Higher Education and Research Bill (Tenth sitting)
Tuesday 11th October 2016
(7 years, 8 months ago)
Public Bill CommitteesRead Full debate Higher Education and Research Act 2017 View all Higher Education and Research Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 11 October 2016 - (11 Oct 2016)
The Committee divided: - Ayes: 7 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 7 - Question accordingly agreed to.
The Committee divided: - Ayes: 11 / Noes: 6 - Question accordingly agreed to.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 233, in schedule 4, page 74, line 32, after “providers” insert “and students”.
See amendment 232.
Amendment 4, in schedule 4, page 74, line 39, at end insert—
“Bodies suitable to perform quality assessment functions: student representatives
4A (1) A body is suitable to perform the quality assessment function under section 23 if, in addition to meeting conditions A to D, at least two of the persons who determine the strategic priorities of the body are currently enrolled on a course at a higher education provider.
(2) For the purposes of sub-paragraph (1), ‘course’ means any graduate or postgraduate course.”
This amendment would require the board of any body designated to perform the quality assessment function under section 23 to include at least two student representatives.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
It is a pleasure to serve under your chairmanship again, Mr Hanson. I think the Minister will be relieved to know that I had come to the end of my comments. In great anticipation that he will go away and look at how to improve student representation on the assessment body, I will withdraw the amendment.
Wes Streeting (Ilford North) (Lab)
It is a pleasure to serve under your chairmanship again, Mr Hanson. I am sure that people have waited with bated breath over lunch to find out whether I will press amendment 4 to a vote, but it is not my intention to do so at this stage.
Dr Blackman-Woods
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 56, in schedule 4, page 75, line 1, after “include” insert “the”.
This amendment clarifies that when the Secretary of State provides a notice all of the reasons for the decision are given.
Amendment 57, in schedule 4, page 75, line 6, leave out “and standards of” and insert
“of, and the standards applied to,”.
See the explanatory statement for amendment 46.
Amendment 58, in schedule 4, page 75, line 30, leave out “an assessment function” and insert “the assessment functions”.
See the explanatory statement for amendment 44.
Amendment 59, in schedule 4, page 75, line 33, leave out “designated function” and insert “assessment functions”.
This amendment is consequential on amendment 43.
Amendment 60, in schedule 4, page 75, line 37, leave out “designated function” and insert “assessment functions”.
This amendment is consequential on amendment 43.
Amendment 61, in schedule 4, page 76, line 4, leave out second “designated” and insert “assessment”.
This amendment is consequential on amendment 43.
Amendment 62, in schedule 4, page 76, line 25, at end insert—
“Power of the OfS to give directions
9A (1) The OfS may give the designated body general directions about the performance of any of the assessment functions.
(2) In giving such directions, the OfS must have regard to the need to protect the expertise of the designated body.
(3) Such directions must relate to—
(a) English higher education providers or registered higher education providers generally, or
(b) a description of such providers.
(4) The designated body must comply with any directions given under this paragraph.”
This amendment allows the OfS to give the designated body directions regarding the exercise of the assessment functions. In using this power, the OfS must have regard to the need to protect the expertise of the body.
Amendment 63, in schedule 4, page 76, line 29, leave out “designated function” and insert “assessment functions”.
This amendment is consequential on amendment 43.
Amendment 64, in schedule 4, page 76, line 30, leave out “that function” and insert “those functions”.
This amendment is consequential on amendment 43.
Amendment 65, in schedule 4, page 76, line 40, after “provided” insert “in England”.
This amendment clarifies that in Schedule 4 a “graduate” means a graduate of a higher education course provided in England.
Amendment 66, in schedule 4, page 77, line 1, leave out “an assessment function” and insert “the assessment functions”.—(Joseph Johnson.)
See the explanatory statement for amendment 44.
Schedule 4, as amended, agreed to.
Clause 27
Power of designated body to charge fees
Amendments made: 67, in clause 27, page 16, line 15, leave out subsection (3).
This amendment is consequential on amendment 43.
Amendment 68, in clause 27, page 16, line 20, leave out “or (3)”.
This amendment is consequential on amendment 43.
Amendment 69, in clause 27, page 16, line 21, leave out from “provider” to “by reference to” in line 22 and insert “—
(a) may be calculated,”.
This amendment is consequential on amendment 43.
Amendment 70, in clause 27, page 16, line 25, leave out from “functions;” to “may” in line 29 and insert “and
(b) ”
This amendment is consequential on amendment 43.
Amendment 71, in clause 27, page 16, line 32, leave out “or (3)”.
This amendment is consequential on amendment 43.
Amendment 72, in clause 27, page 16, line 34, leave out
“in the case of subsection (2)(a),”.
This amendment is consequential on amendment 43.
Amendment 73, in clause 27, page 16, line 37, leave out paragraph (b).—(Joseph Johnson.)
This amendment is consequential on amendment 43.
Clause 27, as amended, ordered to stand part of the Bill.
Clause 28
Power to approve an access and participation plan
Gordon Marsden (Blackpool South) (Lab)
I beg to move amendment 200, in clause 28, page 17, line 12, at end insert?
“(1A) The OfS must appoint an independent Director for Fair Access and Participation responsible for approving access and participation plans.”
This amendment would strengthen the powers of the proposed Director for Fair Access and Participation in line with the current powers of the Director and those proposed in the Higher Education Green Paper.
The Chair
With this it will be convenient to discuss the following:
Amendment 201, in clause 28, page 17, line 14, leave out “OfS may, if it” and insert
“Director for Fair Access and Participation may, if the Director”.
This amendment and amendment 204 would ensure that decisions on the approval or rejection of participation plans rest with the Director, not the head of the Office for Students.
Amendment 202, in clause 28, page 17, line 14, at end insert—
“(3A) The Director for Fair Access and Participation may make recommendations to the OfS on the matters to which the OfS should include in guidance that the Director will have regard in deciding whether to approve plans.”
This amendment would ensure that the Director can make recommendations to the OfS on the matters to be included in guidance that the Director will have regard in deciding whether to approve plans.
Amendment 203, in clause 28, page 17, line 15, after first “OfS” insert
“having considered any recommendations made by the Director for Fair Access and Participation and having consulted the Director,”.
This amendment would ensure that the OfS considered any recommendations made by the Director for Fair Access and Participation and where a matter was not covered by a recommendation the OfS consulted the Director.
Amendment 204, in clause 28, page 17, line 15, leave out second “OfS” and insert
“the Director for Fair Access and Participation”.
See amendment 201.
Amendment 205, in clause 28, page 17, line 16, at end insert—
“(4A) Where the Director for Fair Access and Participation considers that there is significant risk to widening participation or that access targets will not be achieved, the Director may issue to a provider or class of providers, which have similar and identifiable characteristics affecting the satisfying of an access and participation plan condition—
(a) guidance setting out additional matters to have regard to in connection to approving the plan; and
(b) a warning.”
This amendment would ensure that the Director could issue formal guidance and warnings to certain providers that are not widening access or meeting access targets.
Amendment 206, in clause 28, page 17, line 19, leave out “OfS” and insert
“Director for Fair Access and Participation”.
This amendment would ensure that the Secretary of State’s regulation-making powers specifying the matters to be taken into account in determining whether or not a plan is to be approved apply to the Director for Fair Access and Participation not the head of the Office for Students.
Gordon Marsden
I hope that you had a restorative recess, Mr Hanson. It is a great pleasure to serve under your chairmanship. I rise to speak to this group of amendments, which are in my name and that of my colleague, the shadow Secretary of State, and are all about the Office for Fair Access. Hon. Members will be relieved to hear that I will speak not to each amendment but to the broad thrust of them all.
We have discussed OFFA previously, but these amendments focus specifically on the powers to approve an access and participation plan. We will hear more about access and participation plans later this afternoon when we debate further amendments, but as far as we are concerned, at the heart of such plans is what the Office for Fair Access was set up for and what the director of fair access is tasked with doing. I know that the Minister and I have a high opinion of the current holder of that office, and nothing that I will say refers to a particular individual. As I have said previously, we are legislating for a period of up to 15 or 20 years, so we have to consider the evolution of the office for students and the nature of the different individuals who might occupy that office. I therefore think it reasonable to try to bring the relationships involving the director for fair access and participation in line with the current powers and those proposed in the higher education Green Paper.
The Minister clearly thinks that has been done, and he has perfectly reasonably prayed in aid various comments from the current director. But there is a continuing nagging concern—not just with us, but with many people in the HE sector—that under these reforms the director could be seen as subordinate to the head of the office for students. That body will have significant funding from universities—we wait to hear further how much that will be, although some figures have already been put out—which might make the OFS less inclined to challenge institutions on access. Even if it does not, the Minister will be familiar with the phrase, “Caesar’s wife should be above suspicion.” I am not correlating Les Ebdon with Caesar’s wife, but the Minister will understand my point: there is a danger, if that is the position institutionally, in what people might think.
The report that lays out the business case for the office for students states that
“day to day responsibility for operations and decisions relating to the OfS’ Access and Participation functions”
should sit with the director, but that is not currently underpinned in the Bill. The Sutton Trust and various other organisations have concerns about that point, as does the director of fair access himself, as I believe he said when he gave evidence to the Committee.
It is crucial that the director for fair access and participation has the independence to challenge universities robustly, so that universities that dislike access rulings designed to help able young people from low-income homes are not able to appeal to the head of the OFS. That is why we believe that the Bill should be amended—so that it is clear that the director has a direct line into the Secretary of State and is not simply reporting to the members of the OFS board and the OFS chief executive, although he may want to consult them quite substantially.
In various responses to the White Paper, the director of fair access identified at least two possible areas where the Bill could be strengthened, one of which was this one. He was told that the power to approve access and participation plans will sit with the OFS corporately, not with the new director. Nothing in the Bill requires the OFS to exercise those powers through the director, although that would be sensible in the light of schedule 1. Paragraph 3 of schedule 1 merely requires the director to report on the exercise of functions, which is a narrative exercise. He or she is not even accountable for the exercise of those functions. The director will fulfil that obligation by delivering an accurate report, and whether that report describes a good or bad situation will not be his or her concern under the provisions in the Bill. At present, whether the director will have the functions required will depend on the scheme of delegation adopted by the OFS.
The purpose of the amendments is to put flesh on the bones of those intentions. Those bones include the power to negotiate with institutions and ultimately to approve or refuse an access and participation plan. The amendments would both strengthen that position and ensure that the director had the ability to do so.
In case people think that these issues are hypothetical, dry or technical, it might be worth reflecting on what happened during the 2016-17 access agreements, which were a positive thing for both the Government and the director. The director’s negotiations led to improved targets at 94 institutions, and 28 of those increased their predicted spend. That secured an estimated additional £11.4 million for fair access and participation.
If the director for fair access and participation could be bypassed or overruled by the OFS chief executive or the board, that could undermine his or her ability to negotiate directly with vice-chancellors and to offer robust challenge. That in turn would be likely to lead to a significant scaling down of ambition by some institutions. We need the powers in question to be clearly stated on the face of the Bill. I accept that the Minister might say that they will be intrinsic guidance, but this is what one Minister can say in 2016, and we do not know what another Minister might say in 2021 or 2022. That is why we need the amendments.
We know already that the portfolio of skills that a director of the Office for Fair Access needs to possess is complex. They need to be able to get on with Government, and they need to be well positioned to make nuanced judgements about what is reasonable and achievable in setting up access agreements. Above all, as in any negotiations, they need to have flexibility—if I can put it this way, they need to have a few other cards up their sleeve. Far from being a distraction or causing problems within the OFS, making those points clear in the framework set out in the Bill would improve and settle the relationship—that is not to say that it would bad in the first place—between the office for students, its members, its board and the director. The issue would not have to be teased out over a period of what might be creative tension over various issues. I have sat in enough Select Committee meetings to know that problems in one particular area can throw up conceptual difficulties in relationships between offices, and that the amendments are therefore advisable. If the director does not have responsibility for access agreements, it risks sending a message to the sector that fair access and participation have been deprioritised.
The Government are keen to meet their goal of doubling the rate of young people from disadvantaged backgrounds entering higher education by 2020. In order for them to do that—this is not a criticism, just an observation—there will need to be some acceleration of progress. If the director does not retain the authority to approve or refuse an access and participation plan, or if that power can be delegated to others and decisions can be overturned, that could a significant period of to-ing and fro-ing within the OFS in which the Secretary of State or the Minister would have to intervene. That would not help anybody, and there is a real risk that the position of the director would be seen as being weakened. That could send a message that fair access had been deprioritised and would likely lead to a scaling down of ambition by institutions. Such a message could also be seen as contrary to the Government’s fair life chances and social mobility agenda. All of us in the House, whatever position we take on a particular aspect of the Bill, fervently want to see that social mobility. I again urge the Minister to think hard about some of the nuances I have talked about. Let us see what he has to say.
The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
It is a pleasure to see you in the Chair once again, Mr Hanson, although we have not made as much progress in your absence as you might have hoped. It is also a pleasure to see the hon. Member for Blackpool South in his place on time to start the proceedings. I am glad that he did not have to scapegoat Network Rail for his late arrival.
Gordon Marsden
I know that the hon. Gentleman wishes to defend the Government in all shapes and forms, but that does not necessarily involve defending Network Rail. If he carries on in that vein I might have to examine his record of interests to see whether he has shares in the company.
The Chair
Order. Members will have to fill me in on that at a later time. In the meantime, I call the Minister.
Joseph Johnson
If the hon. Gentleman wants to lodge his time of arrival at Victoria, we can verify his claim with the operator and get to the bottom of his late arrival.
I am grateful to hon. Members for tabling the amendments. They touch on points that we discussed extensively at an earlier stage in our proceedings, and they are intended to clarify the role and responsibilities of the director for fair access and participation in relation to access and participation plans.
We are giving amendment 200 careful thought. There is obviously agreement on both sides of the House that social mobility is a huge priority, and all the more so now for the current Government. Widening access and participation in higher education is one of the key drivers of that. The OFS will have a duty to consider the quality of opportunity in connection with access to and participation in higher education across all its functions, so widening access for and participation of students from disadvantaged backgrounds will be at its very core. It will be the responsibility of the OFS to ensure that it is fulfilling that function. As I have said before, it continues to be our clear intention that the OFS will give the DFAP responsibility for activities in that area. We envisage that, in practice, that will mean that the other OFS members will agree a broad remit with the DFAP, and that the DFAP will report back to them on those activities. As such, the DFAP will have responsibility for the important access and participation activities in question, including agreeing access and participation plans on a day-to-day basis.
We do not accept that the reforms will undermine the ability for stretching access plans to be agreed and strengthened. Indeed, the OFS as a whole will have responsibility for promoting equality of opportunity, which, as I have said, means that it will have access to the full suite of OFS sanctions. I will come on to describe what those could be.
Amendment 205 is intended to ensure that the DFAP can issue guidance and warnings when a provider does not meet their targets. In future, we expect that the OFS will continue to monitor a provider’s progress against its plan and agree targets with it, as the director of fair access does now. Concerns about progress would be raised directly with the provider. That has proved to be an effective system, with the current director of fair access’s interventions having led to an improvement in targets at 94 institutions and increased expenditure at 37 for 2017-18. Where it was considered appropriate, a range of OFS sanctions would be available, including the power to refuse an access and participation plan. I therefore ask the hon. Gentleman to withdraw the amendment.
Gordon Marsden
I welcome what the Minister has said, which is consonant with what he has said on previous occasions. I repeat our view that it would be beneficial to make the amendments, for the reasons that I have given, but I accept the Minister’s assurance that he is giving them careful thought. There will be a number of opportunities to develop them at other stages of the Bill’s passage, and on that basis I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
I beg to move amendment 179, in clause 28, page 17, line 16, at end insert—
‘( ) The OfS must, in deciding whether to approve a plan, have regard to whether the governing body of an institution has consulted with relevant student representatives in producing its plan.
( ) In this section “relevant student representatives” means representatives who may be deemed to represent students on higher education courses provided by the institution including, but not limited to, persons or bodies as described by Part 2 of the Education Act 1994.”
This amendment would ensure that when higher education providers produce an Access and Participation Plan, they must consult with students and student representatives, including – but not limited to – the students’ union at that higher education provider.
This amendment would add a new subsection to clause 28, to ensure that before a participation and access plan is approved, the institution in question can demonstrate that students have been consulted in the drawing up of that plan. It is a positive step forward that, through measures in the Bill, institutions will be required to produce participation and access plans. I know that a number of organisations, including the National Union of Students, welcome and support those provisions. However, as the Minister will be aware, much of the excellent access and outreach work at universities is done by students, often co-ordinated by their students unions. The amendment would therefore recognise the work of students and ensure that they are involved when their university produces the access and participation plan. The amendment would give student representatives the chance to discuss their views on their university’s plan and ensure that it reflects the interest of current and future students.
We had a long discussion in this morning’s session about student representation, but I hope that the Minister can be a bit more forthcoming about student involvement in the plan. Frankly, it is hard to envisage how a plan for widening access and participation could be drawn up without speaking to current students and involving them in what that plan ultimately looks like. I look forward to hearing what the Minister has to say.
Joseph Johnson
The hon. Lady has again raised the important issue of student representation and involvement, this time in the development of access and participation plans. I am pleased to have been given the opportunity to set out how students are already involved in the development and monitoring of access agreements, including through students unions or associations.
The Office for Fair Access expects providers to include a detailed statement on how they have involved and consulted students in the development of their plan. For example, providers are encouraged to set out where students have been involved in the design and implementation of financial support packages. Some students unions run information, advice and guidance sessions to explain the support packages, to ensure maximum take-up from eligible students. That approach, which has been in place for over a decade, has been successful. All providers produce statements on consultations with their students, and the director of fair access has had regard to those when deciding whether to approve a plan. Over time, the quality of engagement with students has improved. Some providers include text written by their student representatives as part of their access agreements, and some student groups send in their own separate submissions. Although that approach has worked well, we will reflect on the hon. Lady’s comments and consider how best to ensure that students can continue to be engaged in this area in the future. On that basis, I ask her to withdraw the amendment.
Dr Blackman-Woods
I suggest to the Minister that it is one thing to encourage institutions to involve students in the drawing up of their plans and quite another to insist that they do it. We are saying that best practice suggests that they really must do that. I have heard what the Minister has said and will and look at the matter again, to see whether it can be dealt with more effectively, perhaps somewhere in regulations. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 28 ordered to stand part of the Bill.
Clauses 29 and 30 ordered to stand part of the Bill.
Clause 31
Content of a plan: equality of opportunity
Wes Streeting
I beg to move amendment 16, in clause 31, page 18, line 22, at end insert—
‘(1A) The regulations made under sub-section (1)(a) shall include goals for ensuring fair access and widening participation, to which a provider will be considered in agreement to achieving once a plan has been approved under section 28.”
This amendment would require an access and participation plan to include specific goals for ensuring fair access and wider participation.
The Chair
With this, it will be convenient to discuss the following: amendment 17, in clause 31, page 18, line 25, leave out “subsection (1)” and insert “subsections (1) and (1A)”.
This amendment is consequential to amendment 16.
Amendment 18, in clause 32, page 19, line 12, at end insert—
‘( ) The regulations may include a designation of power to the Director of Fair Access and Participation to set specific targets for a higher education provider where the Secretary of State is of the view that the provider is failing to meet the fair access and widening participation goals under section 31(1A).
( ) Where such powers are exercised, the specific targets for a provider set by the Director of Fair Access and Participation shall be considered a general provision of the plan for the purposes of section 21 (refusal to renew an access and participation plan).”
This amendment would enable the Secretary of State to give power to the Director of Fair Access and Participation to set specific targets when it has been deemed that the institution is failing to meet the goals relating to fair access and wider participation set out in its access and participation plan (see amendment 16). The second subsection would enable the OfS to refuse to renew a plan if a provider fails to meet the targets set by the Director of Fair Access and Participation.”
Wes Streeting
Thank you, Mr Hanson, for calling me to speak, and I am glad that we are moving at a slightly faster pace this afternoon than we did this morning.
Further to the discussion that we have just had, these amendments seek to require access and participation plans to include specific goals for ensuring fair access to and wider participation in higher education. The reason for setting that out is that—further to the point made by my hon. Friend the Member for Blackpool South, the shadow Minister, and my hon. Friend the Member for City of Durham—the role of the director of fair access has been, by and large, successful since its inception. However, in light of the wider changes that are being made to the Office for Fair Access itself and by its inclusion as part of the office for students, it is important to make sure that the director for fair access and participation has the necessary powers to ensure that institutions include specific goals in their access and participation plans as well as the power to set specific targets, when it is deemed that an institution is failing to meet the goals relating to fair access and wider participation that it has set out in its access and participation plans. Amendment 18 would ensure that the OFS has the power to refuse to renew a plan if a provider fails to meet the target set out by the director for fair access and participation.
All these amendments seek to do is to make sure that the director for fair access and participation has the teeth, or the muscle, or whichever euphemism people wish to use to describe the director’s powers. However, the danger with the way that the director of fair access is being treated in the rest of the Bill is that they will lack sufficient independence and power to hold institutions to account.
That goes back to the point I made at the outset of the discussion of the Bill, on Second Reading. In the higher education sector, there are still too many institutions that are socially elitist rather than simply academically elite, and there are too many institutions that proclaim to be success stories in widening participation while presiding over retention rates and graduate destination data that ought to make their vice-chancellors blush.
In that context, it is right and proper to have an independent voice and an independent role that can hold institutions to account if they fall short of the expectations set by Parliament and the Secretary of State and, of course, the expectations of students who enrol on courses. These amendments would give the director for fair access and participation beefed-up powers, within the auspices of the OFS, which would give the public and students assurance that we take these issues seriously and that institutions will be held to account if they fail in this regard.
I commend these amendments to the Minister and I look forward to hearing his reply.
Joseph Johnson
I am grateful to the hon. Member for giving us the opportunity to discuss this important matter.
Currently, the director of fair access agrees targets proposed by providers as part of their access agreements. The DFA’s powers do not enable him or her to impose targets at present. This approach was founded on the desire to protect an institution’s autonomy over admissions and its academic freedom. Those are fundamental principles, on which our higher education system is based and on which it has flourished. This group of amendments seeks to change that approach to agreeing access and participation plans and introduce greater prescription in this area.
We asked for views on this precise question in our Green Paper consultation, including whether the OFS should have a power to set targets, should an institution fail to make progress. Importantly, OFFA did not agree and said that the OFS should not have a power to set targets. Its response highlighted the importance of providers owning their targets. If targets are set externally, they can become both resource-intensive and a blunt instrument. This can make it difficult to hold institutions to account when progress is slow. Effort becomes focused on the process rather than broader improvements in access and participation. That is why we did not take these proposals forward.
The Bill includes arrangements to call providers to account where they are considered to be failing to meet their access and participation plans. Where it is considered appropriate, there would be access to a range of OFS sanctions. As I said in answer to an earlier amendment, these include the power to refuse an access and participation plan, to impose monetary penalties and, in extreme cases, to suspend or even de-register providers.
I hope I have therefore reassured the hon. Member that the Bill contains sufficient safeguards to tackle under- performance and I ask him to withdraw Amendment 16.
Wes Streeting
I am grateful to the Minister for his reply and for outlining the range of sanctions that apply within the scope of the legislation. I think that is in part reassuring. My point is more a message for institutions rather than for the Minister per se, and it is that institutional autonomy is often used as a convenient cover to avoid and escape accountability. Institutions have largely gone along with the direction of travel of higher education policy, both for funding arrangements and the regulatory environment. It seems to me they want all the benefits of having a more marketised consumer-led system without the downsides of accountability and responsibility to—in the most crude and reductive sense—consumers. That is not the language I tend to use, but none the less the brave new world of the marketisation of higher education speaks increasingly of consumers.
I think it is unacceptable and harder questions ought to be asked of institutions. It was my intention that these powers would be used only in extreme circumstances, or in cases of particular failure, because it is not desirable to have external targets set, for the reasons outlined by the Office for Fair Access in its submission. I thought the vice-chancellor of the University of Cambridge was rather coy in the evidence session before the Committee. The recent example of the University of Cambridge, where it tried to row back from the previous commitment it had made to access and participation targets, was a good example of the Office for Fair Access working, where robust dialogue behind the scenes and a respectful relationship with institutions can lead to the right outcome.
As we travel further down this system, I think we will encounter further difficulties. It is right and proper that there should be powers for the office for students to hold institutions to account. I am grateful to the Minister for outlining the powers in the Bill and I beg to ask leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Gordon Marsden
I beg to move amendment 207, in clause 31, page 18, line 43, at end insert?
“(g) for details of individual Higher Education providers, their policies for part-time and mature students.”
This amendment would require universities and other higher education providers to include a policy in regard to part-time and mature students in their access and participation plan.
The Chair
With this it will be convenient to discuss amendment 287, in clause 36, page 20, line 15, at end insert
“to include access to and participation in part-time study”
This amendment requires the OfS to report on access to and participation in part-time study in its report(s) to the Secretary of State.
Gordon Marsden
Amendment 207 picks up on a theme that we discussed earlier, which is the essential need to strengthen the access and participation of part-time and mature students, particularly given the decline in their numbers in recent years.
The amendment requires universities and other higher education providers to include a policy for part-time and mature students in their access and participation plan. It would also require the office for students to consider appointing a director for part-time and mature students to its board. The amendment was suggested by the Sutton Trust, but a large body of opinion in the lifelong learning area believes that it is important—as we have said in relation to other groups—that when the office for students is established, the importance of part-time and mature students is recognised, particularly in access and participation plans.
The discussions that we have had so far have included many references to the Open University. That is not surprising: the Open University is a huge success story for the UK; it is an international institution based in Britain and it has the largest number of adult students and so on. But several other institutions, of greater longevity than the Open University, also have concerns in these areas. For example, Birkbeck College of the University of London has made a couple of points about this. When the Minister was talking about cockney universities, I cannot remember if Birkbeck was one of them, but it is of the same vintage. It was founded in 1823 as the London Mechanics’ Institute with the express remit to open up higher and university education to working people.
Birkbeck has a teaching model with a flexible course structure, allowing students to complete a degree in the same length of time as regular students studying in the daytime at other universities. Some Members here may even have members of their staff who have done exactly that sort of thing at Birkbeck. It is a very broad-based and world class research-intensive institution and has very good statistics in that respect. But Birkbeck is concerned about a number of issues in the Bill, not in terms of commission but of omission. It says:
“The vast majority of our students are aged over 21, most choose evening study because they work full-time or have family commitments during the daytime. Provision for part-time and mature learners is important for social mobility. Part-time study is frequently the route into higher education for most non-traditional and mature students. Part-time study is also, by definition, local. In 2015-16 one in five undergraduate entrants in England from low participation neighbourhoods chose or have no option but to study part-time, while 38% of all undergraduate students from disadvantaged groups are mature. Part-time study also cannot be ignored if we want to see economic growth. In 2011-12, there were nearly half a million people in the UK studying part-time at undergraduate level, but the decision to withdraw funding from universities in England and introduce a student loans system led to the tuition fee increase that we know about and to the very significant and dramatic downturn in part-time student numbers.”
The Minister will no doubt be relieved to know that I do not intend to bash the Government over the head any further on the matter at this point in time, but merely to make the observation that whatever the circumstances, we are where we are with those numbers. The Government have taken a number of relatively modest steps to try to address the issue, but that will not happen overnight. That strengthens the need to include the emphasis on the issue as part of the remit of the OFS on the face of the Bill. That is why Birkbeck and others believe that it is important that the duties of the proposed office for students are expanded explicitly to promote adult, part-time and lifelong learning. They have already said that they would like to see a clearer commitment to part-time provision through a requirement—not a “hope” or a “we’ll see about it”—that the OFS board includes expertise in part-time learning among its members, and to think also about the diversity of the UK student body as a whole.
The Minister will be familiar with this argument because he has employed it himself. If we are to succeed and prosper economically and socially, and if we are to fulfil people’s life chances, we are going to need to focus more and more on mature students, many of whom will be part time. The reasons for that are clear and demographic, and are repeated in the Government’s White Paper. I do not intend to repeat them further today, but they sharpen the focus on why we need this provision in the Bill.
Paul Blomfield (Sheffield Central) (Lab)
It is a pleasure to speak to my amendment 287 with you in the chair, Mr Hanson. The amendment complements the amendment moved by my hon. Friend the Member for Blackpool South by adding a responsibility on the OFS to report on access to and participation in part-time study.
I echo some of my hon. Friend’s points. One of the many things that distinguishes our great higher education system in this country is the large number of part-time students, which is something like 40% at postgraduate level and 20% at undergraduate level. Many of them are of course studying in the Open University, to which my hon. Friend has rightly drawn attention as a great success story of British higher education.
We need to focus on the issue of part-time students in the context of the Government’s ambition for higher education and for social mobility within higher education. I think the Government’s own vision is that we need to move away from conventional models of higher education, and that is partly behind some of the thinking—that the Opposition do not fully agree with—on some of the new sorts of providers that the Government have in mind.
The vision of a higher education system that moves beyond the conventional route of leave school, go to university, study full time for a number of years, come out with a degree and then leave it behind, is no longer relevant in the challenges that people face in today’s economy. We need to talk confidently about a system of lifelong learning in which part-time study has an increasingly important role, which will not simply be provided for by the new providers that the Minister has spoken of in the past. We should be deeply concerned that, following the introduction of the new fees structure through to 2014, part-time student numbers dropped by 50%. The Social Mobility and Child Poverty Commission described that as
“an astonishing and deeply worrying trend”.
It is one that we should really look to address.
In the case of part-time study, funding is key. The Minister spoke eloquently earlier about the number of students still applying to higher education from disadvantaged backgrounds, despite the funding changes, and I accept those figures, although the changes have had an impact on choice in higher education and work is needed on how some students from disadvantaged backgrounds have limited their choices by going to universities closer to home to keep their costs down. Nevertheless, we know that for part-time students, funding is key and we know that partly because the Labour Government made mistakes on that. The introduction of equivalent or lower qualifications, and limiting options for people to take second and subsequent degrees based on earlier qualifications, led to a significant reduction in part-time students in the past. I welcome the fact that the Government have learned from those lessons and are changing their position on ELQs.
Wes Streeting
I am grateful to my hon. Friend for highlighting this important issue. He is right to draw on some of the shortcomings of policy under the last Labour Government on ELQs. Does he also agree with me that aspects of the coalition Government’s student finance reforms should have been beneficial for part-time students, but did not necessarily lead to the increase in participation that was intended? Because of the complexity governing part-time students, and the law of unintended consequences, it is even more important to have a specific focus on part-time students in the report to the Secretary of State from the director of fair access and the OFS.
Paul Blomfield
I thank my hon. Friend for his intervention. He is absolutely right. In fact, the changes in the coalition Government’s proposals that he cites were used by some in the Government to celebrate the progressive nature of those proposals—we would not wholly agree with that. We need to understand, though, the difference between the impact of funding changes on school students, who may well have been—and certainly seem to be—willing to take on debt, compared with those who are in mid-career or later in life.
Ben Howlett (Bath) (Con)
We have been doing some work on this in the Women and Equalities Committee. One thing that is clear is the lack of data. Many hypothetical scenarios have been analysed, but does the hon. Gentleman agree that there is an opportunity here to get to the nitty-gritty of the argument and find out the data behind the reasons why participation levels are falling among part-time students, particularly for older workers? In some instances, it might be the fact that there are other options available to them, such as apprenticeships and all the other Government schemes. In other instances it might be the provision of finance. We need an assurance from the Minister about what proposals he has to create more data, to analyse the subject more.
Paul Blomfield
I thank the hon. Gentleman for his intervention and, indeed, for the work we do together on the all-party parliamentary group on students. That is a fair point. I was concentrating on some of the funding factors. For older students, the fact that they have mortgages and families, or that they are at albeit modest salary levels that trigger immediate repayment, are apparent disincentives. Matching the introduction of the new funding regime and the cliff-edge drop in the numbers of part-time students would suggest that there is a relationship. He is absolutely right that we should be looking at all the data and doing research properly to understand what is happening. I agree with him, and that is at the heart of my amendment: the OFS should have the responsibility to think deeply about part-time participation and draw up recommendations to address that.
Gordon Marsden
My hon. Friend is making a powerful case for his amendment. Does he—and, indeed, the hon. Member for Bath—agree that we do have indications of how the process affects older people in particular, though it is not exactly anecdotal? We have those indications from what has happened with the take-up at 24-plus of advanced learning loans, which are designed for students at level 3 and above. That was presaged, in my mind, by the discussions I had on that process; I talked to many women who said that they would not have progressed if they had had to take out loans at that juncture rather than having grants.
Paul Blomfield
My hon. Friend makes an important point to which we should pay attention, and he is absolutely right. Earlier, he cited Birkbeck’s important role in creating opportunities for social mobility through modes of part-time learning over many years. He—and, I hope, the Minister—may have seen the Gresham lecture given earlier this year by the long-time Master of Birkbeck, Baroness Blackstone, in which she focused on some of these exact issues with funding and proposed radical solutions, which at least deserve attention. For example, recognising the strategic importance of part-time learning, in the same way as we recognise the strategic importance of science, technology, engineering and mathematics subjects, she argued that perhaps we need to look again at the funding model to provide support for the delivery of part-time education, which in many ways is more expensive for universities than conventional learning. For example, she argued that maybe we could look at incentives through adjustments to the national insurance system.
A number of interventions made today deserve serious consideration, but I simply propose my amendment in the spirit of the comments made by the hon. Member for Bath. We need to do much more work on this issue, which should be a central responsibility of the OFS.
Joseph Johnson
I am sympathetic to the aims of the amendments and grateful again for the chance to discuss them. I have always been clear that fair and equal access to HE 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 for individuals, employers and the economy, so let me reassure the Committee that the Government are acting to support part-time students and part-time provision. Funding, as the hon. Member for Sheffield Central said, is obviously important. Over the course of the past few years, the Government and the predecessor coalition Government have taken significant steps to transform the funding available for part-time study. Going back to moves made in 2012-13, we started to offer tuition fee loans for part-time students so that how learners of all ages choose to study does not affect the tuition support available. Looking forward to 2018-19, we will, for the first time ever, provide financial support to part-time students, comparable to the maintenance support we give to full-time students with the introduction of part-time maintenance loans.
As the hon. Gentleman said, other factors are also an important part of the picture of what is happening in part-time provision. He was gracious enough to allude to the Labour party’s introduction of the equivalent and lower qualification restriction, which has undoubtedly also been a contributory factor to the decline in numbers. We have started to lift this restriction, principally by providing financial support from Government for a second degree if people wishing to study retrain part time in a STEM subject from September next year. This will allow more people of all ages to retrain in key STEM subjects.
Amendment 207 relates to providers including part-time and mature students’ provision in access and participation plans. Let me reassure the Committee that we agree that a focus on part-time and mature students in access and participation plans is important. That is why our recent guidance letter to the director of fair access in February this year asked him to provide a renewed focus on part-time study in his guidance to institutions on their access agreements for 2017-18. This should be of particular benefit to mature learners.
I am pleased to be able to tell the Committee that mature learner numbers, which dipped following the change in the fee regime in the middle of the last Parliament, have now recovered significantly and were at record levels at around 83,000 in 2015—compared with the previous high of 81,000 that they touched in 2009 and the 2006 levels of about 56,000 to 57,000—so they are now moving back in the right direction.
The Bill will help further by giving the OFS the flexibility to ask providers to focus on key areas that are important to widening participation and social mobility, in the same way that the Secretary of State’s guidance to the director of fair access currently allows. Clause 31 covers the general provisions that might be required by regulations. These arrangements provide flexibility in access and participation agreements so that they can focus on widening participation for different groups of students. I therefore believe that the Bill already delivers the aim of this amendment.
I turn to the amendment on the OFS’s duty to report on part-time higher education provision. The OFS has a duty requiring it to consider the need to promote greater choice and opportunities for students in the provision of HE in England, and a duty to cover equality of opportunity. It must prepare a report on the performance of its functions during each financial year, which will be laid before Parliament. The Bill also contains powers under clause 36(1)(b) for the Secretary of State to direct the OFS to report specifically on matters relating to equality of opportunity. That could of course include part-time learners.
Paul Blomfield
I welcome the direction of travel of the Minister’s comments. Could he share with the Committee whether he would expect the OFS specifically to look in that work at the issue of part-time students as an early priority?
Joseph Johnson
Yes, that was the purpose of our guidance to the director of fair access back in February, to signal that we wanted to see further progress on institutions making part-time study a core feature of their offer. So, yes, I would imagine that this would be priority focus of the OFS. In conclusion, I do not believe the amendment is necessary. There are sufficient provisions in the Bill to ensure that part-time and mature study are priorities for the OFS and the director of fair access within it. I would therefore ask the hon. Member for Sheffield Central to withdraw his amendment.
Gordon Marsden
I have heard what the Minister has to say. The direction of travel, as my hon. Friend the Member for Sheffield Central says, is extremely welcome as are, indeed, the figures that the Minister quoted, but I would gently remind him that, for all the demographic reasons that I have spoken about, we need to speed up that expansion of participation. However, I hear what he has to say, will look forward to further discussions on it in this Bill and possibly subsequently and, with that, I am content to withdraw our amendment.
Paul Blomfield
Equally, I welcome the statement made by the Minister, particularly in relation to his expectations of the OFS, and specifically in relation to part-time study and I will not press my amendment to a vote.
Gordon Marsden
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 74, in clause 31, page 19, line 7, after “include” insert
“education provided by means of”.—(Joseph Johnson.)
This amendment makes the language used in clause 31(5)(b) (the definition of references to “higher education” in that clause) consistent with that used in the definition of “higher education” in clause 75(1).
Clause 31, as amended, ordered to stand part of the Bill.
Clauses 32 and 33 ordered to stand part of the Bill.
Clause 34
Advice on good practice
Gordon Marsden
I beg to move amendment 209, in clause 34, page 19, line 31, leave out “may” and insert “should”.
This amendment would require the OfS to identify good practice on the promotion of equality of opportunity and to disseminate advice about good practice.
This is a small but meaningful amendment that relates obviously to the clause on good practice. We could have a pedagogical debate on what good practice is but the Committee will be relieved to know that I do not intend to go down that route, except to observe that “may” is, of course, a word much in vogue with the Conservative party at the moment, but “may” is also a word that is often in vogue in the drafting of Bills when a minimum rather than a maximum of things is expected. In this particular instance, given that the Government are saying, quite rightly, that good practice is key to the promotion of equality of opportunity and that they need to give advice about such practice to registered higher education providers, it would do no harm whatsoever to strengthen that guidance to the OFS. It is not micromanagement, it is strengthening the advice. That is why, Mr Hanson, we have suggested that on this occasion rather than having the word “may”, we should have the word “should”.
Joseph Johnson
We believe that the Bill as drafted delivers the policy intent behind the amendment. Spreading good practice in widening participation is currently a key part of the director of fair access’s role. We want the office for students to continue to undertake this role.
The Office for Fair Access currently undertakes a programme of evaluation, research and analysis. This aims to improve understanding and inform improvements in practice by identifying and disseminating good practice. Universities expect to spend £833.5 million through access agreements in 2017-18 on measures to improve access and success for students from disadvantaged backgrounds. It is important that this money is used effectively on the basis of evidence of what works best.
Higher education providers use the outcomes of OFFA’s research and good practice so that they can develop their own initiatives and policies, based on the latest evidence. It is important that the office for students continues to build this bank of evidence and best practice on widening participation, so that performance continues to develop and improve.
Through the Bill, the OFS may provide advice on good practice in relation to access and participation, so we are clear that the Bill as drafted enables that to continue in the future. I therefore ask the hon. Gentleman to withdraw the amendment.
Gordon Marsden
I will not resile from what I said about people using the word “may” rather than “should”, but I do not intend to dance on the head of a pin over it. I therefore beg to ask leave withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 34 ordered to stand part of the Bill.
Clause 35 ordered to stand part of the Bill.
Clause 36
Power of Secretary of State to require a report
Gordon Marsden
I beg to move amendment 210, in clause 36, page 20, line 10, leave out
“Secretary of State may, by direction, require the OfS to”
and insert “OfS must”.
This amendment would ensure the OfS must report to the Secretary of State its annual report, or special reports, on matters relating to equality of opportunity.
The Chair
With this it will be convenient to discuss the following:
Amendment 211, in clause 36, page 20, line 11, at end insert
“and to the relevant select committee (or committees) of the House of Commons”.
See amendment 212.
Amendment 212, in clause 36, page 20, line 19, at end insert—
“(5) “Relevant select committee” is the departmental select committee (or committees) appointed by the House of Commons to examine the expenditure, administration and policy of the principal government department or departments and associated public bodies with responsibilities for higher education in England.”
Amendments 211 and 212 would ensure the OfS must report to the relevant select committee(s) its annual report, or special reports, on matters relating to equality of opportunity.
Gordon Marsden
This trio of amendments is designed to strengthen and reinforce our concern that the operation of the OFS, like that of any major new public institution of that nature, should receive adequate and sufficient scrutiny, not simply on the Floor of the House but in various Committees, and certainly in at least one relevant Select Committee. I remain unclear about whether any aspects of the Bill will be covered by the Department for Business, Energy and Industrial Strategy in any shape or form. The Minister himself may still be groping towards some of these answers, so I will not press him on that. That is why the amendment say “committees” rather than “committee”.
The principle is very important. I have spoken previously about the value of pre-legislative scrutiny and my regret that it was not applied in the case of this Bill, which is complex. The other important role that Select Committees can play is monitoring and taking things forward. The Government propose and pass Bills, but Select Committees are, on the whole, relatively non-partisan and relatively positive in the suggestions they make. I think it would be valuable for the various things coming forward from the OFS to be reported fairly crisply and usefully to the relevant Select Committee. That accounts for amendment 211.
It is also important—there are precedents for this in the case of Ofsted and other aspects of education policy—that the OFS has a duty to report to the relevant Select Committees with its annual report or special reports, particularly on matters relating to equality of opportunity. Again, I am not suggesting that there would be any innate reluctance on the part of the OFS to do that, but we do not know who the board and chief executives will be. When we set up new bodies, rather than do as we have sometimes done in the past—engage in a tussle between the Executive and the legislature, which often generates a lot of heat, but not much light—I think it is important that we ensure the OFS has a responsibility to examine expenditure, administration and policy in that respect. That is the reason for amendment 212.
Finally, to say that the OFS must report to the Secretary of State in its annual report or in special reports on matters relating to equality of opportunity is of paramount importance, not least for all the reasons that my hon. Friend and I have discussed under previous amendments. Again, that simply strengthens the argument we made in relation to amendment 209.
Joseph Johnson
We believe that the Bill as drafted will deliver the policy intent that the hon. Gentleman wants. The OFS will be required by schedule 1 to provide an annual report covering all its functions. Reporting on access and participation matters will sit with the OFS, which will also have a new duty requiring it to consider equality of opportunity in connection with access and participation plans across all its functions. The OFS’s work on access and participation should be reported to Parliament as part of its overall accountability requirements. It would not be consistent with integrating the role into the OFS for the DFAP to report separately.
Clause 36 supplements the requirement for an annual report and allows the Secretary of State to direct the OFS to report on widening participation issues—either in its annual report or in a special report. That replicates an existing provision, in place since 2004, which has never been used. We agree this is important and have retained the requirement, so that if there are specific concerns about access and participation at a particular time there is a mechanism for the Secretary of State to request action. The Bill requires that the OFS annual report and any special reports on access and participation be laid in Parliament. As that will ensure that any such reports are publicly available, open to scrutiny and accessible to all appropriate House of Commons Committees, we do not think it necessary to specify the requirement in greater detail in legislation, and I ask the hon. Gentleman to withdraw the amendment.
Gordon Marsden
Obviously the Minister has a slightly more expansive view of what the Bill allows or expects to do than perhaps we do, but we hear what he has to say. He has put the importance of these issues and conditions straightforwardly on the record and on that basis I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Paul Blomfield
I beg to move amendment 288, in clause 36, page 20, line 18, at end insert—
‘(3A) The Secretary of State may require a report under subsection (1) on the establishment of a national credit rating and transfer service as a means of improving access to and participation in higher education.”
This amendment would allow the Secretary of State to require the OfS to look into establishing a national credit rating and transfer service for recognition of prior learning to encourage student mobility.
The amendment may deal with another matter on which we are very much on the same page as the Government: using the opportunity to develop more innovative approaches to both study and routes through higher education through the development of more effective systems of credit accumulation and transfer. Those in higher education have talked about doing this for many years. I remember a period about 20 years ago when many universities were restructuring the way they delivered their courses, moving away from an October to June programme to look at semesterised and modularised structures. The underlying objective of that restructuring was to facilitate more effective credit accumulation and transfer, but the development did not progress, often because of resistance on the part of some universities to recognising properly the value of taught modules in other institutions. If we are to move forward, we need a more effective strategy driven by Government.
I recognise, as I am sure the Minister is about to remind me, that the Government launched a consultation earlier this year that concluded in July. The objectives of that consultation were described in the summary:
“We’re interested in how switching university or degree course can be made easier”.
That is precisely what the amendment is about. I appreciate that the Government have not had the opportunity to consider the results of the consultation, or perhaps the Minister will surprise us by sharing some thoughts that have come out of it.
Such a system would be important at different levels. First, it would give us an opportunity to move beyond a conventional approach to pursuing a course in university. It would enable people to build up in different ways a programme of study leading to a degree. Crucially, it would give people the opportunity, which I am sure the Minister would welcome, to switch between workplace-based learning and institution-based learning and to consider a range of higher education opportunities in accumulating a degree.
The Minister cited earlier the report published last year by the Higher Education Policy Institute and the Higher Education Academy, which said—he will correct me if I have got the number wrong—that something like 30% of students currently on courses in universities would have opted for a different programme of study if they had known then what they know now. That is a hugely significant statistic. Currently, our system of higher education militates against students being able to fulfil their ambitions. A properly developed system of credit accumulation and transfer would enable them, at the point when they think, “Perhaps my study is heading in the wrong direction,” to realign it, put together a different programme of modules and move between universities.
A second reason that we ought to look at this system relates to market failure, as we discussed previously. If the Government move in the direction they wish to with the Bill, it is important to look at how we protect students from market failure. Financial compensation is only one part of that. Students who have invested time and energy and accumulated credits through study at an institution can have the rug pulled from under their feet. If we had a properly developed system of credit accumulation and transfer, it would be possible for people to use the learning they have already achieved to move to another institution—not in the way that has sometimes happened in the past, where the Government or the Higher Education Funding Council for England have had to step in to barter and negotiate between institutions, but in a recognised way. Students could then say, “I have these credits. I want to progress my learning in this way at this different institution.” There may be a way of linking that with student protection plans.
This is a probing amendment, to see where the Government are moving on this issue and to see if we cannot use the opportunity of the Bill to kick-start attempts made in the past to create a more innovative approach to people’s learning programmes through a properly recognised and organised system of credit accumulation and transfer.
Gordon Marsden
It is a great pleasure to speak in support of my hon. Friend’s amendment. In his speech, he has encapsulated one of the most important and exciting developments in 21st-century learning that the Bill could achieve.
My hon. Friend referred to market failure and he was right to do so. It is interesting that about a week ago the Jisc parliamentary briefing for the Bill specifically talks about this in terms of the Government’s proposals to deregulate parts of the higher education market. I understand that Jisc is sponsored as the UK’s expert body for digital technology by the Department. It says that there needs to be a mechanism for recognising and communicating the credits students have gained for modules already studied. It is essential that well managed credit accumulation and transfer scheme arrangements are in place to support students who are affected by market exit. Jisc also talks about the need for a mechanism for recognising and securely storing the credits students have gained for modules already studied, so that these credits can then be transferred to a student’s next institution. It makes the obvious point that disorderly wind-down or abrupt closure where the data are lost would have serious implications for affected students and potentially for the reputation of the sector. I think that reinforces my hon. Friend’s argument.
I also want to make the point that credit transfer is very important for people who want to move from one institution to another, not least in the circumstances that have been described, but it is also vital in terms of the new flexibilities that the work, life and study balance will require in the 21st century. I will not repeat what I have said on a number of occasions and in a number of places about this, except to emphasise the very strong belief that I and many others hold that the world of further education, higher education and online learning are morphing into each other, sometimes much more rapidly than conventional universities or even conventional policy makers realise, and that process will continue. The question for us in this country is not whether it will happen or not. It will happen. The question is whether it will be our institutions—those higher education and lifelong learning institutions for which we are famous—that take the advantage of this, or whether we will be colonised, if I can use that word, from outside. I think those are really important issues for the Minister to consider, not least in the context of the response to the call for evidence from May.
