The Minister for Universities, Science, Research and Innovation (Chris Skidmore)
I beg to move,
That the draft Higher Education and Research Act 2017 (Further Implementation etc.) Regulations 2019, which were laid before this House on 29 April, be approved.
It is a pleasure to have the chance to address the House today. I welcome the opportunity to debate these regulations, which are the final planned set related to the implementation of the higher education elements of the Higher Education and Research Act 2017. To implement the research elements of the Act, there will be further regulations related to the closure of the research councils and the establishment of UKRI—United Kingdom Research and Innovation.
As I mentioned during last week’s debate in Committee on the Higher Education (Monetary Penalties and Refusal to Renew an Access and Participation Plan) (England) Regulations 2019, we have made great progress since the Higher Education and Research Act, otherwise known as HERA, came into law in 2017.
You may recall, Mr Speaker, that HERA abolished the Higher Education Funding Council for England, otherwise known as HEFCE, and the director of fair access to higher education, more commonly known as the Office for Fair Access, or OFFA. A new regulator was created—the Office for Students, or the OfS—to oversee and monitor the activities, including in relation to fair access and participation, of English higher education providers that register with it. The OfS currently regulates registered HE providers under transitional arrangements, and we hope the new regulatory regime will be fully operational from August this year.
In addition to retaining existing HEFCE and OFFA functions for the transitional period, the OfS has gradually begun to exercise its functions under HERA. HERA gave the Office for Students the power to create a new single register of higher education providers. Registration with the OfS is the only route for providers to access student support funding through charging fees for courses that attract student loans. It is now a requirement for an institution to obtain degree-awarding powers or to obtain the right to call themselves a university. Since the formation of the Office for Students on 1 January 2018, it has registered more than 350 higher education providers—352 as of 13 May, to be precise—to exacting standards, including all English universities.
The HERA reforms to the system of regulating higher education were wide ranging, which means that a number of changes to the statute book are needed to reflect the reforms introduced and ensure the smooth running of existing legislation.
That brings us to why we are here today. The main purpose of the regulations before the House is to make consequential amendments to existing legislation—a standard procedure after any primary legislation has passed.
The majority of those amendments replace references to now defunct bodies or repealed legislation. They also reflect the diversification of HE providers and the wide range of providers that are registered with and regulated by the OfS. Further, they reflect the movement to a formal regulatory system based on registration. Some of the cross-references in other enactments relate to the quasi-regulation of higher education institutions by HEFCE, and others to receipt of or eligibility for funding. The amendments reflect that nuance to preserve the original intention of such provisions.
The OfS assumed responsibility for determining applications for university title on 1 April this year. Before that date, applications were determined by the Privy Council. Transitional regulations were made to allow applications made before 31 March to be dealt with under the old system. Further provision is made in the regulations in relation to university title, to ensure that the consequential amendments they contain do not disturb applications already in process under the old regime.
The regulations also enable registered HE providers that are charities to become exempt from registration with, and direct regulation by, the Charity Commission. If a provider chooses to take advantage of that opportunity, the OfS will act as principal regulator for the provider, enabling it to avoid duplicative regulatory returns to both the Charity Commission and the OfS. HEFCE was formerly principal regulator for HEIs that it funded. A registered charity that does not wish to become exempt will not become exempt against its will; a provider must take action to obtain the exemption. This amendment is intended to create greater flexibility and choice for charitable bodies that are registered HE providers.
I am pleased to say that the regulations make the regulators code applicable to all the OfS’s regulatory functions, under section 24 of the Legislative and Regulatory Reform Act 2006, fulfilling a commitment made by my hon. Friend the Member for Orpington (Joseph Johnson) in 2017 during the passage of HERA. I know that he and the House will be pleased to see the progress made in that regard.
I thank my trusted ministerial colleagues for the assistance and collaboration of their Departments in establishing the consequential amendments required. In short, the regulations create the opportunity for more charitable bodies to become exempt from direct regulation by the Charity Commission; ensure that key enactments continue to work in the real world, minimising the risk of disruption and chaos; and put OfS compliance with the regulators code on a statutory footing.
