Higher Education and Research Bill (Fourth sitting)

Paul Blomfield Excerpts

Committee Debate: 4th sitting: House of Commons
Thursday 8th September 2016 Public Bill Committees

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

I echo the hon. Lady’s pleasure at serving under your chairmanship, Mr Hanson.

I shall move straight to the points raised by the amendment, with which I fundamentally disagree. I do, though, appreciate the hon. Lady’s efforts to be helpful and am pleased to have a chance to address the points she made. The Bill sets out a programme of reforms for higher education that will improve quality and choice for students. It will encourage competition and allow for consistent and fair oversight.

As I said when I gave evidence to the Committee this morning, there have been several significant changes to the higher education system since the last legislation was introduced to overhaul the regulation of the sector, all the way back in 1992. The majority of funding for the system used to come directly from the Government, in the form of grants. We have now moved to a system in which students themselves fund their studies.

The regulation of the sector clearly needs to keep pace with developments if confidence, as well as our international reputation and standing, are to be maintained, so we need an HE regulator that is focused on protecting students’ interests, promoting fair access and ensuring the value for money of their investment in higher education. That has been a central tenet of Government reforms since the publication of the 2011 White Paper, “Students at the Heart of the System”. Ensuring that the student interest is at the centre of the sector’s systems and structures is a cardinal principle of our approach.

[Paul Blomfield (Sheffield Central) (Lab)]

I thank the Minister for giving way; it is probably the first of many occasions. I wonder whether he could not give some reassurance to my hon. Friend the Member for Walsall South on the issues she is raising by indicating that he views our amendments sympathetically. They would give life to what he just talked about—putting students at the heart of the system—by providing for effective student representation both at the top on the OFS board and throughout the system.

[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.

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[Wes Streeting]

Given the nature of the role of board members, those people would not be token; they would in fact have serious duties and responsibilities, and their voices and valuable perspectives would be heard at the heart of discussions. I might argue, by the way, that patient interests really ought to be represented on the board of the Care Quality Commission, but that is certainly outside the scope of the Bill. I have a serious point: I urge the hon. Gentleman and the Minister to agree with the new Prime Minister, who has said some interesting things since her elevation to the highest office about the importance of having worker and consumer representatives on company boards. That is an interesting point that ought to be addressed at the heart of the Bill.

Whether we believe that students are consumers of higher education or we prefer to see them as co-producers, both those visions would be served by these amendments, because students’ voices would be heard on the board of the office for students. I propose that there should be two student representatives, because I found—particularly in the higher education sector—that it was often helpful for there to be someone else who shared my perspective and experience when I was sat at the table with people who had often been around for some time, had been through the mill and had a great deal of experience. That principle has been supported by the evidence that the Committee has gathered. It is regrettable that we had only one NUS representative in, and for only 15 minutes. We had two GuildHE representatives in for an hour. In fact, we heard a whole range of perspectives from just the universities represented during our evidence gathering, but there was very limited time for students. I hope that we do not make the same mistake with the architecture of the higher education system.

Placing students on the board of the office for students would bring to life the Minister’s commitment that the new body will place students at the heart of its work. We might have a debate about the best mechanism for that and the appointments process. I have suggested, for example, that the board itself should appoint student representatives, there might be some chopping and changing as a result of turnover or churn, and the Secretary of State may not want to get bogged down in annual or biannual appointments.

We can debate implementation and perhaps even tidy it up on Report, but at this stage I would like the Government to commit to including students on the board of the office for students. That is not much to ask. It would not have a great cost, but there would be an opportunity cost of excluding students. Students have a valuable perspective to offer. There are countless examples of NUS representatives, student union representatives and students themselves making valuable contributions to university governing bodies and higher education bodies and enhancing the quality of our higher education sector as a result. I commend these amendments to the Committee and hope for a favourable hearing from the Minister.

[Paul Blomfield]

To make up for failing to do so earlier, may I say what a pleasure it is to serve on this Committee under your chairmanship, Mr Hanson? I look forward to several weeks of debating with the Minister, who through the process of this Bill being brought together has proved to be a very listening Minister. He has ensured that proposals have developed and responded to concerns that have been raised. I hope we can continue to do that as we debate. While there will be a few dividing lines between each side of the Committee, there are also many things on which we can agree. Many of the amendments have been tabled genuinely to be helpful—this is one such amendment—and I hope there will be space for us to reach some understanding around them.

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[Joseph Johnson]

We have made it clear that we want the student voice prominently represented in the governance structures of the main regulatory body. We would not want to set out in legislation that the holders of particular positions in the NUS or other student unions had ex officio places on the board of the office for students. That would tie the hands of the board of the OFS in a way that would be entirely undesirable in primary legislation.

