Higher Education and Research Bill

Lord Adonis Excerpts

Committee: 2nd sitting (Hansard - continued): House of Lords
Wednesday 11th January 2017 Lords Chamber

[Lord Willetts (Con)]

My Lords, I would like to comment on some of the interventions we have heard expressing concerns about alternative providers. Sometimes, it has been an unhappy story and alternative providers have not delivered what they were supposed to but some of the criticisms are unfair, for two reasons.

First, we should remember that these organisations have no access to research funding or funding for higher cost subjects, so there is a large range of university activities for which they have no access to public funding to engage in. In fact I know that for some of them, their grievance is that they would rather like to have access to some of these strands of funding so that they could provide a greater range of subjects.

Secondly, it is not entirely true to say that they are all of a sort. In my experience, they are quite astute at identifying where there are gaps in provision. For example, modern music is not a subject which is particularly accessible and well taught in higher education institutions. If you want some qualifications of higher education standard for modern music, you by and large go to an alternative provider. Many of them have focused on vocational courses. There is increasing interest in alternative models for delivering medical education. I am being wary as I see the noble Lord, Lord Winston, is poised but there is beginning to be debate about whether medical education could do with some innovation, and some new providers would like to come in.

The argument on this was very well set out at the time of Robbins. There was a lively debate then about new ways of delivering higher education, and the conclusion of some of the leading universities at the time and of the UGC was that the best way to get innovation in higher education was to allow in new institutions to deliver it, as that was a better way of achieving it than expecting the existing ones to do things differently. The new Robbins universities were of course set up without any prior track record. They got university title straightaway and came in with great ambitions for doing things differently.

As we go through these clauses there are lots of genuine concerns, which we need to focus on, about the weight given to competition and collaboration. I may come to those when we debate those clauses, but we should just remember that the story of the advance of British higher education is successive waves of new entrants coming in and doing things differently. That is why we have the diversity that we currently celebrate, and we should, as a minimum, expect it to be as possible in the future for new entrants to come in as it was at the time of Robbins and of the great Victorian reforms.

[Lord Adonis (Non-Afl)]

My Lords, I am glad I am following rather than preceding the noble Lord, Lord Willetts, because the point I wanted to make was about geographical diversity. Mindful of the injunction he gave earlier on that we do not want to load still more duties and responsibilities on the Office for Students, I am not suggesting that there should be an amendment on this, but it is very important that the OfS, and indeed public policymakers at large, have regard to the importance of fostering and improving the geographical diversity of our higher education institutions. One of the things that is surely clearest to those of us who have been engaged in the big and increasingly challenging debate on regional regeneration is the importance of higher education institutions in the regions serving a steadily higher proportion of our larger communities across the country.

What is interesting about Robbins is that of the big developments in the 1960s, although it is true that there was some significant innovation in terms of the type of higher education being introduced, by far the biggest and best example was not in fact a Robbins institution but the Open University, which was quite strongly opposed by some of the established institutions at the time. It was only—how can I put it?—a significant exertion of prime ministerial power on the part of Harold Wilson, along with Jennie Lee, that got the Open University going.

[Lord Willetts]

I completely accept the heroic success of the Open University. But is the noble Lord, Lord Adonis, saying that he very much welcomes the fact that it got university title straightaway?

[Lord Adonis]

The OU was a wise and sensible innovation, although there is a wider issue here of alternative providers and profit against trustee status, which I will come back to. The 1960s universities were of course set up on the trustee model. The most significant change that Robbins made was not innovation in terms of types of university, but in extending university institutions to large parts of the country where they either had not existed at all before or could offer only other people’s degrees. The University of London was basically the institution which enabled large parts of the country to have any higher education system at all in the past.

