman welcomes the measure. There is a happy consensus on it in all parts of the House. We are pleased that as a Government we took the initiative to consult on this back in 2014, and we now have a legislative vehicle that will give the Secretary of State for the first time the ability to offer a non-interest-bearing product. We are currently constrained from putting that kind of alternative finance package in place. We are dependent on the passage of the Bill, but our intent is to get cracking on it as soon as parliamentary business allows.

This Government are committed to a sustainable and fair funding system. We are seeing more people going to university and record numbers of students from disadvantaged backgrounds. I hope the Opposition can see that their amendments can now be withdrawn safely and that the student funding regime is sustainable and already works in the best interests of students and this country.

Question put and agreed to.

Clause 78, as amended, accordingly ordered to stand part of the Bill.

Clause 79 ordered to stand part of the Bill.

Clause 80

Power to determine the maximum amount of loan etc

Amendments made: 243, in clause 80, page 49, line 29, at end insert—

“(1A) In subsection (2), after paragraph (a) insert—

“(aa) for the designation of a higher education course for the purposes of this section to be determined by reference to matters determined or published by the Office for Students or other persons;”.”

This amendment makes clear that regulations under section 22 of the Teaching and Higher Education Act 1998 may make provision for the designation of higher education courses for the purposes of that section to be determined by reference to matters determined or published by the Office for Students or other persons.

Amendment 244, in clause 80, page 49, line 29, at end insert—

“(1B) In subsection (2), after paragraph (f) insert—

“(fa) in the case of a grant under this section in connection with a higher education course, where a payment has been so suspended, for the cancellation of any entitlement to the payment in such circumstances as may be prescribed by, or determined by the person making the regulations under, the regulations;”.”

See the explanatory statement for amendment 242.

Amendment 109, in clause 80, page 49, line 31, leave out “in relation to England”.

This amendment provides for new subsection (2A) of section 22 of the Teaching and Higher Education Act 1998 (which clause 80(2) inserts into that section) to apply to Wales as well as England.

Amendment 245, in clause 80, page 49, line 34, at end insert—

“(3) In subsection (3), after paragraph (d) insert—

“(da) in the case of a loan under this section in connection with a higher education course, for the cancellation of the entitlement of a borrower to receive a sum under such a loan in such circumstances as may be prescribed by, or determined by the person making the regulations under, the regulations where the payment of the sum has been suspended;”.”—(Joseph Johnson.)

See the explanatory statement for amendment 242.

Clause 80, as amended, ordered to stand part of the Bill.

Clause 81

Qualifying institutions for purposes of student complaints scheme

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

[Gordon Marsden]

The clause expands the student complaints regime to a list of new higher providers that are required to join the higher education complaints handling scheme. That in itself is good and useful, but I want to discuss the nature of the expansion that requires this student complaints regime. In discussions on the Bill so far, the Minister has been at pains to praise competition and the free market in expanding provision and expanding opportunity, both for providers and for students, but the interesting issue is the nature of the expansion.

I do not know whether the Minister is familiar with the QAA report that was highlighted in Times Higher Education on 28 July this year. That report said that 19 of the 23 new providers that were inspected were located in the London area, with 12 clustered within a one-mile radius of the centre of the capital. The report also said that although the total number of inspections is small, the proportion of unsatisfactory reviews appears to be increasing. In 2013-14 one of seven providers inspected failed to meet standards and in 2014-15 seven of the 20 fell short.

The point I want to make is that it is not sufficient simply to amend the student complaint regime to accommodate an increase in numbers of providers. The Government should really be paying some close attention to whether the increase in new providers is geographically and regionally fair. Competition there may be, but that is competition largely in and around one city: London. The Campaign for the Defence of British Universities says:

“it is local and regional universities that do the heavy-lifting on social mobility—not the most selective universities…And in many parts of England”—

as we have discussed when talking about the implications of Brexit for funding for universities—

“they are often engines of economic growth as well.”

The Minister’s new counterpart, the Secretary of State for Business, Energy and Industrial Strategy, understands that well and has made strong points about the need to spread advantage and equality, but it seems to me that in what the Government have said so far on competitiveness and encouraging new providers there has been very much focused on London and the south-east. The Minister will no doubt talk about Hereford and one or two other places, but if the Government are serious about expanding new provision or utilising existing provision in further education colleges to expand numbers and include those new institutions providing higher education in the student complaint regime, as the clause provides for, they have to do far more on their diversity strategy to ensure that new providers, good though they may or may not be, are not simply confined largely to London and the south-east.

[Joseph Johnson]

Our higher education sector enjoys an excellent reputation around the world. We want to continue to ensure that all HE students enjoy a high-quality learning experience. It is important that there are effective arrangements in place for students to raise concerns and formal complaints in the relatively small number of cases when things go wrong.

As it stands today, the responsibility for handling student complaints rightly rests in the first instance with the autonomous and independent institutions that deliver higher education. Providers will want to respond to feedback from their students, including those issues raised through complaints. That will both enable the speediest resolution of issues for the student and provide the institution with a means of improving quality for all their students in the longer term. When complaints remain unresolved, there is a well established service offered by the Office of the Independent Adjudicator for Higher Education.

The scheme operated by the OIA was set up as an alternative to the courts and is free of charge to students. The clause extends access to the service to the students of all providers that are included on the OFS register. In practice, that means that those providers that have chosen to join the OFS register but are not accessing public funding will be part of the OIA scheme. That should give protection to an additional group of students that are part of the higher education system. We should also expect to see an improvement in complaint handling arrangements at those providers. A major part of the OIA’s role is also to spread good practice in complaints handling more generally.

The clause also states that where a provider ceases to be a qualifying institution for the purposes of the student complaints system—for example because they have been removed from the register—that provider becomes a transitional provider for a 12-month period. That puts into legislation an additional protection to all students by ensuring that complaints can now be considered in that 12-month period.

I turn to some of the points the hon. Gentleman made in his remarks about coldspots. We are not specifying particular places where the OFS must direct resources or new providers need to be. We want to be led by market demand and the needs of learners across the economy, and we are encouraged by evidence that coldspots are attracting new entrants. He and I have discussed a number of those new entrants over the past few months, and he is familiar with the examples in Hereford, the new institutions coming up in Suffolk and the proposed institutions in Milton Keynes, and so on. We are pleased that market processes are encouraging new entrants to fill such coldspots, but we are not just leaving it to the market; we are proactively identifying opportunity areas. He will have seen the announcement in recent days of 10 areas of England that we have identified as clearly experiencing social mobility challenges because of a relative lack of high-quality provision, including his own patch in Blackpool. I hope he will welcome the Government’s steps to identify parts of the country, including his own, that need special attention and action.

Question put and agreed to.

Clause 81 accordingly ordered to stand part of the Bill.

Clause 82 ordered to stand part of the Bill.

Schedule 8

Higher education corporations in England

Amendment made: 110, in schedule 8, page 89, line 3, leave out from beginning to end of line 10 and insert—

“(1A) The application of the seal of a higher education corporation in England must be authenticated by the signature of—

(a) the chair of the corporation or some other person authorised for that purpose by the corporation, and

(b) any other member of the corporation.

(1B) A document purporting to be duly executed under the seal of a higher education corporation in England or signed on the corporation’s behalf—

(a) is to be received in evidence, and

(b) is to be taken to be executed or signed in that way, unless the contrary is shown.”—(Joseph Johnson.)

This amendment replaces the new section 124ZB(2) of the Education Reform Act 1988 with two new subsections. New subsection (1A) requires the seal of a higher education corporation in England to be authenticated by two signatories, the chair or other authorised person and one other member. This replicates the current requirement in paragraph 16 of Schedule 7 to the Education Reform Act 1988. Subsection (1B) replaces current subsection (2) with wording that is consistent with that used in Schedules 1 and 9 to the Bill.

Schedule 8, as amended, agreed to.

Ordered, That further consideration be now adjourned. —(David Evennett.)

Higher Education and Research Bill (Eleventh sitting)

Debate between Lord Johnson of Marylebone and Gordon Marsden

Committee Debate: 11th sitting: House of Commons
Thursday 13th October 2016 Public Bill Committees

[Joseph Johnson]

It is great to have you back in the Chair, Sir Edward.

These amendments will ensure that premises of all institutions that act on behalf of a provider to deliver higher education courses—for example, as part of a franchising or subcontracting arrangement—are within scope of the powers to enter and search set out in clause 56 and schedule 5. The provision is vital to ensure that all students are protected to the same level. Amendment 291 also makes a small change so that the powers to enter and search cease to apply where the breach is of an initial registration condition.

[Gordon Marsden (Blackpool South) (Lab)]

May I echo the Minister’s sentiments by saying what a great pleasure it is to have you in the Chair again, Sir Edward?

We welcome the amendments, which put important flesh on the bones and are not simply technical, as some amendments are. They show that the Government have looked at and taken cognisance of the complex structures in which such things can be done and particularly what the National Audit Office said in 2014, when it conducted an inquiry into private higher education providers after concerns were raised relating to support provided to students at some alternative providers.

The provisions in clause 56 address some of those concerns, but the Minister will know—my hon. Friend the Member for Sheffield Central talked about this on Tuesday, when discussing new clause 9—that we have in this arena at the moment some very complex business, corporate and judicial arrangements. This is only talking about companies that operate principally in the United Kingdom. I am not saying that every alternative provider in the UK is good or that every alternative provider from outside the UK is bad. Nevertheless, as my hon. Friend said, the more complex the structure, the more opportunities there are for difficulty—I put it no stronger than that.

On Tuesday, my hon. Friend said that some companies are

“less concerned than others with the quality of the offer they make…Theirs is a model in which companies offer a product, and students are then attracted by aggressive marketing…are let down by the quality of provision…and face enormous debts to repay.”—[Official Report, Higher Education and Research Public Bill Committee, 11 October 2016; c. 383.]

Of course, those are the worst circumstances. Given the Minister’s eagerness to expand the alternative provider sector, I know he is doing his best to assure us all that this will be the exception rather than the rule, but if we look at what has happened in the United States—the Century scandal and various other problems—we see that the common denominator is complex structures of corporate governance that have allowed some of these abuses to flourish. We therefore welcome the strengthening of the provisions by these amendments.

I refer to the Commons Library briefing, which says:

“The Impact Assessment states that this provision will ‘deter noncompliant behaviour’ and ‘reduce reputation risk’ to the sector. It should also facilitate the recovery of misused public funds.”

The impact assessment says that the provision will reduce those risks, not that it will eliminate them. We therefore believe it is right to proceed on the precautionary principle. We welcome the amendments and will wait to see whether they are adequate for the purpose.

[Joseph Johnson]

I thank the hon. Gentleman for his welcome for the amendments. We share the same objectives, but I point out that it is not only newer entrants into the sector who require us to have these powers; there have also been instances in what we may regard as the classic university sector that have made it necessary for the powers to be introduced. I draw to his attention some cases we have seen in that part of the sector, which is by no means immune from the kinds of problems we want to ensure we stamp out.

One high-profile case that the hon. Gentleman may well remember in the sector funded by the Higher Education Funding Council for England was that of London Metropolitan University, which provided inaccurate data returns to HEFCE, resulting in it receiving significantly more funding than was due. The investigation into concerns about the university was hampered by access issues. HEFCE subsequently decided to recover access funding of £36.5 million over the three years up to and including 2007-08. So I would steer the hon. Gentleman away from the black and white picture of “alternative providers bad, classic sector good”, because it is not as simple as that, as he well knows.

The amendments will ensure that the powers of entry and search are effective and proportionate. I commend them to the Committee.

Amendment 89 agreed to.

Amendment made: 90, in clause 56, page 33, line 39, at end insert—

“(3) A “linked institution” in relation to a supported higher education provider means an institution which acts on behalf of the provider in the provision of a higher education course by the provider.”.—(Joseph Johnson.)

This amendment extends the power of entry so that it applies to premises occupied by institutions that are linked to supported higher education providers as defined in the amendment. Amendments 89, 91, 92, 94 and 95 are consequential on this change.

Clause 56, as amended, ordered to stand part of the Bill.

Schedule 5

Powers of entry and search etc

Amendments made: 91, page 77, line 11, after “provider” insert

“or a linked institution in relation to such a provider”.

See the explanatory statement for amendment 90.

Amendment 92, page 77, line 17, after “provider” insert

“or a linked institution in relation to such a provider”.—(Joseph Johnson.)

See the explanatory statement for amendment 90.

--- Later in debate ---

[Gordon Marsden]

I note that subsection (6) of the clause states:

“But nothing in this section authorises the OfS to provide information where doing so contravenes the Data Protection Act 1998.”

Can the Minister say whether that alters any of the Department’s current practices for the provision and commercial use of information?

[Joseph Johnson]

The office for students is subject to the Data Protection Act 1998 and is not authorised to infringe it. There is no derogation from the provisions of that Act for the OFS, but the OFS is also restricted by the fact that it may share information with another body only if appropriate for the efficient performance of the functions of either the OFS or the other body. As such, the clause allows for close engagement between the OFS and other bodies subject to the Data Protection Act.

[Gordon Marsden]

I am sorry to press the Minister further, but he elaborates on the purpose of what is said, but does not really answer my question as to whether the Bill will change the status quo and make it easier or more difficult for commercial use to be made of the information in question. Perhaps if he finds it difficult to respond on this occasion, he might like to write to the Committee.

[Joseph Johnson]

I thank the hon. Gentleman for that intervention. I am happy to write to the Committee on that point to clarify my answer, if that would be helpful.

Question put and agreed to.

Clause 58 accordingly ordered to stand part of the Bill.

Clause 59

Duty to publish English higher education information

[Gordon Marsden]

I beg to move amendment 292, in clause 59, page 35, line 12, leave out “body” and insert “bodies”.

This amendment would allow for the option of more than one information/data provider in the future.

--- Later in debate ---

[Joseph Johnson]

I thank the hon. Gentleman for moving his probing amendment. I am grateful for the chance to clarify our intentions.

The amendments seek to allow for more than one designated information body. A core principle of our reforms is to minimise the regulatory burden on providers. Following the principle of gathering information only once, to avoid duplication, we believe it is best for the sector to have only one body designated to collect the information at any one time. Making a single body responsible for higher education data functions replicates the current co-regulated arrangement, which the sector has stated it is keen to see continue, but I assure Members that the OFS will be able to engage with other bodies and to contract out where appropriate, which could be used to assist in running an information campaign for students and prospective students, for example.

[Gordon Marsden]

I understand that point, and this is one area in which I am not arguing that proliferation or competition would necessarily be a good thing. My only concern is about where that leaves the current arrangements. For example, as I understand it data from the Higher Education Statistics Agency cover the part-time market but UCAS data do not. Where does that leave us regarding which information and data providers such institutions have to engage with?

[Joseph Johnson]

Our intention in the reforms is merely to replicate the current arrangements, which are working well. There has been no call from providers or the sector generally to have a multitude of bodies designated for the purpose of collecting information. The focus of the data body is very much on the statistics process, not on admissions per se. On that basis, I ask the hon. Gentleman to withdraw his amendment.

[Gordon Marsden]

It may be too early in the morning for me because I have still not quite absorbed the full detail of that response, although I am sure it is accurate. However, on the basis of the Minister’s assurances, I beg to ask leave to withdraw the amendment. We can always return to the subject in another place, if necessary.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Gordon Marsden]

These amendments also have at their heart the need to reflect and respond to the increasing diversity of higher education students and providers in England. That is why the Open University and one or two other organisations have suggested that it might be helpful to amend clause 59. Their suggestions are embodied in the proposed amendments. We have a lot of sympathy with those organisations’ belief that these changes would lead to a more balanced distribution of effort in the communication of higher education information to prospective students.

The Minister and I have crossed swords—no, not crossed swords; we have talked in a collaborative way about the importance of expanding the opportunities that are given to younger people in both the academic and the vocational arenas. The Minister also spoke the other day about the Government valuing adult students. It is therefore important that the structures for determining how information is published should be available to all people, whatever their age or individual circumstances. That is the purpose of amendment 295.

Again, the amendments are probing. We are not arguing that they need to be in the Bill, but it would be helpful if the Minister commented on whether he considers the existing terminology applying to the duty to be entirely adequate to deal with the changes that he envisages and the existing diversity of higher education students and providers. Perhaps he can indicate, by guidance or other comments, to the bodies coming into operation that the needs of adult students as a very diverse group should be reflected in the mechanisms that reach them.

[Joseph Johnson]

I am grateful for the opportunity to discuss the amendments. On amendment 293, I assure hon. Members that I entirely agree that careful consideration of where information is published and on what platforms is an essential part of ensuring the publication of information meets the needs of students and those considering higher education. However, clause 59 already requires the OFS to have regard to what, when and how it publishes information in the way most helpful to students; where information is published is implicit within that duty. We fully expect the OFS to ensure that information is published so that all students, school leavers and adult learners have access to it.

I fully support the issues raised in amendment 294 and 295. It will clearly be incredibly important that the OFS operates in the interests of all students, regardless of age or individual circumstances, and I believe the Bill as drafted already achieves that. The drafting of clause 59(5)(a) and (b) is already sufficiently broad to encompass all prospective students, and clause 2 places a general duty on the OFS to promote equality of opportunity for all students. The legislation clearly sets out our firm intention that the OFS will take into account the needs of students and prospective students from all backgrounds across the full range of its activities, including information dissemination.

As for amendments 296 and 297, we have already included in the Bill measures requiring the OFS, when publishing information, to have regard to what would be helpful for registered higher education providers. The OFS will have the discretion to consult any relevant bodies as part of its consultation process, including staff representative bodies, where it considers this appropriate, but we do not think it is for the OFS to separate the interests of providers and their staff members. In most cases, these will align anyway and the interests of staff and what data they need to provide a high-quality experience for their students will be shared with their institution and therefore represented already, but we recognise that there may be instances where higher education employees want corporate information relating to the accountability of their own institution. In such instances, it is a matter of good governance that providers ensure they offer sufficient transparency to their staff on the information that they require. We do not see it as an appropriate responsibility of the OFS or the designated body to intervene in making available provider data to its employers.

[Gordon Marsden]

I want to press the Minister on the reporting requirements on higher education providers. We have talked about the interests of students, but there is also a key interest in those reporting requirements for the workforce, particularly key workforce data that would assist in ensuring a sustainable sector. This is something that the University and College Union and other organisations representing people employed in the higher education sector are concerned about. Would this, for the sake of argument, include information on insecure contracts and on student and staff ratios?

[Joseph Johnson]

Those are questions that the OFS will consider when setting out guidance on these matters. It is not for me now to prescribe in detail the kinds of information that would be included in the arrangements. What we are clear about is that the OFS will seek the views of institutions; included in those views will be the interests of the employees of those institutions. We do not want to create an artificial distinction now. I therefore ask the hon. Gentleman to withdraw amendment 293.

[Gordon Marsden]

I thank the Minister for that response. It is clearly useful that we have had acknowledged in the debate today the interests of employees in the sector as well as the interests of students. I have heard what he has to say. He can be assured that, as and when the OFS comes into force, we will keep a vigilant eye on it to make sure that it does indeed do what the Minister says he would like it to do, or hopes it will do. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 59 ordered to stand part of the Bill.

Clause 60 ordered to stand part of the Bill.

Schedule 6 agreed to.

Clause 61 ordered to stand part of the Bill.

Clause 62

Studies for improving economy, efficiency and effectiveness

--- Later in debate ---

[Gordon Marsden]

I assure the Minister that we have no problem with the clause as such; my understanding is that it replicates an existing power held by HEFCE. The clause is perhaps phrased slightly broadly—economy, efficiency and effectiveness can sometimes be in the eye of the beholder rather than subject to detailed metrics. However, mindful of the Government’s wish not to micromanage in this area, I am not going to press the Minister on that.

I am going to ask the Minister this: when replicating a power held by one existing body and assigning it to a new body coming into being—that is going to be a lengthy process, as we know, and we will no doubt discuss it further in Committee—it would be interesting to know what assessment, if any, the Department has made of how effective that power has been prior to now.

[Joseph Johnson]

This is an important clause. Students invest significantly in their higher education experience and Government continue to make a substantial amount of public money available to higher education providers. It is essential for both students and taxpayers that those providers operate as efficiently and effectively as possible, and that is exactly what the clause addresses.

The clause gives the OFS the power to conduct efficiency and effectiveness studies of providers and, as the hon. Gentleman said, it is precisely the same power as HEFCE has under section 62 of the Further and Higher Education Act 1992. In answer to his last point, I should say that HEFCE has done a great job as a funding council. This is one of the powers it has used to enable it to make an assessment of the performance of the sector.

[Gordon Marsden]

No one is here today to pronounce negatively during the funeral rites for HEFCE, but I did ask a very specific question. Before the Department decided to bring forward the clause, which as the Minister rightly says replicates a power held by HEFCE, had it done any assessment as to how effective the power had been in the first place? Do I take it that the answer is no?

[Joseph Johnson]

The hon. Gentleman will understand that we have given careful consideration to all the powers HEFCE has, how it uses them and those that are appropriate to map over to the new body. He can take it as read that the fact we have decided to replicate the provisions that apply to HEFCE to the new body—the OFS—means we have undertaken a thorough assessment that it is a relevant power that has been necessary in the past and we expect to continue to be necessary in the future. It is justified, given the investment students and Governments will continue to make in higher education, and I believe the clause should stand part of the Bill.

--- Later in debate ---

[Joseph Johnson]

We would not expect to set out the precise circumstances governing the use of this power in the Bill, but they will be subject to guidance from the Department to the office for students in the normal manner in due course.

[Gordon Marsden]

The Minister asks me yet again to trust in the sentiment of what his Department has done, but the answer, I fear, is that there was no specific or distinct assessment of the sort for which I have asked. Nevertheless, I have heard what he has to say. We will see how the transfer operates, and on that basis I am content to leave it at that.

Question put and agreed to.

Clause 62 accordingly ordered to stand part of the Bill.

Clause 63 ordered to stand part of the Bill.

Clause 64

Other fees

--- Later in debate ---

[Joseph Johnson]

The hon. Gentleman returns to one of his favourite themes. We are ensuring that the student interest will be properly represented, and better represented than it ever has been in the system’s regulatory structures. Schedule 1, which we have discussed extensively already, makes provision for the Secretary of State to ensure that he has regard to the desirability of people on the OFS board having experience of representing student interest, and they will do that effectively.

[Gordon Marsden]

I intervene to amplify the point made by my hon. Friend the Member for Ilford North. The Minister made reference—off the cuff, I assume—to Ofgem. He said it was entirely reasonable that Ofgem recovered costs from its providers, which is all well and good, but Ofgem does not recover costs from the employees of the providers, which is essentially the principle on which he appears to be operating.

[Joseph Johnson]

I am sorry, but I simply do not follow the hon. Gentleman’s logic. Does he want to explain further?

[Gordon Marsden]

I am more than happy to. The Minister said a few moments ago, and prayed in aid, that in his view it was reasonable for students to bear some of the costs on this issue by referring to Ofgem. If I heard him correctly, he said that in other areas Ofgem recovers costs from its providers. The Minister is not making a correct analogy. Ofgem may recover money and costs from its providers, but it does not recover the costs from either the employees of the providers or, for that matter, the consumers of material that the providers provide. The Minister is asking students to chip in to that process. The analogy is flawed.

[Joseph Johnson]

I am not sure it is flawed. I think the hon. Gentleman has not understood the points his colleagues are making; that is the thrust of it. To help him on this, the point his colleagues are making is that providers are being asked to pay a registration fee, and that universities or HEIs draw income from a multitude of sources, one of the most important of which is tuition fees—therefore students, indirectly, will be contributing to the pot of resources that enable providers to pay their registration fees. That is the thrust of the point his colleagues were making. Employees of the higher education institutions are not making any contribution. I think he has misunderstood the point his colleagues were making.

[Gordon Marsden]

May I intervene?

[Joseph Johnson]

I am going to press on.

[Gordon Marsden]

But that is not what I said when I talked about students.

[Joseph Johnson]

The hon. Gentleman was referring to employees.

[Gordon Marsden]

Of Ofgem.

--- Later in debate ---

[Joseph Johnson]

I will have a go. The hon. Gentleman’s arguments are riddled with internal contradictions, unfortunately. He started by saying that transition costs are high. Indeed, they are £8.2 million in the first year of the operation of the office for students in 2018-19. Inevitably, given that the Government are committing to paying for the transition costs, their share of the OFS’s overall costs will be higher in the initial year than in subsequent years. That is why, as he rightly identified, there is a decline in the Government’s share of the overall tab being picked up. If he did not understand it, that is the reason why—

[Gordon Marsden]

rose—

[Joseph Johnson]

I am going to press on, because I have a number of other points to make. The hon. Gentleman is also wrong that this cost will necessarily fall on students. As he well knows, the sector has significant income from a variety of sources. Many universities also have scope to make potentially significant efficiency savings in how they operate. The idea that all costs will necessarily be shunted directly on to students is ridiculous.

The hon. Gentleman needs to get this into proportion. He should be aware that the sector’s overall income is in the order of £30 billion a year. We are talking about asking the universities to take some of the burden off the general taxpayer, who will otherwise have to meet this cost, by making a contribution in the order of £15 million in the first year. He needs to get his arguments into some sense of proportion.

[Gordon Marsden]

Will the Minister give way?

[Joseph Johnson]

No, I will keep on going. Creating the office for students is about improving the regulatory system and creating a stable, level playing field for providers. The OFS will operate on a sector-funded model, with co-funding from Government, bringing the funding approach in line with that of other regulators. The Bill will enable that, granting the OFS the powers to charge providers registration fees and other fees to cover the costs of its functions.

--- Later in debate ---

[Gordon Marsden]

Will the Minister give way?

[Joseph Johnson]

I have already indicated that I will not give way further.

[Gordon Marsden]

On a point of order, Sir Edward. This is a disgrace. The debate is about significant interpretation of statistics. The Minister is attempting to present his case and is referring to points that my hon. Friends and I have made. It is, at the very least, a lack of courtesy for him not to allow us to question him further on those statistics.

[The Chair]

Unfortunately, I cannot rule on questions of courtesy. If the Minister wants to give way, he can give way. If the hon. Gentleman wants to speak after the Minister, to get his point across, I am happy to facilitate that.

--- Later in debate ---

[Gordon Marsden]

Thank you, Sir Edward, for allowing me to reply on this matter. It is a matter of much regret that the Minister is so uncertain in his statistics that he is not prepared to take interventions from the floor on these specific issues.

I repeat the points that we have made, and I will address one of them. The Minister talks about the total Government support and the transition figure being taken out. That makes it all the more remarkable, given that the transition funding is being taken out, that the Government are not proposing to increase their share of the pot.

The Minister talks about small amounts of money and trifles, as he regards them, in regard of the university sector. I repeat, in case the Minister did not hear, that the estimate for total Government support—the money that the Government are putting in 2019-20—is only £8 million. The amount of money they expect the sector to put in is £24.4 million, which is a ratio of 3:1. That completely demolishes the Minister’s suggestion that this is a fair and equitable process.

In papers such as this document there would normally be some contingency funding element. There is no contingency funding element in there at the moment. We can only take these figures at face value. What they say is that the Government think that the new OFS structure is going to be such a rip-roaring success for universities that by the second year universities will be happy or content, or it will be useful to them, to provide 75% of the costs and the Government only 25%.