I want to pick up on one or two points that the hon. Member for City of Durham made. She said that the way in which the higher education market had evolved to cause students to be regarded as consumers was regrettable, and she also regretted the withdrawal of the state from the financing of higher education. I would like to point out that that is not true: the taxpayer still makes a considerable contribution to the funding of the system. Taxpayers fund it directly, and also often subsidise the loans that underwrite students’ studies. That is a critical feature of a progressive higher education system that has enabled many people from disadvantaged backgrounds to go to university and benefit from it.

As I was saying, schedule 1 is progress. It includes a requirement that is not found in current legislation. The student voice and the student interest will be represented in the main regulatory body; that has not previously been the case. The Committee should welcome that, even if some want the types and specific characteristics of the student representatives to be set down even more clearly.

[Paul Blomfield]

I thank the Minister for giving way again. He has explained his aspiration to engage students. The first OFS board will set the tone; it will set an operating framework that will be maintained over many years. Under the Bill, would the Minister expect that first board to include a current, or at least very recent, student, so that that particular experience could complement its work?

[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.

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[Dr Blackman-Woods]

I rise to support the amendment and the excellent case that my hon. Friend the Member for Blackpool South has made. On Tuesday, we heard from the director of fair access, Professor Les Ebdon, about how important it is that the Bill protects the interests of not only current students but future students. I cannot overstate the importance of the Bill providing a robust framework for fair access to universities, and I am concerned that it may water down some of the director of fair access’s powers to hold universities to account on widening access.

That issue was raised by Professor Ebdon in his evidence, during which he said:

“The concern that I would have is around whether it actually gives more power to the director of fair access or not.”

He was speaking about the new role of director for fair access and participation. He added:

“At the moment, the director of fair access has the sole authority for deciding whether an access plan is sufficient and universities have done what is sufficient to promote and safeguard the interests of students. I know there would be a number of universities that, if they had somebody else—another chief executive above me—to go to, would take my decision to them, because they argue long and hard with me about the decisions I make.”––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 57, Q86.]

The point of the amendment—this may address the point made by the hon. Member for Bury St Edmunds—is that it seeks to ensure that the final responsibility for decisions relating to fair access and participation rests solely with the director for fair access and participation, not with other members of the board or a chief executive who might be in the structure above the director. The amendment seeks to address the concerns expressed by OFFA by ensuring that responsibility for holding universities to account rests solely with the director for fair access and participation, and that universities cannot try to undermine the authority of the director by going above his or—at some time in the future—her head to a higher authority.

There is a danger that without the amendment, the good progress that we are making on widening access could be slowed down as universities delay taking action on failings in their access programmes, believing that they can rely on complaining or appealing to someone else to overturn what has been requested of them by the director for fair access and participation, and that they may not ultimately have to take the actions that he or she suggests.

I look forward to hearing what the Minister has to say. If he does not like the wording of the amendment, we would be happy for him to come back with another form of words that would ensure that there is no watering down of directives that might be given by the new director for fair access and participation.

[Paul Blomfield]

I rise to speak to my amendments, which in an extraordinary example of excellent co-ordination say much the same thing but in a slightly different way. Amendment 156 tries to address what I see as a flaw in the schedule as drafted, which makes the director for fair access and participation responsible simply for reporting. The amendment seeks to clarify that he or she is not responsible simply for reporting but for that function and reporting on it. I think that is a helpful additional drafting point.

Amendment 157 clarifies the point about delegation and that the director should not be bypassed by his or her responsibilities being delegated to somebody else. The way that we deal with the matter could set the tone for discussions over the next few weeks. There is complete agreement on trying to achieve widening participation and enormous progress has been made. The Government have shown commendable ambition to make further progress. With these amendments we are considering ways to help that along.

I am sure my colleague the hon. Member for Cannock Chase will acknowledge that when we considered this issue in the Select Committee on Business, Innovation and Skills there were, despite the one area of disagreement, many areas of agreement. One was fair access. Changing the institutional architecture of the sector, which has merits, by bringing the Office for Fair Access into the OFS, also has risks unless we protect the autonomy and authority of that function within the office. That was a key recommendation of the Select Committee report, agreed by all Members. It also relates to the next group of amendments and I will say more about it then. We are simply seeking to ensure that that function has the authority to deal with universities, to get the sort of change of culture and practice that we are all trying to achieve.

I was a supporter of David Willetts’s appointment of the current director, which was not uncontroversial at the time. That was a signal from the previous Government that there was an intention to see change and Professor Ebdon has assisted that process enormously. He has been a very impressive director of fair access and we should listen closely to the evidence that he gave us on Tuesday. He is clear that this sort of definition is required to ensure that the director has the authority to help the Government achieve their objectives in negotiating the deals with the universities.

