Lifelong Learning (Higher Education Fee Limits) Bill

(Limited Text - Ministerial Extracts only)

Report stage
Tuesday 5th September 2023 Lords Chamber

[Lord Berkeley of Knighton (CB)]

My Lords, many interesting points have been made about the amendments. I agree with the noble Lord, Lord Willetts, and the other speakers that we would like to see this progress; it is a good idea. We want to improve access to education, which means having more and better information about fees and recognising the fact that they cannot just continue uncontrolled.

Another point I endorse is that which the Minister said in a previous speech on this subject: that the Government had a “phased approach” to this. I think consideration has been given to the many points that have been very intelligently raised; I am sure that the Minister is grateful for them.

[The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)]

My Lords, ahead of speaking to the amendments tabled, I thank all noble Lords across the Chamber for their contributions and the support they have expressed, both for this Bill and for the wider programme to transform opportunities to build qualifications over one’s lifetime. We heard from the noble Baronesses, Lady Garden and Lady Wilcox, about the importance of filling skills gaps so that the economy can grow. I thank both my noble friend Lord Willetts and the noble Lord, Lord Berkeley of Knighton, for their support and acknowledgement that the Bill will open new opportunities for learners.

Amendment 1, tabled by the noble Baroness, Lady Garden of Frognal, would define a credit as equivalent to “10 notional learning hours” in the Bill. The Government believe that it is crucial that the definitions of credits in the fee limit calculations align to standard practice in the sector—a point the noble Baroness, Lady Wilcox, made. The Government plan to set out this detail in regulations, rather than in primary legislation. The power to do so is provided for in new paragraph 1B of Schedule 2 to the Higher Education and Research Act 2017, introduced through Clause 1 of this Bill. Specifying learning hours in secondary rather than primary legislation means that providers that might choose to use a different number of learning hours per credit will simply have those courses treated as non-credit-bearing for fee limit purposes. If we took the approach of this amendment, those same providers could instead be considered in breach of the fee limit rules as a whole, with all the regulatory consequences that might bring. I am sure that is not what the noble Baroness intends with her amendment.

To be clear, as I think the noble Baroness’s amendment seeks to do, the Government do not intend to change the number of learning hours in a credit unless standards in the sector change. Learning hours are, and should continue to be, based on sector-led standards. Regulations on learning hours will follow the affirmative resolution procedure, so Parliament will get the opportunity to debate and formally approve any changes to those regulations.

Amendment 2 and Amendment 4, tabled by the noble Baroness, Lady Twycross, and the noble Lord, Lord Watson of Invergowrie, would require the Secretary of State to publish a review of the impact of the future Act on the progress of the rollout of the lifelong loan entitlement. Amendment 4 sets out that such a review must be published ahead of regulations being laid, and Amendment 2 would require the review to be presented to Parliament before the end of 2026. I thank my noble friend Lord Willetts for being the very eloquent messenger of the noble Baroness, Lady Wolf. We absolutely agree with her point and that made by the noble Lord, Lord Berkeley. Amendment 2 specifies that the review should include the impact of the credit-based method on sharia-compliant loans and skills gaps.

I thank your Lordships for these amendments. The Government agree with the sentiment behind them, if such sentiment seeks the department’s commitment to monitoring the impact of these measures on the transformation of student finance under the lifelong loan entitlement. As your Lordships will be aware, the Government published an impact assessment alongside the Bill upon its introduction in the other place in February this year. Subsequently, the department published an updated and more extensive impact assessment of the lifelong loan entitlement, more broadly, alongside the publication of the consultation response in March. As was committed to in the impact assessment published in March, and in accordance with the Better Regulation Framework, a more detailed assessment of impacts will be published at the point when the Government lay the necessary secondary legislation to implement the lifelong loan entitlement fully. Therefore, the Government already intend to publish an updated impact assessment covering all aspects of the LLE, including the measures in the Bill, when regulations are laid.