My hon. Friend the Member for Sheffield Central has said that these ideas have been floating around for years. Of course, I am duty bound both to him and to Sir Bernard Crick, who is no longer with us, to praise the initiative of my noble Friend Lord Blunkett, who published “The Learning Age” in 1999 with Bernard Crick, which put forward some very innovative ideas in that area. We know what the problems were at the time with individual learning accounts. I was one of the people who sat on the Select Committee that looked at that. There were obviously difficulties, but the principle of having accounts that enabled a credit-based system and banking of credits is a very important one. We are unlikely to achieve huge success unless we take a fundamental look at some of the broader issues of funding, but that is for another day and another time and certainly does not fall within the relatively narrow scope of the amendment. I only make the point because I think the two things have to be considered in tandem.
The truth of the matter is that we have systems in the UK at the moment which recognise previous learning. In Scotland there is the Scottish credit qualifications framework, which integrates work-based and lifelong learning. We could learn a lot of things from lots of different places. If the Government are really keen to make progress and to support the sort of ideas that I, my hon. Friend and many other people have discussed, they could do far worse than go back to the major work produced in 2009 for the National Institute of Adult Continuing Education by Tom Schuller and David Watson, “Learning through Life”, which has some very innovative and important things to say in that area.
This is an area where there is still fruitful work going on. The Learning and Work Institute has produced ideas for a new citizen skills entitlement, which merits further consideration. Ofsted has talked about how well providers prepare learners for successful life in modern Britain. Ruth Spellman, the chief executive officer of the Workers’ Educational Association, said when its report on this matter was launched just before the recess:
“An Education Savings Account...would enable individuals to save for their future Education... This could also encourage and attract employer contributions, particularly if government were to allow tax relief...this would create longer-term and more stable funding streams”.
That is on the funding side; the other part of the equation is the credit accumulation.
As the Minister knows, I spent nearly 20 years as an Open University course tutor. What I learnt from that process, apart from the immense sacrifices and dedication of the students, is that the ability to engage in study programmes that coped with things that happened in life—perhaps students had to care for an elderly relative, or had family issues, or were simply ill—and the ability to take years out but not to lose all of that credit are absolutely key to where we need to go in the 21st century.
This is a probing amendment, but it is a pointed probe in the sense that the Government have an opportunity to do significant things in this area that would attract a lot of support. We want them to do those things. They are overdue.
Joseph Johnson
I thank the hon. Member for Sheffield Central for tabling the amendment. It touches on a subject to which we are giving much careful thought, as I indicated when we discussed it briefly earlier in our proceedings.
Supporting students who wish to switch to another higher education institution or degree is an important part of our reforms. It is vital that we make faster progress in this area, and I share the general sentiment expressed by the hon. Gentleman. It is disappointing that we have not managed to put in place an effective mechanism of the sort proposed up until this point. The sector can do more to offer flexible study options to meet students’ diverse needs, and it can do more to support social mobility by doing so.
There is an obvious link between withdrawal rates and students not being able to transfer between providers. The amendment refers to a credit rating service. Although we want to enable credit transfer, we want to do so in a context of institutional autonomy, which is crucial to the reputation and vibrancy of UK higher education. We want to avoid a universal approach that undermines that by inadvertently homogenising or standardising provision, which would risk the loss of the great diversity that is one of the key strengths of our sector.
As the hon. Gentleman mentioned, the Government called for evidence on credit transfer and accelerated degrees. We were pleased to receive more than 4,500 responses and we are in the process of analysing all of those carefully. There are a number of issues that we need to consider before moving forward, including the extent of student demand and awareness of the issue, the funding implications that the hon. Gentleman touched on, and external regulatory requirements. We expect to come forward by the end of the year with our response to the results of the call for evidence that we have conducted.
Carol Monaghan (Glasgow North West) (SNP)
I can see another issue if we use student retention as one of the metrics of the teaching excellence framework. If students change institutions, will that be taken into account? Will leeway be given to institutions that allow students to transfer credit?
Joseph Johnson
That is an important point that the TEF panel assessors will take into account. It has been factored into the development of the teaching excellence framework metric, but that is obviously an important point to bear in mind.
Although I understand the reason for the amendment, there are powers already in the Bill that allow the Secretary of State to require the office for students to report on matters relating to equality of opportunity in either its annual report or the special report that I mentioned before, and any such report would have to be laid before Parliament, so there is no need explicitly to require reporting on the establishment of a national credit rating and transfer service as a means of improving access to and participation in higher education. The measures in the Bill support our ambitions on widening participation in general. As I said, we are giving the call for evidence responses very careful thought. In the meantime, I ask the hon. Gentleman to withdraw his amendment.
Paul Blomfield
I thank the Minister for his remarks. I think we share a similar ambition. Although I understand it, I am a little anxious about his caution about what he described as homogenising. I do not think anyone wants that. People celebrate the diversity of the sector and would not want in any way to undermine it, but we need to find some way in which universities that may be reluctant to embrace a system such as the one we are discussing are enabled and encouraged to do so more actively than they have been in the past. The enormous energy that went into modularising and semesterising programmes, with the objective of encouraging CATS, failed precisely because of that issue. I hope that when the Minister has had the opportunity to look at the impressive number of responses to the consultation, he will be willing to think radically about how we can embed that sort of system within our higher education terrain. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 36 ordered to stand part of the Bill.
Clause 37
Financial support for registered higher education providers
Amendment made: 241, in clause 37, page 21, line 7, at end insert—
“but also includes a 16 to 19 Academy (as defined in section 1B(3) of the Academies Act 2010).”—(Joseph Johnson.)
This amendment ensures that the definition of “school” used in clause 37 of the Bill includes 16 to 19 Academies.
Clause 37, as amended, ordered to stand part of the Bill.
Clauses 38 and 39 ordered to stand part of the Bill.
Clause 40
Authorisation to grant degrees etc
Gordon Marsden
I beg to move amendment 213, in clause 40, page 22, line 4, leave out “or research awards or both”
See amendment 214.
The Chair
With this it will be convenient to discuss the following:
Amendment 214, in clause 40, page 22, line 6, at end insert—
‘(1A) The OfS may by order in conjunction with UKRI authorise a registered higher education provider to grant research awards.”
Amendments 213 and 214 would give the OfS the power to authorise higher education providers to grant both taught and research degrees but the OfS should be required to do this in conjunction with UK Research and Innovation (UKRI).
Amendment 235, in clause 40, page 23, line 21, at end insert—
‘(13) The OfS must consult with UKRI, including Research England, and the appropriate National Academies and learned societies before authorising any provider to grant research awards.”
This amendment ensures that OfS consults UKRI, including Research England, before issuing authorisation to grant research awards.
Gordon Marsden
I am pleased to move this amendment and to support the similar amendment tabled by my hon. Friend the Member for City of Durham. The amendments reflect not only our concern but that of a large number of organisations and HE providers about what the relationship will be between the OFS and the new UK Research and Innovation body. Obviously, we will have far more discussion about that in the context of part 3 of the Bill. At this stage, we want to flag up the strong concerns that there should be right from the beginning, not exactly a symbiotic relationship, but a very close relationship between the OFS and UKRI. These probing amendments intend to tease out some of that discussion.
Dr Blackman-Woods
I shall continue in the same vein as my hon. Friend. Amendment 235 queries whether the OFS should have the sole power and control over who can grant research awards. Giving the OFS the sole power would mean that it would not have to work with any research funding bodies, or indeed any other relevant agencies, in coming to a decision about whether to grant an institution research degree-awarding powers. There are two significant problems with that. First, the OFS granting research degree-awarding powers without reference to other bodies diminishes the level of expertise going into the decision-making process about whether a specific institution should have those degree-awarding powers. In addition, given that UKRI, Research England and the national academies and learned societies also have responsibilities for providing research funding, it seems to be a major error not to consider what role they would have in the granting of research degree awarding powers. Apart from anything else, it could affect funding decisions that those bodies make.
Consulting UKRI and Research England, among others, on whether to grant research degree-awarding powers would allow for a variety of opinions to be aired and would ensure that the OFS is not acting in isolation. It is really important that the Minister looks at that. He helpfully produced a paper, which we got a couple of days ago—I am not sure when it was produced—which talks about how UKRI should work in partnership with other bodies. Unless I have missed it, though, we do not seem to have had a similar exercise on who the OFS needs to work with.
Particularly with regard to research degree-awarding powers, it would be helpful if the Minister gave some thought to the full range of institutions that need to be involved, not least because this is the second really important point. As the system stands and is described in the Bill, it lacks oversight and checks and balances from the research sector. There is nothing to be gained from the OFS working alone, but a lot to be gained from it working in collaboration. I look forward to the Minister’s response.
Joseph Johnson
I am grateful that hon. Members have raised the role of UKRI in the authorisation of the granting of degrees. Our reforms are designed as a single, integrated system that reduces complexity, eliminates barriers to close working and delivers clear responsibilities, especially for the protection of the interests of students. To deliver that integration and close co-operation, it is vital that the OFS and UKRI are empowered to work together. For that reason, clause 103 makes provision to ensure that they do that in a way that enables them to carry out their functions effectively and efficiently.
One key area in which the OFS and UKRI should work in close co-operation is the assessment of applications for research degree-awarding powers, and the provisions in clause 103 will facilitate that. I am satisfied that the provision for co-operation between the OFS and UKRI will address the concern that the hon. Gentleman rightly touches on in his amendment.
The Secretary of State will have powers to require that co-operation to take place if it does not do so of its own accord. We intend to make it explicit in the Government guidance on degree-awarding powers, which we plan to publish, that we expect the OFS to work with UKRI in that way. On that basis, it is not necessary to capture that point in clause 40 as well, so I ask the hon. Gentleman to withdraw the amendment.
Gordon Marsden
The Minister will understand that I can speak only to the Labour Front Benchers’ two amendments. It is encouraging to hear that he has made provision for co-operation between UKRI and the OFS. He mentioned clause 103, so no doubt we will have another opportunity to discuss the issue when we examine that part of the Bill. On that basis, I will be content to withdraw the amendment.
Dr Blackman-Woods
I am afraid that I am not quite so easily repleted—[Laughter.] Clause 103 states:
“The OfS and UKRI may cooperate with one another”.
I accept that subsection (2) gives the Secretary of State an ability to make them co-operate, but the clause does not really capture what we are trying to achieve with our amendments, which is to ensure that the research community is included when research degree-awarding powers are given. The provision might include UKRI, but it does not include the national academies and other learned societies.
I am sure that, having heard my point again, the Minister will want to go away and look into it. Perhaps he will give us an indication of what might be in the guidance or regulations that would assist the OFS in coming to its decisions on research degree awarding powers.
Gordon Marsden
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Gordon Marsden
I beg to move amendment 219, in clause 40, page 22, line 6, after “grant” insert “taught awards and”.
This amendment would make clear that qualifying further education providers will have access to taught awards and foundation degrees and also be able to provide degrees, diplomas, certificates or other appropriate courses of study, as defined by the bill.
The amendment is designed to deal with a particular situation in respect of further education colleges that offer higher education courses. Hon. Members will be aware that at a number of points during the passage of the Bill—on Second Reading and in Committee—I have commented on the importance of higher education delivered by the further education sector, and on the need for the Government to focus significantly on that. The amendment deals with some practical problems that do occur. Without mentioning individuals, I can say that at least a couple of cases have been brought to my constituency advice surgery, and other hon. Members may have faced similar issues.
About 250 colleges offer higher education. Twenty of them, including my local college, Blackpool and the Fylde College, have more than 1,000 HE students, and 186 have fewer than 500. The vast majority of college HE courses have been priced at under £6,000, although there has been an increase in those charging above the threshold since the trebling of the tuition fee ceiling in 2012.
The purpose of the amendment is to change the situation whereby colleges that offer foundation degrees are unable also to provide a certificate of higher education, to provide a flexible qualification option for students. Colleges with foundation degree-awarding powers can issue only one award and can consequently issue only a 240-credit foundation degree. A certificate of higher education is 120 credits; the AOC believes, and we agree, that colleges should be able to deliver that as well. Employers often want only a 120-credit certificate of higher education, rather than the full 240-credit foundation degree, because many roles require only level 4. For example, many technician jobs in manufacturing, engineering, construction and accountancy do not require degree-level entry. In addition, many higher apprenticeships include the higher national certificate, which, again, is below degree level.
If I can say so without going outwith clause 40, this issue is highly relevant to what we have said more broadly about the Government’s skills plan. The Sainsbury review particularly singled out the importance of boosting our technical skills, and the Minister and other Ministers concurred with its conclusions. The amendment offers a practical way of assisting that process.
In some cases, a one-year course is an exit destination in its own right. The Bill provides a timely opportunity to address that. The recent OECD report “Skills beyond School”, which echoes the Sainsbury review, states:
“Nearly two-thirds of overall employment growth in the European Union…is forecast to be in the ‘technicians and associate professionals’ category”.
In a 2014 report, the UK Commission for Employment and Skills—which, sadly, the Government have now withdrawn support from, but which has nevertheless produced valuable reports for the Government—found that
“questions remain about the UK’s intermediate skills base. This remains smaller than in many other advanced economies.”
It stated that
“skills shortages are acute, and persistent, in middle-skill skilled trades—declining in number, but demanding to recruit”.
Allowing colleges to offer certificates of higher education would mean that they could meet local labour market needs better, because nationally developed qualifications are often too generic. It would allow colleges to develop learning modules locally to meet specific industry and business needs. It would also prevent time loss, because the college would not have to go to a university to develop such a qualification; it would be able to work immediately with an employer to deliver the necessary training. I say to the Minister in passing that moving in that direction seems entirely appropriate and in accordance with what the Government have already done in the Bill to simplify and improve further education colleges’ ability to award their own separate degrees. Giving colleges the ability to accredit individuals with a certificate of higher education would also be a big step in the right direction towards the much-needed national higher education system that we have been discussing.
The amendment also underlines the point that, in this area at least, further education and higher education are facing and addressing the same sorts of issues. It would promote part-time learning and could allow students to reduce debt more sensibly. Given the recommendations in the skills plan, a certificate of higher education issued by colleges could help to bridge credit-bearing programmes introduced to facilitate transfer or progression between academic and technical routes.
I appreciate that there is a lot of what I might describe as “techie business” in what I have just said, and I do not necessarily expect the Minister to sign up to the amendment, but I ask him and his officials to go away and look carefully at the points I have made. They are not partisan points; the amendment would actually facilitate some of the work the Government are doing in the Bill. Also, in the context of devolution, which we have not talked about much in relation to the Bill, it would make it much easier for some of the new combined authorities, and indeed some of the mayors taking on skills powers, to deliver flexibly some of the improvements that are not just desirable but necessary if we are to boost our productivity and achieve the targets that we will need to achieve in the 2020s.
Joseph Johnson
I am glad to have the opportunity to discuss FE institutions, many of which are colleges, and degree-awarding powers. Institutions in the FE sector can currently apply for and obtain taught degree-awarding powers so long as they provide higher education and meet the relevant criteria. Indeed, in June of this year, Newcastle College Group became the first FE college to be granted taught degree-awarding powers, and other colleges are in the process of applying.
Any institutions that obtain taught degree-awarding powers, including FE Colleges, are already authorised to grant certificates and other awards as well as degrees. Institutions in the FE sector will continue to be able to apply for and obtain taught degree-awarding powers under the reforms in the Bill. The proviso is that they must be a registered higher education provider and, like other registered higher education providers, meet the relevant criteria. We intend to consult on the detailed criteria following Royal Assent and before the new regulatory framework takes effect. There is therefore no intention to prevent FE colleges from accessing taught degree-awarding powers through the Bill.
As happens now, institutions in the FE sector will also be able to apply for foundation degree-awarding powers only—with the proviso that, in addition to being registered and meeting other criteria, they provide a satisfactory statement of progression setting out what the provider intends to do to enable students to progress on to courses of more advanced study. Again, that is in line with the current arrangements for FE colleges that wish to apply for foundation degree-awarding powers. I therefore believe that the amendment is unnecessary.
Gordon Marsden
Whether the amendment is unnecessary or not—obviously guidance has been given that means we might want to discuss the matter further—does the Minister agree that the ability for colleges to accredit individuals with a certificate for higher education would be a big step in the right direction? That is essentially what the Association of Colleges is asking for.
Joseph Johnson
We will obviously look very carefully at the submission from the Association of Colleges, and officials have heard the hon. Gentleman’s comments. We will go away, have a further look at the issue and reassure ourselves that the approach that we are taking is the correct one, but for the time being, we believe that the Bill covers his intentions, and I ask him to withdraw the amendment.
Gordon Marsden
I thank the Minister for that reply. We look forward to the further rumination, if I can put it that way, on the particulars of the issue, and on that basis I am content to beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Gordon Marsden
I beg to move amendment 216, in clause 40, page 22, line 28, at end insert
“(c) the provider operates in the interest of students and the public.”
This amendment would ensure any new provider must be operating with the public and student interests as a priority.
The Chair
With this it will be convenient to discuss the following:
Amendment 217, in clause 40, page 22, line 28, at end insert
“(d) the provider shows evidence of satisfactory and consistent higher education delivery for a minimum of three years, which period may be extended, as part of a partnership with a validating provider.”
This amendment would ensure a further education provider can demonstrate that it can meet the requirements to exercise degree-awarding powers.
Amendment 218, in clause 40, page 22, line 28, at end insert
“(e) there is reasonable assurance that a provider is able to maintain the required standards for the duration of whatever authorisation period is set by the OfS.”
This amendment would ensure that any provider authorised to grant degrees must be able meet the required standards set for the full period of time they are authorised for.
Amendment 234, in clause 40, page 22, line 28, at end insert—
“(c) the OfS is assured that the provider is able to maintain the required standards of a UK degree for the duration of the authorisation; and
(d) the OfS is assured that the provider operates in students’ and the public interests.”
This amendment requires the OfS to be assured about the maintenance of standards and about students’ and the public interest before issuing authorisation to grant degrees.
Amendment 220, in clause 40, page 23, line 9, at end insert
“(9A) In making any orders under this section, and sections 41, 42 and 43, the OfS must have due regard to the need to maintain confidence in the higher education sector, and in the awards which they collectively grant, among students, employers, and the wider public.”
This amendment would ensure that the granting and removal of degree awarding powers would be linked to a need to maintain confidence in the sector, and with a view to preserving its excellent reputation.
New clause 9—Automatic review of authorisation—
“(1) The OfS must review an authorisation given by a previous order under section 40(1) if—
(a) the ownership of the registered provider is transferred to another legal person; or
(b) the owner of the registered provider has had restrictions placed on its degree-awarding powers in another jurisdiction, or
(c) for any other reason it would be in the student or public interest to do so.
(2) In this section “review” means consider whether to vary or revoke authorisation within the meaning of section 42.”
This new Clause would ensure that a review of a provider’s degree awarding power would be triggered if the ownership of a provider changes, if the owner of the registered provider faces restrictions to its degree awarding powers in another jurisdiction or if the OfS deems a review necessary to protect students or the wider public interest.
Gordon Marsden
We come to one of the most significant and contentious elements of the Bill—the Government’s proposals to enable new providers. Clearly, the amendments cover a wide area of subjects. Often on these occasions it is difficult to know whether one is delivering a clause stand part speech as opposed to a speech on each amendment or group of amendments, but I will do my best to do the latter.
The Chair
If the hon. Gentleman wishes to refer to any or all of the amendments in the context of the clause, I will be happy to accept that. We can determine later whether we have a clause stand part debate, depending on the level of discussion at this time.
Gordon Marsden
That is very helpful, Mr Hanson. I am grateful for your guidance.
For the convenience of the Committee, I will make clear the context in which we tabled the amendments. Amendment 216 would ensure that providers operate in the interest of students and the public, which we believe is very important. It is not simply a question of competitiveness. Amendment 217 is about providers showing evidence of satisfactory and consistent higher education delivery. I will talk more specifically about the rationale for that timeframe. Amendment 218 states that any provider authorised to grant degrees should be able to meet the required standards set for the full period of time they are authorised for. Amendment 220 states that the OFS must have due regard to the need to maintain confidence in the higher education sector and the awards they collectively grant among students, employers and the wider public.
The amendments deal with specific parts of the process of authorising the granting of degrees proposed by the Government. However, they appear in the context of our grave concerns about the mechanisms and the process that the Government are preparing to take forward. It is not only our grave concerns; most, if not all of the large university and HE provider organisations, including Universities UK and the University and College Union, have the same concerns.
We said on Second Reading that we were concerned about where the rapid expansion of what the Government call challenger institutions is taking us. I said I was concerned that giving providers the option from day one to build up that process would potentially be very dangerous, with students in effect taking a gamble on probationary degrees from probationary providers. I asked, rhetorically, who would pick up all the pieces if those things went wrong.
The amendments are designed to mitigate—I am afraid they would not entirely obliterate—the problems that might arise from the way the framework has been put forward. I want to repeat, to avoid any doubt, that we do not in principle oppose the expansion of the sector, competition in the sector or new providers. However, we believe strongly that without a strong regulatory framework that makes viable easier access for new providers to the higher education sector, we could have major crises, difficulties and scandals that would affect not only the institutions and the students—who are crucial—but this country’s whole reputation for delivering higher education provision.
If the Minister is in any doubt about that, he need only look at the some of the questions raised in the United States about the activities of private providers; at some of the criticisms that Baroness Wolf has levelled at a similar process in Australia; or, as I said on Second Reading, at the issues involving BPP and the Apollo Group some three to four years ago, which caused his predecessor to take a deep breath and pause on these areas. I am not suggesting to him that these things should be set in stone just because the Government got it wrong four years ago and were forced to retreat; I am suggesting that, as I have said previously, the rather gung-ho and raw free-market rhetoric of the White Paper should be tested against some very specific issues and safeguards, which is what we are trying to do with these amendments.
I repeat what has been said by the UCU, which
“acknowledges that private colleges and universities have been a feature of our HE system for a long time. However we are strongly of the opinion that higher education providers should be not-for-profit bodies because these pose a far lower risk to the sector. Accelerating the rate at which for-profit organisations can award degrees or become universities exposes the sector to greater risk from those motivated to move into the market predominantly for financial gain.”
The UCU also expressed concern about the issues surrounding university title, which we will address in due course.
When we consider new clause 6—this will also come up when we consider amendment 221 to clause 43—it might be worth noting that existing universities have grave concerns about the right to revoke degree-awarding powers by order. All the people who would be affected by the failure of a new provider, such as the people who clean, who maintain the buildings or who cook the food—all the people who keep higher education providers going—deserve a say and protection in this area, as well as the students and the academics who will teach at these new institutions, which is why Unison has expressed its strong concerns about the proposal.
The risks of market exit were discussed in the detailed impact assessment produced by the Department for Business, Innovation and Skills, which assumed that volatility and the risk to students of course or institution closure could be managed with protection plans. Those assumptions, which I have looked at two or three times, still seem to be extremely cavalier. The impact assessment states that there is a
“risk to students attending HEPs that fall outside the scope... Internal BIS forecasts estimate that the number of providers operating outside of the system…will decrease from 655 to 460 by 2027/28.”
There will still be people outside the system.
MillionPlus has expressed similar concerns, and I will put this squarely in the Brexit context. As I said earlier, the eyes of the world will be focused on us, for good or ill, over the next two to three years. I would be surprised if anyone who has been abroad anywhere in the past couple of months has not been asked, “What do you think about Brexit?” For good or ill, that is what loads of people now think about the UK, and it shines a light on the importance of ensuring that the obvious ups and downs of the Brexit process do not cause irrevocable damage to one of this country’s most precious worldwide brands, the UK higher education brand. If we enter a process that does not have sufficient guarantees and protections, apart from the things that we should be doing on a social and a citizen basis to protect the people who work in such areas—this is a pragmatic point—we will commit an act of great folly from which, as I said this morning, we will find it difficult to recover.
Our proposals are designed to mitigate that process. Research Fortnight argued in May that
“the title of university needs to be seen as a privilege…not an automatic entitlement”.
I agree with that. One of my concerns about the Government’s approach—I said this right at the beginning, and others have said the same—is the way in which they have not rowed back on the proposal that, from almost the first day of operation, these applicant providers will have the ability to operate and recruit people for degree processes.
Gordon Marsden
Martin Wolf said:
“The reform of Britain’s universities is a betrayal”—
Gordon Marsden
No I will not. I am just about to finish the quote. Then the Minister can intervene.
“The reform of Britain’s universities is a betrayal of Conservative principles”.
So there we have concerns across the sector, even in the Minister’s own party.
Joseph Johnson
Is the hon. Gentleman suggesting that Martin Wolf is an aspiring Conservative member, as he put it?
Gordon Marsden
No. I said that Martin Wolf was not about to cross the Floor to join the Labour party and that is exactly the case. [Interruption.] If Mr Wolf wanted to put things on record I am sure he could do so, but that is the point I am making. The Bill is causing concern among the Conservative party’s own traditional supporters and representatives, and elsewhere. That is the important issue to be addressed here.
The Bill, as the Council for the Defence of British Universities has said,
“is designed to give encouragement to ‘new providers’ but has few safeguards to protect students from for-profit organisations… Experience in this country, and particularly in the US, suggests extreme caution is needed to protect the reputation of British universities”.
Those are some of the issues that we have tried to mitigate in our amendments. I have asked the Minister a range of specific questions regarding the TEF paper, and I invite him to respond to them.
Dr Blackman-Woods
Given the gung-ho attitude that the Minister has displayed in wanting to open up the sector to alternative providers, I am not sure I will get anywhere with amendment 234, but I will try, because as my hon. Friend the Member for Blackpool South has outlined, there is considerable concern across the higher education sector that not enough regulation and requirement is being put on to new institutions before they are allowed to have degree-awarding powers.
The amendment would put a few additional requirements into clause 40(4). The OFS would have to assure itself that the provider was able to maintain the required standards of a UK degree for a period of perhaps three to five years—the length of time we would expect a degree to last—to ensure that it was properly bedded in. The reason for that, as my hon. Friend outlined clearly, is to prevent students from undertaking courses and degrees with new providers that have not been adequately tested and where there are not enough safeguards in place. If a course falls, students have to transfer or be compensated in some way, so the amendment is an attempt to put a few more safeguards in the system.
The amendment asks that
“the provider operates in the interest of students and the public.”
That is important because, as my hon. Friend said, we are all genuinely worried that some providers could operate simply in the interests of their shareholders, without sufficient regard to the needs of students.
We have rehearsed a whole set of arguments, which I will not go through again, about the way in which institutions should demonstrate a public interest. They should have a civic role and be judged in exactly the same way as all other universities. The Minister has not really given us an adequate explanation as to why he has adopted a gung-ho approach with so little regulation and requirements being placed on alternative providers, and he has not mentioned what he will do if students end up losing out. The Committee has not sufficiently added requirements to the Bill to ensure that students’ interests, and indeed the public interest, are safeguarded.
Paul Blomfield
I rise to speak to new clause 9, fairly briefly. I do not want to repeat the concerns that have been ably outlined by my hon. Friends, but I want discuss one particular problem. The Minister is deeply conscious of the risks presented by some potential new providers. We have discussed those risks outside of the Committee, and he recognises the importance of having a robust regulatory framework.
New clause 9 would deal with a specific problem of which the Minister will be aware in relation to some private providers in this country and, in particular, in the United States, where the terrain is similar to the one that he is, arguably, trying to create through the Bill. One problem in the United States—this is also true in Australia to a significant degree, as the Minister knows, because he has looked at the system there—is that a business model has developed for some avaricious companies that see the opportunity to milk the public funds that are available to support students through loans.
Those companies are less concerned than others with the quality of the offer they make, and they have no long-term commitment to students. Theirs is a model in which companies offer a product, and students are then attracted by aggressive marketing, draw down a loan, are let down by the quality of provision, end up with a degree with questionable value, and face enormous debts to repay. It is a model that neither I nor the Minister want, but it has been encouraged, in some cases, by the transfer of ownership once degree-awarding powers have been given. My hon. Friend the Member for Blackpool South mentioned BPP and Apollo, but the Minister is also aware of the problem in the United States.
The new clause would ensure that the regulatory portal for entry to degree-awarding powers will be triggered if an institution changes ownership, because the culture, commitment and quality of provision can change substantially when that happens. Likewise, if restrictions have been imposed in another jurisdiction on the owner of an institution with degree-awarding powers—we know that many companies in the sector operate across countries—that should be a sufficient signal to us to be worried and to review any decision on degree-awarding powers for that owner in our jurisdiction. In those two respects, the new clause would simply provide a trigger to re-open the decision to give degree-awarding powers, which I would have thought the Minister would agree with. I hope he will either support the amendment or reassure me about how he intends to address the issue.
Joseph Johnson
I am still reeling from the hilarious image that the hon. Member for Blackpool South conjured up of Martin Wolf as an aspiring Conservative Member of Parliament. I worked with Martin for 13 years at the Financial Times and I have no doubt that that characterisation of his career plans is very wide of the mark. Judging by some of his contributions to the debate over the future of HE in this country, he might be more likely to seek to become master of an Oxford college. But a Conservative MP? I think not.
The Chair
Order. He is also not on the face of the Bill, so stick to the argument—or lack of it.
Joseph Johnson
We are justifiably proud of our HE sector, and our country is renowned as the home of many world-class institutions, but that does not mean that we should be satisfied with the status quo. As I have said before, the current system is too heavily weighted in favour of existing incumbents, which is stifling innovation in the sector. As Emran Mian, director of the Social Market Foundation, has said:
“Higher education is too much like a club where the rules are made for the benefit of universities. These reforms will begin to change that.
Students will have access to more information when they’re making application choices; and universities will be under more pressure to improve the quality of teaching.”
Under the current regime, new and innovative providers have to wait until they have developed a track record that lasts several years before they can operate as degree-awarding bodies in their own right, no matter how good their offer or how much academic expertise they bring to bear. To develop that track record, they typically have to rely on other institutions to validate their provision in some way, which can be a huge obstacle. The onus is on the new entrant to find a willing incumbent and to negotiate a validation agreement. Such agreements can be one-sided and in some cases prohibitively expensive, as we heard in evidence given to the Committee.
Our reforms will ensure that students can choose from a wider range of high-quality institutions and will remove any impression that, as John Gill, the esteemed editor of Times Higher Education, put it, existing universities can
“act like bouncers, deciding who should and should not be let in.”
If a higher education institute can demonstrate its ability to deliver high-quality provision, we want to make it easier for it to start awarding its own degrees—not harder, as the hon. Member for Blackpool South would like—rather than needing to have its courses awarded by a competing incumbent. Earlier in this sitting, the hon. Gentleman said that the whole point was that it should be difficult. We fundamentally disagree. If there are high-quality providers out there that want to come in and provide high-quality education, we want to make that easier for them, not more difficult.
Gordon Marsden
Again, the Minister is trying to set up a straw man. “Difficult” does not mean “impossible”. It means that, because literally hundreds and in the future possibly thousands of people will be relying on the decision that is made, there should be due process—a significant process. The trouble with what the Minister suggests is that he is not just making it easier, he is making it far too easy.
Joseph Johnson
I ask the hon. Gentleman to look back at the transcript of our earlier discussions and reread his comments. He said that the whole point was that it should be difficult. That is a fundamental point of difference between us. We believe it should be easy for high-quality providers to get into the system and offer high-value-for-money higher education.
We know how important universities can be to their local economies. Recent research by the London School of Economics has demonstrated the strong link between universities opening and significantly increased economic growth. Doubling the number of universities per capita is associated with more than 4% higher GDP per capita. However, the sector has built up over time to be serving only parts of the country. It is not providing employers with enough of the right graduates, especially STEM graduates. It can do more, as we discussed earlier, to offer flexible study options to meet students’ diverse needs, and it can do far more to support social mobility. Most OECD competitor countries have a higher proportion of the population entering higher education than the UK. We have about a 51% first-time entry rate, compared with an OECD average of about 60%.
Dr Blackman-Woods
Would the Minister accept that, if the Government are serious about wanting more people to have an experience of higher education, that can be done through expanding the current institutions or in a more measured way of bringing alternative providers into the system? My anxiety has grown over the afternoon, because making it easy for alternative providers will not necessarily guarantee sufficient safeguards for students or the public.
Joseph Johnson
Of course we want high-quality provision to expand, whether through the entry of new institutions or the expansion of existing institutions that do well in the quality assurance frameworks that we have in our system—the research excellence framework and the TEF that we are introducing for teaching. They will get more resources and will be able to expand high-quality research and teaching activities. That is how we see the market developing in this country.
The system needs to have informed student choice and competition among high-quality institutions at its heart. Competition between providers in higher education—indeed, in any market—incentivises them to raise their game, offering consumers a greater choice of more innovative and better-quality products and services. The Competition and Markets Authority concluded in its recent report on competition in the HE sector that aspects of the current system could be holding back competition among providers, which needed to be addressed. That is what we are doing with the provisions in this and later clauses, including those covering validation.
Paul Blomfield
I would be grateful if the Minister could share with us the work that the Department has done on comparing the impact of private providers in other countries with developed higher education systems. My understanding is that there is very limited evidence to suggest that increased competition has contributed to innovation, higher quality or lower prices within the countries that the Department has looked at. Could he share the evidence?
Joseph Johnson
First, I would encourage the hon. Gentleman not to try to compare apples and pears by talking about the US experience. Many of the parallels that he is attempting to draw with the so-called private sector in the US are not really relevant to our environment here in the UK. US private providers are subject to little state control. We have a strong, and increasingly strong, regulatory framework in place to ensure appropriate oversight. I again encourage Opposition Members not to disparage institutions that they describe as for-profit or private providers. Let us remember first that all higher education institutions are private to begin with—every single one of them. Let us try to get that straight in our minds right away.
Joseph Johnson
No, I am going to make this point, because the hon. Gentleman has already intervened. Let us also remember that there are exceptionally good providers in the sector delivering high-quality education sector, for example Norland College, the University of Law or BPP University. For-profit providers have among the highest levels of student satisfaction in the system, demonstrated for example by the University of Law coming joint first in overall satisfaction in the most recent national students’ survey. I find it sad and disappointing that the hon. Member for Blackpool South wants to disparage such institutions and those who choose to study at them.
Gordon Marsden
I am not disparaging those institutions. They have reached that position precisely through the rigorous system that we currently have, which the Minister is proposing to dismantle. He has failed to address some of the questions I put to him. For example, does he seriously believe that the introduction of single-subject DAPs is a good thing for students?
Joseph Johnson
I will shortly come on to the single-subject degree-awarding powers measures that we are proposing, and yes, I obviously believe that specialist provision is to the advantage of the higher-education system, because it will help us address many of the skills shortages that the country faces. We can point, for example, to the New Model in Technology and Engineering institution in Hereford, which will be a specialist STEM provider in an HE cold spot. That is precisely the kind of new entry that we want to encourage into the system.
Competition expands the market and widens choice to the benefit of students. That is generally, although not universally, accepted. It is certainly accepted by the sector itself.
Joseph Johnson
I am going to make some progress, because I have got a fair amount to get through.
Universities UK, the representative body, has said it welcomes the Government’s intention to allow new providers in the system to secure greater choice for students and to ensure appropriate competition in the higher education sector. Paul Kirkham pointed out in a speech earlier this year that
“there are many reputable APs out there, providing specialist, bespoke education and training to students who, lest we forget, consciously choose such an alternative.”
The story of those new entrants and of diversity and provision has been one of widening participation. We want them to be able to compete on a level playing field.
As we discussed earlier, the world is changing fast, and the higher education sector needs to change too if it is to meet the needs of 21st-century learners, yet in a 2015 survey of vice-chancellors and university leavers 70% of respondents said that they expected higher education to look the same in 2030 as it does now—largely focused around the full-time three-year degree. The risk is that, given their position, that will become a self-fulfilling prophecy. We know, for example, that the share of undergraduate students in English higher education institutions studying full-time first-year degrees—the traditional model—has increased from 65% in 2010-11 to 78% in 2014-15. Allowing the vested interests of incumbents to continue to protect what is effectively a one-product system that promotes only the three-year, full-time, on-campus undergraduate university course as the gold standard comes with considerable risk. It is a high-cost and inflexible approach, and given that in excess of 50% of the population wish to engage in higher education, it cannot be the only solution. That system of validation is curbing innovation and entrenching the same model of higher education.
As Paul Kirkham said in evidence to 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, Q15.]
As Roxanne Stockwell, the principal of Pearson College, said in her submission:
“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.”
We must not be constrained by our historical successes.
Carol Monaghan
I do not recognise the picture of higher education that the Minister is painting. It has changed greatly, even in the past 10 to 20 years. There is a massive focus on skills, and students are now leaving university with much greater abilities, and the problem-solving, business and employability skills that are required. I simply do not recognise the picture of traditional HE that the Minister paints.
Joseph Johnson
I urge the hon. Lady to recognise that huge value has been added to the sector by the arrival of new entrants. New providers have tapped into unmet demand, and that is why they are springing up. They are surviving the test of the marketplace and meeting a need that is not presently being met. That is why they are coming into existence; they are providing value and succeeding and thriving in the marketplace. We should welcome what they bring rather than denigrate it.
As a report on international experience by the Centre for Global Higher Education found, private providers can
“swiftly provide courses to meet unmet demand, and deliver them in convenient ways, such as online or in the evening and over the weekend.”
We also know that they offer greater flexibility to potential students by having different course start dates throughout the year. Alternative providers are already supporting greater diversity in the sector, which we should all welcome. Some 56% of students at alternative providers are aged 25-plus—I know that the hon. Member for Blackpool South cares greatly about mature students—compared with only 23% of students at publicly funded institutions. They have higher numbers of black and minority ethnic students, with 59% of undergraduate students at alternative providers coming from BME ethnic groups compared with 21% at higher education institutions overall.
Gordon Marsden
All the statistics that the Minister has just reeled off, which we recognise, underline precisely why we need rigorous—not blocking—regulation. The sorts of people who are going to the providers he talks about are those who will suffer most greatly if those providers go belly up. That is why we need rigour in that area, and that is why the best alternative providers have succeeded and are coming through at the moment. He is constantly setting up straw men.
Joseph Johnson
We are in agreement. There will be robust quality gateways, financial management tests and governance tests in the system.
Joseph Johnson
They are as robust as they need to be, and they will ensure that only high-quality, well managed, stable institutions that deliver high-quality higher education enter our system.
As I have set out, current would-be new entrants typically rely on competitors for a foothold in the sector. It is hard to think of another sector—including those involving major once-in-a-lifetime decisions, such as mortgage or pension providers—where one provider is beholden to another for market entry in that manner.
Inevitably, the nature of our validation requirements has a moulding effect on entry into the system. New providers may feel forced to adopt practices, habits and mentalities of incumbents in a way that can stifle innovation or even cede some of the new entrants’ competitive advantage. For example, we can read in the evidence provided by Le Cordon Bleu how that can happen. It chose not to offer a UK degree via the validation process, as it felt it would be required to hand over its recipes, techniques and individual culinary style to another institution in order to have its courses validated.
Joseph Johnson
I will make some progress, if the hon. Lady will let me.
In the case of Le Cordon Bleu, the intellectual property of its course would be free for the validating institution to redistribute as it saw fit. We have heard a fair amount from Opposition Members about for-profit providers, and the idea that for-profit institutions would not act in the interests of students. That is simply not true.
The Chair
Order. Will the hon. Gentleman refrain from heckling? He has the opportunity to speak, and he can respond in due course.
Joseph Johnson
The insinuation that followed the persistent tropes denigrating private providers, new providers or alternative providers was very clear: the hon. Gentleman sees for-profit providers as fly-by-night operators out to exploit naive students at the expense of taxpayers. The whole riff he has been developing over weeks before this Committee is unmistakeable, and it is simply not true.
We need a diverse, competitive higher education sector that can offer different types of higher education, giving students the ability to choose between a wide range of providers. We must not constrain entrepreneurial activity and stifle innovative provision at students’ expense. New ventures are driven by a range of motives, not just by wealth creation, such as the desire to innovate and create new products, the desire to prove themselves better and smarter and a desire to create a personal legacy. It also seems strange that on the one hand making a profit is deemed distasteful, whereas on the other hand to fail to make a profit would be judged as a sign of financial unsustainability. There is an inherent contradiction in the hon. Gentleman’s approach to this question.
Turning to the specifics of amendments 216, 217, 218, 220 and 234, I hope—although I may not be successful—that I can still assure hon. Members that the reforms we are proposing will ensure that both the interests of students and the wider public are well served. In recognising the need for the changes that I have just set out, we also recognise the great importance of sustaining and improving quality and standards. Our plans are designed to ensure that quality is maintained, and that only those providers that can prove they can meet the high standards associated with the values and reputation of the English HE system can obtain degree-awarding powers. We intend that the assessment of whether a provider meets the criteria to hold degree-awarding powers would rest with the designated quality body; this mirrors current arrangements.
In order to become eligible for degree-awarding powers, providers will have to register with the OFS. We expect them to register in either the approved or approved fee cap categories. This would ensure that applicants for degree-awarding powers meet high market entry and ongoing registration conditions, which we expect to include quality and financial sustainability, management and governance criteria. As now, degree-awarding powers will either be granted on a time-limited or an indefinite basis. Degree-awarding powers being awarded on a time-limited and renewable basis in this way is critically not new: alternative providers and further education providers are already granted these powers on a six-yearly renewable basis. We intend to level up the playing field and raise the quality threshold so degree-awarding powers are granted on a time-limited basis to all in the first instance, with the opportunity for all to progress to indefinite degree-awarding powers subject to satisfactory performance.
What we do intend to do is change the requirement that new high-quality providers have to build up a track record and be reliant on incumbent institutions to validate their provision. However, as we set out in the factsheet on market entry and quality assurance that we published and sent to the Committee, we plan that in order to be able to access time-limited probationary degree-awarding powers, providers will also need to pass a new and specific test for probationary degree-awarding powers. Under this test, we expect applicants to be required to demonstrate that they have the potential to meet the full degree-awarding powers criteria by the end of the three-year probationary period and we fully expect probationary degree-awarding powers to be subject to appropriate restrictions and strict oversight by the OFS in order to safeguard quality. We expect this oversight to be similar to the support of a validating body, except that new providers will not need to ask a competitor to do this.
Gordon Marsden
The Minister is now beginning to address the specific points I made, although he has still not commented on the rationale for allowing single-subject DAPs. That is not the same as STEM ones, Minister, because those cover a much broader range of things. May I ask the Minister specifically whether he considers the inclusion of self-evaluation as a key element in deciding whether people should have these degree-awarding powers sufficient and adequate?
Joseph Johnson
As he has pressed on this first, let me come to the hon. Gentleman’s point about single-subject degree-awarding powers. We want the scope of degree-awarding powers to be more flexible, so that both probationary and full degree-awarding power holders would be able to offer degrees in specific subjects or with greater choice of levels. This would enable them to start awarding degrees while developing their provision and capacity, to assume increased levels of powers and enable the removal of restrictions over time. Holders of single-subject DAPs will, if granted validation powers, be able to validate in that subject only, and we intend that they will be eligible for university title. There are many specialist providers that I believe would benefit from this. For example, Norland College has been delivering specialist education since the 1860s and could be one of the providers that seeks to benefit from these provisions. It has a solid reputation for the quality of its provision.
Turning to the hon. Gentleman’s more recent point about self-evaluation, we intend self-evaluation to be only one part of a thorough and robust process to assess readiness for probationary degree-awarding powers. Understanding what it means to uphold academic standards is essential for any provider and should be tested, and we intend to consult on detailed criteria that we plan to publish in guidance.
Gordon Marsden
I listened carefully to the Minister, as I have throughout our proceedings. At least he is now addressing some of the meat of the issues, rather than going off and misrepresenting Labour’s position, which I warned him not to do at the beginning because we have made our position clear.
The Minister attempts to smear the Opposition by saying that we are not in favour of for-profit institutions. We did not say that. We said that for for-profit institutions to be absorbing significant amounts of public money and support—the implication of his proposals—we need rigorous inspection and process. I do not believe that he has demonstrated that today by offering a system of, “We’ll do it this way and that way with guidance.”
Where is the evidence? The Minister has produced no evidence for the so-called stifling of all the private institutions that are just springing up. We heard evidence from private sector alternative providers, including Condé Nast. Those providers were not—dare I say—typical of the sort of providers that we will get during this great revolution that the Minister is talking about. If he looked beyond his obsession and besottedness with his competition gurus to the possible implications if his proposals went wrong, he will see that we are not crying about things that will not happen. These are real risks and it is incumbent on us as policy makers and Members of Parliament to look not just to the utopian view but to a realistic view. Public money going into this expansion needs guarantees for the students and for the people who work in the institutions. If they do not get those guarantees, not only will a great deal of public money be lost but the public reputation of our higher education system will be at risk.
It is clear that the Minister is not going to move on these amendments. We will not press the amendments to a vote at this point and will make a decision on clause 40 when we have completed the further deliberations on the clause.
Dr Blackman-Woods
I want to say briefly to the Minister that I do not think that it should be easy to get degree-awarding powers in this country. If we are really serious about upholding the quality and excellence of higher education, there should be a rigorous system and, because of the Minister’s remarks and the lack of safeguards for students and the public, I wish to press amendment 234 to a vote.
Paul Blomfield
I am sorry that the Minister sought to characterise our concerns in the way that he did. There are good examples in many countries across a diverse range of higher education providers, but he will also recognise that there are examples of unscrupulous operators who have caused real problems, not just in the United States—also in Australia. In the US, it has led the federal authorities to take legal action on behalf of students against some of the providers. All we are seeking to do is to ensure that a robust framework is in place to protect us from that situation in this country.
On new clause 9, I was reassured to some degree by the Minister’s comments on change of ownership, but I would welcome clarification on whether the review process that he would expect would be as robust as the initial regulatory entry. He did not address my concerns on the restrictions being imposed on providers in other jurisdictions, which is the second part of new clause 9, and whether that would also trigger the sort of review I am seeking through the new clause.
Joseph Johnson
I thank the hon. Gentleman for his reasoned approach. The approach that the OFS would take would depend on the circumstances of any transfer of ownership. The whole philosophy of the OFS is that it is a risk-based regulator that seeks to act in a proportionate, reasonable way. Given that core approach to the way that it will regulate the sector, we would not expect it to have a one-size-fits-all policy response to every particular circumstance that might arise. I think the answer is that the OFS would evaluate the situation in light of all its duties and take a decision on how to proceed on that basis. That would include circumstances such as those covered by the other part of the new clause relating to other jurisdictions and legal environments outside this country. The OFS would evaluate it and take a view.
Paul Blomfield
I will not press the new clause to a vote at this stage but I will seek future assurances, particularly in relation to that second part about action in other jurisdictions. Does the Minister not agree that if we are considering circumstances in which providers are known to have transgressed in other countries we would expect a significant review of their operation in this country?
Gordon Marsden
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 234, in clause 40, page 22, line 28, at end insert—
“(c) the OfS is assured that the provider is able to maintain the required standards of a UK degree for the duration of the authorisation; and
(d) the OfS is assured that the provider operates in students’ and the public interests.”—(Dr Blackman-Woods.)
This amendment requires the OfS to be assured about the maintenance of standards and about students’ and the public interest before issuing authorisation to grant degrees.
Question put, That the amendment be made.
Gordon Marsden
I beg to move amendment 215, in clause 40, page 23, line 11, after “instrument” insert
“approved and made by the Privy Council as an Order in Council”.
This amendment would ensure scrutiny by the Privy Council of the power to grant awards.
The Chair
With this it will be convenient to discuss the following:
Amendment 224, in clause 51, page 30, line 15, leave out “(instead of the Privy Council)” and insert “and the Privy Council”.
This amendment would ensure the Privy Council retained the right of oversight for the award and revocation of university title.
Amendment 225, in clause 52, page 31, line 7, leave out “Office for Students” and insert “Privy Council”.
This amendment would ensure the Privy Council retained the right of oversight for the award and revocation of university title.
Amendment 226, in clause 52, page 31, line 18, leave out lines 18 to 21.
This amendment would ensure the Privy Council retained the right of oversight for the award and revocation of university title.
Amendment 227, in clause 52, page 31, line 22, leave out lines 22 to 25.
This amendment would ensure the Privy Council retained the right of oversight for the award and revocation of university title.
Amendment 228, in clause 52, page 31, line 26, leave out “Office for Students” and insert
“the Office for Students and the Privy Council”.
This amendment would ensure the Privy Council retained the right of oversight for the award and revocation of university title.
Amendment 229, in clause 53, page 32, line 5, leave out “OfS” and insert
“the Office for Students and the Privy Council”.
This amendment would ensure the Privy Council retained the right of oversight for the award and revocation of university title.