I hope the Minister will say he is happy to bring back some different form of wording, if not to accept the amendments, picking and choosing between mine and those tabled by my Front Benchers. I hope he will be able to make an amendment that reflects that suggestion, in which case I would be happy not to press mine to a vote.

[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.

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We know from all of the evidence that exists that fair access to higher education is not simply the responsibility of universities; it stretches back far earlier, in terms of both the education system and broader aspects of social policy. In that context, it is important to give all Members an opportunity to look carefully at the issues contained therein. Given that, I hope the amendments will receive a favourable hearing from the Minister and that he can consider them as he will be considering the amendments we have just debated.

[Paul Blomfield]

I will only make a brief contribution, which is to follow up on the point I was making about the Select Committee report on this specific point. I will share the brief recommendation we made as a Committee, with the endorsement of every member of the Committee:

“In order to best promote widening participation, and to help the Government meet its own targets, we believe it important that the decisions of the Director for Fair Access are seen as fully independent and not subject to being overruled by any higher authority within the same organisation. The ability for this post to report direct to the Minister and to Parliament should therefore be built into the new higher education architecture.”

I think that crystallises the point made powerfully a moment ago by my hon. Friend the Member for Ilford North when moving his amendments. I hope, and I am sure, that we can reach the same accommodation if the Minister is able to respond in the same terms as he did to the previous group of amendments.

[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.

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[Paul Blomfield]

Does my hon. Friend agree that we are at such a critical juncture in developing widening participation targets and strategies that it is a risky time for them to be completely subsumed? I would not challenge for a moment the Minister’s genuine intent, but there is a risk in organisations that what the Minister described as “mainstreaming” sometimes means that functions get subsumed, and we have to take care that the particular function of widening participation is not.

[Wes Streeting]

I wholeheartedly agree with my hon. Friend; his point reinforces the recommendation of the Business, Innovation and Skills Committee. When the Minister goes away to reflect on these issues, he should consider not just what is being said here but the view of that Committee. Parliamentary accountability is important, and as my hon. Friend warns, there is sometimes a risk that mainstreaming leads to a lack of focus. I do not think we are anywhere near where we need to be as a country on social mobility—on ensuring that people’s backgrounds and the circumstances of their birth do not determine their destiny in life. Higher education has a critical role to play. We know from looking around the Palace of Westminster and from looking at the top of business and civil society that the levers of social, political and economic power tend to be pulled by people who went to university—often to the same universities.

It is important that we keep a close eye on this matter, because it goes beyond the question of value to higher education; it is in the national interest. That is why there is such interest in parliamentary debates on these issues, and why I think parliamentary accountability is important. However, I am mindful of what the Minister said about considering these issues further and so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Higher Education and Research Bill (Third sitting)

Paul Blomfield Excerpts

Committee Debate: 3rd sitting: House of Commons
Thursday 8th September 2016 Public Bill Committees

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

I thank the Minister for responding positively to our request.

[Paul Blomfield (Sheffield Central) (Lab)]

I also thank the Minister. This is an extremely positive step. I wondered, however, whether we could squeeze the session with the Minister, for whom I have high regard and with whom I am looking forward to having many debates, so that we could have more time with the NUS and the QAA.

[The Chair]

Before the Minister responds, are there any other comments on the motion?

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[Ben Howlett]

As long as it works in practice.

[Paul Blomfield]

Q May I ask two unrelated questions? The first is about distribution of research funding across the sector. Professor Nelson, you talked about working together better. I wonder whether you are looking at working together more consistently as well, because it is fair to say that there is a difference of approach by research councils in terms of how effectively they enable every part of the sector to compete equitably for research funding. In many senses, Horizon 2020 and FP7 before it have been more successful in doing that. What thoughts do you have on how the new framework can enable that?

Professor Philip Nelson: It should help us resolve some of those differences that have developed over the years that we appreciate are unhelpful. We need to resolve some of that. There are very often small differences in policy that have a disproportionate effect, so we need to work at that. We have a lot of work under way already in trying to think that through. Some of it gets entangled. Certainly the new organisation with a single accounting officer who can just turn around and say, “Right, we are going to do it this way” will be helpful, if I can put it as bluntly as that. So I think that will enable us to resolve those things, or many of them at least. So that is another good feature of the proposed reform.

[Paul Blomfield]

Q My second, unrelated question is about the office for students, which is there to ensure we get the best learning experience for all our students. The narrative and discourse around the Bill so far is inevitably around undergraduate and postgraduate taught students. What responsibility do you see the office for students having in ensuring the best learning experience for postgraduate research students?

