The Secretary of State for Education (Justine Greening)

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I beg to move, That the Bill be now read a Second time.

As the Prime Minister said outside Downing Street last week, this Government want to give everybody, no matter what their background, the opportunity to go as far as their talents will take them, in a country that works for everyone. Our higher education institutions are crucial to giving people the power to determine their own futures. They present opportunities for individuals to better themselves—to broaden their knowledge base, sharpen their skills, and participate in the groundbreaking research that can make the future brighter for everyone.

My time at Southampton University was one of the most shaping periods of my life. I should point to my time at the Department for International Development as another of those periods. For me, the chance to go to university was absolutely pivotal to being able to make something of myself. Today, I can still point to the telephone box in Kingsbridge, Devon where I rang through to get my A-level results while we were on holiday that year. In that moment, my whole future changed for the better. I was the first person in my family to be able to go to university. I remember, after that call, going to the pub across the road to celebrate with a drink. None of us really knew what going to university would be like for me, but we all knew that it was going to be the best thing and that it would improve my life chances. Opportunity is about giving our young people the freedom to fly, and universities are absolutely central to that.

My party’s record on this in government is one we can be proud of. We have taken away the limit on student numbers so that more people than ever before can benefit from higher education, and the participation rate among students from the most disadvantaged backgrounds is at record levels. We have put in place the essential funding changes that have placed our universities on a stable financial footing so that they are resourced for success, and we have protected investment in our world-class science base.

The universities that our young people attend are some of the best in the world. We punch well above our weight, with 34 institutions ranked in the world’s top 200 and more than twice that number in the top 800. But there is more to do to make sure that everyone can access a high-quality university place, and in spite of the progress made, we are far from meeting our economy’s need for graduates, so this Government are absolutely determined to support and nurture our universities, and to ensure that they are open to every student who has the potential to benefit from them.

The creation of new universities is an undoubted force for good, both academically and economically. Recent research by the London School of Economics shows that doubling the number of universities per capita could mean a 4% rise in future GDP per capita too. However, the current system for creating universities can feel highly restrictive, with new providers requiring the backing of an incumbent institution to become eligible to award its own degrees. This Bill levels the playing field by laying the foundations for a new system where it will be simpler and quicker to establish high-quality new providers. I am pleased that in May the hon. Member for Wallasey (Ms Eagle) confirmed that the Opposition do not object to broadening choice for students by expanding the higher education sector.

These reforms, which are the first since the 1990s, enable us to maintain the world-class reputation of our higher education institutions, because quality will be built in at every stage—from the way we regulate new entrants to how we deal with poor-quality providers already in the system. I recognise that there have been concerns about the quality of new providers—that they cannot possibly be as good as what we already have. It is not the first time that such arguments have been made. The same arguments were made when the new red-brick universities were being established just before the first world war, but today Sheffield, Birmingham and Manchester—which I visited very recently in my previous role—are world-class universities. This “quality” argument was made about the 1960s expansion, but in four of the past 10 years the Sunday Times award for university of the year has gone to one founded in that very period—currently the University of Surrey. In 1992, it was a Conservative Government who had the vision to set free the polytechnics to enable them to become universities. Now we are making it possible for a whole new generation of universities to help us to extend access to higher education for young people across our country.

Justine Greening

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I acknowledge that the Scottish National party takes a very different view of this issue. The reality is that the choice that it has made has resulted in fewer students being able to go to university in Scotland. One in five students in Scotland who apply for, and who have the grades to get, a place cannot go because the funding is not available. The hon. Lady’s Government in Scotland have made that choice, but it is not a choice that this Government want to make. We have to make sure that places are available for students who have the potential and talent to make their way in life. Putting a cap on opportunity and potential is not just bad for students; it is bad for our country more broadly.

Justine Greening

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Since 2009, students from a disadvantaged background in England are 36% more likely to go to university. It is not good enough to come up with excuses and tell young people of great quality who have the grades that they cannot go to university because the Government who, unfortunately, are running the country in which they live are not prepared to take the decisions to enable funding to get to the sector and create the places that they need. We are prepared to do that.

The Bill is about opening up the sector to enable new providers to enter it and create the extra places that our young people need. There will be rigorous tests for those new providers, as well as for those that already exist, centring on quality and making sure that they have financial stability. We are interested in enhancing the world-class reputation of our universities in creating opportunity for all, rather than in expansion for its own sake.

Justine Greening

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My hon. Friend is absolutely right. The good news is that we expect many—indeed, most—of the jobs created over the next few years to be graduate-level jobs. Our economy is creating opportunities, but we need to make sure that our young people are in a position to take them. That is part of the reason why this Bill is absolutely critical. Wherever and whatever a person is studying, part of how they are able to succeed is making sure that they get high-quality teaching. That is why we are delivering on the Government’s manifesto pledge to implement a new teaching excellence framework for universities.

Justine Greening

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The bottom line is that the evidence base shows not only that more young people are going to university than ever before, but that a higher proportion of them are from disadvantaged backgrounds. As I said to the hon. Member for Glasgow North West (Carol Monaghan), we do our young people a disservice if our system cannot be financed to create places for them.

Justine Greening

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I am going to make some progress, because it is important that I cover the teaching excellence framework, which is at the heart of the Bill.

The framework will assess and drive up quality by providing reputational and financial incentives for success, which is a proven approach to ensuring high standards at our universities. That approach is based on what we have learned from our experience. It was a Conservative Government who introduced funding for research on the basis of quality, which is now a widely accepted way of working. The research excellence framework is regarded globally as the gold standard for institutional research. By extending that principle to teaching, we can ensure that British higher education remains in the world’s elite, and that students at all universities—old and new—receive the quality teaching that they have every right to expect.

Let me be absolutely clear: the Bill does not raise tuition fees or change current procedures for secondary legislation setting the maximum tuition fee cap. That will, rightly, continue to require the same level of parliamentary scrutiny as before, and the Bill will allow the maximum fee cap to keep pace with inflation, which the last Labour Government allowed for every year from 2007. What we are saying to high-quality providers is, “You can access fees up to an inflation-linked maximum fee cap if—and only if—you can demonstrate that you are providing high-quality teaching and you have an agreed access and participation plan in place.”

The Bill allows fee caps to be set below the maximum, to reflect varying levels of teaching excellence framework awards. The providers that are not meeting those standards will have to charge fees beneath the maximum fee cap, and that cap will not increase in real terms.