In addition, parliamentary accountability mechanisms are already in place to review Acts of Parliament and the impact that they have on policy, including post-legislative scrutiny in particular, but not exclusively. There will be continued scrutiny of the LLE and the impact of these measures in both this place and the other place, including the role of the Education Select Committee in scrutinising the work of the department.

I will just rest for a moment on the point about post-legislative scrutiny, which I understand the noble Baronesses raised at the briefing yesterday. The noble Baroness, Lady Wilcox, will be aware that under the current government guidance and as proposed in 2008, between three to five years after an Act is passed it should be reviewed by the government department and Parliament. I can assure the noble Baroness that the Government will seek to work together with the relevant Select Committee in line with that guidance. However, while we recognise the importance of reviewing the implementation, it should be not just of this Act but of the reform of the system—and again, I can commit that the Government would like to see that review happen.

On the specific details within the amendments themselves, the timing requirement in Amendment 4 would require a review of the impact of the Bill on the rollout of the LLE prior to regulations being laid. I want to be clear here that any impact assessment which is conducted ahead of laying regulations would not be any different to the impact assessment currently available for the Bill and the consultation process. The next point at which impacts can be assessed is when the regulations are laid and, as stated, the Government are committed to publishing an impact assessment at that time.

Amendment 2 relates to the impact of the credit-based method on sharia-compliant loans and skills gaps. First, it is important to note that fee limits are set on courses, not on students. Therefore, the credit-based method—like the current fee limit system—will not depend on any characteristics of individual students. All students on a course will have their fees determined in line with the same fee limit rules, regardless of whether they use their LLE, self-fund, or use alternative loan arrangements.

I take this opportunity to assure your Lordships that the Government remain committed to delivering an alternative student finance product compatible with Islamic finance principles. The noble Baroness, Lady Garden, questioned why it was taking so long. I will not rehearse all the arguments, but I think she will remember that we touched on this in Committee, and it really is linked to the complexity of implementation. Every element that changes within the student finance systems needs to be mirrored for the alternative finance product, so it is a more complicated process and is contingent, and it has to follow the building of the systems which will allow us to deliver the new approach.

The noble Baroness, Lady Wilcox, questioned our commitment to being able to deliver by 2025. I remind the House of the measures that we set out in the letter that I sent your Lordships on this point following Grand Committee. I am pleased to confirm that in August, the Student Loans Company commenced delivery planning for alternative student finance, and it is supported on this phase of work by experts in Islamic finance, the Islamic Finance Council UK. I continue to meet on a quarterly basis with the Student Loans Company, the Islamic Finance Council UK, the noble Lord, Lord Sharkey, Stephen Timms MP and representatives from the Islamic community to discuss the steps the Government are taking to deliver alternative student finance as swiftly as possible. Because of the delays there have been, we need to be as transparent as possible to make sure that we build or rebuild trust with the community that we really will deliver on this. I will provide a further update on alternative student finance later this year.

On skills gaps, in response to the LLE consultation, the Government made it clear that they will be taking a phased approach to modular funding, as the noble Lord, Lord Berkeley, reminded the House, focusing on higher technical courses which have the clearest employer value. It is important to note that fee limits are not a means to address skills gaps; they are to ensure that students have affordable access to higher education provision provided by those higher education providers who receive government funding to support course delivery.

Finally, it is worth noting that the LLE policy is much wider than the provisions of the Bill, and as such, the reviews sought through these amendments would focus narrowly on fee limits and not on the impact of the LLE as a whole.

For these reasons, while the department understands the sentiment behind these amendments, they would either have unintended consequences or would be unnecessary, as there will already be mechanisms in place to provide such review. Therefore, the Government cannot accept these amendments and I hope that your Lordships will withdraw or not move them.

[Baroness Garden of Frognal (LD)]

My Lords, I thank the Minister for her response and her reassurance, and I thank the noble Baroness, Lady Wilcox, and the noble Lords, Lord Willetts and Lord Berkeley, for their comments on this short debate.