Professor Philip Nelson: I think that is an important issue, absolutely. For example, 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. In that particular area, there is clear overlap of responsibility. It will be down to ensuring that that connectivity is well and truly in place.

Professor Ottoline Leyser: I agree. I think this is very important across the board for a number of reasons. There are a couple of points I would like to make. One is that one of the opportunities generated by UKRI would be the possibility to have more integrated research into teaching and research training. One of the things that the cross-council pot could do would be to consider whether 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.

I would like to connect that a little bit back to this diversity point. I think there is a concern about the narrative of “the best teaching”, because by definition different people work in different ways and the system has to support diversity of provision. Any system that is set in place at any level—whether undergraduate, graduate or graduate research—has got to have on tap different options for different kinds of students with different kinds of learning styles and different kinds of goals for what they want to get out of that learning. There is a danger of winding up with too much of an assessment-driven, individual metric-driven approach for assessing across the board. You canalise into a rather narrow range of provision that will not suit the diversity of students.

[The Chair]

Q Professor McKernan, do you want to add anything?

Dr Ruth McKernan: I do not have anything more to add.

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[The Chair]

To ask the final question, I call Paul Blomfield.

[Paul Blomfield]

Q The NUS has put student representation at every level of the system at the heart of its submission. Can you explain in practical terms why that is important?

Sorana Vieru: We cannot talk about working for the benefit of students without involving students themselves. There is a bit of doublespeak in saying, “We’re introducing a single regulatory framework because we need to keep up with how the sector is looking currently. However, on the board of the office for students, we don’t require someone who has current experience and could reflect what being a student is like right now.” It could be anyone—someone who graduated 20 years ago. If our regulatory framework is mirroring the state of higher education institutions right now—

Douglas Blackstock: A useful model would be to look at what we have done over the last decade. We have embedded student engagement through all of our work. Students are on our review teams and are involved in all the developmental processes. There are two students on our board. There is a student advisory board of 20 students who we recruit through public advertisement to give strategic advice to the board. I think that would be a useful model for the Committee to look at.

[The Chair]

I thank the witnesses. I am sorry to have rushed them, but time is limited; I am bound by the programme motion.

Examination of Witness

Joseph Johnson gave evidence.

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[Mark Pawsey]

Q Minister, why should institutions treat students as informed consumers?

Joseph Johnson: They are required to by the Consumer Rights Act 2015. That is the first thing. They are required to by law. Universities are governed by consumer legislation in this country, so that is a starting point. Questioning whether this is a market completely misses the point. It is a market by law.

[Paul Blomfield]

Q You really do not seem to have lamented the lack of part-time education. Part-time student numbers have obviously collapsed since the funding arrangements changed in 2012. What do you think the Bill does to address that?

Joseph Johnson: It does a lot. It builds on measures that we have been taking over recent months. As you know, we have introduced maintenance loans for part-time students with effect from 2017-18. That is an important provision that will facilitate access to part-time education. That built in turn on access to tuition fee loans that we introduced just before. We have extended the equivalent or lower qualifications exemption so that more people can take a second degree on a part-time basis in science, technology, engineering and maths subjects. The bigger picture is that by allowing new providers into the system, we are more likely to get providers who are providing part-time provision. Alternative providers, as they are known, have a much higher proportion of part-time students in their student cohort than traditional providers. It follows therefore that allowing a greater diversity of providers into the system will benefit part-time students and people who want to study later in life.

[Valerie Vaz]

Q It is good to see you Minister. Presumably the Secretaries of State didn’t think that this was an important meeting, so they sent you along, but this is within your expertise, isn’t it?

Higher Education and Research Bill (First sitting)

Paul Blomfield Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 6th September 2016 Public Bill Committees

[Mr Marsden]

made the point that the Government’s failure even to consider students’ presence in the evidence sessions before being pressed to do so was deplorable, and that they could have accommodated students on the Thursday, as they had the SNP at late notice.

[Paul Blomfield (Sheffield Central) (Lab)]

commented that it was odd not to have witnesses representing students, either from the NUS or those who had participated in QAA audits.

[Joseph Johnson]

thanked hon. Members for their comments and said that he did not want the Committee to think that the Government had not been engaging with students.

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[Dr Blackman-Woods]

Q Would the panel accept that, if we are looking at another playing field, we should consider something beyond regulation and maybe have a set of expectations about what institutions are actually delivering, so that, if it is a level playing field, it goes beyond regulation?

Professor Simon Gaskell: We certainly favour inclusion in the Bill of a clause that indicates that there is a responsibility for the public good of institutions that wish to call themselves universities.