Gordon Marsden
The group of amendments was tabled not in the expectation that there would be problems with the development of the office for students but in response to the concerns of a number of organisations, including universities, that there should be an existing backstop to the process. It is curious, perhaps, that we should propose to preserve an institution that the Government propose to destroy, but that is what the effect of the changes would be, with the Privy Council being removed from the entire process.
I do not want to speak in great depth or detail, except to repeat what I have said previously, which is that we are entering a period of great difficulty in how our higher education might be perceived overseas. I will not repeat the arguments I made this morning about UK plc and Brexit, but I think they are extremely valid. There is the old saying, of course: if it ain’t broke don’t fix it. The Minister, full of his competition zeal for all the poor providers that have been blocked out for years and years by the Privy Council and all the other archaic institutions, wants to remove them from the process. We do not suggest that the Privy Council remain the prime mover in the process. However, particularly in the first few years, when the office for students is setting itself up and finding its feet, there should be circumstances in which the powers that the Privy Council currently exercises in the oversight of the award and revocation of university title should be there as a backstop.
Joseph Johnson
In our reforms, we have deliberately taken out the function of the Privy Council in the granting of degree-awarding powers and university title in order to streamline the processes and transfer responsibility for those functions to the office for students. At the moment, as the hon. Gentleman knows, for degree-awarding powers the QAA advises HEFCE. HEFCE advises the Department, and the Department then advises the Privy Council. There is a similar process for university title. That is unduly complex and time-consuming to little or no additional advantage.
On the whole, there was no opposition to these changes in the responses we had to the Green Paper. This response to our Green Paper consultation from a provider that has only recently gone through this process illustrates the point:
“Removing the role of the Privy Council in making decisions about DAPs and University Title seems prudent. Our experience of the process suggests that this stage does not have added value and merely extends the time taken to complete the process.”
In fact, we checked back through recent history and there were no examples of the Privy Council not following the Department’s advice on granting degree-awarding powers and university title—not one.
Under our new system, the office for students, as the independent sector regulator, will be best placed to take decisions on degree-awarding powers and university title. That will cut out some of the process and lead to a more streamlined system. I know the hon. Member for Blackpool South wants to make things more difficult for providers, but we want to make things simpler. This is one of the ways in which we envisage reducing the bureaucracy and burdens that prevent high-quality new providers from entering the sector.
Joseph Johnson
I am going to make some progress.
In its evidence to the Committee, Independent Higher Education supported this view:
“The transfer of this authority to the OfS, a modern regulator, away from the outwardly archaic and opaque mechanism of approval by the Privy Council, will be more appropriate for a dynamic and diverse sector which includes industry-led provision and overseas providers bringing their extensive experience to the UK”.
However, I recognise that the amendments are probably born of a desire to ensure proper independent decision making, with a view to protecting the quality and prestige of these awards, as well as students in the system. Let me therefore be clear that I fully agree with that intention and have designed a system that will do just that.
Let me explain how the future processes will work. With regards to degree-awarding powers, we have every intention of keeping the processes, which have worked well to date, broadly as they are. We expect the process to remain broadly peer review-based and we envisage that the OFS will seek information from the quality body, with involvement from an appropriately independent committee. On university title, again, we are not planning to change the independent decision making and scrutiny. For both areas, we want decisions to continue to be made by an arm’s length body, based on departmental guidance that has been subject to consultation as and when appropriate. That also applies to variation and revocation of degree-awarding powers and revocation of university title. Additionally, those processes will be supported by a right of appeal, as set out in clauses 45 and 55.
Although I thank Opposition Members for giving me the opportunity to talk about these important matters, we have designed the new system with the right safeguards in place. Reinserting a role for the Privy Council would therefore add nothing except unnecessary process, so I ask the hon. Member for Blackpool South to withdraw his amendment.
Gordon Marsden
Well, I am reassured that the Minister thinks he has managed to produce a brand-new system that is going to work absolutely perfectly; that is what people always say when they produce brand-new systems. For the avoidance of doubt, we were not suggesting retaining the Privy Council in its existing position, and nor were the people who supported our proposal. It was a backstop, and I hope the Minister understands that—I have tried to make it as clear as possible.
The Minister has given various assurances today; we will see how they pan out in practice. I maintain that it is a risk to create a new brand on the international HE stage without a backstop, when we are going to be in such difficult circumstances over the next two or three years. However, we are not going to agree, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss new clause 6—Committee on Degree Awarding Powers and University Title—
“(1) The OfS must establish a committee called the ‘Committee on Degree Awarding Powers and University Title’.
(2) The function of the Committee is to provide advice to the OfS on—
(a) the general exercise of its functions under sections 40, 42, 43 and 53 of this Act, and section 77 of the Further and Higher Education Act 1992;
(b) particular uses of its powers under section 40(1) of this Act; and
(c) particular uses of its powers under section 77 of the Further and Higher Education Act 1992.
(3) The OfS must seek the advice of the Committee before—
(a) authorising a registered higher education provider or qualifying further education provider to grant taught awards, research awards or foundation degrees under section 40(1) of this Act;
(b) varying any authorisation made under section 40(1) of this Act so as to authorise a registered higher education provider or qualifying further education provider to grant a category of award or degree that, prior to the variation of the authorisation, it was not authorised to grant; and
(c) providing consent under section 77 of the Further and Higher Education Act 1992 for an education institution or body corporate to change its names so as to include the word “university” in the name of the institution or body corporate.
(4) The OfS must also seek the advice of UKRI before authorising a registered higher education provider or qualifying further education provider to grant research awards under section 40(1) of this Act.
(5) The OfS does not need to seek the advice of the Committee before—
(a) revoking an authorisation to grant taught awards, research awards or foundation degrees; or
(b) varying any authorisation to grant taught awards, research awards, or foundation degrees so as to revoke the authorisation of a registered higher education provider or qualifying further education provider to grant a category of award that, prior to the variation of the authorisation, it was authorised to grant.
(6) Subsection (4) applies whether the authorisation being revoked or varied was given—
(a) by an order made under section 40(1) of this Act;
(b) by or under any Act of Parliament, other than under section 40(1) of this Act; or
(c) by Royal Charter.
(7) In providing its advice to the OfS, the Committee must in particular consider the need for students, employers and the public to have confidence in the higher education system and the awards which are granted by it.
(8) The OfS must have regard to the advice given to it by the Committee on both the general exercise of its functions referred to in subsection 2 and any particular uses of its powers referred to in subsection 3.
(9) The majority of the members of the Committee must be individuals who appear to the OfS to have experience of providing higher education on behalf of an English higher education provider or being responsible for the provision of higher education by such a provider.
(10) In appointing members of the Committee who meet these criteria, the OfS must have regard to the desirability of their being currently engaged at the time of their appointment in the provision of higher education or in being responsible for such provision.
(11) The majority of the members of the Committee must be individuals who are not members of the OfS.
(12) Schedule 1 applies to the Committee on Degree Awarding Powers and University Title as it applies to committees established under paragraph 8 of that Schedule.”
This new clause would create a committee of the OfS which fulfils much the same functions as the current Advisory Committee on Degree Awarding Powers.
Gordon Marsden
In the interest of time, I will try to be concise. Perhaps because we are coming to the end of the afternoon, the Minister was more constructive in his last comments than he had been previously. He talked about outside inspection and I hope that is a harbinger of his looking favourably on new clause 6.
New clause 6 attempts to answer the famous question posed by Cicero, which always bedevils any Government or organisation: “Who governs the governors?” I will not quote it in Latin; I will leave that to the Minister’s brother.
Gordon Marsden
Indeed. Give that man a gold star.
Before we get into ridiculous territory, the serious point is that if we are to have confidence in the system that the Minister is proposing, it is important to have a body that can advise. That is the intention behind the new clause. The idea was put to us by MillionPlus but the view is shared by a large number of other organisations, including UUK, which the Minister quoted earlier.
MillionPlus believes that
“strong safeguards need to be put in place to ensure that any body that is awarded degree awarding powers or university title has met the criteria to do so, and will not put student interest at risk, or potentially damage the hard earned reputation of the entire higher education sector in the UK.”
Those are all things that we have been praying in aid this afternoon.
The new clause would go a long way to meeting that requirement. Subsection (2)(a) would provide for a committee to advise the OFS in general as to how it is fulfilling its functions. Subsections (2)(b) and (c) would allow for that committee to advise the OFS on the particular uses of its power to grant degree-awarding powers or university title.
The new clause allows the OFS to revoke degree-awarding powers or university title without consulting the committee, which means that any argument against it on the grounds that it might create problematic delays if urgent action were required would be mitigated. In fulfilling its role, we would expect the committee to seek advice from the designated quality body.
The current arrangements—and the Minister has made great play of praying in aid the current arrangements—for conferring degree-awarding powers and university title on an institution require, in England, the Higher Education Funding Council for England to seek the advice of the Quality Assurance Agency for Higher Education. That is not required in the Further and Higher Education Act 1992, but it clearly sets a precedent where appropriate expertise is sought prior to any decision making. It is therefore vital that the OFS continue to seek advice from the designated quality body prior to any conferring of degree-awarding powers and/or university title—[Interruption.] I hope the Minister is listening. There is, therefore, a strong argument for introducing the new clause further to reflect that obligation.
Joseph Johnson
We have debated clause 40 extensively, so I will turn straight to new clause 6. I thank the hon. Gentleman for raising the important issue of safeguarding quality and ensuring that only high-quality providers can access degree-awarding powers and university title. We are taking that very seriously. I hope that that came through adequately in the technical note that we published a few weeks ago before the party conference recess.
I am interested that hon. Members have proposed the establishment of a committee with similar responsibilities to the current Advisory Committee on Degree Awarding Powers. I assure this Committee that we have every intention of keeping the processes around the scrutiny of applications for degree-awarding powers, which have worked well—including those around scrutiny of applications for university title—broadly as they are. That includes retaining an element of independent peer review, most likely in the form of a committee of independent members. As now, we would expect that committee to play a vital role in the scrutiny of applications, bringing to bear its unique and expert perspective on the process, and enabling the OFS to draw on its expertise in coming to a decision.
Gordon Marsden
I too will be brief on the substance of clause 40. I welcome what the Minister said about new clause 6. Again, the devil is in the detail and we wait to see that detail in due course, but he has outlined a reasonable process. Unfortunately, however, given the detail of the argument that has been put on clause 40, and in particular the response to our modest and reasonable amendments to mitigate the substantial dangers that we believe are posed by the way in which the Government are proceeding, we do not feel that the Minister has convinced us. We therefore wish to vote against clause 40.
Question put, That the clause stand part of the Bill.
Gordon Marsden
I beg to move amendment 221, in clause 43, page 24, line 32, leave out subsection (3) and insert?
“(5) No order shall be made under subsection (1) unless a draft of the order has been laid before and approved by a resolution of both Houses of Parliament.”
This amendment would ensure the OfS’ power to vary or revoke authorisation given to an English Higher Education provider, or an English further education provider, must be scrutinised and approved by both Houses of Parliament.
The Chair
With this it will be convenient to discuss amendment 222, in clause 44, page 25, line 14, after “provider” insert “and other relevant organisation”.
This amendment would ensure full representations and be made to, and considered by, the OfS before steps are taken to revoke authorisation.
Gordon Marsden
The amendment reflects the concerns we have discussed about the revoking of powers. It also reflects the concerns of a number of bodies, not least Cambridge University, which has expressed real concern about that being done simply by statutory instrument. Cambridge University said in its evidence:
“The Bill must include measures to guarantee appropriate parliamentary scrutiny over the OfS’s discharge of its enforcement powers and imposition of penalties, including the revocation of Degree Awarding Powers and University Title. This is to ensure that any decision that may impinge on institutional autonomy is properly considered and good reason for doing so needs to be established.”
In this case, that means provisions must be scrutinised and approved by both Houses of Parliament. We accept that these occasions are likely to be rare, which is precisely why we think the matter should be reserved for both Houses of Parliament.
Joseph Johnson
The amendments relate to the power to revoke or vary degree-awarding powers, which is one part of the suite of tools available to the OFS under the new regulatory framework. We have long recognised that in order for the sector to be regulated effectively, refined and express powers to vary or remove degree-awarding powers in serious cases are vital. That makes it clear to providers what is at stake if quality drops to unacceptable levels. It does not mean we are interfering with the autonomy of providers.
We intend that the OFS and the new quality body will work with providers to address any emerging problems early on. The OFS would use the power to revoke degree-awarding powers only when other interventions had failed to produce the necessary results. However, I recognise the significance of these refined, express powers and the need to put the right safeguards in place. That is what clauses 44 and 45 are designed to do.
On amendment 222, I hope I can provide some reassurance. I fully agree that when making a decision on whether to vary or revoke a provider’s degree-awarding powers, the OFS should be able to draw on all relevant information. That may include information provided by other organisations such as students unions, other providers or the local community. Of course, we also plan for the OFS to make decisions having received information from the designated quality body and UKRI. The provisions in clause 58 already enable the OFS to co-operate and share information with other bodies in order to perform its functions. We expect the detail of how that should work to be set out in departmental guidance, and we plan to consult on the detail of the guidance prior to publication.
I turn to amendment 221 and the actual process of variation and revocation. Clauses 44 and 45 set out in detail what that process will look like, and we intend them to be supported by more detailed guidance. A significant safeguard in the right to appeal to the first-tier tribunal is contained in clause 45. Having a structured appeals process is vital to ensuring that providers have a clear voice and that the system can hold the trust of students and taxpayers and maintain the world-class reputation of the sector. That is a very strong protection in the Bill and means that the powers of the OFS can be checked by the judiciary.
A decision by the OFS cannot take effect before the routes of appeal are exhausted, and any order by the OFS to vary or revoke degree-awarding powers would be a statutory instrument. That would mean it could be published, thus ensuring appropriate transparency. Together, those are strong safeguards, and the amendments are therefore unnecessary. On that basis, I ask the hon. Gentleman to withdraw his amendment.
Gordon Marsden
I thank the Minister for his response and particularly for his assurance in respect of amendment 222 that there will be consultation with other organisations. I must ask the vice-chancellor of Cambridge University and various others whether they will be content with this simply being a matter for statutory instrument. We will see how the process works out, but I am content with the Minister’s assurances. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 43 ordered to stand part of the Bill.
Clauses 44 and 45 ordered to stand part of the Bill.
Clause 46
Validation by authorised providers
Joseph Johnson
I beg to move amendment 75, in clause 46, page 26, line 5, leave out
“authorised taught awards and foundation degrees”
and insert
“taught awards and foundation degrees that the provider is authorised to grant”.
This amendment is technical and is needed because clause 46(5) defines “authorised” by reference to a registered higher education provider rather than a taught award or foundation degree.
The clause enables the OFS to commission registered degree-awarding bodies to extend their validation services to other registered providers, if, for example, there is a mismatch between supply and demand. The OFS can commission providers to extend their validation services only if that is allowed by the provider’s degree-awarding powers. The OFS cannot bestow new powers on degree-awarding bodies via the commissioning ability. However, the current language in this clause, which refers to
“authorised taught awards and foundation degrees”,
is a little unclear. The amendment seeks to clarify what we mean by an “authorised” award by using clearer, simpler language. It puts it beyond doubt that the OFS can commission a provider to validate only the taught awards and foundation degrees that the provider is authorised to grant. This is a technical amendment and does not change the scope, purpose or effect of the clause.
Amendment 75 agreed to.
Dr Blackman-Woods
I beg to move amendment 236, in clause 46, page 26, line 9, at end insert—
“(2A) Such commissioning arrangements shall include commissioning the Open University as a validator of last resort.”.
This amendment ensures that the Open University rather than the OfS itself is the validator of last resort.
This is a probing amendment to test the Minister’s easy-going, laissez-faire attitude about which courses can be validated and by whom. It is far from clear in clauses 46 and 47 what sort of institution the Minister has in mind for the OFS to use as a validator and, in particular, a validator of last resort. The Opposition are a little bit worried that new providers—or indeed existing providers—could be touting their degrees around different institutions just waiting for one that will validate them, and that the OFS will support that. [Interruption.]
The Chair
Order. I had a strange situation there. I had the hon. Lady speaking, the Opposition Front-Bench spokesman trying to speak to the Minister, the Minister trying to speak to the Opposition Front-Bench spokesman and the Whip trying to speak to me. I am listening intently to the hon. Member for City of Durham, who is the most important person speaking, because she has the floor at the moment. If she would continue, I can refocus.
Dr Blackman-Woods
I was saying to the Minister, who is now talking to the Whip—[Laughter.]
The Lord Commissioner of Her Majesty's Treasury (David Evennett)
We need a cup of tea!
Dr Blackman-Woods
We absolutely do. I will try to be brief.
It is far from clear who the Minister expects the OFS to have in mind as the validator of last resort. The amendment refers to the Open University as it is well known to be a high-quality validator, but that does not mean that the OFS would have to use the Open University. We hope that the Minister will reassure us that the validator of last resort would be an institution that is as highly valued and respected as the Open University, and not just whoever the OFS thinks will validate a particular course in mind so that an institution is able to run something that perhaps should not be run if proper arrangements were put in place.
Joseph Johnson
It is essential that along with the direct entry route to the market, which we discussed earlier in relation to clause 40, new providers should be able to choose to access first-class validation services if they feel that would be the right choice for them. We know from the Green Paper consultation responses that validation arrangements can be mutually beneficial for new providers and incumbents alike. They can enable new providers to draw on the knowledge, skills and expertise of more well established providers in the design and delivery of their awards, while building up their own track record of performance. For incumbent providers, validation can serve as an additional revenue stream and enable them to offer complementary HE provision to their own students. However, validation arrangements can also be one-sided, as the power to enter into, and charge for, a validation agreement lies with the validating body. In the extreme, as we have heard, that could lead to incumbent providers essentially locking new providers out of the system indefinitely, or making it prohibitively or unreasonably expensive.
I welcome the opportunity to acknowledge the important role that the Open University already plays in providing validation services, and I also welcome its general support for the need for the provisions in the clause. Furthermore, I thank the Open University for the way it is already engaging with the QAA and Independent HE to consider how to improve validation services and remove some of the barriers that new providers currently experience. However, I do not think it is right or necessary to include a role for the OU in legislation, as the amendment would have us do.
I would expect the OFS to need to adopt a purely voluntary, open, fair and transparent approach to any commissioning arrangements, so that all providers understand how they can get involved and what would be expected of them. The OFS must be able to set out the terms of the commissioning arrangements and choose the most appropriate registered higher education provider at the time, to ensure that it can continue to stimulate the development and reach of good-quality validation services. If the OU wanted to enter into commissioning arrangements to offer validation services with the OFS, the Bill would not prevent that from happening, but it would not be appropriate to prescribe a role for one registered higher education provider over another in legislation.
Turning to the intent underlying the amendment, we of course expect the parties with which the OFS enters into validating arrangements to be of similar stature to the Open University and to offer the same kind of high-quality provision. I therefore ask the hon. Member for City of Durham to withdraw the amendment.
Dr Blackman-Woods
I think it would help us if the Minister provided some further clarity on the guidance or regulations that will underpin commissioning arrangements, so that we can be absolutely certain that a high-quality provider will ultimately be commissioned as the validator of last resort. Will the Minister reflect on that and bring some further reassurances back to us? I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 46, as amended, ordered to stand part of the Bill.
Clause 47
Validation by the OfS
Joseph Johnson
I beg to move amendment 76, in clause 47, page 26, line 42, after “authorise” insert “authorised”.
This amendment and amendment 77 limit the power of the Secretary of State to make regulations allowing the OfS to authorise registered higher education providers to enter into validation arrangements on its behalf. The providers are required to be “authorised” (defined in the new subsection (6A) added by amendment 78), both to grant the taught awards or foundation degrees to which the arrangements relate, and to enter into the validation arrangements to which the arrangements relate.
Joseph Johnson
The Government’s higher education reforms will allow providers to choose which model of HE provision best suits their needs, removing any unnecessary barriers to market entry for high-quality providers and promoting institutional competition and student choice. To achieve that, it is essential that along with a direct entry route to market, HE providers that can meet relevant quality thresholds and have a degree they want to introduce into the higher education market should be able to access first-class validation services, if they feel that would be the right choice for them.
Clause 47 enables the Secretary of State to authorise the OFS to act as a validator of last resort if he or she deems it necessary or expedient. It also states that the powers set out in regulations may allow the OFS to authorise registered HE providers to validate taught awards and foundation degrees on its behalf. We intend to give the OFS the ability to validate only if there are serious circumstances that warrant it, for example if serious or intractable validation failures exist. It is vital, though, that we set the right parameters for use, which is why it will be for the Secretary of State to authorise the OFS to act as a validator of last resort should he or she deem it necessary or expedient, having taken the OFS’s advice.
The Secretary of State would then need to lay secondary regulations before Parliament, which I would expect to set out the terms and conditions of any OFS validation activity. They would provide Parliament with the opportunity to see those conditions, and Parliament would retain the power of veto. In addition, the OFS should authorise only HE providers that have the necessary degree-awarding powers to validate taught and foundation degrees on its behalf. The clause does not make that explicit, so my amendments ensure that the Secretary of State’s powers are explicitly limited in that way. That important limitation safeguards academic standards and quality, to protect student interests, and I therefore ask hon. Members to allow the amendments to be made.
Amendment 76 agreed to.
Amendments made: 77, in clause 47, page 27, line 2, at end insert—
“(4A) But regulations under subsection (1) may not include power for the OfS to authorise a provider to enter on its behalf into validation arrangements which are—
(a) arrangements in respect of taught awards or foundation degrees that the provider is not authorised to grant, or
(b) arrangements that the provider is not authorised to enter into.”
See the explanatory statement for amendment 76.
Amendment 78, in clause 47, page 27, line 11, at end insert—
“(6A) In this section, ‘authorised’, in relation to a registered higher education provider, means authorised to grant taught awards or foundation degrees, and to enter into validation arrangements, by—
(a) an authorisation given—
(i) under section40(1),
(ii) by or under any other provision of an Act of Parliament, or
(iii) by Royal Charter, or
(b) an authorisation varied under section43(1).”—(Joseph Johnson.)
This amendment defines “authorised” for the purposes of clause 47, using the same definition as is used in clause 46.
Question proposed, That the clause, as amended, stand part of the Bill.
Gordon Marsden
Because of the lateness of the hour I will try to be as brief as possible, even though the Opposition believe that it is fundamentally important that the clause be deleted. I have listened to the Minister and I appreciate the modifications made by his amendments—that is why we did not oppose them—but the fact remains that there is something very strange indeed about setting out powers that could ultimately make the OFS both the regulator of the market and a participant in it. I am rather surprised to hear the Minister, with his emphasis on competitive zeal, proposing a closed shop, which is what it would be. It is not just we who think that; UUK, most of the existing groups and other contributors have said the same.
If the Government want people to trust the OFS to represent student interests properly and protect the quality of HE, it must have a vested interest in those things and in nothing else. For the Government to be producing legislation that could eventually allow the OFS to compete with other providers to validate degrees—it might one day have to be judge and jury—risks tainting the reputation of the OFS from the start, and at the very least placing it in an invidious position. That is why UUK has said that it has grave concerns about the powers in the clause. It says:
“We cannot foresee any circumstances which would justify the creation of such a clear conflict of interest in the position of the OfS, and therefore do not think the bill should grant the OfS this power regardless of any protections through parliamentary scrutiny or governmental oversight. We recommend that clause 47 is removed from the bill.”
We agree with UUK, for the reasons I have just explained, and we will oppose clause 47 standing part of the Bill.
Joseph Johnson
It is essential that along with a direct entry route into the market, new providers can choose to access first-class validation services if they feel that would be right choice for them. We need to consider how these arrangements would work in the context of the new single regulatory framework and market entry reforms, rather than the existing system. For new providers without their own degree-awarding powers that do not want to choose the direct route to market entry, their ability to find a validating partner and to negotiate a good value-for-money validation agreement with them is vital in order to become degree-level providers and to generate good-quality, innovative provision.
We only need to look at recent events at Teesside University. Following a change of leadership, Teesside University said in March this year that it would be ending its validation of higher education programmes in the wider college network outside the Tees valley in 2017—a decision that will affect 10 FE colleges. Teesside admitted that the decision was made
“purely on the university’s strategic direction of travel and not as a reflection on the quality of the provision”
it had been validating. Martin Doel, chief executive of the Association of Colleges, said that the announcement had come as a “very unwelcome surprise” to colleges, and that it would create
“significant problems and additional work and cost”
for them as they try to seek new validating partners.
Ensuring that new high-quality providers are not locked out of the market via their preferred entry route is essential to ensuring that students are able to access the right type of higher education for them. I therefore want to ensure that the OFS has all the necessary tools at its disposal and is properly empowered to recognise and reward good practice or to quickly intervene and correct any serious systemic failures that might occur. If the OFS finds that there are insufficient providers with the capacity or appetite to enter into direct validation agreements with other providers or into commissioning arrangements with the OFS, or if those fail to correct the problem, the OFS will need to find another way to promote competition and choice.
Without these further powers, the OFS could be forced to stand by and watch while good-quality providers that do not want to seek their own degree-awarding powers remain locked out of degree-level provision indefinitely. That would be especially problematic if severe or stubborn intractable validation failures emerge. Jonathan Simons, head of education at the Policy Exchange think-tank, said that the Teesside case was a good example of why institutions should not be forced to rely on incumbents to validate their degrees. As he put it,
“Being dependent on a university for validation puts colleges in a subservient position and at the mercy of universities making decisions about withdrawing partnerships, not least when universities and colleges are competing for the same students…This is exactly why either colleges should be able to have awarding powers themselves, or there should be some sort of degree awarding council.”
Clause 47 enables the Secretary of State to authorise the OFS to act as a validator of last resort should he or she deem that necessary or expedient, having taken OFS advice. We expect the OFS board to have experience of providing HE, so its members will be well placed to understand if there is a systematic problem with validation services across the sector. I also expect OFS advice to be informed by consultation with the sector, so that it has a better understanding of the root causes of any problems and how providers and stakeholders think those can be best fixed. I envisage that the consultation would culminate in the OFS presenting the Secretary of State with a compelling, evidence-based argument that clearly demonstrates the scale, nature and severity of the validation problem and why giving it powers to validate through secondary regulation is the right solution to address that.
Such a power would also allow the OFS to delegate this role to other registered providers that can be authorised to validate awards on its behalf, as we have discussed. For example, I envisage that the OFS could choose to contract in people with the right skills and practical experience of higher education so that the validation service has access to the cohesive academic community it needs to perform this function effectively. In doing so, I expect the OFS to assure itself of the quality of any potential contracting partners, including by obtaining information from the designated quality body.
I am aware that some providers and stakeholders have raised concerns about the potential for the clause to create a conflict of interest—in other words, if the OFS is operating in the market it is regulating, as the hon. Member for Blackpool South put it. I would like to provide reassurance that that option is intended to be used only in extreme circumstances, after other measures have been tried and failed. As I have already said, regulations giving the OFS that power will be put before Parliament. If made, that secondary regulation would essentially allow the OFS to unblock any unnecessary and intractable barriers to degree-level market entry, essentially fixing a market failure.
Dr Blackman-Woods
Would not the Minister question why no other validating body is validating those courses? There is not a body of evidence out there—even at the moment—of lots of high-quality courses not being able to be validated, so I struggle to envisage a set of circumstances in which a course had gone to lots of validating panels and had not been validated and the OFS would think, “Oh yes, it’s great: I’ve got to commission something just to validate this course.” In what circumstances?
Joseph Johnson
We see this power as coherent with our overall vision for the sector of encouraging a competitive market. We see it as a backstop power that will address effectively what would be a market failure in the absence of providers able to validate high-quality provision in a certain area or subject. I urge the hon. Lady to reread the evidence the Committee was given from parties who had had difficulty securing validation agreements or who could attest to the difficulty that others had had in securing validation agreements. They are high-quality providers who had needlessly been made to run an obstacle course in pursuit of validation arrangements.
As I said, I want to provide reassurance that this option is intended to be used only in extreme circumstances after other measures have been tried and failed. It will come before Parliament in the form of secondary regulations. If made, it will allow the OFS to unblock any unnecessary and intractable barriers to degree-level market entry, enable new providers to introduce a more diverse range of innovative degree programmes to students and enable students to achieve an OFS-validated degree award.
I would expect the OFS, as the regulator of HE quality and standards and champion of student interests, to be best in class in demonstrating that its validation services abide by best practice validation principles and deliver to the highest standards. I would also expect the OFS to put in place appropriate governance arrangements that ensure that an appropriate level of independent scrutiny is applied to the validating arm of the organisation and safeguards to protect student interests.
Question put, That the clause, as amended, stand part of the Bill.
Joseph Johnson
I beg to move amendment 79, in clause 49, page 28, line 18, at end insert—
“( ) In subsection (10)(a)—
(a) for “means” substitute “—
(i) means”, and
(b) after “outside the United Kingdom” insert “, and
(ii) includes the Office for Students”.”
This amendment extends the definition of “United Kingdom institution” in section 214 of the Education Reform Act 1988 to include the OfS and so ensures that the offence in that section relating to offering unrecognised awards granted by such an institution also covers awards granted by the OfS.
Joseph Johnson
The amendments will make some clarifications to clauses 49 and 50, which amend the unrecognised degree provisions in the Education Reform Act 1988.
Amendment 79 will ensure that we take a consistent approach to the offence of providing unrecognised degrees. Degree awards made by the OFS and by persons wrongly purporting to be the OFS will also fall within the scope of the provisions concerning unrecognised degrees.
Amendments 80 to 83 and 85 to 87 will ensure that when an English body is included in a recognised body order, it will not be presumed able to grant any or all degrees if its powers have been granted under the Bill. To see what degrees it can grant, it will be necessary to refer to the order that gives or varies its powers to grant degrees. Such orders and regulations will be statutory instruments and should be published accordingly. These provisions are part of the steps that we are taking to ensure, for example, that an English provider that is given only the power to grant bachelor degrees can be caught by the unrecognised degree offence if it grants a masters degree.
Amendment 84 is corrective in nature. It reflects that providers with degree-awarding powers that enable them to validate are free to enter into validating agreements with other bodies without needing further authorisation under the Bill to approve a course. Any validation agreements whereby courses are approved will still need to be in accordance with that body’s academic governance arrangements.
Amendment 88 makes it clear that existing orders relating to degree-awarding bodies remain valid. The status of providers listed on those orders will only be affected if the OFS subsequently varies or revokes their degree-awarding powers.
Amendment 79 agreed to.
Clause 49, as amended, ordered to stand part of the Bill.
Clause 50
Unrecognised degrees: supplementary
Amendments made: 80, in clause 50, page 28, line 36, at end insert—
“( ) For subsection (1) substitute—
(1) The appropriate authority may by order designate each body which appears to the authority to be a recognised body within subsection (4)(a), (b) or (c).
(1A) For the purposes of sections 214 and 215, any body for the time being designated by an order under subsection (1) as a recognised body within subsection (4)(c) is conclusively presumed to be such a body.”.
This amendment and amendment 86 amend the power of the OfS, the Welsh Ministers and the Scottish Ministers under section 216(1) of the Education Reform Act 1988 to designate those bodies which appear to them to be authorised to grant degrees or other awards. In the case of bodies authorised under the Bill to grant awards (i.e. English higher or further education providers or the OfS) or bodies permitted to act on behalf of such bodies to grant awards, designation does not result in a conclusive presumption that they have power to do so. Whether an award granted by such a designated body is a “recognised award” and so exempt from the offence under section 214 of the 1988 Act will depend upon whether the body is authorised to grant the award in question.
Amendment 81, in clause 50, page 28, line 37, leave out “subsections (1) and” and insert “subsection”.
This amendment is consequential on amendment 80.
Amendment 82, in clause 50, page 29, line 13, leave out
“falling within paragraph (za) or (zb) of section 214(2)”
and insert
“within subsection (4)(a) or (b)”.
This amendment is consequential on amendment 80.
Amendment 83, in clause 50, page 29, line 16, leave out “that paragraph” and insert “subsection (4)(a)”.
This amendment is consequential on amendment 80.
Amendment 84, in clause 50, page 29, line 18, leave out from “body” to end of line 19.
This amendment amends one of the new requirements which clause 50 adds to section 216(3) of the Education Reform Act 1988 for being a body listed under subsection (2) of that section. The new requirement enables a body to be listed where it provides a course in preparation for a degree to be granted by a recognised body with degree awarding powers under the Bill. The course must be approved by the recognised body. The amendment removes the requirement that the approval has to be authorised by the recognised body’s degree awarding powers.
Amendment 85, in clause 50, page 29, line 20, leave out
“falling within paragraph (a) or (b) of section 214(2)”
and insert “within subsection (4)(c)”.
This amendment is consequential on amendment 80.
Amendment 86, in clause 50, page 29, line 22, leave out from “subsection (4),” to the end and insert
“after ‘means’ insert
‘—(a) a body which is authorised to grant awards by—
(i) an authorisation given under section40(1) of the Higher Education and Research Act 2016 (“the 2016 Act”),
(ii) an authorisation varied under section43(1) of the 2016 Act, or
(iii) regulations under section47(1) of the 2016 Act,
(b) a body for the time being permitted by a body within paragraph (a) to act on its behalf in the granting of awards where the grant of the awards by that other body on its behalf is authorised by the authorisation or regulations mentioned in paragraph (a), or
(c) ’.”
See the explanatory statement for amendment 80.
Amendment 87, in clause 50, page 29, line 22, at end insert—
“( ) In the heading, after ‘awards’ insert ‘etc’.”.
This amendment is consequential on amendment 80.
Amendment 88, in clause 50, page 29, line 33, leave out
“by the Secretary of State”.—(Joseph Johnson.)
This amendment is consequential on amendment 80 and makes clear that no orders made under section 216 of the Education Reform Act 1988, whether by the Secretary of State, the Welsh Ministers or the Scottish Ministers, before the coming into force of clause 50 are affected by the amendments made by that clause.
Clause 50, as amended, ordered to stand part of the Bill.
Clause 51
Use of “university” in title of institution
Dr Blackman-Woods
I beg to move amendment 237, in clause 51, page 30, line 16, at end insert—
“(2A) The power may be exercised as to include the word university in the name of the institution only when it can demonstrate that—
(a) it offers access to a range of cultural activities including, but not restricted to, the opportunity to undertake sport and recreation and access to a range of student societies and organisations;
(b) it provides students support and wellbeing services including specialist learning support;
(c) it provides opportunities for volunteering;
(d) it provides the opportunity to join a students’ union; and
(e) it plays a positive civic role.”
This amendment ensures that a broad range of activities and opportunities are available to students before allowing a higher education institute to use the title of ‘university’.
The Committee has already gone round the houses on this issue, but the amendment specifically addresses what sort of institution can use “university” in its title. We previously discussed whether something that was not a university could be called one. The amendment would ensure that if something has “university” in its title, it is actually a university, not an institution that is delivering either a single subject—as appeared to be the case in the Minister’s earlier example—or a range of subjects but with nothing else that would enable any of us to recognise it as a university.
Our universities have an excellent reputation not only for providing high-quality education but for delivering all sorts of other things alongside it, such as access to a range of cultural activities, sporting and other recreational activities, good-quality student support, access to health and wellbeing services, specialist support where necessary, opportunities for volunteering and the opportunity to join a student union. The institution itself plays a positive civic role. From clause 51, it appears that absolutely none of that will be necessary in the future for an institution to be called a university. If that is not massively dumbing down our university system, I do not know what is.
I see no justification for allowing an institution to use university in its title when it is clearly not a university and does not provide the range of services associated with a university. I look forward to hearing what the Minister has to say to assure us that he will uphold the quality and excellence of our higher education sector and ensure that all students get not only a chance to have those higher level skills, but an opportunity for personal development and sporting development in a place where their specialist educational needs are supported by the institution.
Joseph Johnson
We return to the criteria that we expect providers to meet in order to obtain a university title, which we discussed quite extensively at an earlier stage in the proceedings. As I have said before, we only want providers with full degree-awarding powers to be eligible for a university title. That process tests, among other things, academic standards and whether there is a cohesive academic community. It is a high bar that only high-quality providers will be able to meet. We are clear that we want to maintain that high bar in the future.
The amendment highlights the breadth of opportunities offered by participation in a higher education course. I welcome the idea behind it, but I do not believe such a prescription is desirable in legislation. There are many examples of extracurricular activities and experiences offered by higher education institutions, such as sporting groups, the arts, associations and exchange opportunities, and many providers play an important role in their local communities in that respect. I agree that in many cases these activities contribute greatly to a student’s learning and personal and professional development and can be as much a part of their education as traditional lectures. When a student is deciding where to study, they are making a decision based on many factors, for example, the qualification they will receive, the cultural and social opportunities, the student organisations they could join and what support is available to them. One size does not fit all and student populations vary hugely in their requirements, as we discussed before. As independent and autonomous organisations, higher education institutions are themselves best placed to decide what experiences they may offer to students and what relationships they have with other local organisations, without prescription from central Government.
Paul Blomfield
In response to an earlier remark I made, the Minister said that he expected all universities to provide services to support students’ mental health. Does he stand by that remark in this context?
Joseph Johnson
That is their duty under the Equality Act 2010—they have to ensure that students are not discriminated against if they have mental health issues and so on—and also their duty of care. That is an important part of what universities do in supporting students, who they have autonomously admitted, through their studies. Having taken that decision, it is important that universities make sure that those students have the academic and the counselling support to enable them to get through their courses of study.
As now, we intend to set out in guidance the detailed criteria and processes for gaining university title, and we plan to consult on the detail before publication. The OFS will then make decisions having regard to that guidance. I therefore ask the hon. Lady to withdraw the amendment.
Dr Blackman-Woods
I have listened carefully to the Minister’s comments. Allowing the possibility of university title being granted to a single-course institution with no supporting services or extracurricular activity is not setting a high bar; it is setting an extremely low bar. The reality of clause 51 is that an institution—a single-course institution—could become a university with no additional services or offers whatever to students.
I heard what the Minister said about guidance and I assume that that guidance will address the specific concerns that I raised previously in Committee and this afternoon. On the basis of the fact that the Minister will produce guidance and, presumably, will let us have some idea of what is going to be in that guidance before we finish our deliberations on the Bill, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 51 ordered to stand part of the Bill.
Clauses 52 to 55 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(David Evennett.)
Higher Education and Research Bill (Ninth sitting)
Tuesday 11th October 2016
(7 years, 8 months ago)
Public Bill CommitteesRead Full debate Higher Education and Research Act 2017 View all Higher Education and Research Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 11 October 2016 - (11 Oct 2016)
The Committee divided: - Ayes: 7 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 11 / Noes: 5 - Question accordingly agreed to.
The Chair
With this it will be convenient to discuss amendment 199, in clause 25, page 15, line 17, at end insert?
‘(3) No arrangements for a scheme shall be made under subsection (1) unless a draft of the scheme has been laid before and approved by a resolution of both Houses of Parliament.”
This amendment and amendment 198 would ensure TEF measures were subject to scrutiny by, and approval of, both Houses of Parliament.
The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
It is a pleasure to serve under your chairmanship, Mr Chope—unexpectedly, as you take the place of Sir Edward and the other standing Chair of the Committee. I thank hon. Members for tabling this amendment. I am sorry that the hon. Member for Blackpool South was not here to move it, but his colleague did so superbly and briefly, which is the sort of taciturn approach to moving amendments that we welcome and would like to see followed throughout the rest of today’s proceedings. I do not, however, believe that the amendment is necessary to achieve its objectives or, indeed, proportionate, given the protections we have put in the Bill. I therefore ask the hon. Gentleman to withdraw it.
Gordon Marsden (Blackpool South) (Lab)
My apologies for my lateness; Members will not be surprised to hear that it was a result of Network Rail.
I do not believe that the Government’s record so far in saying there are sufficient safeguards gives us a great deal of confidence. The truth of the matter is that there are still major issues with the teaching excellence framework that cannot simply be resolved down the Committee corridor at some point. They need proper and full scrutiny on the Floor of the House of Commons, which is why we tabled these amendments. In a spirit of good will, and because my colleague moved the amendment in my place, I will not detain the Committee further. I do, however, note that we view the whole way in which the TEF is being handled in administrative and governmental terms as very fishy. We will continue to probe the Minister on it, so his hopes of a swift finish to the day might be dashed.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
I would like to say a few words about the TEF, rather than the amendments as such. I want to put on record my concern about the way in which people are being swept along, believing that the TEF is particularly meaningful. I had a discussion a few days ago with Professor Jack Dowie, who, as some Members may know, is considered somewhat of a world expert in judgment and decision making. As he put it to me,
“Some instruments measure something that exists independently, like a tumour, and the items in the instrument, like symptoms and signs, are used to reflect the construct”,
which is doing something meaningful.
“However, some instruments claim to measure something that does not exist independently, and university quality is one such thing.”
Two Middlesex University lecturers, Dr Maeve Hosier and Ashley Hoolash, have kindly sent me for review an academic article that has not yet been published. They have just completed a study of the six major league table ranking systems, which are based on different instruments of assessment, and have quite understandably found that they all come up with completely different rankings of universities dependent upon the instruments used. This is just a caution that people should not read too much into how meaningful these types of system actually are.
Jeff Smith (Manchester, Withington) (Lab)
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Joseph Johnson
I beg to move amendment 37, in clause 25, page 15, line 14, after “ratings” insert “—
(a) ”.
This amendment is linked to amendment 40.
The Chair
With this it will be convenient to discuss Government amendments 40, 41, 108, 109, 112 and 113.
Joseph Johnson
I am delighted to move these amendments. One of the strengths of our higher education sector is the way it operates across the whole UK. Though education is devolved, that has not stopped us working together for the benefit of all. This is no different for the TEF. My officials and I are working closely with our counterparts in Scotland, Wales and Northern Ireland, and we have set out in our White Paper that that has led to higher education providers across the whole UK being able to participate in the first year of the TEF. We have had positive discussions with the HE sectors themselves to ensure that year 2 of the TEF takes account of the different approaches in each nation and ensures that every provider is assessed on a level playing field. I am delighted that all three of the devolved Administrations have now confirmed that their providers will be allowed to take part in year 2 of the TEF if they so wish.
As Alastair Sim of Universities Scotland said, when giving evidence to the Committee,
“the engagement with the Department for Education has been constructive and creative about how the metrics of the TEF might be configured in ways that take account of Scottish interests.” —[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 67, Q103.]
These amendments allow that kind of collaboration to continue so the OFS can, subject to the consent of the relevant devolved Government, receive applications for TEF assessments from providers across the UK. Amendments 37, 40, 112 and 113 will enable Ministers in the devolved Governments to decide whether to opt in or out of the TEF scheme. Even if a devolved Minister gives their consent, participation in TEF will remain voluntary for individual providers, as it is in England.
I am keen to address the points made in the evidence sessions about the need for the TEF to recognise the distinctive approaches to higher education across the UK, and we have ensured that the devolved nations are fully represented in the governance structure for the TEF going forward. Amendments 41 and 108 ensure we are using the Scottish, Welsh and Northern Irish definitions of “higher education course” for the purposes of the TEF. Amendment 109 amends clause 80 so that, where Welsh Ministers exercise their existing powers to set maximum fee loans in Wales, they can do so by reference to matters outside of regulations. That could be the list of providers and their relevant tuition fee limits, based on their TEF ratings, which will be published by the OFS.
Carol Monaghan (Glasgow North West) (SNP)
I will raise some of the issues and concerns that Scottish institutions have with the TEF. The Minister has rightly said that Scottish institutions now have the ability to participate in the TEF, but Scottish institutions already have their own quality assurance under the enhancement-led institutional review. That is a collaborative quality assessment that looks at improving standards across the board, whereas the metrics within the TEF at the moment seem to lower standards somewhat. The problem that Scottish institutes have if they do not participate in the TEF is that when they compete in the international market students can look at somewhere with a high TEF rating and compare it with Scottish universities that might not have participated. If some do and some do not, there is a two-tier process.
We would look for some benchmarking of Scotland’s quality assurance against the TEF, so that institutions that choose to participate in the TEF do not disadvantage others or do not have to undergo a double level of quality assurance. We ask that the enhancement-led institutional review should be recognised as meeting the requirements of TEF year 1, to avoid any detriment to Scottish higher education.
Joseph Johnson
Let me reiterate that these amendments provide enabling powers for the OFS to run a TEF scheme that includes higher education providers across the UK subject, as I said, to the consent of Ministers in those Administrations. I am delighted that my devolved counterparts have agreed that they are content to allow their providers to participate in TEF in year 2. We welcome the commitment of Scottish Ministers to allow their universities—their higher education institutions—to participate if they wish to do so. We certainly take on board all the points made by the hon. Lady.
Amendment 37 agreed to.
Joseph Johnson
I beg to move amendment 38, in clause 25, page 15, line 15, after “and” insert “the”.
This amendment ensures that the OfS can assess all of the standards that apply to the higher education provided by a provider and ensures consistency with the language in clause 23(1).
The Chair
With this it will be convenient to discuss Government amendments 39, 44, 46 to 48, 51, 54 to 58, 65 and 66.
Joseph Johnson
I turn now to a relatively large group of minor and technical amendments, which will provide consistency of language and drafting across the Bill as well as additional clarity on specific points.
I do not wish to spend a lot of the Committee’s time on these, as they are purely technical amendments that do not change the core policy. All of them, except for amendments 56 and 65, ensure the language is consistent across clauses 23, 25, 26 and schedule 4.
Amendment 56 clarifies that when the Secretary of State removes a quality body’s designation, she must set out all of the reasons for the decision. Amendment 65 clarifies that “graduate”, for the purposes of schedule 4, means a graduate of a higher education course provided in England. As the designated body will be undertaking functions only in England, it was important to clarify that we were talking only about graduates of a course provided in England.
Amendment 38 agreed to.
Amendments made: 39, in clause 25, page 15, line 15, leave out second “the”.
This amendment ensures that the language of clause 25 is consistent with clause 23 and clarifies that a scheme can cover some or all of the education provided by a provider.
Amendment 40, in clause 25, page 15, line 16, after “rating” insert “, and
(a) to higher education providers in Wales, Scotland or Northern Ireland, in respect of whom the appropriate consent is given, regarding the quality of, and the standards applied to, higher education that they provide where they apply for such a rating.
‘(1A) “The appropriate consent” means—
(a) in the case of a higher education provider in Wales, the consent of the Welsh Ministers to the application of subsection (1) to the provider;
(b) in the case of a higher education provider in Scotland, the consent of the Scottish Ministers to the application of subsection (1) to the provider;
(c) in the case of a higher education provider in Northern Ireland, the consent of the Department for the Economy in Northern Ireland to the application of subsection (1) to the provider.
(1B) Such consent—
(a) may be given either generally in respect of all providers or in respect of providers of a particular description or named providers,
(b) is given by notifying the Chair of the OfS, and
(c) is valid until it is revoked by notifying the Chair.
(1C) For the purposes of applying the definition of “higher education provider” in section 75(1) to subsections (1)(b) and (1A), the reference to “higher education” in that definition—
(a) in the case of an institution in Wales, has the meaning given in section 75(1);
(b) in the case of an institution in Scotland, has the same meaning as in section 38 of the Further and Higher Education (Scotland) Act 1992;
(c) in the case of an institution in Northern Ireland, has the same meaning as in Article 2(2) of the Further Education (Northern Ireland) Order 1997 (S.I. 1997/1772 (N.I. 15));
and the reference to “higher education” in subsection (1)(b) is to be read accordingly.”
This amendment and amendment 41 extend the power of the OfS to make arrangements under clause 25 for a scheme for giving ratings to English higher education providers regarding the quality of, and the standards applied to, higher education that they provide so as to also include Welsh, Scottish and Northern Irish higher education providers where the relevant devolved administration consents and the provider applies for a rating. Amendments 108, 112 and 113 are related amendments.
Amendment 41, in clause 25, page 15, line 17, at end insert—
‘(3) For the purposes of applying that definition of “standards” to subsection (1)(b), the reference to a “higher education course” in that definition—
(a) in the case of an institution in Wales, has the meaning given in section75(1);
(b) in the case of an institution in Scotland, means a course falling within section 38 of the Further and Higher Education (Scotland) Act 1992;
(c) in the case of an institution in Northern Ireland, means a course of any description mentioned in Schedule 1 to the Further Education (Northern Ireland) Order 1997 (S.I. 1997/1772 (N.I. 15)).”—(Joseph Johnson.)
See the explanatory statement for amendment 40.
Paul Blomfield (Sheffield Central) (Lab)
I beg to move amendment 286, in clause 25, page 15, line 17, at end insert—
‘(3) In making arrangements under subsection (1), the OfS must, after a period of consultation, make—
(a) an assessment of the evidence that any proposed metric for assessing teaching quality is in fact linked to teaching quality; and
(b) an assessment of potential unintended consequences which could arise from an institution seeking to optimise its score on each metric, with proposals on how these risks can best be mitigated.