There are no contingency figures for problems. There are no contingency figures for success. What if these new providers all get going very quickly as well as the registration facilities and everything else of the OFS? We do not know what the state of Government will be in 2019-20 or beyond. This is a completely unacceptable premise on which to proceed financially and economically, let alone on grounds of justice or the effect on students.

This is a mess. The Minister is welcome to intervene on me if he wishes as he has not responded to my question on whether the figures or any part of the document was revised after the Brexit referendum. He knows as well as I do that the implications of Brexit on the higher education sector will be substantial. Yet he has not said a word about it. He is welcome to intervene and tell me whether this has been revised or not, and if not, why not.

[Joseph Johnson]

I am happy to: no substantial changes.

[Gordon Marsden]

There we are. One of the most significant issues in British politics in recent years, having massive effects on all parts of our economy including higher education, yet his Department sat there and did nothing—absolutely nothing—with this document. We are expected to hear from the Minister that it will be all right on the night. Well, we do not believe it will be all right on the night and nor does the university sector. I and my hon. Friends do not see why students in principle, let alone in practice, should be expected to bear the load for a significant amount of that money. On that basis, we oppose clause 64.

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

Higher Education and Research Bill (Ninth sitting)

Debate between Lord Johnson of Marylebone and Gordon Marsden

Committee Debate: 9th sitting: House of Commons
Tuesday 11th October 2016 Public Bill Committees

[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

It is a pleasure to serve under your chairmanship, Mr Chope—unexpectedly, as you take the place of Sir Edward and the other standing Chair of the Committee. I thank hon. Members for tabling this amendment. I am sorry that the hon. Member for Blackpool South was not here to move it, but his colleague did so superbly and briefly, which is the sort of taciturn approach to moving amendments that we welcome and would like to see followed throughout the rest of today’s proceedings. I do not, however, believe that the amendment is necessary to achieve its objectives or, indeed, proportionate, given the protections we have put in the Bill. I therefore ask the hon. Gentleman to withdraw it.

[Gordon Marsden (Blackpool South) (Lab)]

My apologies for my lateness; Members will not be surprised to hear that it was a result of Network Rail.

I do not believe that the Government’s record so far in saying there are sufficient safeguards gives us a great deal of confidence. The truth of the matter is that there are still major issues with the teaching excellence framework that cannot simply be resolved down the Committee corridor at some point. They need proper and full scrutiny on the Floor of the House of Commons, which is why we tabled these amendments. In a spirit of good will, and because my colleague moved the amendment in my place, I will not detain the Committee further. I do, however, note that we view the whole way in which the TEF is being handled in administrative and governmental terms as very fishy. We will continue to probe the Minister on it, so his hopes of a swift finish to the day might be dashed.

--- Later in debate ---

[Joseph Johnson]

Who is Mr Bagshaw?

[Gordon Marsden]

Mr Bagshaw is a contributor to the Wonkhe website.

--- Later in debate ---

[Gordon Marsden]

The hon. Gentleman no doubt considers himself a bit of an expert, given his co-vice-chairmanship of the all-party group on students, which my hon. Friend the Member for Sheffield Central chairs. I hear what the gentleman from the QAA said. Of course, the QAA, as well as the Higher Education Funding Council for England and various other organisations, will be under the sword of Damocles over the next two to three years as the Bill goes through, so perhaps it is not surprising that there might be some circumspection about commenting on the situation. The fact of the matter is that no one knows. No one knows because the detailed basis on which the TEF will eventually be implemented is still not there. I will come on later to why the Government seem to be missing several tricks in not moving further down that road at the moment, but that is the case right now.

What we know is that the evidence is piling up about year-on-year tuition fee increases that are not based on merit. There might be arguments for increasing tuition fees, but the Government are setting out an automatic mechanism for a two-year period that will significantly and substantially increase fees with no impact assessments and no reference to the quality of the university degrees that are being graded, in a rather trivial PR fashion, as gold, silver and bronze. That is the reality, and the Minister cannot escape from it.

On some of the tuition fee issues and on how the Bill would set in stone that the fee increases will be linked to the TEF, allowing all the work to be done in the OFS away from the daily scrutiny of Parliament, documents such as “Does Cost Matter?”, produced by the National Education Opportunities Network, found that if fees increased, young people who were eligible for free school meals would be the most likely to reconsider going to university, followed by non-white young people.

We have a lot of evidence and a lot of suggestions that that sort of process will have a double-whammy effect. First, it will do nothing for the reputation of the universities in those two years. They will not be able to demonstrate their reputation over and above that which is already there because the metrics for the TEF in the two years are so crude. What it will do is empower them to increase their fees, and we know how various universities chose to interpret what the Minister did in the summer by increasing fees for current students, as well as for future students. That will be a serious and difficult issue.

I am sorry to tell the Chief Whip that I cannot name the next person I wish to quote because he wishes to write anonymously—[Laughter.] That is because he is a young academic who is too financially insecure to risk rocking the boat over the TEF structure. Not the Chief Whip—I promoted him—but the Government Whip will perhaps store his guffaws and allow me to quote from a piece about the TEF in The Guardian on 23 September.

“There was—at least in my mind—huge potential for the Tef to recognise the valuable job that teaching-intensive universities do, and encourage sound pedagogical practice… Rather than doing any of these things, the Tef will be based on three crude metrics: student retention and progression; the number of students in paid employment after graduation; and scores on selected items of the National Student Survey… Methodologically, the Tef is flawed. For instance, students’ assessments of individual teachers show persistent gender bias, and the item on assessment and feedback hardly ever changes, whatever the context. It’s also flawed conceptually: ‘satisfaction’ is not the same as ‘learning’, as any psychology text will tell you.”

That was something the hon. Member for Cannock Chase’s colleague amusingly commented on earlier. The writer continues:

“The Tef isn’t concerned with the art and practice of teaching. It does not set out to capture and promote those practices… I don’t believe that universities have to resign themselves to the Tef structure… But I can’t speak out: as a young academic, I’m far too financially insecure to risk rocking the boat.”

Let me quote somebody who is prepared and able to put her head above the parapet: a senior professor of psychology at Oxford, Dorothy Bishop.

“The report shows that while the costs of TEF to the higher education sector…are estimated at £20 million, the direct benefits will come to £1,146 million, giving a net benefit of £1,126 million.”

She shows clearly that crucial data from statistical modelling show that the

“TEF generates money for institutions that get a good rating because it allows them to increase tuition fees in line with inflation. Institutions that don’t participate in the TEF or those that fail to get a good enough rating will not be able to exceed the current £9,000 a year fee, and so in real terms their income will decline over time.”

[Joseph Johnson]

Will the hon. Gentleman state clearly whether he opposes allowing universities to increase their fees in line with inflation? Does he want a real-terms reduction in universities’ revenues from tuition fees? Currently, the £9,000 is worth £8,500 in the money of 2012; it will be worth £8,000 by the end of this Parliament. Does he want to starve our universities of resources?

[Gordon Marsden]

I point out respectfully to the Minister that he is the person making the decisions. What I am pointing out is that the TEF is being undermined as a concept by the cynical linking of fees on an “as you were” basis over a two-year period. That is the issue. There are all sorts of other issues relating to the merits and demerits of increasing tuition fees that we could discuss, but they are not within the broadest scope of clause 25 and I want to get back to the TEF. If the Minister wants on another occasion to have a lengthy debate about what his Government have done over the past four years for part-time and mature learners by trebling their tuition fees, for example, I would be interested to have that.

--- Later in debate ---

[Joseph Johnson]

Does the hon. Gentleman acknowledge that, since 2009-10, someone from a disadvantaged background is now 36% more likely to go to a university than they were when we came to power? That demonstrates that there is no inherent contradiction between the fee model we have put in place and continuing to make progress on widening participation.

[Gordon Marsden]

I acknowledge any improvements, however they have come, for people from disadvantaged backgrounds, but there is also the counter-evidence of the figures that I have given. The Minister knows, because he will have been lobbied very hard by the Open University, Birkbeck and others, that there is great concern out there about the whole process. The Government have become complacent. Coming from a relatively low level of increase, the assumption is that they can continue to load debt on to young people. I come back to what I said. If they do that in the context of the teaching excellence framework, they are not helping students, not helping universities and not helping the social mobility that the Minister and I desperately want to see in this country.

In terms of the teaching excellence framework and the proposal as to how the ratings work and how the tuition fee will be linked to it, we should think about the people who advise those who might apply to universities. It was interesting to see the comments of the spokesperson for the large independent schools talking about this in the TES at the end of August. He said:

“What does this tell us about the way the HE sector views itself? Is it becoming fundamentally more commercialised? Are universities simply in a fight for survival”—

he is talking about the rise in fees—

“Or are they just realistically pointing to the cost of what is still, let’s not forget, a world-class sector?”

The Committee will have to excuse my French, as it were, but this is what he says:

“Perhaps, once the python has swallowed the pig, £9,250 has been accepted with a shrug of the shoulders and once-a-year rises are the norm throughout our big HE sector, this little storm will seem irrelevant. But I doubt it. Prospective students…need more than ever to consider their options carefully. For many, a strong UK university degree will still be absolutely the right thing…For others, a free…degree apprenticeship will be a better option.”

He also said others may look abroad and that

“as we take transition from school to university more seriously, it will be interesting to know how many of our graduates decide their degree was not worth the money paid.”

The Minister will have had representations, and rightly so, from the Campaign for British Universities and others on the alternative white paper, which suggests that the Bill should include

“A major opportunity…to review and reduce the burden of red tape facing all UK institutions. Yet this bill proposes additional and wasteful bureaucracy.”

It also makes the point that

“the TEF’s costs will be borne by universities themselves, which will be forced to pass on these costs to students and their families. And, since even the highest TEF scores will only allow fee increases equal to inflation”

that will be a problem. It continues:

“The TEF is also entirely wasteful because there is simply no solid evidence that UK university teaching is of such poor quality that additional regulation is needed.”

I do not entirely share that perspective, but I do share the concerns of those people who are worried that the calibre of their teaching and what they are doing will be significantly affected by the way in which the Government are linking the TEF with increased tuition fees.

The TEF process really ought to have more debate on the Floor of the House. If the Opposition had greater confidence that the Minister and his team were looking at that broader element, we might be less severe in our criticisms. However, it is not just us saying such things. In the Royal Academy of Engineering’s submitted evidence, HERB 41, it welcomed the principle of the TEF and said it has

“long argued for improvements in the balance of teaching”.

However, it also talked about the importance of the

“use of benchmarks for comparison between universities on aspects such as ethnicity and socio-economic deprivation.”

Indeed, those are issues that my hon. Friends have already talked about. It continued:

“The Academy would like to see the TEF move towards a discipline based measure as soon as possible, as a TEF score for an entire university will not provide any meaningful data”.

Therein lies the nub of it. That is an issue on which the Minister has been questioned on several occasions in diverse places and on which, thus far, we have no answers.

It is not unreasonable for people to be concerned about where that is going. It is not unreasonable for us to ask questions, and it is certainly not unreasonable for us to ask them when, yet again, we see the Government trying to shoehorn through a measure without proper scrutiny in the House, linking it in a way that will not be valuable and successful for our students or for our universities.

I remind the Minister that the two-year period the Bill proposes we now commence, of an “as you were” situation that will allow universities to increase their tuition fees to a yet unknown amount, will coincide with a period of huge political uncertainty as we manage to negotiate—or not, given the Government’s current record—a satisfactory outcome to the referendum. We see today in the foreign exchange figures and all sorts of other figures how uncertain that process will be. We know already of the blockages and concerns in terms of research that HE institutions in this country say they will face as a result of Brexit, and we will no doubt return to those issues in part 3 of the Bill. In that situation, maintaining the quality of our universities and the understanding of the quality of UK plc internationally will be crucial.

We only get one chance with these things. If the Government ruin the potential of a teaching excellence framework by linking it inappropriately, by not addressing some of the major issues I have talked about and by producing a situation where students and universities feel unsatisfied and the rest of the outside world wonders what on earth is going on, they will inflict damage on the HE sector in this country—unwantedly—that would take decades to recover from. It is an act of complete and supreme folly at this time to use party political games to avoid having to make decisions about inflation-based rises in tuition fees and to shoehorn that into a framework that was never designed for that process. That is why we are profoundly concerned by clause 25 and the way in which the Minister has responded, and we shall oppose clause stand part.

[Joseph Johnson]

I am glad that the hon. Gentleman got the chance to make his big speech, having missed the first opportunity at the start of today’s proceedings. He said he was late in arriving due to Network Rail. I pause on that for a second, because on coming into the House of Commons this morning, I overtook him on Great Smith Street. The Committee might be interested to know that he was looking at his mobile phone and walking rather slowly. I was making my way purposefully in order to be here on time, so that I could hear his great speech, and I have finally now got it.

[Gordon Marsden]

Before we degenerate into discussion of the speed at which the Minister and I proceeded towards Parliament, he might like to note that I came into Victoria station, where the tube station was closed, and therefore was walking not at an unreasonably slow pace but at a reasonable pace. If he would like to return to the issues, instead of trying to score silly points, he might do better.

[Joseph Johnson]

I think I have made my point. Network Rail is running well under this Government and will continue to do so.

As hon. Members will know, the quality of our higher education system is something we are rightly proud of, but teaching is not always given the recognition it deserves. Teaching quality is of paramount importance. It frames the experience that students have while in higher education and determines their future opportunities and experiences in the workplace. Governments of both parties have recognised that we need to do more to drive up the quality of teaching in our institutions.

Information on teaching quality is not always available or clear to prospective students. According to the Higher Education Policy Institute, just 18% of students feel they have enough information on how their fees are spent, and one third would have chosen a different course if they had known what they do on completing. This information will shape their future, but prospective students are effectively making decisions blind. The teaching excellence framework, which was a Conservative party manifesto commitment, addresses that by setting a scheme for the impartial assessment of different aspects of teaching, including student experience and the job prospects of graduates.

The framework puts teaching on a par with our country’s world-leading research, so that we not only get more students into higher education but ensure it is worth while for them when they get there. I am delighted that the devolved Administrations have confirmed they will allow their providers to take part in the TEF in year 2, meaning that we have one system that operates across the whole UK. The TEF will reward providers that deliver high-quality teaching for all. It will support the propagation of good practice across the sector, and it will address the information gap, giving prospective students more information about the teaching they will receive and the outcomes they are likely to obtain.

--- Later in debate ---

[Joseph Johnson]

Before I respond, let me first touch on the issues raised by the hon. Members for the City of Durham and for Sheffield Central about the TEF and the reputation of the sector as it might be perceived by international students. We strongly believe that the TEF will enhance the overall reputation of the sector. We would be the first country to introduce such a system of assessing teaching excellence and students will have a better idea of what they can expect from their time of study here in England and in other parts of the country that choose to participate in it than they will anywhere else in the world. Providers with high levels of the TEF will have been through an extraordinary process of scrutiny that will help them market themselves more effectively around the world.

Let me turn to the other points on migration made by the hon. Member for Ilford North. As he will imagine, I am working closely—as are other members of the Government—with the Home Office on various options regarding student migration and, in particular, whether our student immigration rules should be tailored to the quality of course and educational institution. No decisions have been made on the best way to do that. The Home Office has indicated that it will be consulting in the autumn on a number of measures to remove opportunities for abuse, while still ensuring that the UK can attract genuine students from around the world. I reiterate, for the hon. Member’s benefit, that we will not be looking to cap the number of genuine students from outside the EU who can come to study in the UK. I hope that that provides him with reassurance.

[Gordon Marsden]

On that point, in relation to the broader point of reputational damage, the Minister is making great play of the fact that this will be a game-changer for us internationally, and so on; but the truth remains that, for good or bad reasons, students internationally do not know what the TEF will ultimately be based on. The Minister knows that there has been huge discussion about the inadequacy of merely giving one TEF rating to an individual HE provider, as opposed to schools or courses. How on earth can international students, or any students, have confidence in a system as a gold standard measurement when we have no further clarity on whether the TEF will be done on an institutional basis or on a school or disciplinary one?

[Joseph Johnson]

The UK, through the Quality Assurance Agency for Higher Education, has long been at the forefront of quality assessment processes around the world, and its expertise is sought after in a number of countries. We expect that the TEF will likewise have a pioneering effect around the world.

[Gordon Marsden]

On that point, will the Minister give way?

[Joseph Johnson]

No, I am not giving way, thank you very much. We believe that the TEF has the potential to enhance the reputation of UK higher education.

--- Later in debate ---

[Joseph Johnson]

These amendments bring the Bill into line with the policy stated in the White Paper. All the amendments except for amendment 62 remove the power for the Secretary of State to designate a body to undertake the functions in clause 25 and therefore operate the TEF. The TEF, as we have been discussing, is central to the improvement of the student experience, which is of core interest to students, and as per our policy intent in the White Paper, I believe that responsibility for the operation of the TEF should be held by the office for students.

Our intention has always been for the OFS to operate the TEF and we do not envisage a need to require another body to undertake these functions. In the absence of a compelling case, I believe it is simpler, clearer and, from a legislative perspective, more proportionate to remove the power to designate a body to run the TEF functions. I reassure the Committee, however, that removing this power does not prevent the OFS from working with others on the delivery of the TEF, which I recognise might be desirable at some point in the future. The OFS could, for instance, contract a body to support its work on the TEF, just as HEFCE is working with the QAA on delivery of year 2 of the TEF.

[Gordon Marsden]

The Minister talks about working with other people on the structure of the TEF. I press this not in a combative way, but merely in the sense of wanting to have some information. Can he provide any indication as to when or from whom he expects the delineations to how the TEF is to be delivered—whether by institution or by discipline or by school? When are we likely to know about that?

[Joseph Johnson]

I urge the hon. Gentleman to read our consultation response to the TEF year 2 proposals, which we published on 29 September. This provides significant detail about how the TEF will develop in years to come.

Turning to amendment 62, our policy intent is to ensure a co-regulatory approach to quality assessment. Clause 26 allows Ministers to establish a clear role for a quality body, administratively and visibly separate from Government and the OFS, as recommended by the Select Committee on Business, Innovation and Skills earlier this year. Amendment 62 provides a new power for the OFS to give general directions to a designated quality body on how it should carry out the assessment functions. The OFS can give only general directions and must have regard to protecting the expertise of the designated body when giving those directions.

This is not about dictating how the designated body should do its job or about giving the OFS the power to intervene in or dictate the outcome of individual cases. This change is solely to deliver on what our White Paper said, which is that the designated quality body would design and operate the quality assessment system, reporting to and within parameters set by the OFS.

Amendment 42 agreed to.

Amendments made: 43, in clause 26, page 15, line 26, leave out paragraph (b).

This amendment removes the ability to designate the functions in clause 25 (rating the quality of, and standards applied to, higher education) to be performed by the designated body and ensures that only the functions in clause 23 (assessing the quality of, and standards applied to, higher education) can be designated. Amendments 45, 49, 50, 52, 53, 59, 60, 61, 63, 64, 67, 68, 69, 70, 71, 72 and 73 are consequential on this amendment.

Amendment 44, in clause 26, page 15, line 27, leave out

“an assessment function, the function does”

and insert

“the assessment functions, the functions do”.—(Joseph Johnson.)

This amendment and amendments 47, 48, 54, 55, 58 and 66 ensure consistency of language with paragraph 1 of Schedule 4.

Clause 26, as amended, ordered to stand part of the Bill.

Schedule 4

Assessing higher education: designated body

Amendments made: 45, in schedule 4, page 73, line 7, leave out “either or both of”.

This amendment is consequential on amendment 43.

Amendment 46, in schedule 4, page 73, line 10, leave out “and standards of” and insert

“of, and the standards applied to”.

This amendment and amendments 51 and 57 ensure that the language used in relation to standards in Schedule 4 is consistent with clauses 23 and 25.

Amendment 47, in schedule 4, page 73, line 15, leave out

“be designated under this Schedule”

and insert

“perform the assessment functions”.

See the explanatory statement for amendment 44.

Amendment 48, in schedule 4, page 73, line 17, leave out

“be designated under this Schedule”

and insert

“perform the assessment functions”.—(Joseph Johnson.)

See the explanatory statement for amendment 44.

[Gordon Marsden]

I beg to move amendment 230, in schedule 4, page 73, line 29, at end insert

“(ca) a number of persons that, taken together, appear to the OfS to represent, or promote the interests of, higher education staff”.

See amendment 231.

[Gordon Marsden]

In moving these two amendments, we wish to pick up a theme that we have previously expressed on several occasions: the office for students needs to be an office not just for students. So far, as regards the membership of its bodies, the Government have been relatively reluctant to do that. The OFS needs to address and promote the interests of higher education staff. This is a really serious issue. The Minister will have heard the concerns expressed by a wide range of higher education staff about this Bill and about issues to do with the TEF. There is also a general sense that the Government sometimes seem to think that all they need to do is to round up a certain number of vice-chancellors to say a certain number of things on a particular occasion and they will have the approval of the whole higher education sector, but that of course is not the case. For the higher education sector to succeed and flourish, it needs the co-operation, collaboration and involvement of all its members, so, again, the amendments are designed to take us down that road.

The first amendment, 230, would straightforwardly insert into schedule 4 the appropriate phrase:

“a number of persons that, taken together, appear to the OfS to represent, or promote the interests of, higher education staff”.

The second amendment, 231, says the same thing. The purpose of both amendments—Opposition Members have touched on this issue previously—is to ensure that before recommending the designation of a body to perform assessment functions, the OFS consults bodies and, indeed, individual groups of higher education staff. If the Government want people at every level in the sector to buy into these reforms, as they regard them, and to buy into this new settlement with the OFS, it is crucial that the OFS has the broadest base of support and general enthusiasm across the sector. These modest amendments are designed to assist the Government in that process, and I hope that the Minister will feel able to be positive about them.

[Joseph Johnson]

I welcome the discussion, recognising the importance of a diverse range of views and interests across HE in ensuring that a suitable body is designated to manage the assessment of quality on behalf of the OFS. As the amendments and this brief debate have highlighted, the staff of our HE providers are of course an important part of what drives quality. That is clearly recognised in current practice. The views of HE staff and their representatives are sought by Government, HEFCE and others in consultations on decisions that introduce changes to the HE system. They are already represented on the advisory groups and committees of bodies such as the QAA and HEFCE. However, the amendments would introduce an additional level of prescription for the OFS that I do not believe is desirable. By providing a more prescriptive list of required consultees, we would run the risk that the OFS did not feel able to use the discretion provided under the schedule to consult such persons as it considered appropriate. The prescribed list should be limited to those who are fundamentally essential to taking a decision on whether a quality body is suitable and can deliver on the co-regulatory approach. I therefore ask the hon. Member for Blackpool South to withdraw the amendment.

[Gordon Marsden]

I will withdraw the amendment, but I am sad, yet again, that the Minister thinks that the only thing that matters is the people who sign the cheques or who press the buttons or take the decisions. [Interruption.] I am sorry, but that is the way it will be seen outside the massed ranks of the Government by many in the sector: this is an opportunity missed, as it has been missed so far on the Bill with students, to put them in the frame for a brand-new structure. That is what people will be concerned about. I will withdraw the amendment on behalf of the Opposition, but the Government should think very carefully about the way in which they are alienating so many people in the sector. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: 49, in schedule 4, page 73, line 39, leave out “either or both of”.

This amendment is consequential on amendment 43.

Amendment 50, in schedule 4, page 74, line 1, leave out “recommended function or functions” and insert “assessment functions”.

This amendment is consequential on amendment 43.

Amendment 51, in schedule 4, page 74, line 4, leave out “and standards of” and insert

“of, and the standards applied to,”.

See the explanatory statement for amendment 46.

Amendment 52, in schedule 4, page 74, line 6, leave out sub-paragraphs (3) and (4).

This amendment is consequential on amendment 43.

Amendment 53, in schedule 4, page 74, line 19, leave out from beginning to “and”.

This amendment is consequential on amendment 43.

Amendment 54, in schedule 4, page 74, line 24, leave out “an assessment function” and insert “the assessment functions”.

See the explanatory statement for amendment 44.

Amendment 55, in schedule 4, page 74, line 27, leave out “function” and insert “functions”.—(Joseph Johnson.)

See the explanatory statement for amendment 44.

Higher Education and Research Bill (Tenth sitting)

Debate between Lord Johnson of Marylebone and Gordon Marsden

Committee Debate: 10th sitting: House of Commons
Tuesday 11th October 2016 Public Bill Committees

[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

It is a pleasure to see you in the Chair once again, Mr Hanson, although we have not made as much progress in your absence as you might have hoped. It is also a pleasure to see the hon. Member for Blackpool South in his place on time to start the proceedings. I am glad that he did not have to scapegoat Network Rail for his late arrival.

[Gordon Marsden]

I know that the hon. Gentleman wishes to defend the Government in all shapes and forms, but that does not necessarily involve defending Network Rail. If he carries on in that vein I might have to examine his record of interests to see whether he has shares in the company.

[The Chair]

Order. Members will have to fill me in on that at a later time. In the meantime, I call the Minister.

[Joseph Johnson]

If the hon. Gentleman wants to lodge his time of arrival at Victoria, we can verify his claim with the operator and get to the bottom of his late arrival.

I am grateful to hon. Members for tabling the amendments. They touch on points that we discussed extensively at an earlier stage in our proceedings, and they are intended to clarify the role and responsibilities of the director for fair access and participation in relation to access and participation plans.

We are giving amendment 200 careful thought. There is obviously agreement on both sides of the House that social mobility is a huge priority, and all the more so now for the current Government. Widening access and participation in higher education is one of the key drivers of that. The OFS will have a duty to consider the quality of opportunity in connection with access to and participation in higher education across all its functions, so widening access for and participation of students from disadvantaged backgrounds will be at its very core. It will be the responsibility of the OFS to ensure that it is fulfilling that function. As I have said before, it continues to be our clear intention that the OFS will give the DFAP responsibility for activities in that area. We envisage that, in practice, that will mean that the other OFS members will agree a broad remit with the DFAP, and that the DFAP will report back to them on those activities. As such, the DFAP will have responsibility for the important access and participation activities in question, including agreeing access and participation plans on a day-to-day basis.

We do not accept that the reforms will undermine the ability for stretching access plans to be agreed and strengthened. Indeed, the OFS as a whole will have responsibility for promoting equality of opportunity, which, as I have said, means that it will have access to the full suite of OFS sanctions. I will come on to describe what those could be.

Amendment 205 is intended to ensure that the DFAP can issue guidance and warnings when a provider does not meet their targets. In future, we expect that the OFS will continue to monitor a provider’s progress against its plan and agree targets with it, as the director of fair access does now. Concerns about progress would be raised directly with the provider. That has proved to be an effective system, with the current director of fair access’s interventions having led to an improvement in targets at 94 institutions and increased expenditure at 37 for 2017-18. Where it was considered appropriate, a range of OFS sanctions would be available, including the power to refuse an access and participation plan. I therefore ask the hon. Gentleman to withdraw the amendment.

[Gordon Marsden]

I welcome what the Minister has said, which is consonant with what he has said on previous occasions. I repeat our view that it would be beneficial to make the amendments, for the reasons that I have given, but I accept the Minister’s assurance that he is giving them careful thought. There will be a number of opportunities to develop them at other stages of the Bill’s passage, and on that basis I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Dr Blackman-Woods]

I beg to move amendment 179, in clause 28, page 17, line 16, at end insert—

‘( ) The OfS must, in deciding whether to approve a plan, have regard to whether the governing body of an institution has consulted with relevant student representatives in producing its plan.