Pam Tatlow: This is properly addressed in terms of the general duties of OFS. For example, we have proposed a reference to confidence and the public interest. In other words, we know that Ministers are very clear that they want a more competitive market. The risk is that we just see students as consumers. Students, and we ourselves, see students as much more than that, and higher education has got a wider purpose.

One way to address the issue would be to knock off what I call some of the hard edges around the general duties of OFS to ensure that there is a wider commitment, which I am convinced Ministers actually have.

[Paul Blomfield]

Q Can I press a little further on the regulatory framework? I think there is a consensus that we need a new regulatory framework and it is welcome that the Government are bringing forward a Bill to enable us to debate that. The Bill has also been brought forward in the context of trying to change the terrain of higher education and encourage greater diversity of providers. In that context, do you think that the regulatory framework as presented in the Bill is fit for purpose? Are there any risks involved in the proposals before us?

Gordon McKenzie: I think it is broadly fit for purpose. There are risks in some of the detail. Although I know the Government released some further information yesterday evening, which I have still to look at in detail, I do not think the Government are yet saying enough about how they will ensure that the new entrants to the market and sector are high quality.

I do not think the Government are yet convincing about their proposal that some people may be able to have the power to award their own degrees on a probationary basis, because I do not think that the Government have yet answered the question of what happens to the students if the provider fails probation. Who awards their degree? What have they got for their three years?

I think there are elements of the detail that require scrutiny. I do have concerns that at the moment the promised role of the office for students as taking an overview of the sector is not really there or enabled by the Bill. I think those things could be fixed—so it is basically fit for purpose, but with further work.

[The Chair]

As there are six members of the panel and time is limited, could you give relatively succinct answers? We have other Members who wish to ask questions.

Professor Joy Carter: I echo what Gordon said. For me the risks are in three broad categories. One is speed: are we moving too quickly to give the power to award degrees—the provisional degree-awarding powers and so on? The second category is around university title and the notion that we have already discussed about academic community and public engagement. The third category of risks is about autonomy and the power of the office for students and the power of the Secretary of State in relation to autonomous and successful universities.

Paul Kirkham: I would say that there is greater risk in leaving it as it is and not adjusting this right now. 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.

The biggest risk for me in the Bill is that it has not properly addressed the issue of student financing. We currently have a student loan system, which is essentially based around a calendar year and predicated primarily on the traditional three-year degree system. Until such time as we have proper reform of the finance system, we will not get proper innovation into the sector. I personally advocate some form of credit-based financing, which will give students much more flexibility, and when combined with more effective credit transfer will also give them much more mobility across the sector.

Pam Tatlow: I simply refer to clause 2, which we think extends the Secretary of State’s powers; we have an explanation around that if the Committee wants a supplementary submission on it. We have particular reservations around OFS being a validator and a provider. In other words, it seems almost to be the validator of last resort. You can’t have it both ways—the OFS being a regulator of the sector as well as a validator and provider. That is a contradiction in terms. We have specific queries around that.

We welcome part 2 on a sharia-compliant loan system, but it does absolutely nothing if you want to deliver accelerated degrees, for example. It is a missed opportunity.

Alex Proudfoot: Briefly, I think the OFS needs to have a power reserved in order to validate degrees because, unfortunately, the current validation system in the UK is so broken. That would not be necessary if the autonomous institutions in the UK that currently validate new provision acted as if they had a public interest in diversifying the landscape of higher education and making new provision available to students. 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.

We are currently doing some work to try to improve the situation, but it is important that the OFS has this as validation of last resort, as Pam referred to it. If nothing else, it should encourage validating institutions to take their responsibility seriously.

Pam Tatlow: May I come back on that? More than 100 institutions can validate throughout England. If you cannot be validated as an independent provider by one of those, what is the matter with what you are delivering? That is the point. This is not a closed shop.

Alex Proudfoot: In some cases, the matter—

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[Jo Churchill (Bury St Edmunds) (Con)]

Q Moving to a slightly different area, do you think the reforms in the Bill will help to drive social mobility and widen participation? I am particularly interested in capturing the more mature people in our workforce to ensure skills are kept up throughout a working life.

Professor Quintin McKellar: We would specifically hope that the Bill might include not only elements that drive competition but those that drive collaboration, because we think that collaborative activity can help us with our widening participation. To give one example, black and minority ethnic students have currently got an attainment disadvantage across the sector and we are working together collaboratively across the sector to try to address that. Without that sort of collaboration—if we were simply competing with each other—it is very difficult. Collaboration is hugely important, particularly in regard to social mobility.

Mary Curnock Cook: While the arrangements for making data from UCAS, for example, available to researchers will not change social mobility in itself, it does open up the opportunity to look specifically at different aspects of social mobility.