Our proposal to maintain the real value of the maximum fee cap, but only for those with excellent teaching, is backed by those who know the sector best. Universities UK has described that approach as “balanced and sustainable” and argues that maintaining the real value of the maximum fee cap is

“essential to allow universities to continue to deliver a high-quality teaching and learning experience for students.”

Justine Greening

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The hon. Gentleman raises an important point. The real-terms ability of the maximum fee to keep up with inflation is enabling £12 billion of investment to get into higher education over the coming years. It is critical to make sure that students get value from the investment that they make in themselves and that teaching is of high quality. That is why the teaching excellence framework is such an important part of the Bill.

The proposed office for students is another part of the Bill that clearly shows that we are putting students at the heart of our higher education policy, as they should be. The creation of an office for students, which will be the principal regulator for higher education, will put students’ interests at the heart of regulation. It will have a legal duty requiring it to consider choice and the interests of students, employers and taxpayers, and it will look across higher education as a whole, with responsibility for monitoring financial stability, efficiency and the overall health of the sector.

The current system was designed for an era of direct Government funding of higher education when fewer people attended university. Higher education attendance is no longer a privilege of the elite. We lifted the limit on student numbers, meaning that more people than ever before have been able to benefit from a university education. The legislative framework needs to reflect that.

The office for students will create a new single register of higher education providers, replacing the current fragmented system and ensuring a single route into the sector. The simpler system means that this Bill will reduce regulatory costs on the sector and contribute to this Government’s deregulatory agenda. It also ensures that the requirements are clear and fair. Only those on the single register will be able to obtain degree-awarding powers, become universities or charge fees that attract student loans. Those providers will have to comply with conditions relating to, for example, their financial stability and the quality of their provision. The office for students will have powers to impose additional conditions—for instance, around access and participation for students from disadvantaged backgrounds—on fee-capped providers that wish their students to be able to access student support.

Justine Greening

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I take the right hon. Gentleman’s point, which is an important one. I want universities to continue to work hard on the ground in many of the local communities of which they are part, to encourage a pipeline through which children can come and apply. If the percentage of university students from disadvantaged backgrounds is to rise, that is incredibly important.

The right hon. Gentleman will be interested to know that an element of the Bill tackles collaboration, specifically with UK Research and Innovation, which I will come on to shortly. There will also be time to debate this in the Bill Committee. I absolutely agree with the sentiment that he has expressed, and it is important that universities engage with local communities beyond their own campuses and encourage young people.

Justine Greening

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I agree with the hon. Gentleman that those different parties have to work together at a local level. The University of Roehampton, in my constituency, does really great work in reaching out to our local community. As a higher education institution, it has a large proportion of students from more disadvantaged backgrounds studying for degrees. He is right about that. I am determined to make sure that the higher education sector plays its role in communities more broadly. I do not believe that collaboration necessarily has to be codified in the Bill, as he suggested, for it to happen, but I agree with the sentiments that he expressed.

Justine Greening

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I want to make a little more progress, because it is important that I continue to inform the House of how the office for students will work, and particularly how it will regulate providers.

If a provider breaches its conditions of registration, the OFS will have access to a range of sanctions, including monetary penalties and, in extreme cases, suspending or deregistering providers, to safeguard the interests of students and taxpayers and to maintain the world-class reputation of the sector. Our proposals have the support of those who know best, with the likes of Professor Simon Gaskell, chair of a taskforce that was established to review the regulation of the sector, commenting that

“there have been a number of significant changes to the funding of higher education and to the number of providers offering courses. Regulation of the sector needs to keep pace with these developments if confidence, and our international reputation, are to be maintained.”

Indeed, only today the University Alliance described the Bill as

“a raft that can take us to calmer waters”.

Justine Greening

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I feel as though we are already delving into the Bill Committee debate that will no doubt take place on this clause. I welcome the House’s engagement with the Bill. It is important to get it right, and we will have an important debate to make sure that it is properly structured. I look forward to the Bill Committee debate when Parliament returns after the recess.

Justine Greening

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I will take one more intervention before I make some progress.

Justine Greening

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The hon. Gentleman makes a further point about the need for universities to be part of their broader communities. It is probably worth my setting out how much I welcome the fact that the further and higher education briefs are now part of a broader Department for Education brief, which makes us well placed to look across the piece at how the institutions that help to develop our young people’s talent and potential can work effectively together, as well as with broader communities.

Thanks to the reforms we introduced in the last Parliament, the entry rate for young students from disadvantaged backgrounds is at a record level. In the final year of the last Labour Government it was around 14%, and today it stands at almost 19%. But we need to go further. As the Prime Minister said last week, this Government

“will do everything we can to help anybody, whatever your background, to go as far as your talents will take you.”

This legislation supports the key principle that higher education should be open to all who have the potential to benefit from it, but this has to be about more than just accessing opportunity. Although application rates for students from disadvantaged backgrounds are at record levels, we want to ensure that those students are supported across their whole time at university. Too many disadvantaged students do not complete their courses, for various reasons, and universities can and must do more to help them to get across the finishing line. That will allow them not only to gain the degree that they set out to get, but to reap the career rewards of doing so.

Justine Greening

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We need to look at the level of tuition fees that has been introduced, the rate of applications from disadvantaged students, and the number of disadvantaged students who are going to university. Those young people are taking a decision to invest in themselves, and they believe that it will offer value for money. The Bill will enable us to strengthen that decision by underwriting the teaching in universities with a teaching excellence framework.

Justine Greening

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There are two areas in which the Bill can particularly help. First, it will provide transparency and give us a clearer sense of who is entering and going through our university system. One of the functions of the office for students will be to improve transparency, which will help us not only to improve access but to widen participation. Secondly, some of the financing changes will free up opportunities for people who find it harder to go to university because they cannot get the finance for a course. The Bill will allow us to take those two steps forward.

We are going further than Labour ever did to strengthen access agreements. Under the Bill, institutions wanting to charge tuition fees above the basic level will have to agree plans that look at participation as well as at access. We want to ensure they are doing everything they can to support students from disadvantaged backgrounds throughout their course to reduce the number of drop-outs and help all students into fulfilling careers.