Of course, we are all committed to encouraging lifelong learning—it is essential for the well-being of the country and of individuals—and we all want to make sure that it is encouraged. As I say, we continue to express concern that adults may not prepared to take on loans for this but, obviously, only time will tell. I thank the Minister for her remarks about sharia finance, because it is a concern that Muslim students are deterred from entering higher education because they cannot get the means to do so. With that, I thank all your Lordships and I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Garden of Frognal (LD)]

My Lords, we have here a fairly formidable list of things, all of them important. I want to focus on subsection (2)(j) in the new clause proposed by Amendment 3, which concerns:

“the financial sustainability of the tertiary education sector”.

We note that student fees have not gone up in all the years they have been there and that universities now face intense financial pressures. I note that, in Committee, the noble Lords, Lord Willetts and Lord Johnson, put forward a suggestion that student fees should rise with inflation; that has not gone further but I wonder whether the Minister could give some succour to university vice-chancellors, who are desperately worried about how on earth they can balance their books as costs go up but income does not.

[Baroness Barran (Con)]

My Lords, I now turn to Amendment 3, tabled by the noble Baronesses, Lady Twycross, Lady Thornton and Lady Wilcox of Newport, and the noble Lord, Lord Blunkett. This amendment would require the Secretary of State to publish an annual review of the operation of the provisions of this Act and specifies several areas that the review must cover, including learner uptake, access to higher education and financial sustainability in tertiary education more broadly.

As mentioned in relation to Amendments 2 and 4, the Government published an impact assessment upon the introduction of this Bill in February and an extensive impact assessment of the lifelong loan entitlement more broadly in March. The Government intend to publish an updated impact assessment covering all aspects of the LLE, including the measures in this Bill, when regulations are laid.

There will be continued scrutiny of the Bill and the LLE via existing parliamentary accountability mechanisms, for example post-legislative scrutiny and the Education Select Committee. In addition, there are already systems by which the areas mentioned in this amendment are monitored. I will take each area in turn to provide reassurances as to the existing work being undertaken in these areas and the mechanisms in place for review.

In relation to the point from the noble Baroness, Lady Thornton, about three to five years, I was speaking specifically about post-legislative scrutiny. It is in the Cabinet Office guidance from 2008—a period that I imagine the noble Baroness might support. Obviously, as I have just listed, there are a number of other mechanisms for scrutiny.

The amendment lists a number of areas relating to uptake. I want to take this opportunity to refer noble Lords to the publications produced by the Higher Education Statistics Agency, which will continue to include data on learner uptake and enrolments. For example, the Higher Education Statistics Agency website allows anyone to view information about higher education student enrolments broken down by year, level of study, higher education provider, subject, mode of study and more. High-level national results are also published in its annual statistical bulletin.

Regarding uptake of modular and part-time study, the Government expect to see a shift in how, what and when people study as the LLE provides support for alternatives to full-time study. For example, Universities UK polling in 2020 on modular study indicated that 82% of prospective students polled who were either unemployed, at risk of unemployment or looking to learn a new skill would be keen to study individual modules of a university degree.

Turning to access, tackling inequality in higher education is a central part of the Office for Students’ mission. The OfS shares information through its access and participation data dashboard, which allows it and the public, alongside registered universities and colleges, to identify gaps between groups. The OfS also maintains an equality of opportunity risk register, which identifies key sector-level risks to equality of opportunity in higher education and highlights the student groups that are most affected by each one.

The Government recognise the importance of supporting access, which is why maintenance loans will be available for all eligible courses and modules that require in-person attendance under the LLE, as will targeted support grants such as the disabled students’ allowance and the childcare grant. The impact assessment published alongside this Bill notes that learners who will particularly benefit from the introduction of fee limits for short courses and modules are more likely to be older, female, from ethnic minority backgrounds or from lower socioeconomic groups.