( ) In this section “relevant student representatives” means representatives who may be deemed to represent students on higher education courses provided by the institution including, but not limited to, persons or bodies as described by Part 2 of the Education Act 1994.”

This amendment would ensure that when higher education providers produce an Access and Participation Plan, they must consult with students and student representatives, including – but not limited to – the students’ union at that higher education provider.

This amendment would add a new subsection to clause 28, to ensure that before a participation and access plan is approved, the institution in question can demonstrate that students have been consulted in the drawing up of that plan. It is a positive step forward that, through measures in the Bill, institutions will be required to produce participation and access plans. I know that a number of organisations, including the National Union of Students, welcome and support those provisions. However, as the Minister will be aware, much of the excellent access and outreach work at universities is done by students, often co-ordinated by their students unions. The amendment would therefore recognise the work of students and ensure that they are involved when their university produces the access and participation plan. The amendment would give student representatives the chance to discuss their views on their university’s plan and ensure that it reflects the interest of current and future students.

We had a long discussion in this morning’s session about student representation, but I hope that the Minister can be a bit more forthcoming about student involvement in the plan. Frankly, it is hard to envisage how a plan for widening access and participation could be drawn up without speaking to current students and involving them in what that plan ultimately looks like. I look forward to hearing what the Minister has to say.

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[Joseph Johnson]

Yes, that was the purpose of our guidance to the director of fair access back in February, to signal that we wanted to see further progress on institutions making part-time study a core feature of their offer. So, yes, I would imagine that this would be priority focus of the OFS. In conclusion, I do not believe the amendment is necessary. There are sufficient provisions in the Bill to ensure that part-time and mature study are priorities for the OFS and the director of fair access within it. I would therefore ask the hon. Member for Sheffield Central to withdraw his amendment.

[Gordon Marsden]

I have heard what the Minister has to say. The direction of travel, as my hon. Friend the Member for Sheffield Central says, is extremely welcome as are, indeed, the figures that the Minister quoted, but I would gently remind him that, for all the demographic reasons that I have spoken about, we need to speed up that expansion of participation. However, I hear what he has to say, will look forward to further discussions on it in this Bill and possibly subsequently and, with that, I am content to withdraw our amendment.

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[Gordon Marsden]

I beg to move amendment 209, in clause 34, page 19, line 31, leave out “may” and insert “should”.

This amendment would require the OfS to identify good practice on the promotion of equality of opportunity and to disseminate advice about good practice.

This is a small but meaningful amendment that relates obviously to the clause on good practice. We could have a pedagogical debate on what good practice is but the Committee will be relieved to know that I do not intend to go down that route, except to observe that “may” is, of course, a word much in vogue with the Conservative party at the moment, but “may” is also a word that is often in vogue in the drafting of Bills when a minimum rather than a maximum of things is expected. In this particular instance, given that the Government are saying, quite rightly, that good practice is key to the promotion of equality of opportunity and that they need to give advice about such practice to registered higher education providers, it would do no harm whatsoever to strengthen that guidance to the OFS. It is not micromanagement, it is strengthening the advice. That is why, Mr Hanson, we have suggested that on this occasion rather than having the word “may”, we should have the word “should”.

[Joseph Johnson]

We believe that the Bill as drafted delivers the policy intent behind the amendment. Spreading good practice in widening participation is currently a key part of the director of fair access’s role. We want the office for students to continue to undertake this role.

The Office for Fair Access currently undertakes a programme of evaluation, research and analysis. This aims to improve understanding and inform improvements in practice by identifying and disseminating good practice. Universities expect to spend £833.5 million through access agreements in 2017-18 on measures to improve access and success for students from disadvantaged backgrounds. It is important that this money is used effectively on the basis of evidence of what works best.

Higher education providers use the outcomes of OFFA’s research and good practice so that they can develop their own initiatives and policies, based on the latest evidence. It is important that the office for students continues to build this bank of evidence and best practice on widening participation, so that performance continues to develop and improve.

Through the Bill, the OFS may provide advice on good practice in relation to access and participation, so we are clear that the Bill as drafted enables that to continue in the future. I therefore ask the hon. Gentleman to withdraw the amendment.

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[Gordon Marsden]

This trio of amendments is designed to strengthen and reinforce our concern that the operation of the OFS, like that of any major new public institution of that nature, should receive adequate and sufficient scrutiny, not simply on the Floor of the House but in various Committees, and certainly in at least one relevant Select Committee. I remain unclear about whether any aspects of the Bill will be covered by the Department for Business, Energy and Industrial Strategy in any shape or form. The Minister himself may still be groping towards some of these answers, so I will not press him on that. That is why the amendment say “committees” rather than “committee”.

The principle is very important. I have spoken previously about the value of pre-legislative scrutiny and my regret that it was not applied in the case of this Bill, which is complex. The other important role that Select Committees can play is monitoring and taking things forward. The Government propose and pass Bills, but Select Committees are, on the whole, relatively non-partisan and relatively positive in the suggestions they make. I think it would be valuable for the various things coming forward from the OFS to be reported fairly crisply and usefully to the relevant Select Committee. That accounts for amendment 211.

It is also important—there are precedents for this in the case of Ofsted and other aspects of education policy—that the OFS has a duty to report to the relevant Select Committees with its annual report or special reports, particularly on matters relating to equality of opportunity. Again, I am not suggesting that there would be any innate reluctance on the part of the OFS to do that, but we do not know who the board and chief executives will be. When we set up new bodies, rather than do as we have sometimes done in the past—engage in a tussle between the Executive and the legislature, which often generates a lot of heat, but not much light—I think it is important that we ensure the OFS has a responsibility to examine expenditure, administration and policy in that respect. That is the reason for amendment 212.

Finally, to say that the OFS must report to the Secretary of State in its annual report or in special reports on matters relating to equality of opportunity is of paramount importance, not least for all the reasons that my hon. Friend and I have discussed under previous amendments. Again, that simply strengthens the argument we made in relation to amendment 209.

[Joseph Johnson]

We believe that the Bill as drafted will deliver the policy intent that the hon. Gentleman wants. The OFS will be required by schedule 1 to provide an annual report covering all its functions. Reporting on access and participation matters will sit with the OFS, which will also have a new duty requiring it to consider equality of opportunity in connection with access and participation plans across all its functions. The OFS’s work on access and participation should be reported to Parliament as part of its overall accountability requirements. It would not be consistent with integrating the role into the OFS for the DFAP to report separately.

Clause 36 supplements the requirement for an annual report and allows the Secretary of State to direct the OFS to report on widening participation issues—either in its annual report or in a special report. That replicates an existing provision, in place since 2004, which has never been used. We agree this is important and have retained the requirement, so that if there are specific concerns about access and participation at a particular time there is a mechanism for the Secretary of State to request action. The Bill requires that the OFS annual report and any special reports on access and participation be laid in Parliament. As that will ensure that any such reports are publicly available, open to scrutiny and accessible to all appropriate House of Commons Committees, we do not think it necessary to specify the requirement in greater detail in legislation, and I ask the hon. Gentleman to withdraw the amendment.

[Gordon Marsden]

Obviously the Minister has a slightly more expansive view of what the Bill allows or expects to do than perhaps we do, but we hear what he has to say. He has put the importance of these issues and conditions straightforwardly on the record and on that basis I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[Gordon Marsden]

It is a great pleasure to speak in support of my hon. Friend’s amendment. In his speech, he has encapsulated one of the most important and exciting developments in 21st-century learning that the Bill could achieve.

My hon. Friend referred to market failure and he was right to do so. It is interesting that about a week ago the Jisc parliamentary briefing for the Bill specifically talks about this in terms of the Government’s proposals to deregulate parts of the higher education market. I understand that Jisc is sponsored as the UK’s expert body for digital technology by the Department. It says that there needs to be a mechanism for recognising and communicating the credits students have gained for modules already studied. It is essential that well managed credit accumulation and transfer scheme arrangements are in place to support students who are affected by market exit. Jisc also talks about the need for a mechanism for recognising and securely storing the credits students have gained for modules already studied, so that these credits can then be transferred to a student’s next institution. It makes the obvious point that disorderly wind-down or abrupt closure where the data are lost would have serious implications for affected students and potentially for the reputation of the sector. I think that reinforces my hon. Friend’s argument.

I also want to make the point that credit transfer is very important for people who want to move from one institution to another, not least in the circumstances that have been described, but it is also vital in terms of the new flexibilities that the work, life and study balance will require in the 21st century. I will not repeat what I have said on a number of occasions and in a number of places about this, except to emphasise the very strong belief that I and many others hold that the world of further education, higher education and online learning are morphing into each other, sometimes much more rapidly than conventional universities or even conventional policy makers realise, and that process will continue. The question for us in this country is not whether it will happen or not. It will happen. The question is whether it will be our institutions—those higher education and lifelong learning institutions for which we are famous—that take the advantage of this, or whether we will be colonised, if I can use that word, from outside. I think those are really important issues for the Minister to consider, not least in the context of the response to the call for evidence from May.

My hon. Friend the Member for Sheffield Central has said that these ideas have been floating around for years. Of course, I am duty bound both to him and to Sir Bernard Crick, who is no longer with us, to praise the initiative of my noble Friend Lord Blunkett, who published “The Learning Age” in 1999 with Bernard Crick, which put forward some very innovative ideas in that area. We know what the problems were at the time with individual learning accounts. I was one of the people who sat on the Select Committee that looked at that. There were obviously difficulties, but the principle of having accounts that enabled a credit-based system and banking of credits is a very important one. We are unlikely to achieve huge success unless we take a fundamental look at some of the broader issues of funding, but that is for another day and another time and certainly does not fall within the relatively narrow scope of the amendment. I only make the point because I think the two things have to be considered in tandem.

The truth of the matter is that we have systems in the UK at the moment which recognise previous learning. In Scotland there is the Scottish credit qualifications framework, which integrates work-based and lifelong learning. We could learn a lot of things from lots of different places. If the Government are really keen to make progress and to support the sort of ideas that I, my hon. Friend and many other people have discussed, they could do far worse than go back to the major work produced in 2009 for the National Institute of Adult Continuing Education by Tom Schuller and David Watson, “Learning through Life”, which has some very innovative and important things to say in that area.

This is an area where there is still fruitful work going on. The Learning and Work Institute has produced ideas for a new citizen skills entitlement, which merits further consideration. Ofsted has talked about how well providers prepare learners for successful life in modern Britain. Ruth Spellman, the chief executive officer of the Workers’ Educational Association, said when its report on this matter was launched just before the recess:

“An Education Savings Account...would enable individuals to save for their future Education... This could also encourage and attract employer contributions, particularly if government were to allow tax relief...this would create longer-term and more stable funding streams”.

That is on the funding side; the other part of the equation is the credit accumulation.

As the Minister knows, I spent nearly 20 years as an Open University course tutor. What I learnt from that process, apart from the immense sacrifices and dedication of the students, is that the ability to engage in study programmes that coped with things that happened in life—perhaps students had to care for an elderly relative, or had family issues, or were simply ill—and the ability to take years out but not to lose all of that credit are absolutely key to where we need to go in the 21st century.

This is a probing amendment, but it is a pointed probe in the sense that the Government have an opportunity to do significant things in this area that would attract a lot of support. We want them to do those things. They are overdue.

[Joseph Johnson]

I thank the hon. Member for Sheffield Central for tabling the amendment. It touches on a subject to which we are giving much careful thought, as I indicated when we discussed it briefly earlier in our proceedings.

Supporting students who wish to switch to another higher education institution or degree is an important part of our reforms. It is vital that we make faster progress in this area, and I share the general sentiment expressed by the hon. Gentleman. It is disappointing that we have not managed to put in place an effective mechanism of the sort proposed up until this point. The sector can do more to offer flexible study options to meet students’ diverse needs, and it can do more to support social mobility by doing so.

There is an obvious link between withdrawal rates and students not being able to transfer between providers. The amendment refers to a credit rating service. Although we want to enable credit transfer, we want to do so in a context of institutional autonomy, which is crucial to the reputation and vibrancy of UK higher education. We want to avoid a universal approach that undermines that by inadvertently homogenising or standardising provision, which would risk the loss of the great diversity that is one of the key strengths of our sector.

As the hon. Gentleman mentioned, the Government called for evidence on credit transfer and accelerated degrees. We were pleased to receive more than 4,500 responses and we are in the process of analysing all of those carefully. There are a number of issues that we need to consider before moving forward, including the extent of student demand and awareness of the issue, the funding implications that the hon. Gentleman touched on, and external regulatory requirements. We expect to come forward by the end of the year with our response to the results of the call for evidence that we have conducted.

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[Joseph Johnson]

I am glad to have the opportunity to discuss FE institutions, many of which are colleges, and degree-awarding powers. Institutions in the FE sector can currently apply for and obtain taught degree-awarding powers so long as they provide higher education and meet the relevant criteria. Indeed, in June of this year, Newcastle College Group became the first FE college to be granted taught degree-awarding powers, and other colleges are in the process of applying.

Any institutions that obtain taught degree-awarding powers, including FE Colleges, are already authorised to grant certificates and other awards as well as degrees. Institutions in the FE sector will continue to be able to apply for and obtain taught degree-awarding powers under the reforms in the Bill. The proviso is that they must be a registered higher education provider and, like other registered higher education providers, meet the relevant criteria. We intend to consult on the detailed criteria following Royal Assent and before the new regulatory framework takes effect. There is therefore no intention to prevent FE colleges from accessing taught degree-awarding powers through the Bill.

As happens now, institutions in the FE sector will also be able to apply for foundation degree-awarding powers only—with the proviso that, in addition to being registered and meeting other criteria, they provide a satisfactory statement of progression setting out what the provider intends to do to enable students to progress on to courses of more advanced study. Again, that is in line with the current arrangements for FE colleges that wish to apply for foundation degree-awarding powers. I therefore believe that the amendment is unnecessary.

[Gordon Marsden]

Whether the amendment is unnecessary or not—obviously guidance has been given that means we might want to discuss the matter further—does the Minister agree that the ability for colleges to accredit individuals with a certificate for higher education would be a big step in the right direction? That is essentially what the Association of Colleges is asking for.

[Joseph Johnson]

We will obviously look very carefully at the submission from the Association of Colleges, and officials have heard the hon. Gentleman’s comments. We will go away, have a further look at the issue and reassure ourselves that the approach that we are taking is the correct one, but for the time being, we believe that the Bill covers his intentions, and I ask him to withdraw the amendment.

[Gordon Marsden]

I thank the Minister for that reply. We look forward to the further rumination, if I can put it that way, on the particulars of the issue, and on that basis I am content to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[Gordon Marsden]

Martin Wolf said:

“The reform of Britain’s universities is a betrayal”—

[Joseph Johnson]

Will the hon. Gentleman give way?

[Gordon Marsden]

No I will not. I am just about to finish the quote. Then the Minister can intervene.

“The reform of Britain’s universities is a betrayal of Conservative principles”.

So there we have concerns across the sector, even in the Minister’s own party.

[Joseph Johnson]

Is the hon. Gentleman suggesting that Martin Wolf is an aspiring Conservative member, as he put it?

[Gordon Marsden]

No. I said that Martin Wolf was not about to cross the Floor to join the Labour party and that is exactly the case. [Interruption.] If Mr Wolf wanted to put things on record I am sure he could do so, but that is the point I am making. The Bill is causing concern among the Conservative party’s own traditional supporters and representatives, and elsewhere. That is the important issue to be addressed here.

The Bill, as the Council for the Defence of British Universities has said,

“is designed to give encouragement to ‘new providers’ but has few safeguards to protect students from for-profit organisations… Experience in this country, and particularly in the US, suggests extreme caution is needed to protect the reputation of British universities”.

Those are some of the issues that we have tried to mitigate in our amendments. I have asked the Minister a range of specific questions regarding the TEF paper, and I invite him to respond to them.

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[Joseph Johnson]

We are justifiably proud of our HE sector, and our country is renowned as the home of many world-class institutions, but that does not mean that we should be satisfied with the status quo. As I have said before, the current system is too heavily weighted in favour of existing incumbents, which is stifling innovation in the sector. As Emran Mian, director of the Social Market Foundation, has said:

“Higher education is too much like a club where the rules are made for the benefit of universities. These reforms will begin to change that.

Students will have access to more information when they’re making application choices; and universities will be under more pressure to improve the quality of teaching.”

Under the current regime, new and innovative providers have to wait until they have developed a track record that lasts several years before they can operate as degree-awarding bodies in their own right, no matter how good their offer or how much academic expertise they bring to bear. To develop that track record, they typically have to rely on other institutions to validate their provision in some way, which can be a huge obstacle. The onus is on the new entrant to find a willing incumbent and to negotiate a validation agreement. Such agreements can be one-sided and in some cases prohibitively expensive, as we heard in evidence given to the Committee.

Our reforms will ensure that students can choose from a wider range of high-quality institutions and will remove any impression that, as John Gill, the esteemed editor of Times Higher Education, put it, existing universities can

“act like bouncers, deciding who should and should not be let in.”

If a higher education institute can demonstrate its ability to deliver high-quality provision, we want to make it easier for it to start awarding its own degrees—not harder, as the hon. Member for Blackpool South would like—rather than needing to have its courses awarded by a competing incumbent. Earlier in this sitting, the hon. Gentleman said that the whole point was that it should be difficult. We fundamentally disagree. If there are high-quality providers out there that want to come in and provide high-quality education, we want to make that easier for them, not more difficult.

[Gordon Marsden]

Again, the Minister is trying to set up a straw man. “Difficult” does not mean “impossible”. It means that, because literally hundreds and in the future possibly thousands of people will be relying on the decision that is made, there should be due process—a significant process. The trouble with what the Minister suggests is that he is not just making it easier, he is making it far too easy.

[Joseph Johnson]

I ask the hon. Gentleman to look back at the transcript of our earlier discussions and reread his comments. He said that the whole point was that it should be difficult. That is a fundamental point of difference between us. We believe it should be easy for high-quality providers to get into the system and offer high-value-for-money higher education.

We know how important universities can be to their local economies. Recent research by the London School of Economics has demonstrated the strong link between universities opening and significantly increased economic growth. Doubling the number of universities per capita is associated with more than 4% higher GDP per capita. However, the sector has built up over time to be serving only parts of the country. It is not providing employers with enough of the right graduates, especially STEM graduates. It can do more, as we discussed earlier, to offer flexible study options to meet students’ diverse needs, and it can do far more to support social mobility. Most OECD competitor countries have a higher proportion of the population entering higher education than the UK. We have about a 51% first-time entry rate, compared with an OECD average of about 60%.

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[Joseph Johnson]

First, I would encourage the hon. Gentleman not to try to compare apples and pears by talking about the US experience. Many of the parallels that he is attempting to draw with the so-called private sector in the US are not really relevant to our environment here in the UK. US private providers are subject to little state control. We have a strong, and increasingly strong, regulatory framework in place to ensure appropriate oversight. I again encourage Opposition Members not to disparage institutions that they describe as for-profit or private providers. Let us remember first that all higher education institutions are private to begin with—every single one of them. Let us try to get that straight in our minds right away.

[Gordon Marsden]

rose—

[Joseph Johnson]

No, I am going to make this point, because the hon. Gentleman has already intervened. Let us also remember that there are exceptionally good providers in the sector delivering high-quality education sector, for example Norland College, the University of Law or BPP University. For-profit providers have among the highest levels of student satisfaction in the system, demonstrated for example by the University of Law coming joint first in overall satisfaction in the most recent national students’ survey. I find it sad and disappointing that the hon. Member for Blackpool South wants to disparage such institutions and those who choose to study at them.

[Gordon Marsden]

I am not disparaging those institutions. They have reached that position precisely through the rigorous system that we currently have, which the Minister is proposing to dismantle. He has failed to address some of the questions I put to him. For example, does he seriously believe that the introduction of single-subject DAPs is a good thing for students?

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[Joseph Johnson]

I urge the hon. Lady to recognise that huge value has been added to the sector by the arrival of new entrants. New providers have tapped into unmet demand, and that is why they are springing up. They are surviving the test of the marketplace and meeting a need that is not presently being met. That is why they are coming into existence; they are providing value and succeeding and thriving in the marketplace. We should welcome what they bring rather than denigrate it.

As a report on international experience by the Centre for Global Higher Education found, private providers can

“swiftly provide courses to meet unmet demand, and deliver them in convenient ways, such as online or in the evening and over the weekend.”

We also know that they offer greater flexibility to potential students by having different course start dates throughout the year. Alternative providers are already supporting greater diversity in the sector, which we should all welcome. Some 56% of students at alternative providers are aged 25-plus—I know that the hon. Member for Blackpool South cares greatly about mature students—compared with only 23% of students at publicly funded institutions. They have higher numbers of black and minority ethnic students, with 59% of undergraduate students at alternative providers coming from BME ethnic groups compared with 21% at higher education institutions overall.

[Gordon Marsden]

All the statistics that the Minister has just reeled off, which we recognise, underline precisely why we need rigorous—not blocking—regulation. The sorts of people who are going to the providers he talks about are those who will suffer most greatly if those providers go belly up. That is why we need rigour in that area, and that is why the best alternative providers have succeeded and are coming through at the moment. He is constantly setting up straw men.

[Joseph Johnson]

We are in agreement. There will be robust quality gateways, financial management tests and governance tests in the system.

[Gordon Marsden]

They are not robust.

[Joseph Johnson]

They are as robust as they need to be, and they will ensure that only high-quality, well managed, stable institutions that deliver high-quality higher education enter our system.

As I have set out, current would-be new entrants typically rely on competitors for a foothold in the sector. It is hard to think of another sector—including those involving major once-in-a-lifetime decisions, such as mortgage or pension providers—where one provider is beholden to another for market entry in that manner.

Inevitably, the nature of our validation requirements has a moulding effect on entry into the system. New providers may feel forced to adopt practices, habits and mentalities of incumbents in a way that can stifle innovation or even cede some of the new entrants’ competitive advantage. For example, we can read in the evidence provided by Le Cordon Bleu how that can happen. It chose not to offer a UK degree via the validation process, as it felt it would be required to hand over its recipes, techniques and individual culinary style to another institution in order to have its courses validated.

[Joseph Johnson]

I will make some progress, if the hon. Lady will let me.

In the case of Le Cordon Bleu, the intellectual property of its course would be free for the validating institution to redistribute as it saw fit. We have heard a fair amount from Opposition Members about for-profit providers, and the idea that for-profit institutions would not act in the interests of students. That is simply not true.

[Gordon Marsden]

We did not say that—we said they might.

[Joseph Johnson]

The insinuation was certain.

[Gordon Marsden]

You’re the one who’s insinuating.

[The Chair]

Order. Will the hon. Gentleman refrain from heckling? He has the opportunity to speak, and he can respond in due course.

[Joseph Johnson]

The insinuation that followed the persistent tropes denigrating private providers, new providers or alternative providers was very clear: the hon. Gentleman sees for-profit providers as fly-by-night operators out to exploit naive students at the expense of taxpayers. The whole riff he has been developing over weeks before this Committee is unmistakeable, and it is simply not true.

We need a diverse, competitive higher education sector that can offer different types of higher education, giving students the ability to choose between a wide range of providers. We must not constrain entrepreneurial activity and stifle innovative provision at students’ expense. New ventures are driven by a range of motives, not just by wealth creation, such as the desire to innovate and create new products, the desire to prove themselves better and smarter and a desire to create a personal legacy. It also seems strange that on the one hand making a profit is deemed distasteful, whereas on the other hand to fail to make a profit would be judged as a sign of financial unsustainability. There is an inherent contradiction in the hon. Gentleman’s approach to this question.

Turning to the specifics of amendments 216, 217, 218, 220 and 234, I hope—although I may not be successful—that I can still assure hon. Members that the reforms we are proposing will ensure that both the interests of students and the wider public are well served. In recognising the need for the changes that I have just set out, we also recognise the great importance of sustaining and improving quality and standards. Our plans are designed to ensure that quality is maintained, and that only those providers that can prove they can meet the high standards associated with the values and reputation of the English HE system can obtain degree-awarding powers. We intend that the assessment of whether a provider meets the criteria to hold degree-awarding powers would rest with the designated quality body; this mirrors current arrangements.

In order to become eligible for degree-awarding powers, providers will have to register with the OFS. We expect them to register in either the approved or approved fee cap categories. This would ensure that applicants for degree-awarding powers meet high market entry and ongoing registration conditions, which we expect to include quality and financial sustainability, management and governance criteria. As now, degree-awarding powers will either be granted on a time-limited or an indefinite basis. Degree-awarding powers being awarded on a time-limited and renewable basis in this way is critically not new: alternative providers and further education providers are already granted these powers on a six-yearly renewable basis. We intend to level up the playing field and raise the quality threshold so degree-awarding powers are granted on a time-limited basis to all in the first instance, with the opportunity for all to progress to indefinite degree-awarding powers subject to satisfactory performance.

What we do intend to do is change the requirement that new high-quality providers have to build up a track record and be reliant on incumbent institutions to validate their provision. However, as we set out in the factsheet on market entry and quality assurance that we published and sent to the Committee, we plan that in order to be able to access time-limited probationary degree-awarding powers, providers will also need to pass a new and specific test for probationary degree-awarding powers. Under this test, we expect applicants to be required to demonstrate that they have the potential to meet the full degree-awarding powers criteria by the end of the three-year probationary period and we fully expect probationary degree-awarding powers to be subject to appropriate restrictions and strict oversight by the OFS in order to safeguard quality. We expect this oversight to be similar to the support of a validating body, except that new providers will not need to ask a competitor to do this.

[Gordon Marsden]

The Minister is now beginning to address the specific points I made, although he has still not commented on the rationale for allowing single-subject DAPs. That is not the same as STEM ones, Minister, because those cover a much broader range of things. May I ask the Minister specifically whether he considers the inclusion of self-evaluation as a key element in deciding whether people should have these degree-awarding powers sufficient and adequate?

[Joseph Johnson]

As he has pressed on this first, let me come to the hon. Gentleman’s point about single-subject degree-awarding powers. We want the scope of degree-awarding powers to be more flexible, so that both probationary and full degree-awarding power holders would be able to offer degrees in specific subjects or with greater choice of levels. This would enable them to start awarding degrees while developing their provision and capacity, to assume increased levels of powers and enable the removal of restrictions over time. Holders of single-subject DAPs will, if granted validation powers, be able to validate in that subject only, and we intend that they will be eligible for university title. There are many specialist providers that I believe would benefit from this. For example, Norland College has been delivering specialist education since the 1860s and could be one of the providers that seeks to benefit from these provisions. It has a solid reputation for the quality of its provision.

Turning to the hon. Gentleman’s more recent point about self-evaluation, we intend self-evaluation to be only one part of a thorough and robust process to assess readiness for probationary degree-awarding powers. Understanding what it means to uphold academic standards is essential for any provider and should be tested, and we intend to consult on detailed criteria that we plan to publish in guidance.

--- Later in debate ---

[Joseph Johnson]

In our reforms, we have deliberately taken out the function of the Privy Council in the granting of degree-awarding powers and university title in order to streamline the processes and transfer responsibility for those functions to the office for students. At the moment, as the hon. Gentleman knows, for degree-awarding powers the QAA advises HEFCE. HEFCE advises the Department, and the Department then advises the Privy Council. There is a similar process for university title. That is unduly complex and time-consuming to little or no additional advantage.