(4) The assessment under subsection (3) must be made public.”
This amendment would require an assessment of the evidence of the reliability of the TEF metrics to be made and for the assessment to be published.
It is a pleasure to serve under your chairmanship, Mr Chope. I hope this is a proposal on which we can find agreement across the Committee. With this amendment, I am seeking to reflect the recommendation made unanimously by the Select Committee on Business, Innovation and Skills, when we looked at teaching quality in our recent report. There were some areas where we robustly did not agree, but this is a matter on which we did, and I am sure that if I deviate from that consensus, the hon. Member for Cannock Chase will pick me up on it. Although we fully endorsed the Government’s focus on teaching excellence, in the light of evidence we heard we were concerned about getting the arrangements right. The metrics being proposed were not, as the Government recognised, measures of teaching quality; they were rough proxies.
The three key metrics are employment, retention and the national student survey. We discussed employment briefly under earlier clauses. In all the evidence we received, and certainly across the Committee, it was recognised that employment destination, although important, is not a satisfactory measure of teaching quality. That is an important point, and it is an issue that the Government are concerned about in relation to their work on social mobility and creating opportunities, on which the Prime Minister has put great emphasis. If someone comes from the right school and the right family and goes to the right Oxbridge college, it does not matter how well they are taught; they will probably end up in a good job; that is widely recognised. Employment destination is not a measure of teaching quality. The Select Committee were concerned that that is a flawed metric for measuring teaching excellence. That is not controversial; it is something on which we find cross-party agreement.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
My hon. Friend is making a powerful case. Even allowing for benchmarking, universities experience very different local labour markets that students can easily move into. Does he agree that that has not been sufficiently taken on board by the Minister?
Paul Blomfield
My hon. Friend highlights a point made to our Select Committee: a simple, crude focus on people’s salary and employment outcomes fails to recognise the enormous difference between regions. As someone who represents a Sheffield constituency and both Sheffield universities, I am very conscious of that, and it is a point that has been made powerfully to me. We felt as a Select Committee that the employment metric was flawed.
On the retention metric, although the Committee celebrated the Government’s intention to focus on retention, in the work on access and widening participation the focus should be not simply on getting people to university, but on ensuring that they succeed there and have good outcomes after graduation. The focus on retention is welcome, but we were not convinced that it was right as a metric for measuring teaching quality. We have seen in school league tables and how we measure schools’ performance that such a focus can lead to unintended and perverse outcomes. The easiest way to up a retention score would be to ensure that the intake of students did not include too many people who would struggle to succeed. That clearly is not what the Government want, and it is not what any of us want.
Dr Blackman-Woods
That runs completely counter to what the Government say their social mobility agenda is, because it will make universities less likely to take people who they think are higher risk—mature students, perhaps, or students who have a range of problems. That would be a really unfortunate consequence of the way the legislation is drafted.
Paul Blomfield
Our Select Committee was very focused on the Government’s welcome and ambitious targets to improve the representation of those from less advantaged backgrounds in higher education, but my hon. Friend is absolutely right to say that this metric could lead to exactly those unintended and perverse outcomes.
Carol Monaghan
The hon. Gentleman is making a lot of sense. There is also a danger that university courses that are tougher or potentially tougher could be dropped because they would have student leakage. I am talking particularly about science, technology engineering and maths subjects, such as physics, where there are great shortages. We should be protecting against anything that causes losses in those areas.
Paul Blomfield
I thank the hon. Lady for raising another dimension of precisely the problem that we were concerned about: that although well intentioned, the retention metric could lead to gaming, unintended consequences, and outcomes that run counter to the Government’s own objectives.
Amanda Milling (Cannock Chase) (Con)
We discussed this issue at great length in the Select Committee. The hon. Gentleman is going through each of the metrics individually, but actually they make up a basket of metrics and they need to be looked at as such. Does he agree that one thing that came out of the Select Committee was that we have these quantitative metrics, but there are also the qualitative metrics? We will be looking at things more in the round. Although there are the metrics that the hon. Gentleman is going through individually, they need to be looked at as a basket and as ones that will be developing over time. Learning gain was another metric that we considered. The sector should be engaging in this process.
Paul Blomfield
The hon. Lady knows that I completely agree that the metrics should be developed over time. We have heard on many occasions the teaching excellence framework compared with the research excellence framework. Getting the REF right has taken several years. My concern—shared by the Select Committee, I think—is that we should not blunder into a scheme that will measure universities inaccurately when it is such an important flagship for the Government’s policies. I also agree that there is a basket of metrics, but the Government’s focus in all their publications and all the commentary has been on just three. I was simply highlighting the concerns that I think she will agree the Select Committee had about those three, which are at the heart of the basket.
The third metric, of course, is the national student survey. I will say at the outset that I think the NSS has been an extremely positive tool to engage universities in focusing on teaching quality, and I think it is fine to build on it in many ways. For example, universities’ consistently poor rating for assessment and feedback in the NSS has led to real change in the relationship between teachers and students. The NSS itself is quite positive, but in the Committee we heard clearly that there is, as I think everyone in the room would recognise, a difference between measuring general satisfaction and measuring teaching quality. There is a difference between the satisfaction of students and knowing confidently that they are well taught.
Carol Monaghan
I thank the hon. Gentleman for giving way again. As a former teacher, I know well that what comes back in such surveys can often be personality driven and has no bearing on the quality of teaching. We have to look at student satisfaction with a degree of caution.
Paul Blomfield
The hon. Lady is right. As we all know from our university days and school days, there can be a huge difference between enjoying a class—having a great time with a particular teacher and liking that person enormously—and being well taught.
Roger Mullin
To give one example, when I was teaching at Stirling University about 30 years ago, my feedback from one student said “Nice eyes and a gorgeous bum.” [Laughter.]
Paul Blomfield
Even from my position sitting in this Committee Room, I would not wish to assess that evaluation, but I understand why the hon. Gentleman might want to share that with the Committee. It highlights in a particularly graphic way how we know the NSS does not provide a satisfactory metric in that respect. However, as the Government said, these are proxies.
The amendment would ensure, as the Select Committee recommended, that the office for students has a responsibility, in overseeing the metrics, to ensure that they can confidently and accurately measure teaching quality and nothing else—not the personal features of the hon. Member for Kirkcaldy and Cowdenbeath, not employment outcomes based on family background and school connections, but teaching quality. On that we are all agreed, and I therefore hope the Government will feel able to accept the amendment.
Joseph Johnson
I thank the hon. Gentleman for tabling the amendment on a subject that he and I have discussed on many occasions over the last year or so. I am sure we will continue to do so for some time to come.
The summary of our position is that excellent teaching can occur in many forms. There is no one-size-fits-all definition of teaching excellence, but great teaching, defined broadly, increases the likelihood of good outcomes, and metrics are crucial to measuring those outcomes. Chris Husbands, the TEF chair and vice-chancellor of Sheffield Hallam, has noted that the TEF’s approach is realistic about the difficulty of assessing teaching quality. He wrote:
“It does not pretend to be a direct audit of the quality of teaching. Instead, it uses a range of evidence to construct a framework within which to make an assessment—looking at a range of data on teaching quality, learning environments and student outcomes.”
In developing the metrics, we and the Higher Education Funding Council for England have listened carefully to the consultation feedback. We have used a set of criteria to decide which metrics to use: that they must be robust, valid, comprehensive, credible and current. We wanted to use tried and tested data sets that are already widely established in the sector, not least to avoid the need to collect new data and impose a burden on institutions. There is currently a limited set of metrics that meet those criteria, but those metrics do allow for differentiation across providers. For example, on retention and student outcomes, many providers are well above or below the current sector-accepted benchmark. Quality teaching clearly makes a difference. To quote Chris Husbands again, his
“sense is that as the system matures, the metrics will also mature, but it is difficult to argue that teaching quality, learning environment and student outcomes are not the right places to look to make an assessment.”
We consulted extensively on the metrics as part of the year 2 technical consultation and made further improvements to the way the metrics were handled. The sector has welcomed our changes. For example, on the publication of the TEF year 2 documentation, Maddalaine Ansell, the chief executive of University Alliance, said:
“There are decisions here that we strongly welcome, such as a broader approach to benchmarking…and a more granular system for looking at performance differences… We remain confident that we can work with government to shape the TEF so it works well as it develops.”
Let me turn to some of the specific points that the hon. Member for Sheffield Central and other hon. Members made on the metrics proposed and on widening participation. Essentially, the question was, “Won’t the TEF metrics and the TEF process itself encourage providers not to take people from disadvantaged groups?” The answer to that question is clearly no. Providers will be required to demonstrate their commitment to widening participation as a precondition of taking part in the TEF. Assessors will consider how the provider performs across all modes of delivery and its effectiveness at meeting the needs of students from different backgrounds. The assessment process will, however, explicitly look at the extent to which the provider achieves positive outcomes for disadvantaged groups, and the metrics will be benchmarked to prevent the TEF being gamed and to ensure that no institution is penalised for having a large cohort of disadvantaged students.
It is worthwhile reflecting on what a current vice-chancellor says about this aspect of the TEF in relation to widening participation. Edward Peck, the vice-chancellor of Nottingham Trent, recently wrote:
“Emphasising widening access, selecting these metrics, and connecting TEF and fee flexibility will prompt, if pursued rigorously, ever more serious consideration within universities of the ways in which young people from poorer backgrounds get in, are supported in staying, and get decent jobs when they leave. These are just the conversations that we ought to be having in universities more often and with greater results.”
Dr Blackman-Woods
I am sure it is always possible to find one vice-chancellor who might agree with the Government’s approach, but the Minister must have had representations from a range of universities, including the Open University, that are really concerned about the weight that is being attached to things like retention. I know they have raised that with Committee members; I would be astonished if they had not raised it with the Minister.
Joseph Johnson
I think the hon. Lady is trying to present the TEF metric as being in conflict with widening participation. It is not; it is supportive of it. It is a precondition of participating in the TEF that institutions need an access agreement, and that sets an increasingly high bar for their commitment to widening participation. Research by the Social Market Foundation, for example, has found that there is no link between increased widening participation and worsening continuation rates. The hon. Lady and her colleague are setting up an Aunt Sally or a straw man; there is no evidence of the link that they are asking the Committee to consider.
While non-continuation rates are higher among the most disadvantaged students, some institutions are clearly successful at keeping those low as well. This cannot just be because some institutions are selective and have enrolled the most qualified and motivated students from disadvantaged groups. The Social Market Foundation research points to a number of institutions, with different profiles, that are making a success of the student experience. They include City University, St Mary’s Twickenham, Aston, Bishop Grosseteste, Lincoln and Kingston, which have among the highest retention rates of all institutions for the most disadvantaged students.
It is also worth hon. Members listening to what Les Ebdon, the director of fair access, had to say on this matter, because he probably knows more about it than anybody in the business. To quote his response to the TEF year 2 publication:
“The minister has made it clear that he sees fair access as being integral to the TEF, and I welcome the publication of the year 2 specification. The links to fair access have been further strengthened, following clear support from the sector in their consultation responses. It is especially pleasing to see specific measures on positive outcomes for disadvantaged students, and clear instructions to TEF panellists that they should consider disadvantaged students at every stage.”
Paul Blomfield
I want to raise a slightly different point on retention. The Minister will be aware of the recent publication by the Higher Education Policy Institute of a report produced by Poppy Brown that discusses the crisis in mental health in our universities, the growing concern across the sector and the investment of some institutions in, and different responses to, the challenge. What are his thoughts on the effect that growing crisis in mental health might have on achieving successful outcomes in retention and what support universities might need in doing that?
Joseph Johnson
I thank the hon. Gentleman for raising that subject. I commend the vice-chancellor of Buckingham University, Anthony Seldon, for leading a campaign to raise awareness of this important issue across the HE sector. It is vital that universities take full responsibility for the wellbeing of their students, towards whom they have a duty of care. Ensuring that students are supported throughout their studies, including during difficult periods relating to mental health or other issues that cause them to need counselling services, is an important part of a university’s overall pastoral role.
The hon. Member for City of Durham asked about regional employment variations across the system and how they will be taken into consideration in the TEF. That is an important point to which the Department has been giving considerable thought in developing the TEF. The TEF assessors will be able to take local employment into account when they assess providers’ qualitative submissions. If providers believe it is relevant to provide regional employment maps alongside their data on outcomes through the destination of leavers from higher education survey, the panel of assessors will be ready to take any such points into consideration. Of course, it is worth bearing in mind that students are mobile to a great extent and that we live in a national labour market. Regional employment maps will not be the only factor that assessors take into account, but they will take them into account in making their broad, rounded assessment of a university’s contribution to good outcomes.
In our consultation on the TEF metrics we received strong support for our proposals, with more than 70% of respondents welcoming our approach to contextualising data and the provider submissions. We will continue to review the metrics in use, and where there is a strong case to do so, we will add new metrics to future rounds of the TEF. We have taken and will continue to take a reasoned approach to the metrics. We have thought carefully, consulted widely and commissioned expert advice. Given the co-regulatory approach I have described, we expect the OFS to take a similar approach in future. I therefore ask the hon. Member for Sheffield Central to withdraw his amendment.
Paul Blomfield
I thank the Minister for his remarks. He is right to say that we have discussed this issue at length on many occasions, and no doubt we will continue to do so. I have also discussed it at length with Chris Husbands, whom the Minister cites extensively.
I do not want to take up the Committee’s time by critiquing the Minister’s remarks. He said much with which I agree, although I disagree with some points. I simply ask that we focus on what the amendment says, because I do not think it contradicts anything that he has just said. It simply says that
“the OfS must, after a period of consultation, make…an assessment of the evidence that any proposed metric for assessing teaching quality is in fact linked to teaching quality”.
If he would like to say where he disagrees with the idea that metrics on teaching quality should demonstrate teaching quality, I would be happy to take an intervention. In the absence of that, I feel that I should press the amendment to a vote.
Question put, That the amendment be made.
Gordon Marsden
I begin by apologising for not having said earlier that it is a great pleasure to serve under your chairmanship, Mr Chope. I needed to get my breath back. Perhaps I need to get my breath back even more now, given the breathtaking complacency the Minister has just demonstrated towards my colleague’s amendment.
That amendment, blocked by the full weight of the silent Government Back Benchers, would have done nothing but put into effect what the Government claim they wish to do with the TEF. Let me take the Committee to the wording of the clause, because words matter and the way in which clauses are drafted matters. It is remarkable that the teaching excellence framework clause is literally the clause that dare not speak its name. It states:
“The OfS may make arrangements”—
it might just think about it when it is at it, sometime—
“for a scheme to give ratings to English higher education providers regarding the quality of, and standards applied to, the higher education that they provide where they apply for such a rating”.
The Government are signalling right in the middle of the clause that they do not want debate on the Floor of the House or in any meaningful measure about the nature of the teaching excellence framework. Persistently, in the Bill and in their comments, the Government have made that very clear.
During the recess, on 29 September, the Government published their ratings plans for year 2. You were not in the Chair, Mr Chope, but before the conference recess, Opposition Members complained that documents that should have been made available to the Committee were not made available proactively, but simply put on the Government’s website. The Minister responded very positively on that occasion and various papers have been submitted to the Committee, and we have had papers for part 3. However, I have checked with my colleagues and I have to say that their ability to get hold of the information depended on going to the website and reading the papers from that day, because this was brought out during the recess.
If I sound sceptical and sometimes rather cynical about the Minister’s assurances, it is because at every stage and every turn so far, the Government have done their best to hide the TEF’s merits under a bushel, as far as parliamentary process and scrutiny are concerned. The wording that has been chosen is interesting because it is almost as if the Minister and the people who drafted the clause know that they are trying to dodge the scrutiny of Parliament and therefore the words that dare not be spoken—teaching excellence framework—are not included in the clause.
We are not going to make a formal complaint that the paper was not circulated to all members of the Committee, but I hope the Minister will bear in mind his good intentions before the conference recess and ensure that, in the limited time left to us, when new documents are published that are germane to the Committee, they are circulated to all members of the Committee and not simply put on an obscure part of the website where people have to look for them.
I think it is fair to say that the announcement on 29 September essentially gave universities and higher education providers an extra year to try to get their situation right before the details of the TEF came into effect in terms of properly analysing and judging the merits or demerits of universities. I do not want the Minister to stand up and say, “Oh, Labour don’t believe in the TEF,” as he did before the conference recess. I emphasise that we do believe in the importance of teaching excellence; we do believe in the importance of teaching excellence framework. What we are concerned about is that the merits of that teaching excellence framework need to be properly and fully explored before it becomes tainted by being regarded simply as an automatic mechanism to increase fees year on year.
This is highly germane, Mr Chope, to the approach the Government have chosen to adopt. They responded to various providers’ comments on the initial draft that the intended wording was not sensible. The Government came up with a new formula: in year 2, HE providers would be judged according to three categories—bronze, silver and gold. Perhaps, as one or two commentators said, the heady achievements of our Olympic and Paralympic teams in Rio swayed some bored official in an office who was trying to think up new phrases to describe this thing that had been comprehensively criticised for its terminology by the university sector. I am not particularly opposed to the idea of gold, silver and bronze in its own right, but the fact of the matter is, as a number of commentators have noted, it is selling a pig in a poke.
I refer the Minister to an interesting article that appeared on the Wonkhe website, which I am sure he is familiar with as he has appeared on it from time to time. The article went into some detail—probably more detail, Mr Chope, than you or I would necessarily want to do other than for the purposes of scrutinising the Bill—about the associated papers that went with the Bill. I will quote from the article because it is relevant to the way in which the Government are getting the whole process of the TEF wrong. In the article by Mr Bagshaw, he writes:
“In the government’s response to the consultation it is rightly noted that the original judgements”—
the original judgments were “meet expectations”, “excellence” and “outstanding”—
“were hopelessly indistinguishable…. Perhaps this is a case of grade deflation… Passing one’s QAA review was supposed to be something of a ‘gold standard’ in international higher education. Yet just meeting that gold standard will now only merit a lowly Bronze award, which virtually everyone will receive by default—at least.
The medal system might satisfy an ‘all must have prizes’ mentality, but it risks forcing what is actually a fine-grained judgement into three uneasy buckets: will the sector really bear the idea that…half of its ‘excellence’ is merely Silver? That’s the anticipated distribution, with 20% Bronze, 50-60% Silver and 20-30% Gold.”
The Lord Commissioner of Her Majesty's Treasury (David Evennett)
An expert!
Gordon Marsden
Not necessarily an expert, but someone who might have actually read all the details of what has come about. If the Government Whip wants to do his usual noises off, I will refer him to a number of other people that he might have heard of.
That is one element of what has been said. Despite what the Minister has tried to make out, it is not the case that all universities are throwing their hats up in the air at what has been arranged for TEF year 2. Vice-chancellor and chair of MillionPlus Dave Phoenix said in the context of the announcement about part 2:
“The decision to include additional benchmarking criteria such as socio-economic background and disability is a step in the right direction.”
However, we remain concerned about the timetable for implementation and the link with fees. The chief executive of the University Alliance mission group said that
“the merits of a highly skilled employment metric and the medal-style ratings system will need to be tested. The trial year will be vital to getting this right.”
However, while they are getting it right—or otherwise—in the second year, they will all be allowed to increase their tuition fees by the rate of inflation or whatever mechanism the Government decide they need to employ at that time. I thought that one of the principles of the Olympics was to go “higher, faster and stronger” but it seems to me that the result of the way in which the Government has shoehorned this TEF and linked it in is that the fees are the only thing that will be going higher.
Knowing what is going on in the financial markets today and given Mervyn King’s remarks about rises in the rate of inflation, it is a reasonable guesstimate that fees may well be 3.5% or even 4.5% higher by the time year 2 starts. Nobody knows—not me, not the Minister—but the Government are cheerfully imposing this linkage without any extra demonstration of quality of the sort that they say is essential to the process of the teaching excellence framework. How is that a good recommendation for the TEF? To the criticisms that were levelled when the announcement was made, the Government spokesperson replied:
“Universities will not be able to increase their fees unless they pass rigorous quality standards.”
I have already made the point that these are not going to be “rigorous quality standards” in year 2; at best, they will be a move in that direction. They are certainly not going to be quality standards if a provider can achieve a bronze standard and apparently be regarded as not entirely satisfactory, and still be able to apply for the full whack. If the Minister has evidence to the contrary, I look forward to hearing it.
That will do nothing at all to satisfy the concerns of institutions, the concerns and fears of students who are already laden with huge debt, or the wishes and concerns of all those in this place who believe that essential issues about the fee increases and their linkage to the TEF should be properly debated in this House. If the Minister follows the form he took before the summer recess—if he is still in place—the announcement will be smuggled out with about 20 others at the end of term, when it could have been discussed two days earlier, during the Bill’s consideration. That is one reason why we are so sceptical about how the Minister and the Government are proceeding.
Ben Howlett (Bath) (Con)
The hon. Gentleman is keen on quoting certain people, so let me quote someone who is an expert on quality assurance and see what he thinks. The chief executive of the Quality Assurance Agency for Higher Education, who I consider to be an expert in the area, has said:
“The government has struck a balance between encouraging competition and rigorous protection of UK higher education’s world-class reputation”.
There is clear evidence that the Bill produces high-quality, rigorous quality assurance. What I hear from the hon. Gentleman is completely contrary to what the experts say. Listen to the experts.
Gordon Marsden
The hon. Gentleman no doubt considers himself a bit of an expert, given his co-vice-chairmanship of the all-party group on students, which my hon. Friend the Member for Sheffield Central chairs. I hear what the gentleman from the QAA said. Of course, the QAA, as well as the Higher Education Funding Council for England and various other organisations, will be under the sword of Damocles over the next two to three years as the Bill goes through, so perhaps it is not surprising that there might be some circumspection about commenting on the situation. The fact of the matter is that no one knows. No one knows because the detailed basis on which the TEF will eventually be implemented is still not there. I will come on later to why the Government seem to be missing several tricks in not moving further down that road at the moment, but that is the case right now.
What we know is that the evidence is piling up about year-on-year tuition fee increases that are not based on merit. There might be arguments for increasing tuition fees, but the Government are setting out an automatic mechanism for a two-year period that will significantly and substantially increase fees with no impact assessments and no reference to the quality of the university degrees that are being graded, in a rather trivial PR fashion, as gold, silver and bronze. That is the reality, and the Minister cannot escape from it.
On some of the tuition fee issues and on how the Bill would set in stone that the fee increases will be linked to the TEF, allowing all the work to be done in the OFS away from the daily scrutiny of Parliament, documents such as “Does Cost Matter?”, produced by the National Education Opportunities Network, found that if fees increased, young people who were eligible for free school meals would be the most likely to reconsider going to university, followed by non-white young people.
We have a lot of evidence and a lot of suggestions that that sort of process will have a double-whammy effect. First, it will do nothing for the reputation of the universities in those two years. They will not be able to demonstrate their reputation over and above that which is already there because the metrics for the TEF in the two years are so crude. What it will do is empower them to increase their fees, and we know how various universities chose to interpret what the Minister did in the summer by increasing fees for current students, as well as for future students. That will be a serious and difficult issue.
I am sorry to tell the Chief Whip that I cannot name the next person I wish to quote because he wishes to write anonymously—[Laughter.] That is because he is a young academic who is too financially insecure to risk rocking the boat over the TEF structure. Not the Chief Whip—I promoted him—but the Government Whip will perhaps store his guffaws and allow me to quote from a piece about the TEF in The Guardian on 23 September.
“There was—at least in my mind—huge potential for the Tef to recognise the valuable job that teaching-intensive universities do, and encourage sound pedagogical practice… Rather than doing any of these things, the Tef will be based on three crude metrics: student retention and progression; the number of students in paid employment after graduation; and scores on selected items of the National Student Survey… Methodologically, the Tef is flawed. For instance, students’ assessments of individual teachers show persistent gender bias, and the item on assessment and feedback hardly ever changes, whatever the context. It’s also flawed conceptually: ‘satisfaction’ is not the same as ‘learning’, as any psychology text will tell you.”
That was something the hon. Member for Cannock Chase’s colleague amusingly commented on earlier. The writer continues:
“The Tef isn’t concerned with the art and practice of teaching. It does not set out to capture and promote those practices… I don’t believe that universities have to resign themselves to the Tef structure… But I can’t speak out: as a young academic, I’m far too financially insecure to risk rocking the boat.”
Let me quote somebody who is prepared and able to put her head above the parapet: a senior professor of psychology at Oxford, Dorothy Bishop.
“The report shows that while the costs of TEF to the higher education sector…are estimated at £20 million, the direct benefits will come to £1,146 million, giving a net benefit of £1,126 million.”
She shows clearly that crucial data from statistical modelling show that the
“TEF generates money for institutions that get a good rating because it allows them to increase tuition fees in line with inflation. Institutions that don’t participate in the TEF or those that fail to get a good enough rating will not be able to exceed the current £9,000 a year fee, and so in real terms their income will decline over time.”
Joseph Johnson
Will the hon. Gentleman state clearly whether he opposes allowing universities to increase their fees in line with inflation? Does he want a real-terms reduction in universities’ revenues from tuition fees? Currently, the £9,000 is worth £8,500 in the money of 2012; it will be worth £8,000 by the end of this Parliament. Does he want to starve our universities of resources?
Gordon Marsden
I point out respectfully to the Minister that he is the person making the decisions. What I am pointing out is that the TEF is being undermined as a concept by the cynical linking of fees on an “as you were” basis over a two-year period. That is the issue. There are all sorts of other issues relating to the merits and demerits of increasing tuition fees that we could discuss, but they are not within the broadest scope of clause 25 and I want to get back to the TEF. If the Minister wants on another occasion to have a lengthy debate about what his Government have done over the past four years for part-time and mature learners by trebling their tuition fees, for example, I would be interested to have that.
Joseph Johnson
Does the hon. Gentleman acknowledge that, since 2009-10, someone from a disadvantaged background is now 36% more likely to go to a university than they were when we came to power? That demonstrates that there is no inherent contradiction between the fee model we have put in place and continuing to make progress on widening participation.
Gordon Marsden
I acknowledge any improvements, however they have come, for people from disadvantaged backgrounds, but there is also the counter-evidence of the figures that I have given. The Minister knows, because he will have been lobbied very hard by the Open University, Birkbeck and others, that there is great concern out there about the whole process. The Government have become complacent. Coming from a relatively low level of increase, the assumption is that they can continue to load debt on to young people. I come back to what I said. If they do that in the context of the teaching excellence framework, they are not helping students, not helping universities and not helping the social mobility that the Minister and I desperately want to see in this country.
In terms of the teaching excellence framework and the proposal as to how the ratings work and how the tuition fee will be linked to it, we should think about the people who advise those who might apply to universities. It was interesting to see the comments of the spokesperson for the large independent schools talking about this in the TES at the end of August. He said:
“What does this tell us about the way the HE sector views itself? Is it becoming fundamentally more commercialised? Are universities simply in a fight for survival”—
he is talking about the rise in fees—
“Or are they just realistically pointing to the cost of what is still, let’s not forget, a world-class sector?”
The Committee will have to excuse my French, as it were, but this is what he says:
“Perhaps, once the python has swallowed the pig, £9,250 has been accepted with a shrug of the shoulders and once-a-year rises are the norm throughout our big HE sector, this little storm will seem irrelevant. But I doubt it. Prospective students…need more than ever to consider their options carefully. For many, a strong UK university degree will still be absolutely the right thing…For others, a free…degree apprenticeship will be a better option.”
He also said others may look abroad and that
“as we take transition from school to university more seriously, it will be interesting to know how many of our graduates decide their degree was not worth the money paid.”
The Minister will have had representations, and rightly so, from the Campaign for British Universities and others on the alternative white paper, which suggests that the Bill should include
“A major opportunity…to review and reduce the burden of red tape facing all UK institutions. Yet this bill proposes additional and wasteful bureaucracy.”
It also makes the point that
“the TEF’s costs will be borne by universities themselves, which will be forced to pass on these costs to students and their families. And, since even the highest TEF scores will only allow fee increases equal to inflation”
that will be a problem. It continues:
“The TEF is also entirely wasteful because there is simply no solid evidence that UK university teaching is of such poor quality that additional regulation is needed.”
I do not entirely share that perspective, but I do share the concerns of those people who are worried that the calibre of their teaching and what they are doing will be significantly affected by the way in which the Government are linking the TEF with increased tuition fees.
The TEF process really ought to have more debate on the Floor of the House. If the Opposition had greater confidence that the Minister and his team were looking at that broader element, we might be less severe in our criticisms. However, it is not just us saying such things. In the Royal Academy of Engineering’s submitted evidence, HERB 41, it welcomed the principle of the TEF and said it has
“long argued for improvements in the balance of teaching”.
However, it also talked about the importance of the
“use of benchmarks for comparison between universities on aspects such as ethnicity and socio-economic deprivation.”
Indeed, those are issues that my hon. Friends have already talked about. It continued:
“The Academy would like to see the TEF move towards a discipline based measure as soon as possible, as a TEF score for an entire university will not provide any meaningful data”.
Therein lies the nub of it. That is an issue on which the Minister has been questioned on several occasions in diverse places and on which, thus far, we have no answers.
It is not unreasonable for people to be concerned about where that is going. It is not unreasonable for us to ask questions, and it is certainly not unreasonable for us to ask them when, yet again, we see the Government trying to shoehorn through a measure without proper scrutiny in the House, linking it in a way that will not be valuable and successful for our students or for our universities.
I remind the Minister that the two-year period the Bill proposes we now commence, of an “as you were” situation that will allow universities to increase their tuition fees to a yet unknown amount, will coincide with a period of huge political uncertainty as we manage to negotiate—or not, given the Government’s current record—a satisfactory outcome to the referendum. We see today in the foreign exchange figures and all sorts of other figures how uncertain that process will be. We know already of the blockages and concerns in terms of research that HE institutions in this country say they will face as a result of Brexit, and we will no doubt return to those issues in part 3 of the Bill. In that situation, maintaining the quality of our universities and the understanding of the quality of UK plc internationally will be crucial.
We only get one chance with these things. If the Government ruin the potential of a teaching excellence framework by linking it inappropriately, by not addressing some of the major issues I have talked about and by producing a situation where students and universities feel unsatisfied and the rest of the outside world wonders what on earth is going on, they will inflict damage on the HE sector in this country—unwantedly—that would take decades to recover from. It is an act of complete and supreme folly at this time to use party political games to avoid having to make decisions about inflation-based rises in tuition fees and to shoehorn that into a framework that was never designed for that process. That is why we are profoundly concerned by clause 25 and the way in which the Minister has responded, and we shall oppose clause stand part.
Joseph Johnson
I am glad that the hon. Gentleman got the chance to make his big speech, having missed the first opportunity at the start of today’s proceedings. He said he was late in arriving due to Network Rail. I pause on that for a second, because on coming into the House of Commons this morning, I overtook him on Great Smith Street. The Committee might be interested to know that he was looking at his mobile phone and walking rather slowly. I was making my way purposefully in order to be here on time, so that I could hear his great speech, and I have finally now got it.
Gordon Marsden
Before we degenerate into discussion of the speed at which the Minister and I proceeded towards Parliament, he might like to note that I came into Victoria station, where the tube station was closed, and therefore was walking not at an unreasonably slow pace but at a reasonable pace. If he would like to return to the issues, instead of trying to score silly points, he might do better.
Joseph Johnson
I think I have made my point. Network Rail is running well under this Government and will continue to do so.
As hon. Members will know, the quality of our higher education system is something we are rightly proud of, but teaching is not always given the recognition it deserves. Teaching quality is of paramount importance. It frames the experience that students have while in higher education and determines their future opportunities and experiences in the workplace. Governments of both parties have recognised that we need to do more to drive up the quality of teaching in our institutions.
Information on teaching quality is not always available or clear to prospective students. According to the Higher Education Policy Institute, just 18% of students feel they have enough information on how their fees are spent, and one third would have chosen a different course if they had known what they do on completing. This information will shape their future, but prospective students are effectively making decisions blind. The teaching excellence framework, which was a Conservative party manifesto commitment, addresses that by setting a scheme for the impartial assessment of different aspects of teaching, including student experience and the job prospects of graduates.
The framework puts teaching on a par with our country’s world-leading research, so that we not only get more students into higher education but ensure it is worth while for them when they get there. I am delighted that the devolved Administrations have confirmed they will allow their providers to take part in the TEF in year 2, meaning that we have one system that operates across the whole UK. The TEF will reward providers that deliver high-quality teaching for all. It will support the propagation of good practice across the sector, and it will address the information gap, giving prospective students more information about the teaching they will receive and the outcomes they are likely to obtain.
Dr Blackman-Woods
I am very interested in what the Minister is saying. A lot of the information underpinning the metrics in the TEF has already been collected. Did the Department do any modelling of what the outcome would be, particularly for the gold-silver-bronze regime? Was there any attempt to measure the reputational damage that could be done to the sector if universities somehow slip inadvertently into the bronze category? Higher education in the UK has an excellent national and international reputation, which could be seriously impeded if the Government are not careful. Has any modelling been carried out?
Joseph Johnson
I thank the hon. Lady for her question. HEFCE has been developing the TEF on behalf of the Department and will have undertaken considerable analysis of how it will operate across the system. We are clear that the ratings are the reflection of the tough quality standards that we expect of our providers. We have a world-class HE system. The ratings will provide recognition on top of the tough quality standards that are imposed on all providers in return for securing entry into the system. I would not agree with any assessment that a bronze rating would be lowly; it would be a significant achievement.
Paul Blomfield
The relationship between the TEF and the financial sustainability of the sector is important, so I want to press the point made by my hon. Friend the Member for City of Durham. The Minister will agree with me on the importance of international students as a source of revenue, and I am sure we were both disappointed by the Home Secretary’s comments last week. What consideration has been given to the impact of the TEF on international student recruitment? If it was part of an international move, that would be fine, but if we are unilaterally choosing to grade our universities and say that some are not as good as others, does the Minister not recognise that that is potentially a significant disincentive, at a time when we are already losing market share?
Joseph Johnson
The TEF, and its link to the inflationary uplift in fees on a conditional basis for those universities demonstrating high-quality teaching, will be important for the financial sustainability of the sector.
Let us start with the financial sustainability of the sector, which was the opening part of the hon. Gentleman’s question. The TEF puts in place conditions that allow us to enable institutions to raise their fees in line with inflation. If we do not do that, as I said earlier in answer to the hon. Member for Blackpool South, the value of fees in real terms will decline to £8,000 per year by the end of this Parliament. That is unsustainable. As we have heard from many people who gave evidence to the Committee, we cannot come back here in 10, 15 or 20 years’ time with fees still pegged at £9,000 when prices in the rest of the economy will have risen substantially. This is a responsible step to put the funding of our institutions on a sustainable footing.
I now turn to the other issue raised by the hon. Member for Sheffield Central about international students. We welcome international students and the contribution they make to our world-class university sector. That is why I was delighted this morning to announce that EU students applying to our universities for entry in the 2017-18 academic year will be eligible for the Student Finance England range of loans and grants, as they are now, for the full duration of their course of study, in the normal way. That demonstrates that this Government continue to welcome international students: they make a big contribution to our system.
Wes Streeting (Ilford North) (Lab)
I welcome the announcement the Minister has made this morning. The concern the Opposition has outlined is that the TEF is being used as a Trojan horse for the increase in fees. It may be pegged to inflation now, but what is to stop a different approach in the future, once the principle is established? On that point, given the Home Secretary’s speech at the Conservative Party conference, is the Minister not concerned that the bronze-silver-gold rating system could be linked to the international student visa system, with greater preference given to gold institutions, compared with silver or bronze?
Joseph Johnson
Before I respond, let me first touch on the issues raised by the hon. Members for the City of Durham and for Sheffield Central about the TEF and the reputation of the sector as it might be perceived by international students. We strongly believe that the TEF will enhance the overall reputation of the sector. We would be the first country to introduce such a system of assessing teaching excellence and students will have a better idea of what they can expect from their time of study here in England and in other parts of the country that choose to participate in it than they will anywhere else in the world. Providers with high levels of the TEF will have been through an extraordinary process of scrutiny that will help them market themselves more effectively around the world.
Let me turn to the other points on migration made by the hon. Member for Ilford North. As he will imagine, I am working closely—as are other members of the Government—with the Home Office on various options regarding student migration and, in particular, whether our student immigration rules should be tailored to the quality of course and educational institution. No decisions have been made on the best way to do that. The Home Office has indicated that it will be consulting in the autumn on a number of measures to remove opportunities for abuse, while still ensuring that the UK can attract genuine students from around the world. I reiterate, for the hon. Member’s benefit, that we will not be looking to cap the number of genuine students from outside the EU who can come to study in the UK. I hope that that provides him with reassurance.
Gordon Marsden
On that point, in relation to the broader point of reputational damage, the Minister is making great play of the fact that this will be a game-changer for us internationally, and so on; but the truth remains that, for good or bad reasons, students internationally do not know what the TEF will ultimately be based on. The Minister knows that there has been huge discussion about the inadequacy of merely giving one TEF rating to an individual HE provider, as opposed to schools or courses. How on earth can international students, or any students, have confidence in a system as a gold standard measurement when we have no further clarity on whether the TEF will be done on an institutional basis or on a school or disciplinary one?
Joseph Johnson
The UK, through the Quality Assurance Agency for Higher Education, has long been at the forefront of quality assessment processes around the world, and its expertise is sought after in a number of countries. We expect that the TEF will likewise have a pioneering effect around the world.
Joseph Johnson
No, I am not giving way, thank you very much. We believe that the TEF has the potential to enhance the reputation of UK higher education.
Carol Monaghan
Does the Minister understand the difficulty faced by HE providers in the devolved Administrations? They are now in a difficult situation whereby if they participate in the TEF, they have to go through two different systems of quality assurance, but if they do not participate in the TEF, they have no badge so they will be disadvantaged in the international market. They have been placed in a difficult position.
Joseph Johnson
I thank the hon. Lady for giving me the chance to speak exactly to her points about how the TEF will work in Scotland and in the other devolved Administrations. It is right that HE providers across the whole UK have access to the TEF and the benefits that it will bring. I am delighted that my devolved Administration counterparts have confirmed that they will allow their providers to participate in TEF should they wish to.
I appreciate that how the sectors operate in the devolved Administrations differs from how the sector operates in England. It is crucial that the TEF takes into account those differences so as to recognise excellence in teaching in whatever form it takes. To that end, officials in the Department for Education have been working closely with officials in the Scottish Government and the other devolved Administrations. Our officials met with representatives of the Scottish HE sector in June and August.
I remind the hon. Lady of what Alastair Sim said in his evidence to the Committee a few weeks ago, when he noted that
“engagement with the Department for Education has been constructive and creative about how the metrics of the TEF might be configured in ways that take account of Scottish interests.”––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 67, Q103.]
The TEF framework for year 2, which was published on 29 September, was been adjusted to ensure that it can fairly assess the distinctive nature of HE provision in each of the four nations of the UK. That will allow the TEF to operate fairly across the UK, something the whole sector was keen to see.
I feel I have addressed the substance of the points raised, and I therefore ask the Committee to support the clause.
Question put, That the clause, as amended, stand part of the Bill.
Joseph Johnson
I beg to move amendment 42, in clause 26, page 15, line 21, leave out “either or both of”.
This amendment is consequential on amendment 43.
The Chair
With this it will be convenient to discuss Government amendments 43, 45, 49, 50, 52, 53, 59 to 64, and 67 to 73.
Joseph Johnson
These amendments bring the Bill into line with the policy stated in the White Paper. All the amendments except for amendment 62 remove the power for the Secretary of State to designate a body to undertake the functions in clause 25 and therefore operate the TEF. The TEF, as we have been discussing, is central to the improvement of the student experience, which is of core interest to students, and as per our policy intent in the White Paper, I believe that responsibility for the operation of the TEF should be held by the office for students.
Our intention has always been for the OFS to operate the TEF and we do not envisage a need to require another body to undertake these functions. In the absence of a compelling case, I believe it is simpler, clearer and, from a legislative perspective, more proportionate to remove the power to designate a body to run the TEF functions. I reassure the Committee, however, that removing this power does not prevent the OFS from working with others on the delivery of the TEF, which I recognise might be desirable at some point in the future. The OFS could, for instance, contract a body to support its work on the TEF, just as HEFCE is working with the QAA on delivery of year 2 of the TEF.
Gordon Marsden
The Minister talks about working with other people on the structure of the TEF. I press this not in a combative way, but merely in the sense of wanting to have some information. Can he provide any indication as to when or from whom he expects the delineations to how the TEF is to be delivered—whether by institution or by discipline or by school? When are we likely to know about that?
Joseph Johnson
I urge the hon. Gentleman to read our consultation response to the TEF year 2 proposals, which we published on 29 September. This provides significant detail about how the TEF will develop in years to come.
Turning to amendment 62, our policy intent is to ensure a co-regulatory approach to quality assessment. Clause 26 allows Ministers to establish a clear role for a quality body, administratively and visibly separate from Government and the OFS, as recommended by the Select Committee on Business, Innovation and Skills earlier this year. Amendment 62 provides a new power for the OFS to give general directions to a designated quality body on how it should carry out the assessment functions. The OFS can give only general directions and must have regard to protecting the expertise of the designated body when giving those directions.
This is not about dictating how the designated body should do its job or about giving the OFS the power to intervene in or dictate the outcome of individual cases. This change is solely to deliver on what our White Paper said, which is that the designated quality body would design and operate the quality assessment system, reporting to and within parameters set by the OFS.
Amendment 42 agreed to.
Amendments made: 43, in clause 26, page 15, line 26, leave out paragraph (b).
This amendment removes the ability to designate the functions in clause 25 (rating the quality of, and standards applied to, higher education) to be performed by the designated body and ensures that only the functions in clause 23 (assessing the quality of, and standards applied to, higher education) can be designated. Amendments 45, 49, 50, 52, 53, 59, 60, 61, 63, 64, 67, 68, 69, 70, 71, 72 and 73 are consequential on this amendment.
Amendment 44, in clause 26, page 15, line 27, leave out
“an assessment function, the function does”
and insert
“the assessment functions, the functions do”.—(Joseph Johnson.)
This amendment and amendments 47, 48, 54, 55, 58 and 66 ensure consistency of language with paragraph 1 of Schedule 4.
Clause 26, as amended, ordered to stand part of the Bill.
Schedule 4
Assessing higher education: designated body
Amendments made: 45, in schedule 4, page 73, line 7, leave out “either or both of”.
This amendment is consequential on amendment 43.
Amendment 46, in schedule 4, page 73, line 10, leave out “and standards of” and insert
“of, and the standards applied to”.
This amendment and amendments 51 and 57 ensure that the language used in relation to standards in Schedule 4 is consistent with clauses 23 and 25.
Amendment 47, in schedule 4, page 73, line 15, leave out
“be designated under this Schedule”
and insert
“perform the assessment functions”.
See the explanatory statement for amendment 44.
Amendment 48, in schedule 4, page 73, line 17, leave out
“be designated under this Schedule”
and insert
“perform the assessment functions”.—(Joseph Johnson.)
See the explanatory statement for amendment 44.
Gordon Marsden
I beg to move amendment 230, in schedule 4, page 73, line 29, at end insert
“(ca) a number of persons that, taken together, appear to the OfS to represent, or promote the interests of, higher education staff”.
See amendment 231.
The Chair
With this it will be convenient to discuss amendment 231, in Schedule 4, page 75, line 20, at end insert
“(da) a number of persons that, taken together, appear to the OfS to represent, or promote the interests of, higher education staff”.
This amendment and amendment 230 would ensure that before recommending the designation of a body to perform assessment functions the OfS consults with bodies representing higher education staff.
Gordon Marsden
In moving these two amendments, we wish to pick up a theme that we have previously expressed on several occasions: the office for students needs to be an office not just for students. So far, as regards the membership of its bodies, the Government have been relatively reluctant to do that. The OFS needs to address and promote the interests of higher education staff. This is a really serious issue. The Minister will have heard the concerns expressed by a wide range of higher education staff about this Bill and about issues to do with the TEF. There is also a general sense that the Government sometimes seem to think that all they need to do is to round up a certain number of vice-chancellors to say a certain number of things on a particular occasion and they will have the approval of the whole higher education sector, but that of course is not the case. For the higher education sector to succeed and flourish, it needs the co-operation, collaboration and involvement of all its members, so, again, the amendments are designed to take us down that road.
The first amendment, 230, would straightforwardly insert into schedule 4 the appropriate phrase:
“a number of persons that, taken together, appear to the OfS to represent, or promote the interests of, higher education staff”.
The second amendment, 231, says the same thing. The purpose of both amendments—Opposition Members have touched on this issue previously—is to ensure that before recommending the designation of a body to perform assessment functions, the OFS consults bodies and, indeed, individual groups of higher education staff. If the Government want people at every level in the sector to buy into these reforms, as they regard them, and to buy into this new settlement with the OFS, it is crucial that the OFS has the broadest base of support and general enthusiasm across the sector. These modest amendments are designed to assist the Government in that process, and I hope that the Minister will feel able to be positive about them.
Joseph Johnson
I welcome the discussion, recognising the importance of a diverse range of views and interests across HE in ensuring that a suitable body is designated to manage the assessment of quality on behalf of the OFS. As the amendments and this brief debate have highlighted, the staff of our HE providers are of course an important part of what drives quality. That is clearly recognised in current practice. The views of HE staff and their representatives are sought by Government, HEFCE and others in consultations on decisions that introduce changes to the HE system. They are already represented on the advisory groups and committees of bodies such as the QAA and HEFCE. However, the amendments would introduce an additional level of prescription for the OFS that I do not believe is desirable. By providing a more prescriptive list of required consultees, we would run the risk that the OFS did not feel able to use the discretion provided under the schedule to consult such persons as it considered appropriate. The prescribed list should be limited to those who are fundamentally essential to taking a decision on whether a quality body is suitable and can deliver on the co-regulatory approach. I therefore ask the hon. Member for Blackpool South to withdraw the amendment.
Gordon Marsden
I will withdraw the amendment, but I am sad, yet again, that the Minister thinks that the only thing that matters is the people who sign the cheques or who press the buttons or take the decisions. [Interruption.] I am sorry, but that is the way it will be seen outside the massed ranks of the Government by many in the sector: this is an opportunity missed, as it has been missed so far on the Bill with students, to put them in the frame for a brand-new structure. That is what people will be concerned about. I will withdraw the amendment on behalf of the Opposition, but the Government should think very carefully about the way in which they are alienating so many people in the sector. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 49, in schedule 4, page 73, line 39, leave out “either or both of”.
This amendment is consequential on amendment 43.
Amendment 50, in schedule 4, page 74, line 1, leave out “recommended function or functions” and insert “assessment functions”.
This amendment is consequential on amendment 43.
Amendment 51, in schedule 4, page 74, line 4, leave out “and standards of” and insert
“of, and the standards applied to,”.
See the explanatory statement for amendment 46.
Amendment 52, in schedule 4, page 74, line 6, leave out sub-paragraphs (3) and (4).
This amendment is consequential on amendment 43.
Amendment 53, in schedule 4, page 74, line 19, leave out from beginning to “and”.
This amendment is consequential on amendment 43.
Amendment 54, in schedule 4, page 74, line 24, leave out “an assessment function” and insert “the assessment functions”.
See the explanatory statement for amendment 44.
Amendment 55, in schedule 4, page 74, line 27, leave out “function” and insert “functions”.—(Joseph Johnson.)
See the explanatory statement for amendment 44.
Dr Blackman-Woods
I beg to move amendment 232, in schedule 4, page 74, line 30, at end insert “and students”.
This amendment and amendment 233 would ensure that the OfS consults students before body suitable to carry out assessment functions is designated.
The Chair
With this it will be convenient to discuss the following:
Amendment 233, in schedule 4, page 74, line 32, after “providers” insert “and students”.
See amendment 232.
Amendment 4, in schedule 4, page 74, line 39, at end insert—
“Bodies suitable to perform quality assessment functions: student representatives
4A (1) A body is suitable to perform the quality assessment function under section 23 if, in addition to meeting conditions A to D, at least two of the persons who determine the strategic priorities of the body are currently enrolled on a course at a higher education provider.
(2) For the purposes of sub-paragraph (1), “course” means any graduate or postgraduate course.”
This amendment would require the board of any body designated to perform the quality assessment function under section 23 to include at least two student representatives.
Dr Blackman-Woods
It is a pleasure to serve under your chairmanship, Mr Chope.