Justine Greening

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The Bill puts in place the powers that we need to take a more flexible approach to funding. As the hon. Lady says, some students are less likely to want to take out a conventional student loan. We need to respond to that if we are to widen participation, and that is precisely what the Bill does. It will actually achieve the aims she talks about.

We will have transparency, which will require higher education institutions to publish application, offer and progression rates by gender, ethnic background and socioeconomic class. Across all its functions, the office for students will have to take into account the need to promote equality of opportunity across the whole lifecycle for disadvantaged students, not just access.

Academic autonomy is the bedrock of success for our higher education sector. The Bill introduces measures to safeguard the interests of students and taxpayers, while protecting academic freedom and institutional autonomy. It enables the OfS to be independent of Government and the sector, as a regulator should be. It will be an arm’s length non-departmental public body, just as the Higher Education Funding Council for England is now.

The office for students will operate a risk-based approach to regulation by concentrating regulation where it is needed and ensuring the highest standards are maintained across the sector, while reducing the regulatory burden on the best performing institutions. If a university is doing well, it should not have to worry so much about bureaucrats peering over its shoulder.

However, one important aspect of such risk-based regulation will be a more flexible approach to degree-awarding powers. We will move away from the one-size-fits-all approach, which currently requires smaller, specialist institutions to demonstrate that they can award degrees in any subject, and requires new providers—including some of the very best overseas institutions—to spend four years building up a track record in England, irrespective of a long record of excellence elsewhere in the global academic world.

The provision to vary degree-awarding powers will enable specialist institutions to gain such powers only in the subject areas in which they have an interest or a need. It will enable the office for students to give degree-awarding powers on a probationary basis to institutions that can clearly demonstrate their capability and have a credible plan to ensure they meet the full degree-awarding powers criteria after three years. As part of that, the OfS will require clear and robust protections for students when granting probationary degree-awarding powers.

Justine Greening

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Broadly, the rule that 55% of students need to be studying on degree courses will remain. In the end, however, what we are trying to do more broadly with these changes is to open up the chance for new high-quality institutions to join existing high-quality institutions in our higher education sector in being able to offer degrees.

Justine Greening

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The Bill is about ensuring that we have a strong, robust, successful, innovative and high-quality higher education sector for Britain’s young people. The hon. Gentleman sets out problems and then suggests we should not bring forward a Bill to tackle them.

Justine Greening

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My right hon. Friend is absolutely right. For the many institutions that have spent years working steadily to get their own degree-awarding powers, these changes will be welcome. They should not have to wait so long, and once the Bill is passed, they will not have to do so.

Justine Greening

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I am sure my right hon. Friend is right.

Justine Greening

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I will make a bit more progress, because I recognise that many hon. Members want to contribute to this debate. I will give way in a second, but it is important that I briefly set out for the House how the OfS will be able to act when students and taxpayers are not well served. When there are grounds to suspect a serious breach of a provider’s conditions of registration or funding, the office for students will have the power to enter and search a higher education provider, subject to the crucial safeguard that a court warrant must be obtained first.

Justine Greening

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I will give way to the hon. Gentleman because he has been trying to catch my eye, but I must then try to make some progress on this long Bill.

Justine Greening

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I was talking about the changes to degree-awarding powers. For institutions that may currently feel they cannot go down this route because it is simply too complex and long-winded, we will open up the sector to enable great institutions to step up to become, over time, an institution that awards degrees directly and then for excellent institutions to become, after a further three years, a university. This is important for Britain. If we are to be a country in which our young people have the number of places they want at high-quality institutions, with the range of different degrees that they want and that our economy needs, it is important to have a higher education sector that can respond and that is what the Bill seeks to address.

The Bill enables the OfS to require registered higher education providers to have a student protection plan in place. Students will want to know what to expect from their providers if their course of study cannot be delivered. Although some providers currently have student protection plans, the new requirement means that students of all registered providers will be protected.

This Government believe that no one with the necessary ability should be denied a place at university. That is why, for the first time ever, we are providing direct financial support for those undertaking postgraduate masters study. We also intend to extend direct financial support to postgraduate doctoral study and to introduce part-time maintenance loans comparable to those we give to full-time students.

The Bill will make significant improvements to higher education and research, but let me reassure the House that none of these changes will be delivered by undermining other routes into highly skilled employment. We are committed to creating 3 million apprenticeships by 2020, and the Government recently launched the skills plan, which is our response to Lord Sainsbury’s independent review of technical education, setting out an ambitious overhaul of the post-16 skills system. Taken as a whole, those changes will allow young people to make well-informed decisions about their futures, giving them every opportunity to achieve their potential and, at the same time, improving the quality, relevance and value of learning.

I have talked a lot today about teaching and students, but the UK is also a world leader in research and innovation. Established and emerging economies alike look on in envy not just at the quality and breadth of our research, but at our incredible track record of turning innovative ideas into life-changing, marketable products and services. The Government are protecting science resource funding at its current level of £4.7 billion, which will rise in cash terms every year for the rest of the Parliament. At the same time, we are investing in new scientific infrastructure on a record scale, delivering on the £6.9 billion science capital commitment in our manifesto.

Few people understand the research landscape better than the Nobel prize-winning geneticist Sir Paul Nurse. Aside from being an inspirational example of how social mobility can happen in our country, last year he completed an independent review of our seven research councils, recommending that the seven existing bodies be brought together into a single body. The Bill will make his recommendation of

“a formal organisation…which can support the whole system to collectively become more than the sum of its parts”

a reality.

Justine Greening

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The Bill will help in two ways. Not only will it naturally bring the research councils together under one umbrella organisation; it will give that organisation a much more powerful voice when developing links with the business community. I know from the time I spent in industry before entering the House that the link in Britain between academia and research and business is a strong one, but one that can be strengthened further. As we consider how our country will be successful as we navigate through the Brexit process, making the most not only of our young people’s talents, but of our most world-class research institutions and the brains within them will be key.

The Bill will bring into being a new body called UK Research and Innovation that will strengthen the strategic approach to future challenges, while maximising the value of the Government’s investment of more than £6 billion a year in research and innovation. UKRI will provide a strong, unified voice for the UK’s research and innovation funding system on the global stage, cementing Britain’s world-leading position. UKRI and the Office for Students will work closely together to ensure that there is a co-ordinated, strategic approach to the funding of teaching and research in England.

