Higher Education and Research Bill

Lord Kerslake Excerpts

Committee: 3rd sitting (Hansard): House of Lords
Monday 16th January 2017 Lords Chamber

[Lord Willetts]

My Lords, that fascinating intervention gets to the heart of the direction of travel that is being debated in many different amendments this afternoon.

My understanding—I am sure the Minister will correct me if I am wrong—is that universities and higher education institutions are not public sector bodies. Nevertheless, in a range of different contexts, Parliament has decided to impose on them the obligations they would have if they were. The public sector equality duty could be one example. Freedom of information is another example. My concern—here I am a bit of a purist—is that universities are not part of the public sector and it is quite important for universities that they are not. If I were running a university—which I am not—I would start feeling two kinds of pressures on me. On the one hand, a significant number of Members of this House and elsewhere want to treat universities as if they are public bodies, so that whenever there is a nice public sector duty around they say, “Let us add it to universities although they are not part of the public sector”. Both FoI and public sector equality are examples. On the other hand, at the same time the Government—and this process goes back before 2010—are saying, “There is a private contractual obligation to deliver a service to a student so really they have got to be subject to competition law and the CMA and so on”. They end up being subject to a pincer movement, where they have got all the private obligations as if they were a company that needs to be competing, plus we throw in all the public obligations as if they were in the public sector when they are not.

The dynamic of these debates begins by saying we must do more to preserve the autonomy of universities and then spend the rest of the time adding extra obligations we would like them to comply with. If at the end of the legal process of preparing what will become an Act of Parliament we have ended up with more obligations on the universities, making them subject to the CMA, and more public sector duties despite them not being in the public sector, we will leave universities even more burdened than they are at the moment. We require some self-denying ordinance so that we do not keep piling more obligations on them. We have already imposed on them a range of obligations that go way beyond what any other private body is susceptible to. At some point there is a danger that universities will end up in the public sector. There is a danger that we all talk about them as if they are part of the public sector and treat them as if they are hospitals, schools and so on. They are not. They are independent bodies outside the public sector and we should be wary of imposing obligations on them as if they are inside, especially when we are in parallel and subject to greater market competition as well.

[Lord Kerslake (CB)]

My Lords, I strongly endorse what the noble Lord, Lord Willetts, has said. I declare an interest as chair of the board of Sheffield Hallam University and the chair of Peabody. An explanation for that will follow

There is a cautionary tale here in relation to housing associations and the story around their public body status. For a long period of time they were regarded as not public bodies and therefore able to exercise borrowing and take forward proposals outside of the public sector. The effect of successive changes of regulations and controls on housing associations then led to a reclassification by the ONS as public bodies. As a consequence we are now in a process of seeking to deregulate housing associations to move them out of that situation. We do not want to go through the same process for universities. We should proceed with care on this issue.

[Lord Stevenson of Balmacara]

I always proceed with care. I am not afraid of that sort of gibe. We could get ourselves in an awful tangle if we start following the noble Lord, Lord Willetts, down this route. It is a familiar theme that he runs with all the time whenever he gets close to something he does not want to do. We must all be careful not to have too many loads on us. We can worry too much about form and not enough about content and I want to challenge him on that. I understand what the noble Lord, Lord Kerslake, is saying on this, but these bodies are, if you stand a little apart from the close intricacies of how they operate, performing a public function, a function that is valued by the public. I have said already that they are public bodies but not public sector bodies, but as the noble Lord said, there is an issue about FoI and the implications around that. We have got to find a balancing point on that.

Let us park the philosophy for a second and return to the substance of the original amendment. Our Amendment 111 is a probing amendment to try to get a little further on this, because I could not reconcile the drafting in the original Bill with what I thought would be the sorts of issues reflective of the health or otherwise of the sector and would be required as mandatory transparency conditions. The obvious point about using the existing equality legislation occurred to others who are more versed in these issues than I am. I tabled a probing amendment on those lines to try to get that out and it has revealed an interesting topic. I do not know where we go with this. I understand the issues that the noble Baroness, Lady O’Neill, gave us an insight into and which we will need to reflect on.

Three things occur to me. It was rightly pointed out that our Amendment 111 would delete the socioeconomic background requirement in Clause 9(3). There was a reason for our madness on that point in that it seemed a wide-ranging issue on which to request transparency. We are talking about mandatory transparency and socioeconomic background is a term of art, not a term of science, although one could get close to it from a number of directions. It is so imprecise as not to have a particular value. Moreover, ethnicity is not the same as race and the gender of individuals is a multiple, complex issue. These issues are raised within the Equality Act and we have to be much more subtle about how we approach them. I was looking more at the detail and working back from that.