Three years ago, on behalf of the North East local enterprise partnership, I was asked to lead a review of policies to promote economic regeneration in the north-east. One of the things that became clearest to me in our work was that the single most important class of public institutions, in terms of fostering regeneration and innovation in the north-east, were the five universities in the region. Without them, what was an exceptionally challenging area for growth, innovation, the location of businesses and creating higher education opportunities would be in a much worse condition. Underlying this, a particular issue which we face as I see it in the higher education sector is the propensity of students, particularly those from less-advantaged backgrounds, to study at local universities rather than to aspire to go to national universities. If the local universities are not there or do not themselves offer the quality—there will often not be a choice there because of the nature of their communities —then there are no higher education opportunities at all in those communities. When it comes to objectives for public policy for the period ahead, maintaining and enhancing the geographical diversity of high-quality institutions is hugely important.

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[Lord Willetts]

My Lords, I would like to follow on from that speech by asking the Minister, who has been so helpful this evening, to clarify how collaboration might work. I listened attentively to what he said in his intervention on the previous group of amendments and he seemed to make the argument that this overarching aim of serving the interests of students would encompass both competition and collaboration. It would be helpful to me and perhaps to other Members of the Committee to have that explained.

We have had examples from academics of what might happen in the world of universities. Let me give an example from the area of policy, which is that sometimes a university may have got into significant financial difficulties. What HEFCE did was essentially to broker a merger of universities. Sometimes that involved sending a rather weak swimmer to rescue a drowning man and created another set of problems, but nevertheless what HEFCE can do when an institution gets into difficulties is promote mergers.

It is an unhappy parallel and I am reluctant to raise it, but we have seen examples in health legislation of bringing in a duty to promote collaboration. Reportedly, that subsequently led to occasions when it was rational for two underfunded and financially exposed hospitals to come together, but that was not possible because there was a competition requirement on Monitor with no scope for promoting collaboration. So it would be helpful if we could hear from the Government that they do indeed understand these types of functions and that there could be circumstances where it remains desirable, and—here I follow on from what was said by my noble friend Lord Jopling—whether the way to tackle it is through a long list of duties or a simpler overarching statement. It would be helpful to understand the logic.

What is partly going on here, if I may say in my final observation, is that we are dealing with a problem of trust. Indeed, we may have someone who is an expert on trust here in the Chamber with us. The odd feature is that HEFCE had an extraordinarily wide range of powers, which it operated with extraordinarily high levels of discretion and a minimal legal framework. It got away with that because, by and large, people understood and trusted HEFCE. The more we can think of this body as a successor to HEFCE in a different financial environment—it does not have grant-giving powers as its ultimate source of responsibility, so it needs a legal power as a regulator instead—the more we can think of it as the heir to HEFCE, apart of course from the research side, and exercising the range of functions that HEFCE had. At one moment, HEFCE was promoting cold spots and at another it was brokering mergers because, by and large, it was trusted by the sector to do that kind of thing. Some statement about the spirit of HEFCE living on, combined with a broader approach, might be a better way of tackling this than setting out a very long list of duties and obligations of which I continue to remain wary. There is no evidence that that promotes trust in any other area, and I have to say that the advice I was given by parliamentary draftsmen when I was a Minister was that they hated long lists of duties in undifferentiated lists. They never regarded that as a good way of defining a legal framework within which a body would operate.

[Lord Adonis]

My Lords, I turn to the issue of geographic diversity. One of the prime areas where there has been collaboration is in creating campuses and a university presence in areas of the country where it otherwise would not have been either an economic or a prime mission of a university to seek to make such provision. The example that comes to mind from my time as a Minister, and where quite a lot of work was done by government bodies to foster collaboration, was in Medway. As I recall, that was a collaboration between the University of Greenwich, the University of Kent and, I think, another institution to enable higher education provision to be made in a very challenging and deprived area. A sole provider would not have been prepared to move in there. The same was true of the creation of higher education provision in Cornwall, which, as I recall, was a collaborative vision on a similar basis. Looking at the need to spread geographical provision more widely, fostering collaboration between institutions, and further education institutions where necessary, will be very important to making any provision at all.