The Minister says that the TEF or teaching quality assessment is a core interest for students. It therefore seems really odd that the body that might be deemed suitable to perform assessment functions does not have to pay any attention whatsoever to the student voice. If the amendments to paragraph 4 of schedule 4 were made, a body would be deemed
“suitable to perform an assessment function”
only if it represents
“a broad range of registered higher education providers”
and students, and if it
“commands the confidence of registered higher education providers”
and students. It seems to us a little perverse that the Government would want to establish a framework that allowed a body to assess teaching quality when it did not have the confidence of the student body and would not even seek to assess whether the student body had any confidence in it. I look forward to hearing what the Minister has to say on these two modest but important amendments, because they would ensure that a body chosen by the OFS was deemed appropriate only when students and the student voice were represented and when the OFS was absolutely sure that the body also commanded the confidence of students.
I will finish by quoting the evidence given to the Committee by Sorana Vieru, vice-president of the NUS:
“We cannot talk about working for the benefit of students without involving students themselves.” —[Official Report, Higher Education and Research Public Bill Committee, 8 September 2016; c. 97, Q163.]
The Minister will know that it is already best practice throughout the sector to involve students in the quality assurance process. Why not put that in the Bill to ensure it happens?
Wes Streeting
It is a pleasure to serve under your chairmanship, Mr Chope. In speaking on amendment 4, which stands in my name, I return to my familiar hobby-horse of student representation in the Bill, in the futile hope that the Government have seen sense and taken into account the importance of including students in a Bill that is allegedly about them.
When I reviewed the record of yesterday’s debates in the Chamber, I thought for a moment that when I came into this Committee Room I might receive some good news from the Minister. My hon. Friend the Member for Bristol East (Kerry McCarthy) asked the Secretary of State for Education:
“If she will offer students places on the board of the Office for Students.”
The Secretary of State replied:
“We have made it clear that the Office for Students must have student representation, and we will take every opportunity to embed student engagement in the culture and structure of the new organisation.”
“Hallelujah!” I thought. “We’ve had a breakthrough. The Secretary of State has clearly been reading the Committee’s debates and been so persuaded by our arguments that she has made an exciting announcement.” However, in the next column I read the Secretary of State’s response to the hon. Member for Bath, who represents a significant number of students at Bath University and Bath Spa University. He said:
“Adding students to the board of the Office for Students would put at risk representation and engagement with students”—
quite how he reached that conclusion I am not sure. The Secretary of State then said, toeing the Minister’s line, that
“we do not want to be over-prescriptive”. —[Official Report, 10 October 2016; Vol. 615, c. 1-2.]
Sadly, I was not in the Chamber at the time, so I do not know whether the Minister leant across to have a word in the Secretary of State’s ear to get her back on message, but it was very disappointing.
So here I am, trying to make the case that students should be represented on the board of a designated quality provider. We use that language because, for reasons that also escape me, the QAA is not automatically the designated quality provider. Instead, we have to go through a ludicrous and wasteful tendering process to reach the obvious conclusion that the Quality Assurance Agency should be the designated quality provider. In that context, I want to ensure that whichever body is designated to perform the quality assessment function under section 23 should have at least two student representatives on its board.
This is actually existing practice: the board of the QAA currently has among its membership the vice-president for higher education of the National Union of Students and, for this year at least, the education officer of Cambridge University Students’ Union. There are two student voices, one directly connected with an institution and the other representing students on a national level, although currently on a break from a PhD. It seems to me that the QAA has already reached the right conclusion and we should make sure that the future designated quality providers also reach that conclusion.
Carol Monaghan
Of course the team that carries out the reviews in Scotland—the enhancement-led approach—is a team of six reviewers, including one international reviewer, three senior UK-based academics, one co-ordinating reviewer and one student. Should we be looking to Scotland here?
Wes Streeting
I have long admired the quality enhancement approach of the Scottish higher education system and think the Scottish higher education sector has often led the way on student engagement in the quality enhancement process. The committee for QAA Scotland includes the head of Student Partnerships in Quality Scotland, the organisation that brings the sector together with student representatives to look at quality enhancement, and it does address the concern.
I have heard in some quarters—this comes to the point the hon. Member for Bath was trying to make in the Chamber yesterday—the argument that if there are students on the board of an institution, that somehow diminishes the need to engage students elsewhere within the institution. In the Quality Assurance Agency, there are two student representatives on the board, there are students represented elsewhere on committees in it, there is a whole committee dedicated to student engagement, and there are students involved in quality assessment as part of institutional review teams—not just in Scotland but in England as well, following the Scottish lead. That is a great model because the QAA has recognised, both in principle and through the benefit of experience, that involving students in a meaningful way in the quality assurance process has benefits for everyone. The student voice has to be involved and engaged. It is critical for helping to measure quality and making sure students get what they are promised.
Ben Howlett
If the hon. Gentleman had not tweeted earlier the fact he was going to ask this question, I would have had to come up with this on the spot. His point regarding the QAA is interesting. I agree that there should be student engagement throughout the entire system, but the point the QAA was making in oral evidence and in writing was that we should not have student representation on boards, even though it does at the moment, but that we should making sure we engage with students throughout the entire process. If we think about what it is saying, this is not working, so we have to look at a much more holistic approach to student engagement throughout the system.
Wes Streeting
If that were the case, the QAA would need to come back and explain why it chooses to have students on its board. The hon. Gentleman is misrepresenting what the QAA said. What it has said, quite rightly, is that it is important to engage students at every level and to have meaningful engagement and dialogue with students beyond simply putting them on the board of an institution. I have not heard anyone from the QAA say—but I am happy to see the evidence printed in black and white in the record or written evidence—that institutions should not have students on the board of higher education institutions, and I have not heard anyone say that the office for students should not have student representatives on the board. If that were the case, they would be arguing against their own student representation on the board of the QAA, which I think they value because it has been there for some time and continues to be present.
I do not agree with the false dichotomy that the hon. Member for Bath has put forward. I do not think it is either/or. I agree with him: we do not just want students represented on the board and we need meaningful engagement throughout the system, but that is not a choice; both are necessary for the benefit of everyone involved in higher education.
Having made these arguments, I hope the Minister is inclined to follow existing practice at least, by making sure that whichever organisation is appointed as the designated quality provider follows the QAA’s practice of having at least two student representatives on the board. We are now nearing the end of this Committee stage. I hope that the Minister appreciates that the continued resistance to having guaranteed student representation is making the Government’s words on student engagement and the centrality of students to the Bill ring rather hollow.
Joseph Johnson
Again, we have had a good debate on the importance of student involvement in the HE sector and its systems and structures. I certainly agree that the quality body will need to represent the diverse interests across the HE sector, including those of students.
Hon. Members will be pleased to note that that there is already good practice established by the QAA of building student representation into the quality system. To summarise, the QAA includes two student representatives on its board of directors, has established a student advisory board to provide support, and includes students in its review and scrutiny processes for degree-awarding powers. Crucially, however, this is not set in legislation. It happens because it is considered to be an effective way of making an informed assessment of quality—an approach I hope will continue. The arrangements for the two student board members are set out in the QAA’s articles of association, and this is a more appropriate level for such stipulations to be made than in legislation itself.
The conditions set out in paragraph 4 of schedule 4 are there to ensure that we can establish an effective co-regulatory approach with the sector, as recommended by the Business, Innovation and Skills Committee. It is not designed to prescribe specific interests, but instead to make clear that the quality body should represent and have the confidence of a broad cross-section of the sector. I am keen that paragraph 4 remains flexible and not prescriptive, to guard against the risk that at some point in the future a suitable and well qualified body could be disbarred from designation on a technicality. This does not, however, prevent a designated quality body from involving student representation as an effective way to carry out its quality assessment functions.
Even without legislation, when future Secretaries of State come to a view on whether a body is capable of performing the assessment functions in an effective manner, I would imagine that they would look at a range of matters. These may include whether the student interest was represented within the organisation and whether that representation or lack thereof would have an impact on its capability. However, I recognise that hon. Members are making clear the importance of continuing this level of student engagement within the quality body. I also appreciate the strategic level on which amendment 232 in particular asks for this to be considered, rather than over-specifying the membership of the independent quality body itself. However, I remain confident that any designated quality body would include such representation without the law having to specify it. I therefore hope that the hon. Lady is reassured, and ask that she withdraws her amendment.
Dr Blackman-Woods
I have to say to the Minister that I really do not follow his logic at all. What is being argued is that the reason we are going through the whole assessment of quality is so that students get information that will help them to understand more about the quality of teaching in an institution. Yet somehow the student voice is not being put in the Bill as a group of people who must have confidence in the body that is being set up. That seems to me to be absolutely extraordinary. It does not make any sense at all.
Joseph Johnson
Part 2 of schedule 4 states that the OFS must consult with people representing a broad range of students before recommending a suitable quality body, so we will be consulting students. The OFS itself, as we have discussed previously, will include on its board people who must have experience of representing the student interest.
Dr Blackman-Woods
I have heard what the Minister says, but unfortunately because of the way in which paragraph 4 is constructed it is very clear about the body representing a broad range of higher education providers and having the confidence of the higher education providers. We are not saying that that is unimportant, but it is equally important that students have confidence in the body and are represented on the body. I do not think that we are going to resolve this issue at the moment, but I ask the Minister to take this issue away, look at it again, and see if he can come up with a form of words that would keep everybody happy. I will be happy to withdraw the amendment—
The Chair
We have to adjourn. The hon. Lady will need to withdraw her amendment after we return at Two o’clock.
Digital Economy Bill (First sitting)
Tuesday 11th October 2016
(7 years, 8 months ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 View all Digital Economy Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 11 October 2016 - (11 Oct 2016)
The Chair
Before we begin, I have a few preliminary points. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings. Today, we will consider the programme motion on the amendment paper. We will then consider a motion to allow us to deliberate in private about our questions before the oral evidence sessions, and a motion to enable the reporting of written evidence for publication. In view of the time available, I hope we can take those matters formally, without debate.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25am on Tuesday 11 October) meet—
(a) at 2.00pm on Tuesday 11 October;
(b) at 11.30am on Thursday 13 October;
(c) at 9.25am and 2.00pm on Tuesday 18 October;
(d) at 11.30am and 2.00pm on Thursday 20 October;
(e) at 9.25am and 2.00 pm on Tuesday 25 October;
(f) at 11.30am and 2.00pm on Thursday 27 October;
(2) the Committee shall hear oral evidence in accordance with the following Table:
Date | Time | Witness |
|---|---|---|
Tuesday 11 October | Until no later than 10.00am | BT/EE TalkTalk Three |
Tuesday 11 October | Until no later than 10.30am | Sky Virgin Vodafone |
Tuesday 11 October | Until no later than 11.00am | Which? Countryside Alliance |
Tuesday 11 October | Until no later than 11.25am | Open Data Institute The Co-operative Group |
Tuesday 11 October | Until no later than 2.45pm | The British Board of Film Classification NSPCC |
Tuesday 11 October | Until no later than 3.00pm | Dr Edgar Whitley, London School of Economics Wireless Infrastructure Group |
Tuesday 11 October | Until no later than 4.00pm | Big Brother Watch Open Rights Group |
Tuesday 11 October | Until no later than 4.30pm | ProjectsbyIF Open Corporates TUC |
Tuesday 11 October | Until no later than 5.00pm | Professor Sir Charles Bean, London School of Economics The Royal Statistical Society |
Thursday 131 October | Until no later than 12.00pm | StepChange Citizens Advice Dr Jerry Fishenden |
Thursday 131 October | Until no later than 12.30pm | OFCOM |
Thursday 131 October | Until no later than 1.00pm | The Information Commissioner’s Office |
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 4; Schedules 1 to 3; Clauses 5 to 84; new Clauses; new Schedules; remaining proceedings on the Bill;
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00pm on Thursday 27 October. —(Matt Hancock.)
The Chair
On the basis of the motion, the deadline for amendments to be considered at the first line-by-line sitting of the Committee on 18 October is the rise of the House on Thursday 13 October.
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Matt Hancock.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Matt Hancock.)
The Chair
Copies of the written evidence that the Committee receives will be made available in the Committee Room. We will now go into private session to discuss lines of questioning.
The Chair
Welcome to the Digital Economy Bill Committee. We will now hear evidence from BT/EE, TalkTalk and Three. Before calling the first person to ask a question, I should like to remind all Committee members that questions should be limited to matters within the scope of the Bill and that we must stick to the timings in the programme motion that the Committee has agreed. We have until 10 am for this session, so I ask Members and witnesses to be as concise and to the point as they can be.
Nigel Adams (Selby and Ainsty) (Con)
Mr Stringer, may I put on the record and bring the Committee’s attention to my declaration of interest? I am a director of two telecommunications companies and a shareholder in both; my wife is a shareholder in those companies as well.
The Chair
Q That is now on the record. Does anyone else wish to declare an interest? No. Could the witnesses please introduce themselves for the record?
David Dyson: David Dyson. I am the CEO of Three UK.
Baroness Harding: Dido Harding, chief executive of TalkTalk.
Sean Williams: Sean Williams, chief strategy officer at BT Group.
Louise Haigh (Sheffield, Heeley) (Lab)
Q Thank you for coming to give evidence today. May I start with you, Sean? First, do you think that 2020 and 10 megabits per second are sufficiently ambitious targets for the universal service obligation?
Sean Williams: Yes, I do. We have made clear our willingness to deliver 10 megabits to every premises in the country by the end of 2020 without any further public funding and without even really progressing the USO regulations. On the way to doing that, we will be building on the fact that by the end of next year we should have fibre broadband coverage to 95% of the country.
As we get towards 2020, we will be building further fibre networks, so we expect to be getting more than 24 megabits to 97% or 98% of the country, and then fixed broadband of 10 megabits to 99%. We think that the last 1% needs to be done by 4G and satellite. Although we think about the issue as getting 10 megabits by 2020, in our view the vast majority will actually be getting a lot more than 10 megabits by then.
Louise Haigh
Q Baroness Harding, should the USO not have been an open tender process? If it had been, would it not have been right for it to have gone to more than one contractor, given the differences between the problems in inner city areas and those in rural areas?
Baroness Harding: Yes, maybe. I presume that you refer to the BDUK process that has taken place. I am actually very supportive of a universal service obligation. I do not agree with Sean Williams that 10 megabits will be sufficient as we look forward; it is very dangerous to try to set that number through primary legislation because technology is moving so fast. I fear that the rural communities who are furious that they do not have 10 meg today will be furious that they do not have 1 gigabit in three or four years’ time. I think you should be more ambitious, otherwise the political problem will never go away.
In terms of how then to get value for money for any form of Government subsidy, taxpayers’ money or levy going towards the final few per cent., I agree with the premise of your question. The more competition there is, the better, and it is a huge shame that there was none in the last process. To be fair to the Government of the time, I do not think that was because of how it was designed. The good news is that the market has changed quite a lot since then, and there are now a number of quite small providers building proper fibre-to-the-premises 1 gig services in rural areas, such as Gigaclear. I would be much more hopeful that, looking forward, it will be possible to design a process that is not reliant on one large incumbent.
Claire Perry (Devizes) (Con)
Q As you know, I represent a very rural constituency. I support what has happened; it is clearly far better than it was five years ago. However, what happens if no USO provider is willing to come forward to deal with the last 500 houses in the Devizes constituency? What should happen then?
The Chair
The acoustics in the room are terrible. If Members and witnesses could really speak up, that would be very helpful.
Sean Williams: To answer from our perspective, we are willing to enter into a binding legal commitment that we will deliver at least 10 megabit broadband to 100% of premises by the end of 2020. Our objective with this is really to give the Government and Ofcom comfort that we can get on and do this.
I would emphasise that I think that there is a lot of competition, as the Baroness just mentioned. We have Virgin expanding their network, we have Gigaclear and Hyperoptic expanding their network and we have the mobile operators expanding networks that can deliver 10 megabit broadband by 4G. There is a lot of competition to deliver this. For our part, we are willing to undertake to make sure that every single premises can get 10 megabits by the end of 2020.
Baroness Harding: The MP for Devizes raised a very good question. I am a firm believer that competition will do the majority of this, and we should try our damnedest to make the private sector fund most of this through competition, but I think there is a fair chance that in three or four years’ time a number of your constituents will not have broadband that they think is good enough.
I promise that I will not take up the whole session on this, but I think that the solution is to separate Openreach completely and put a universal service obligation on an independent Openreach. Once you have an infrastructure entity that is not owned by one of the retail providers, that takes away a lot of the industry issues with the public subsidy in some shape or form needed to get proper fibre for that final few per cent.
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
Q Given that broadband speeds have doubled in the past three years, and that the pace of demand is accelerating, I find it staggering that we should say to rural constituents, “You are second-class digital citizens and must accept 10 megabits.” How do we bring forward a scheme that ensures that, in areas where they want to go further to ensure that they keep up or even get ahead, the universal service obligation does not peg them at a low speed? How could we design a flexible, regional USO model? Has that been considered by anyone on the panel?
Sean Williams: I do not want to occupy a disproportionate amount of air time here. We think that, by the end of 2020, we will be able to deliver fibre broadband speeds to probably 97% or 98% of households across the whole country, and at least 10 megabits to everybody by then, unilaterally and without any public funding or a USO. That will continue to go on after that as we continue to innovate networks.
We also have a commitment to deliver ultrafast broadband—more than 100 megabits—to 10 million premises, and fibre-to-the-premises deployment to another 2 million premises by 2020. There is going to be an awful lot of network investment, which, by the way, can only happen in an integrated, end-to-end business case.
Calum Kerr
Q Mr Williams, do you think that a tactical, on-demand USO only provided by BT can really provide the strategic outcome—a direction toward “gigabit Britain”—that I think we all agree is a matter of when and not if? If we continue to do this in a piecemeal fashion surely all we are going to do is cement the digital divide, rather than close it.
Sean Williams: To get these networks out to as many premises as possible, by as many providers as possible, through competition and commercial market action is exactly the right solution. To get good networks out to everybody, both mobile as well as fixed, it is important that everybody has an incentive to invest. Through competition and commercial investment, we will get to the answer.
The Minister for Digital and Culture (Matt Hancock)
Q I welcome the commitment from BT to reach 100% of premises by 2020, but I ask for a point of clarification on language. Mr Williams, you referred in the percentages to “fibre” and, separately, to “fibre to the premises”. Can you confirm that by “fibre” you mean a combination of fibre and copper and that by “fibre to the premises” you mean pure fibre? The use of the term “fibre” reflects statistics that I understand mean fibre to the cabinet, so I find confusing the offer to households being “fibre plus copper”. I would be grateful if you clarified that.
Sean Williams: I am happy to. When I use the term “fibre broadband”, I mean fibre to the cabinet, which is a combination of rolling out fibre further into the network but with copper into the end premises. When I use the term “fibre into the premises” I mean fibre all the way into the building. I apologise for being unclear.
When I say we will deliver fibre broadband, it will largely be, in my view, through a combination of fibre and copper, but we are also very positive about fibre to the premises and typically deploy fibre to the premises in all new building sites and in lots of Broadband Delivery UK areas. We are developing fibre to the premises solutions that are particularly targeted at small and medium-sized enterprises. We have made a commitment that we will get ultrafast broadband speeds, which is both fibre and copper, and also fibre-to-the-premises solutions to 1 million SMEs by 2020. We have heard the prioritisation that the Government have put on getting very good broadband speeds to small and medium-sized enterprises and we have made a commitment we will get that to 1 million of them by 2020 as well.
Claire Perry
Q I am conscious of what Baroness Harding said about perhaps not setting a quantum, but do you think there should be a separate quantum for SMEs? One of the challenges we have is that there is not enough. We do not have separate legislation or, indeed, powers for cabling to new business parks. If I may ask a supplementary question, in my experience the issue with the USO is often with the broadband speeds in the household; it is not just a question of getting the cable to the front door or the bricks. What could the process be for dealing with those claims and helping householders realise that that might be a problem?
One final question: we would like the USO to be an average speed, rather than being achieved 15% of the time, or whatever the current average regulations are. What are your views on that? Are you prepared to commit to our offering an average USO of 10 megabits per second?
Baroness Harding: At the risk of being dangerously technical, I think we all try to summarise in the form of speed, but actually consumers and businesses would say that reliability and consistency are every bit as important as speed. The small businesses that are customers of TalkTalk would say, “It’s not the headline speed I need. I need it to work every single second when my customers are using the chip and pin machine in my small corner shop”, for example. So while speed is a useful proxy, it is not perfect.
The Minister gets to the nub of the issue: when you have a proper fibre network that goes all the way to the premises, you have upgrade potential. You just change the card in the rack of computers back at the exchange and you can go from 1G to 100G. You also have a much, much more reliable network. When it rains, water does not get into the copper and it does not stop working.
The small businesses that we talk to are very cross that the fibre-to-the-premises roll-out has missed out a lot of business parks—not necessarily because they want speed, but because they want a reliable service where they can upload as much as they can download and customers can always buy things from them.
I would therefore support being clearer in the detailed regulations that I presume Ofcom would set in specifying the service requirements for small businesses as opposed to consumers.
Christian Matheson (City of Chester) (Lab)
Q What flexibility would you like to see within the legislation for either the Government or perhaps Ofcom to be able to deem the level of the USO in the manner that Baroness Harding described as technology increases?
David Dyson: I have a couple of points. Covering some of the previous questions, it is impossible to predict what will be the right speed in five years’ time. There are two elements to delivering that. One is effective competition. On the second, I agree with Baroness Harding that in those harder-to-reach less economic areas, the separation of Openreach is the only way that you will get assurance that those customers will get the right speed.
Fundamentally, Ofcom needs to have more powers to make the right decisions that effectively create the right competitive environment in the UK—an environment where it is not constantly worried about being litigated. At that point, you have a stronger regulator that will make the right decisions for the right reasons and a lot of these discussions will take care of themselves.
Baroness Harding: You can see from my nodding head that I agree with David. A lot of the provisions in the Bill are very good, pro-consumer, and I would encourage the Committee to look very favourably towards them. David has just alluded to one of them, which is to make sure that you have a stronger regulator that can get decisions taken faster without using up nearly 50% of the Competition Appeal Tribunal’s time.
Sean Williams: On the specific question about flexibility, as long as it is stable enough for network investors to deploy a certain investment in order to get to the target and then recover some of their investment money, it can be flexible after that. If it is too flexible, you never quite know what you are supposed to be investing in, so I think it needs to be definitive for a period and then it can move on progressively as society and the economy moves on.
I agree with Baroness Harding on the subject of reliability. Reliability is a very important metric, but SMEs are not typically the most demanding broadband customers. A big household streaming lots of HD videos is a very demanding broadband supplier. SMEs and large households have different kinds of requirements and we need to work with Ofcom to establish exactly what those standards should be.
It is true that some of the problems happen within the home or within the business premises. It is important to make sure that all the retailers—TalkTalk and all the others—are able to support their customers in the business or home. Making sure those networks and wi-fi work well is also very important, to answer Mr Perry’s earlier remarks.
Kevin Brennan (Cardiff West) (Lab)
Q Sean, do you recognise the figure that improving wayleave rights under the ECC will reduce costs for providers by 40%? Would you like to tell us whether any surplus from that will be used to invest in local communities or will it be going to your profit margins?
Sean Williams: I do not recognise the particular figure, to be honest, but I would not necessarily dispute it.
Kevin Brennan
Q Is it in the right ball park? Is that what you are saying?
Sean Williams: It is 40% of what? I do not know exactly where that figure comes from, to be perfectly honest with you, but what I would say is that on the EE network we have a commitment to get to 99%-plus of premises getting 4G, and 95% of the geographical area of the country, by 2020, getting 4G services. Also, that requires us to roll out new masts and new services, and every cost reduction in that vein will support the agenda of rolling out 4G networks everywhere as far as we can.
Kevin Brennan
Q So all that will be reinvested into the—
Sean Williams: I think it is all supportive of delivering more roll-out by all the mobile networks, yes.
Kevin Brennan
Q Can I ask you, how will we have competition in next generation access? Will certain areas of the country be limited to 10 megabits in the future?
Sean Williams: As I say, I think we are getting lots of competition already. Virgin is rolling out. Hyperoptic, Gigaclear and others, all the 4G networks, Three, EE, Vodafone, O2 are all rolling out competitive networks, so I think the large majority of the country will have availability of choice of provider.
Kevin Brennan
Q Will certain areas be limited, do you think, in reaching the 10 megabits?
Baroness Harding: I think the way that you ensure that there is sufficient competition to drive investment and create choice is by having a very strong regulator that does not believe any of us, actually, when we say “Trust us, we will be okay; we will do it for you.” If you live in any of the rural constituencies in the country, you do not have Virgin as an alternative. There is only one fixed line network provider. There are only two mast joint ventures for mobile networks, so I would argue that the telecoms market is not competitive enough at all and that the best way Government can ensure that all constituents across the country benefit is by having a much stronger regulator that forces competition. I think you should be very worried when you hear large incumbents saying, “Set up a universal service obligation but don’t let it get too far ahead of what we’ve got in our business case.” That is not what business should be doing. Businesses will invest more if they are scared their customers will go elsewhere, not because they have been given a promise by Government.
David Dyson: But also you should be very worried when you hear statements about how BT is planning to take profits from the duct access and reinvest in that, and in cross-subsidising mobile access. That is just fundamentally wrong, and is not supportive of competition.
Nigel Huddleston (Mid Worcestershire) (Con)
Q Far fewer people switch broadband and phone providers than gas or electricity, for example. Do you support the Government’s published principles of switching, which will make it easier for consumers to switch?
Baroness Harding: Yes, completely. I think it is extremely confusing for consumers, because how you switch depends on which network you are with today, and which one you are going to. It is not a level playing field among competitors, so, for example, someone leaving TalkTalk who takes mobile phone, broadband and TV—a proper quadplay customer—does not have to speak to TalkTalk at all, as they should not. They head off to whomever they want to go to, and the switching process will work its way through. On the other hand, someone leaving Virgin and going to BT, or leaving Sky TV and coming to TalkTalk, has to speak to Virgin or Sky respectively. We and, I think, Three as well have been campaigning for simpler switching for eight years. Finally we have a Bill that is very much on the consumer side, that will make switching easier and competition stronger. I think it is a great thing.
Sean Williams: And BT completely supports the position.
David Dyson: Three has campaigned for more than a decade on this issue. It is a complete joke that it has taken so long, and it fundamentally goes back to the point that Ofcom needs more powers to make decisions that are in the consumer interest. We are the bottom of the class from a global perspective, in terms of switching. I think Papua New Guinea ranks alongside us as the only country that still has donor-led porting. It is a joke. Ofcom tried to legislate on that five years ago, and Vodafone litigated on a technicality and won. Since then it has been kicked into the long grass. It is a major issue, but the more fundamental issue is that Ofcom does not have the power, right now, to make decisions that are fully in the interests of consumers and competition.
Nigel Huddleston
Q Baroness Harding, you mentioned that this is a consumer-friendly Bill in various degrees. Mr Dyson and Mr Williams, are there any other elements of the Bill that you see as consumer friendly that would benefit my constituents, for example?
David Dyson: Absolutely. The electronic communications code reform is critical in being able to roll out more coverage, more capacity and better quality from a mobile perspective. That is a really important step. We hear a lot about coverage, capacity and quality. Ofcom recognises that there is a major issue in consistency of access not just for operators across the country, but for different technologies. That will certainly help, but for me the most important element of the Bill is effectively to give Ofcom the powers to create competition in this market.
Fundamentally for us, the most important decision that Ofcom needs to take in mobile in the next five years is going to happen before the Bill comes through in that spectrum. The UK is bottom of the class not only in mobile number portability, but in spectrum distribution in this market. It is the most fundamental input in terms of a level competitive playing field and Ofcom is about to take that decision in the context that it is always worried about being litigated. The facts speak for themselves. We have a terrible position in the UK right now and I am worried that it will not get any better unless Ofcom has more powers.
Christian Matheson
Q I am hearing mixed messages about this industry and its ability to achieve a USO. On one hand, we hear that market forces will achieve it and, on the other hand, we hear that Ofcom does not have enough power and that there is a fear of litigation. Should this Bill be giving greater powers to Ofcom? For example, in areas such as Devizes, which Claire Perry talked about, where there are broadband not spots, should Ofcom deem a provider to provide for that area?
Baroness Harding: The key thing in the Bill is to reform the appeals regime. As David Dyson has just alluded to, between 2008 and 2013, which are the most up to date stats I could get last night, Ofcom accounted for just under 50% of all cases in the Competition Appeal Tribunal. Our industry is important, but it is not that important compared with the whole of the rest of competition issues because the standard of appeal is much lower in telecoms than in any other regulated sector. That means there is a very cautious regulator.
BT has managed to raise $45 million from private equity funds to fund its litigation pot. Ofcom spent £10 million in the last two years on litigation. That is awful use of taxpayers’ money. It means you have an industry that is used to appealing every single decision the regulator takes, so the regulator is too cautious. That is why we are saying, “Give them the powers and competition will do the job for you.”
Sean Williams: I am sorry, but I completely disagree with that point. First, it is not true to say that everything gets appealed. BT did not appeal a charge control this very year that took a billion pounds of profitability out of BT—in fact out of Openreach—over a three-year period. We did not appeal the previous charge control, which did a similar thing and we did not appeal the one before either.
Ofcom is an extremely powerful regulator that is accountable to nobody but the Competition Appeal Tribunal. No one in the Government can tell it what to do. It has extremely wide discretion. You will not get better decisions out of Ofcom if you reduce the standard of appeal to judicial appeal standard. Is it reasonable, is it fair, is it just that Ofcom can take £3 billion of shareholders’ equity value away from them on a judicial review standard? It is not. It is thoroughly unjust.
To keep Ofcom accountable, to keep its decisions high quality and to comply with the regulatory scheme, it is of the utmost importance to require an appeal on its merits. It is required across the communications sector across the whole of the European Union. It is not by any means unique. Ofcom makes many very impactful decisions and that is why it gets many of its decisions appealed to the Competition Appeal Tribunal, very often by the small players in the industry. The organisation that is appealing Ofcom’s most recent charge control is CityFibre Holdings, which thinks that Ofcom’s decision to drive down Openreach prices will kill off its business plan, not just Openreach’s. It is not BT that is appealing that decision. It is very important that the one piece of this that really needs to come out is the change to the appeal regime.
It is also true to say that the Supreme Court of the United Kingdom, only about two years ago, was absolutely clear that the scheme provides for an appeal on the merits.
David Dyson: There are two important points on this. First, Three is 100% supportive of the changes in the Bill in this regard. Secondly, it is really important to note that all the Bill proposes to do is raise the standard of appeal that Ofcom has to the same level as regulators in other industries, which does not feel excessive to me.
Sean Williams: Except that Ofcom has many more powers than any other regulator, including a dispute resolution power that is not available to any other sectoral regulator. That is the cause of many of the disputes and appeals that happen.
The Chair
Order. I am afraid that that brings us to the end of the time allotted. I thank our witnesses on behalf of the Committee.
Examination of Witnesses
Daniel Butler, Paul Morris and David Wheeldon gave evidence.
The Chair
Welcome to this session of the Digital Economy Bill Committee. We will now hear oral evidence from Sky, Virgin Media and Vodafone. We will finish this session at 10.30 am. The time is very tight. May I ask the witnesses to identify themselves?
Paul Morris: I am Paul Morris, head of government affairs and sustainability at Vodafone.
Daniel Butler: I am Dan Butler, head of public affairs and policy at Virgin Media.
David Wheeldon: I am David Wheeldon, group director of policy and public affairs at Sky.
Louise Haigh
Q I will start with the question that I asked the last panel. Do you think that 10 megabits per second by 2020 is ambitious enough?
David Wheeldon: That is a very hard question to answer. The flexibility within the Bill for the universal service obligation threshold to change makes sense, in order to address the likely customer needs. Our view—we have said it very publicly—is that we have to be much more ambitious in terms of connectivity in this country.
We would like to see ubiquitous fibre to the premise, and we believe ultimately that the economy is going to depend on that. The USO will be a useful interim measure until we can get there, but one might hope that, over time, a USO will not be necessary if we have full connectivity across the country.
Louise Haigh
Q Are you saying fibre to 100% of premises?
David Wheeldon: Eventually, that is the ambition we should aim for.
Louise Haigh
Q How would that be achievable?
David Wheeldon: We believe there is an opportunity to create the right market structure to bring a lot more investment into the industry. We are being held back at the moment by relying on the copper network. There is an argument we have made, as you know, about Ofcom’s communications review with regard to the structure of Openreach. That is not directly relevant to this Bill, but ultimately, as far as the USO is concerned, it makes a lot of sense to be able to set a threshold that you may want to vary over time.
Daniel Butler: Virgin Media’s starting point is to ask what the purpose of a USO is and what it is designed to achieve. The definition is quite clear: it is to underpin a series of activities that produce some economic and social externalities that are to the broader benefit of society. Ofcom defines those as email, web browsing, maybe a little bit of video streaming and maybe some IP voice. Its use case for a four-person household is that 10 megabits is sufficient to enable all those activities to happen simultaneously.
We view 10 megabits as appropriate for that definition of a universal service obligation. We think that more bandwidth-intensive activities, such as HD streaming and real-time gaming, have a looser connection to the underlying principles of a universal service obligation, because the benefits of those types of activity are primarily to the individual, not to society as a whole, so why should they be subsidised?
I will make one final point, which is that the debate around future-proofing the USO lacks one crucial bit of analysis. Bandwidth requirements might increase over time, but so too does the sophistication of networks in processing higher bandwidth applications. Video streaming is a case in point. When video streaming became ubiquitous, companies started investing in better video compression, and as a result video compression rates have halved every seven years. Networks are getting better at dealing with higher bandwidth applications.
Louise Haigh
Q Why should we be limiting ourselves to something that is barely sufficient now? What changes could we see in the Bill that would give us anything like the connectivity that Mr Wheeldon just mentioned?
Paul Morris: You have to make sure that the USO does not get in the way of future ambition. We have to think about how we move from what we have today, which is largely a copper and fibre mix, with the exception of Virgin. We still have telephone lines running broadband, essentially; as David says, we have to move on and be more ambitious. The point is to make sure that the USO does not get in the way of that ambition to do better and to use fibre for homes and businesses. We should make sure that the smaller networks have an option to be involved in the USO, and, if they have the ambition, that they know that a USO provider is not going to over-build them.
There is lots to be done outside the legislation, and clearly we do not need to repeat the mistakes of BDUK. We need to know where the assets are, who can do the work and where the green cabinets are. It needs to make sense and we need to have some kind of register. We need a practical approach and money needs to follow results—not the other way round, which was the other issue with BDUK. We can learn from some issues from the past, and we need to make sure that this USO does not get in the way of what we need to do next, which is to have much more fibre in the ground across the whole country.
Claire Perry
Q I represent a fairly rural constituency and I was interested to know what would happen if no USO provider came forward to do the right thing. What should happen in that case? How will the Government be able to mandate that provision?
Daniel Butler: We are not convinced that that situation will arise. What Mr Williams from BT just outlined was that BT was willing to enter into a legal obligation in which it would be the national provider for a universal service obligation. That is how it works today under the fixed telephony USO. Up to a relatively high cost threshold, BT is not allowed to pick and choose which areas and premises it connects and which it does not; it has a legal obligation to fulfil. The model does not need to radically change as we move to a broadband USO.
Paul Morris: Basically, you have to remember that most of these premises will have a telephone line—although not all, I grant you. That is a good start. It is about how we use what is already there well, and how we upgrade it.
Claire Perry
Q Exactly, but as I know from personal experience, having a copper line does not guarantee anything like the advertised speeds today. My previous question related to small businesses. Some of the most frustrated people in my constituency are small businesses in business parks, who could benefit hugely from an upgrade. Do you think the Government should be setting a separate USO for a small business, versus a household?
Daniel Butler: The evidence suggests that 10 megabits is sufficient for the average small business. An extensive study conducted by Communications Chambers for the Broadband Stakeholder Group found that in 2015, the average bandwidth requirement for a small business was 5 megabits per second. That was likely to increase to about 8 megabits per second by 2025.
As Mr Williams pointed out in the previous session, the bandwidth requirement of the average small business is likely to be less bandwidth-intense than the average household. The heavy-bandwidth applications that place the most pressure on a household connection— simultaneous usage and HD video—are less pronounced in a small business environment, where the majority of usage involves accessing Government websites, accessing websites more generally, sending emails and so on.
Claire Perry
Q That rather depends on the sort of small business. While that might be true for a farmer, for example, what I want in my constituency is the ability to have the sort of businesses that would locate to silicon roundabout come to a beautiful part of the country where property is much cheaper. I would be cautious about writing off rural areas as only ever being able to access Government websites and check their emails one at a time. I think we should be doing something much more ambitious with obligations—particularly for small business parks, so you have clusters of fibre around those.
David Wheeldon: We would probably part company with Virgin Media here, in as much as we do not think you should be constraining by type of usage in quite that way. All the history and evidence of the data that goes across our networks means we are seeing a continued exponential increase in data usage. Going back to what Daniel said earlier, it is hard to say that specific usages are worthy of a USO intervention and others are not. Those things will change over time, including small businesses—their use cases will change over time.
In the case of businesses and business parks, it is extraordinary that there are business parks, not just in rural areas but in city areas, that do not have sufficient fibre connections. Very often that is to do with the distortions in the market where it is to the benefit of the network operator to be selling expensive leased lines to businesses rather than investing in fibre to all premises.
When we come down to it, this is a problem based around the quality of the infrastructure we have at the moment and the incentives to continue to invest. As Paul Morris said, it is important that we get the USO right, but it must not stand in the way of the massive further investment we believe is required of the nation’s network.
Thangam Debbonaire (Bristol West) (Lab)
Q I am a little shocked to hear Mr Butler say that 10 megabits is okay for the average small business. In my constituency, high-tech industries and digital creative industries need something much more reliable, much more secure and a lot greater than 10 megabits. They are not just uploading the odd film; they are making the films. Can I push you on that? They need secure, reliable, consistent bandwidth. What on earth has blocked the roll-out of that so far in city centres as well as rural areas? What else could the Bill do to push business, provide the infrastructure or give Ofcom the teeth—whatever is needed—to help the high-tech and creative industries grow?
Daniel Butler: This is one part of the market where Paul’s concerns about market distortion are particularly pronounced, because the market for small business connectivity is evolving at a rapid pace. Broadband providers are beginning to target the types of use cases you outlined there: high-tech but small business where, realistically, a leased line is not an affordable solution. Virgin Media has been at the vanguard of product innovations to make symmetric business broadband connections available to high-tech businesses in London, but also outside of London, at more affordable, residential-type price points. This is one example where the market is evolving at a very rapid pace.
Business connectivity is starting to address the challenges you have identified. The use requirements I outline are what the evidence suggests is the typical requirement of a small business. Obviously, there will be outliers where the market is the right mechanism to deliver for those companies.
Thangam Debbonaire
Q I am not just talking about outliers, Mr Butler. You talked about providing to London and some areas outside London. London is overheating, with great respect to my London colleagues. A lot of these industries are looking to other cities and if they cannot get what they need they are going to stay put in London—and that is not good for the economy, both rural and urban. What else can be done by business or what else do you need in the Bill for this to be put right?
Paul Morris: As you will know, telecoms has got a lot going on at the moment. There are other things going on: we have an Ofcom strategic review, which is looking, in part, at how the relationship between Openreach works with the rest of the industry. There are a number of moving parts, not necessarily in the Bill, that need to be thought about.
I suggest we need to think about what we do next—that is, post-BDUK. I do not necessarily mean Government programme support, but what the ambition of the country is when it comes to traditional infrastructure. We have probably looked at other traditional infrastructure first; now it is time to look more at digital. That is beyond the Bill but it is something that needs to be done, certainly within this Parliament. We also need to start thinking about delivery because, frankly, that will take 10-plus years to do.
We need to look at the strategic review, including the relationship with Openreach. At least two of us here have that as businesses; frankly, that can be a bit more ambitious, deliver a better service, and be in control of its own investment, board and everything. Openreach needs to be independent. If that cannot work, then we have made the case to say that Openreach needs to be separate from BT. That is something that Ofcom needs to look at.
Within the Bill, the universal service obligation—you have both identified an issue. If you look at the Ofcom figures, small businesses are disadvantaged probably more than consumer households because you are not on the traditional phone network, effectively, if you are in a business park. So you have got the right point.
I would suggest that, with the USO the way it is today, we make a small step in the right direction with this idea of how we do more. I think Dan is right: there are connectivity options coming in as well. So it is a mixed picture, but I do agree—I do not think that 10 megabits is enough for most small businesses, unless of course they are one-person bands doing stuff for which they need the phone more than the computer. Again, it all comes down to a mixture of things going on that are in and around the legislation. There are a number of things going on.
Daniel Butler: I add one final point on provisions in the Bill that would help. There are provisions in the Bill that will reduce the cost of network expansion in the UK—an exercise that Virgin Media is currently undertaking with our £3 billion network expansion. That network expansion is benefiting business parks and small stay-at-home businesses. Last month, we announced 90 new business parks that we were connecting under Project Lightning. The specific way in which the Bill can support that is through reform of the electronic communications code that will lower the cost of and time taken to achieve a wayleave agreement. The measures in the Bill take us part of the way towards that reform, but could be more ambitious.
The Chair
Can I remind Members and witnesses to be as brief as possible? I call the Minister.
Matt Hancock
Q No—I was going to ask for more details on which bits of the Bill could help.
Kevin Brennan
Q I remember one of your predecessors in a predecessor company, Mr Butler, explaining to me why they were digging my street up in the 1990s. They basically said, “We are installing a straw to suck money out of people’s houses”, which I think is the best explanation I ever received of what was involved. On the electronic communications code, how can you assure us that its reform will actually benefit consumers principally and not just allow you to keep more of the money that you suck out of people’s houses?
Daniel Butler: The reforms that are envisaged will transform the economics of roll-out. The figures discussed in the previous session were a 40% reduction in the cost of roll-out. The primary way in which that benefits consumers is that that allows us to build to more premises on a commercial basis.
Virgin Media currently plans to build to 4 million premises by 2020. Wayleaves are a considerable line item on the balance sheet for that investment, and also it takes a lot of time to get agreement, so anything we can do to reduce the cost and improve the efficiency of getting those will have the consumer benefit of allowing us to connect up more premises. I mentioned that Government could be more ambitious in this regard. In effect, the Government’s reforms will deal with the worst abuses of the systems—that is communications providers’ exposure to ransom rents—but Ministers and the Secretary of State increasingly talk about broadband being equivalent to a utility and the reforms do not quite go that far. Water companies have the most advantageous wayleave regimes under their statutes. They do not pay what is called in the valuation jargon “consideration” and, as are result, they pay 60% less—these are Government’s figures—than communications providers.
Matt Hancock
I think the explanations coming from the witnesses are excellent. I did not have any other questions.
Nigel Huddleston
Q Are the switching proposals in the Bill, which make it easier for customers to switch and give them more power and information, a step in the right direction?
David Wheeldon: They clarify Ofcom’s existing powers, so to that extent they are a welcome clarification. We have some concerns about the direction of travel that Ofcom is going in, not least because we see and operate in a market where there is already extensive switching and all the customer satisfaction surveys suggest that the vast majority of customers are happy with it.
What we are worried about is that Ofcom might go down a direction that tries to mandate a certain type of switching between networks that do not have any obvious need or reason to engage with each other. It is one thing in telecoms where you have to exchange customer information and data, but in TV, where you do not have any need to speak to a different TV network or operator, the idea of putting in place a new system where we are required to talk to each other could end up being quite burdensome and bureaucratic.
I hope that, as we engage with Ofcom, we avoid doing that. In the end we want to make this as easy as possible for customers, because that is in all our interests. We compete pretty ferociously with each other on a day-to-day basis, so a system that works for customers is in all our interests. The provisions in the Bill that clarify Ofcom’s role are fine.
Matt Hancock
Q Could you remind me what proportion of the market Sky has?
David Wheeldon: In the overall broadband market we are below 40%, I believe. In TV, it is 60%—I am not sure quite what the breakdown between us and other pay TV providers is. We compete not just with Virgin and BT and others but increasingly with Netflix and free-to-air. Many of our customers will go to take a free-to-air package from us. So the market is pretty dynamic and I think that at the moment it seems to be working pretty well for customers.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Q I want to go back to the average speed, which we were talking about earlier. When you provide businesses with average services, and you give them average speed—give them the minimum they need to be average—you are locking them into being average businesses; you are not giving them the opportunity to be more ambitious. How do you square that with a programme of ambition for the 21st century, taking people forward? What do you do to encourage devolved Administrations such as the Scottish Government, and councils, where they want to go further and have faster speeds?
Paul Morris: We have got to figure out a way, and this is going to be a combination of things. We talked about the code earlier; that is part of it. How do you build the network? How do we make that easier? How do we focus on support that, frankly, has been there for more traditional infrastructure? We have talked about some of the other areas, such as how we ensure that Openreach serves its customer base better and has more ambition. That would get you to a point.
As you know, the Scottish Government have been thoughtful in this area. What do we do after that? I know you have got the 100% ambition, and there I think it is a case of a mixture of things. A better Openreach that is more independent, serves its customers better and is more ambitious gets you to a point. You then have either USO or some kind of intervention potentially in some areas where the industry can look at support and how that works across technologies.
So I think it is a combination of commercial roll-out, see how far we get—we will not know that until we reform the market—and then look at what is left and see where we go from there. I agree with you. I note that there is not a speed limit in the Bill and I think we do need to be more ambitious. Of course, we cannot solve this tomorrow, but we need to recognise that the data usage trajectory is upwards and we need to think in those terms. We do not build a little bit of a better railway; we build a much better railway. We need to think like that.
David Wheeldon: I absolutely concur with that. We look at this as a national service provider. We want to sell our TV services to every customer in the country if we can. We are agnostic about the kind of technology that we use, but increasingly using broadband services to do that is the way we are going. Therefore, if we are going to be ambitious, to enable companies like ours to continue to grow, invest and innovate, we need a national solution, and a national solution will depend upon the national network owner, which is Openreach. In the end, all these roads lead back to Openreach. That is why the structure of the industry does matter; the ability to get capital into the industry to invest in the kinds of future networks we need is critical. That is why we have made such a big noise about the structure of the industry and the Ofcom review. We really believe that it matters, not so much as a broadband provider, but as a user of the network. We want to be able to have a national solution.
Drew Hendry
Q Given that Openreach is pinning its position on getting 95% coverage by 4G by 2020, that surely leaves 5% in areas where they will be forced to use satellite. That is a group of consumers that cannot switch and cannot go across. What do you do for those people who find themselves in those geographically disadvantaged areas, where they are not going to be reached by that plan? How can you get that sense of ambition going for those people?
Daniel Butler: The first objective is to minimise the extent to which a backstop intervention, as you characterise it, is required. To our mind, Ofcom said a few things over the summer—it did not just talk about structural separation; it also talked about what the 10-year strategic direction for our sector should be and what conditions would best deliver for investment and for the consumer. It was unambiguous in saying that network competition, having multiple network operators in the ground and available to consumers, is the best driver of investment incentives, the best driver of superfast broadband penetration and the best driver of consumer outcomes.
To tie your two questions together, the Scottish Government have the opportunity to create the best possible environment for the deployment of new infrastructure using the devolved planning powers that they have at their disposal. Virgin Media is in the process of quite an extensive roll-out of our network in Scotland and I think there is an opportunity there to minimise the gap that is required for a universal service obligation to apply.
Nigel Adams
Q Returning to broadcast, I have a question for Daniel which may not come as a surprise, since I alluded to it on Second Reading. If you take out line rental and broadband charges, what is the cheapest way that someone can access a public service broadcasted channel, and how much does it cost on your platform?
Daniel Butler: Sorry, Nigel, if you debundle—?
Nigel Adams
The cost of the line rental and broadband charges, what would the charge be?
Daniel Butler: Our basic TV tier does not have a premium. If, as a customer, you get a triple-play bundle with a freeview-like TV service, it is effectively free; there is no added charge for the TV element. We do not sell TV as an individual product, if that is what you are asking.
Nigel Adams
Q Yes; it is all bundled in that cost. The reason I allude to it is that, clearly, there is currently no payment made to, effectively, the rights holders. A fair proportion—I would think maybe half—of your content is potentially driven through PSBs. I just wonder why you think that that is a reasonably fair position.
Daniel Butler: We think it is a fair outcome because there are flows of value in both directions—for the pay-TV operators in this market and the PSBs. As part of entering into the public service bargain, the public service broadcasters get a series of regulated benefits. The biggest of those are gifted spectrum and EPG prominence on our platform. EPG prominence guarantees them viewership, which translates into advertising revenue. From them, we get access to content, which is very valuable to our customers—it is much-loved content. That is the UK’s PSB bargain. Ofcom assesses that to be a balanced bargain, it does not think that either side is losing out as a result of that bargain, and the fact that PSBs continue to enter into that bargain reinforces the fact that they see it as sufficiently valuable too.