I have highlighted the wide-ranging nature of the legislation affected by these amendments. If the amendments are not approved, it could have serious negative consequences for the HE sector. Among other things, it could result in: confusion around whether certain providers have to charge VAT on student fees; the Office for Students not being subject to the public sector equality duty; certain charities being unexpectedly faced with a change to their accounting rules, resulting in confusion and more paperwork and potentially affecting students and their overall experience; and students being denied their full entitlement to state benefits because of outdated references to defunct legislation.
This Government firmly believe that the higher education regulatory system must effectively protect the interests of students in the short, medium and long term. I hope Members will agree that the regulations are of the utmost importance to students and the sector alike and will approve them.
Chris Skidmore
I thank hon. Members for participating in this debate. I shall try to respond briefly to the points that have been raised.
I thank the hon. Member for Motherwell and Wishaw (Marion Fellows) for her remarks on the Scottish system. I will be heading to Scotland in early June and will endeavour to focus also on some of the issues of widening participation. I have regular meetings with the Scottish Minister for Further Education, Higher Education and Science, Richard Lochhead. On the points that the hon. Lady raised about research, I know that we are going a bit off piste in relation to the statutory instrument before us, but I reiterate my commitment to ensuring that we maintain our common research links with our European partners. When I was in Berlin, speaking at the “Going Global” conference hosted by the British Council, I met Minister Karliczek, Federal Minister of Educational Research, and had meetings with the Fraunhofer and Max Planck research organisations to make that commitment.
Regarding our association with such future programmes as Horizon Europe, yesterday the Government published our international research and innovation strategy, making clear our commitment to being outward-facing and ensuring that we continue to endeavour to have strong global research links.
On tier 4 visas—the hon. Lady will be aware that the Home Secretary is sitting beside me—we must remember that researchers from international countries are still able to come to the United Kingdom. We recently launched the first Future Leaders Fellowships programme, £900 million of investment in 550 international fellowships, which has seen people from Japan to Canada coming to the UK. We recognise there are issues relating to visas that need to be looked at as part of the consultation for the immigration White Paper, but issues around tier 4 visas have not prevented existing international researchers from being able to participate in UK research life.
Turning to the points made by the hon. Member for Blackpool South (Gordon Marsden), on the amendment to schedule 3 of the Charities Act 2011, which sets out that charities are exempt from registration with and direct regulation by the Charity Commission for England and Wales, HEFCE was the principal regulator for HE providers that were exempt charities under the existing schedule 3 of the 2011 Act, and the OfS was made principal regulator for higher education under the earlier consequential and transitional regulation which came into force on 1 April 2018. The amendments to schedule 3 require that currently exempt HE charities remain registered with the OfS to continue to hold exempt status and provide the opportunity for any provider registered with the OfS to be exempt by applying to the Privy Council. That will mean that exempt charities registered with HE providers will not have to register with or make returns with the Charity Commission, but will instead report to the OfS as principal regulator.
The amendments have been made with the intention to reduce the administrative and regulatory burden on charities and ensure that the OfS has a sufficient regulatory relationship with the relevant exempt charities to be an effective principal regulator. The amendment to the Charities Act made the removal of exempt status automatic upon deregistration, so no action is actually required by the OfS. The OfS can deregister a provider only if certain conditions are met. That covers both conditions on registration, and consideration of the denial of an access and participation plan.[Official Report, 4 June 2019, Vol. 661, c. 1MC.]
On the impact assessment, the regulations contain two sets of saving provisions. The first deal with the applications made for university title that were made before 1 April 2019. The second type of saving provisions relate to the repeal of a particular statutory provision under which so-called designation orders were made. Those orders designated certain providers as higher education institutions. There are a number of references and regulations governing teachers’ pension schemes and local government schemes to designated institutions. If we do not preserve the orders for those very narrow purposes, future staff’s eligibility for the schemes will be lost, so there are benefits in ensuring that staff have access to those pension schemes.
The entire purpose of the consequential saving provisions is to preserve the intention and scope of the underlying legislation in the context of the changes brought about by HERA. We therefore do not anticipate any additional regulatory burden as a result of the regulations. As I said in my opening speech, the main purpose of the consequential amendments is to minimise the risk of chaos and disruption to students, staff and providers. The hon. Gentleman mentioned the SLSC asking for clarity on a few of the provisions in the regulations. I understand that it often does so as part of the scrutiny process and we will respond in due course.