Justine Greening

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The Bill is about strengthening our capacity to do world-beating research. The money will follow where the excellence is. I have no doubt that there is significant excellence in Wales. That is why there has been significant funding for some of our world-class research that is taking place in that part of the UK. The Bill is about enabling the seven research councils to add up to more, as Sir Paul Nurse said, by bringing them under one umbrella.

The Bill will ensure that the UK is equipped to carry out more multidisciplinary research and to better respond with agility and flexibility to the latest research challenges. By bringing Innovate UK into UKRI, we will harness the opportunities across business as well, so that business-led innovation and world-class research can better come together and translate our world-class knowledge into world-class innovation. Innovate UK will retain its individual funding stream and continue its support for business-led technology and innovation.

We are protecting in law, for the first time ever, the dual-support research funding system in England—a system that many people consider to have underpinned universities’ confidence to invest in long-term research and that has contributed to our well-deserved global reputation for excellence.

The formation of UKRI will provide crucial support during this period of change in our relationship with the European Union. As we face new challenges, we need a strong and unified voice to represent the interests of the research and innovation community across Government, across Europe and around the world.

Justine Greening

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I do not agree with the hon. Lady, but I recognise the challenges that she talks about in making sure that the universities sector and the higher education sector more broadly come out of the process of Brexit stronger. That is why we are engaging in a structured way across Government and outside Government in sectors such as HE to ensure that we have a smart approach to taking Britain through the Brexit process. I refer her to the point that the University Alliance made earlier today about the Bill being

“a raft that can take us to calmer waters”.

The Bill is how we will provide the security, vision and direction for a strong higher education sector.

Justine Greening

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I have taken an awful lot of interventions, but I must now make some progress and allow the debate to continue.

Our universities are world class and our researchers are world beating. That is because over the years, over the decades and over the centuries, they have evolved and adapted to face the challenges and changes of the world around them—the world that they do much to study, understand and explain. We have to make the bold moves that are needed to secure their success for many more years to come. These changes are about further unlocking and unleashing the talents of our people and our best brains. I want the young people of today and tomorrow to be given every opportunity to succeed. That is why I am proud to put the Bill before the House. I pay tribute to the Minister for Universities and Science, who has done so much work to get the Bill to this stage.

The Higher Education and Research Bill will put more information and more choice in the hands of students. It will promote social mobility so that every person in this country has the opportunity to make the most of themselves. It will boost productivity in the economy as we realise our future outside the European Union. It will enhance and cement our position in the world as leaders in groundbreaking research, and ensure that students and taxpayers receive value for money from their investment in education. It is the right thing to do and the smart thing to do.

The Prime Minister told us last week that

“together we will build a better Britain”.

I am clear that education has to be at the forefront of that. Our universities deserve the best, our students deserve the best and our researchers and innovators deserve the best, so that they can play their role in building that better Britain. The Bill will provide them with nothing less than the best, and I commend it to the House.

The Lord Commissioner of Her Majesty's Treasury (Mr David Evennett)

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Wait and see.

The Minister for Universities and Science (Joseph Johnson)

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This has been a terrific debate, in which there has been very strong consensus across the House that our universities rank among the very best in the world, our research base is a global envy and our higher education sector is generating the knowledge and skills that are fuelling our economy and providing the basis for our nation’s intellectual and cultural success.

However, there has also been an acknowledgment in all parts of the House that we can do better still. The world of higher education has changed fundamentally since the last major legislative reforms of 1992. With student number controls now lifted, we are in an era of mass higher education that is no longer limited to the academic elite within a small and primarily Government-funded set of institutions. The majority of funding for undergraduate courses now comes from the students themselves, via Government-backed loans.

The sector has long acknowledged that the current regulatory framework is simply not fit for purpose. We must do more to ensure that young people from all backgrounds are given the opportunity to fulfil their potential and the information they need to make good choices about where and what to study. The Bill provides stability and puts in place the robust regulatory framework that the sector itself agrees is needed. It joins up the very fragmented system of regulation across the current sector, giving us what will be a best-in-class regulatory framework.

Joseph Johnson

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I will not give away for the moment, because I have a significant amount of material to get through in a very limited time.

The Bill creates a level playing field, making it easier for new high-quality providers to compete with established degree-awarding universities. This will drive up innovation, diversity, quality and capacity, ensuring we remain attractive internationally. It will give students better access to information, empowering them to make the best choices about where to study. It ensures incentives are in place for providers to focus on the quality of the teaching they offer to students.

This Government are committed to equality of opportunity for all. The Bill delivers on that commitment, with a renewed focus on access and participation for disadvantaged students. The new office for students will be required to consider equality of opportunity across the entire student lifecycle, and our reforms to the research landscape will deliver a system that is more agile, flexible and able to respond strategically to future challenges.

This afternoon, we have often heard concerns that now is not the time to proceed with the Bill and that we should press the pause button. That is wrong: the time is right to press ahead, and important sector representatives agree. As Maddalaine Ansell, the chief executive of University Alliance, put it in an article just the other day, the Higher Education and Research Bill

“is a raft that can take us to calmer waters”.

I urge Opposition Members to get on board.

The Bill delivers on pledges in the Conservative manifesto on which we were elected. It will provide stability for the sector, putting in place a robust regulatory framework. The sector has been calling for this legislation since the tuition fee changes were put in place during the last Parliament, and it welcomes the stability and certainty that the Bill will provide. As GuildHE, another representative body, has put it:

“Pausing on the Bill and risking further damage to our international reputation for quality through regulatory failure would be a mistake”.

Joseph Johnson

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I encourage Opposition Members to be optimistic about our future as a global leader in higher education and science. The UK has been at the centre of scholarship and science for hundreds of years. Many universities were powerhouses of scholarship long before the European Union came into existence, and I am confident that they will continue to be so for years and years to come.

Our universities are world leading and, although it is too early to say what the new EU settlement will be for science, I am confident that we will continue to thrive following the referendum result. That is why I have been engaging closely with Commissioner Moedas in Brussels and many other people in Governments across Europe, including my Italian counterpart. I welcome their commitment to ensuring that we will not be discriminated against in the period we find ourselves in. I welcome this morning’s statement by the League of European Research Universities that British universities should not be viewed as a risk to research projects and that they will continue to be “indispensable collaborative partners” in the months and years ahead.