The Chair
I am afraid that brings us to the end of the time allotted for the Committee to ask questions. I thank the witnesses very much on behalf of the Committee for the evidence they have given.
Examination of Witnesses
Pete Moorey and James Legge gave evidence.
The Chair
We will now hear evidence from Which? and the Countryside Alliance. We have until 11 am for this session. Would the witnesses please introduce themselves for the record?
James Legge: I am James Legge, and I am head of political at the Countryside Alliance.
Pete Moorey: I am Pete Moorey, and I am head of campaigns at Which?
Louise Haigh
Q Should this Bill not contain a USO for mobile coverage?
James Legge: Yes, we think that it should.
Louise Haigh
Q What should that USO be?
James Legge: I think that a minimum at the moment should probably be about 3G but, a little like the USO for broadband, we need to be a bit more ambitious. We also have to realise that there is a big infrastructure problem for about 50% of rural premises. The infrastructure is not there to carry more than 10 megabits per second, and for one in five premises it will not carry more than 5 megabits. So there is not only the level at which the USO is set to begin with, but also the issue of upgrading infrastructure.
Louise Haigh
Q Do you think that there is potential for the USO to actually limit the investment for infrastructure in the future?
James Legge: It is important that it is seen in addition to the Government’s ambition to deliver superfast broadband at—at the moment—a speed of 24 megabits to 90% to 95% of premises. In my opinion it should really be seen as a safety net, as opposed to a situation in which we say, “Well, we’ve reached 10 megabits, we can leave it there.” If you take into consideration that universal access in the EU is being set at 30 megabits by 2020, and Sweden is looking at 100 megabits in the same timeframe, where we are is good but we have a way to go yet.
Pete Moorey: There is clearly a big issue in terms of mobile coverage. You may have seen the research we did with OpenSignal last week which pointed to the fact that in many parts of the country you can get access to a 4G signal only 50% of the time, while in London it is 70% of the time. Obviously, that is way behind countries such as the US and Canada where it is 80% of the time, and countries such as South Korea and Japan where it is 90% of the time. We have not specifically taken a position on a USO for mobile, but it is definitely something that needs consideration.
The other issue here is around what mobile operators themselves are doing with customers when they are in the phone shop and choosing a package. This includes the information that operators are providing to customers about the signal that they can expect, and indeed the opportunity that customers have to be able to get out of the contract when they are unable to get a signal.
Louise Haigh
Q What could the Bill do to achieve the level of investment in infrastructure that is necessary? Is separation of BT from Openreach absolutely vital for this?
Pete Moorey: We are satisfied with the position that Ofcom is taking on Openreach at this stage. One area where we are more concerned is around the way that Ofcom is seeking to regulate the standards for Openreach. We think there is a danger that actually regulators are not often well placed to do that and, as they set very prescriptive rules that operators have to achieve, operators are driven by those rules rather than good consumer outcomes. We would like to see Ofcom flip the way that they are looking at the new standards for Openreach and ensure that they are much more focused around consumer outcomes. That would drive the business to achieve against those measures rather than a set of prescriptive standards, which Openreach or others can say that they have achieved but actually has not resulted in a better service for customers.
Mark Menzies (Fylde) (Con)
Q On a slightly different point, I have a question for Which? around data sharing. Clearly, there are mixed views as to whether it is a good or a bad thing. I would like to understand what you think that the benefits would be, particularly to vulnerable groups, of the Government having access to this data?
Pete Moorey: In broad terms, we support the measures in the Bill and we see this from two perspectives. There is the work that we have done in our campaigning, particularly on areas such as energy, where we know that year after year the energy suppliers have said that they would like to be able to better target energy efficiency schemes at the most vulnerable households, and that they have struggled to do that. We think a lot of good steps could be taken as a result of that.
The other side is around the role we play in providing products and services for consumers. We run a number of excellent websites—Which? University, Which? Birth Choice, and Which? Elderly Care—which provide people with all the information they need to enable them to make a choice when they come to that decision. We have been hamstrung on occasion in being able to provide the richness of information that people would want when trying to make that decision where local authority data or other public service data have not been available. Taking steps in this direction would help not only Which? to do that better, but a lot of the other service providers in that space.
Kevin Brennan
Q On the point about coverage of broadband and mobile, where would we come in the European champions league of coverage? Will the Bill push us up the league at all, in your opinion?
James Legge: I cannot give you a precise figure. I am afraid I do not know the answer to where we lie in the overall league table of Europe.
Kevin Brennan
What do you think?
James Legge: I do not know. Our ambition certainly seems to be less than what the European Union intends to see delivered. I think there is scope for saying 10 is great, but we should be looking at more. We should also make sure that the USO moves up—I think the Bill makes provision for this—because there is no point in leaving it at 10 when we have 300.
Kevin Brennan
Q You listed a lot of countries that do better than us when you gave your answer earlier. If the Bill potentially brings some progress, are we running fast enough to keep up with our colleagues on the continent?
Pete Moorey: I think it was me who gave the list of countries. We can come back to you on that with the data we have on 3G and 4G and also on broadband.
Kevin Brennan
Q It would be very helpful if you could do that before we meet next week.
Pete Moorey: On the 10 megabit point, clearly for a lot of consumers it will not be enough; for others, it will be a godsend. Ofcom has done a pretty decent piece of work in understanding average consumer use at the moment. It has developed a speed that is probably appropriate to start, but will have to be addressed in time. The really important issue is how it does that and how it involves consumers in the process. There is a real danger that we get into an arbitrary point of view and say, “Well, it should be 15 or 20 megabits” rather than setting the speed with consumers themselves.
Claire Perry
Q I want to focus questions directly on Mr Legge. I represent a very rural constituency. We are very anxious about home building. We now have effective neighbourhood plans that rather than mandating giant developments plonked down wherever anybody wants them, require developers—often small developers—to work with communities. The preamble is to ask you whether you think the new law coming in next year to require automatic superfast broadband connection for sites of more than 100 homes is suitable for rural areas, or whether we ought to be going further and effectively making it a utility provision for all home builders.
James Legge: My view is very much that it should be seen as a utility provision. The whole way in which we have looked at the housing problem in rural areas has transformed over the last 10 years from the idea of plonking mini-towns on the edge of existing communities. We have realised that if you try to do that, all you do is create massive local opposition and nothing gets built. What you want is small-scale development that is sensitive and local to the community, provides local housing, and is affordable, often affordable in perpetuity.
The idea that you will only get broadband provision when you build 100 premises on the edge of a village or in a rural area is undesirable, simply on the grounds that where new properties are going in and we are putting in an infrastructure, it seems absurd not to take the opportunity. We would not say we are not going to put in electricity, water or, ideally, gas as well, although we do not have mains gas everywhere, to be fair. I think broadband is too important.
It is also important to realise that the population trend at the moment is a move from towns to rural areas. There is enormous potential. If you take a population of 10,000, there are more start-up businesses in rural areas. I think London and some of the major urban city centres exceed. The countryside is a largely missed opportunity, but all the signs are there that if it gets broadband it is ready to fire and go further; so the figure of 100 is too urban-centric in thinking.
Christian Matheson
Q Mr Legge, you talk about the need for a fair system of site rents for country landowners in terms of wayleaves and access.
James Legge: I do not think that I did—
Christian Matheson
There needs to be,
“clarity over the new system of valuation for site rents that is fair and equitable as well as a robust Code of Practice to ensure landowners, infrastructure providers and mobile phone operators are clear”.
Is there not a danger of conflict between looking after the needs of large landowners to get fair wayleave agreements on their properties and potentially preventing the roll-out of broadband and infrastructure services to other rural residents because we are keeping costs higher to benefit the landowners?
James Legge: I think we recognise that the new communications code must reduce the cost of putting in the infrastructure, both on public and private land, and must also encourage the sharing of masts and access to infrastructure. There is a difference between saying that we will do it and, say, paying a private landowner nothing, and paying them something that is reasonable and fair, taking account of the way in which we treat other utilities. I know that our view differs slightly, though, from some of the other landowning organisations that are focused on land ownership. We are very much focused on delivery to the consumer, but we think it should be fair, equitable and clear.
Matt Hancock
Q May I clarify that? You said that the new communication code must do those things. Did you mean by that, that it does do those things and that that is right, or that you do not think it fits what you set out? What you set out is entirely concurrent with the Bill.
James Legge: Yes, and we are supportive of that. We support the fact that we have got to start seeing broadband on the same par as a utility, as opposed to something where there is a premium cost to the provider, which limits provision—
Matt Hancock
Q I was seeking clarification on whether you are looking for something more than is in the Bill. You were saying that that is what is in the Bill and it is right that that goes through.
James Legge: Not at this stage.
Nigel Adams
Q I suspect that the Bill is not going to be subject to the most detailed discussion around the country. However, as a question to both of you, having had an opportunity to analyse the Bill, if we were all pitching this to our constituents across the country, what do you see as the key benefits for consumers?
Pete Moorey: The telecoms sector needs to catch up with where consumers are. That is part of what the Bill is trying to do: we need to recognise that people increasingly see their mobile phones and broadband as essential items. Yet we know that customer satisfaction is very low and that people are increasingly frustrated about their inability to get a signal or to get the broadband speed they are paying for.
There are critical things in the Bill that will start to bring the telecoms sector kicking and screaming into the 21st century. For me, those elements include switching—I think it is incredible that we do not have provider-led switching in the telecoms sector. Automatic compensation is very important. With water, electricity and gas, if we lose a connection we get a compensation payment, but that is not the case in telecoms. The appeals process, which we have heard a lot about this morning, has had a chilling effect on the regulator’s ability to introduce measures that would both improve competition in the sector and better protect consumers.
The final area, for us, is nuisance calls, which we know are some of the biggest bugbears that people face—they are sick to death with receiving annoying calls and texts. To put the ICO guidance on nuisance calls into statute is another step towards tackling that everyday menace.
James Legge: Yes, I think that switching and compensation are important: it is important to hold the feet of the telecoms companies to the fire. But there is possibly an opportunity in the legislation to empower the consumer. At the moment, we have a sort of opaqueness around data and provision. We do not have address-level data. If I want to decide where I am going to get my mobile or broadband from, I cannot just put in my address and find out that the company that provides the best service is x. I have to sign up to someone. Then I can test the level of my service through their internet connection as a customer.
If there was more transparency, and if people had the information to hand, they would be able to make better choices. The market would also be more competitive for mobile or broadband providers, because if they do not provide the coverage, they will lose customers. It is no good waiting for someone to sign up and then find out that switching is jolly difficult, so customers say, “Well, I’ll just put up with this and complain”. We do that terribly well.
We should be able to say, “No, sorry. You didn’t tell me this. I didn’t have the data. Your service is appalling. I’m switching, and it is easy.” The level of switching at the moment is extremely low. A previous witness suggested that there was general contentment, which is not my experience.
Calum Kerr
Q There has been a lot of discussion in this session about fixing mobile coverage. Do you think that the Bill will achieve that? It comes down to licence obligations. If we want to do it, we need to set the right licence obligations. I accept that you are going to get less money.
On the electronic communications code changes, if we want the measures to be about driving more coverage, should we actually just exclude existing sites—you will have a lot of landowners and we will have local government bodies that will lose a lot of money—and say, “Access will change but, in terms of valuations, let’s exclude existing sites; this is about you going to new sites and doing them more cheaply”?
James Legge: I had thought—if I have understood the question correctly—that the Minister indicated previously to the House that it was not going to be retrospective.
Calum Kerr
Q It is not retrospective, so you will not revisit deals. Essentially, when a site comes up for renewal, the valuation of that land will be treated differently, so costs will drop dramatically. My suggestion is that they should be excluded from a valuation perspective, and the old rules apply for valuation.
James Legge: So you keep the old rules at the renewal point for old sites.
Calum Kerr
So you will still see some price erosion, but not as much.
James Legge: I would have thought that anything that brings the cost down for the providers when it comes to rolling out and upgrading infrastructure—
Calum Kerr
Q This is existing infrastructure.
James Legge: But a lot of it needs upgrading.
Calum Kerr
Q They will be allowed to do it, but the rental cost of that land would go down.
James Legge: Well, we would agree with that. If the rental goes down and it costs less to upgrade the infrastructure, that is a good thing from our point of view. Presumably that would be under the newer system, not the older one. My understanding—and this may be wrong—is that the new code values land and access in a slightly different way, and the cost should be less to the person putting the infrastructure in. I had a discussion with the Local Government Association about that issue. The LGA said that it would potentially get slightly less money on public land, but that there are savings at the other end. If, for example, you have more efficient provision of digital government—“digital by default”—there could be savings at the other end. The LGA has a slightly mixed view. Yes, it might lose some income but, ditto, landowners will—
Calum Kerr
Okay. I do not think you understood my question, but I will leave it there.
The Parliamentary Secretary, Cabinet Office (Chris Skidmore)
Q Mr Moorey, let us return to your comments about Which? being hamstrung by a lack of data sharing. Could you give a fuller explanation of that? Will you put on record the views of Which? about the public services delivery power, and the potential benefits that it might bring, particularly to the most vulnerable in society?
Pete Moorey: As I said, we are broadly supportive of the measures in the Bill. We are hamstrung from two perspectives. The first is a service delivery perspective. When we are delivering something such as our Which? elderly care website, we want to have the richest possible data available to help people make decisions. Yet on occasions when we have gone to certain local authority providers or certain care home providers, we have had an inability to gather that data and provide it in a comparable way. There is also the need to get that information in a clear and comparable format so that organisations like us can do that much better. It is something we have worked on a lot over the past few years with regard to universities. We are starting to see some of the data coming through at the kind of level that students want when they are making those choices. Clearly, having such legislation would better allow us to do that.
Chris Skidmore
Q Any comments on, particularly, the public services power, and how that might affect it?
Pete Moorey: No, no specific other comments on the Bill itself.
Thangam Debbonaire
Q I particularly direct this question at Mr Moorey, because I noticed you mentioned unsolicited calls and the problem of people receiving them despite registering with the Telephone Preference Service. I can declare that I am one of those. I am particularly concerned about the example of a constituent in a neighbouring constituency to mine, Olive Cook, who was one of Britain’s longest-serving poppy sellers, having started in 1938. She fell to her death after being plagued by nuisance callers, particularly from charities. My experience has been that there are also private companies making them. Who is it? Who makes nuisance calls? How are they being dealt with? Does the Bill go far enough to ensure that those companies are held responsible—the directors, if necessary? Should they be made more accountable? Can you tell me some more, please?
Pete Moorey: We have made a lot of progress, I think, on nuisance calls over the last three or four years. That is thanks to an awful lot of people around this table. The Government have made progress with the action plan that we have had, and then in setting up the taskforce, which Which? chaired. We have seen changes to the powers of the Information Commissioner’s Office, and it is now much better able to take action against nuisance callers, and hit them with bigger fines. Caller line identification has been introduced. However, you are right that there is still an awfully long way to go.
Nuisance calls come from a range of places, all over the place. Frequently they come from claims management companies and lead generators. Sometimes they come from reputable businesses. Sadly, too often they also come from scammers and fraudsters. The important measure in the Bill is putting the Information Commissioner’s code into statute, which I think will give it more clout. However, we agree that more could be done about director-level accountability. We recognise that many MPs support that, as do the Scottish Government. Indeed, the Information Commissioner herself, who I believe you are seeing this afternoon, has made supportive noises about it.
We would like director-level accountability to be introduced. It is important, because while in recent years the ICO has used its powers to fine companies, it has collected only four out of the 22 fines it has imposed in the past year. We are concerned that some of the more disreputable firms simply abolish themselves once they are fined—and they are phoenixing. Directors pop up elsewhere and continue the behaviour of making nuisance calls and sending texts. That behaviour needs to be stopped. We need to ensure that those directors are struck off, and that they cannot do the same thing again.
Thangam Debbonaire
Q Is the Telephone Preference Service system now completely pointless? My constituents say to me that they feel completely unprotected by it. Could the Bill do more to strengthen it?
Pete Moorey: It is not pointless. Our research shows that if people sign up to the TPS they usually have a reduction in calls. The problem is that there are too many firms out there that either just abuse the Telephone Preference Service and call people who are on the list, or indeed have consumers’ consent to call them, because, sadly, the customers have incorrectly ticked a box at some point, and thought they were not giving consent when they were giving it. More needs to be done about the data consent issue. I know that the Information Commissioner’s Office is doing more about it.
Kevin Brennan
Q So just to be clear, you would welcome amendments to the Bill that would strengthen action, including direct action against directors to avoid the shutting down of shell companies. Is there a case for some kind of aggravated offence where people are on the Telephone Preference Service, or where older people are specifically targeted in such a way?
Pete Moorey: I know there is a local police commissioner who is looking at the issue at the moment—particularly around making scam calls a hate crime. That is an interesting development. There is more that could be looked at in that area. I think a good start in the Bill would be the introduction of director-level accountability.
Kevin Brennan
I introduced a ten-minute rule Bill on this in 2003, so it is depressing that it is still a problem.
Kevin Brennan
It is according to the Government that there has been much progress.
Rishi Sunak (Richmond (Yorks)) (Con)
Q Mr Moorey, to elaborate on what you said about the provisions in the Bill to reform the appeals process, I think you described the current set-up as having a chilling effect on competition and pro-consumer impacts. It would be great if you would elaborate on what the Bill will do to improve that situation.
Pete Moorey: I think it has. I think the reason why we do not have things like a gain in provider-led switching and automatic compensation in the sector is in part due to the fact that the regulator has not felt able to move ahead with those things without appeal. Indeed, the speed at which the regulator acts is also a result of the appeals mechanism. We see proposals coming from Ofcom, particularly around things like switching, where it seems to go through a process of repeated consultation really out of a fear of being appealed by the companies. So I think it has had a chilling impact, and those are a couple of examples.
As other panel members have said, moving to a system that every other economic regulator in the country uses, which means that you are able to challenge on the process rather than the merits, would therefore be a significant change. I simply do not see the case for the telecoms sector being any different from energy or any other economically regulated sector.
Nigel Huddleston
Q A great frustration in rural areas in particular is being promised mobile coverage or broadband speed that is not delivered. What in the Bill can ensure that those speeds are delivered and that coverage is acceptable?
Pete Moorey: The automatic compensation element is an important part of that. If you are not receiving the speed or signal required, there could be a case for compensation. Clearly, a big issue that we want to see addressed that is not in the Bill is around the Advertising Standards Authority code and the fact that companies can advertise that you will get a certain speed when actually only 10% of their customers get that. I know that the ASA and its committees are looking at that, but I think that needs to move forward much quicker. That is clearly not something for the Bill, but it is something we would support.
Nigel Huddleston
Q What about terminating contracts?
Pete Moorey: Ofcom has taken a lot of steps in recent years to allow people to terminate contracts when they are not getting the speed they want. I think that is an area that needs to be looked at with regard to mobiles as well. Vodafone has introduced a new rule that means that you can get out of a contract within 30 days if you are not getting the signal you expected. Again, I do not think that is necessarily something for the Bill, but it is certainly something the regulator should be looking at.
Claire Perry
Q I wanted to confirm with Mr Legge that he was aware that there are provisions in the Bill to report broadband speed by household. That is something I welcome, and I hope he does too. I suppose that, like me, he is concerned about Mr Huddleston’s point about the provision of service speed to many households in rural areas. I hope that, as a representative of a large chunk of the country, he will welcome that as a positive step for many rural households.
James Legge: Yes, we absolutely think the Bill is very much a step in the right direction, but it is like everything: one can always ask for more and hope for more. Certainly, from our point of view, increasing competition and empowering the consumer is one of the most important aspects of the Bill. Otherwise, people are not in a position to make choices and then take action when the companies do not deliver. As I said, it is important that that is seen as a first step and not as, “We have got 10 megabits—then what?”
Calum Kerr
Q Have you considered whether automatic compensation should be not just for download speed but for upload speed? On the USO, have you put forward proposals on other, more granular levels, such as cost and latency as well as upload and download?
Pete Moorey: Our general view on compensation is that it really should be down to the regulator to set the specific areas that are covered. It needs to do that with consumers, and it needs to be based on consumer expectations. We need to look hard at what the consumer expectations in this world are. If you look at things like water and energy, actually a lot of those compensation levels and what they cover have not been reviewed for some time. We would not want a situation in telecoms where an arbitrary figure of £30 or £40 was set for particular things and then over time that was not addressed.
Calum Kerr
Q They are on or off-type services, though, which, to go your point, should do what it says on the tin. There should be a more granular—
Pete Moorey: Absolutely, and it should meet customers’ expectations for that service.
The Chair
I am afraid that brings us to the end of the time allotted for the Committee to ask questions. On behalf of the whole Committee, I thank the witnesses for their evidence. Thank you very much.
Examination of Witnesses
Jeni Tennison and Mike Bracken gave evidence.
The Chair
Q We will now hear oral evidence from the Open Data Institute and the Co-op Group. We have until 11.25 am for this session. Will the witnesses please introduce themselves for the record?
Jeni Tennison: My name is Jeni Tennison. I am the CEO at the Open Data Institute.
Mike Bracken: My name is Mike Bracken. I am the Chief Digital Officer at the Co-operative Group.
Louise Haigh
Q Mike, to what extent do you think the Government have achieved their stated objective of open policy making by default?
Mike Bracken: I do not have a strong opinion on that. You would have to ask the person responsible overall for policy in Government or the Minister responsible.
Louise Haigh
Q Do the proposals on Government data sharing give you assurance that the Government have sufficiently considered safeguards on privacy, personal data and criteria for data sharing and time limitations?
Mike Bracken: In short, no. The sentiment behind many aspects of the Bill is to be applauded. The Co-op is a big supporter of open data and we see it as the catalyst of a digital economy. There are many complicated issues in this space, privacy and security being highest among them. While we applaud the sentiments of the Bill, there is much detail in the operational management of how data can and should be shared around Government Departments.
While we, of course, are looking for our members’ interests in accessing open sets of public data, it is not yet clear that the current sharing agreements of data within Government are appropriate and it would appear that the move away from open registers of data may hamper the appropriate levels of sharing data in Government. It also may be the case that the friction that our members and members of society feel in dealing with duplicate sets of data, inconsistent sets of data and so on, which lead to substantial problems in accessing Government and their services, may not be improved by the current sharing policies as set out.
Louise Haigh
Q Do you think it is a backward step in public trust in Government data handling?
Mike Bracken: We think the Bill is a positive forward step in terms of the sentiment behind it—
Louise Haigh
Q But in terms of public trust in Government data handling?
Mike Bracken: I could not comment on that. The sentiment of the Bill overall is a positive one, but there is not enough detail on the sharing arrangements within Government and within Government Departments.
Louise Haigh
Q Jeni, my first two questions to you, please.
Jeni Tennison: I agree with much of what Mike has said. The important thing for securing public trust in the measures in the Bill is to have them clearly communicated to the public. Currently, the way they are written is quite complicated and it is quite hard to understand what they really mean.
It is also hard to understand the measures in the Bill in the context of the existing data-sharing agreements in the public sector. We would like to see a lot more transparency around what existing measures there are within Government for data sharing and how the Bill fits with those existing measures so that people can really get to grips with the way in which data are flowing through Government.
Mike Bracken: May I add to that? I completely support what Jeni has said. The issue is that, while we agree that making services and data better and easier to access—the current sharing arrangements are opaque at best—we question the sentiment behind widening those sharing arrangements when they are currently not fully understood. It would appear that that sentiment is driven more by the operational structures of Whitehall and Government agencies than by the needs of users accessing that data.
Rishi Sunak
Q Jeni, do you mind giving us some specific examples that I can explain to my constituents about where increased use of data sharing can help their lives, and where public services can be improved, especially for those who are more vulnerable and benefit from public services? Where will data sharing help them to get the right policies to them?
Jeni Tennison: I tend to work in the open data area rather than around data sharing so many of the examples I tend to use are around data that are openly available for anyone to access using Share. The example I tend to use, which helps people to get to grips with it, is Citymapper, which makes data available to us to enable us to navigate around cities very easily.
When you look at the public sector and the kind of decisions it needs to make, such as planning decisions about where to place schools or transport links, where to put more infrastructure, such as physical infrastructure like mobile masts, for example, you can see that having better access to data about people’s needs—who they are and what their requirements are—might enable it to make better decisions about where those facilities are needed.
Q Thangam Debbonaire: This is for Jeni Tennison about the evidence in the Open Rights Group’s submission. In points 37 and 38 in your objections to the definition of pornographic material, you objected to the inclusion of all 18 materials.
Thangam Debbonaire
I am sorry. I mixed you up with someone else. I withdraw my question.
Chris Skidmore
Q Mr Bracken, you were responsible for launching the Government’s data programme when you were head of the Government Digital Service, so I think that some of the measures in the Bill are very much trying to build on your fantastic work when you were setting a vision for transforming the management and use of data within the Government and driving the use of data as a tool when making decisions in Government. Do you have thoughts about your work in GDS and how the Bill is now building on that work? How do you feel that the powers in the Bill will try to unlock some of the opportunities for better use of data?
Mike Bracken: Obviously, I am here as a member of the Co-op, so I am not going to give a review of my time in Government.
Chris Skidmore
You were closely integrated into this approach.
Mike Bracken: Of course. The first thing is to recognise the positive sentiment in the Bill. There is much in it to admire and applaud and I believe it builds on some of the sentiment for providing better public services that certainly ran through my time in Government, pressed by various Ministers in the Cabinet Office, one of whom is sitting next to you now.
As I said earlier, I think the concern is not the sentiment and support, but in the lack of detail and the operational change that goes with that. Much of the work done previously, to date, has centred around things like single, canonical sets of data, so that there are accurate datasets about individuals, about place, about location, and that they are used within Government. That sentiment too often flies in the face of Whitehall’s demand to own its own data, or what it perceives to be its own data, in every piece of Government. That leads to the current sharing agreements around Whitehall, which are opaque at best and create friction for our members, friction for members of society and friction for business. It is harder to find accurate data, it adds an economic downside to people dealing with Government. The Bill currently seems to move away from the sentiment of sorting that problem out. It seems to reinforce the primacy of Whitehall’s willingness to share more data in ways that it has been sharing data over time. So while the sentiment of the Bill overall is positive, this area of how data are shared does not seem to be looking at the sort of open registers, those single approaches, that we started to look at in the latter part of the previous Parliament.
Matt Hancock
Q Do you agree that those areas in addition that you are looking for are essentially administrative rather than legal changes? That is to say, the Government need to move in that direction, I would argue that they are moving in the direction that you set out, but you would not put that in a Bill; you need to make it happen.
Mike Bracken: Yes. Absolutely, Minister. Too often, there was an assumption that those things would need regulatory or Bill backing. My experience was pretty much 100% that that was not the case; these are largely about administrative and operational management of data across Whitehall and across Departments. Clearly, there are some areas, security being an obvious one, where you need more legal oversight, but primarily it is not so much about a Bill.
Kevin Brennan
Q First, I agree with what Jeni said about Citymapper; it has changed my life, it is absolutely fantastic—I actually use the bus now. However, either witness, will the Bill in any way help to avoid another care.data type of scandal?
Jeni Tennison: I will go back to what I was saying around transparency and public trust. For me, the important part of any dealing with private, personal data has to be that we drive towards trust by being open about what is being done with those data, by being transparent about how they are being used, what decisions are being made with them, whom they are being shared with and under what circumstances. Those principles of having openness around the handling of personal data are what will drive public trust in their use. We are in a very difficult space here between trying to balance the right to privacy of an individual with the public good we can get from the use of data. It is a fuzzy and difficult one, one we are going to be working through for many years, but having transparency and openness about it enables us to have an informed debate about where we are making that balance.
Kevin Brennan
Q Will the Bill make a care.data scandal in the future less likely, more likely or make no difference?
Jeni Tennison: For me, it does not go far enough in the need for transparency around where the sharing is going on, which is what I think would be necessary in order to avoid that.
Kevin Brennan
Q Finally, should the Bill be strengthened in some way in order to achieve that, and could that be done by an amendment to it, either of you?
Jeni Tennison: I think it could be strengthened by adding some provisions around openness and transparency, putting that at the heart of what you need to do whenever there is a data-sharing arrangement.
Claire Perry
Q I appreciate that point, but does either of you agree that there is a real asymmetry of concern between data which an individual may share with a public body and data which individuals share with a corporate body? One thing I am fascinated by, and it relates to so many provisions in the Bill, is that we knowingly or unknowingly give away rights to all kinds of information with every keystroke we make on the internet. We give huge chunks of personal information to corporate bodies which do not have the definition, as per clause 31, of improving the welfare of the individual, but are simply in it for profit. How would either of you help us to address that? Perhaps the Government—rightly, as an elected organisation—are being scrutinised about this, but my constituents are willy-nilly giving away vast chunks of their data, and in some cases giving away private data to very insecure storage facilities, almost without knowing it. It is frustrating for a Government who are trying to do the right thing to make digital government far more effective—as you did, Mike, during your time—to constantly be facing concerns and criticisms that ought properly to be applied to corporate bodies, but never are.
Mike Bracken: I completely understand your point about asymmetry and I agree with that. I would suggest that in corporate, public and private life it is a fair assumption that many people in the country are waking up to how their data have been used, how they have released that data and, increasingly, the repercussions of that, whether on social media, transactional data with a private company or, indeed, the public sector. There is a general awareness of and unease about some of the practices in all three of those sectors.
Having said that, the Government are held to a different account. Our members—we are a member-based organisation—hold the Co-op to a different account. We are the custodian of their data, and we are owned by our members. Many of the services we provide or help to provide to our members, such as wills, probate and funeral care, are deeply emotive at a certain time of life. These services often depend on Government data being in very good shape about place, location and identity. It is a fair correlation to draw that there should be a symmetry between how an organisation like us should be governed and managed, and the rules that should apply to public sector data. That is not to say that all the data regulations which apply to all corporations and trading organisations need to be exactly the same as those for the Government. That would be a political issue far beyond my position to comment on. The Co-op would look to see that the Government uphold the highest possible standards, so that our members can get the best possible use of that public data.
Jeni Tennison: Perhaps I can add a couple of things. Mike has made the point well that the Government need to act as a model for how to do data sharing well, and how to be open and transparent about handling people’s personal data. The Government are in a position of authority there. However, the other thing to bring up is that we have a mixed economy for the delivery of public services, including the private sector, charities and social enterprises. There should be some scrutiny over the way in which those organisations are handling personal data in the context of delivering those public services.
Nigel Huddleston
Q Do you believe that there is a lot of work to do in terms of clarity, in order to allay some of the fears about which data are being used here? I have had emails from constituents, and there is a perception that Excel spreadsheets will be floating around universities with personal financial data and personal health records. It is nothing like that, is it? It is aggregated and anonymised. What can we do, what can Government do and what can you do to help clarify the opportunity, move the debate on to those opportunities and allay some of those fears about data protection?
Jeni Tennison: I completely agree that there needs to be greater clarity about which data are being shared with whom, and why and how. You say that we are talking here about the transfer of aggregate and anonymised data, but that is not necessarily the case for some of the pieces of data sharing that are in the Bill. Some of it is the sharing of individual-level data, but it is not clear whether those are bulk Excel spreadsheets or through APIs. Those are the kinds of details that actually make a difference to how anybody might think about this trade-off between privacy and the public good.
Mike Bracken: Perhaps another way of thinking about that would be to question whether there needs to be sharing at all. As Jeni said, the sharing of data in Government has many different forms. Hopefully, many of those are secure and anonymised. I have doubts about our overall data-sharing operations, simply because Government is so distributed and there are so much data. Adding more sharing, without a clear landscape under which that is happening, seems to add more risk of privacy violation and more risk to security. Perhaps a way to think about it is access rather than sharing. Many Government Departments, and many organisations, are able to provide individual data points at point of request to people who they trust. You can query a dataset using an application programming interface rather than sharing an entire dataset with Departments. I suspect it is that willingness to share very large sets of data in different ways for the convenience of Government Departments and agencies that is the root cause of the unease around the data sharing part of the Bill.
Nigel Huddleston
Q Forgive me, but is that not the point? I said let us focus on the opportunities but already we have gone on to the negatives and the concerns. It is often commented that by sharing health records we could cure cancer in 10 years. If I asked my constituents if they would share their health information with a university, 99 out of 100 people would say yes. We have to be more ambitious on the communication of the opportunities as well, have we not?
Mike Bracken: The opportunities are great and we are very supportive of that, but I suspect you did not ask each individual constituent if we should share everybody’s health data. That is the point. When we ask for data sharing it is down to an individual’s point of view. The Government use bulk data too often when what is actually required is only a small amount of data by another Government Department. There are different mechanisms that can do that more safely.
Chris Skidmore
Q The research power for data sharing, as presented, has been welcomed by many academics and civil society groups as a means of unlocking data for research for public benefit. Looking particularly at that data sharing with non-public bodies, do you recognise the benefits of that power? In terms of your point about communicating the value of the Bill, we have the research power and other things. Looking at vulnerable groups, such as troubled families, we have other powers that are there for public benefit. How do you feel we should express that public benefit?
Jeni Tennison: The benefits of each of the individual pieces of the Bill are different kinds of benefits to different kinds of people. I think they need to be separated out in some ways and not be muddled up together. That is one of the challenges with the Bill.
Matt Hancock
Q Can you set out what some of those might be?
Jeni Tennison: The benefits?
Matt Hancock
Yes.
Jeni Tennison: The research power enables us to provide data to researchers and academics who can then draw broad conclusions about, for example, the state of our economy, or who can give more accurate and up-to-date information about the way in which we are functioning as a society in general. Having those is of great benefit to society. The pieces around fuel poverty and so on are more specific benefits to both individuals who would be touched by that and to the efficiency of the public sector.
Matt Hancock
Q And in terms of the data measures to tackle fraud?
Jeni Tennison: I have not looked at the detail of the individual measures for those kinds of benefits.
Louise Haigh
Q Is the point not that these benefits cannot be achieved unless the risks are tackled head-on, which is exactly what happened with the care.data issue in the last Parliament? That health data could not be shared because the public did not trust the Government or insurers with that risk. I worked in insurance at the time and that came as quite a blow. Is the point not that the Government need to take on the issues around transparency and trust in this Committee? Mike, on your point about data access, do you think Government are currently geared up to allow that, rather than bulk data sharing?
Mike Bracken: “Government” is a very broad organisation. There are promising moves around registers of data and around reinstating an address register. I do not know quite where that is now. There was a promising move but that now seems to be a little on the backburner—I am not sure. The point is that that question needs to be asked to 20-plus Government Departments and more than 300 agencies and non-departmental public bodies, each of which has a different answer. It is hard to summarise where “government” is at any one point without any open standards between those and without any clear framework under which Government data are already being shared.
The Chair
Order. That brings us to the end of the time allotted to the Committee to ask questions. On behalf of the Committee, I thank the witnesses for their evidence.
Digital Economy Bill (Second sitting)
Tuesday 11th October 2016
(7 years, 8 months ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 View all Digital Economy Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 11 October 2016 - (11 Oct 2016)
The Chair
Colleagues and members of the public, welcome to our second evidence session on the Digital Economy Bill. Before we get under way and introduce our first set of witnesses, a number of colleagues wish to declare an interest.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I do not have any direct interests, but for full transparency I draw the Committee’s attention to my share ownership in Teclan Ltd, which is in the Register of Members’ Financial Interests.
Nigel Huddleston (Mid Worcestershire) (Con)
Again for full transparency, prior to becoming an MP I worked for Google, in which I have a small share interest at the moment.
Nigel Adams (Selby and Ainsty) (Con)
As I stated in the earlier session, I am a director and shareholder of two telecommunications businesses, and I believe my wife is also a director and shareholder.
Examination of Witnesses
David Austin and Alan Wardle gave evidence.
The Chair
Q 83 For this session we have until 2.45 pm. Will the witnesses please introduce themselves for the record?
David Austin: My name is David Austin. I am the chief executive of the British Board of Film Classification.
Alan Wardle: I am Alan Wardle, head of policy and public affairs at the National Society for the Prevention of Cruelty to Children.
Louise Haigh (Sheffield, Heeley) (Lab)
Q David, am I right in interpreting the amendments that the Government tabled last night as meaning that you are intended to be the age verification regulator?
David Austin: That is correct. We reached heads of agreement with the Government last week to take on stages 1 to 3 of the regulation.
Louise Haigh
Q Are you sufficiently resourced to take on that role?
David Austin: We will be, yes. We have plenty of time to gear up, and we will have sufficient resource.
Louise Haigh
Q Will it involve a levy on the porn industry?
David Austin: It will involve the Government paying us the money to do the job on our usual not-for-profit basis.
Louise Haigh
Q What risks do you envisage in people handing over their personal data to the pornographic industry?
David Austin: Privacy is one of the most important things to get right in relation to this regime. As a regulator, we are not interested in identity at all. The only thing that we are interested in is age, and the only thing that a porn website should be interested in is age. The simple question that should be returned to the pornographic website or app is, “Is this person 18 or over?” The answer should be either yes or no. No other personal details are necessary.
We should bear in mind that this is not a new system. Age verification already exists, and we have experience of it in our work with the mobile network operators, where it works quite effectively—you can age verify your mobile phone, for example. It is also worth bearing in mind that an entire industry is developing around improving age verification. Research conducted by a UK adult company in relation to age verification on their online content shows that the public is becoming much more accepting of age verification.
Back in July 2015, for example, this company found that more than 50% of users were deterred when they were asked to age verify. As of September, so just a few weeks ago, that figure had gone down to 2.3%. It is established technology, it is getting better and people are getting used to it, but you are absolutely right that privacy is paramount.
Louise Haigh
Q Are you suggesting that it will literally just be a question—“Is the user aged 18?”—and their ticking a box to say yes or no? How else could you disaggregate identity from age verification?
David Austin: There are a number of third-party organisations. I have experience with mobile phones. When you take out a mobile phone contract, the adult filters are automatically turned on and the BBFC’s role is to regulate what content goes in front of or behind the adult filters. If you want to access adult content—and it is not just pornography; it could be depictions of self-harm or the promotion of other things that are inappropriate for children—you can go to your operator, such as EE, O2 or Vodafone, with proof that you are 18 or over. It is then on the record that that phone is age verified. That phone can then be used in other contexts to access content.
Louise Haigh
Q But how can that be disaggregated from identity? That person’s personal data is associated with that phone and is still going to be part of the contract.
David Austin: It is known by the mobile network operator, but beyond that it does not need to be known at all.
Louise Haigh
Q And is that the only form of age verification that you have so far looked into?
David Austin: The only form of age verification that we, as the BBFC, have experience of is age verification on mobile phones, but there are other methods and there are new methods coming on line. The Digital Policy Alliance, which I believe had a meeting here yesterday to demonstrate new types of age verification, is working on a number of initiatives.
Claire Perry (Devizes) (Con)
Q May I say what great comfort it is to know that the BBFC will be involved in the regulatory role? It suggests that this will move in the right direction. We all feel very strongly that the Bill is a brilliant step in the right direction: things that were considered inconceivable four or five years ago can now be debated and legislated for.
The fundamental question for me comes down to enforcement. We know that it is difficult to enforce anything against offshore content providers; that is why in the original campaign we went for internet service providers that were British companies, for whom enforcement could work. What reassurance can you give us that enforcement, if you have the role of enforcement, could be carried out against foreign entities? Would it not be more appropriate to have a mandatory take-down regime if we found that a company was breaking British law by not asking for age verification, as defined in the Bill?
David Austin: The BBFC heads of agreement with the Government does not cover enforcement. We made clear that we would not be prepared to enforce the legislation in clauses 20 and 21 as they currently stand. Our role is focused much more on notification; we think we can use the notification process and get some quite significant results.
We would notify any commercially-operated pornographic website or app if we found them acting in contravention of the law and ask them to comply. We believe that some will and some, probably, will not, so as a second backstop we would then be able to contact and notify payment providers and ancillary service providers and request that they withdraw services from those pornographic websites. So it is a two-tier process.
We have indications from some major players in the adult industry that they want to comply—PornHub, for instance, is on record on the BBC News as having said that it is prepared to comply. But you are quite right that there will still be gaps in the regime, I imagine, after we have been through the notification process, no matter how much we can achieve that way, so the power to fine is essentially the only real power the regulator will have, whoever the regulator is for stage 4.
For UK-based websites and apps, that is fine, but it would be extremely challenging for any UK regulator to pursue foreign-based websites or apps through a foreign jurisdiction to uphold a UK law. So we suggested, in our submission of evidence to the consultation back in the spring, that ISP blocking ought to be part of the regulator’s arsenal. We think that that would be effective.
Claire Perry
Q Am I right in thinking that, for sites that are providing illegally copyrighted material, there is currently a take-down and blocking regime that does operate in the UK, regardless of their jurisdiction?
David Austin: Yes; ISPs do block website content that is pirated. There was research published earlier this year in the US that found that it drove traffic to pirated websites down by about 90%. Another tool that has been used in relation to IP protection is de-indexing, whereby a search engine removes the infringing website from any search results. We also see that as a potential way forward.
Thangam Debbonaire (Bristol West) (Lab)
Q First, can I verify that you both support adding in the power to require ISPs to block non-compliant sites?
David Austin: Yes.
Alan Wardle: Yes, we support that.
Thangam Debbonaire
Q Good. That was quick. I just wanted to make sure that was there. What are your comments on widening the scope, so that age verification could be enforced for matters other than pornography, such as violent films or other content that we would not allow in the offline world? I am talking about things such as pro-anorexia websites. We know that this is possible to do in certain formats, because it is done for other things, such as copyright infringement. What are your views on widening the scope and the sanctions applying to that?
Alan Wardle: We would support that. We think the Bill is a really great step forward, although some things, such as enforcement, need to be strengthened. We think this is an opportunity to see how you can give children parity of protection in the online and the offline worlds.
It is very good, from our perspective, that the BBFC is doing this, because they have got that expertise. Pornography is not the only form of harm that children see online. We know from our research at the NSPCC that there are things like graphic violence. You mentioned some of the pro-anorexia and pro-suicide sites, and they are the kind of things that ought to be dealt with. We are supporting developing a code of practice with industry to work out what those harms are—and that is very much a staged approach.
We take it for granted that when, for instance, a child goes to a youth group or something like that, we make sure there are protections there, and that the staff are CRB checked. Somehow it seems that for children going on to the internet it is a bit like the wild west. There are very few protections. Some of the content really is upsetting and distressing to children. This is not about adults being blocked from seeing adult content. That is absolutely fine; we have no problem with that at all. But it is about protecting children from seeing content that is inappropriate for them. We would certainly support that widening, but obviously doing it in a staged way so that the regulator does not take on too much at once. We would certainly support that.
David Austin: I would echo what Alan says. We see this Bill as a significant step forward in terms of child protection. We absolutely agree with the principle of protecting children from a wider range of content—indeed, that is what we do in other areas: for example, with the mobile network operators and their adult filters. Like Alan, I think we see it in terms of more of a staged approach. The BBFC taking on this role is a significant new area of work—quite a challenge to take on board. I think there is a potential risk of overloading the Bill if we try to put too much on it, so I would very much support the NSPCC’s phased approach.
Thangam Debbonaire
Q Is there anything further that you think needs to be added to the Bill to make the sanctions regime work? I am also thinking—at the risk of going against what you just said, Mr Austin—about whether or not we should be considering sites that are not designed for commercial purposes but where pornography or other harmful material is available on a non-commercial basis; or things not designed for porn at all, such as Twitter timelines or Tumblr and other social media, where the main purpose may not be pornography or other harmful material, but it is available. Do you think the Bill has enough sanctions in it to cope with all of that, or should that be added? Is there anything else you would like to add?
David Austin: There were a few questions. I will try to answer them all, but if I miss any of them please come back to me. In terms of sanctions, I have talked about ISP blocking and de-indexing. We think those could be potentially effective steps. In terms of commercial pornography, we have been working on devising a test of what that is. The Bill states explicitly that the pornography could be free and still provided on a commercial basis. I do not think it is narrowing the scope of the regulation an awful lot by specifying commercial pornography. If there are adverts, if the owner is a corporate entity, if there are other aspects—if the site is exploiting data, for example: there are all sorts of indications that a site is operating on a commercial basis. So I do not see that as a real problem.
In relation to Twitter, which you mentioned, what the Bill says the regulator should do is define what it sees as ancillary service providers. Those are organisations whose work facilitates and enables the pornography to be distributed. There is certainly a case to argue that social media such as Twitter are ancillary service providers. There are Twitter account holders who provide pornography on Twitter so I think you could definitely argue that.
I would argue that Twitter is an ancillary service provider, as are search engines and ISPs. One of the things that we plan to do in the next weeks and months would be to engage with everyone that we think is an ancillary service provider, and see what we can achieve together, to try and achieve the maximum protection we can through the notification regime that we are taking on as part 3 of the Bill.
The Chair
Just before we move on, shall we see if Mr Wardle also wants to contribute to things that should be in the Bill?
Alan Wardle: On that point, I think it is important for us that there is clarification—and I would agree with David about this—in terms of ensuring that sites that may for instance be commercial but that are not profiting from pornography are covered. Again, Twitter is an example. We know that there are porn stars with Twitter accounts who have lots of people following them and lots of content, so it is important that that is covered.
It is important that the legislation is future-proofed. We are seeing at the NSPCC through Childline that sexual content or pornography are increasingly live-streamed through social media sites, and there is self-generated content, too. It is important that that is covered, as well as the traditional—what you might call commercial—porn. We know from our research at the NSPCC that children often stumble across pornography, or it is sent to them. We think that streamed feeds for over-18s and under-18s should be possible so that sort of content is not available to children. It can still be there for adults, but not for children.
Nigel Adams
Q Can you give us your perspective on the scale of the problem of under-18s’ access to this sort of inappropriate content? I guess it is difficult to do a study into it but, through the schools network and education departments, do you have any idea of the scale of the issue?
Alan Wardle: We did research earlier this year with the University of Middlesex into this issue. We asked young people—under 18s—whether they had seen pornography and when. Between the ages of 11 and 18, about half of them had seen pornography. Obviously, when you get to older children—16 and 17-year-old-boys in particular—it was much higher. Some 90% of those 11 to 18-year-olds had seen it by the age of 14. It was striking—I had not expected this—that, of the children who had seen it, about half had searched for it but the other half had stumbled across it through pop-ups or by being sent stuff on social media that they did not want to see.
It is a prevalent problem. If a determined 17-year-old boy wants to see pornography, undoubtedly he will find a way of doing it, but of particular concern to us is when you have got eight, nine or 10-year-old children stumbling across this stuff and being sent things that they find distressing. Through Childline, we are getting an increasing number of calls from children who have seen pornographic content that has upset them.
Nigel Adams
Q Has there been any follow-on, in terms of assaults perpetrated by youngsters as a result of being exposed to this?
Alan Wardle: It is interesting to note that there has been an exponential rise in the number of reports of sexual assaults against children in the past three or four years. I think it has gone up by about 84% in the past three years.
Nigel Adams
Q By children?
Alan Wardle: Against children. Part of that, we think, is what you might call the Savile effect—since the Savile scandal there has been a much greater awareness of child abuse and children are more likely to come forward, which we think is a good thing. But Chief Constable Simon Bailey, who is the national lead on child protection, believes that a significant proportion of that is due to the internet. Predators are able to cast their net very widely through social networking sites and gaming sites, fishing for vulnerable children to groom and abuse.
We believe that, in developing the code of practice that I talked about earlier, that sort thing needs to be built in to ensure that children are protected from that sort of behaviour in such spaces. The internet is a great thing but, as with everything, it can be used for darker purposes. We think there is increasing evidence—Simon Bailey has said this, and more research needs to be done into the scale of it—that children, as well as seeing adult content, are increasingly being groomed for sex online.
Nigel Adams
Q Mr Austin, what constructive conversations and meetings have you had with ISPs thus far, in terms of the potential for blocking those sites—especially the sites generated abroad?
David Austin: We have not had any conversations yet, because we signed the exchange of letters with the Government only last Thursday and it was made public only today that we are taking on this role. We have relationships with ISPs—particularly the mobile network operators, with which we have been working for a number of years to bring forward child protection on mobile devices.
Our plan is to engage with ISPs, search engines, social media—the range of people we think are ancillary service providers under the Bill—over the next few weeks and months to see what we can achieve together. We will also be talking to the adult industry. As we have been regulating pornography in the offline space and, to an extent, in the online space for a number of years, we have good contacts with the adult industry so we will engage with them.