The hon. Gentleman focused on the risks around data sharing in relation to regulation 14 and schedule 8 to the Digital Economy Act 2017. Schedule 8 allows bodies named in it to disclose information to each other for the purposes of taking action in connection with fraud perpetrated against a public authority. The amendments replace Innovate UK and existing research councils with references to UKRI, HEFCE and the OfS, because HEFCE has been abolished, and Innovate UK and the research councils have been incorporated into UKRI. If we do not make the amendment, the OfS will not be able to make or receive fraud-related disclosures envisaged under the Act. There would also be ambiguity as to whether disclosures could be made or received by relevant constituent parts of UKRI.
Separately, regulations 28 and 32 amend the Education (Information About Children in Alternative Provision) (England) Regulations 2007 and the Education (Individual Pupil Information) (Prescribed Persons) (England) Regulations 2009. The provision requires institutions that are not schools in receipt of funding from the Department for Education to provide certain pupil information to the Secretary of State and other bodies, including HEFCE. The amendment will substitute OfS for HEFCE, as HEFCE no longer exists. That is the same for regulation 32.[Official Report, 4 June 2019, Vol. 661, c. 2MC.]
It is important to state on record that we need data sharing to track pupils to ensure, when it comes to improving the position of disadvantaged students and students in widening participation categories, the data is available.
Gordon Marsden
I appreciate the detailed explanation of the technical reasons for the changes and I have no wish to prolong the debate unduly, but the thrust of my remarks was to express our continued concerns about the inadequacy of the protections in this area. Will the Minister give the House an assurance today that he is confident the status quo in terms of the safeguards will in fact do the business, given that we and other bodies have raised substantial concerns about the current procedures?
Chris Skidmore
The section 3 regulations the hon. Gentleman mentioned in his earlier contribution were debated at the time of the regulations. The consequential provisions substitute the OfS for HEFCE. I will put on record that the Department takes its obligations under data protection laws very seriously. There is a panel that assesses each sharing request for public benefit, proportionality, the legal underpinning, and strict information security standards. I reiterate that no data sharing will take place without the Department ensuring that those measures are taken into account.
That takes us to the wider issue of the OfS being part of the regulators code and the application of that code meeting the commitment the Government made during the passage of the Act. In addition to the matters the OfS must have to regard to under HERA are the five principles of good regulation under the regulators code. It is worth putting them on record: the regulator should carry out activities in a way that supports those it regulates to comply and grow; regulators should provide simple and straightforward ways to engage with those they regulate and hear their views; regulators should base their regulatory activities on risk; regulators should share information about compliance and risk; and regulators should ensure clear information, guidance and advice is available to help those they regulate to meet their responsibilities to comply. The opportunity for the OfS to be a part of the regulators code is an additional indication of the responsibilities that the OfS takes its new role very seriously.
If I had longer I would go through the importance of why we are debating the regulations. As Universities Minister, I am delighted they have reached the Floor of the House rather than Committee Corridor. I believe this marks a significant moment in the reforms that began way back with the first Green Paper in 2015, all the way through to the final provisions of the Act being put in place. We have seen a shift from a provider-focused system to a student-focused system. We have seen a system that will now move to focusing on how we can best ensure we have value for money for students and deliver the best student experience. We can ensure that new providers, including FE providers, are able to enter the market.
When addressing the Education Committee this morning, we spoke at length about how we can ensure that FE and HE providers have greater opportunities to work together. One important part of the regulations is ensuring that FE providers will be able to have degree-awarding powers and apply to a much more streamlined system through the OfS. My ambition and long-term hope is that it will allow FE providers to have degree-awarding powers, rather than going through the rather complex and nuanced current franchising route. That will ensure we create a single system for a post-18 education world that benefits students, so they understand their role in the education system.
Question put and agreed to.
Resolved,
That the draft Higher Education and Research Act 2017 (Further Implementation etc.) Regulations 2019, which were laid before this House on 29 April, be approved.
House of Commons Commission
Resolved,
That Pete Wishart be appointed to the House of Commons Commission in place of Stewart Hosie in pursuance of the House of Commons Administration Act 1978, as amended.—(Jo Churchill.)