On the whole, there was no opposition to these changes in the responses we had to the Green Paper. This response to our Green Paper consultation from a provider that has only recently gone through this process illustrates the point:

“Removing the role of the Privy Council in making decisions about DAPs and University Title seems prudent. Our experience of the process suggests that this stage does not have added value and merely extends the time taken to complete the process.”

In fact, we checked back through recent history and there were no examples of the Privy Council not following the Department’s advice on granting degree-awarding powers and university title—not one.

Under our new system, the office for students, as the independent sector regulator, will be best placed to take decisions on degree-awarding powers and university title. That will cut out some of the process and lead to a more streamlined system. I know the hon. Member for Blackpool South wants to make things more difficult for providers, but we want to make things simpler. This is one of the ways in which we envisage reducing the bureaucracy and burdens that prevent high-quality new providers from entering the sector.

[Gordon Marsden]

May I intervene on the Minister?

[The Chair]

That is up to the Minister.

[Joseph Johnson]

I am going to make some progress.

In its evidence to the Committee, Independent Higher Education supported this view:

“The transfer of this authority to the OfS, a modern regulator, away from the outwardly archaic and opaque mechanism of approval by the Privy Council, will be more appropriate for a dynamic and diverse sector which includes industry-led provision and overseas providers bringing their extensive experience to the UK”.

However, I recognise that the amendments are probably born of a desire to ensure proper independent decision making, with a view to protecting the quality and prestige of these awards, as well as students in the system. Let me therefore be clear that I fully agree with that intention and have designed a system that will do just that.

Let me explain how the future processes will work. With regards to degree-awarding powers, we have every intention of keeping the processes, which have worked well to date, broadly as they are. We expect the process to remain broadly peer review-based and we envisage that the OFS will seek information from the quality body, with involvement from an appropriately independent committee. On university title, again, we are not planning to change the independent decision making and scrutiny. For both areas, we want decisions to continue to be made by an arm’s length body, based on departmental guidance that has been subject to consultation as and when appropriate. That also applies to variation and revocation of degree-awarding powers and revocation of university title. Additionally, those processes will be supported by a right of appeal, as set out in clauses 45 and 55.

Although I thank Opposition Members for giving me the opportunity to talk about these important matters, we have designed the new system with the right safeguards in place. Reinserting a role for the Privy Council would therefore add nothing except unnecessary process, so I ask the hon. Member for Blackpool South to withdraw his amendment.

[Gordon Marsden]

Well, I am reassured that the Minister thinks he has managed to produce a brand-new system that is going to work absolutely perfectly; that is what people always say when they produce brand-new systems. For the avoidance of doubt, we were not suggesting retaining the Privy Council in its existing position, and nor were the people who supported our proposal. It was a backstop, and I hope the Minister understands that—I have tried to make it as clear as possible.

The Minister has given various assurances today; we will see how they pan out in practice. I maintain that it is a risk to create a new brand on the international HE stage without a backstop, when we are going to be in such difficult circumstances over the next two or three years. However, we are not going to agree, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

--- Later in debate ---

[Gordon Marsden]

Indeed. Give that man a gold star.

Before we get into ridiculous territory, the serious point is that if we are to have confidence in the system that the Minister is proposing, it is important to have a body that can advise. That is the intention behind the new clause. The idea was put to us by MillionPlus but the view is shared by a large number of other organisations, including UUK, which the Minister quoted earlier.

MillionPlus believes that

“strong safeguards need to be put in place to ensure that any body that is awarded degree awarding powers or university title has met the criteria to do so, and will not put student interest at risk, or potentially damage the hard earned reputation of the entire higher education sector in the UK.”

Those are all things that we have been praying in aid this afternoon.

The new clause would go a long way to meeting that requirement. Subsection (2)(a) would provide for a committee to advise the OFS in general as to how it is fulfilling its functions. Subsections (2)(b) and (c) would allow for that committee to advise the OFS on the particular uses of its power to grant degree-awarding powers or university title.

The new clause allows the OFS to revoke degree-awarding powers or university title without consulting the committee, which means that any argument against it on the grounds that it might create problematic delays if urgent action were required would be mitigated. In fulfilling its role, we would expect the committee to seek advice from the designated quality body.

The current arrangements—and the Minister has made great play of praying in aid the current arrangements—for conferring degree-awarding powers and university title on an institution require, in England, the Higher Education Funding Council for England to seek the advice of the Quality Assurance Agency for Higher Education. That is not required in the Further and Higher Education Act 1992, but it clearly sets a precedent where appropriate expertise is sought prior to any decision making. It is therefore vital that the OFS continue to seek advice from the designated quality body prior to any conferring of degree-awarding powers and/or university title—[Interruption.] I hope the Minister is listening. There is, therefore, a strong argument for introducing the new clause further to reflect that obligation.

[Joseph Johnson]

We have debated clause 40 extensively, so I will turn straight to new clause 6. I thank the hon. Gentleman for raising the important issue of safeguarding quality and ensuring that only high-quality providers can access degree-awarding powers and university title. We are taking that very seriously. I hope that that came through adequately in the technical note that we published a few weeks ago before the party conference recess.

I am interested that hon. Members have proposed the establishment of a committee with similar responsibilities to the current Advisory Committee on Degree Awarding Powers. I assure this Committee that we have every intention of keeping the processes around the scrutiny of applications for degree-awarding powers, which have worked well—including those around scrutiny of applications for university title—broadly as they are. That includes retaining an element of independent peer review, most likely in the form of a committee of independent members. As now, we would expect that committee to play a vital role in the scrutiny of applications, bringing to bear its unique and expert perspective on the process, and enabling the OFS to draw on its expertise in coming to a decision.

--- Later in debate ---

[Gordon Marsden]

The amendment reflects the concerns we have discussed about the revoking of powers. It also reflects the concerns of a number of bodies, not least Cambridge University, which has expressed real concern about that being done simply by statutory instrument. Cambridge University said in its evidence:

“The Bill must include measures to guarantee appropriate parliamentary scrutiny over the OfS’s discharge of its enforcement powers and imposition of penalties, including the revocation of Degree Awarding Powers and University Title. This is to ensure that any decision that may impinge on institutional autonomy is properly considered and good reason for doing so needs to be established.”

In this case, that means provisions must be scrutinised and approved by both Houses of Parliament. We accept that these occasions are likely to be rare, which is precisely why we think the matter should be reserved for both Houses of Parliament.

[Joseph Johnson]

The amendments relate to the power to revoke or vary degree-awarding powers, which is one part of the suite of tools available to the OFS under the new regulatory framework. We have long recognised that in order for the sector to be regulated effectively, refined and express powers to vary or remove degree-awarding powers in serious cases are vital. That makes it clear to providers what is at stake if quality drops to unacceptable levels. It does not mean we are interfering with the autonomy of providers.

We intend that the OFS and the new quality body will work with providers to address any emerging problems early on. The OFS would use the power to revoke degree-awarding powers only when other interventions had failed to produce the necessary results. However, I recognise the significance of these refined, express powers and the need to put the right safeguards in place. That is what clauses 44 and 45 are designed to do.

On amendment 222, I hope I can provide some reassurance. I fully agree that when making a decision on whether to vary or revoke a provider’s degree-awarding powers, the OFS should be able to draw on all relevant information. That may include information provided by other organisations such as students unions, other providers or the local community. Of course, we also plan for the OFS to make decisions having received information from the designated quality body and UKRI. The provisions in clause 58 already enable the OFS to co-operate and share information with other bodies in order to perform its functions. We expect the detail of how that should work to be set out in departmental guidance, and we plan to consult on the detail of the guidance prior to publication.

I turn to amendment 221 and the actual process of variation and revocation. Clauses 44 and 45 set out in detail what that process will look like, and we intend them to be supported by more detailed guidance. A significant safeguard in the right to appeal to the first-tier tribunal is contained in clause 45. Having a structured appeals process is vital to ensuring that providers have a clear voice and that the system can hold the trust of students and taxpayers and maintain the world-class reputation of the sector. That is a very strong protection in the Bill and means that the powers of the OFS can be checked by the judiciary.

A decision by the OFS cannot take effect before the routes of appeal are exhausted, and any order by the OFS to vary or revoke degree-awarding powers would be a statutory instrument. That would mean it could be published, thus ensuring appropriate transparency. Together, those are strong safeguards, and the amendments are therefore unnecessary. On that basis, I ask the hon. Gentleman to withdraw his amendment.

[Gordon Marsden]

I thank the Minister for his response and particularly for his assurance in respect of amendment 222 that there will be consultation with other organisations. I must ask the vice-chancellor of Cambridge University and various others whether they will be content with this simply being a matter for statutory instrument. We will see how the process works out, but I am content with the Minister’s assurances. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 43 ordered to stand part of the Bill.

Clauses 44 and 45 ordered to stand part of the Bill.

Clause 46

Validation by authorised providers

[Joseph Johnson]

I beg to move amendment 75, in clause 46, page 26, line 5, leave out

“authorised taught awards and foundation degrees”

and insert

“taught awards and foundation degrees that the provider is authorised to grant”.

This amendment is technical and is needed because clause 46(5) defines “authorised” by reference to a registered higher education provider rather than a taught award or foundation degree.

The clause enables the OFS to commission registered degree-awarding bodies to extend their validation services to other registered providers, if, for example, there is a mismatch between supply and demand. The OFS can commission providers to extend their validation services only if that is allowed by the provider’s degree-awarding powers. The OFS cannot bestow new powers on degree-awarding bodies via the commissioning ability. However, the current language in this clause, which refers to

“authorised taught awards and foundation degrees”,

is a little unclear. The amendment seeks to clarify what we mean by an “authorised” award by using clearer, simpler language. It puts it beyond doubt that the OFS can commission a provider to validate only the taught awards and foundation degrees that the provider is authorised to grant. This is a technical amendment and does not change the scope, purpose or effect of the clause.

Amendment 75 agreed to.

--- Later in debate ---

[Joseph Johnson]

The Government’s higher education reforms will allow providers to choose which model of HE provision best suits their needs, removing any unnecessary barriers to market entry for high-quality providers and promoting institutional competition and student choice. To achieve that, it is essential that along with a direct entry route to market, HE providers that can meet relevant quality thresholds and have a degree they want to introduce into the higher education market should be able to access first-class validation services, if they feel that would be the right choice for them.

Clause 47 enables the Secretary of State to authorise the OFS to act as a validator of last resort if he or she deems it necessary or expedient. It also states that the powers set out in regulations may allow the OFS to authorise registered HE providers to validate taught awards and foundation degrees on its behalf. We intend to give the OFS the ability to validate only if there are serious circumstances that warrant it, for example if serious or intractable validation failures exist. It is vital, though, that we set the right parameters for use, which is why it will be for the Secretary of State to authorise the OFS to act as a validator of last resort should he or she deem it necessary or expedient, having taken the OFS’s advice.

The Secretary of State would then need to lay secondary regulations before Parliament, which I would expect to set out the terms and conditions of any OFS validation activity. They would provide Parliament with the opportunity to see those conditions, and Parliament would retain the power of veto. In addition, the OFS should authorise only HE providers that have the necessary degree-awarding powers to validate taught and foundation degrees on its behalf. The clause does not make that explicit, so my amendments ensure that the Secretary of State’s powers are explicitly limited in that way. That important limitation safeguards academic standards and quality, to protect student interests, and I therefore ask hon. Members to allow the amendments to be made.

Amendment 76 agreed to.

Amendments made: 77, in clause 47, page 27, line 2, at end insert—

“(4A) But regulations under subsection (1) may not include power for the OfS to authorise a provider to enter on its behalf into validation arrangements which are—

(a) arrangements in respect of taught awards or foundation degrees that the provider is not authorised to grant, or

(b) arrangements that the provider is not authorised to enter into.”

See the explanatory statement for amendment 76.

Amendment 78, in clause 47, page 27, line 11, at end insert—

“(6A) In this section, ‘authorised’, in relation to a registered higher education provider, means authorised to grant taught awards or foundation degrees, and to enter into validation arrangements, by—

(a) an authorisation given—

(i) under section40(1),

(ii) by or under any other provision of an Act of Parliament, or

(iii) by Royal Charter, or

(b) an authorisation varied under section43(1).”—(Joseph Johnson.)

This amendment defines “authorised” for the purposes of clause 47, using the same definition as is used in clause 46.

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

[Gordon Marsden]

Because of the lateness of the hour I will try to be as brief as possible, even though the Opposition believe that it is fundamentally important that the clause be deleted. I have listened to the Minister and I appreciate the modifications made by his amendments—that is why we did not oppose them—but the fact remains that there is something very strange indeed about setting out powers that could ultimately make the OFS both the regulator of the market and a participant in it. I am rather surprised to hear the Minister, with his emphasis on competitive zeal, proposing a closed shop, which is what it would be. It is not just we who think that; UUK, most of the existing groups and other contributors have said the same.

If the Government want people to trust the OFS to represent student interests properly and protect the quality of HE, it must have a vested interest in those things and in nothing else. For the Government to be producing legislation that could eventually allow the OFS to compete with other providers to validate degrees—it might one day have to be judge and jury—risks tainting the reputation of the OFS from the start, and at the very least placing it in an invidious position. That is why UUK has said that it has grave concerns about the powers in the clause. It says:

“We cannot foresee any circumstances which would justify the creation of such a clear conflict of interest in the position of the OfS, and therefore do not think the bill should grant the OfS this power regardless of any protections through parliamentary scrutiny or governmental oversight. We recommend that clause 47 is removed from the bill.”

We agree with UUK, for the reasons I have just explained, and we will oppose clause 47 standing part of the Bill.

[Joseph Johnson]

It is essential that along with a direct entry route into the market, new providers can choose to access first-class validation services if they feel that would be right choice for them. We need to consider how these arrangements would work in the context of the new single regulatory framework and market entry reforms, rather than the existing system. For new providers without their own degree-awarding powers that do not want to choose the direct route to market entry, their ability to find a validating partner and to negotiate a good value-for-money validation agreement with them is vital in order to become degree-level providers and to generate good-quality, innovative provision.

We only need to look at recent events at Teesside University. Following a change of leadership, Teesside University said in March this year that it would be ending its validation of higher education programmes in the wider college network outside the Tees valley in 2017—a decision that will affect 10 FE colleges. Teesside admitted that the decision was made

“purely on the university’s strategic direction of travel and not as a reflection on the quality of the provision”

it had been validating. Martin Doel, chief executive of the Association of Colleges, said that the announcement had come as a “very unwelcome surprise” to colleges, and that it would create

“significant problems and additional work and cost”

for them as they try to seek new validating partners.

Ensuring that new high-quality providers are not locked out of the market via their preferred entry route is essential to ensuring that students are able to access the right type of higher education for them. I therefore want to ensure that the OFS has all the necessary tools at its disposal and is properly empowered to recognise and reward good practice or to quickly intervene and correct any serious systemic failures that might occur. If the OFS finds that there are insufficient providers with the capacity or appetite to enter into direct validation agreements with other providers or into commissioning arrangements with the OFS, or if those fail to correct the problem, the OFS will need to find another way to promote competition and choice.

Without these further powers, the OFS could be forced to stand by and watch while good-quality providers that do not want to seek their own degree-awarding powers remain locked out of degree-level provision indefinitely. That would be especially problematic if severe or stubborn intractable validation failures emerge. Jonathan Simons, head of education at the Policy Exchange think-tank, said that the Teesside case was a good example of why institutions should not be forced to rely on incumbents to validate their degrees. As he put it,

“Being dependent on a university for validation puts colleges in a subservient position and at the mercy of universities making decisions about withdrawing partnerships, not least when universities and colleges are competing for the same students…This is exactly why either colleges should be able to have awarding powers themselves, or there should be some sort of degree awarding council.”

Clause 47 enables the Secretary of State to authorise the OFS to act as a validator of last resort should he or she deem that necessary or expedient, having taken OFS advice. We expect the OFS board to have experience of providing HE, so its members will be well placed to understand if there is a systematic problem with validation services across the sector. I also expect OFS advice to be informed by consultation with the sector, so that it has a better understanding of the root causes of any problems and how providers and stakeholders think those can be best fixed. I envisage that the consultation would culminate in the OFS presenting the Secretary of State with a compelling, evidence-based argument that clearly demonstrates the scale, nature and severity of the validation problem and why giving it powers to validate through secondary regulation is the right solution to address that.

Such a power would also allow the OFS to delegate this role to other registered providers that can be authorised to validate awards on its behalf, as we have discussed. For example, I envisage that the OFS could choose to contract in people with the right skills and practical experience of higher education so that the validation service has access to the cohesive academic community it needs to perform this function effectively. In doing so, I expect the OFS to assure itself of the quality of any potential contracting partners, including by obtaining information from the designated quality body.

I am aware that some providers and stakeholders have raised concerns about the potential for the clause to create a conflict of interest—in other words, if the OFS is operating in the market it is regulating, as the hon. Member for Blackpool South put it. I would like to provide reassurance that that option is intended to be used only in extreme circumstances, after other measures have been tried and failed. As I have already said, regulations giving the OFS that power will be put before Parliament. If made, that secondary regulation would essentially allow the OFS to unblock any unnecessary and intractable barriers to degree-level market entry, essentially fixing a market failure.

Higher Education and Research Bill (Eighth sitting)

Debate between Lord Johnson of Marylebone and Gordon Marsden

Committee Debate: 8th Sitting: House of Commons
Thursday 15th September 2016 Public Bill Committees

[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.

--- Later in debate ---

[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

--- Later in debate ---

[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.

[Gordon Marsden]

Will the Minister give way?

[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.

--- Later in debate ---

[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

--- Later in debate ---

[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.

--- Later in debate ---

[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?

--- Later in debate ---

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

Higher Education and Research Bill (Seventh sitting)

Debate between Lord Johnson of Marylebone and Gordon Marsden

Committee Debate: 7th Sitting: House of Commons
Thursday 15th September 2016 Public Bill Committees

[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

I am happy to do so, Mr Hanson. I appreciate there is a lot of material that Committee members have been sent in preparation, so I understand why the document might have slipped the hon. Gentleman’s attention.

[Gordon Marsden]

rose—

[The Chair]

Order. Please allow the Minister to complete his comments.

--- Later in debate ---

[Joseph Johnson]

These three small amendments clarify that only higher education courses can be subject to a fee limit registration condition under clause 10. The definition of a higher education course is in clause 75(1), which sets out various definitions for the purposes of part 1 of the Bill. Clause 10 already provides that, for the purposes of fee limits, a “course” and, as a result of these amendments, a “higher education course”, does not include any postgraduate course other than one of initial teacher training. The changes simply clarify that the scope of the clause is confined to higher education courses.

Amendment 29 agreed to.

Amendments made: 30, in clause 10, page 6, line 37, after “of” insert “higher education”.

See the explanatory statement for amendment 29.

Amendment 31, in clause 10, page 7, line 2, leave out “course” and insert “higher education course”.—(Joseph Johnson.)

See the explanatory statement for amendment 29.

Clause 10, as amended, ordered to stand part of the Bill.

Schedule 2

The Fee Limit

Question proposed, That the schedule be the Second schedule to the Bill.

[Gordon Marsden]

I used the phrase “Hamlet without the prince” in an earlier session. I find it quite astonishing that the Minister is either so supremely confident in the clarity of schedule 2, or so contemptuous of the need for it to be debated, that he did not speak to it. This may not be Hamlet without the prince, but there is an issue that dare not speak its name, certainly in the context of the Bill: the relationship of fees to quality. It is not exactly the issue that dare not speak its name, because although clause 25, which we will debate later, does not in any shape or form contain the dread phrase “teaching excellence framework,” it contains a form of words that might, if one were lucky, lead one to the conclusion that it has some connection with that, in the same way as it might have enabled my hon. Friend the Member for City of Durham to find the thing that she was trying to find on the Department for Education website.

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[Joseph Johnson]

The hon. Gentleman is kind to invite an intervention. We are extremely committed to the teaching excellence framework, which was a manifesto commitment and the centrepiece of our Green Paper and White Paper, and which we discussed extensively in the evidence sessions. The framework is described clearly in clause 25 as a system for providing ratings to English higher education providers. I am looking forward to discussing it extensively whenever he wishes.

[Gordon Marsden]

Well, I hope that the Minister might wish to discuss the framework in terms of schedule 2, because that certainly has implications for it. Schedule 2 introduces the whole area of the fee limit and fee regime and deals with high level quality ratings and circumstances in which the provider has no access and participation plan. There is a mass of stuff that we could talk about.

Tucked away right at the end of this rather dry schedule is a section on procedure, which of course deals with the procedures for increasing tuition fees. If hon. Members wish to turn their attention to the dry page in question, it is page 70, line 30 onwards. The schedule deals there with fee increases and the basis on which those will take place in relation to paragraph 2, which deals with ways in which fee limits can be set and all the rest of it. That is all the detail of the thing.

It is curious that the schedule goes into all that detail, because the Minister announced major increases in tuition fees for 2017-18 in a written statement that was published on the last day before the summer recess along with 29 other written statements, which in the view of the press—these are not my words—were “smuggled out”. That was a matter of some debate on the last day of term, and suggests that he is very tentative about discussing this issue.

[Joseph Johnson]

I want to pick up on the hon. Gentleman’s use of the term “major increases”. Does he acknowledge that we are in fact simply allowing the real-terms value to be maintained? There is no real-terms increase. Does he understand that?

[Gordon Marsden]

When I referred to a major increase, I was not commenting on the specifics of the percentage; I was talking about the fact that it will affect all students. Neither the Minister nor, as far as I am aware, anyone from his Department has seen fit to comment on the issue, but over the summer a number of universities have taken the confirmation in the written statement as a green light to put up fees not simply for those who enrol in 2017-18, but for those who already have a loan. There was some discussion in the media—again, I do not think the Minister took part in it—about whether, for example, a reference to the potential for fees to go up on the University of Exeter’s website constituted a good enough broadcasting of the issue. This will have a retrospective impact on students at a number of universities, and it has come about on the back of the way in which the Minister chose to announce the process.

If I remember correctly, when the Minister and his colleagues were pressed on the process, they said that they were doing it in accordance with the requirements of previous legislation. It is curious—I put it no more strongly than that—that when it suits him to smuggle a measure out in a statement on the last day of term, he prays in aid legislation that is more than a decade old, but when it comes to this thing, it is referenced in the context of the main Bill but without our being told anything more about the teaching excellence framework that will enable fees to go up.

--- Later in debate ---

[Gordon Marsden]

I am grateful to you, Mr Hanson. Although schedule 2 and clause 25 are closely enmeshed, I will do my best to observe your strictures.

Both the Conservative Members who intervened—maybe we can get everybody up before the end of the sitting—are missing the point. I am talking about the procedure—about the dichotomy between the procedure that the Minister is proposing today, but that he has not wanted to talk about, and the procedure that he and his colleagues employed before the summer recess to get the inflation-based element through.

Without straying into clause 25, I remind the Minister and his colleagues of what they said in the past and the basis on which the TEF was presented to this House. I am not saying the Minister did not have lots of discussions. He listened to the university sector, which was absolutely manic about the idea that it would have to produce lots of stuff for the first year of the TEF’s operation, and he said, “We’ll do it on the basis that you—the universities and higher education institutions—are essentially given a clean bill of health, which will enable you to implement an inflation-rated scheme”. That is what we are talking about: the dichotomy between those two things.

[Joseph Johnson]

The hon. Gentleman seems a bit baffled by procedure. I remind him that we are using the same provision that the Labour Government introduced in 2004 so that universities do not suffer an annual erosion in real terms of their income.

[Gordon Marsden]

The Minister is desperately trying to set up a whole series of straw people in order to get away from the essential elements of the arguments in the case. He is praying in aid what was set in legislation in 2004, when tuition fees were not £12,000; they are now set to increase from £9,000 to £12,000, possibly by the end of this Parliament. I am merely drawing attention to the dichotomy, which the Minister is clearly uncomfortable with, between the careful way in which he now wishes to place this proposal into legislation and the fact that he has had to rely on that mechanism.

My other point—I do not want to stray outside the schedule, but it is relevant—is that only two days before that statement, we had the Second Reading debate on the Bill. Even the most pedantic and pernickety of Ministers might have thought it was useful, in the context of the Bill, to talk about the teaching excellence framework, the impact it would have on fees and, in that process, to say, “Of course, I refer the House to the increase that I suggested might happen,” but at which point he had not moved.

[Joseph Johnson]

I remind the hon. Gentleman, as the contents of the White Paper seem to have eluded him on other occasions, in particular in respect to the widening participation statement we discussed on Tuesday, that the White Paper clearly set out that our policy for maintaining fees would be that they could increase with inflation. This was not a secret. We had announced it prominently in our White Paper.

[Gordon Marsden]

The question of what is or is not a secret is a matter for a lot of discussion, no doubt. What is not a matter for discussion is the fact the Government did not put the mechanism for this increase in the Bill until the last day before the summer recess started. In my view, they did that quite deliberately in the hope it would be smothered in public interest by the other 28 statements that went round. It is a common practice of Governments to do that, but it is reprehensible. It is particularly reprehensible when we now know that the consequences of it are that a number of universities have implemented it for existing students, and not simply for students enrolling from 2017-18.

As this subject is clearly irritating and frustrating the Minister quite a lot, I will move on to talk about the issues that affect the relationship between teaching quality and fees. We are going to talk about the detail of the TEF in regards to clause 25, so again I will comment in more general terms. The National Union of Students has made it clear that it firmly opposes statutory links between teaching quality and the level of fees being charged for that teaching. My hon. Friends and I made that clear on Second Reading. I remind colleagues of what I said in the summer Adjournment debate, when I came to inform the House that this had been done in what I regarded as an irregular manner. I said:

“I think that the way the Government have dealt with this matter is thoroughly reprehensible…We engaged in a vigorous discussion”

on the Bill, as to

“whether it was right to link fees to the Teaching Excellence Framework, but at no time during that process did Ministers take the opportunity to say anything about the issue.”—[Official Report, 21 July 2016; Vol. 613, c. 1056.]

I am saying that today because I want it to be put on record that we are talking about the discrepancy in procedures.

It is a question not just of increasing the fees, but of increasing the loans by 2.8% to match that increase in fees. That will have all the knock-on effects on students from disadvantaged backgrounds. Apart from the principled point that the NUS is making, as the Minister knows there is at least a degree of scepticism about the outcome for universities of linking the TEF with tuition fees, and scepticism on the part of one or two or them about linking it. Inevitably, however, students are on the hard end of this and they want to know what the evidence is for the measure.

The NUS rightly says:

“Since tuition fees were trebled in 2012, there is no evidence”

as a direct result of that process

“to suggest that there was a consequential improvement in teaching quality.”

It goes on to say that, broadly,

“There has been no change in student satisfaction with the teaching on their course, while institutions have instead been shown to spend”

in many cases

“additional income from the fees rise on increased marketing materials rather than on efforts to improve course quality.”

We will want to return the question of what this money will be used for when we talk about the obligations laid on new providers. Of course, if they sign up for the full-fat version of the fees, they will have to abide by the teaching excellence framework as well.

--- Later in debate ---

[Gordon Marsden]

Thank you, Mr Hanson. I merely remark that there are a whole range of other issues around what the teaching excellence framework needs to do for students and institutions, and no doubt we will have the ability to discuss those further when the Minister speaks eloquently on clause 25.

[Joseph Johnson]

The hon. Gentleman seems to have forgotten that he was once fully committed to the principle of funding on the basis of quality. May I remind him of what he said in 2001, when he was younger and wiser?