Many companies in the adult industry are prepared to work with us. Playboy, for instance, works with us on a purely voluntary basis online. There is no law obliging it to work with us, but it wants to ensure that all the pornography it provides is fully legal and compliant with British Board of Film Classification standards, and is provided to adults only. We are already working in this space with a number of players.
Nigel Huddleston
Q Obviously, the BBFC is very experienced at classifying films according to certain classifications and categories. I am sure it is no easy task, but it is possible to use an objective set of criteria to define what is pornographic or disturbing, or is it subjective? How do you get that balance?
David Austin: The test of whether something is pornographic is a test that we apply every single day, and have done since the 1980s when we first started regulating that content under the Video Recordings Act 1984. The test is whether the primary purpose of the work is to arouse sexually. If it is, it is pornography. We are familiar with that test and use it all the time.
Nigel Huddleston
Q In terms of skills and resources, are you confident you will be able to get the right people in to do the job properly? I am sure that it is quite a disturbing job in some cases.
David Austin: Yes. We already have people who have been viewing pornographic content for a number of years. We may well need to recruit one or two extra people, but we certainly have the expertise and we are pretty confident that we already have the resources. We have time between now and the measures in the Bill coming into force to ensure that we have a fully effective system up and running.
The Minister for Digital and Culture (Matt Hancock)
Q I just want to put on the record that we are delighted that the BBFC has signed the heads of agreement to regulate this area. I cannot think of a better organisation with the expertise and the experience to make it work. What proportion of viewed material do you think will be readily covered by the proposed mechanism in the Bill that you will be regulating the decision over but not the enforcement of?
David Austin: I am not sure that I understand the question.
Matt Hancock
Q I am thinking about the scale of the problem—the number of views by under-18s of material that you deem to be pornographic. What proportion of the problem do you think the Bill, with your work, will fix?
David Austin: So we are talking about the amount of pornography that is online?
Matt Hancock
Q And what is accessed.
David Austin: Okay. As you all know, there is masses of pornography online. There are 1.5 million new pornographic URLs coming on stream every year. However, the way in which people access pornography in this country is quite limited. Some 70% of users go to the 50 most popular websites. With children, that percentage is even greater; the data evidence suggests that they focus on a relatively small number of sites.
We would devise a proportionality test and work out what the targets are in order to achieve the greatest possible level of child protection. We would focus on the most popular websites and apps accessed by children—those data do exist. We would have the greatest possible impact by going after those big ones to start with and then moving down the list.
Matt Hancock
Q So you would be confident of being able to deal with the vast majority of the problem.
David Austin: Yes. We would be confident in dealing with the sites and apps that most people access. Have I answered the question?
Matt Hancock
Q Yes. Given that there is a big problem that is hard to tackle and complicated, I was just trying to get a feel for how much of the problem you think, with your expertise and the Bill, we can fix.
David Austin: We can fix a great deal of the problem. We cannot fix everything. The Bill is not a panacea but it can achieve a great deal, and we believe we can achieve a great deal working as the regulator for stages 1 to 3.
Louise Haigh
Q My question follows on neatly from that. While I am sure that the regulation will tackle those top 50 sites, it obviously comes nowhere near tackling the problems that Mr Wardle outlined, and the crimes, such as grooming, that can flow from those problems. There was a lot of discussion on Second Reading about peer-to-peer and social media sites that you have called “ancillary”. No regulation in the world is going to stop that. Surely, the most important way to tackle that is compulsory sex education at school.
Alan Wardle: Yes. In terms of online safety, a whole range of things are needed and a whole lot of players. This will help the problem. We would agree and want to work with BBFC about a proportionality test and identifying where the biggest risks are to children, and for that to be developing. That is not the only solution.
Yes, we believe that statutory personal, social and health education and sexual relationships education is an important part of that. Giving parents the skills and understanding of how to keep their children safe is also really important. But there is a role for industry. Any time I have a conversation with an MP or parliamentarian about this and they have a child in their lives—whether their own, or nieces or nephews—we quickly come to the point that it is a bit of a nightmare. They say, “We try our best to keep our children safe but there is so much, we don’t know who they are speaking to” and all the rest of it.
How do we ensure that when children are online they are as safe as they are when offline? Of course, things happen in the real world as well and no solution is going to be perfect. Just as, in terms of content, we would not let a seven-year-old walk into the multiplex and say, “Here is ‘Finding Nemo’ over here and here is hard core porn—off you go.”
We need to build those protections in online so we know what children are seeing and to whom they speaking and also skilling up children themselves through school and helping parents. But we believe the industry has an important part to play in Government, in terms of regulating and ensuring that spaces where children are online are as safe as they can be.
Christian Matheson (City of Chester) (Lab)
Q To follow on from the Minister’s question, you feel you are able to tackle roughly the top 50 most visited sites. Is there a danger that you then replace those with the next top 50 that are perhaps less regulated and less co-operative? How might we deal with that particular problem, if it exists?
David Austin: When I said “the top 50”, I was talking in terms of the statistics showing that 70% of people go to the top 50. We would start with the top 50 and work our way through those, but we would not stop there. We would look to get new data every quarter, for example. As you say, sites will come in and out of popularity. We will keep up to date and focus on those most popular sites for children.
We would also create something that we have, again, done with the mobile operators. We would create an ability for members of the public—a parent, for example—to contact us about a particular website if that is concerning them. If an organisation such as the NSPCC is getting information about a particular website or app that is causing problems in terms of under-age access, we would take a look at that as well. In creating this proportionality test what we must not do is be as explicit as to say that we will look only at the top 50.
First, that is not what we would do. Secondly, we do not want anyone to think, “Okay, we don’t need to worry about the regulator because we are not on their radar screen.” It is very important to keep up to date with what are the most popular sites and, therefore, the most effective in dealing with under-age regulation, dealing with complaints from members of the public and organisations such as the NSPCC.
Alan Wardle: I think that is why the enforcement part is so important as well, so that people know that if they do not put these mechanisms in place there will be fines and enforcement notices, the flow of money will be stopped and, crucially, there is that backstop power to block if they do not operate as we think they should in this country. The enforcement mechanisms are really important to ensure that the BBFC can do their job properly and people are not just slipping from one place to the next.
Claire Perry
Q Of those top 50 sites, do we know how many are UK-based?
David Austin: I would guess, none of them. I do not know for sure, but that would be my understanding.
Claire Perry
Q Secondly, I want to turn briefly to the issue of the UK’s video on demand content. My reading around clause 15 suggests that, although foreign-made videos on demand will be captured by the new provisions, UK-based will continue to be caught by Communications Act 2003 provisions. Do you think that is adequate?
David Austin: That is my understanding as well. We work very closely with Ofcom. Ofcom regulates UK on demand programme services as the Authority for Television On Demand, but it applies our standards in doing so. That is a partnership that works pretty effectively and Ofcom has done an effective job in dealing with that type of content. That is one bit that is carved out from the Bill and already dealt with by Ofcom.
The Chair
We have given the witnesses a good half-hour grilling, so if no one is seeking to catch my eye—yes, Calum?
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
May I move on to intellectual property?
Calum Kerr
Q Thank you. There are some welcome measures in the Bill relating to making the protection of intellectual property online as same as it is offline. I note, though, that there is some concern about search engines and how intellectual property would be policed. What is your view on how that will work? Do there need to be additional powers?
David Austin: To be honest, we do not deal with intellectual property. Our core work is the protection of children, and intellectual property is another issue. We do work with an industry for which the protection of intellectual property is very important, but I am afraid I am not the person to ask.
Alan Wardle: I am not an expert on intellectual property, regrettably.
The Chair
Colleagues, are there any other questions for these excellent witnesses? No. In that case, thank you very much indeed, David and Alan, for your evidence. We appreciate it.
Examination of witnesses
Dr Edgar Whitley and Mr Scott Coates gave evidence.
The Chair
Q We have roughly 45 minutes for this group of witnesses, if necessary. Will the witnesses please introduce themselves?
Dr Whitley: My name is Dr Edgar Whitley. I am an academic at the London School of Economics. Of particular importance for this session is the fact that I am the co-chair of the privacy and consumer advisory group of the Government Digital Service.
Scott Coates: Good afternoon. My name is Scott Coates and I am the CEO of the Wireless Infrastructure Group, an independent British wireless infrastructure company that builds and operates communication towers and fibre networks.
Louise Haigh
Q In your written evidence, Mr Coates, you talked about the need for greater diversity in the ownership of mobile infrastructure. Does the Bill go far enough on that?
Scott Coates: We welcome the measures in the Bill to improve the speed at which infrastructure can be deployed and to improve the economics of deploying the infrastructure. It is critical to understand that there are different ways of deploying infrastructure. There are different ownership models, for which the Bill could have different impacts. When I say “infrastructure”, I mean the kind of mobile and fixed infrastructure that you see in the field, whether that is cables, ducts, cabinets or communication tower facilities.
There are two different types of owners of those types of infrastructure. First, the vertically integrated players are effectively building and operating that infrastructure for their own networks, primarily, and their business case is based on their economic use of that infrastructure. Secondly, you have a growing pool of independent infrastructure companies, of which we are one. We are very different from the traditional, vertically integrated players in that we are investing in infrastructure not for our own network, but to provide access, on a shared basis, to all other networks.
Louise Haigh
Q What are the current proportions for ownership?
Scott Coates: If I talk about mobile infrastructure, around a third of the UK’s communications towers—of which we think there are around 27,000 in the UK—are independently operated. It is really interesting that, globally, there has been a very firm shift over the past decade towards more independent operation of such upstream digital infrastructure.
Currently, more than 60% of all communication towers globally are held in an entity separate from the networks that use them. In countries such as India or the US, that figure is somewhere between 80% and 90%. There are real benefits that flow from the independent ownership of infrastructure. We are trying to do more in the UK, but the UK currently lags behind in the global statistics I mentioned.
Louise Haigh
Q Does the Bill do anything to address that?
Scott Coates: One of the things that we acknowledge and welcome in the Bill is that it is very clear about maintaining investment incentives—not just for the vertically integrated players, but for the independent infrastructure players such as ourselves—
Louise Haigh
Q It will not do anything to address the proportion, will it? It will only entrench the division already there.
Scott Coates: I do not think that the Bill does anything to encourage more independent infrastructure. The Government’s policy position at the moment is very clear: they want to maintain investment incentives for independent infrastructure. To achieve clarity on this requires that the Bill is worded very carefully.
When we deploy our tariff facilities and infrastructure on or adjacent to land, as things are now one of the definitions of UK land often covers things that sit on that land. One of the potential risks is that if the activities we engage in and the facilities that we deploy are not carefully carved out, they risk being treated as land. Under the new valuations principles in the communications code, that potentially risks giving them no value or low value, which would obviously be devastating to investment appetite. The consequence of that would be further concentration of infrastructure ownership in the hands of the larger, vertically integrated players who have different incentives from us when they approach this.
Louise Haigh
Q So there is potential for this to get worse, but what could be done to actually encourage more independently owned infrastructure?
Scott Coates: We would like to see a carve-out that is as clear as possible for the activities that we are engaged in. We would like to see it made absolutely clear that the communications code, which is a compulsory purchase tool to bring land into the telecoms sector, does not drift beyond that focus and risk entering into what is really Ofcom’s territory, which is to govern the relationships between telecoms companies.
Louise Haigh
Q Dr Whitley, if I may jump to part 5 of the Bill, we heard earlier that there were concerns that the Government have not taken sufficiently into account safeguards around privacy and personal data. Do you think that this strikes the right balance between open policy-making and privacy?
Dr Whitley: My main concern with part 5 is that the detail is just not there. The codes of practice that one would expect to have there, which would give the details about how privacy might be protected, are not present. We have been involved with the privacy and consumer advisory group. As far as I can tell, we had our first meeting with the team who were developing these proposals back in July 2013. We said from the very beginning that we want detail, because when we have specific details we can give advice and suggestions and review it, but we have never had that level of specific detail.
Louise Haigh
Q So the proposals do not reflect at all the three years of consultation that have taken place?
Dr Whitley: Obviously, that is reflected in some parts of the proposals, but we asked for more details specifically on how privacy will be protected regarding the data-sharing proposals, and that is still not there.
Louise Haigh
Q Should that detail be in primary legislation?
Dr Whitley: Whether it is in primary legislation or in codes of practice, my personal view is that you need a certain level of detail to be able to make an informed decision. Otherwise there will be some vague position of, “We will share some data with other people within Government. Trust us, because we are going to develop some codes of practice that will be consulted on and will then be put in front of Parliament. There will be protections and it will all be fine”. We are saying that there are lots of different ways of doing that. The earlier you give us at least a first attempt at those details, the better we can improve it.
Louise Haigh
Q In that period of consultation, was the detail around transparency never discussed?
Dr Whitley: It depends. There has been talk along the lines of there being codes of practice and liaison with the Information Commissioner’s Office, so at a very high level there has obviously been some discussion. But at the very specific level—for example, the civil registration clauses talk both about allowing a yes/no check around whether there is a birth certificate associated with a family, while on the other hand there will be bulk data sharing within Government so that different Departments can know stuff and possibly make things better for society.
One half of that seems to be quite specific, and you can see how it could well be designed as a simple “Does a birth certificate exist for this person?” and the answer is yes or no. The privacy protections around that are reasonably well known and not very much data is being shared. Then the other illustration just says, “we will share these data with other bits of Government” and there is nothing there about what kind of privacy protections might be put in place. There are many different ways in which that can be done, but until we have some specific details, we cannot give you sensible reviews as to whether that is a good or not so good way of doing it.
Nigel Huddleston
Q Mr Coates, what role should wireless technologies play in achieving the universal service obligation?
Scott Coates: There is no doubt that for the last 5%, maybe a greater proportion than that, wireless technologies have a significant role to play. Six of the seven trials run by the Department for Culture, Media and Sport earlier this year were of a wireless-based structure. I think there is a role for it. It is also interesting, as you look beyond 10 megabits to the future when universal service means something far more substantial than that, that a new disruptive technology is coming.
Everyone is talking about 5G; it does not really exist at this stage, but we know it is going to be ultra-high bandwidth, ultra-low latency, with the potential to be a disruptive technology and replace fixed line to the home. Some countries around the world that have not had the wave of fixed line technology roll-out will be moving straight to wireless as their domestic broadband service.
Nigel Huddleston
Q What kind of timescales were you thinking about for the achievement of 5G?
Scott Coates: With 5G, it is really hot and talked about now, but it is still some way off. Mobile operators will market it strongly and talk about it strongly, but there was something last week from France Telecom admitting it does not know what it is yet, and that is the substance of the matter.
As we come in to the early 2020s, at the beginning of the next decade, we will start to see something. Interestingly, the infrastructure that is going to enable it is starting to go down now, so particularly in urban areas; as the concentration of cell sizes needs to get smaller and smaller, the infrastructure needed to power faster 4G services will ultimately be the infrastructure used to power 5G.
Coming back to the structure of the industry, it is critical that there is a competitive infrastructure market for 5G. As a new technology that is a combination of wireless and fibre, it has the opportunity to have multiple infrastructure parties competing. It also carries the risk of being a monopolised infrastructure.
Nigel Huddleston
Q Is this roll-out likely through purely commercial models or do you see a role for some kind of Government support here?
Scott Coates: In terms of using wireless to achieve USO, mobile as a technology has a very clean and efficient way of pushing out coverage to rural parts of the population, and that is through the licences. There is another major round of licensing, with something called 2.3 and 2.4, which is coming soon.
There is also 700 MHz, which is a really powerful frequency for delivering coverage into rural areas and which has already been licensed in many European countries. It is not licensed here yet, but the rules of those licences create an opportunity to get coverage out to the most rural parts of the country. You could do things like in Germany, where they said rural areas have to be covered before urban areas. That is the most efficient way of unlocking coverage from a wireless perspective in rural areas.
Scott Mann (North Cornwall) (Con)
Q One of the biggest challenges facing coastal and rural communities like mine is the problems with undulating coastlines and areas of outstanding natural beauty. I am interested in your thoughts on how we can strengthen the Bill to make sure we get out to some of the rural areas left behind in the past.
Scott Coates: I refer you back to the last question. The most efficient way to deal with that is through the licences. There is licensing coming up that will create an opportunity. Unfortunately, it is going to be a few years before the airwaves that deliver that are available for deployment.
There is a lot of activity happening in the sector at the moment. The mobile operators are very busy investing in their networks and we are working hand in hand with them to help them deliver that. I know we are building new towers in coastal areas right now; I do not know if we are building one in your constituency. So it is getting better. Bear in mind that the Government struck a deal with the mobile operators 18 months ago and the operators are busy investing on the back of that. In the last 4G licence, when the 800 MHz got auctioned, one of the licence lots, bought by Telefónica, required it to cover more of the country, so Telefónica is investing on the back of that as well.
Claire Perry
Q I want to push Dr Whitley on the privacy question. I think that what you are asking for, a code of conduct and some clarity, is reasonable, but equally, we cannot know what the demands and the questions might be going forward, or the data requirements. I look back on where Government do share data, querying the national insurance database, or, indeed, the Government ID project, where DVLA records were queried as a measure of identity, it all appeared to be fine, there were no issues of privacy or data loss, to my knowledge. In a way, should we not be taking on trust—I know that trust is a word people never like to use with Government, whereas we trust corporates all the time with all kinds of data—that we have not had a problem and that the right rules and procedures and the spirit of privacy will be protected?
Dr Whitley: You have highlighted a very privacy-friendly way of checking data that says, somebody has a database and you look it up and you say, “This particular person, or this particular attribute, is it true, yes or no?” Referring to the previous evidence session and the question, “Is this person over 18 and therefore able to access?”, yes/no seems a perfectly reasonable way of doing that and that is the kind of thing that we have been encouraging Government to do. As you say, the Verify programme uses exactly those kinds of checks. The problem is that, without that level of detail, it is not at all clear that that is going to be proposed for all parts of the data sharing. Again, with the civil registration data, they say explicitly, “We want to do bulk sharing” and that is, by definition, not a yes/no check. That is, “Here is a set of data that we have that we think will be useful for your Department to match against and thereby tailor particular services.”
As the National Audit Office reported a few weeks ago, there were 9,000 data incidents within Government in 2014-15. If you start just moving the data around, you really run the risk of data incidents of varying levels of severity, and if you do not have that detail you have to rely on trust. Is it not better to have that detail, so you can say, “This is what we want to do, this is the way we are thinking of doing it”, and ask experts, not only in PCAG but in general, “Do you have any issues or concerns about that and, if you do, what alternative ways might there be for addressing those?”?
Claire Perry
Q Do large corporate families do that? Nobody ever reads the Ts and Cs, but if they do, do you give explicit permission for your data to be handled around the Facebook family, for example, in the way that you suggest Government should specify? That is just a question from ignorance.
Dr Whitley: I do not know exactly how Facebook would handle it, but even if you are not worried about the data breach and data loss issue there is just a simple efficiency thing: it is a lot easier to have small pieces of data—yes/no, they are interested in this form of cat food, they are interested in those kinds of holidays, therefore target adverts based on that—than sending huge swathes of data to other parts of the system for duplication and therefore increasing the risk of data loss.
Claire Perry
Q It is an operational concern as well as a privacy concern?
Dr Whitley: Yes. From my perspective you start with a privacy concern that says, minimise the data that you are handling, do not have it in duplicate locations all over, but a consequence of starting with that privacy concern is that you also have very clear operational efficiencies; that you are not duplicating data and you are not having large amounts of data in your system, because the more data you hold, the more likely it is that there will be a breach, an attack, an accidental loss or whatever.
Rishi Sunak (Richmond (Yorks)) (Con)
Q Mr Coates, will you expand a little on your experience, internationally, of licence requirements in broadening coverage to rural areas? What is the specific benefit of independently owned infrastructure for rural communities, in bringing access to places which struggle with mobile signal today?
Scott Coates: I am going to pick on two countries that we have looked at making investments into. Germany, which I mentioned earlier, has an outside-in policy, so you have to cover their rural areas with your new batch of spectrum before you are allowed to deploy it into urban areas. France has got a very interesting model, in which they have compartmentalised the whole country. At the moment the Ofcom licences ensure that Scotland, England and Wales have their own targets, but if you break it down even further, the demands become higher on those targets. We have seen some targets in France where, by compartment, we are looking at 99.6% coverage by 2027. They have given the industry a long time to reach that target, but it is very bold. If people knew it was going to get better, maybe it would become a bit more understandable. This is not like changing a lightbulb; this is infrastructure that needs to be built.
I think there are three benefits of independent infrastructure. First, there is clear evidence that it enables better connectivity. Because our infrastructure is operated independently of a network, we do not have any of the conflicts of interest that normally exist in the vertically integrated model, in which the infrastructure owner is forced to provide access to their competitor. Because we focus only on infrastructure—it is our core business model—we tend to build better infrastructure, and we share it with more networks. There is evidence out there. Ernst and Young looked at this last year and studied independent communication tower ownership across north America and Europe. They compared it with communication towers that are owned as part of mobile networks. They found that there are twice as many networks using the independent infrastructure, compared with the vertically integrated owned infrastructure. That is twice the productivity coming off a piece of infrastructure, which is transformational, when it comes to enabling connectivity, particularly in rural areas.
The second benefit is around investment. At the end of the day, solving these problems comes down to investment. Independent infrastructure opens up a whole new channel of investor and brings a different type of investor into our industry: long-term, low-cost-to-capital infrastructure investors who are targeting infrastructure only. They do not want to invest in the retail operations or in buying premiership football rights; they want to invest purely in infrastructure. We can be a conduit to bring in that capital to invest in infrastructure. Earlier this year, after 10 years of various rounds of financing, our business announced a major fundraising transaction with a UK blue chip infrastructure investor—3i Infrastructure plc—and a north American investor that invests on behalf of state pension plans. That is exactly the kind of capital you want—long-term, patient capital—fuelling the growth of infrastructure.
The final benefit is in and around competition. We create competition at the infrastructure level. On the fixed-line side of the market, you can see some of the challenges from a lack of competition. But we also enable competition at a retail level, because our infrastructure is open for everyone to use. Mobile operators are the biggest users of our infrastructure, but well over 100 different network use our infrastructure in rural areas. Sometimes that can mean a local wireless broadband company that simply cannot afford to build its own infrastructure and would find it very difficult to get access to a mobile operator on a piece of infrastructure. On average, every one of our towers in the UK supports a non-mobile operator network running over it. Those are the three benefits of independent infrastructure.
Calum Kerr
There was a Coates who played for Liverpool. He was from Uruguay, so they called him Co-ah-tez.
Scott Coates: He played against England once.
Calum Kerr
Q He will again.
I would like to ask you about the USO, and then I would like to come on to the mobile environment. I have a problem with the USO not just because of the lack of ambition and what 10 megabits means for people living in those areas, but because the tactical low-speed USO will not push fibre a lot further. The lines between wired and wireless are blurring all the time, so would a more ambitious USO with faster speeds help you, in terms of pushing fibre further and putting other infrastructure out there?
Scott Coates: I think it comes down to the cost element. The further out you go with fibre, the more expensive it becomes. Our infrastructure in rural areas tends to be bigger pieces of infrastructure, so quite often there is fibre coming through it or it links to a site that has fibre, and that creates more bandwidth to power the wireless services coming over it. More generally, I would say that the USO is a start. No one is going to be happy with 10 megabits in a few years, but I would say that you need to start somewhere and it needs to be manageable from a cost point of view.
Calum Kerr
Q I will not ask you, then, whether the Scottish Government’s policy to have 30 megabits everywhere is more appropriate. I think that everyone is in agreement that the electronic communications code needed to be reformed, and there are some welcome measures in there, but as an independent infrastructure provider, do you honestly think that that will lead to more coverage by mobile providers, or will it simply give them a better bottom line?
Scott Coates: There are certainly measures that will make it easier to get rid of the bottlenecks and faster to resolve disputes. Running cables to connect up mobile sites has been a real challenge, so being able to fix those problems—that is not really about economics; it is about having faster resolution. Some of the pricing elements I do not think will have a material impact in rural areas when the commercial case to invest is not really there for the mobile operators anyway. The only way you can deal with that is through the licences. The new code will help to remove some of the ransom costs that we see in the industry and certainly give us a much more powerful weapon against those, but on a day-to-day basis, we do not expect to be moving towards compulsory-based conversations with our customers. The industry needs to work on a voluntary basis. That is absolutely essential; it is how it works everywhere else in the world. We have busy infrastructure facilities. We are there on average every 12 days. We need to have a good partnership with our land providers. The code is a really helpful and powerful new tool of last resort, but our whole industry needs to maintain a voluntary basis of engaging as our MO for dealing with landowners.
Calum Kerr
Q Thank you very much. Mr Coates, I thought you gave a great overview of why independent infrastructure is really important. You obviously feel a concern, so is there specific wording that you would like to see in the Bill that we could discuss at the next stage to ensure that you are protected and the value of your assets is not lost?
Scott Coates: Thank you for that question. We have had a really engaging journey with the Minister’s officials. They have been very diligent and transparent in engaging with us all the way through this fairly long process on the communications code. Our concern generally is that there is a fine line between the technical drafting that says that what we do on land is not covered by the communications code, and the risk of a legal challenge that it might be and might have nil or low value. What we have really asked for is as much clarity as can be provided. That will help to enhance the investability of our business. We are in a different place from the mobile operators and some other network providers, because we do not get any economic benefit from our own infrastructure; it is built for other people to use, so we are not a net user of infrastructure.
Calum Kerr
Q So that is a, “Yes, if possible, please.” It is okay; do not answer that. You have already answered. My final quick question is this. Although this is not retrospective, is there any case for excluding existing sites, if this is really about building out more network, in terms of the valuation element, given that a lot of those sites are actually on publicly owned land?
Scott Coates: There is certainly a difference in the substance of a transaction when you are approaching a farmer, a sports club, a university or whatever and asking for access to build a new piece of infrastructure where there is new coverage, and you are having that negotiation in the context of a new communications code that has tighter reference points on pricing. You will have more leverage for that conversation. You will still end up, I believe, paying them a rate way in excess of what zero value would be because that is just how you have those conversations, but it will be less than what is paid today, that is for sure, because you have got this new reference point. The substance of that is very different from the substance of a voluntary agreement you entered into with a firm six or seven years ago and that comes up for renewal in two to three years and the infrastructure is already there.
I think it is important that we have a robust set of tools as an industry but, as I mentioned earlier, it is equally if not more important that the industry acts responsibly and avoids behaviour such as forcing situations where they need a new compulsory purchase tool, even though they have already got access today. There is definitely a way of engaging on existing sites that should be a bit different from new sites, as part of a package of trying to maintain the voluntary support of the land and property sector for our industry.
Matt Hancock
Q Could you set out in more detail—you have already gone into this a bit—about what you mean when you say that the code should include land owned by the infrastructure providers but not the apparatus, and the distinction there in the written evidence?
Scott Coates: It comes back to this. Under UK property law, anything that affixes to land could be considered land. At the moment, the code effectively is to regulate land coming into the telecom sector, not to regulate the relationships between telecoms companies. It carves out from land the apparatus.
I am advised that there is a risk of ambiguity. That is probably the best way I could describe it. It may be challenged down the line. This is an evolving and dynamic industry where we don’t exactly know the physical things we are going to be deploying in future. There is a risk that some of the things we do might receive a challenge that it is land not apparatus. I do not know.
Is a new runway at Heathrow infrastructure or land because it sits on top of land? Is the national grid transmission network an infrastructure asset or land because it sits on land? It is a fairly technical point. Like all these things, once the lawyers are running around looking at them, they will find concerns.
All we are saying is that we invest over 20 to 30-year horizons. The more clarity that can be provided is helpful. We acknowledge and clearly appreciate the intent behind Government policy to protect investment and passive infrastructure but more clarity around that will only help the investability of what we do.
Matt Hancock
Q Thanks. I am also grateful for what you said about the team at DCMS, who will have picked up on your kind words I am sure. I wanted to follow up on 5G. You talked earlier about the 5G roll-out. This is a bigger-picture question. What do think the Government need to be doing now to ensure that we are in the lead when it comes to the roll-out of 5G?
Scott Coates: People must be exhausted with hearing about the challenges with Openreach and what can be done there. The key thing is to help facilitate our competitive market for infrastructure. So 5G has the ability to be driven by the mobile operators, by the fibre players, by independent infrastructure companies. If you look at the US, half the small cells that power 4G and 5G are actually going in by independent infrastructure players; mobile operators as well as fibre players are in there, too.
It comes down to helping to facilitate as competitive a market as possible. We have started deploying infrastructure in at least one city in the UK: 4G initially, but it will lead to 5G. We would love to be able to get a competitive basis of access, or any access, to BT ducts. We cannot do that, despite the fact that they can access every single piece of our infrastructure.
That is one thing. The other thing is around the planning permissions for affixing equipment to lampposts. We are working in Aberdeen and I have to say that we have had a fantastically positive experience with the local council, which has been amazing and very supportive in everything we have been trying to do there. That experience is not shared across other councils in the UK.
Matt Hancock
Q Thanks very much. Dr Whitely, would you say that, done right and should the codes come out right, the clauses in the Bill have the potential to improve public services through better use of data?
Dr Whitley: Absolutely. You could have a side question about whether, for example, focusing on subsidies from energy providers is the best way to deal with fuel poverty, but in terms of that specific focus—if it is done right—then, absolutely. Our concern is that we just do not have the detail as to whether or not it is going to be done right. That has been the frustration over the last three years.
Drew Hendry
Q I want to talk about the spectrum licensing issue. We spent a lot of time in earlier sessions talking about the minimum average speed, particularly for SMEs, as being 10 megabits per second and whether or not that was ambitious for the future.
You talked about the outside-in licensing regime that could be possible—and is possible in other countries since it is being deployed, particularly for new tech and for the 700Mhz and the 5G licensing that will come. If that approach is adopted by the UK Government in terms of licensing, is it your belief that it would make that inequality almost go away and that it would deliver much greater equality across the pace of speeds for people to access business and other methods that they need?
Scott Coates: If a policy objective is to ensure that rural areas get a high quality mobile signal, then forcing the industry to invest in rural areas—and effectively funding that by allowing them to pay less money for the licences that they acquire—is the most efficient way to deliver that. It would have positive outcomes, for sure.
Drew Hendry
Q So it would achieve that aim, in your view, and it would to a great extent future-proof the need to go to that level of where you are going from 10 megabits per second to a higher level, and then a higher level again. Is that correct?
Scott Coates: Yes. The industry invests in order to stay competitive in areas where the market is working, and—where the licences oblige them—to invest in areas where the market is not working. The infrastructure needed to support some of these new services needs to be high bandwidth to support that, which will then support the uplift into the future in quality and speed of service.
Nigel Huddleston
Q Dr Whitley, are you excited by the potential opportunities of the use of big data by Government?
Dr Whitley: This is not about big data but data-sharing, but there are opportunities there for big data to be used. There are questions about how you manage it and about how you handle it.
One of the other things that I am involved with is a steering group for the Administrative Data Research Network, which is where administrative data can be used by researchers in very strictly controlled environments to answer interesting research questions, generate hypotheses and explore those hypotheses by matching data from various different Government datasets. But that is done in a very locked down, secure environment with no mobile phones and no taking out of data and so on. So there absolutely are opportunities, but doing it right is what I particularly care about.
Nigel Huddleston
Q We are one of the most sophisticated digital economies on the planet and we have some of the brightest brains on the planet. Surely we can work this out.
Dr Whitley: Yes. The process has been going on for three years and we still do not have codes of practice. That is the bit that puzzles me. If we have all these brilliant brains can they not put together even a draft code of practice, so that we can know what we are talking about?
For example, in the consultation around fuel poverty, it talked about gathering data and matching up potential houses and individuals who might benefit or be at risk, and it says that they will inform the licensed energy suppliers as to which of their customers should receive assistance. That, to me, sounds like a push: “Here is a big set of customers that may or may not belong to your company. Check through that list to see whether or not any of them are your customers and give them a fuel discount.”
But then a couple of paragraphs further on—this is the consultation relating to the proposals—the Government would simply have an eligibility flag along with customers’ names or addresses for doing that. Even in the consultation, it does not seem that these brilliant minds have been applied as well as they could be.
Nigel Huddleston
Q Once we work that out, which I am confident we will, where are the opportunities? Where is the up side? Where is the positive stuff coming out of this? How can Government be better as a result of this? I am always an optimist.
Dr Whitley: Done right, there are fantastic opportunities. Government is digitising. The GDS has got lots of experience about how to manage and handle and do attributes checking, which is what most of this is. There are definitely opportunities and the skills, but somehow something has gone wrong with regard to these proposals.
It is not as if the proposals have been rushed through in the past few minutes. We have been looking at these and asking for more details since July 2013 and we are still here without even a resemblance of a code of practice. Part 5 has six codes of practice that need to be developed and none of them is here. Yes, please, but some detail. I am academic; I want to see the detail.
Louise Haigh
Q As you say, it is an enormous shift in terms of data sharing within Government. Clause 29 would allow personal data on citizens to be shared if there is a
“contribution made by them to society”
or wellbeing to be gained. That basically covers anything, doesn’t it? Why have the Government not produced even a draft code of practice at this stage? How can we possibly be expected to vote on this while plainly placing blind faith in the Government?
Dr Whitley: You are basically saying what I was going to say. If you compare the comprehensive replies that Mr Coates has been able to give, talking about very specific details, with the vague “we don’t know anything” comments that I have made, you see that it is a real problem and also an issue for more general scrutiny of technological issues. If you do not have details about the different mobile phone frequencies that you are talking about, you cannot make detailed policy. Yet when it comes to data sharing, there is a sense that it will all work out in the end because we have the right people to do it.
Louise Haigh
Q How would you advise the Government to achieve that code of practice?
Dr Whitley: We have consistently said—the Privacy and Consumer Advisory Group particularly, because we have this existing relationship with Government, but civil society and experts more generally—that we are more than happy to engage. We have repeatedly said, “Give us some detail. Don’t just come and talk about high-level stuff. Give us the detail and we will give you detailed comments to improve the process.”
That has worked very well in relation to the Verify scheme; that is privacy friendly and has a lot of support from the kinds of people who are very concerned about privacy. So the expertise is there and the working relationships are there. Give us an opportunity to help; we want to. It is just that we need something to work on.
The Chair
Thank you very much to Mr Coates and Dr Whitley for some excellent evidence. We are very grateful. We will now move on to our next set of witnesses.
Examination of Witnesses
Jim Killock and Renate Samson gave evidence.
The Chair
Thank you to our next two witnesses for being here promptly. We will now hear evidence from Big Brother Watch and the Open Rights Group. For this session we again have broadly half an hour to 45 minutes. Will the witnesses please read their names into the record?
Jim Killock: I am Jim Killock, executive director of the Open Rights Group.
Renate Samson: I am Renate Samson, chief executive of Big Brother Watch. We were also a member of the open policy making group and the Privacy and Consumer Advisory Group, to which Dr Whitley referred earlier.
Louise Haigh
Q I will pick up where we left off, if that is okay. You were both involved in the consultation process for part 5 of the Bill. Did the proposals come as a surprise to you? Do they make sense to you as data experts?
Renate Samson: No, they do not make very much sense, if I am honest. As I said, we were a member of the open policy making process and we also submitted to the consultation. I am genuinely surprised that after a two-year process, all of a sudden it felt very rushed. There were conversations and meetings happening right up to the Queen’s Speech; there was still a general lack of clarity, particularly on safeguards, and many questions were still being asked, such as how, why, when and so on. The next thing we knew, it was in the Queen’s Speech and the Bill was published.
Reading through part 5—and I have read through it a lot and scratched my head a great deal, mainly for the reasons given in evidence earlier today—you see that the codes of practice, which would explain an awful lot of what we imagine is meant or may not be meant, just have not been published. I have repeatedly asked for them and been given various expected dates, and we are sitting here today without them but with the Bill already having been laid before Parliament.
We have also done a lot of work on the Investigatory Powers Bill, for which the codes of practice were there right from the start. There was clarity as to what was intended and what was going to be legislated for, straight up. So, I am profoundly disappointed, because data sharing and digital government are hugely important and we seem to be very far away after a very long process.
Jim Killock: It is worth considering why the open policy making process was put in place. Data sharing is known to be potentially controversial. It was knocked out of at least one previous Bill a few years back when proposed by Labour because of the lack of privacy safeguards. Everyone understood that something more solid was needed. Then the Cabinet Office was very keen to ensure it did not raise hackles, that it got the privacy and the safeguards right, that trust was in place. It was therefore a surprise, after that intense process, to get something back that lacked the safeguards everybody had been saying were needed.
We are particularly concerned not only about the lack of codes of practice, but the fact that a lot of these things should be in the Bill. Codes of practice are going to develop over years. We need to know about things like sunsetting, for instance—that these things are brought to a close, that you do not just have zombie data sharing arrangements in place, where everyone has half-forgotten about them and then suddenly they are revived. You need to have Parliament involved in the specifics.
As we have heard, data sharing has a huge range of possibilities, starting with the benign and the relatively uncontroversial: statistics and understanding what is happening to society and Government policy, where privacy is relatively easy to protect. You use the data once, you do the research and that is it. It ranges from that through to the very intrusive: profiling families for particular policy goals might be legitimate, but it also might be highly discriminatory. Getting to the specifics is important.
You need the safeguards in place to say, “These are the kinds of things we will be bringing back; these are the purposes that we may or may not share data for.” That way, you know there is a process in place. At the moment, it feels like once this has passed, the gate is opened and it is not necessarily for Parliament to scrutinise further.
Louise Haigh
Q We talked earlier about the bulk transfer and bulk sharing of data, and an earlier witness talked about providing data access, rather than data sharing. Should the Government not be pursuing trials on that basis, rather than these enormous powers without any kind of assurances to the public or parliamentarians about how they will be using them?
Renate Samson: It was very specific at the end of the open policy making process that, for example—put the bulk to one side for a moment—but regarding the fraud and debt aspect of the Bill, it had been agreed that three-year pilot projects would take place with subsequent review and scrutiny potentially by the OPM or by another group. They are in the Bill as a piece of legislation with the Minister deciding whether or not it is okay and potentially asking other groups, which are not defined. That is half an answer to half your question. Pilots are an excellent idea if they are pilots, not immediate legislation.
With regards to the bulk powers in the Bill, civil registration documents were a late addition. We are still not clear as to their purpose. The purpose given in the consultation to the OPM process, but also in the background documents relating to the Bill, is a whole mix of different reasons, none of which, I would argue, are clear and compelling or, indeed, necessary and proportionate. But again, as you have heard a lot today, without detail, how can we properly answer your question?
Jim Killock: I have a quick observation on this. We currently have a data protection framework. The European Union is revising its data protection laws; they are somewhat tougher, which is quite a good thing, but we do not know what the future of data protection legislation is in the UK. It might be the same or it might be entirely different in a few years’ time.
That is a very good reason for ensuring that privacy safeguards are quite specific and quite high in some of these sensitive areas, because we do not know whether the more general rules can be relied on and whether they are going to be the same. That is not to say that we do not need higher safeguards in any case here, because you are not dealing with a consent regime. People have to use Government and Government have to look at the data, so it is not a mutual agreement between people; you have to have higher safeguards around that.
Thangam Debbonaire
Q My questions are directed at Mr Killock and relate to paragraphs 37 and 38 of your submission, “Definition of pornographic material”. We heard earlier that both the NSPCC and the British Board of Film Classification support a provision to require ISPs to block websites that are non-compliant. There was also discussion of widening the scope to apply the restrictions to other harmful material that we would not allow children access to in the offline world. Here, you seem to be questioning the value of that:
“This extension of the definition…also raises questions as to why violent—but not sexual—materials rated as 18 should then be accessible online.”
I also question this consistency but the solution, to me, seems to be that we should include other material, such as violent material and pro-anorexic websites, as we talked about earlier. Will you tell us a bit more about what your objection is to creating a framework to keep children as safe online as they are offline?
Jim Killock: We have no objection; it is a laudable aim and something we should all be trying to do. The question is, what is effective and what will work and not impinge on people’s general rights? As soon as you look a little beyond pornography, you are talking about much more clear speech issues.
There will be a need to look at any given website and make a judgment about whether it should or should not be legally accessed by various people. That starts needing things like legal processes to be valid. Some of the things you are talking about are things that might not be viewed by anybody, potentially. The problem with all these systems is that they just do not work like that. They are working on bulk numbers of websites, potentially tens of thousands, all automatically identified, as a general rule, when people are trying to restrict this information. That poses a lot of problems.
I also query what is the measure of success here. Because I feel, I suspect, that the number of teenagers accessing pornography will probably not be greatly affected by these measures. There is more of an argument that small numbers of children who are, perhaps, under 12 may be less likely to stumble on pornographic material, but I doubt that the number of teenage boys, for instance, accessing pornographic material will be materially changed. If that is the case, what is the measure of success here? What harm is really being reduced? I just feel that, probably, these are rather expensive and difficult policies which are likely to have impacts on adults. People are saying it is not likely to affect them, but I rather suspect it might, and for what gain?
Thangam Debbonaire
Q You have mentioned your feelings and your suspicions but, actually, the British Board of Film Classification already has a system for identifying for instance pro-anorexic, pro-suicide and violent websites. It already has a system for use on mobile networks.
Jim Killock: No, it does not.
Thangam Debbonaire
Yes, it does. They sat right here this afternoon.
Jim Killock: No it does not. The mobile providers have a system that the BBFC—
Q Thangam Debbonaire: So a system exists?
Jim Killock: They have a system, which is not wildly accurate that people choose to use. To the extent that they are choosing to use it, there is some legitimacy around that. People choose to have websites blocked and they understand that a certain number of them may be incorrectly blocked, that is OK.
Thangam Debbonaire
Q Are you saying that that sort of system does not exist, because we were told that it did earlier?
Jim Killock: This is what they are currently doing: they are blocking websites, which are sometimes the right websites, sometimes not; sometimes the right websites are not blocked. It is essentially automated decision making that comes with the problem that you can only really do this by things like keyword search. There are not enough humans available at the right price to do the review, so all kinds of things get blocked for essentially no real reason. For instance, we have had a widget manufacturer—
Thangam Debbonaire
Q Forgive me for interrupting Mr Killock, but there is a good reason. You asked about successful outcomes—and if you are going to ask a question, I am going to answer it—the successful outcome is that children are protected in the online world in the same way as they are protected in the offline world. I have to reiterate this to you: I do not understand why you think it is a risk worth taking that some adults may or may not have their own personal preferences infringed, balanced against the harm which we know is done to children. On teenage boys, just saying that because teenage boys may or may not continue to watch pornography there is no point, that seems to be a very sad conclusion to come to.
Jim Killock: The point is that you can help children to be protected, the questions is, what is the best way? For instance, I agree with the NSPCC’s calls for the compulsory education of children. Of course that should be happening and it is not. Similarly, Claire Perry’s initiative to have filters available has its merits. Where I have a problem is where adults are forced into that situation, where they are having websites blocked and where there is little redress around that. I caution you around large-scale blocking of websites because we know from our own evidence that a very large number of websites get blocked incorrectly and it has impacts on those people too. The question is, what is effective? I am not sure that age verification will be effective in its own terms in protecting children.
Claire Perry
Mr Killock, it is nice to hear you finally supporting the initiative. Indeed, all of the shroud waving about false blocking was brought out with vigour many times over the past five years—
Jim Killock: We stand by that.
Claire Perry
Q My point is that it is sad that the campaign once again from your organisation is that the perfect must be the enemy of the good. I am afraid I would also question this issue of false blocking, and I would appreciate written evidence if you have it. It is a tiny fraction. It has never reached anything like the levels your organisation has claimed, and the processes for notification and unblocking have massively improved over the last five years. My question to you is: at what point does your organisation stop dealing with this world where it is, “Hands off our internet” and start accepting that content provision via the internet, which is just another form of provider, should have exactly the same safeguards as exist in the offline world?
Renate, your points around this are also quite disturbing because you are holding up for a perfect world—
Renate Samson: What points?
Q Claire Perry: Around privacy and data recognition. At what point do we accept that what is proposed in this Bill is actually a good step forward? While it may not be perfect, it is a massive step-change improvement on what we have today.
Jim Killock: The first question is: “What is the impact on everyone?”
Claire Perry
Q No, the question is: will you provide us with written evidence of this issue of false blocking, in detail, because I happen to think it is completely untrue, your words on this?
Jim Killock: Yes, we can.
Claire Perry
Q We would appreciate written evidence by next week. Thank you.
Jim Killock: We have literally hundreds.
Claire Perry
Q Hundreds? Of the 1.5 billion websites that are out there?
Jim Killock: The error rate does not appear so large; but when you multiply that by the number of providers that have different blocking systems it becomes quite significant.
The Chair
Do not interrupt the questions, or the answers.
Jim Killock: On the wider question, what is effective, the question is how are children protected, versus what is the impact on adults. At the moment we do not know, because the system is not in place, what that effect on adults will be; but we have to be concerned that adults should feel free to access legal material, no matter what it is. They should not feel like they are being snooped on or having their privacy or anonymity removed.
I was encouraged by some of things that were said earlier, but I have to say that when we sent some technical observers to hear about the systems that are likely to be put in place—the sort of things that vendors want to do—we heard a rather different story. The sorts of things they want to do include harvesting user data, maybe using Facebook and other platforms, to pull in their data to verify people’s age by inference. These things were not privacy friendly. Let us assume that the BBFC has a job, as apparently it does. It would be good if it had clear duties around privacy and anonymity, to make sure that it has to put those things first and foremost when it is choosing and thinking about age verification systems.
Claire Perry
Q As a supplementary, does your organisation campaign against age verification on gambling sites on the internet?
Jim Killock: No, we do not.
Claire Perry
Q Even though exactly the same issues of privacy could apply?
Jim Killock: I think they are rather different, are not they?
Claire Perry
Q Why? They are legal.
Jim Killock: The first thing is that gambling sites are dealing with money. They have to know a little bit about their customers. They need to do that for fraud purposes, for instance. The second thing is, I think, it is much harder to argue that there is a free expression impact for gambling, compared with accessing legal material, whether it is pornographic or not.
Claire Perry
Q So your interest is not about legality. It is about your interpretation of legal and illegal material.
Jim Killock: It ultimately is about what the courts think is the boundary around free expression, and what sort of things are impacting on people’s free expression and privacy. That is our standpoint. What we are asking for, the same as you, is the same standards online as offline. One of those standards is human rights and what we are entitled to do.
The Chair
Let us hear from Ms Samson; and then we are moving on.
Renate Samson: Just to be clear, we submitted evidence and we have concerns about part 5 of the Bill. The questions you have been asking Mr Killock—I am unclear; are you asking me about the same issues you are asking him?
Claire Perry
No, specifically about the part 5 questions.
Renate Samson: Okay. We have not, in our evidence and our concerns, asked for a perfect Bill, although I do not believe there is any harm in trying to make the best piece of legislation we can. The work that we do with the Privacy and Consumer Advisory Group and as part of the open policy making process is about having engagement, to ensure that we are the leading light in data sharing, but also data protection. As Mr Killock has mentioned, we are currently looking at the Data Protection Act 1998. That will probably expire in May 2018, and we will get the general data protection regulation. Right now the measure in question does not even refer to that, or, indeed, to the Investigatory Powers Bill. It refers to the Regulation of Investigatory Powers Act 2000 and the DPA. Also, it will probably fail on a number of the key points of the GDPR, in relation to potential profiling, consent of the individual, and putting the citizen at the heart of data sharing and data protection.
I am not looking for “perfect”, but I think “perfect” is a good place to head towards.
Nigel Adams
Q My question is for Mr Killock, with regard to what the Bill is seeking to do in terms of equalisation of copyright offence penalties. I just wondered why your organisation was not in favour of rights holders—the tens of thousands of content creators. Why is your organisation not keen on the idea in the Bill?
Jim Killock: That would be a misrepresentation. We are quite clear in our response. We are worried about the impact of this on people who should not be criminalised and who we thought the Government were not trying to criminalise in this case. Our position is that if the Government are going to extend the sentence and have the same sentence online as offline for criminal copyright infringement—that is to say, 10 years—then they need to be very careful about how the lines are drawn, because the offences are quite different. Offline, in the real world, criminal copyright infringement covers a number of acts. It is all about copying and duplication. Essentially, it is about criminal gangs duplicating DVDs and the like. Online, making that separation is harder, because everything looks like the same act—that is to say, publication. You put something on the internet, it is a publication. So how do you tell who is the criminal and who is the slightly idiotic teenager, or whatever it happens to be? How do you make sure that people who should not be threatened with copyright criminal sentences are not given those threats?