Turning to our rationale for opening the market in the Bill, it is generally accepted that competition between providers in any market incentivises them to raise their game and offers consumers a greater choice of more innovative and better quality products and services at lower cost. Higher education is no exception. As my hon. Friend the Member for Cannock Chase (Amanda Milling) said in her excellent remarks, there is certainly room for improvement. Students’ perception of value for money is continuing to fall. In the Higher Education Policy Institute student experience survey published last month, just 37% of student respondents felt that they received good value for money. That was down from 53% in 2012.

We need to address the fact that many students are starting to ask whether university is worth it. Many employers have similar questions when they look at the labour market mismatch in our economy. While employers are suffering skills shortages, especially in high-skilled STEM areas, at least 20% of graduates are in non-professional roles three and a half years after graduating. If the students who are paying for the system and the taxpayers who are underwriting it are not completely satisfied, the market needs help to adapt. This we will provide as a Government. Like my right hon. Friend the Member for Surrey Heath (Michael Gove), who made an outstanding speech, I make no apology for seeking to expand higher education provision and give students more choice and more opportunities at every stage of their lives.

Like my right hon. Friend the Member for Cities of London and Westminster (Mark Field), I welcome the contribution that alternative providers are making and that they will be able to make all the more easily in future. There is no longer a one-size-fits-all model of university education. Students have a sharper eye for value than ever before and they are calling out, as my hon. Friend the Member for Milton Keynes South (Iain Stewart) said, for pioneering institutions offering alternative educational models and an increased focus on skills that will prepare them for the future with the mindset and agility needed to fulfil roles that may not even yet exist. I welcome his engagement with the Milton Keynes institute of technology, which is a flagship for the challenger institutions that we want to come into the sector.

Critically, as other Members have stressed, it is vital that no institution is able to enter our system and access student finance without meeting the very high academic standards that we expect of the sector, as set out in the White Paper. On longevity, we expect institutions to meet the same financial sustainability rules that exist for incumbents. The Bill makes no changes to those demanding requirements. The reforms will, however, make it easier and quicker for new providers to enter the HE market. They will drive innovation, promote choice for students and increase opportunity, but they will also ensure that new providers can enter the market only when they demonstrate that they are able to deliver academic services of the quality that we expect.

The Bill reflects our determination to accelerate social mobility in this country through higher education. When we reformed the student finance system in 2011, some, including Labour Members, said participation would fall. In fact, the opposite has happened. We have a progressive student finance loan system that ensures that finance is no barrier to entry. It is working as a system. Young people from disadvantaged backgrounds are going to university at a record rate—it is up from 13.6% of the bottom quintile in 2009 to 18.5% in 2015. I am afraid Labour Members were wrong then and they are wrong now. Young people from disadvantaged backgrounds are 36% more likely to go to university than they were in 2009, but we can and must go further. Our new Prime Minister has rightly prioritised a country that works for everyone and not just the few.

Our reforms in the White Paper and the Bill support that ambition. The Bill introduces a statutory duty on the office for students to promote equality of opportunity across the whole higher education lifecycle for disadvantaged students, and not just at the point of access. That includes Oxbridge and other elite institutions, exactly as the right hon. Member for Tottenham (Mr Lammy) would want us to ensure. We will bring together the responsibilities of OFFA and HEFCE for widening access into the new office for students. As part of that body, the new director for fair access and participation will look beyond the point of access into higher education and across disadvantaged students’ entire time in higher education. We will also require higher education providers to publish application, offer and progression rates by gender, ethnicity and socio-economic background.

I welcome the cross-party support for our focus on teaching excellence. We are committed to introducing a teaching excellence framework in our manifesto because we want to drive up teaching standards throughout the sector. The Bill delivers on our pledge to drive up teaching quality and to provide students with robust, comparable information on where teaching is best in the system. It will rebalance the priority given to teaching and learning compared with research, and will mean that the funding of teaching is based on quality, not just quantity—a principle long and successfully established for the funding of research.

On the link between tuition fees and the teaching excellence framework, it is worth noting that the previous Labour Government raised tuition fees in line with inflation in every year from 2007 to 2010, regardless of teaching quality. We will allow fees to rise with inflation only for those institutions offering the highest-quality teaching. Maximum fee caps will be kept flat in real terms. We will allow them to increase only in line with inflation each year, as provided for by the Labour Government. Both Universities UK and GuildHE—expert sector groups—have made clear that allowing the value of fees to be maintained in real terms is essential if universities are to continue to deliver high-quality teaching.

Our reforms go well beyond education and also cover our research base. We have heard comments about our outstanding research base. Its strengths in adding to human knowledge and improving our lives are not in doubt. They will continue to be protected, but we have the opportunity to maximise the benefits of our investment through a strengthened strategic approach, removing the barriers to more inter- and multidisciplinary research, and ensuring that we capitalise on links between our research base and business. We have long recognised the contribution of science and research to our wellbeing and wider economy. Our reforms build on those strengths, placing research and development at the heart of a national industrial strategy.

We have heard many passionate voices from both sides of the House today. The House can unite in support of the excellence of our universities and our research, but the Government are not willing simply to celebrate the excellence already achieved—we want it to continue and to build on it further. Our reforms will create a level playing field for new providers and increase competition in the system. We will encourage innovation in the higher education sector, transform the sector’s ability to respond to economic demands and the rapidly changing graduate employment landscape, and ensure that we remain attractive internationally for decades to come. I commend the Bill to the House.

Question put, That the Bill be now read a Second time.

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

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I beg to move,

That—

(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 6 September) meet—

(a) at 2.00 pm on Tuesday 6 September;

(b) at 11.30 am and 2.00 pm on Thursday 8 September;

(c) at 9.25 am and 2.00 pm on Tuesday 13 September;

(d) at 11.30 am and 2.00 pm on Thursday 15 September;

(e) at 9.25 am and 2.00 pm on Tuesday 11 October;

(f) at 11.30 am and 2.00 pm on Thursday 13 October;

(g) at 9.25 am and 2.00 pm on Tuesday 18 October;

(2) the Committee shall hear oral evidence in accordance with the following Table:

Joseph Johnson

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said that it was open to all parties to propose witnesses, but that the Labour party had not proposed NUS representatives until so late in the process that they could not be accommodated within the programme motion. He commented that the Scottish National party had proposed witnesses representing Scottish higher education and that they would give evidence in the afternoon sitting.