[Joseph Johnson]

The hon. Gentleman said very clearly:

“We must reassess the balance between teaching and research…The HEFC should seriously consider incorporating a teaching quality assessment exercise in the RAE”.—[Official Report, 8 November 2001; Vol. 374, c. 170WH.]

That implies we fund teaching on the basis of quality just as we fund research on the basis of quality, which is precisely what we are doing.

[Gordon Marsden]

That is clutching at straws, but I stand by what I said in 2001. If the Minister will permit a mild compliment, I compliment the Government on grasping the nettle of increasing the way in which teaching, as a principle, is judged in relation to research. Many Labour Members have been banging on about that for years.

The Minister wants to go into history. When I was on the Education Committee in the 2000s, we questioned the then Labour Government vigorously about the research assessment exercise changes, and many of us on that Committee made the point that teaching excellence needs to be recognised and funded. There is no argument about us being in support of placing greater emphasis on teaching excellence. The argument is about whether we can save the Government from the consequences of their own folly. If the Government are not careful, they will taint the whole exercise through the cynical way in which they are using this simply as a coupon—I repeat the reference. That is precisely why a number of higher education institutions, including the University of Cambridge, have said that, and it is precisely why a number of Russell Group vice-chancellors—we will come on to this in clause 25—have shown themselves very lukewarm and sceptical about signing up to the TEF in the first place.

--- Later in debate ---

[Gordon Marsden]

The people I am calling misguided certainly, and possibly cynical, are the Minister and his—[Interruption.]

[Joseph Johnson]

I am extremely concerned that the vice-chancellor of Cambridge has been misrepresented in the hon. Gentleman’s comments. We heard in the evidence session, and he said very clearly in his evidence, that the way the Government was recognising teaching through the TEF was, in his words, “really good”.

[Gordon Marsden]

The Minister is being very selective, of course. It depends on how we interpret the phrase, “the way”. All I can tell the Minister—I will sift through the mountain of papers here—is that we have ample evidence in the written material given to the Committee and submitted before Second Reading from the University of Cambridge on that matter. [Interruption.] I will give way in a moment, but if I may just quote from what I said in the Second Reading debate, to refresh the Minister’s memory:

“Long-established institutions such as Cambridge University have said quite straightforwardly that they do not support the link between the TEF and fees. Cambridge University states: ‘it is bound to affect’”—[Official Report, 19 July 2016; Vol. 613, c. 718.]

[Interruption.] I am sorry the Minister does not like it. It was the university’s written evidence that was given to us all when we debated the Bill on 19 July—[Interruption.]

[Gordon Marsden]

Right. I will continue. So that the Minister is in no doubt, Cambridge University stated in its written evidence to the Committee, in specific response to questioning on the link between the TEF and fees, that

“it is bound to affect student decision-making adversely, and in particular it may deter students from low income families from applying to the best universities”.

All the passion and enthusiasm that the Minister quite rightly generates for improving access for students from low-income families is in danger of being torpedoed, according to the vice-chancellor of the University of Cambridge, because of the pernicious link that the Government have chosen to introduce between the TEF and the fee increase. If there is an argument for fee increases, let that argument be made separately.

[Joseph Johnson]

Will the hon. Gentleman give way?

[Gordon Marsden]

I will give way in a moment. Do not try and justify fee increases by referring to and using the teaching excellence framework in a way that, if we are not careful, will taint the whole process thereafter.

[Joseph Johnson]

I rise to bring to the hon. Gentleman’s attention that there are many in the sector who can see that this will do exactly what he wants: it will enable universities to reinvest in teaching methods. I want to draw to his attention the words of Professor Steve Smith, the highly respected vice-chancellor of Exeter University, who said:

“At a time when our institutions face significant cost pressures the TEF presents us with an opportunity to invest in our students’ futures and the long-term economic success of our country, and to be recognised for outstanding teaching at the same time.”

--- Later in debate ---

[Gordon Marsden]

My hon. Friend is absolutely right. I pay tribute to the work of the Select Committee in that respect. Of course university vice-chancellors are pragmatic people; they have to be. It is rather like when the late lamented Chancellor of the Exchequer said there could be any form of new structure for combined authorities as long as there were mayors.

[Joseph Johnson]

I am extremely concerned at the misrepresentation. These examples I am giving of individual vice-chancellors supporting the TEF and the fee link are not unrepresentative of the sector. That is why I am going to read to the hon. Gentleman the submission from Universities UK.

--- Later in debate ---

[Joseph Johnson]

The OECD has made its comments and it is of the view that we have the most sustainable funding system of any country in the world. We are developing it further with our teaching excellence framework.

Despite what the Labour party said at the time, students have not been deterred from going into higher education and young people from disadvantaged backgrounds have not been put off from going to university. We now have entry rates, as I have said, at record levels of 18.5% in 2015, up from 13.6% in 2009-10. In fact, individuals from disadvantaged backgrounds are now 36% more likely to go to university than they were when the Conservatives came into office in 2010. Our student funding system is fair and sustainable. It removes financial barriers to anyone hoping to study, and is backed by the taxpayer, with outstanding debt written off after 30 years. That is a deliberate, conscious decision by Government to invest in the skills base of the country.

[Gordon Marsden]

The Minister repeats his and his colleagues’ familiar statement about fee movement and extra participation, and all the rest of it; but I will also repeat what I have said: there comes a sticking point, and just because some of the more pessimistic assumptions about fee rises that were made in the late 2000s have not come to pass, that does not mean to say that there have not been casualties along the way.

[Joseph Johnson]

Our funding model, which we are continuing to develop and make more contingent on the delivery of quality, is a great strength of our system, and it is acknowledged as such by education experts such as the OECD. As a result of it, we have been able to lift the cap on student numbers. Labour was never able to do that with its model of funding. As a result, we have lifted the cap on aspiration and today we are enabling more people than ever before to benefit from higher education.

I do not believe that Labour’s proposals for funding higher education are remotely realistic, even if they were intelligible, and I am not the only person to think that. The hon. Member for Blackpool South mentioned Times Higher Education in his remarks. He might have read, in this week’s edition, an interesting interview with Lord Mandelson, former Secretary of State for Business, Enterprise and Regulatory Reform. On the question of how Labour will fund the removal of tuition fees he said:

“By spending less on health or housing? Or by raising general taxation, the burden of which would inevitably fall on middle-income families?”

He said that Labour was not being honest about its promises on tuition fees. Pledging to remove them was not

“an honest promise to make”.

Does the hon. Gentleman agree with Lord Mandelson?

[Gordon Marsden]

At the risk of sounding like Old Father Time, I will say that I have known Peter Mandelson far longer than the Minister, and I know one of his traits over the years has been to challenge and prick, and all the rest. What the Minister has said is not good enough. We are here to examine the Government’s record with students. The truth is that, since fees trebled, the figures for part-time students have gone down. There is no guarantee that the figures for other students will not go down as well.

--- Later in debate ---

[Joseph Johnson]

Happily. The hon. Gentleman is deluding himself if he thinks that the chair of the teaching excellent framework does not understand the fee link that he himself is implementing. He does his fellow Sheffielder something of a disservice in casting that sort of aspersion on him.

What we are doing in schedule 2 for the first time is ensuring that only those providers who can demonstrate high-quality provision can maintain their fees in line with inflation. The ability to raise fees with inflation was provided for by the last Labour Government in 2004, but without any reference at all to quality or the student experience. Through schedule 2, we are doing better than that. The TEF fee link, in particular, as Government Members have already noted, was endorsed earlier this year by the Select Committee on Business, Innovation and Skills, which said that

“we support the principle of a more sophisticated link…between teaching quality and fee level”.

[Gordon Marsden]

I do not want this to turn into an argument about semantics, but the reality is, as was mentioned earlier, in this schedule, we are being asked to buy a pig in a poke. We do not know what the shape of it is. When the Select Committee said that, it was about the principle and the concept, not about the detail, which the Minister is either not in a position or not willing to tell us about.

[Joseph Johnson]

We can discuss the TEF in much greater detail at a later stage—I am looking forward to it—but we have consulted on it on several occasions now. The TEF is in shape. It is up and running, and it could not remotely be described in the way that the hon. Gentleman did.

[Joseph Johnson]

No, I want to make progress. The sector is familiar with the principle of linking funding to quality, which was introduced by the Conservative Government in the 1980s, when they introduced the research assessment exercise. Over successive iterations, the research excellence framework has undoubtedly driven up the quality of our research endeavour as a country, keeping us at the forefront of global science.

[Gordon Marsden]

On that point, will the Minister give way?

[Joseph Johnson]

No, I am going to make some progress. We are now extending this principle to teaching quality. Schedule 2 provides the mechanism for the setting of fee limits, allowing providers to charge fees up to an inflation-linked cap according to ratings of teaching quality established through the teaching excellence framework, which is mentioned under clause 25, as the hon. Gentleman said earlier.

[Gordon Marsden]

I am grateful to the Minister for giving way, as I appreciate that he must get through his points. I will be brief. The teaching excellence framework, notwithstanding the fact that it is a one-size-fits-all judgment for the first year, is at the moment scheduled to come to fruition over only three or four years. The Minister knows very well that the conversion of the research assessment exercise into the research excellence framework took six years. Why, therefore, is he so confident that the Government will get it right in a short period of time?

[Joseph Johnson]

The hon. Gentleman cannot have it both ways. He cannot criticise us for taking time to get it right and then wish it were in place sooner. We are developing the TEF in a phased, careful way. We are listening to the sector. That is why it is being piloted and trialled in its first two years.

--- Later in debate ---

[Joseph Johnson]

Such incentives will play a powerful role in rebalancing universities so that they focus more on teaching than ever before. We do not have marginal funding allocated towards teaching in our funding system for universities at the moment and this will be a powerful driver of change in that respect.

It is right that only providers that demonstrate high-quality teaching will be able to access tuition fees up to an inflation-linked maximum fee cap. We expect the TEF to deliver additional income for the sector of £16 billion by 2025 and it will also allow providers to reinvest in teaching methods that work. As the Sutton Trust said,

“we need to shake the university sector out of its complacency and open it up to a transparency that has been alien to them for far too long. It is good that they are judged on impact in the research excellence framework, and that the teaching excellence framework will force them to think more about how they impart knowledge to those paying them £9000 a year in fees.”

The fee link has been welcomed not just by individual vice-chancellors but by the sector. The hon. Member for Sheffield Central challenged me to reference a body representative of the sector and I am very happy to do so. Universities UK said:

“Allowing universities to increase fees in line with inflation, on the condition of being able to demonstrate high-quality teaching through an effective TEF, is a balanced and sustainable response to these two objectives.”

Let me reassure the Committee that, as I set out in the White Paper, our proposed changes to the fee limits accessible to those participating in the TEF will at most be in line with inflation—fee caps will be kept flat in real terms. Let me also reassure the Committee that, should the upper or lower limits be increased by more than inflation, which is certainly not our intention, it will require regulations subject to the affirmative procedure, which require the approval of Parliament. That is in line with the current legislative approach to raising fee caps and we have no desire to depart from those important safeguards, so Parliament will therefore continue to retain strong controls over fees.

[Gordon Marsden]

Will the hon. Gentleman give way?

[Joseph Johnson]

No, I will not.

[Gordon Marsden]

On that very specific point—

[The Chair]

Order. It is for the Minister to determine whether he wishes to give way or not.

[Joseph Johnson]

To summarise, the Government are committed to a progressive approach to higher education funding and to ensuring the financial sustainability of the sector. Schedule 2 establishes a direct link between fees and the quality of teaching—a principle supported by the Select Committee on Business, Innovation and Skills and the wider sector—along with a clear framework of control for Parliament. The provisions ensure that we can meet our manifesto commitment to deliver TEF under the Bill by ensuring that well-performing providers are rewarded so that they can continue to invest in excellent teaching.

[Gordon Marsden]

I would like to speak briefly to propose that we vote on stand part. I am disappointed with the Minister’s response. He has on a number of occasions evaded our direct questions about the link between TEF and the fees. He has tried to subsume it into a broader argument about TEF. I repeat, so that no one is in any doubt, we support anything that will improve teaching quality and incentivise it. To be asked to buy a pig in a poke, which is how I have already described the measure, and for the Minister then to tell us us that any further iterations would simply go down the corridor—that is precisely what happened with the grants and maintenance loans, and we had to drag the Government to the Floor of the House to have a debate—is indicative of how defensive the Government feel about the arguments. That is why we wish to vote against the schedule.

Question put, That the schedule be the Second schedule to the Bill.

--- Later in debate ---

[Joseph Johnson]

I am happy that we are back on more consensual aspects of the Bill, and we share all the hon. Members’ interests and concerns in that respect. I am extremely keen to use this opportunity to set out our intentions for student protection plans. I hope that the Committee members found it helpful to read the explanatory note that we put out yesterday, although I appreciate that they will not have had much time to look at it. It is, however, available for their further perusal.

Student protection plans are not a new concept, and some providers already have them. The current approach across the HE system, however, is entirely voluntary, and coverage is far from consistent across the sector. What the Bill does, importantly, is give the office for students the power to require registered providers to put student protection plans in place. All approved providers and approved fee cap providers in receipt of public funds will be expected, regardless of size, to have a student protection plan approved by the OFS. That is new, and the measure has been welcomed by the NUS in its written evidence to the Committee. I have met the NUS on a number of occasions. If it has continuing concerns, following our publication of this preliminary clarifying material, I would be happy to meet again to discuss how we can go further, if necessary.

The plans as we have set them out will ensure that students know from the outset what kind of support would be offered to them if a course, campus or institution was at risk of closure, or if some other material change at their provider left them unable to continue their studies. Providers will be expected to make contingency plans to guard against the risk that courses cannot be delivered to students as agreed. Those plans will be proportionate and in line with the risk profile of the provider. We expect the OFS to require student protection plans to be implemented before a provider’s financial position becomes unsustainable. They will be triggered by material changes, to be specified by the OFS in guidance. The guidance will also provide further details on what the OFS expects to be covered in a plan and we expect that that will be subject to full consultation by the OFS. As a result, the Bill rightly does not prescribe the type of events or mitigations that should be included.

I can reassure Members that we fully intend for student protection plans to set out information, options and any remedial actions students can expect in any event where a material change occurs that could affect their continued participation in study. That is an important step forwards in the protection of the student interest in higher education. I therefore respectfully ask the hon. Gentleman to consider withdrawing his amendment.

[Gordon Marsden]

I listened very carefully to what the Minister said. He laid out principles, and I am sure that all members of the Committee will want to study the document in some detail. We will no doubt have another opportunity to discuss it during our consideration of the Bill. On the basis of the progress in principle, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(David Evennett.)

Higher Education and Research Bill (Sixth sitting)

Debate between Lord Johnson of Marylebone and Gordon Marsden

Committee Debate: 6th sitting: House of Commons
Tuesday 13th September 2016 Public Bill Committees

[Joseph Johnson]

Monopolies and the absence of competition in almost any sector that the hon. Gentleman cares to examine have led to a decline in the standards of public services, a lack of choice and a lack of quality provision. Competition is generally recognised as one of the great drivers of the consumer interest and we want it to continue to be so.

I turn now to amendment 141. I have always been absolutely clear that fair and equal access to higher education is vital. Everyone with the potential to benefit from education in every form should be able to do so. Studying part time and later in life brings enormous benefits to individuals, the economy and employers. That is why we are introducing maintenance loans for part-time study and have enabled more people to re-study through the extension of the exemption for equivalent or lower qualifications.

We want to promote retraining and prepare people for the labour market of the future, which is why we are reviewing the gaps in support for lifetime learning, including flexible and part-time study. New providers can play an important role here: 59% of students at alternative providers are aged over 25, compared with just 23% of students at publicly funded institutions.

[Gordon Marsden]

rose—

[Joseph Johnson]

I will give way, but we do need to make more progress.

[Gordon Marsden]

Indeed. We might make a bit more progress if the Minister were able to answer the question that I put, or rather the question from my colleague in the House of Lords that I echoed, about the part-time maintenance consultation, which is highly welcome but which, as was said, could not come too soon. Do we have a date for this yet?

[Joseph Johnson]

I will happily come back to the Committee with an intended date of consultation. We are moving full speed ahead with the introduction of the part-time maintenance loans, which will be an important feature of the new system. We are transforming the funding environment for part-time students and the consultation will take us one step towards our objective.

It is essential that the OFS works collaboratively with the Institute for Apprenticeships, which will play a significant part in accomplishing the agenda. Although I support the principles behind amendment 141, the changes sought by the hon. Members are more than adequately achieved by the current text. We would do well to keep the OFS’s duties and responsibilities more open to future-proof the new body against unforeseeable economic challenges. For those reasons, the amendment is not necessary. We should avoid limiting flexibility. By doing so, we ensure that our education system remains responsive to change in the labour market and to the needs of our economy in the future. On that basis, although I understand the intentions of hon. Members, I respectfully ask that the amendment be withdrawn.

--- Later in debate ---

[Gordon Marsden]

These amendments are to seek some strong reassurance about what the role of the Secretary of State may be. I always feel—not absolutely as a principle—that in such Bills it is sometimes better to say “must” than “may” because “may”, with all due respect to our Prime Minister, is open to a number of interpretations, which lead us into judicial review and other such matters. The purpose of amendment 143 is to help to inform the choices made by the Secretary of State and to ensure that any changes must—not may—be set out to show that they benefit the sector.

Amendment 144 is simply to emphasise the fact that the register will be a rolling register that will be updated regularly. I assume I am correct on this; if I am not, the Minister is welcome to intervene. While not expecting Parliament or the relevant Select Committees to receive a running commentary, we do feel it would be helpful to ensure that the register of higher education providers is published regularly. We have suggested a quarterly basis and that the register should be made available to Parliament and the relevant Select Committees—“Committees” is deliberately in the plural, Mr Hanson, because of this morning’s discussions about the cross-over between the two Departments.

[Joseph Johnson]

The higher education sector in England has undergone significant change over the last 30 years. The regulatory architecture we have today is out of date. As we have discussed, it was designed in the early 1990s for an era of limited university competition, student number controls and majority grant funding. As the funding that providers receive has passed from Government to students, so the basis for regulation has widened from the protection of the public purse to the protection of the student. At its heart, the system needs to have informed choice and competition among high-quality institutions. Competition between providers in higher education—indeed competition in any market—incentivises them to raise their game, offering consumers a choice of more innovative and better-quality products and services at lower cost. In order to deliver that competitive market, we need a single, simple regulatory system appropriate for all providers. We need to stop treating institutions differently based on incumbency or corporate form and instead create a level playing field with a single route to entry and a risk-based approach to regulation. The Bill will create just such a single regulatory system, underpinned, for the first time, by a single, comprehensive register of English HE providers.

Amendment 143 is intended to place a clear duty on the Secretary of State to lay regulations—and consult before doing so—on the information that must be included in an institution’s entry on the register. I accept that the nature of the information on the register is vital. It is through establishing and publishing the register that we will, for the first time, be able to give students consistent and comparable assurances about all registered higher education providers. I also accept that there is a need to set out the information that must be included in a provider’s entry to the register in regulations that will be laid before Parliament and subject to scrutiny. Although the current draft of the Bill suggests that the Secretary of State may make regulations, that is standard legislative drafting and is not meant to imply that the Secretary of State will not usually make regulations. I can assure Members that they will be made, and that they will be subject to the usual scrutiny process. However, I believe that consulting on each and every case may be going too far if we are making only minor changes.

Amendment 144 seeks to place a duty on the Secretary of State to make the register available on a quarterly basis to Parliament and Select Committees. Entry on the register is voluntary, but if the provider wishes to access the benefits of student support and official recognition as an HE provider, it must be registered. The OFS register is a single, comprehensive record of those English HE providers. It gives students consistent and comparable assurances about all registered HE providers. It will be updated in real time, as and when changes are made to it, so it will be live. The register and the information within it will be publicly available, and will be hosted on the OFS website. There would be little value in placing a duty on the Secretary of State to make available information that will already automatically be in the public domain. On that basis, although I understand the intentions here and fully agree with the need to promote these important issues, I do not believe that the amendment is necessary; the Bill already makes the relevant provisions. I ask the hon. Gentleman to consider withdrawing the amendment.

[Gordon Marsden]

I am grateful to the Minister for his thoughtful, succinct and indeed positive response to the intentions behind the two amendments. I am content with his explanation on amendment 143. I hear what he says about the information being available all the time, but one of the paradoxes of the digital age is that things that are there all the time for people to look at never get looked at because they are there all the time. I am not going to oppose this and I will withdraw the amendment, but I would ask the Minister and his officials to give proper thought as to how things are promoted online, rather than simply put online. I hope that the Department will take that on board. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 ordered to stand part of the Bill.

Clause 4

Registration Procedure

--- Later in debate ---

[Joseph Johnson]

I start by thanking the hon. Gentleman for his helpful and pragmatic suggestions. Before I turn to his amendments, it might be helpful if I explained how we expect the OFS to operate this risk-based approach to regulation in practice.

The OFS will consult on, and then publish, the initial registration conditions that all providers will be required to meet before they are granted entry to the register. The conditions will relate to important matters such as quality, financial sustainability and standards of management and governance. Providers that cannot demonstrate that they meet these standards will not be registered. Additionally, if the OFS considers that an institution or an element of an institution, such as its financial sustainability, poses a particularly high risk, the OFS can add, change or tailor specific registration conditions to the risks posed by the provider.

Amendment 145 seeks to increase from 28 to 40 days the minimum time the OFS must allow for a provider to make further representations in the event of the OFS proposing to refuse a provider’s application for entry on to the register. Amendment 149 has a similar theme: it would increase from 28 to 40 days the minimum time for a provider to make representation to the OFS if the OFS proposed introducing or varying a condition of registration. Finally, amendment 173 seeks to increase from 28 to 40 days the minimum period of time for a provider to make representations to the OFS if the OFS proposes to suspend the provider from the register.

Allowing providers an absolute minimum of 28 days to make additional representations to the OFS is not, in itself, ungenerous. The OFS is required to act in a transparent, accountable and proportionate manner. It is our firm expectation that if a provider has a good case for needing additional time to make a representation, the OFS would and will allow it. Members will note that the minimum period of 28 days has precedents. It is a frequently used time period for allowing appeals and representations, appearing, for example, in section 151A (5) and (6), “Power to impose monetary penalties”, in the Apprenticeships, Skills, Children and Learning Act 2009.

We could have chosen to follow much tighter timescales for making representations, such as the 14-day warning notice period for sanctions imposed under the Financial Services and Markets Act 2000. We think a starting point of 28 days achieves the right balance between procedural fairness for the provider and an efficient, speedy outcome for others affected by the decisions, such as students.

[Gordon Marsden]

Yes, I hear what the Minister has to say, and although I have spoken against the omnipotence of precedent on previous occasions, I am not against precedent, and in the case that he mentioned, 14 days was perfectly reasonable. Entering into the spirit of what the Minister said on new providers, some of them—we could refer to some of those who presented evidence to us—would probably start off in an entrepreneurial state, without the full administrative panoply to be able to respond practically in that period. The purpose of putting down 40 days was to recognise that under the Government’s proposals, a number of much smaller institutions than we have had so far will want to gain approval.

[Joseph Johnson]

I take on board the hon. Gentleman’s further clarification of his amendment, which we found helpful and constructive, as I said. I hope that the Government have explained their thinking. We feel we have a balanced and proportionate approach that gives providers a procedural chance to make representations, but that also takes into account the interests of other parties affected by such decisions.

For all three scenarios covered by the amendments, there is a clear process to follow: the OFS must notify providers of its intention. Furthermore, the particular characteristics of the higher education sector mean that proportionate regulation is needed to protect the interests of students, employers and taxpayers. Clause 2(1)(f) states that

“so far as relevant, the principles of best regulatory practice…should be…proportionate and…targeted only at cases in which action is needed.”

On that basis, although I understand that the hon. Gentleman means well, and although I fully agree on the need to promote these important issues, I do not believe that his amendments are necessary. The Bill already makes the necessary provisions, so I ask him to withdraw his amendment.

[Gordon Marsden]

I am reassured by what the Minister says, not least because the provision is de minimis and the OFS will be able to vary the period. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 ordered to stand part of the Bill.

Clause 5

The initial and general ongoing registration conditions

--- Later in debate ---

[Gordon Marsden]

I rise to speak to this miscellany of amendments which has a common theme. Clauses 5 and 6 are about the registration conditions. The Minister has quite rightly put emphasis on the innovation of having a central register and everything that goes with it. It is therefore incumbent on us to consider that when registration conditions are made the OFS has considered the broadest range of recommendations about what will be very important decisions, either to allow a registration to go forward, or to revise it, sometimes in a minor way, but sometimes perhaps in a major way, or sometimes, of course, to refuse it. Because of that, the principle behind these amendments is that everybody who is involved in the life of that institution—insofar as practically possible—whether students, teachers, or the workforce that supports those institutions should have some input to that process.

Philosophically, that is a really important thing that the Bill and Ministers need to grasp. If we want to engage people more broadly in higher education, whether to work, to teach or to study in it, we have to give them a stake in the decisions that affect the institution where they are working. That is the principle behind the amendments.

Amendment 146 on the consultation of HE providers would omit, as far as the OFS is concerned, the phrase,

“if it appears to it appropriate to do so”.

This terminology is more redolent of an absolutist monarch such as Louis XIV, the Sun King, than of a new transparent organisation. The language is, to use the French, de haut en bas. The Minister has excellent French, so he will know what I mean. To be honest, it is daft to say

“if it appears to it appropriate to do so”.

Of course it is appropriate to consult higher education providers in such circumstances.

Amendment 147 is very specific, and it states that in clause 5, after the word “providers” we should insert for the avoidance of doubt, as the phrase has it, “staff and students”. The amendment would ensure that there is some consultation with bodies or informal groups representing higher education staff and students. I refer to informal groups because again I am conscious, not least because the Opposition do not want to be accused of stopping progress and innovation, that some of these new providers will be relatively small and may have relatively informal groupings. It is therefore not unimportant that the position of their staff and students is taken into account.

Amendment 148 is probably the most vital of the three proposed amendments to clause 5. If there are to be changes to an institution’s registration conditions, its students and student body should be informed. Members of the Committee might think that is unnecessary, as the students and the student body are bound to be informed, but as I have said previously, we should legislate for the worst scenarios and the worst employers and not for the best. There are recent examples or allegations relating to major changes to London Metropolitan University’s terms and conditions. I once sat on a Committee down the corridor that was talking about providers, and people from London Metropolitan were eloquent on this issue. It is essential that the OFS has a proper information process—the OFS needs to take responsibility for this—that ensures that students and their representatives are properly informed of changes to their institution’s registration conditions. That is crucial.

Finally, clause 6 addresses the specific ongoing registration conditions. Subsection (6) currently states:

“The OfS must have regard to any representations made by the governing body of the institution…in deciding whether to take the step in question.”

It is important that the OFS may also consider representations from other relevant stakeholders it considers appropriate. I hope the Minister will note that we are not advocating an absolute duty on the OFS to consult such people, but we would ask it to do so on a case-by-case basis. It is important to establish the principle in the Bill that stakeholders other than the governing body should be able to make representations to the OFS. Those other stakeholders are people who have invested two or three years of their time and money in studying. They are people whose livelihoods depend on the institutions in question. It is surely not too much to ask that the OFS should be prepared, where appropriate, to consider their representations, too.