We particularly draw attention to the phenomenon of copyright trolling. For instance, there is a company called Golden Eye International, a pornographer which specialises in sending bulk letters to Sky customers, BT customers and so on, saying, “Please pay us £300 because you downloaded a film that is under copyright.” These are obviously pornographic films and they then wait for people to pay up. They have no specific knowledge that these people are actually the people doing the downloading, all they know is that somebody appears to have downloaded.
Nigel Adams
Q Sorry to interrupt, but the idea of the Bill is not to go after people who are downloading content, it is purely for those who are uploading content for commercial gain. That is the whole purpose.
Jim Killock: Unfortunately, that is not how the language of the offence reads. The test in the offence is that somebody is “causing a loss”, which is defined as not paying a licence fee, or is “causing the risk of loss”, about which your guess is as good as mine, but it is essentially the same as making available, because if you have made something available and somebody else can then make a copy, and then infringe copyright further and avoid further licence fees, basically that is a criminal act. So file sharers, whether they are small or large, all appear to be criminal copyright thieves. Similarly, people who are publishing things on websites without licence are also potentially criminalised. Those things can be dealt with much better and more simply through civil courts and civil copyright action. What we are calling for is either to get rid of those things which are attacking individuals and wrongly bringing individuals into scope, or to put thresholds of seriousness around the risk of loss and/or causing loss. Something like, “Serious risk of causing significant loss” would be the way to deal with this. Similarly, “Causing serious loss”.
Nigel Adams
Q But if you are knowingly uploading creative content online for commercial gain, to my mind it does not matter whether it is 50 quid or 50,000 quid, you are knowingly stealing someone’s content.
Jim Killock: The commercial gain is not part of this offence. That is what I am saying. The offence is purely to cause loss—in other words, to not pay a licence fee—or to cause risk of loss. There is no “commercial” in it. So you have to put the threshold somewhere. You have an offence for the commercial activities and, separately, individuals who cause risk of loss or fail to pay a licence fee.
Nigel Adams
Q What do you think is a reasonable limit? Where would you set the limit?
Jim Killock: In terms of taking someone to court, there is no particular limit. If I cause £20 of damage to somebody where I should have paid it, the small claims court should be available and I should be able to either prosecute someone or be prosecuted in a civil court in the normal way. The question of how much is “serious” is, in all likelihood, something we should probably leave to the discretion of judges. It will not be very easy to fix a particular amount, but I think “serious” is usually the word used.
Nigel Huddleston
Q As you have already recognised, this part of the Bill has already been subject to a consultation. There were 282 responses to that consultation, with the majority of them being broadly supportive. You have raised quite a few perfectly valid concerns, but do you accept that there is broad public support for the sharing of data when there is a clear social upside?
Jim Killock: I think we are all clear that data sharing should be enabled. The question is how you do that without it being a completely wide open process. The principle is not something that anyone has ever objected to.
Renate Samson: On the consultation that you referred to, you just told me that there were 282 submissions and that most of them were broadly supportive, but the Government response did not indicate who was supportive and who was not, and I have not seen the submissions on the website to be able to see for myself who was broadly supportive and who was not.
Having been part of the open policy making process, I would say that several people in that room had a large number of concerns. They were not concerns to prevent data sharing, but concerns to ensure that data sharing could happen in the safest way possible, and not just in terms of privacy. That way, not only can Government benefit from it and clear processes can be established in Government, but the citizen can understand why their data are being shared and can then be supportive of it and can trust that their data are going to be looked after. It is about the citizen being able to feel as though their personal data, which are now part of the air we breathe in a connected, digital society—we cannot function without our data—are safe and secure. It is about not only data being private, because there are varying degrees of privacy, particularly when you are sharing, but the Government understanding that.
Nigel Huddleston
Q I am not sure whether we got a clear answer there. The Commons Library published a briefing, which includes statistics from an Ipsos MORI survey that you have probably seen before. The things that get public support are things such as:
“Creating a DNA database of cancer patients…Using data from electronic travel cards…to improve the scheduling of buses or trains…Using police and crime data to predict and plan for crimes that might take place in future”.
There is a clear public upside for some of the most vulnerable and hurt people in society; are we ever going to reach a point where you are satisfied with the use of data?
Renate Samson: You took evidence this morning from two witnesses whom you asked a very similar question, and I support the answers that they gave. People are happy to share data if they understand why and are asked. I believe that the answer you were given earlier referred to the individual. If you ask me whether I am happy to share my data to cure cancer, I go away and I make the decision about whether or not I am happy to do that. As you have pointed out, the majority of people are probably going to say, “Yes, of course.” Big Brother Watch has no desire to restrict that. We are asking for information that we feel is lacking from part 5 of the Bill. We are asking for information for the individual so that they can give their consent based on proper guidance. That is going to be a key part of data protection law going forward.
This is about the way the questions are being asked. Similar questions have been asked throughout the day. We are not trying to say no. We have never said no. We are just trying to say, “Please present us with as much information as possible, so that we can see how.”
Jim Killock: It is really in the interests of Government to get this right, because in the long term it is a matter of trust. We know that accidents happen. If at least the safeguards are in place and as many accidents are avoided as possible, and if people are not left embarrassed at either data leaks or programmes that turn out to be intrusive or prejudicial against people, then you have won. That really was the purpose of the open policy process: to ensure that the risks were understood so that the Government could legislate on the basis of dealing with the complex risks rather than heading straight into a situation where they got a huge backlash and/or stored up problems for the future.
Renate Samson: May I add something quickly? The first line of Big Brother Watch’s submission says that we support data sharing across Government. I want to be very clear on that.
My second point is about individuals doing well out of this. The Bill, well, the factsheets accompanying the Bill, refer to wellbeing. I direct you all to the Supreme Court’s review of the named persons scheme in Scotland, where it was deemed that wellbeing was not a high enough bar—it did not meet the bar of “vital”, which the Data Protection Act requires. We want to do this properly so that people can benefit, but let us ensure that it is proper—that is not perfect, but the best it can possibly be.
Matt Hancock
Q A couple of questions. Would you be happy to share your blood type data to help cure cancer?
Renate Samson: I do not even know what my blood type is. To answer your question, I don’t know. I would have to give it serious consideration, just as I would seriously consider whether I would be prepared to donate organs after I die. It is not something to which I can give you a snap answer.
Matt Hancock
Q Okay. You referred to the open policy-making process, which was a big process with lots of people involved, and the large majority are content with that process. Have you read all the individual responses to the consultation?
Renate Samson: No, because I do not know where they are published. I looked for them but I could not find them.
Matt Hancock
Q They are on the internet, so you are very welcome to have a look at them.
Renate Samson: My understanding is that I would have to go into every single organisation’s website separately to look at them. They are not collated on the consultation’s website itself.
Matt Hancock
Q No, they are all published online.
Renate Samson: On the consultation’s website itself?
Matt Hancock
Q They are all published online. In an earlier exchange, you talked about the broad purposes of the Bill and the problem with parliamentary scrutiny of those purposes. I would just like to understand a bit more about what you meant.
Renate Samson: Sorry. Could you repeat that?
Matt Hancock
Q In an earlier exchange with Louise, you talked about the broad purposes of the Bill and how they are defined. You said that those purposes are very broad, and I think you said something like, “and therefore it can mean whatever the Government wants it to mean”. I do not understand that, because any sharing of data must be for purposes very specifically set out, for instance supporting troubled families and supporting families in fuel poverty. I think it would be very hard to be against those goals.
Renate Samson: Forgive me, I do not recall that being quite as you have said; I know that Dr Whitley said something very similar to what you just said. Our concern is that I cannot give an answer, because I do not feel as though the Bill has defined clearly what data sharing is or what are personal data. I cannot give an answer without being able to understand what the Government intend to do with regards to data sharing. Troubled families and the retuning of televisions are not included in the Bill, they are referred to in the factsheet accompanying the Bill.
Matt Hancock
Q They are referred to in secondary legislation, which will be scrutinised by Parliament.
Renate Samson: I feel—I can only say how I and Big Brother Watch feel—that having looked through the Bill in great detail, we have more questions than answers. If the codes of practice had been published, it might not have been necessary for me to be sitting here, because I would probably know exactly what is the intention. However, based on what has been published so far, I do not feel that it is clear.
Jim Killock: Future secondary legislation is quite a weak way of Parliament safeguarding a process like this, because essentially you then need to ensure that civil society, Parliament and everyone make sure that all the relevant safeguards are included in each statutory instrument.
Matt Hancock
Q No, the safeguards are in the Bill. It is the purposes that are in the statutory instruments. It is interesting—
Jim Killock: I do not think that the safeguards are in the Bill.
Renate Samson: Could you explain where they are and what they look like? I cannot see them other than the reference to the misuse of data, and we absolutely support the proposal that those guilty of that could be subject to a prison sentence.
Matt Hancock
Q Okay. I want to refer to another point that I did not understand. You said that the problem with the Bill was that it referred to RIPA and the Data Protection Act 1998.
Renate Samson: Because that is current legislation.
Matt Hancock
Q But what exactly would you propose?
Renate Samson: My concern, and this is not a telling off, is that a large chunk of RIPA will no longer be applicable by the end of year when the Investigatory Powers Bill comes in, and the Data Protection Act is about to be replaced with the general data protection regulations. Of course it cannot say that on the face of the Bill and none of the supporting documentation even refers to those two pieces of legislation.
Matt Hancock
Q It just seems a totally odd point, because the Investigatory Powers Bill is not yet law and, as you can see from the screen, it is being debated in the Lords today. GDPR is not in domestic law yet.
Renate Samson: We were trying to be “assistive”—if that is a word—in that there are elements of the Bill about which not just Big Brother Watch but other individuals and organisations are concerned that if it passes, when the general data protection regulations come in, it will not adhere to that law. It was merely a note of what is coming down the line so we have legislation that has longevity.
Matt Hancock
Q I do not think it is possible to legislate on the basis of other legislation that has not yet passed.
Jim Killock: GDPR is passed; it is just not implemented.
The Chair
Thank you to our two witnesses. Thanks very much indeed for your evidence. We release you.
Examination of Witnesses
Sarah Gold, Chris Taggart and Paul Nowak gave evidence.
The Chair
Q We will now hear oral evidence from Projects by IF, OpenCorporates and the TUC. We have three witnesses, so, colleagues, could we have more concise questions and I am sure concise and expert answers? Could the witnesses please introduce themselves for the record?
Chris Taggart: My name is Chris Taggart. I am the CEO and co-founder of OpenCorporates, which is the largest open database of companies in the world.
Paul Nowak: My name is Paul Nowak I am the deputy general secretary of the TUC. We represent 52 affiliated unions who in turn represent about 5.7 million workers.
Sarah Gold: I am Sarah Gold, director and founder of Projects by IF: a design studio that helps companies understand privacy and security by making products and services that empower people.
Matt Hancock
Thank you very much for coming. I want to put on the record something relating to what happened at the end of the last session. For anyone who is interested and has not yet had the chance to find the responses to the consultation on data sharing, they are available on gov.uk/government/consultations/better-use-of-data-in-government. All the responses to the consultation are there.
Louise Haigh
Q Paul, the Government have delayed by a year outlining their digital strategy. Could you give the Ministers a hand here? What would you like to see in a digital industrial strategy?
Paul Nowak: There are a number of points in the Bill where we think there are positive steps forward: things like the universal service obligation. I am happy to talk about some of those points. The missed opportunity for us is really getting a handle on what the emerging digital economy means for working people. Tomorrow, we will have the outcome of the court decision on Uber. That is just one example of where changing technology potentially affects working people’s lives. We believe there should be a proper framework and employment law should properly reflect the change in the world of work. The point was made by a number of MPs on Second Reading that the Bill missed a trick in terms of that new framework of rights and responsibilities for people who work.
Louise Haigh
Q What would that framework look like?
Paul Nowak: It would tackle issues around, for example, employment status. We have this curious interface between the new, emerging digital economy and what I would characterise as some old-fashioned exploitative employment practices. It is great that we can all order new goods and services online via eBay, but often the person who delivers that package will be working so-called to an app and they will be so-called self-employed, driving their own vehicle and with no rights to paid holidays, maternity or paternity leave and so on.
So a framework of laws that is fit for the digital age. It is welcome that the Government have announced that Matthew Taylor will be looking at some of these issues, but I would have thought that for a Digital Economy Bill there is a gap in the Bill itself.
Louise Haigh
Q Has the TUC been consulted on that by the Government?
Paul Nowak: We have had no engagement in terms of the process I described with Matthew Taylor and, as far as I am aware, we have had no input in terms of the Bill and the thinking around what a decent framework of employment rights will look like to respond to that emerging digital economy.
Louise Haigh
Q What about the digital skills gap—where could the Bill go further there?
Paul Nowak: That is not something that we have looked at particularly, but I think it goes without saying that the need for digital skills will go well beyond those core digital industries. The proof of the pudding will be in the eating. We are pleased that the Government are now talking about industrial strategy, and we think that the digital economy should play a key role at the heart of that industrial strategy. It is not just about digital industries themselves; it is about how those digital industries can support jobs in our manufacturing, engineering and creative industries, but you need to make sure that people have the skills—not just at one moment in time, but ongoing skills throughout their working lives—to enable them to adapt to the changing world of work. For example, one of the things that we have pushed heavily through our Unionlearn arm is equipping people with those skills, but making the case that people should have access to careers advice and guidance all the way through their working lives rather than just at the point at which they leave school, college or university.
Louise Haigh
Q Sarah and Chris, I do not know whether you were here for the earlier sessions, but we have heard quite a few concerns about the data-sharing proposals in part 5 of the Bill. Do you share the concerns about the lack of privacy safeguards in those proposals?
Sarah Gold: I do. There are quite a few pieces of information missing that I would like to see in the Bill to protect individuals’ privacy. I think I heard Jeni Tennison talk earlier about openness and transparency, and I agree with her that one of the major pieces that is missing from the Bill is transparency about how people’s information will be used.
For me, this is also a missed opportunity to talk about consent, which is increasingly becoming a design issue, not necessarily just one of policy. That means making sure that there are steps in place to ensure that people understand how their data will be used, by whom, for how long and for what purpose. That is really important, because currently, the only models of consent we seem to default to are terms and conditions, and I have to ask the Committee: when was the last time any of you read or understood a set of terms and conditions?
Louise Haigh
Q Claire Perry brought up the poor standards in the private sector earlier. Presumably you agree that the Bill misses an opportunity to deal with consent for the private sector’s use of data as well.
Sarah Gold: It does, because I think the Government should set best standards on this. There is a real opportunity to do that, and I cannot see that on the face of the Bill.
Chris Taggart: I broadly agree. There was a comment in one of the submissions that despite this being a Digital Economy Bill, it felt like it was from almost 10 years ago. We have the ability to treat data in a much more granular way—dealing with permissions, rights and so on; having things selectively anonymised; having things almost time-boxed, and so on. It struck me that it felt like the Bill was using the broad brush of how we used to exchange data 10 years ago. That seemed like a missed opportunity, particularly given that what we are talking about here is Government to Government. While it is very difficult for the private sector—or even between the Government and the private sector—to come up with some of those solutions, when you are talking essentially about one organisation, particularly one where there is the ability to legislate that everything should happen in the right way, it seems to be a missed opportunity.
I was asked a couple of years ago to be on the Tax Transparency Sector Board, which talked about opening up some of the tax data. Of course, pretty much no data were actually opened up, but some of the discussions were interesting. For example, the Bill talks a lot about individuals, which is absolutely right—I believe that we have innate human rights—but from a tax point of view, individuals and companies are exactly the same thing. There is no difference. HMRC was saying, “Hey, look, whatever we think and whatever we would like to do, we have no ability to treat individuals and companies as the same.” The idea of allowing companies to tick a box and say, “Yes, we’d like our tax to be reported and to be open about it,” or saying, “These offenders will be treated differently if they are corporate offenders,” for example—many countries do report tax offences by companies—was not even possible because of the underlying legislation. There is a sense that that sort of attitude slightly pervades some of this. Again, I am extremely in favour of the Government being more effective and efficient and using information sharing for that, but I would like the Bill to be as good as it possibly can be.
Finally, there are little things—I used to be a journalist but now I am a full-time geek—such as what is being reported? What things have been shared? How are those organisations being identified? The Government do not even have a coherent way of identifying Government Departments or non-departmental public bodies. Those sorts of things. There is a lot more that could be done to make this a genuinely effective Bill.
Thangam Debbonaire
Q Mr Taggart, you mentioned something about its feeling like it is 10 years out of date. I want to bring us bang up to date by chucking in a Brexit question. Is there anything that the three of you could very quickly add to the discussion about what might need to be in the Bill given that we are now in Brexit? Brexit has implications for the digital economy, about which I am sure you know more than me.
Chris Taggart: I will try to be brief. One is to do with policy aspects of what happens. I believe you are hearing from the Information Commissioner later. What happens to data protection in a post-EU UK? From our perspective, the UK has generally taken a slightly different perspective on data protection from the information commissioners in some other countries and is generally taking things like public interest into account and treating paid-for and free information the same, which we welcome. We have some concerns about the general data protection regulations because of that sort of stuff and some of the stuff that is coming from the EU. There are some potential benefits, but there are also some downsides about whether people’s rights will be defended. I think the digital economy becomes much, much more important, and my position here is as an advocate of open data and the potential for open data in driving a thriving digital economy. As a digital entrepreneur, I think we are missing some significant opportunities for that. If you were to sit down today and do a digital economy Bill with the knowledge that in a couple of years we perhaps would not be part of the EU, I think we would be doing something quite different.
Paul Nowak: May I pick up the point about post-Brexit? I think there is growing political consensus that one of the implications of the decision on 23 June is that we need to think seriously about how we invest in our national infrastructure. For the TUC that goes beyond Heathrow, Hinkley, High Speed Rail. It talks to issues around, for example, high-speed broadband. It is about thinking about how this Bill would interface with, for example, announcements that might come in the autumn statement about investment in high-speed broadband. I note that the Chair of the Committee talked about the interface between rail and high-speed broadband, which is something that should be borne in mind. Again, valid points were made on Second Reading about requirements for developers to incorporate high-speed broadband into new housing developments, which is absolutely essential. I reiterate the point I made earlier about seeing this in the context of the wider approach to industrial strategy and how the digital economy can support other parts of the economy that are going to be even more important as we move forward post-Brexit.
Sarah Gold: For me, particularly looking at privacy, security and personal data, it is about the age of some of the language used in the Bill. Even talking about data sharing feels to me like the wrong language. We should be talking about data access. Data sharing suggests duplication of databases, with data being slopped around different Departments, whereas data access suggests accessing minimum data via APIs or by using the canonical Government registers, which is an excellent project that is not mentioned in the Bill but should be.
Nigel Huddleston
Q There is a lot in this Bill, everything from BBC regulation to child protection, the universal service obligation and making switching easier. Can each of you say what are the top two or three positive features of the Bill that you believe will be of benefit to your members, clients or, indeed, the general public?
Chris Taggart: Yes. First of all, I agree that what I would like to see is that the Government—
Nigel Huddleston
I do not think that was the question. I asked what you like about the Bill that would be of benefit to your clients or customers. It is quite long.
Chris Taggart: To be perfectly honest, we operate in the new economy in places like Canary Wharf. We are a growing company and so on. I do not think there is anything in there that is going to benefit us as a growing, innovative digital company, to be honest.
Nigel Huddleston
Q The universal service obligation? Easier switching? None of that?
Chris Taggart: No.
Nigel Huddleston
Q You do not think that is a benefit?
Chris Taggart: Not to us. If you are talking about whether there are benefits to the wider world and to the UK as a whole, yes, I do not have an argument, but you asked whether it is of any direct benefit to us and I said no. There are plenty of things I could put into the Bill that would be of benefit and would be very simple to implement and so on, but in terms of measures in the Bill that would be a direct benefit to us and to the thousands of innovative digital companies in the UK that are making a difference to things like open data and financial services and solving real world problems and so on? Maybe it was not the intention for it to do that, and it does not.
The Chair
A clear answer.
Paul Nowak: If I could start on a positive and then give you a couple of areas where I think the Bill could be strengthened, the universal service obligation is something we would support. I note the discussion on Second Reading that 10 megabits per second is just a starting point. If you want a digital economy that is fit for the future you need to go well beyond that, but the universal service obligation is welcome. Some of the points in clause 4 are important, in terms of protections for musicians and other creative performers. Useful suggestions were made on Second Reading about how some of those provisions could be strengthened, such as ensuring online providers are accountable for any illegal pirated materials that they host and making sure the Government are prepared to step in if voluntary approaches to those sorts of issues fail. That would be a positive set of issues.
I have concerns about the interface between the Bill and the BBC. I know that the NUJ—which is one of our affiliates—is particularly concerned about the role of Ofcom as a potential regulator of the BBC. I am particularly concerned about the BBC taking on responsibility for TV licences for over-75s, not just in terms of the budgetary implications for the BBC but in terms of the BBC effectively taking responsibility for a key part of our social security system.
There are some positives, and the one I would draw out first and foremost is the universal service obligation. No matter what job someone does or where they live, having access to decent high-speed broadband is increasingly essential.
Sarah Gold: I agree with the overall sentiment of the Bill—that having better access to data and to the right infrastructure can lead to better services and a more open society. One of the details I think is good is the significant consequences for individuals should they be part of data misuse. That is really necessary and I see that as a positive step.
Drew Hendry
Q Sarah Gold has given us a really good example of how we could approach terms and conditions in a different way. As somebody who actually went through the Apple iPad terms and conditions three days ago I can tell you it is a mind-numbing experience, so I have great sympathy with that view. What examples can we take into account from other countries that are dealing with these issues as the Bill goes forward? My question for Paul Nowak is what is required to protect workers’ rights with the onset of new, disruptive technologies?
Sarah Gold: In terms of other countries, that is not something I am an expert in. I know that Estonia’s e-citizenship cards can be used as a form of identity across many services, which is certainly helpful. There is an emerging question about what forms of identity individuals, particularly those who are less affluent, will be able to access. That is increasingly becoming a design problem. My work and work at projects by IF is more focused at the moment on UK-based companies and how they approach different forms of consent. We are thinking about privacy through a design lens. We are thinking about the minimum viable data that a service needs to operate and how we can display information in a simple, readable way so people can understand what they are giving away and why, and also get back shared insights. I can speak about some of the emerging trends in technology, such as general transparency and certificate of transparency, which I think have very interesting applications, and about how we can begin to see better forms of consent and permissions across the services. Unfortunately, I am not an expert on other countries.
The Chair
Thank you. Mr Nowak is an expert, I am sure.
Paul Nowak: I have maybe three things to say. First, going back to the point I made before, we should absolutely clarify some of the issues about employment status. I do not think it is acceptable that a multinational corporation can hide behind an app or say, “You’re employed by an algorithm.” It needs to be recognised that it does not matter whether you are getting your work via an app; you are still an employee. If you were a small building contractor, you could not get away with claiming that the person who works for you day in and day out is an independent contractor. HMRC would be down on you like a ton of bricks. I think you need to tackle those issues.
There is a set of issues about what I call sectoral approaches. We know that these new disruptive technologies have an impact across whole sectors. I mentioned parcels delivery. It is no longer the default that the man or woman who delivers your parcel is directly employed by Royal Mail and drives a Royal Mail vehicle. They could be “self-employed” and driving their own vehicle. They may be doing two or three different jobs. There is an argument that we should be thinking about how we bring together players right across a sector at the sectoral level, involving employers, new entrants, trade unions, the Government and others, to think about issues to do with not just employment regulation but skills.
I think it flags up a set of interesting issues about having an employee voice at every level. It is very welcome that the Prime Minister has raised the issue of workers on boards. I think that the value of having an employee voice from the shop floor all the way up is important. I note that, on Second Reading, Huw Merriman made the point that the BBC is a good place to start—the new BBC board can have employee representation. Ensuring that there is an effective employee voice, by whatever means somebody is employed, is important. Crucially, that is about social partnership and dialogue, and engaging workers and unions in thinking about what the best form of that employee voice is and how we ensure that people are not exploited in a particular sector.
Chris Taggart: To pick up on something that Sarah said, the truth is that we live in a data world these days. We cannot move from one side of the street to the other without interacting with data. Everything we do—every phone call we make, every website we visit, every time we use a smartphone—is about interacting with data. Unfortunately, individual citizens are increasingly the products—the data—so we really need to be thinking about what citizens’ rights look like in a data-centric world in which the data could be held anywhere.
It is about not just the legal rights, but the effective rights. One of the things that companies such as Google are doing is disintermediating. Sometimes you may have local monopolies, but you may end up with one global monopoly. Who owns the information from smart meters, and so on? The person who pays the electricity bill, the electricity company, the Government or some third party that can see when you turned on the lights, when you went to bed and those sorts of thing? We really need to be thinking about what rights, abilities and agency comes with being a citizen in the modern world. I think that means having access to the data we need—official registers—and licences that actually work for us, and having a critical eye on some of the emerging global power structures of data.
Paul Nowak: That point about data throws up some profound questions for the employer-employee relationship. For example, it is entirely reasonable for TfL to want to know where their buses are at any given moment of the day or night, but it is less reasonable for an employer to access information about whether or not I turn on my phone at seven o’clock or eight o’clock, or about where I might happen to be outside normal working hours. That speaks to the need for the Government to think about how you facilitate and encourage employers and employees to reach reasonable agreement about the use of data. What is the line? It is going to be different in different sectors and different jobs, but the important thing is that there is a shared understanding of what data are collected, what they are used for and how they might be used. I suspect that in a lot of workplaces that is just not a live conversation.
Sarah Gold: Also, who in the workplace has permission to access that information? That is certainly not clear on the face of the Bill, which suggests that any sharing between civil servants would be okay. That really makes me feel quite scared.
The Chair
Thank you. We have two more questioners: Nigel Adams followed by Louise Haigh.
Nigel Adams
Q Mr Nowak, you alluded earlier to the element of the Bill that you support and referred to musicians. The Bill is trying to bring in measures that would equalise the measures for copyright theft. That is a really good thing to try, and the Musicians Union is very supportive of that measure. Is there anything else that you think would strengthen the Bill in terms of protecting rights holders? We have a huge problem in this country of content creators—rights holders—not getting rewarded because their work is put online illegally. There is quite a bit of work that the tech companies could be doing, but how do you think we could strengthen this area to protect many of your members?
Paul Nowak: I reiterate the points that I made before, but perhaps I can also make an offer. That is certainly an issue on which our Federation of Entertainment Unions—including the Musicians’ Union, the National Union of Journalists, the Broadcasting, Entertainment, Cinematograph and Theatre Union and Equity—would welcome the opportunity for further engagement with the Committee, and we could certainly provide more written information.
First of all, though, we should ensure that online providers are held accountable for any material outside of copyright that they host online. The second point that I made before is that if there is no voluntary, agreed way forward, the Government should be prepared to introduce a code of practice. If you are a musician, the online world and the emerging digital economy clearly throws up all sorts of opportunities, but there is also a real risk. It is not about the creation of a piece of work over three or four minutes; the hours, the days, the weeks that went into the creation of that piece of work could quite easily be dissipated and lost, and somebody else is profiting from the input you have made. It is not an area in which I am an expert, but our entertainment unions would certainly wish to give more evidence.
Nigel Adams
Q That is useful. It is not only about musicians; there are also the people who create content, such as authors, artists and writers.
Paul Nowak: For your information, the latest TUC affiliate is the Artists’ Union England, which represents visual artists. We represent people right across the creative industries, including the musicians, the Writers’ Guild of Great Britain, Equity, which represents actors, and, as I say, visual artists. We would be happy to feed in more information directly from those unions.
Louise Haigh
Q Thinking about algorithms beyond the workplace, we know that Uber, for example, will charge more if your battery is low. Having worked for an insurer before I was elected, I know that the amount of data that is available to insurers to set prices would make your hair curl. How much transparency should there be around the algorithms that companies use to set prices, while protecting the intellectual property of those algorithms?
Chris Taggart: That is a fantastic question, and it comes to the heart of our ability to understand our world and influence it. I take quite strong, almost like democratic first principles with this: you need to be able to understand the world and have the ability to understand the world, and then to be able to influence it. That is what democracy is about. If we do not understand the world—if we do not understand that we are being given this particular news story in this particular way; that we are being given this particular price; that we are being influenced to walk down this street rather than that street in order to do this—then we really do not have that possibility. A question that is not asked often enough but that is starting to be asked more in academic circles is: what are the algorithms on which our lives depend? If we do not understand that we are being driven by algorithms, still less what those algorithms are, how do we have agency? How do we have free will, if you like? I think it is a really important question.
I think that increasingly we will see that we need transparency around that, and that with transparency there is always the ability for there to be negative downsides. You could argue that, by having courts open, people can just walk in off the street and see that this person over there is being prosecuted; some neighbour, or whatever. But if we are not starting to ask those sorts of questions and staring to come up with some informed answers, we will be in a world where we have lost the ability to ask those sorts of questions.
Paul Nowak: I am not particularly well versed in this area, but I suppose that it is a little bit like the terms and conditions question. You could provide so much transparency that it would give the illusion of people being informed, and I think what you want to do is to allow people to understand what are the potential implications of those algorithms. So, if you are using Uber you know that if there is a spike in demand or a lack of supply, you are likely to pay more, and what the implications of that might be, and what the parameters of that are. I do not think that means that Uber needs to make all of its software open source—frankly, that would mean nothing to me—but I want to know when I get in what the fair contractual exchange is between me and the company that is providing the service.
Sarah Gold: I am very well versed in this area but I have very little time to talk about it, which is very frustrating. However, I think that looking at how individuals can question algorithms is very important; I agree with both of your comments. Particularly in GDPR, there is a clear piece that is about people being able to question automated decisions that are made about them.
As a design problem, that is really fascinating. For instance, if you think about when you buy flights on browsers, I think that everyone has probably seen that when you go back to book the flight again, your IP address has been tracked, you are a cookie, and so you see the same flight booked for—it costs you more. So you go into kind of incognito mode to check that.
What I am quite interested in at the moment is that sort of incognito testing of algorithms, so that you can see how your inputs might change an output. In the context of Uber and insurance, I am very interested in this emergence of insurance for, say, a single day of driving or for a particular route, and being insured—say, it costs you far more to go down the M1 than just the A1. And you should be able to understand why that decision has been made about you, because it has a significant consequence for your life.
However, that comes down to the quality of the training data, too, and that comes back to some of the terms of the Bill—we should be working towards greater data minimisation, I think, and also the ability for people to be able to audit not only those data, to correct those when they go wrong, but to provide an audit of data access. While it may not mean everything to all of us, because not all of us are developers, I think that for those individuals who are able to scrutinise the code and check for digital rights management or security vulnerabilities, or biases in data sets, that information is really crucial, because it is those individuals who are our greatest defence against data misuse or fraud.
The Chair
Thank you very much indeed; that is a high note on which to conclude. I thank our three witnesses for your evidence. We may now release you and we will call our final two witnesses for the afternoon to come forward.
Examination of Witnesses
Professor Sir Charles Bean and Hetan Shah gave evidence.
The Chair
Welcome to our two final witnesses today; I am sure you will keep us on our toes in our final session. Could you please introduce yourselves for the record?
Hetan Shah: I am Hetan Shah, Executive Director of the Royal Statistical Society.
Professor Sir Charles Bean: Charlie Bean, London School of Economics and soon to be Office for Budget Responsibility.
Louise Haigh
Q We have heard from witnesses today about a lot of the negatives and potential pitfalls of data sharing across Government. I have nothing against the Government’s intentions here, but do you share the concerns of previous witnesses about the lack of safeguards for privacy in part 5 of the Bill?
Professor Sir Charles Bean: You will have to excuse me; since I was not here for your earlier discussions, I am obviously not aware of what earlier witnesses have said and what their reservations are. My interest obviously is in the use of the information for statistical purposes. It is important that there is a clear and well understood framework that governs that, and there clearly need to be limitations around it.
I have to say that I think the current version of the Bill strikes a reasonably sensible balance, but there are bits that will clearly need to be filled in. The Office for National Statistics will need to spell out a set of principles that govern the way it will access administrative data, and so forth.
Louise Haigh
Q Do you think there is any framework in part 5 around the sharing of data?
Professor Sir Charles Bean: Sorry—
Louise Haigh
You said you are satisfied that it strikes the right balance. Do you believe there is any framework in terms of the principles for data sharing in part 5?
Professor Sir Charles Bean: By “appropriate balance”, I mean in terms of the statistical authority having in-principle access to the administrative data that it needs to do its work, subject to certain limitations.
Louise Haigh
Q Do you believe there should be transparency for—
Professor Sir Charles Bean: I certainly believe in transparency. I am a big fan of transparency. Anyone who has worked at the Bank of England would like transparency.
Hetan Shah: May I come in and build on this? Privacy is absolutely critical to maintaining public trust, and in a sense we think the Bill has missed a trick here. On the research side, the framework is embedded on the face of the Bill. In our view, the ONS has a very good track record—it has maintained 200 years of census data, it has the best transparency, it publishes all the usage of the data and it has already criminalised the proceedings of misuse of data—but that has not been put on the face of the Bill. A tremendous amount could be done to reassure by taking what is already good practice and putting it on the face of the Bill, and I think that will answer the issue for the statistics and research purposes.
Louise Haigh
Q My full question was not, “Do you believe in transparency?” It was going to be: do you believe in transparency in terms of how citizens’ data will be shared with the Government and between Government agencies? That principle, as you say, is not only not on the face of the Bill but not anywhere in the Bill. We have been asked by the Government to rely on codes of practice that have not even been drafted yet.
Professor Sir Charles Bean: I agree that transparency about the principles that will govern sharing of information makes a lot of sense.
Louise Haigh
Q As you say, Mr Shah, for Government data sharing to work requires public trust, and digital government and the use of your statistics absolutely requires trust that the Government will handle data with due purpose and cause.
Hetan Shah: Another thing is that the UK Statistics Authority is directly accountable to Parliament, not the Government. That actually makes the statistics and research strand more accountable compared with other parts of the Bill. I remind you of that, which is very important.
Matt Hancock
Q I would be interested if you could explain and put on the record some of the consequences you see of having this Bill and the underlying secondary legislation on the statute book. What impact will that have on the areas in which you are experts?
Professor Sir Charles Bean: The key thing is that it greatly improves the gateways that enable the Office for National Statistics to use administrative data—tax data and the like—in the construction of official economic statistics. We are well off the pace compared with many other countries. Scandinavian countries, Canada, the Irish and the Dutch make very heavy reliance on administrative data and only use surveys to fill in the gaps. Here, the Office for National Statistics is essentially an organisation that turns the handle, sending out 1.5 million paper forms a year and processing those. Essentially, you are acquiring the same information again that you have already got in some other part of the public sector, where the information is being collected for other purposes.
The key gains here I see as twofold. First, because you access something close to the universe of the sample population rather than just a subset, which would normally be the case with a survey, you potentially get more accurate information. It is potentially also more timely, which for economic policy purposes is important.
The other side of the coin is that by enabling you to cut back on the number of surveys you do, there is a cost gain, which I should say would probably not mainly be a gain to the ONS, because they have to do the processing of the administrative data, but a gain to the businesses and households who are currently spending time filling in forms that they would not need to do if more use was made of administrative data.
Matt Hancock
Q Mr Shah, what do you see as the impact of the data sharing clauses?
Hetan Shah: I completely agree with Charlie Bean that we are really in danger of being left behind compared with where other countries are on this agenda. The European statistics peer review, which happened last year, said that this was the key weakness in our statistical system. If you look at bodies like New Zealand, Finland and Canada, they all have this ability to access, so we have got to have it. We are spending £500 million on the census and you have got a lot of that data that you could be using through administrative data.
Similarly, on inflation, which is a critical economic indicator, at the moment we send out people with clipboards to take price points of 100,000 items in 140 locations around the country every month, but there is scanner data that tells you the price that people paid. This could really revolutionise. It is not statistics for statistics’ sake; it is to answer the questions that parliamentarians and policy makers have on issues about social mobility and productivity. For all these questions you are asking yourselves, we need the data. And if we are criticising the ONS about not being quick enough, we need to give them the powers to be quicker.
The Parliamentary Secretary, Cabinet Office (Chris Skidmore)
Q In terms of the provisions in the Bill on sharing data for research purposes, could you shed a bit more light on how that will benefit the wider research community? I was also wondering what the immediate priorities will need to be for the UK Statistics Authority as the accrediting body for the infrastructure provided by the research powers in the Bill.
Hetan Shah: The Bill creates a permissive power and it really streamlines what at the moment is quite a complex legal environment for researchers accessing Government data. This makes it much clearer that if a researcher meets a set of conditions—the research is in the public interest, the researcher is accredited and it will use the research in a safe haven, as it were, and so on—they are able to access that Government data.
We gave some case studies in our evidence of research that is obvious, such as what affects winter mortality and understanding the productivity gap. Those are questions that researchers want to investigate, but they cannot get hold of the data from Government Departments. To be fair to the Government, there is concern from their side about handing over data when the legal framework is not clear enough. I think this process will really streamline that.
One caveat is that it is slightly odd that health data are out of scope. Most of the biggest concerns that researchers have are in trying to build the relationship between survey data and, often, the health outcomes in certain areas. I understand the reasoning behind this: because of care.data there were some concerns. Health is very important. Our view is that the Bill should build in the scope for health data and then allow for future legislation to say how that will be dealt with, in particular once Fiona Caldicott, the national data guardian, has consulted on her framework, which is happening right now.
Professor Sir Charles Bean: I would endorse a lot of that. I should say that in Canada, where I spent some time talking to Statistics Canada in the course of doing my review, they have exactly this model. There are clearly defined criteria under which researchers can get access, with a sort of prescribed laboratory where they can use it. I think there is something like 30 requests a year to use information, so it is quite heavily used.
Certainly when I was talking to people here during the statistics review, the issue was raised during the consultation process by people such as the Institute for Fiscal Studies, who wanted access to the microdata to be able to study the impact of tax structure on decisions and so forth. The difficulty of getting that microdata inhibited good research. I am sure the demand is there.
Chris Skidmore
Q Several witnesses have expressed various degrees of concern about issues of privacy, whether merited or not. In terms of what is taking place in Canada, have you seen any data leaks or anything that would raise concerns about what we are pursuing?
Professor Sir Charles Bean: I am certainly not aware of any leaks or anything. They are clearly very concerned about making sure that personal information is not divulged. It is very important that the information made available is not only anonymised but cannot be reverse engineered to find out who the agent concerned might be.
If you are looking at information on companies, there may well be, if you are not very careful, information that might be reverse engineered to find out that the name of the company is probably such and such. It is very important that you have good processes to make sure that the information that is provided to researchers is sufficiently anonymised but, as I say, the Canadian experience suggests that you can do that quite happily.
Scott Mann
Q One of the biggest contributing factors for people moving house is having access to a decent broadband signal. Have you done any statistical or economic modelling of population densities and movement away from cities to rural areas? Is that a piece of work that you would be prepared to do to find out the economic benefits to rural areas as part of the USO?
Professor Sir Charles Bean: That is not really my territory.
Hetan Shah: Ditto. I am here to talk about the stats and research clauses. I do not know about the other bits, I am afraid.
Thangam Debbonaire
Q You have both talked about other European countries and Canada. Forgive me for not knowing whether this is the correct term, but are we talking here about big data? Is that the term I hear bandied about? Either way, could you tell me a bit more about the benefits and outcomes in terms of policy information? Give us a bit more information about what these other countries are doing better and how their politicians are better equipped as a result.
Professor Sir Charles Bean: I think most people use the term “administrative data” to refer to large information held within the public sector that accrues as a by-product of whatever the public authority is doing. Tax information is a classic example, and it is something that is obviously potentially of use to the Office for National Statistics in constructing economic statistics. Big data is a wider concept that embraces the vast range of information that is generated by various sorts of private sector organisations, which includes the scanner data that Hetan mentioned. It is the sort of information that is generated by the likes of Google and phone companies. Big data is much broader.
There is a question about the extent to which you can use big data in the construction of official statistics. I think there are two obvious areas that you might want to exploit. One is scanner data for constructive price indices, which Hetan has already mentioned. The other area where I could see private sector big data being of considerable use is on payment information—information from payments processors and payments providers.
Of course, there is a vast amount of other information that is generated by the private sector. Some of that information might be useful for shedding light on new puzzles or new phenomena in the economy. One might want to be a little bit wary about relying on them to build the regular official statistics because you cannot be sure they are always going to be there, whereas you will probably have a reasonable presumption that the payments information and scanner data will continue to be available, and the Office for National Statistics could therefore use them on a regular basis.
Hetan Shah: I can give a couple of examples or case studies. One is pensions. In this country we have made quite a lot of changes in recent years around pensions policy, but it is very hard to track the impact of that. The Bill will allow for the ONS to bring together the benefits and pensions data, which are held by the DWP, the HMRC data, and also to go out to companies or to either regulatory bodies or federated bodies and get their data and bring those together so that we can see what auto-enrolment has actually meant, in terms of the amount people are putting into their pensions, and you can actually start tracking policy.
Another example is international student migrants, which is clearly a hot topic at the moment. At the moment there are Home Office data in one place, the Higher Education Statistics Agency holding useful data in another place and there are labour market data held in a third place. You could bring all those things together to actually track the impact and the numbers and so on, which at the moment we just do not have a good handle on. Those are the sorts of things that are possible if you give your statistical office access to the aggregate data from other Departments and also some access to private sector data.
Thangam Debbonaire
Q Is that the sort of data other countries are using in that way?
Hetan Shah: Yes, that is right. Other countries have different set-ups, as it were, but these are the sorts of puzzles they can solve because they can bring those data together in different ways.
Nigel Huddleston
Q Mr Shah, you have partly answered my question, so I will turn to Professor Sir Charles Bean first. What kind of Government data would you personally like to get access to; what would you do with it; and how would the public benefit from your having it?
Professor Sir Charles Bean: You do not mean me personally? Presumably you mean the Office for National Statistics and the UK Statistics Authority?
Nigel Huddleston
Absolutely.
Professor Sir Charles Bean: First and foremost, I would say the tax data that HMRC holds—value-added tax, income tax and corporation tax. Value-added tax is particularly useful because it tells you something about inputs and outputs of businesses. It is potentially quite good, up-to-date, timely information on activity in the economy. I should say, when I was on the Monetary Policy Committee, we used to get informal briefings each month from the Treasury representative on what they knew about the tax receipts coming in that month, but having more detailed information about what was going on would be potentially very useful. In principle you can envisage building the national income accounts almost entirely on that sort of information if you have access to it, and you can make sure that the income-outcome expenditure sides are all balanced. That, as far as I am concerned, is by far and away the most significant thing.
I think it would be quite useful to bring in another dimension here about why administrative data are useful. There is obviously a lot of interest in regional issues. As it is at the moment, most regional information is collected to align with administrative areas of one sort of another, but those are not always the most natural units to be looking at for studying a phenomenon. If you think of Wales, north Wales is not actually trading with south Wales, it is trading across with Manchester and Liverpool, while south Wales is trading across with Bristol and so forth. If you want to think about the regional economics, you need things that allow you to look at those nexuses, rather than the information you might be given on the Welsh economy. If you have administrative data, with regional, locational identifiers, you can in principle aggregate the information in whatever way is best suited to the particular issue that you want to look at.
In terms of thinking about statistics for the 21st century, we need to be thinking about a framework that is actually quite fluid and flexible, rather than one in which everything is pushed into a set of standard definitions for GDP and stuff like that, and standard regional definitions and so forth. When you have access to the underlying micro information, providing you have appropriate identifiers that you can manipulate and link, you have open to you all sorts of possibilities that we do not currently have.
Nigel Huddleston
Q Mr Shah, do you have anything to add to that?
Hetan Shah: I have just a couple of examples. One is systemic financial risk. Post 2008, I think there was a recognition that we had focused too much on the risk for individual financial institutions and not looked at risk at a systems level. There is a possibility of doing that. The Prime Minister has indicated an interest in how the labour market is changing with the rise of zero-hours contracts and so on. Using a mixture of administrative and private sector data would allow us to start to get a handle on how the economy is changing.
Louise Haigh
Q Mr Shah, you keep mentioning access to data, but the problem we heard earlier is that the Bill talks not about access to data but about data sharing, which implies duplication. We should really be moving towards data minimisation. Do you think that the language of the Bill should reflect access to data, rather than data sharing?
Hetan Shah: My view is that for the clauses on statistics and research the Bill is pretty clear that it is about data access.
Louise Haigh
Q It discusses the transfer of data. It does not talk about your accessing data. It does not mention the technology through which you would do it. There are no codes of practice alongside how it would happen. It is very broad and explicitly talks about data sharing in certain areas.
Hetan Shah: I think I said this earlier, but in case I was not clear I shall repeat it. For statistical and research purposes, statisticians and researchers are interested only in aggregates; they are not interested in us as individuals. It is a key point that the relevant clauses are quite different from some of the other parts of the Bill. Others have indicated in their evidence that this area should be seen as slightly different.
It is also worth noting that there are safeguards that have been tried and tested over many years. There is the security surrounding the data—the ONS will not even let me into the vault where they hold the data. You need to be accredited and to sign something saying that you will not misuse the data. If you do, you will go to jail. The trick that has been missed has been not saying all that, because it is almost assumed that that is how the ONS works. My suggestion is that if you want to strengthen that part of the Bill, you should just lay out the safeguards that are already common practice in the ONS.
Claire Perry
Q Thank you both for setting out some very factual and helpful arguments as to why the provisions are a good thing, particularly when it comes to aggregate statistics. I was struck by a quote in your report published in March, Professor Sir Charles. You mentioned the
“cumbersome nature of the present legal framework”,
which the Bill will clearly help to solve, and you also said that there was a
“cultural reluctance on the part of some departments and officials to data sharing”
and, in many ways, to working together, as we know from experience. How do we solve that problem and get Departments to realise how helpful some of these datasets might be?
Professor Sir Charles Bean: A key thing about the Bill is that it shifts the onus of presumption. There is a presumption of access unless there is a good reason not to comply or explain, if you like, as opposed to the current arrangement, which is that the data owner has the data and you say, “Can you please let us have a look at it?” There is civil service caution. I was a civil servant very early on in my career, so I am aware of how civil servants think. Inevitably, you are always worried about something going wrong or being misused or whatever. That plays into this, as well.
In the review I said there are really three elements and I think they are mutually reinforcing. There is the current legal framework, which is not as conducive as it could be; there is this innate caution on the part of some civil service Departments, or even perhaps on the part of their Ministers on occasion; and then the ONS has not been as pushy as it might have been. It is partly that if you know it is very difficult to get in—people are not very co-operative at the other end and the legal frameworks are very cumbersome—you are less inclined to put the effort in, and you think, “Oh, well, let’s just use the surveys, as we’ve always done.” So I think you need to act on the three things together, but they are potentially mutually reinforcing if you get the change right.
Hetan Shah: This is one area where I think the Bill could be strengthened. At the moment, the ONS has the right to request data; similarly, the researchers have the right to request data. The Department can still say, “No”, and in a sense the only comeback is that there is a sort of name-and-shame element of, “Parliament will note this”, as it were. My worry, given the cultural problems that have been seen in the past, is that that may not be enough. So why do we not do what Canada does? It just says, “The ONS requests”, and the Department gives.
Claire Perry
Q It is a presumption in favour of sharing?
Hetan Shah: Yes, precisely. Similarly, with research you could have the same situation where, as long as the researcher meets the code of practice this required, the presumption would be in favour.
Chris Skidmore
Q Professor Bean, in terms of the current legal framework and the problems with it as it exists, am I right in saying that there is an issue with legislation that was passed in the previous Government, under Gordon Brown’s premiership, that caps the use of data and research material, and which needs to be addressed quite urgently?
Professor Sir Charles Bean: Yes, I think it does need to be addressed. The existing Act was introduced with the intention of trying to improve the ability to share data, but it just has not operated in the way that people maybe hoped it would. In practice, having talked to the ONS and other Departments, it sounds like an extremely cumbersome process. So I think this is a case where the original legislation may have been well intentioned, but—
Chris Skidmore
Q Will there be a problem even with accessing some datasets after a certain point in time—?
Professor Sir Charles Bean: There is a point after 2007, yes. You have to specifically write into the legislation that, in principle, the information can be shared, yes, whereas these information-sharing orders—
Chris Skidmore
Q So that is creating a real problem in the infrastructure that needs to be addressed?
Professor Sir Charles Bean: Yes.
The Chair
Thank you, colleagues. Thank you very much indeed to our final two witnesses; you gave very clear and expert answers. Thank you; it is much appreciated.
Ordered, That further consideration be now adjourned. —(Graham Stuart.)