Collaboration is not only between prestigious institutions, although I should add that in my experience the Government can foster collaboration of any kind where they are prepared to sign very large cheques, which has a large part to do with Crick. However, where we want to see more provision in areas of the country where it is not at the moment in the prime mission of any institution to provide it, collaboration between different types of institution may be a prime way to see that come about.

[Viscount Younger of Leckie]

My Lords, I assure the noble Baronesses, Lady Wolf and Lady Brown, and the noble Lord, Lord Stevenson, that I fully understand the principles they seek to address here. To reassure the noble Baroness, Lady Brown, on the new duties for collaboration and innovation, we are wholly supportive of collaboration and innovation where it is in the interests of students. I hope I can go some way to answer the question raised by my noble friend Lord Willetts on how collaboration and competition will work. I will say a little more about that later. For example, providers could share services to generate efficiencies that allow more resources to be focused on teaching, offer courses in partnership, or design new styles of degree programmes to meet differing students’ needs. These are essentially non-competitive ways to enhance the offering from both or more institutions should they decide to collaborate.

I will start by saying a little more about collaboration. The general duties of the Office for Students are absolutely consistent with the idea that providers should continue to collaborate and innovate in the new regulatory system. There should be no conflict with the OfS’s duty to have regard to encouraging competition between higher education providers where it is in the interest of students. My noble friend Lord Jopling is right in his assessment that the OfS is already required under Clause 2 to have regard to,

“the need to promote quality, and greater choice and opportunities for students”.

Such collaboration and innovation is implicitly and undoubtedly in the student interest. To pick up on the question asked by my noble friend Lord Willetts, there is nothing inherent in that “have regard to” duty that would prevent the OfS also supporting collaboration between higher education providers if it considers it is also in the interests of students, employers or the wider public—for example, by supporting the merger of two providers.

The noble Lord, Lord Winston, asked in his thoughtful, brief intervention how the OfS would enforce collaboration. We do not wish to create an expectation that the OfS should be formally or actively regulating this type of activity. That would be unnecessary.

On innovation, we concur with the noble Lord, Lord Stevenson, about a lack of innovation in the higher education sector. It is important for the OfS to have a focus on supporting a competitive market. That means it must regulate fairly and allow all providers to operate under the same set of rules. This will make it simpler for new high-quality providers to enter and expand, help to drive up teaching standards overall, enhance the life chances of students, drive economic growth and be a catalyst for social mobility.

Competition will incentivise providers to raise their game, fostering innovation. New providers can respond innovatively to what the economy demands and equip students with the skills needed for jobs of the future. So promoting innovation, like collaboration, does not require a separate duty. When it is in the student interest, the OfS will be fully able to support it because the student interest is at the very heart of the OfS. Requiring the OfS to have regard to encouraging competition only where it is shown to be in the interest of students, employers and the wider public would be unnecessary, burdensome and inflexible to implement. The current wording already limits the promotion of competition to where it is in the interests of students and employers. The amendment would mean that the OfS would have to demonstrate that in some way that these various interests were met, placing an unnecessary evidential burden on the regulator and, in turn, on higher education providers.

I now turn to whether the OfS should have regard to encouraging competition where this is in the interest of the public or of wider society. The Bill makes explicit the 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 higher education sector.

As I set out in the previous debate, operating in the public interest or that of wider society is implicit in the role of the OfS as a public body that is accountable to the Secretary of State and to Parliament. The noble Baroness, Lady Wolf, spoke of the conflict between the roles of the CMA and the OfS and asked me to provide further detail. As I said on Monday, I look forward to discussing this matter later in Committee, when we will consider the noble Baroness’s proposed new clause. I hope that she will have a little patience and that we can discuss that at more length later on in the Bill. In the meantime, I hope that I have been able to reassure the noble Baroness, Lady Wolf, and the noble Baroness, Lady Brown, who spoke at the beginning of this debate, that we have struck the right balance—and it is a balance. I hope that she will not press her amendment.