[Joseph Johnson]

I thank the hon. Gentleman for his thoughtful suggestions.

To ensure a level playing field, the Bill will require the OFS to determine and make public the conditions that institutions must meet to gain entry to the register and to remain on it. The conditions of registration, both initial and ongoing, will form the formal basis of the regulatory requirements on higher education providers under the new system. Those conditions include provisions relating to quality assurance, widening participation and data and information requirements. It is clearly the case that students, as well as providers, need clarity on the tests that the OFS will have required providers to pass in order to gain entry to the register, and the ongoing conditions that are in place, so that they can be confident about what it means for a provider to remain on the register.

Amendments 146 and 147 seek to make it mandatory for the OFS to consult each and every time it revises the general, initial and ongoing registration conditions, and to widen the base of those it should consult before doing so from higher education providers to also include staff employed by those providers, and students.

--- Later in debate ---

[Gordon Marsden]

I entirely accept what the Minister says about not wanting to have major consultations on minor changes. I do not want to prolong the exchange, but can I take it that he is going to place that in the guidance to the OFS, or possibly illustrate—although I know that illustrations can never be exhaustive—what sort of circumstances would require that sort of consultation?

[Joseph Johnson]

Yes, we expect to provide guidance to the OFS to give exactly those sorts of examples of the kinds of occasions on which it would be expected to consult widely on the changes to conditions required. In addition, more generally, the OFS will strongly encourage providers themselves to engage and consult with key stakeholders, including students, as a matter of good practice. Whether or not a general registration condition applies to a provider will be made clear on the OFS’s publicly available register.

Amendment 150 seeks to enable the OFS to take into account, when it thinks fit, representations from students and other stakeholders, as well as the provider itself, if the OFS decides to impose or vary a provider’s specific registration condition. The OFS does not need a power in the Bill to do this. It will always be able to listen to representations on various matters from various quarters if it thinks that doing so would add value. The effect of this amendment in reality is likely to be to give representations made by other stakeholders and students an elevated status above representations made by any other party that may have a legitimate interest. That is because students and staff representations would be the only ones mentioned in the clause.

I am clear that, in certain circumstances, it will be in students’ interests that they are informed of a particular change to a provider’s registration conditions, and why that change has happened. The OFS already has the power, when it is appropriate, to compel a provider’s governing body to make sure that students are promptly informed about changes to a provider’s registration conditions. It is my clear expectation that the OFS will act in the interests of students, and will use its powers under clause 6 to make it a specific condition of registration that significant changes to a provider’s registration conditions are communicated promptly and accurately to students. On this basis, while I understand the intentions here, and fully agree with the need to promote these important issues, I do not believe the amendments are necessary as the Bill already makes relevant provisions for them. I therefore ask hon. Members to consider withdrawing their amendments.

[Gordon Marsden]

I thank the Minister again for his constructive approach to outlining some of the circumstances in which access to broader areas would be made available. The truth of the matter is that the proof of the pudding will be in the eating. The OFS is not yet constituted. In its first few months and years, people will watch carefully as to how things proceed. If the general duty proves not to be working as it should—there are sometimes high-profile cases that illustrate faults in legislation that no one had thought of—the Government of the time may wish to return to it, and there are mechanisms for doing that. For the moment, on the basis of what the Minister has said and based on the fact that clear guidance will be given to the OFS, I am content to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 ordered to stand part of the Bill.

Clause 6 ordered to stand part of the Bill.

Clause 7

Proportionate conditions

--- Later in debate ---

[Joseph Johnson]

I again thank the hon. Gentleman for his thoughtful amendment on which we will reflect. I will begin start by saying that risk-based proportionate regulation is at the heart of how the OFS will operate. As I have said, we need a single regulatory system appropriate for all providers, and we must stop treating institutions differently based on incumbency and corporate form. Instead, we should ensure that regulation is tailored to fit their individual needs and demands.

Clause 7 specifies:

“The OfS must ensure that the initial registration conditions…and its ongoing registration conditions are proportionate to the OfS’s assessment of the regulatory risk posed by the institution.”

The OFS will also have a duty to keep the initial and ongoing conditions of registration that it applies to institutions under review. That means that, where and when the OFS considers it appropriate, it will adjust the level of regulation to which a provider is subject to reflect the level of risk it presents at a given time.

Accordingly, where the OFS considers that a provider is particularly low risk, the effect of the clause should be that the OFS will make appropriate changes to its conditions to reflect that and ease the burden of regulation. Similarly, where the OFS considers that a provider, through its performance and behaviour, starts to present a greater degree of risk, the clause should ensure that the OFS will increase the extent of regulation.

That approach will enable and incentivise high-performing, stable and reliable providers to start and grow, increasing student choice in high-quality higher education. It will mean that institutions that pose little risk to students or to the public purse can spend more time focusing on what they do best. Equally, institutions that present a higher risk will undergo more scrutiny and be subject to more measures to protect students, the public purse and English higher education.

Amendment 151 would place a duty on the OFS to take into account a provider’s size, structure, history and track record when determining registration conditions, costs and monetary penalties. It will certainly be the case that track record and perhaps size will be determining factors for the OFS to consider when it imposes registration conditions, but only insofar as those factors might help to determine the size of risk to the taxpayer and students.

The Bill is built on the principle of risk-based regulation in all its forms, and it is unhelpful to identify a list of factors that might substitute for risk in its wider sense. Over time, it is likely that the OFS will adapt and change its approach to identifying and controlling risk as the higher education market evolves. For example, the OFS may identify particular risks that relate to the delivery of particular qualifications and awarding bodies, or courses delivered in particular locations, as with the rapid expansion of higher national courses in business in 2013-14 from approximately 20 London-based providers, which caused real concern about quality and value for money. It is important not to constrain the OFS’s ability to react by weighing some risk factors above others.

On the subject of cost, it is worth noting that in the White Paper we committed to consulting the sector on the detail of the planned registration fees and charges. We will do that this autumn. Regulations will be laid before Parliament setting out the matters that the OFS must take into account when exercising its power to impose a monetary penalty.

[Gordon Marsden]

I hear what the Minister says, but I will make my response at the end of the debate. In connection with provision on “consulting the sector”, there is a sense, which might be entirely unreasonable, in the FE sector, in particular those supplying HE institutions, that they are often an afterthought in the consultation process, so I would welcome an assurance from the Minister that as a group they will be treated equally with the traditional university sector.

[Joseph Johnson]

I am happy to give that assurance. We value exceptionally highly the contribution that FE providers make to the HE sector, as we discussed in a previous sitting. There are 159,000 HE students in FE colleges, which do a terrific job.

The registration fees consultation will seek the views of the entire sector on what would be seen as a proportionate approach to the setting of fees. We want to hear from FE colleges as important institutions delivering HE. On that basis, while I understand the intentions in Committee and fully agree with the need to promote such important issues, I do not believe that the amendments are necessary, because what they propose is already covered by provisions in the Bill. I therefore urge the hon. Member for Blackpool South to consider withdrawing the amendment.

[Gordon Marsden]

I am grateful to the Minister, first, for all the detail and explanation of the consultation and, secondly, for his general mood music, if I may put it that way. We have had a tussle over some things, but to put something in the Bill does not automatically, even in law, mean that other factors will be excluded. However, as I said, I am content with the broad thrust of his assurances and, on that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

[Dr Blackman-Woods]

I have a few questions for the Minister and am seeking some reassurances from him. One possible reading of the clause is that it could lead to dumbing down of the higher education sector by allowing a lesser form of regulation for colleges of a particular type, whether a small FE college, a private provider or a small university.

Given what the Minister said earlier, I am sure that he wants to uphold the excellent reputation of the sector, so he will not want to put in place a regulatory system that could expose the sector to accusations of the quality not being uniform across all the players. I cannot see anything in the clause as drafted that will guarantee an equally rigorous approach across all the different types of institution, regardless of their track record. For example, a college might be good for a couple of years, but then have a poor principal or adverse market conditions, resulting in it being not such a good provider. I am not exactly sure how, if we are going on a particular track record in a particular period of time in terms of the regulatory system, that is going to be captured. These are really a series of questions that I am posing to the Minister. Perhaps some of the detail in the regulations will help us to understand better what the clause will do in practice, but I have huge anxieties about it as drafted. I hope that the Minister is able to address those and help me to feel better.

--- Later in debate ---

[Gordon Marsden]

I rise to discuss what I think is an important issue of principle. The Minister mentioned equal treatment of different institutions, whether they are new providers or long-established institutions.

Before I do so, I want to put this in the context of clause 8, which touches on the issues of mandatory ongoing registration conditions. The University and College Union has drawn attention to the fact that the Bill seeks to “subsume” the Office for Fair Access into the OFS. I hope that that will not be the process. The Office for Fair Access should play an equal part in widening participation access and social mobility. We have discussed that already and I have no doubt we will return to it in some shape or form later.

The reality is that

“The current access agreements will be replaced by access and participation plans as a condition of registration for providers wishing to charge tuition fees higher than the basic cap.”

The Government are consulting on accelerated courses and enabling switching between different courses and degrees. My hon. Friend the Member for City of Durham has tabled amendment 177 on that matter, although we may not reach it today.

In principle—and it is in principle—this is a straightforward proposal. If the sector is to expand significantly, whether via existing institutions—I have talked a lot about FE colleges and HE this afternoon—or via new providers, in principle, all those providers should produce an access and participation plan condition, as defined in clause 12.

We cannot have it both ways. On the one hand, we want to have two sorts of institutions, one being the long-established institutions, which are nice and big and crusty, if I can put it that way, and obviously have to be stimulated to activate their access and participation plans—that may be a distortion of that sector, but nevertheless that is the view that is sometimes expressed by bold free marketeers. On the other hand, as the Minister has been saying, we want everybody to operate on a relatively level playing field. I and I think most rational people, if we stopped them on the street and managed to engage them in some of the complexities of the issue, would say that everyone should be treated the same. Therefore, it is important to include in the Bill the principle that an access and participation plan will be mandatory for all higher education providers. If we do not do that, we will be providing discriminatory conditions for different providers. We will be offering a free hit to a minority—I stress that it might be a minority—of would-be new providers that thought that they could enter the system without having to deal with issues such as access and participation plans. Of course, that would undermine much of the Government’s thrust in the Bill.

The Government have lots of angles on the Bill, but two that are continually repeated are about competition and consumer rights. Competition has to go hand in hand with consumer rights. If a competitive market is going to be set up, with different groups jostling for HE status, they should all be judged by the same mechanism. I am anxious to increase the pool of new providers, but I am also anxious to ensure that, as we do so, providers bring to the table a proper sense of the responsibilities that they will have to meet. It is important that that is at the heart of the mission of the OFS.

There is the possibility of expansion and of acquiring degree status at different parts of the process. We will have some interesting conversations during later scrutiny of the Bill about the protections—or otherwise—that the Government have built into the new provider process in terms of degree awarding powers, so I am not going to touch on that now, but if the Government really want new providers to have some fairly radical abilities to operate in a quasi-university set-up from day one, it is important that they take on board some of the responsibilities in respect of access and participation.

This is not a non-binary option, to use a fashionable phrase. Providers need to accept responsibilities along with the new challenges and opportunities. That is why we are strongly proposing this amendment, which would ensure that all higher education providers have to engage with access and participation plans.

[Joseph Johnson]

Amendments 166 and 167 seek to require all providers on the register to have an access and participation plan, as the hon. Gentleman has said. It may be helpful if I set out our thinking and policy in this area. Our clear intention is that fee-capped providers on the OFS register that are able to charge above the basic level of fees should be required to agree an access and participation plan with the director for fair access and participation, as he will be in the new world. That must be in place before they can charge fees at the higher level. It is consistent with the current approach to access plans, which has worked well since 2004.

In 2017-18, through access plans, universities expect to spend £833.5 million on measures to improve access and success for students from disadvantaged backgrounds. That is up significantly from £404 million in 2009. It is an increase of more than 10% in cash terms, compared with 2016-17 access agreements.

The amendments seek to require all providers, whether or not their students are accessing student support funding or they are charging fees at the higher level, to produce access and participation plans. That does not seem appropriate. We are introducing a regulatory framework that will ask providers to meet certain requirements based on how they participate in the HE system. It is right that the burden we place on providers should be proportionate. This would go too far, given that not all these providers want—or would be able—to charge fees at the higher level. We expect providers to devote a proportion of the higher-level fees towards access and participation in their plans.

[Gordon Marsden]

As always, the Minister is giving an accurate description of the situation. The point is that we are supposed to be entering a new era. We are supposed to be entering a settlement that is going to last 20 to 25 years, I would think. That is how long it is since the last major HE Bill. It is useful to explore the fundamental underlying principles. Does he assume that, simply because an organisation is small—there was some discussion of this with the new providers that came before the Committee and I am not sure we took the same view of their answers—a small provider should be able to duck out of access and participation?

[Joseph Johnson]

Let me develop our thinking a bit further. I have not quite reached the end of the explanation of how the system will work with respect to all providers. As I was saying, we expect providers to devote a proportion of the higher-level fees towards access and participation in their plans. It is worth noting that currently designated alternative providers whose students qualify for student support funding but that do not themselves receive HEFCE grant funding, on the whole have a good record in attracting students from disadvantaged backgrounds.

On the hon. Gentleman’s point that this is not a binary situation, we intend to go further than the current arrangements in our reforms. For the first time, we are proposing that those providers that want their students to be able to access tuition fee loans up to the basic level of £6,000 should have to set out how they intend to promote widening access and participation in a public statement.

Our plans stop short of there being a requirement for these providers to agree a plan with the director for fair access and participation. That is entirely sensible in my view. We think there should be light-touch arrangements for these providers. Their students will only be eligible for student support at the basic fee limit.

--- Later in debate ---

[Gordon Marsden]

It is important to get some clarification. Essentially, the Minister is proposing—forgive me if I have missed this, but this is news to me today—a compromise between the status quo and the full-fat version that we suggest in our amendment. He mentioned that the director of OFFA would not be involved in that. Has there been consultation with the director and what is his view on that?

[Joseph Johnson]

This should not be news to the hon. Gentleman; it featured prominently in our White Paper and has been a central feature of our approach to widening participation in the system. We have discussed the entirety of our widening participation and access reforms with the director of fair access, Leslie Ebdon.

--- Later in debate ---

[Joseph Johnson]

No, the intention is that these are statements that the providers accessing the basic amount of fee loans support for their students put up on their own initiative. They will be required to have them, but they will not be signed off by the director for fair access and participation. We do not think that that would be a proportionate requirement.

Through our planned transparency duty, we intend that these providers will, through these statements, be required to publish data on student application, offer and drop-out rates. These statements are to be broken down by the ethnicity, gender and socio-economic background of the student bodies. The publication of more data will help the sector to support everybody in fulfilling their potential, regardless of their background. It is our intention that the OFS will look at requiring this access and participation statement as part of the conditions of registration.

I expect the OFS to consult when it determines for the first time what the initial and ongoing conditions should be, and a wide range of interested parties representing the interests of students and providers is to have the opportunity to feed in their views through this consultation. This would include details of the various conditions that providers would have to meet, including on access and participation. Widening access and participation are central to our reforms, and I believe that the requirements we are laying on providers in that respect, including the innovation of access and participation statements, are balanced and fair. I ask the hon. Member for Blackpool South to consider withdrawing amendment 166.

[Gordon Marsden]

I have listened carefully and some of what the Minister said is very welcome, but it still does not address the fundamental question that I put at the beginning. We are entering a new era, and signalling that some people do not have the same responsibilities as others is not a satisfactory outcome. For those reasons, I will press the amendment to a vote.

Question put, that the amendment be made.

--- Later in debate ---

[Joseph Johnson]

Students at the Open University have, over time, made the choice to form a students union that represents their interests, but it is horses for courses. We want the current system, which is liberal and permissive, to continue because it is working well. Where students unions can organise themselves and demonstrate that they are adding value to student body, by all means they should come into existence. The current legal framework allows them easily to do so.

[Gordon Marsden]

I do not think that all Opposition members of the Committee would accept the Minister’s claim that it is usually working well. There are lots of smaller institutions where students feel very excluded from the policies and practices of the providers.

[Joseph Johnson]

For that reason, where there are issues, students will welcome the provisions in the Bill which put their interests at the heart of the system and make sure that their voices are better represented in all the system’s structures.

Although these representative structures often do not mean or necessarily entail a formally constituted union, they reflect the different culture and constituents in different student bodies. For example, it may be a group of representatives from across different classes and courses led or chaired by a student president.

The “Higher Education Review (Alternative Providers)” is the QAA’s principal review method for alternative providers. As part of the higher education review, an independent provider must provide evidence of how it is meeting the QAA’s expectations on student engagement. The UK quality code focuses specifically on student engagement, so the provider must evidence how it is meeting the QAA’s expectations in that respect. The code states that through the “Higher Education Review (Alternative Providers)” process, higher education providers must demonstrate how they

“take deliberate steps to engage all students, individually and collectively, as partners in the assurance and enhancement of their educational experience.”

Providers must also work with students to produce an action plan on how to respond to HER recommendations. QAA-reviewed independent providers will have student representatives on their various committees, including some, but not all, at board level.

The amendment would impose a mandatory condition on private providers. The Bill does not impose a similar mandatory registration condition on institutions receiving public funding. The amendment would not only impose a new regulatory burden on alternative providers but would run contrary to our aim of levelling the playing field between traditional institutions and alternative providers.

Higher Education and Research Bill (Fifth sitting)

Debate between Lord Johnson of Marylebone and Gordon Marsden

Committee Debate: 5th sitting: House of Commons
Tuesday 13th September 2016 Public Bill Committees

[Gordon Marsden]

It is indeed a sunny morning, Sir Edward; it is also a rather airless one, so I am happy to see that the window is open. That leads me, reasonably effortlessly, on to the subject of transparency, covered by the amendments.

Without straying outside the narrow confines of the amendments I would just pause to reflect that when any new organisation is set up in government, it should reflect the mores of the time. The mores of our time are those of transparency. Transparency is an interesting word. When I was growing up it had a slightly different meaning. If someone was said to be transparent it meant they were trying to conceal something—or one might say “His arguments are transparent.” Now the English language takes it to mean, “Let a thousand flowers of information bloom.” That is an interesting development in the language.

Today the specific focus is on the office for students as a new organisation. We now conduct our proceedings in this place with transparency, and we believe in public transparency in the matter of remuneration, allowances and expenses. I do not need to remind you, Sir Edward, that we had our own trenchant discussions of transparency in Members’ expenses some time ago. That revealed much about what the general public thought about the lack of transparency on those issues in this place. I do not see why new Government bodies should be exempt, and I think transparency would strengthen the image of the OFS.

Similarly, with respect to amendment 132, there should be transparency on compensation. The other day we had a debate about the reasons why the Secretary of State might think it reasonable to discharge a member of the OFS. There are perfectly reasonable circumstances in which people might leave or settlements might be reached, or in which there might be no particular reason for the Secretary of State to have a person continue in their post. In those circumstances, subject to the civil service code, among other things, it might be perfectly reasonable for some forms of compensation to be made available. However, again, the same principle should apply: subject, obviously, to there not being undue private intrusion, the details of the compensation and what it is for should be made publicly available.

That is an important principle for the Minister to effect. If he agrees with the amendments but considers them defective and tells us that he will present something later, we will accept that. If not, we would like to hear some strong reasons—other than the usual “Well, it is inconvenient”—why there should not be transparency in the two key areas I have outlined for a newly appointed public body.

[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

It is indeed a beautiful day. However, it is tinged with some poignancy and sadness because the former Prime Minister, my right hon. Friend the Member for Witney (Mr Cameron), was a great supporter of transparency in everything he did in his last role. He was also a great supporter of this Bill. It was presented by the then Secretary of State and supported by the former Prime Minister and the current Prime Minister, reflecting the commitment across the two Administrations that have followed the general election to push forward these reforms and to transparency as a great driver of quality and choice in our higher education system.

Amendments 131 and 132 relate to the disclosure of the remuneration and compensation of OFS board members. I welcome transparency, which is a vital element in the effective functioning of the sector, and the Bill champions transparency from universities by requiring them to publish information on their records. Although we do not oppose the intention behind the amendments, we do not accept them on the grounds that such specification is unnecessary in the Bill.

I can confirm to the hon. Member for Blackpool South that once they are appointed, and in the usual way, the OFS chair and chief executive’s salary will be included on a list of senior civil servants and senior officials in Departments, agencies and non-departmental public bodies that is made publicly available on an annual basis.

On the transparency of expenses, allowances and compensation, ultimately the chair and chief executive will be responsible for accounting for OFS expenditure and the finer details of their approach to transparency will be for them to determine. However, the Government are committed to greater transparency, and we expect that, in their annual reporting, NDPBs will publish data on board member remuneration, allowances, expenses and other payments, such as compensation, in line with guidance in the Treasury’s financial reporting manual. I fully expect that the OFS will follow this practice.

Therefore, as the amendments refer to approaches to transparency that are already common practice among NDPBs through successful delivery of the Government’s transparency agenda, the provisions are unnecessary and would restrict future flexibility. If legislation starts to stipulate specific provisions of this type for public bodies, they will inevitably soon become out of date as the transparency agenda progresses. That may then require further primary legislation to deal with any inconsistencies or anomalies that arise. The Government therefore do not propose to accept the amendment and I respectfully ask the hon. Gentleman to withdraw it.

[Gordon Marsden]

I thank the Minister for responding in the spirit of the amendment, even if he did not feel able to respond in the letter. It is a pity that we cannot have the provision in the Bill to send out the message I have talked about, but I accept the Minister’s points. It is important that agreements in the terms of the chief executive and chair are made public in a public fashion, if I can put it that way, and not just tucked away at the end of a list of things that might not attract the attention of Members of Parliament on an off day. I accept the Minister’s assurance.

When I hear Ministers or civil servants talking about flexibility, I sometimes feel that I should reach for my reach for my revolver, because flexibility can cover a multitude of sins. On this occasion, not least because the Minister has made it very clear on the record—that will obviously form part of these proceedings—and because I welcome and respect his commitment to transparency, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Joseph Johnson]

I thank the hon. Member for City of Durham for allowing me this opportunity to explain further how the office for students and UK Research and Innovation will work together on a range of issues relating to their respective remits. Clause 103 proposes safeguards to ensure joint working, co-operation and the sharing of information between the OFS and UKRI, which reflects the Government’s commitment to the continued integration of teaching and research within the HE system, and the clause goes far beyond the image that the hon. Member for Blackpool South conjures up of two or three meaningful lunches between the high-ups, agreeable though that sounds in some respects—I hope I might receive an invitation to one of them.

Both organisations also have a statutory duty to use their resources in an efficient and effective way, which means that they will look for all opportunities to collaborate and share information. As the new organisations are created, we will develop appropriate governance arrangements that embed joint working principles and practice in the framework documents for both organisations and in the informal agreements between them, such as a memorandum of understanding. Those framework documents will provide the hon. Member for Blackpool South with the clarity that he is looking for and will set out the working arrangements between the two bodies, which are highly likely to include regular senior level meetings that could be akin to a committee.

[Gordon Marsden]

I thank the Minister for his response thus far, which is encouraging. On the subject of the framework documents, we know that the process of merging HEFCE into the OFS, the Quality Assurance Agency for Higher Education and so on will be a complex one that will probably take two or three years. Where does the Minister envisage those framework documents coming in that process, as that will be crucial? It would be helpful if he could give us some timeframe for that.

[Joseph Johnson]

We envisage publishing the framework documents once the Bill has received Royal Assent, but I intend to write to the Committee to provide more detail about the co-operation arrangements that we envisage coming into existence as a result of the co-operation and information-sharing provisions in clause 103. For that reason, I believe it is undesirable and unnecessary to be prescriptive in the Bill. As I have said in relation to other amendments, the legislation must remain sufficiently flexible for the Government and organisations to be able to respond to the circumstances of the time. We would not want to restrict the areas in which the OFS and UKRI should work together, and the list proposed by the hon. Member for City of Durham of the important areas raised by the community is not actually comprehensive now, and nor is it likely to be at points in the future.

Let me turn to some of the points raised by hon. Members, the first of which was about postgraduate students. As now, the councils, through UKRI, will fund doctoral students, while the OFS will be the funder for masters courses, providing, for example, top-up teaching grant for high-cost subjects only. The OFS will be the regulator for all students, including all postgraduate students. As I have said, the Bill proposes safeguards to protect joint working, co-operation and the sharing of information between those two bodies, reflecting the integration of teaching and research at all levels.

Each organisation will be required to produce an annual report detailing its activities that will be laid before Parliament. To ask them to produce an additional annual report would, I believe, be duplicative and unnecessary. The Secretary of State also has powers to request any further information from those organisations if such reporting does become necessary.

Let me turn to the changes to the organisation of HEFCE and to the machinery of government. The OFS and UKRI will have distinct missions and it would not be workable to create one large body responsible for all the regulatory functions, as well as a specific focus on the student interest, while simultaneously acting as a funding body for the full range of research funding. The research funding role that HEFCE played now sits better with UKRI, a body explicitly tasked with bringing a coherent approach to funding research, than it would with the OFS, an economic regulator for the student interest.

Higher education and research policies are no strangers to changes in the machinery of government. Prior to 2007 they were also in separate Departments, with higher education in the Department for Education and Skills and research and science in the Department of Trade and Industry. Our partner organisations are already adept at working across departmental boundaries. For example, HEFCE has effective relationships with the Department for Education’s own National College for Teaching and Leadership and Health Education England as well as with the devolved Administrations. The OFS and UKRI will be no different.

Turning to the devolved Administrations, the White Paper is clear that it is our policy intent to ensure that Research England, as part of UKRI, can work jointly with devolved funders. That will mirror the effective working relationship HEFCE currently has in respect of the operation of the research excellence framework, for example, which it runs on behalf of the devolved funding bodies.

Research councils and Innovate UK will continue to operate throughout the UK. We will work closely with the devolved nations as UKRI is established to ensure that the UK’s research and innovation base remains one of the most productive in the world. I welcome the opportunity to provide assurances on joint working. I will write to the Committee to provide further detail ahead of the publication of the important framework documents that will formally govern those relationships. In advance of that, I call on the hon. Lady to withdraw her amendment.

[Dr Blackman-Woods]

I thank the Minister for his response. I would point out that clause 103 states that the OFS and UKRI “may co-operate”; it does not actually direct them to do so. I heard what the Minister said about providing the Committee with more information about the nature of the framework and what might underpin an MOU.

There is one other point that I want to make to the Minister. I do not see any reason why UKRI or the OFS cannot work together to produce a single report that would really help the sector at large to understand what is happening across the whole of it. It would be helpful if he could consider that when putting the framework together. On the basis of what I have heard, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Gordon Marsden]

I beg to move amendment 133, in schedule 1, page 66, leave out lines 9 and 10.

This amendment would prevent the Secretary of State’s representative from taking part in any deliberations of meetings of the OfS or any of its committees.

I have already spoken this morning about setting out guidelines and principles for the OFS. I know that the Minister is keen for the OFS to be seen as having independence under broad direction from the Secretary of State. If it is to function effectively and correctly, it is extremely important that it is seen as independent—after all, it is an arm’s length body. It is worth looking at this in context, because there is a section on procedure on page 66. It states:

“A representative of the Secretary of State is entitled...to attend any meeting of the OfS or of any OfS committee”.

The practicalities of that and how it would work out are obviously a matter for the parties concerned, so I have no problem with someone attending a meeting.