Joseph Johnson

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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.

Joseph Johnson

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stated that the machinery of Government changes had gone through in July and that the lines of ownership were clear.

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

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I beg to move,

That, the Order of the Committee of 6 September be varied so that the following is added at the appropriate place in the table—

Joseph Johnson

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I have reduced the time that I had been allocated to give evidence to the Committee by 50%, going down to 15 minutes, and I feel it is important, before we get into the line-by-line, nitty gritty scrutiny of the Bill, that we have the opportunity as a Government to give an overview of what we are trying to do, the context for the Bill and the core measures that we propose to achieve those objectives. If we shorten the time much further, I am afraid we would lose the ability to give a coherent sense of what we are trying to do overall. I would prefer to be left with the 15 minutes to which I have already reduced my slot.

Question put and agreed to.

Examination of Witnesses

Dr Ruth McKernan, Professor Philip Nelson and Professor Ottoline Leyser gave evidence.

The Lord Commissioner of Her Majesty's Treasury (Mr David Evennett)

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I can’t believe that!

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

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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.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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I thank my hon. Friend for his point. That is right. HEFCE is a brilliant body. As we discussed this morning, it was set up in 1992 as the successor body to the Universities Funding Council. It is in the tradition of being a funding council at a time when the Government no longer principally funds the universities, so it is doing its job in a regulatory environment that reflects a bygone era. We need a regulatory structure that reflects the fact that students are now the primary funders of their education through the student loan system. This is a market, as recognised in law, so we need a market regulator. The office for students is the body that we believe is best placed to do that.

A change of name of the kind that the hon. Member for Walsall South suggests would go against the main principles that we are trying to achieve through these reforms. I note that none of the stakeholders who gave evidence to the Committee on Tuesday or today asked for a change of name.

As a regulator, the OFS will need to build relationships across the sector. Part of its duties will be thinking about the health and sustainability of the HE sector. However, that does not change the fact that the new market regulator should have students at its heart, and I believe that the name of the organisation needs to reflect that. For that reason, I ask that the hon. Lady withdraws her amendment.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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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.

The Lord Commissioner of Her Majesty's Treasury (Mr David Evennett)

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That is rubbish.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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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.

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

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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.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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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—

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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I will happily do so, Sir Edward.

These amendments recognise the importance of widening choice and opportunities to students from all backgrounds and all parts of the country. The Government wholeheartedly support that ambition, but it is crucial that we ensure that those choices are made alongside the available technical and vocational options. There will be opportunity to discuss that in more detail as we take forward both this Bill and the skills plan. However, the OFS’s duties to have regard to the need to promote greater choice and competition already give it the responsibility to focus on those issues.

On amendment 15, widening access to higher education is a priority for the Government. Good progress has been made, and record numbers of young people from disadvantaged backgrounds are going into HE: the proportion has risen from 13.6% in 2009-10 to 18.5% in 2015-16, and provisional figures for 2016 indicate an entry rate of 19%. The hon. Member for Blackpool South acknowledged that the alarmist warnings about the impact of the tuition fee increases have not been borne out by events, and that the pips have not squeaked, at least in the traditional sector. We share his concerns about part-time study, and I will address in greater detail later exactly what we have done and will do to support it.

Joseph Johnson

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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.

Joseph Johnson

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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.”

Joseph Johnson

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To carry on, we are supporting growth in degree apprenticeships, including by making available an £8 million development fund. That will build on the rapid progress that we have been making over the past year. It will help universities and partners build capability and capacity among HE providers to meet employer demand.

I support the good intentions behind the amendment, and it will, of course, be essential for the OFS to work collaboratively with the Institute for Apprenticeships to increase the number, range and choice of degree-level apprenticeships on offer to students. However, the amendment is unnecessary to accomplish the hon. Gentleman’s entirely laudable aim. There are already powers in the Bill that enable collaboration between the OFS and other bodies. Clause 58 empowers the OFS to collaborate, where appropriate, for the efficient performance of its functions, and requires it to do so if directed by the Secretary of State. The OFS can use that power to collaborate and share information with other organisations, such as the IFA.

The Secretary of State will also be able to ask the OFS to work with the IFA through guidance and, in doing so, will be able to set out which areas of activity should be prioritised at any given time. That is a more useful and flexible tool for delivering the kind of increase in degree apprenticeships that we all want. That will enable the OFS to respond to the changing needs of prospective students and the labour market. The amendment would lead to an overly prescriptive approach, and would limit the flexibility that we need to ensure that our education system remains responsive to changes in the labour market and the needs of our economy.

Finally, I turn to amendment 28. I again welcome the opportunity to discuss the important issue of the geographical distribution of higher education provision. HE providers play a significant role in their local economies by supporting and enabling local growth. Access to HE acts as a social mobility catalyst that can improve the life chances of young people in disadvantaged areas or help retrain people later in life. It is important that all areas of the country should be able to benefit from that. HE provision tends to be clustered in cities, with less provision in rural or coastal areas. HEFCE has undertaken valuable work in recent years on the issue of cold spots. I assure the Committee that it is our intention that the OFS should continue doing that important work. However, the amendment is not needed to enable that; it would risk forcing the OFS to take an over-prescriptive and interventionist approach.

The Bill already gives the OFS a duty to have regard to the need to promote greater choice and opportunities for students. That is a broad duty that includes matters such as students having a choice about where to study. That means that the OFS will have a remit to be aware of cold spots, and to take action if necessary.

The amendment would also risk creating the expectation that the OFS would continually monitor the distribution of supply and demand for HE, perhaps in a bureaucratic and costly way. The OFS should be free to determine the extent of the monitoring needed, based on its market intelligence. The amendment would impose a legal requirement on the OFS to take action whenever there was unmet demand. I would be concerned about that, as it would be an over-interventionist approach for the regulator to take in every instance. In many cases, incidences of unmet demand could be addressed by the local area without any direct OFS action. The duty could therefore be inconsistent with the principle of taking regulatory action only when it is needed.

We have an active HE market that is well equipped to identify and respond to student demand with innovative and targeted provision. Our view is that local institutions and authorities are best placed to decide what is needed in their areas; that is in line with the spirit of institutional autonomy. For example, nearby providers and the local community can put plans in place for additional HE provision, perhaps through FE colleges or satellite campuses. The OFS can encourage and support that if necessary, but the decision should be for local areas, reflecting the principles of local devolution.