Professor Sir Leszek Borysiewicz: One potential advantage that we must recognise of the move of some of the education and OFS to the Department for Education is that it may well begin to address the continuum of education and the attainment shortfalls that largely reside within the secondary schools. If that promotes greater interaction between the requirements for entry into higher education and a greater understanding of that within secondary education and more cohesion at that level, that could be a real help towards closing the attainment gap of BME students.

[Paul Blomfield]

Q May I pursue the issue of the regulatory framework a little further? Obviously, this is the first major discussion we have had on this for some time and it is important that we get it right. It is in the context of a Bill that is also seeking to encourage new providers. What thoughts do members of the panel have on how we should get it right and whether there are any ways in which the Bill could be improved in relation to the entry point of the new providers, the overall oversight of the system and the potential for market failure?

Professor Sir Leszek Borysiewicz: This is a difficult issue. I think the provision of diversity in the sector is something that has stood British higher education well. Different institutions have different goals and directions and cater for different needs for higher education within the sector, from mature students at one end, to vocational courses, to those operating in a very academic sphere.

New providers have to be looked at in the context of what is the positive contribution they can make. Two important issues will be the demand from the sector for this new provision and, secondly, the standards under which those institutions are recognised. From my point of view there is a third which is very important: high standards have to be set for the sustainability of new providers in the sector. It is no good an operation starting with an income stream that is predicated on a business plan of recruitment without a sufficient resource to ensure that those entering in year one will be able to complete their studies and end up with a degree that is actually worth something when facing employers. Otherwise, this is something that becomes not helpful and potentially very detrimental to the achievement and attainment of those individual students. That is the one area on which I would like to see rather more stress paid; the sustainability of the provision by a new provider.

Professor Quintin McKellar: We would support the diversity and competition that new providers would bring to the sector. The concern we have is one that has been raised already: that they cherry-pick subjects. In terms of continuing to provide across the board STEM subjects of engineering, mathematics and so on, it is unlikely that the new providers will enter those areas, and that could be a risk for the rest of us.

Sir Alan Langlands: I think the Bill does try to strike the balance between rigour in relation to new entries and streamlining the system a bit. We have to be careful that we are not driven too much in the direction of streamlining without the rigour. The rigour has to be on quality and standards, access and participation, good governance. Linking to Professor Borysiewicz’s point, it is hugely important that financial sustainability is seen alongside academic sustainability. This has got to be a long-term effort, if you are developing a new universe.

Mary Curnock Cook: Briefly, I would like to echo the points about sustainability, because I think it is absolutely catastrophic for students if their provider is forced to exit the market. A lot of higher education is very local. A lot of students go to university within a few miles of where they live, and there are not necessarily other providers where they could continue their studies if their institution fails.

The only other point I would make is about university title. I do not want to start a debate about “What is a university?”, but I think that most people, their parents, advisers, teachers and everyone else involved has a clear idea about what they think a university is. It would be of concern if students were applying to something that they thought was a university in the general understanding of the issue and found that it was something quite different.

[The Chair]

Three Members, 10 minutes.

Student Loans Agreement

Paul Blomfield Excerpts

Monday 18th July 2016 Westminster Hall

[Paul Blomfield (Sheffield Central) (Lab)]

Thank you very much, Mr Pritchard: a good choice, but I am sure my hon. Friend the Member for Ilford North (Wes Streeting) will top my contribution.

It is a pleasure to contribute to the debate with you in the Chair, Mr Pritchard. I congratulate my hon. Friend the Member for Warrington North (Helen Jones) on introducing it, in her customary way, so comprehensively and with such passion. I am also pleased to see that the Minister still in his place. I am looking forward to long debates with him in the weeks ahead on the Higher Education and Research Bill, starting tomorrow.

The Minister has drawn a bit of a short straw today, because he has to defend something that is, frankly, pretty indefensible. I am very grateful to all the people who signed the e-petition to ensure that we have this debate today—I think the second highest number were from my constituency. I am also grateful to all those who have written me to share with me the impact this change will have on them—not so much financially, but in the way they feel they have been treated by the Government.

[Lilian Greenwood (Nottingham South) (Lab)]

I am sure that my hon. Friend will make a fantastic speech. Like him, I represent many thousands of students in my constituency and, again like him, I have received many emails about this subject. Does he agree with me and indeed with my constituents—Tamsin, Elizabeth, Tom and many more—that these plans are dangerous, unfair and frankly outrageous?

[Paul Blomfield]

My hon. Friend is perhaps making all our speeches redundant: she has summed it up in a sentence. Nevertheless, I will continue.