However, parts of meetings fall into different categories, as they do in Select Committees when we have a public session and a private session. I am not sure about the representative of the Secretary of State taking part in OFS deliberations, even though there will be a veto over the decision. I do not know whether this Government are fans of nudge theory—we have not heard the new Prime Minister pronounce upon it yet—but the previous Government and the coalition Government were greatly in favour of the principle of nudge. They believed that people should be nudged towards things rather than legislating on matters. I have observed on occasions that there is nudge and nudge, and sometimes there is iron nudge.

I would not want it to appear, either for the Secretary of State’s reputation or for the subsequent independence of the OFS, that a functionary of a Secretary of State—if I may be so crude as to put it that way—sitting there quietly in the best traditions of Whitehall and observing the deliberations of the committee might cast aspersions on its ability to make judgments independently. I am genuinely curious to know why the Minister feels it would be necessary for a representative of the Secretary of State to take part in deliberations. I think that it would be wholly otiose and that it would send out the wrong signals. Therefore, in the spirit of transparency that we talked about earlier, and the need not to apply undue pressure to the new body, I hope that he will be able to give us a favourable response.

[Joseph Johnson]

The amendment seeks to remove the ability of the Secretary of State’s representative to take part in OFS board meetings. I understand the hon. Gentleman’s desire to ensure—

[Gordon Marsden]

I am sorry to interrupt the Minister, but this needs clarification. We have not sought to stop either the deliberations of the board or having the representative at a board meeting. We have said—this applies to other committees and organisations—that when the board is deliberating on things as opposed to receiving reports and so on, the Secretary of State’s representative should not be present. I beg the Minister not to misinterpret or to allow officials to misinterpret the situation and set up a straw man by saying that we do not expect the representative to be in any shape or form at the board meeting. That is not the case.

[Joseph Johnson]

I understand that difference, although it does not change the substance of what I am saying. Although I understand the hon. Gentleman’s desire to ensure the independence of the OFS board, I do not believe that his amendment, well intentioned though it is, is the right way to achieve that, because it would effectively make the representative a silent observer of the deliberations. It takes us a step back from the arrangements that have worked successfully for the HEFCE board for more than a quarter of a century and it risks the OFS not having access to the Government’s latest policy thinking when it considers how it should act.

--- Later in debate ---

[Gordon Marsden]

I beg to move amendment 135, in schedule 1, page 67, leave out line 31.

This amendment would prevent the OfS from accepting gifts of money, land or other property.

I move from a part of the schedule that caused me some bafflement to one that causes me substantial bafflement. The Minister was talking about good lunches earlier, so in that vein I was surprised to see on page 67, line 31, the list of things the OFS may do. It may do anything except borrow money, but, slightly curiously in that context, we are told that it can acquire and dispose of land and other property, enter into contracts and invest sums. I assume that the Minister will elaborate on some of those examples so that we can be clear that the OFS will not go into offshore investments or anything similar. The serious provision concerns the acceptance of

“gifts of money, land or other property.”

I am by training a historian. We talk about Henry VIII clauses in this place, and when I read this I had an idea of the Tudor way of doing things and of getting things done. The idea that the OFS, which is supposed to be a reputable and even-handed body, would be accepting

“gifts of money, land or other property”

without some aspersions—or nasturtiums, to use the old phrase—being cast on the motives for those acceptances is one that I fail to understand. I look to the Minister to reassure me as to why paragraph 15(2)(d) is included. What sort of gifts of money, land or other property is it envisaged would be accepted? Is he concerned that they would inhibit or influence future decisions, which at that stage the OFS might not be able to foresee, involving the people who had given the gifts? I will simply conclude—going back to our lunch analogy earlier—by reminding the Minister of the saying “there ain’t no such thing as a free lunch”, or in this case, free

“gifts of money, land or other property”

and I look forward to his further explanation.

[Joseph Johnson]

I am very happy to explain the provision. The amendment would remove the OFS’s ability to receive

“gifts of money, land or property”.

Although I think I understand the motivation behind it and even though we can sympathise to some extent with the hon. Gentleman’s underlying concern, we will resist the amendment. In practice, it would remove from the OFS an ability HEFCE has always had—an ability that would allow the OFS to manage any issues raised by the public ownership of some of the land and property of some existing HE institutions if those institutions merged or ceased to operate, and to ensure that the assets were managed effectively. I accept that it may seem odd for any public body—particularly an independent regulator—to be empowered to accept gifts, but there is a specific reason for the existence of this ability in the current legislative framework, and for why we need the OFS to continue to have it.

HEFCE was created at a time when a Conservative Government were implementing substantial reform to the HE sector. Central to that was allowing our polytechnics to become full universities—the single biggest institutional expansion of the sector ever. Before this, as the hon. Gentleman knows well, polytechnics had been owned by local education authorities. Some of the property and land used by some of these institutions was owned by the local authority, meaning that it was public property, so the Further and Higher Education Act 1992 gave HEFCE powers to accept this public property to ensure that if any of the institutions failed or merged into new forms, then HEFCE would have the powers to manage these changes effectively.

As we now know, the former polytechnics have thrived as universities and made a huge contribution to our sector as a whole over the intervening decades, and no one is suggesting that any of them are at any sort of risk of collapsing or even merging, but the fact remains that the public retains some ownership rights of some of the land and property that these institutions use, and no responsible Government can simply give those rights away—indeed, Government need to retain the ability to manage these assets effectively should that ever prove necessary, and the most effective way to do this is to give the OFS the power to accept those assets on behalf of Government.

[Gordon Marsden]

I thank the Minister for his explanation, which I assume he has not concluded. I entirely understand the context of HEFCE and the 1992 legislation. We could have an interesting discussion about whether HEFCE and the OFS are ultimately the same sort of beast, but I do not intend to pursue that argument. I merely say that I do not think that the analogy between what HEFCE did and what the OFS will do is entirely accurate. The OFS will be doing all sorts of things that HEFCE did not do, but we will let that pass.

If I heard the Minister correctly, this is essentially what one might describe as a reserved power, to be exercised in the limited circumstances that he has described—and he described them very accurately in the context of what needed to be there post-1992. I understand the context of making the provision, but I remain concerned that the terms of reference are extraordinarily wide. If I am not to press the amendment I would therefore urge the Minister to put his explanation in writing to all the members of the Committee, so that everybody—not just those here today—can clearly understand the circumstances in which the Department intends that the OFS should use this power, so that there is no doubt that it could not be used for, for the sake of argument, a group of people who wanted to set up a new organisation—

[Gordon Marsden]

It is very long, Sir Edward, and I will shut up at this point.

[Joseph Johnson]

I got the gist of the hon. Gentleman’s point. I would like to provide him with some additional reassurance on one of the other aspects of his earlier remarks in relation to individuals within the OFS taking gifts or money, and that sort of concern. This power only enables the OFS as an organisation to accept gifts. It will obviously be for the OFS to set the terms and conditions of employment for its staff, but we see absolutely no reason why these would not include the standard public sector rules on gifts and hospitality, which set out that a public servant may only accept gifts or hospitality of a purely nominal value. I hope that that provides some reassurance about the seemingly wide scope of this provision. Of course I am happy to set out in writing many of the points I have just made if that would provide reassurance, and I commit to doing that now.

To sum up, in these respects the Bill replicates the arrangements in the existing legislative framework for precisely the same reasons as those arrangements were first put in place. As I said, the amendment would unpick those arrangements. If at some point in the future, for example, one of the former polytechnics were to want to merge, or if it faced a collapse—obviously we hope that would not happen—the OFS would be unable to accept any part of the assets that the institution held over which the public had any ownership rights. This is a failsafe power. We do not anticipate that it will be used frequently, if ever, but it is an important power because in its absence there is a risk of loss to the public purse. For that reason we resist this amendment, and I respectfully ask the hon. Gentleman to withdraw it.

[Gordon Marsden]

On the basis of the Minister’s extended explanation of the circumstances and his promise to put this in writing for the members of the Committee, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 1 agreed to.

Clause 2

General duties

--- Later in debate ---

[Gordon Marsden]

For clarification, my remarks about the pips not squeaking in the traditional sector referred to the period up to 2010. After then, as the Minister is well aware, the tripling of tuition fees in 2011-12 had a dramatic effect on the traditional cohort—we can never demonstrate how many people were deterred from going forward in that process—and there was a dramatic fall in part-time and mature students, which can be closely correlated with the tripling of tuition fees.

[Joseph Johnson]

The office for students brings together the responsibilities of the Director of Fair Access and HEFCE for widening access and promoting the success of disadvantaged students. The Bill will rationalise those activities and ensure they are a key part of the OFS’s remit. Placing a requirement in legislation to publish a strategy is restrictive and unnecessary, and setting a rigid three-year timetable in legislation may in fact limit, rather than encourage, regular review, as the focus would be on the timescale, rather than on when such a strategy might most be needed. Under clause 2, the Secretary of State can issue guidance to the OFS, and the OFS must have regard to the guidance. Such guidance, which provides greater flexibility, is a more appropriate vehicle for setting out expectations with regard to the broader strategy in connection with access and participation.

We are not complacent. We want to do more to continue opening up higher education to those from all backgrounds and ensure that they have successful outcomes, including by ensuring that those who go to university stay to complete their qualification.

On amendment 20, we too want to see an increase in apprenticeships, which are a powerful motor of social mobility and productivity growth. Our ambition is to reach 3 million apprenticeship starts by 2020. Higher and degree apprenticeships are widening access to skilled trades and professions, and are providing the higher level technical skills employers need to improve productivity, while giving young people a career route as equally valid as going to university.

The hon. Member for Blackpool South asked about the join-up between our HE and FE reforms. We are carrying out two reform programmes—in HE and technical education—at the same time. That gives us the best opportunity to ensure that they are complementary and that learners benefit from the changes as soon as possible. The reforms are not about diverting people from academic HE into technical education or vice versa. We want everyone who can benefit from the education they choose to have the chance to do so. Our reforms are focused on strengthening the whole education system, based on a common set of core principles improving the quality and value of learning and its relevance to learners’ future choices; enabling learners to make well informed decisions about the value of their learning options; ensuring learners have the opportunity to move between academic and technical education if they feel their original choice no longer suits them; and giving learners the opportunities and choices that will help them to achieve their potential.

[Gordon Marsden]

No disrespect, but the Minister is reading out the boilerplate of the Government’s aspirations for co-operation in this area, which we fully share. The question is: what is actually happening on the ground? Without diverting too much, what is happening on the ground is that there are major concerns about apprenticeship levels, the numbers of apprenticeships, and the ability to deliver all this in the next 12 months.

I know apprenticeships are not the subject of the Bill, but with the Government saying that degree apprenticeships are so crucial, the Minister has a vested interest in the success of the apprenticeship programme. So far today, he has not given us any indication of the practical integration of discussions on these clauses by officials from his Department and the Institute of Apprenticeships. Nor has he given any indication of conversations he may have had with the Minister of State, Department for Education, the right hon. Member for Harlow, though I know the latter is relatively new in post.

[Joseph Johnson]

The hon. Gentleman asked about degree apprenticeships. I point him towards provisional figures, released in June, that show a dramatic increase in the number of people starting higher apprenticeships. The official figures show that there were more than 37,000 people participating in a higher apprenticeship between August 2015 and April 2016. The figures also show that there are more young people starting apprenticeships, with more than 108,000 starts by under-19s between 2015 and 2016.

We do not agree with the hon. Gentleman on his points about funding. The spending review was a good settlement for the skills and FE sector. We will double spending on apprenticeships by 2019-20 from 2010-11 cash terms, including through the new levy, and will protect the £1.5 billion funding for the core adult skills participation budget, in cash terms.

The combination of the levy, the protection of the adult education budget, the extension of loans and the introduction of the youth obligation mean that by the end of the Parliament, the cash value of core adult technical education funding to support participation will be at its highest ever. The total spending power of the FE sector to support participation will be £3.41 billion by 2019-20, which is a cash-terms increase of 40% compared with 2015-16, and 30% in real terms. The area review programme that the hon. Gentleman mentioned aims to put the FE college sector on a strong financial footing, so that it is better able to meet the educational and economic needs of local areas, including at higher levels.

To finish my comments about the links with the FE reforms under way elsewhere in the Department, led by my able colleague, the Minister of State, Department for Education, my right hon. Friend the Member for Harlow, with whom I have regular conversations, even though he is new to his post, I remind the hon. Member for Blackpool South of the support for the entirety of our package of reforms from the Association of Colleges, which said:

“Choice, access and quality are the welcome watchwords of the Government’s long-awaited plans to open up higher education and to allow more colleges to award HE qualifications. This step change away from the country’s traditional university system will empower more people than ever before to access HE in their local area through a college. It will also provide a wider choice of courses that are linked to employment.”

In response to the higher education White Paper, the AOC said:

“We welcome much of the Bill’s content, as it has been one of AoC’s key long-standing policy objectives to make it easier and quicker for high performing institutions, including colleges, to achieve their own awarding powers.”

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[Joseph Johnson]

Clause 2 sets out a series of important duties for the OFS, including

“the need to promote quality, and greater choice and opportunities for students…to encourage competition between English higher education providers…to promote value for money…to promote equality of opportunity in connection with access to and participation in higher education”,

and to use

“resources in an efficient, effective and economic way”.

Amendment 137, the first amendment in the group, would require the OFS to have regard to all of those statutory duties equally. While the Bill does not place any particular weighting on the general duties, I believe that the amendment would seriously inhibit the ability of the OFS to make effective decisions, so I resist it. In practice, it is akin to telling the organisation to give equal priority to all of its priorities. That does not reflect how any organisation operates in reality. In the design of the OFS, there are a series of matters which it needs to take into account when carrying out its functions. We are also giving it statutory independence to act impartially and objectively in delivering those statutory duties in the light of the relevant circumstances of the time. For us, that has the distinct advantage of giving the independent OFS clear statutory responsibility for deciding what is most important at any one time.

In its day-to-day operations, the OFS will need regularly to manage its different competing priorities, some of which will need to take greater importance than others depending on the issue at stake. The amendment would restrict that independence. If everything were equal and equally important, the OFS would be unable to make judgments about relative importance—the kind of judgment that HEFCE currently has to make every day.

[Gordon Marsden]

Again, the Minister is deliberately setting up a straw man. We are not suggesting that the OFS board, to put it at its crudest, would have to divide its time at a meeting between x, y and z. Anyone in any organisation with any sense whatsoever will prioritise one thing at one time and others at other times. Macmillan’s “Events, dear boy, events” only makes that more important. The idea that we are suggesting that that should be reflected in a day-to-day mathematical formula is ludicrous. We are looking for some indication from the Government that they do not regard competition as the be-all and end-all of the OFS’s duties.

[Joseph Johnson]

They are all important duties, which is why they are all on the face of the Bill. As I said, we would not want to give them on the face of the Bill an equal weighting, because that would restrict the flexibility of the OFS board to take into account the different circumstances it might face at any particular point in time.

Before I get into the detail of the amendments on competition duty, I want to touch on collaboration, which hon. Members have raised. We will talk about it more when we come to the next group of amendments, but we may as well start now. Members are concerned about the scope of the competition duty in part because they worry it might stifle collaboration. I want to make it clear that I see promoting collaboration as an important part of the OFS’s role. I do not see competition and collaboration as being inherently in tension with each other. Competition between businesses that are also competitors is common practice in other sectors when there are mutual benefits to be gained from it. I want the OFS to support such collaboration where it is in the interest of students. The OFS will recognise the importance of collaboration between providers, especially, for example, where it might enable efficiencies.

The Bill does not prevent collaboration. The OFS does not need a separate duty on collaboration, as it has a general duty already to have regard to the student interest, and such collaboration would be in the student interest. Collaboration can take many forms, and we do not want to be prescriptive about what it should look like or create an expectation that the OFS should formally regulate this type of activity. That would be unnecessary. It is, however, part of the general overview of the sector and of the role of providers that we would expect the OFS to have, and we can make that clear in our guidance to the OFS.

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[Gordon Marsden]

I must challenge that statement, which has been repeated by the Minister. It was said in the evidence sessions, and has been said outside this place—and I have some sympathy with the view—that if, given the multitude of choices for validation from existing higher education institutions, those new providers cannot get anyone to validate them, they must be in a bad way. Only this week the Open University put itself forward, as the Minister will be well aware, as a potential validator of many new institutions and, indeed, some of the FE institutions that seek degree status. So let us have no more of the straw man—the argument that those poor small new institutions cannot be validated because there is a vested interest out there blocking them. If there was such a situation, it is rapidly being addressed, and what the Minister is arguing for is not needed.

[Joseph Johnson]

The hon. Gentleman should have listened more closely to the evidence that we heard last week from the likes of Alex Proudfoot, the chief executive of Independent Higher Education, formerly Study UK. He spoke powerfully about the flaws in the current system that we are seeking to address through our reforms. I remind the hon. Gentleman, who appears to have forgotten, that he said:

“Unfortunately, we find that, quite rightly within their own autonomous priorities and strategies, some institutions draw back from validation, leaving institutions and students high and dry. We see institutions blocking new courses from being validated because they compete with one of their own courses or, indeed, one of their own partner’s courses. Unfortunately, we see a very high cost and very limited transparency in the process across the sector––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 14, Q13.]

[Gordon Marsden]

I am sorry to come back at the Minister on that, but if he is going to trade quotes from the evidence sitting, Mr Proudfoot’s statements were entirely general. I think that the evidence will bear me out: he did not say anything in detail about numbers of organisations. Of course there will always be individual organisations that do as he said, but the general position is very clear. There is a host of institutions that can do validation and, as I have said, the Open University is now added to their numbers.

[Joseph Johnson]

Again, there was ample evidence in the sittings, with specific institutions that offer high-quality HE provision pointing to their problems in being validated. We heard, for example, from Angela Jones of Condé Nast College:

“We have just been through the whole process of finding a validating partner for our degree, and it was really difficult…For us, the idea of an office for students in a central place to go and be supported through that process is very helpful.”

Professor Philip Wilson said:

“We have seen a number of institutions pull the ladder up from colleges on validation powers with pretty much no notice, which has caused a number of issues—it filters down to the students and causes disruption.”––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 49, Q74.]

We could also point to the evidence from Paul Kirkham, chief executive of the Institute of Contemporary Music Performance, who told the Committee:

“There are significant risks to student and taxpayer of a very static, non-changing universe of providers and way too much emphasis on the three-year, on-campus degree.”––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 13, Q13.]

By placing a general duty on the office for students to have regard to encouraging competition between English HE providers we will foster a more competitive system and level the playing field for new providers, ensuring that regulation does not block new entrants from competing and providing the innovation the sector needs. The sector supports that ambition. As Roxanne Stockwell, the principal of Pearson College, put it:

“It is clear that the dominance of the one-size-fits-all model of university education is over. Fee rises have transformed students into more critical consumers and the government is right to recognise this in their reform package. Students are calling out for pioneering institutions offering alternative education models and an increased focus on skills that will prepare them for the careers of the future - with the mind-set and agility to fulfil roles that may not even exist yet. The government’s plans address this demand by making it easier for credible new organisations to enter to sector should be welcomed by all.”

Making it easier for high-quality providers to enter and expand will help to drive up teaching standards overall, enhance the life chances of students and drive economic growth, and will become a catalyst for social mobility.

The Bill makes explicit the fact that there is a general duty to encourage competition

“where that competition is in the interests of students and employers”.

In doing so, it emphasises that the student interest is at the heart of the OFS and recognises the wider public benefits associated with maximising choice and competition in the HE sector. Requiring the OFS to have regard to competition only where it is “shown to be” in the interests of students, employers and the wider public would be burdensome and inflexible. Amendment 139 appears to suggest that the OFS would in some way have to demonstrate that those various interests were met, placing an unnecessary evidential burden on the new regulator.

On the question of whether the OFS should have regard to encouraging competition where it is in the public interest as well as in the interests of students and employers, operating in the public interest is implicit in the role of the OFS. It will be a public body that is accountable to the Secretary of State and to Parliament. Moreover, there are general duties on the OFS to promote value for money, equality of opportunity and to operate

“in an efficient, effective and economic way.”

There are also significant assurances built into the Bill to safeguard the public interest, including a requirement that the OFS, through the Secretary of State, provides an annual report to Parliament on the performance of its functions and finances. For those reasons, I respectfully ask the hon. Members who tabled the amendments not to press them.

[Gordon Marsden]

Because of the lateness of our proceedings I do not intend to respond in great detail, but I profoundly disagree with the Minister’s cavalier interpretation of what one needs to do on validation. We can talk about bad examples across the board, but this will go from one situation to another. Individual organisations, whether Condé Nast or any other, will have to go through a proper process—that is the whole point of the thing. As we come to other aspects of the Bill we will see why the Government’s attitude toward new providers risks creating many problems for students. On this occasion, because the hour is late and we are about to conclude the session, I do not intend to press our amendments to a vote, but I assure the Minister we will return to the issue in some detail elsewhere in the Bill. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered¸ That further consideration be now adjourned. —(David Evennett.)

Higher Education and Research Bill (Fourth sitting)

Debate between Lord Johnson of Marylebone and Gordon Marsden

Committee Debate: 4th sitting: House of Commons
Thursday 8th September 2016 Public Bill Committees

[Joseph Johnson]

Yes, I will certainly come on to that issue, which is the subject of a number of later amendments, but I will happily touch on it in answering the hon. Gentleman.

In its written evidence, University Alliance states that:

“As the organisation responsible for regulating the higher education sector, the OfS will need to ensure that institutions operate in the interests of students.”

That point was reiterated by Professor Quintin McKellar, vice-chancellor of the University of Hertfordshire in his evidence to this Committee, when he said that

“the Government’s idea to have an office for students that would primarily be interested in student wellbeing and the student experience is a good thing.”––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 22, Q31.]

We also heard from Alan Langlands, vice-chancellor of the University of Leeds, who concurred when he said:

“I think the Government have struck a reasonable balance, and putting students at the centre is sensible”.––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 27, Q41.]

The creation of the office for students is about putting students at the heart of the system. It has been a consistent theme of Conservative and, formerly, coalition policy for a considerable time. The OFS will, for the first time, have statutory duties focused on the interests of students and equality of opportunity when using the range of powers given by the Bill.

In addition, unlike appointments to the HEFCE board, the Secretary of State must “have regard” to the desirability of the OFS’s members having proven experience of representing the interests of students when appointing the OFS board. That goes straight to the point that the hon. Member for Sheffield Central raised. Schedule 1 of the Bill captures the intent of many of the amendments that have been tabled for later clauses. We feel that schedule 1 fully meets those intentions of ensuring that the OFS board has people with the experience of representing student interests.

[Mr Gordon Marsden (Blackpool South) (Lab)]

May I repeat my delight in serving under your chairmanship, Mr Hanson, and that of Sir Edward? On the very specific reference that the Minister has just made, some might say he is just trying to defend the indefensible. It is “Hamlet” without the prince, but we will come on to that in a moment.

Is it not the case that the specific phrase “have regard” offers the minimum in draftsmanship, not the maximum? We have to legislate not for the best universities—I am sure the Minister will in due course become part of them—but for the most unexcellent. Just saying “have regard” will not be sufficient to give the guarantees that students need.

[Joseph Johnson]

I completely agree that for the OFS to function effectively in students’ interest, they should be represented properly on it. We have had a crack at that in schedule 1. I am certainly receiving a lot of representations from Opposition Members and from student unions and so on saying that we have not gone as far as we might in entrenching that core principle with which we are in basic agreement: students need to be properly represented in the governance of the office for students.

I have understood the messages we are being sent, but I point out that at board level we will be recruiting those with experience of representing or championing the student interest. A critical feature of the OFS as it is organised is that overall it must have members with experience of representing the full diversity of the sector, including students. It is essential that the individual appointed can act on behalf of the wider student interest. That reflects common practice: board members are typically appointed for their breadth of experience and representation.

OFS members will have significant responsibilities in taking decisions, many of which will ultimately impact on all students, so it is essential that each member brings more than an individual perspective to the decision-making process to ensure that the diversity of stakeholders is fairly represented.

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[Joseph Johnson]

I will respond to amendments 2, 122 and 3 together, as they all relate to student representation on the board. As I said earlier, students’ interests really are at the heart of the reforms. They are hard-baked into the Bill. They are clearly and explicitly, in black and white, in schedule 1, in which, as has already been made clear, the Secretary of State must have regard to the desirability of the OFS board containing people with experience of representing students’ interests.

We will continue to engage with our partners as the implementation plans are developed. That will include ensuring that the student perspective is represented on boards and decision-making bodies. That is why, for the first time, we are setting up an office for students, with the intention, set out in primary legislation, that its members will, between them, have experience of representing such interests. I think it is fair for the Committee to acknowledge that that is progress. The current legislative framework, which was set up in 1992, did not have any requirements for the board of HEFCE or its predecessors to have experience of representing the student interest. It is also fair to acknowledge that putting students at the heart of the governance of the main regulatory body that will oversee the sector is a significant step in the right direction, even if that is not quite as hard-baked as the hon. Member for Blackpool South would like, in terms of prescribing the specific number of people on boards who are capable of representing the student interest, or prescribing that those involved be current students.

[Mr Marsden]

I entirely acknowledge what the Minister says about the provision not existing in 1992 or subsequently, but that, while not exactly being a lawyer’s argument, is a slight straw person, if I could put it that way. We might as well say, “We have near-universal suffrage in the UK today; they didn’t have that 200 years ago.” It is not a very strong line of argument, I would suggest. The Minister talked about experience of representing the student interest; most of us here have that experience, so I wonder if either he or his officials could give us a definition of that, and say whether it includes or excludes existing students.

[Joseph Johnson]

It could easily include students who are presently at university, but we would not want to put that in the legislation, because that might exclude people who are quite capable of playing that role. Many NUS executives, for example, could occupy the position, but they are often not actually studying, as I understand the NUS’s arrangements. They take leave of absence or years out from their university. They sometimes perform these important functions shortly after they have stopped studying. Putting in legislation the kind of requirement that the hon. Gentleman wants would prevent many of those kinds of people from contributing their valuable experience. We would not want to exclude them by putting in a requirement that they be existing students. It would perhaps not be in the student interest to do so, because we want to make those skills available.

It is essential that the individuals who are eventually appointed be able to act on behalf of the wider student interest that I spoke about. Students are a highly diverse group, and we want representatives on the OFS board who can represent the rich diversity of the student population—mature, part-time, minority ethnic and distance learners, as well as many other forms of learners. We want the OFS board members to be able to represent more than one type of student. It is very possible that we can recruit members with several of the criteria that we are looking for.

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[Joseph Johnson]

I would not want that to be explicit in primary legislation. It will be for the Secretary of State to have regard to the duty to think about the desirability of student representation, but I do not want the Bill to be clear now as to whether it would be a current student or someone who had just finished studying. It could be either of those, or people with a number of other characteristics. The key thing is that there will be people on the OFS board who will be capable of representing the wider student interest.

[Mr Marsden]

Without trading lawyers’ words, the amendment says that at least one of the members should,

“at the time of their appointment, be currently engaged in the representation or promotion of the interests of individual students, or students generally”.

That is drafted quite widely, for the specific and practical reasons that the Minister outlined. It certainly does not say that a member has to be an NUS officer or official. There is a degree of latitude in the amendment.

Even at this stage, I shall make an offer to the Minister: if he is worried that the amendment is technically deficient—after all, he is Goliath and we are David in this matter; he has many officials to draft amendments, whereas ours may well be technically deficient—and he wants to suggest improvements to it, that would be a different matter, but he has not said that.