Our reforms will also support new institutions opening in cold spots where there is unmet demand. It will be quicker and easier for new high-quality HE providers to establish themselves. New universities can be agile and nimble, can respond to what students and the economy demand, and can equip students with the skills needed for the jobs of the future. I therefore ask the hon. Gentleman to withdraw the amendment.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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We absolutely recognise the important role that universities play in society. As the hon. Lady says, as well as often being large local employers, HE providers need to be well connected with their local business community and other education providers. They often provide additional services and facilities that are important to local communities, but we do not want to be prescriptive about what that wider role should look like or create an expectation that the OFS should formally regulate this type of activity. That is unnecessary. It is part of the general overview of the sector and of the role of providers that we would expect the OFS to have, but we will make that clear in our guidance, if that is of any comfort to the hon. Lady.

The OFS’s general duty to have regard to encouraging competition recognises that higher education is a market and needs a regulator suited to dealing with that reality. The Competition and Markets Authority concluded in its report on competition in HE that aspects of the current system could be holding back competition among providers and needed to be addressed. Currently, as we heard in the evidence sittings, the sole option for providers new to the UK sector, or too small or specialist to gain their own degree-awarding powers, is to have their degree validated by an incumbent provider. Not only does that appear to frustrate competition, it stifles innovation and results in the entrenchment of the same model of higher education.

Joseph Johnson

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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.]

Joseph Johnson

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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.

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

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First, let me say that I can see the principles that hon. Members are seeking to address here. I entirely agree that it is very important that the strong reputation of the English HE sector is maintained and that there is confidence in both the sector and the awards it collectively grants. The OFS has a key role to play in that. I also agree that the OFS will need to determine and promote the interests of students, that providers should continue to collaborate and innovate, and that studying part-time and later in life brings enormous benefits for individuals, the economy and employers. However, the OFS is already required under clause 2 to have regard to the need to promote quality and greater choice and opportunity for students.

Our higher education sector is indeed world class, and one of our greatest national assets. I entirely agree that it is crucial that this strong reputation is maintained and that there is confidence in both the sector and in the awards made by its providers. We have heard the same arguments about letting in poor providers at every period of great university expansion. The expansion of the sector over the decades has been the story of widening participation and access to the benefits of higher education. The concerns that we have heard at every wave of expansion have successively proved to have been manageable and, eventually, unfounded.

There is no specific current legislative provision that places a duty on the regulator to maintain confidence in the academic awards made by HE providers. However, the OFS is already required, under clause 2, to have regard to the need to promote quality, and good quality is the key ingredient that inspires confidence. As the Quality Assurance Agency recently noted, it is the Government’s intention that,

“no higher education provider will be given DAPs”

degree-awarding powers—

“without due diligence around quality assurance and this responsibility is expected to be carried out by the designated independent quality body.”

The QAA also said that,

“the transition to a more flexible, risk-based approach to awarding DAPs and university title…will help underpin the government’s policy objectives to open the sector to new high quality providers, encourage innovation and offer more choice to students”.

In particular, the power to award degrees will remain subject to specific criteria which all prospective providers must meet. The detail of those will be subject to consultation in due course, but I do not envisage the criteria themselves differing much from the existing criteria, and certainly not in a way where quality and therefore confidence is undermined.

The criteria for degree awarding powers are currently set out in detailed guidance. That will continue to be the case under the Bill. The current criteria and guidance for degree awarding powers run to 25 pages; all the criteria go towards ensuring quality and therefore confidence. Current guidance describes in some detail what is expected of providers with regard to key aspects concerning, for example, governance and academic management, academic standards and quality assurance, scholarship and pedagogical effectiveness, and the environment supporting delivery of taught HE programmes. We intend to consult on the detail of the future guidance, but will in all circumstances seek to assure quality. That level of detail cannot be captured in primary legislation.

Through our new regulatory framework, we are giving the OFS the powers to ensure that quality and standards are maintained. That will ensure that all parties, be they students, employers or the wider public, can have confidence that an English degree remains a high-quality degree and that it will continue to be something that has real value.

Let me deal with amendment 136. For the OFS to function effectively in the student interest, students should of course be represented, and that is our intention. Student interests are at the heart of our reforms, and we will continue to engage with our partners as the implementation plans are developed. As has been seen, from the Green Paper onwards we have sought the engagement and thoughts of all involved in the sector; we have engaged directly with students and their representatives, and I have had numerous meetings over the past year with student representative bodies including the NUS and the Union of Jewish Students, as well as many meetings with individual students. We will be embedding that culture of engagement within the OFS across all its duties, not just access and participation plans.

The Committee has heard from Universities UK, GuildHE and MillionPlus, all of which agreed that the general principle of student engagement was right, but that goes further than just representation. There needs to be a variety of mechanisms to enable student engagement, rather than just prescribing in legislation how that is to be achieved. The Office for Fair Access, for example, already requires providers to include a detailed statement on how they have consulted students in developing access agreements. The director of fair access has regard to that statement when deciding whether to approve an access plan.

Joseph Johnson

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Under the current director of fair access, we have seen spectacular progress, as we all acknowledged in Thursday’s sitting, and we would expect him and his successor to continue with the excellent model that he has put in place. That has seen these arrangements work well, and that is why we do not think it necessary to legislate.

Joseph Johnson

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We obviously are thinking very carefully about the debates that we have at all stages of the Committee’s proceedings, and I am reflecting on how best we ensure that we achieve all our intentions to ensure that students are better represented in the sector’s systems and structures. We have put forward a proposal, which we discussed in great detail, in relation to the role of the OFS board in representing the student interest. We want to ensure that that is about more than representation and that the student interest genuinely is mainstreamed throughout everything that the OFS does.

That is why, for example, we absolutely recognise the need for access plans in particular to continue representing the student interest, and why in this Bill we are extending access plans to include participation and therefore looking at students and what happens for them right across their time in higher education. The hon. Member for Ilford North will appreciate that that goes far further than the plans introduced in 2004, which were limited to the point of access into higher education, rather than participation in and the benefits from higher education, to which we are seeking to extend them.