My hon. Friend makes an important point. Let me cite one of my constituents who has written to me. Rachel Stamper is due to graduate soon from Sheffield Hallam University. She started her degree—a bachelor of arts in early childhood studies—back in 2013. She made careful calculations before she started. She looked at what the Government said—that she would have to pay back on the money she borrowed. Like everybody else, she was told that from April 2017 the £21,000 repayment threshold would start to rise annually with average earnings. She based her decision to go to university on that information, because she thought that she could trust the Government.

Rachel made the calculations about what she could afford on the basis of the trust that she put in the Government. Now, she expects to pay thousands more over the life of her loan, because, given her area of study, she will graduate with an incredibly socially useful degree, fulfilling a positive and useful role within our society, but she is not necessarily going to be a high earner. As Rachel said to me, this is about more than “just money”:

“A retrospective change will destroy any trust I, and future generations, have in the student finance system, and perhaps even more widely, in the political system as a whole.”

This proposal was part of a double whammy announced by the then Chancellor after the election last July. As Osbornomics seems to have been rejected by the new Prime Minister, perhaps we now have a little bit of wriggle room to examine some of its more toxic components. This change is clearly one of them, because the first part of that double whammy was the abolition of maintenance grants, which in many ways overshadowed the decision we are talking about today. Nevertheless, the change in the threshold is important because it will have a genuine impact on graduates.

Why are we here today? Why are the Government proposing this change? My hon. Friend the Member for Warrington North made the point very well. Going back to 2012, the year before the system came in, many of us argued that the proposed new system was not only unfair, but that it had not been properly thought through—there was a back-of-an-envelope calculation of what the cost would be. In particular, we talked about the cost of unrepayable debt—the so-called resource accounting and budgeting, or RAB, charge. I remember the Universities Minister at the time, for whom I had a high regard, arguing on the Floor of the House and in the Select Committee on Education, on the number of occasions we scrutinised him about it, that he was confident that the RAB charge would settle at around 28%. As the conversation went forward over the years, he talked about 30% and then the upper 30s. Then it was 40% and finally, in our last exchange in the Select Committee, he said that the Department for Business, Innovation and Skills was modelling it at more than 50%, at which point the new system was clearly costing us more than the old system, on top of being unfair.

Something had to give, and it was clear before the last general election that something was going to give. I asked Ministers on the Floor of the House for assurances that they would not make students pay for the Government’s own mistakes by changing the terms of the system. I was told, in this great language that people use before elections, that there were no plans to do so. Well, no sooner were the votes counted than the plans were rolled out.

[Peter Grant (Glenrothes) (SNP)]

I have no doubt that the hon. Gentleman would have studiously examined, as we all did, all the election manifestos at the time. He will be aware that there was no mention whatsoever of the change in the Conservative manifesto, yet it was imposed within a few months of the party coming to power.

[Paul Blomfield]

The hon. Gentleman makes an important point, which goes back to the issue of trust that is at the heart of today’s debate. We pushed the Government on the matter in the previous Parliament and there was no indication that the change was going to happen. We looked at the manifesto, and there was no indication there either. As soon as the election was out of the way, it happened: graduates being forced to pay for the Government’s mistakes. As the hon. Member for Southport (John Pugh) said, there was a consultation on the change. People think, “A consultation—presumably that is because the Government want to listen,” which is not an unreasonable starting point. Some 84% of the respondents said, “This is a bad idea.” What is the Government’s response? “Great stuff. We’ll go ahead.”

We face a system in which not only are those who did not expect it being asked to pay more, but, as my hon. Friend the Member for Walsall South (Valerie Vaz) pointed out, those who will earn the least will be hit the hardest. The Government’s equality impact assessment said:

“In terms of lifetime earnings, our analysis shows the greatest financial impact will be concentrated on those with around median lifetime earnings (between £20,000 and £35,000)”.

The figures are clear—the Government’s own figures. A graduate earning between £21,000 and £36,000 will pay an extra £6,100. By contrast, those earning more than £40,000 will pay an extra £400 and those earning more than £50,000, an extra £200.

A recent Sutton Trust report shows that although the overall average extra repayment will be £2,800—on the trust’s numbers—the gender pay gap means that women graduates will be disproportionately affected. Black students will also be disproportionately affected. The Higher Education Statistics Agency destination of leavers data show that, although the variance in non-black graduates’ salaries is larger than that for black graduates, there is more of a bunching effect for the latter, between £20,000 and £30,000, which is the salary range that will be most affected by the proposed changes. All those discriminatory impacts conflict with the Government’s stated objectives of widening participation in higher education and of trying to get those who are not traditional participants engaged more fully. All that mess is because of the Government’s initial mistakes in introducing the 2010 system.