[Joseph Johnson]

I deal with the amendments that have been tabled. I do not choose which amendments Opposition Members table; I can deal only with those that are presented to me. The amendment as drafted would restrict student representation at board level to a current student. We think that is over-prescriptive. It is of course right that we engage directly students who are currently in higher education, but restricting the requirement in such a way would risk our not being able to appoint the right person to the role. It could, for example, prevent us from appointing a future full-time officer of a student representative body. For that reason, I urge the hon. Member for Ilford North to withdraw the amendment.

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[Joseph Johnson]

Ensuring that the OFS board members reflect the diversity of the HE sector is of the utmost importance to this Government. It is also essential that the board has the range of skills, knowledge and experience that will be required for it to be the market regulator of a sector that is of such strategic importance to the UK.

The current legislative framework requires the Secretary of State solely to have regard to the desirability of appointing HEFCE board members with experience of the HE sector, business or the professions. Over the years, that has given successive Secretaries of State from different parts of the House the flexibility to ensure that the HEFCE board has the breadth and depth of experience and skills that it has needed to deal with the priorities of the day.

The provisions in this Bill relating to the OFS board appointments take the same approach as the current legislative framework. In line with the OFS’s broader remit, we have expanded the number and range of areas to which the Secretary of State must have regard when appointing OFS board members. For example, those areas now include developing and implementing a regulatory framework, and promoting student or consumer choice. However, the basic approach remains the same. The Secretary of State must have regard to the desirability of appointing, but is not bound to appoint, people with certain backgrounds. The aim of the Bill remains to preserve the crucial flexibility for Secretaries of State to constitute the OFS board in the most appropriate way to address the challenges and opportunities it faces at any given time.

On amendment 123, it is extremely important that the Secretary of State has the ability to determine the overall balance of the board, and to decide where the OFS board needs greater strength and depth. While I agree that a balanced approach will be important, the amendment would inhibit the Secretary of State’s ability to make appointments that reflect current priorities. It risks having a board lacking the depth and breadth of key experience it needs to tackle the issues of the day, which may vary over time. The amendment would mean that the Secretary of State needed to have equal regard to all the criteria. It therefore implies that it would be desirable to have equal representation from all the areas on the list all of the time.

The process we have adopted for making appointments to the OFS board is based on that which has been successful for the HEFCE board over the past quarter of a century. The current legislative framework requires the Secretary of State to have regard to the desirability of appointing HEFCE board members with expertise in higher education, business and the professions. In terms of OFS board recruitment, the legislation expands the skills it is desirable to have. In purely numerical terms, the Bill lists seven areas, whereas the previous legislation mentioned only three, which means there will likely have to be some trade-offs between different types of experience that the Secretary of State will need to consider when making appointments. Furthermore, it is highly probable that some people will satisfy more than one of the criteria, and it would therefore be odd to try to pigeonhole individuals into a category for the purposes of satisfying the amendment, rather than making a judgment on the best way for the OFS to deliver its duties.

On amendment 124, I am glad that the hon. Member for Blackpool South has raised the important role of FE colleges in HE. Some 159,000 students study HE in a college, which is why I would like to highlight the support given to the package of reforms contained in the White Paper and the Bill by the AOC. The AOC says:

“We welcome much of the Bill’s content, as it has been one of AoC’s key long-standing policy objectives to make it easier and quicker for high performing institutions, including colleges, to achieve their own degree awarding powers”,

as the hon. Gentleman’s college in Blackpool has successful done recently. I will read another quote from the AOC that shows the support from colleges for what we are trying to do through our reforms:

“Choice, access and quality are the welcome watchwords of the Government’s long-awaited plans to open up higher education and to allow more colleges to award HE qualifications. This step change away from the country’s traditional university system will empower more people than ever before to access HE in their local area through a college. It will also provide a wider choice of courses that are linked to employment.”

I agree that having board members who can represent a wide variety of students would serve to enhance the diversity of the board. However, a specific amendment to ensure that is not necessary, as the definition of higher education providers in clause 75(1) is broad enough to capture further education providers. The definition already includes any provider who is offering higher education courses, which reflects the definition used in the Education Reform Act 1988. That definition has been used deliberately so that it captures HE in FE as an important and valued part of the sector.

There is nothing to be gained by highlighting a distinction between higher education and further education providers as the amendment proposes. The Bill enables the necessary flexibility to select board membership that best represents a very broad range of student interests. The amendment would serve to restrict that flexibility. It is essential that the individuals appointed can represent all students, which reflects common practice, where board members are typically appointed for their breadth of experience and representation.

[Mr Marsden]

I have to say that the Minister’s response was an extraordinarily—this was possibly predictable—managerialist response written by his civil servants. It was a pretty poor response. On the specific point he made, I would have more sympathy with the technical position—I have no doubt that the civil servants have gone through the previous legislation—were it not for the fact that in the White Paper and the Bill that was presented, the role of further education colleges in delivering higher education was pretty non-existent. That is why it is important to include the phrase in the Bill at this point.

[Joseph Johnson]

I have made the point that including the phrase is simply unnecessary, because the definition of “higher education provider” that we are using, which is taken from the 1988 Act, captures the delivery of HE through FE colleges. It would be entirely redundant and confusing for people to see a new definition spring up at this point in the Bill.

Turning to amendment 125, widening access and promoting the success of disadvantaged students will be a key part of the office for students’ remit. We want to ensure that in bringing forward our reforms, higher education providers do not lose sight of their vital role in promoting social mobility and in helping some of the most disadvantaged young people in our society to benefit from our world-class HE system.

The integration of the remit of the director of fair access within the OFS signals our commitment to making fair access and participation a priority. The OFS will have a new duty that will require it to consider equality of opportunity in connection with access to and participation across its functions, so widening access and participation for students from disadvantaged backgrounds will be at its very core.

I understand the concerns expressed about the importance of considering experience of widening access and participation when appointing the chair and ordinary members, but just because it is not in the list in schedule 1 does not stop the Secretary of State from appointing ordinary members who have that experience. The OFS’s members will be drawn from a wide range of backgrounds to ensure that the body is supported by the knowledge and expertise critical to delivering its mission and informed by representation that reflects the diversity of the sector’s providers and students.

We have already signalled the importance we attach to access and participation through the duties we are placing on the OFS and through the creation of the director for fair access and participation post. The DFAP will, like other members, be appointed directly by the Secretary of State. The DFAP must have the skills necessary to fulfil the duties placed on the OFS in widening access and participation. The necessary experience will therefore be there within the membership of the OFS. The OFS members will operate in effect as a board.

Amendment 126 relates to HE staff representation. The HE sector is diverse. It includes: large teaching intensive institutions that operate on an international level; highly specialist conservatoires of music, dance and the performing arts; and small, very locally based organisations focused on giving the most disadvantaged groups access to HE. In the Bill we have already included measures that mean the Secretary of State must have regard to the benefit of having represented on the board experience of providing higher education and experience of a broad range of providers. Such experience could come from higher education staff involved in teaching or research, or from leaders of higher education providers.

The most important thing will be that the individuals can bring a broad range of experience and represent interests that go beyond their personal position. In any case, it would be difficult to get a truly representative cross-section of HE staff, even if they filled all 15 available places on the HE Board. It would be impossible to ensure anything like fair representation from the other stakeholders in the HE sector alongside having anything approaching even reasonable representation of HE staff.

In practice, we see no reason why many members of the OFS board will not, at one time or another, have worked in HE and be able to use the experience they gained there to represent HE staff, regardless of whether they are actually employed in HE at the precise time they are serving on the OFS board. I therefore ask the hon. Gentleman to withdraw the amendment.

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[Joseph Johnson]

I thank hon. Members for their helpful and extremely interesting amendments. Although I was less able to be accommodating on previous amendments, I would like to signal that we are giving these amendments very careful thought. There is obviously agreement on both sides that social mobility is a huge priority, all the more so now for this Government. Widening access and participation in higher education is one of the key drivers of that.

I agree strongly with the hon. Member for Sheffield Central that the current director of fair access, whom I played a part in reappointing last year, has done a superb job and continues to be exemplary in the way he discharges his functions in that critical role.

Through our reforms, we are keen to ensure that promoting the success of disadvantaged students will be a central part of the OFS’s remit. Through the Bill, the OFS will bring together the responsibilities for widening participation currently undertaken by the director for fair access and HEFCE. Bringing those functions together in one body will ensure greater co-ordination of activities and funding at national level. That should allow greater strategic focus on those areas identified as a priority. In establishing the OFS, we have been clear that we are creating a single body, whose members will, in effect, operate as a board responsible for a range of functions, including access and participation. It will be the responsibility of the OFS to ensure that all its functions are being fulfilled.

Let me reassure Members the intention is that the OFS will give responsibility to the director for fair access and participation for activities in this area. The intention is that the OFS will give responsibility to him for these matters. We envisage that in practice that will mean that the other OFS members will agree a broad remit with the future director for fair access and participation and that the DFAP will report back to them on those activities. As such, the DFAP would have responsibility for those important access and participation activities, including—critically—agreeing the access and participation plan on a day-to-day basis with higher education institutions.

Amendment 134 would place in legislation details of how the OFS members will operate when considering delegation of functions. It would not, however, be appropriate to put that kind of detail into statute. Rather, we would expect the OFS, once established, to confirm how it will operate and exercise its delegation powers taking account of guidance from the Secretary of State. However, let me repeat and attempt to reassure hon. Members that the intention is for the OFS to give responsibility for access and participation to the director for fair access and participation.

The work of the DFAP does not need to be separated from the rest of the work of the OFS. The reforms mean that access and participation will be considered in the context of everything that the regulator does, with the Secretary of State’s directly appointed champion in the form of the director for fair access and participation. The Government are serious about social mobility and that is exactly what the measures will help to drive. I therefore ask the hon. Member for Blackpool South to withdraw his amendment.

[Mr Marsden]

I thank the Minister for laying out the outline and broader direction so strongly. I am glad that he reflected on my comments and those of my colleagues, and indeed the exchange I had with the hon. Member for Bury St Edmunds, because that was helpful in bringing out the tensions between day-to-day executive activity and broad strategy and policy. He referred to that in his comments.

We will take the Minister’s assurances at face value. We need to do that because what Ministers say in Committee influences the interpretation of the final legislation. We will wait to see how that issue is dealt with—in another form, if that is what he wishes. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Mr Marsden]

The generic points the Opposition Front Benchers would like to make in this area have been amply covered by my hon. Friends the Members for Sheffield Central and for Ilford North. I will briefly touch on amendment 128. I say again that we entirely endorse and think it is of huge importance that that report should come to Parliament on a regular basis. Although this is not part of any of the amendments, it is taken for granted that it should also go to the relevant Select Committees. It is in that context of closing the circle that we wanted to clarify with a probing amendment that the director would report to the board members of the OFS on his performance.

To go back to the point that the hon. Member for Bury St Edmunds made earlier, we do not want the director to sit in a bubble. I can imagine that the OFS board, once it gets going, will have myriad things to consider at its meetings and it is important therefore that we flag up that there is a regular slot for the board members to receive that report from the director for fair access and participation. That would be of benefit to the board as a whole and to the director in maintaining his strong relationship with it.

[Joseph Johnson]

Again, I thank hon. Members for their interesting amendments. Widening access and promoting the success of disadvantaged students will be a key part of the remit of the office for students. It will build on the important progress that has been made in widening participation in recent years. Hon. Members will have noted that the latest data for 2016 entry shows that the application rate for 18-year-olds from disadvantaged backgrounds is again at a record level.

We want to ensure in bringing forward our reforms that higher education providers do not lose sight of their vital role in promoting social mobility and in helping some of the most disadvantaged young people in our society to benefit from our world-class higher education system. The integration of the remit of the director of fair access into the OFS signals our commitment to making fair access and participation a priority. The OFS will have a new duty requiring it to consider equality of opportunity in connection with access and participation across all its functions, so widening access and participation for students from disadvantaged backgrounds truly will be at its very core.

There is a further protection in the arrangements because, as I have said, the DFAP will be directly appointed by the Secretary of State, but ultimate responsibility for access and participation sits with the OFS and it will be the responsibility of the OFS to ensure that all its functions are being fulfilled. As I said in my comments on the last group of amendments, the intention is that the OFS will give responsibility to the director for fair access and participation for activities in this area. We envisage that, in practice, that will mean that the other OFS members will agree a broad remit with the DFAP and that the DFAP will report back to them on those activities.

The OFS board will have responsibility for access and participation but, on a day-to-day basis, I envisage that that will be given to the DFAP. In particular, he or she will have the responsibility for agreeing access and participation plans, as is currently the case. I reiterate that because it is such an important point and I know hon. Members are focused on that issue.

The amendments would have the effect of requiring reports by the director for fair access and participation to be presented to the Secretary of State and to Parliament separately from other OFS reporting. As I said, that is an interesting idea, to which we will give some thought. We agree that it is important for the DFAP to report on their activities and areas of responsibility, so the Bill does require the DFAP to report to OFS members. As I have said previously, we are mainstreaming access and participation as a key duty for the regulator as a whole. As such, it will then be for the OFS members to report on that function.

The OFS members will operate in effect as a board, although they are not referred to by that term in the Bill. It will be required to produce an annual report covering its functions, and access and participation activities have been identified as a key function by virtue of their prominence in the Bill. That report will be sent to the Secretary of State and laid in Parliament. The work of the DFAP does not need to be separate from the rest of the OFS and its work should be reported to Parliament as part of the OFS’s overall accountability requirements. In addition, the Bill allows the Secretary of State to ask the OFS to provide additional reports on access and participation issues, either through its annual report or through a special report. Any such report will also be laid before Parliament and therefore made available in the Library. The OFS can produce separate independent reports on widening participation. It would not be consistent with integrating the role into the OFS to require separate external reporting from a single OFS member when the organisation will be governed collectively by all its members.

These arrangements ensure that effective reporting will be in place, so that the Secretary of State and Parliament can effectively monitor activity in this area. As I said, we are looking carefully at it, but in the meantime I ask the hon. Member for Ilford North to withdraw his amendment.

--- Later in debate ---

[Mr Marsden]

The hon. Gentleman refers to another welcome precedent. Yes, Select Committees sometimes have this power but the devil is in the detail. I am reminded of what President Reagan said: in these matters one should “trust, but verify”. There have been discussions in the past about the powers of Select Committees. This is a new proposal, and it is a probing amendment, but it would do no harm if the Minister were prepared to say today that this is a part of the process that he would welcome.

[Joseph Johnson]

I think I can be of some help. There is no legal obligation for pre-appointment hearings to take place for OFS appointments, as currently none of them is on the Cabinet Office list of appointments subject to pre-appointment hearings—that is a technical point, and I do not want to be accused again of being overly managerial. Despite there being no direct legal obligation, I reassure the Committee that we fully intend to actively involve the Select Committee or Select Committees, as appropriate, in the appointment process, including the option of pre-appointment hearings for senior OFS appointments. I welcome the constructive role that Select Committees can play through pre-appointment hearings. I believe that that involvement will ensure sufficient parliamentary oversight.

For that reason, I firmly resist the suggestion in the amendment that a vote in both Houses should be needed to ratify the appointments. We need to ensure an appropriate level of ministerial involvement in the appointment to a key public role. Parliamentary ratification is not in line with normal practice and would be both burdensome and unnecessary. Furthermore, there is no precedent for parliamentary approval of such appointments. HEFCE appointments have never been subject to parliamentary approval, and the Cabinet Office general guidance on pre-appointment scrutiny states that it is for Ministers to decide whether to accept the Select Committee’s recommendation on an appointment. We are following the Office of the Commissioner for Public Appointments approved process and as such are working closely with an assigned public appointments assessor to ensure that all public appointments are fair and open. I therefore ask the hon. Member for Blackpool South to withdraw the amendment.

[Mr Marsden]

I have heard what the Minister has said. I am grateful for his endorsement of the overall principle. Heaven forfend that I should ruffle feathers in the Cabinet Office dovecote on this matter and provoke a constitutional crisis. On that basis, I am happy to take his assurance and to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Mr Marsden]

I hear what the hon. Gentleman says, and of course we are all honourable Gentlemen and Ladies in this place and I hope we all act rationally, although there has been just a smidgen of examples in the past in which Ministers, on both sides of the House, appear not to have acted entirely so. [Hon. Members: “Surely not.”] Surely not. I take the point that the hon. Member for Cheltenham is making, but I feel that some movement—again, the Minister might not like the phrase “must specify”—away from a phrase that is redolent of Henry VIII powers would be helpful.

[Joseph Johnson]

I understand that the amendment is well intended, but I am afraid we are not going to be able to support it and certainly not as it is drafted. The amendment would require the Secretary of State to specify the reasons for removing a member of the OFS board from office and we strongly resist it. It would take us well away, quite clearly in the wrong direction, from the current legislative arrangements for HEFCE board membership. Such a requirement would be inconsistent with normal practice on public appointments, and as my hon. Friend the Member for Cheltenham hinted, it would be unnecessary, as general public law principles require that the Secretary of State must act reasonably and proportionately in taking an action such as removing a member from the board. The specific terms and conditions of appointments would also have effect in that way.

The Secretary of State might remove a board member for a number of reasons, and in many cases it would not be appropriate to disclose the grounds for dismissal. I am sure hon. Members can understand that the removal might, for example, be because of personal or health-related issues and making those public could be an inappropriate breach of a member’s privacy. Disclosure of reasons for dismissal may have an adverse effect on the reputation or future employment of the member.

Schedule 1 to the Further and Higher Education Act 1992 currently empowers the Secretary of State to appoint HEFCE board members on such terms and conditions as he deems appropriate. For the past 25 years, Secretaries of State from successive Administrations have routinely attached terms and conditions to the appointment of HEFCE board members relating to the circumstances in which they might be removed from office. These have, for example, included conditions relating to the individual’s fitness to hold public office and record of attendance at HEFCE board meetings.

--- Later in debate ---

[Mr Marsden]

On that point, I appreciate that the Minister is trying to be helpful and I also appreciate there is a balance to be struck between transparency and the sorts of personal issues he talks about. I do not think I am going to agree with him that the Bill has got the balance right; I personally believe that there needs to be greater transparency in it. To be helpful, given that he is praying in aid HEFCE as the precedent, if he is not prepared to accept the amendment, will he at some point disclose the generic list of principles that would be appropriate to remove a member of the OFS board?

[Joseph Johnson]

As I have said, over the past 25 years Secretaries of State have routinely attached terms and conditions to the appointments of HEFCE board members. I gave a couple of examples of the conditions that have been common practice, including that an individual must be fit to hold public office and that they must have a strong record of attendance at HEFCE board meetings. Those are the kinds of conditions that are typical, the breach of which might lead to a Secretary of State deciding that it was necessary to remove a member. I have to say that it has never proved necessary to remove a HEFCE board member over the past 25 years. If it had, the Secretary of State would have written to the board member in question to explain his or her decision. That letter would have had to be clear about the grounds on which the Secretary of State was removing the board member, and the individual in question would have had every right to make that letter public if they had wished to.

The Bill draws on that successful historical practice. Schedule 1 makes provisions identical to those in the Further and Higher Education Act as regards the Secretary of State’s discretion to set such terms and conditions for appointing OFS board members as he or she deems appropriate. As I have said, that replicates current arrangements and provides that crucial flexibility for the Secretary of State to set a clear expectation, appropriate to the circumstances of the time, on appointing OFS board members. In addition, the amendment would be inconsistent with the arrangements that apply more generally across the range of public appointments. I therefore ask the hon. Gentleman to withdraw his amendment.

[Mr Marsden]

We are not going to agree in principle on this issue, but I understand the Minister’s position. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(Mr. Evennett.)

Oral Answers to Questions

Debate between Lord Johnson of Marylebone and Gordon Marsden

Tuesday 28th June 2016 Commons Chamber

[Joseph Johnson]

Certainly. In our manifesto we committed to rolling out our very successful catapult network, which provides shared facilities that companies, on their own, could not afford to construct. That enables our businesses to maximise the value of research coming out of our university system. In this Parliament, we have already delivered new catapults at Alderley Park in Cheshire and in Cambridge, with the precision medicine catapult. This is an expanding and very successful network, and it will continue to be so.

[Mr Gordon Marsden (Blackpool South) (Lab)]

The Minister’s higher education White Paper rightly bangs on about how important high-level skills are, but the imminent skills White Paper is not even part of his new Higher Education and Research Bill. With those who teach, manage and work in HE fearful of the consequences of Brexit, should he not be prioritising skills strategies for both our community-based and internationally focused universities and using FE colleges as key HE providers? Why is he instead gambling the bank on allowing unknown, brand-new providers to get degree-awarding powers from day one—probationary degrees from probationary providers—risking our universities’ brand reputation overseas, as well as jobs and productivity at home?

[Joseph Johnson]

I am working closely with my colleague the Skills Minister, whose forthcoming White Paper will have many of the answers to the questions the hon. Gentleman has posed. We are surprised by the tone of scepticism about the potential for new higher education providers to lift quality and enhance the range of high-quality higher education on offer in this country. I am afraid, though, that that is of a piece with the Labour party’s previous opposition to the conversion of polytechnics and to new universities in the 1960s.

Education (Student Support) (Amendment) Regulations 2015

Debate between Lord Johnson of Marylebone and Gordon Marsden

Thursday 14th January 2016 General Committees

[The Minister for Universities and Science (Joseph Johnson)]

It is a pleasure to serve under your chairmanship, Mr Percy. I welcome the chance to set out the case for this statutory instrument, which details the higher education student support arrangements for the 2016-17 academic year. It is, as hon. Members said, an important instrument, and its provisions touch on some of the principles that guide the Government’s higher education policies.

The instrument includes an increase in loans for living costs for current full-time students, as well as a number of policy and technical changes to ensure that the student finance system remains fair. The most significant provision is the change to the student support package for new students, and I will devote the majority of my remarks to this.

Before discussing the content of the instrument, I would like to clarify the parliamentary process—an issue raised by a number of Opposition Members. Changes to student support are made annually through secondary legislation, through amendments to the Education (Student Support) Regulations 2011. There are a number of hon. Members here who are not able to vote in the Committee, but who have none the less made valuable contributions to this important debate, illustrating the fact that Parliament is having an opportunity to examine this measure.

These regulations are made under the Teaching and Higher Education Act 1998, which was passed under the previous Labour Government. Today’s Delegated Legislation Committee therefore follows the procedure agreed by Parliament. This debate follows an early-day motion in the Commons, and I understand that the other place will also get the chance to consider this instrument following the tabling of a motion yesterday by Lord Stevenson of Balmacara.

[Mr Marsden]

I share other Opposition Members’ respect for the Minister and I sense that he is in a dilemma because he is not entirely comfortable with this process. He is trying to justify it by saying that it is due custom and practice. He is absolutely right about that, but any Government have the ability to break due custom and practice. I know that only too well, because I sat in this House in 2006, when we had the great casino debate. That measure was obviously going to affect Blackpool and could have been brought to a Delegated Legislation Committee, but because of the strength of feeling on the matter in the House, the Government of the day allowed a 90-minute debate on the Floor of the House. If we can debate casinos on the Floor of the House for 90 minutes, why cannot we debate this issue?

[Joseph Johnson]

I am glad that the hon. Gentleman acknowledges that we are following due custom and practice. I will carry on explaining the Government’s intentions in bringing this instrument before the Committee.

The instrument provides that those students beginning courses in 2016-17 will qualify for increased loans for their living costs while studying, instead of maintenance grants. An eligible student whose family income is £25,000 or less and who is living away from home and studying outside London will qualify for up to 10.3% more living costs support in 2016-17 than they would receive under current arrangements. That is an additional £766 of support, and that increase in support for living costs has been called for by individual students. Indeed, the 2012 report by the National Union of Students entitled “The Pound In Your Pocket” indicated that there are two main considerations for students when deciding whether to go to university. The first is whether they have the means to meet their costs when needed, and the second is whether the eventual benefits of higher education will outweigh the costs. With these regulations, we are ensuring that students from the most disadvantaged backgrounds have access to more support than ever before. Students understand the value of obtaining a degree.

--- Later in debate ---

[Joseph Johnson]

We published the full equality impact assessment on 5 December, which, in reference to the earlier comments made by the hon. Member for Blackpool South, gave the Committee plenty of time to analyse it and go through it closely before today’s meeting. The Government have been fully transparent with respect to the equality impact assessment.

[Mr Marsden]

On a point of order, Mr Percy. The Minister is playing with words in terms of 5 December. Actually, the date on the impact assessment is November, so obviously they got it out even later. The fact of the matter is that the membership of this Committee, with the exception of himself and myself, was drawn up only a few days ago, so how Members could be expected to know that they would need to look at it in December is another matter.

Draft English Apprenticeships (Consequential amendments to Primary Legislation) Order 2015

Debate between Lord Johnson of Marylebone and Gordon Marsden

Wednesday 21st October 2015 General Committees

[Joseph Johnson]

It is a pleasure to face such a formidable, forensic opposite number—I am not envious of my hon. Friend the Minister for Skills in that respect. I will do my best to answer some of the hon. Gentleman’s questions, and, in areas in which I cannot provide him with as much detail as he would like, I will happily write to him and other members of the Committee.

The hon. Gentleman’s first question was whether all references to apprenticeships in legislation are now covered, following the changes made in this order, or whether there are still loopholes. The intention is that the work done in this Committee today should mean that the legislation is now comprehensive, and we hope that we are addressing his concern in that respect.

The hon. Gentleman’s second major point was about the Welsh aspect of the order. He asked what discussions the Government have had with the Welsh Government on the protection of apprenticeship standards. As he knows, skills policy in Wales is a devolved matter, and therefore the protection of apprenticeship standards in Wales is an issue for the Welsh Government.

I turn to how alternative English apprenticeships will work, which is another issue that the hon. Gentleman raised. Alternative English apprenticeships are intended to allow the Government to make provision, where appropriate, for apprenticeships in occupations where it is not the norm for apprentices to have an employer.

Finally, the hon. Gentleman asked about responsiveness to the needs of employers. I point out that we have, as he knows, set out the trailblazers programme. As I mentioned, there are 140 groups in that programme, comprising 1,300 businesses involved in designing world-class apprenticeships, including degree apprenticeships, which are essential for employers to ensure that they get the pipeline of skills that they need in years to come. We are working closely with trailblazers at all phases to ensure quality across standards. Giving employers responsibility for developing those standards is absolutely vital in ensuring that they have a vested interest in producing high-quality standards that are robust. A number of criteria have been set that all new apprenticeship standards must meet in order to ensure quality and consistency across all apprenticeships. Those criteria provide a framework against which to approve the proposals put forward by employers developing the new standards.

[Mr Marsden]

I appreciate, again, that the Minister’s officials may wish to draft something for him in response to this point. When I referred to alternative apprenticeships, I mentioned two categories that had been suggested to me: one was self-employed people and the other was people who do not earn during their apprenticeships. There are certain very narrow circumstances in which that can and does happen at the moment, but I am sure the Minister would agree with me that that should not be regarded broadly as the norm, even for self-employed people. It would therefore be useful to know in due course, if not today, just how widely or narrowly the measure is drawn, if indeed the criterion is applied in those cases.

[Joseph Johnson]

On this occasion, I will write to the hon. Gentleman and make sure that he has that information available to him shortly.

Question put and agreed to.