We will be embedding outreach activity to engage with students within the culture of the OFS, as part of its duty to promote quality and greater choice and opportunities for students. I would expect the OFS to use a range of ways to engage and consult with students, including social media, online consultation, and collaboration with partners, which has had wide reach in the past.

On amendment 140, the general duties of the OFS are absolutely consistent with the idea that providers should continue to collaborate and innovate in the new regulatory system, as we discussed extensively this morning. We are wholly supportive of collaboration where that is in the interests of students, and nothing in the Bill prevents it. Collaboration can take many forms, and we do not want to be prescriptive about what it should look like.

Joseph Johnson

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We believe strongly that there is a need for competition to generate the driving forces that push up the quality of provision in the HE system and enable a more meaningful range of choices for students. We think that that would be in the student interest. Our overarching purpose is to make sure that the OFS operates in the student interest. We believe that that overriding goal captures many of the benefits that collaboration could achieve, and therefore putting collaboration on the face of the Bill would be redundant. When collaboration is in the interests of students it would already be covered by the OFS’s overarching duty in clause 2.

I have listened carefully to the hon. Gentleman, and I can assure him that we will of course make clear in our guidance to the OFS that having regard to collaboration is part of its general role in having an overview of the sector and of the role of providers. We will make clear in the guidance that collaboration is compatible with competition when it is in the interests of students. The OFS does not need a separate duty to promote collaboration; it has a general duty to have regard to the student interest and can therefore support collaboration when it is in that student interest.

We know that there is a continuing entrenchment of the same model of higher education in this country. The share of undergraduate students in English higher education institutions doing typical full-time first degrees has increased from 65% in 2010-11 to 78% in 2014-15. It is important that the OFS has a focus on supporting a competitive and more innovative market. This will have the effect of making it easier for new providers to enter the market and expand, helping 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, which has been stifled for too long under the current system.

I concur with the hon. Gentleman about a lack of innovation. In my view, 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.

Joseph Johnson

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I think that it is generally recognised that competition is one of the great forces—

Joseph Johnson

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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.

Joseph Johnson

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I will give way, but we do need to make more progress.

Joseph Johnson

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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.

Joseph Johnson

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I am grateful for the opportunity to discuss this important issue, which has been raised by a number of Members and by people beyond this Committee. For 25 years the Government have issued guidance to HEFCE on what are high priority and strategically important subjects, such as STEM. The Bill enshrines that guidance in law while simultaneously creating new protections to safeguard providers’ academic freedoms and institutional autonomy, which are, I believe we all agree, the cornerstones of our higher education system. In his evidence to this Committee last week, Sir Leszek Borysiewicz, vice-chancellor of Cambridge University, praised the protections we have included in the Bill, saying that he particularly liked

“the implicit and explicit recognition of autonomy, as originally proposed by Robbins and Dearing”.––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 23, Q32.]

Joseph Johnson

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Pam Tatlow, chief executive at MillionPlus, agreed in her evidence to the Committee that,

“we have got to protect quality and standards for our students. We have also got to maintain a system in which we can maintain confidence”.––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 12, Q11.]

As a result, the Bill makes explicit mention of standards in order to ensure there is no uncertainty about the ability of the OFS to provide these assurances.

Amendment 161 seeks to remove the Secretary of State’s ability to refer to particular courses in her guidance to the OFS. There would be no ability for the OFS to have regard to the Government’s overall priorities and strategy for higher education where this relates to specific subjects; the amendment would remove that ability from current and future Governments. This would deviate from current practice, whereby the Government continue to issue strategic guidance in this way. I therefore strongly resist such an amendment.

Further, the Bill sets clear limitations on the Government’s powers to direct the OFS in order to protect academic freedoms and institutional autonomy. For the first time, it is made explicit that it cannot refer to parts of courses, their content, how they are taught, who teaches them or admissions arrangements for students. I hope that I have addressed the Committee’s concerns on these points and that the amendment will be withdrawn.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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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.

Joseph Johnson

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I thank the hon. Member for Sheffield Central for his amendment, which he was kind enough to flag to me last week. The Government fully share his aim of increasing the number of younger people registered to vote. Participating in elections at all levels is essential if we are to have a healthy democracy. Indeed, the Government have demonstrated their commitment to that aim by supporting and contributing financially to the pilot project of the University of Sheffield, which is in the constituency of the hon. Member for Sheffield Central, as he mentioned.

The pilot project sought to integrate electoral registration with student enrolment. I congratulate the University of Sheffield on its commitment to devising a workable solution to the problem. It achieved the successful outcome of integrating online electoral registration and university enrolment using the university’s bespoke in-house enrolment software. The vice-chancellor should be commended as the driving force behind the successful pilot. However, this is not a case of one size fits all. Integrated registration is just one option that the Government will consider alongside others in determining how best to increase student registration. Those options will include working in partnership with student-facing organisations and local authorities.

The process should be voluntary. It would not be right to force all providers on the register to adopt such an arrangement. Administering such an arrangement will incur costs, which larger institutions such as the University of Sheffield may find easier to accommodate than smaller specialist providers. Moreover, it would not be appropriate to include such a condition in the Bill. The conditions of registration are primarily to provide proportionate safeguards for students and the taxpayer, and to take forward social mobility policies. Requiring providers to carry out electoral registration, particularly when there are other means of students enrolling on the electoral register, is not the best way forward.

In addition, the introduction of online electoral registration by the previous Government has made it simpler and easier than ever to register to vote. Since the introduction of individual electoral registration in June 2014, there have been more than 20 million applications to register. Some 78% of electors currently apply to register online, and that figure rises to 86% for the 18 to 24 age group. That demonstrates that the way in which electors engage with electoral registration is evolving.

The Government are looking at modernising and streamlining the annual registration canvass. Impacts on students from the current process will be picked up as part of the modernising electoral registration programme. We are looking at the lessons learned from enrolment pilot schemes, such as the one conducted successfully at the University of Sheffield, to see whether they have wider application. We are also considering other options to increase student registration, including as part of the Government’s democratic engagement strategy, and we expect to set that out early in 2017. Ahead of that, I ask that the amendment be withdrawn.

Joseph Johnson

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I am happy to discuss further with the hon. Gentleman how we can involve the Cabinet Office. We have already had quite detailed discussions with Cabinet Office Ministers who are sighted on the hon. Gentleman’s amendment. They are aware of the status of our Bill, but I am happy to discuss this further outside the Committee.