I represent more than 36,000 students, more than any other Member of Parliament. Thousands graduate from the two universities in my Sheffield constituency. Because of this measure, Sheffield graduates are being made to pay for the Government’s mistakes, with the terms of the deal being changed long after they signed up to it. If a second-hand car salesman tried, years later, to get a customer to pay more than the contracted deal, he would be referred to trading standards. With a bank, there would be action by the Financial Conduct Authority. Why should the Government be subject to different standards? This is fraudulent behaviour. It undermines trust in the Government and confidence in the student loan system. I urge the Minister to think again.

--- Later in debate ---

[Joseph Johnson]

Higher education has been a devolved issue since 1999, and it is up to the devolved Administrations to determine how they spend their resources. In England, we have chosen to put our higher education on a sustainable footing, which has meant that proportionately more people can go to universities in this country than ever before. We want that to continue.

[Sir David Amess in the Chair]

Many hon. Members raised the threshold freeze and retrospection. The e-petition that we are discussing was started by Mr Alex True, who is a recent graduate, because he was concerned by the Government’s decision, which we announced in November 2015, to freeze the repayment threshold at £21,000 until April 2021. This is an important matter and a proper subject for debate, and I welcome the opportunity to explain why the Government took that decision and its impact.

We considered freezing the threshold because we needed to ensure that higher education funding remained sustainable. The choice was either to ask graduates who benefit from university to meet more of the costs of their studies or to ask taxpayers to contribute more. We undertook a full consultation on the change, as Members have mentioned. The consultation was open for 12 weeks, until 14 October 2015, and we then undertook a full assessment of the equalities impact, in line with our obligations. The responses to the consultation, which I accept were often against the proposal, were analysed exceptionally carefully. On balance, the Government decided that it was fairer to ask graduates for a greater contribution to the costs of their study rather than to ask taxpayers to do so. The reasons for that are clear. Graduates benefit hugely from higher education. On average, graduate earnings are much higher than those of non-graduates. In 2015, graduates’ salaries averaged £31,500, compared with £22,000 for non-graduates. The threshold is still higher in real terms than the one we inherited from the Labour Government.

[Paul Blomfield]

A good attempt from the Minister, but does he not accept that he is missing the point? It is not a question of comparing the threshold he inherited; it is about the commitment made to students when they entered into their university degrees. Does he not accept the argument that it is a fraudulent practice to enter into an agreement on one set of terms, only for the Government then to change those terms completely? Would he accept that in relation to the purchase of a product he was making?

[Joseph Johnson]

Hon. Members made much the same point on many occasions throughout the debate, and I will come on to those arguments shortly.

[Joseph Johnson]

I look forward to explaining shortly to my hon. Friend exactly why we took the decision and the reasons why we believe it was the right way forward to put our system on a sustainable footing and ensure more opportunities for young people to gain from all the advantages that higher education can bring them.

For loans taken out before 2012, graduates started repaying when their income reached £15,000. That threshold has now risen to £17,495. The Government set the repayment threshold at £21,000 for post-2012 borrowers, proposing that that would be uprated annually in line with earnings from 2016, when the first graduates under the new system would start repayments. When the policy was introduced, the threshold of £21,000 was about 75% of expected average earnings in 2016. Updated calculations, based on earnings figures from the Office for National Statistics, show that figure is now 83%, reflecting weaker than expected earnings growth over the intervening period. The proportion of borrowers liable to repay when the £21,000 threshold took effect in April is therefore significantly lower than could have been envisaged when the policy was originally introduced. The threshold would now be set at around £19,000 if it were to reflect the same ratio of average earnings.

I also wish to stress that the impact of the freeze is relatively modest—albeit, I accept, still unwelcome for graduates. Borrowers earning over £21,000 will repay about £6 a week more than if we had increased the threshold in line with average earnings. Of course, those graduates earning less than £21,000 will not be affected at all.

[Paul Blomfield]

Is the Minister not confirming what I said earlier? I hope he will address that specifically, but the problem is that when the Government introduced the new system, they got the resource accounting and budgeting charge wrong. The consequence is an additional cost on the Exchequer, and instead of taking responsibility for that, the Government have transferred that responsibility on to students.

[Joseph Johnson]

Modelling the RAB charge is not an easy process, but the figures that the hon. Gentleman referred to earlier were simply not correct. We never modelled the RAB charge at over 50%. We expect about 20% to 25% of the loan book not to be repaid, and that is a deliberate, conscious investment by the Government in the skills base of the country. It is a progressive policy that enables people to go into careers that may not necessarily allow them to repay the full amount, and the Government do that knowingly and willingly.