Higher Education (Industry and Regulators Committee Report)

Baroness Twycross Excerpts

Tuesday 21st May 2024 Grand Committee

[Baroness Twycross (Lab)]

My Lords, I commend my noble friend Lady Taylor for securing this debate on the report of the Industry and Regulators Committee, and all members of the committee. Like the noble Lord, Lord Storey, I felt privileged to hear from such well-informed contributors.

Having reread the report in preparation for this debate, its title, Must Do Better, felt like an understatement. The committee was damning in its criticism of the Office for Students, and, as my noble friend highlighted in her opening speech, the committee’s overall finding was that it is performing poorly. I am not sure that many positive points were raised in the report, besides those attributed to the noble Lord, Lord Wharton, the chair of the Office for Students, although the noble Lord, Lord Johnson, provided a defence of the regulator in his contribution, as did the noble Lord, Lord Lucas. The examples which the noble Lord, Lord Storey, just provided in his speech gave context, with the engagement he has had with real-life examples, which was helpful.

I look forward to the Minister’s response to the many points that have been raised and, in particular, to hearing what has changed in the interim since the committee’s report was published. It was clear from many contributors to the debate, including my noble friend Lady Taylor, the noble Lord, Lord Clement-Jones, and others, that over recent years universities have faced many issues, from having to deal with the pandemic to research funding being limited and pressure on the funding model.

The “looming crisis” the report cites is, as a number of noble Lords have stated, clearly already here. The Office for Students appears, unfortunately, be part of the problem whereas it should be a major part of the solution. A regulator should do what it says on the tin. This is a regulator that, as the noble Lord, Lord Norton, said, has not lived up to its name. It should not be rocket science: indeed, the mission statement for the Office for Students says:

“We aim to ensure that every student, whatever their background, has a fulfilling experience of higher education that enriches their lives and careers”.


However, despite the good intentions described by the noble Lord, Lord Johnson, the Office for Students has not delivered for students yet, or for the sector, and lacks clarity over even what it defines as a student interest.

The noble Lord, Lord Wharton, highlighted the freedom of speech Act, and its implications are significant for universities. As the noble Lord, Lord Mann, made starkly clear, the regulatory guidance proposed by the Office for Students on freedom of speech has led to a situation that, as Labour warned it could and would, will allow Holocaust deniers and their ilk to potentially spread hate on our campuses. Will the noble Baroness commit to intervene to ensure that the rollout of the regulatory guidance described by the noble Lord, Lord Mann, is paused until such time as it is fit for purpose and has appropriate safeguards for all students, not least for the protection of Jewish students? Moreover, will she explain how the Government will ensure that the Office for Students will reset its work to be less simplistic and narrow in its approach? Will the Government require the Office for Students to refresh its approach to student engagement? Will they insist that the regulator defines what it sees as student interests?

The noble Lord, Lord Willetts, spoke about the social mobility aspect of universities, which I would hope would be among the key issues that should be promoted and measured by the OfS. The committee recommended that the OfS should take on the role of providing students with clear and digestible information on costs, outcomes and contact time, which, as the noble Lord, Lord Willetts, said, is a real concern to prospective students. As the noble Lord, Lord Storey, said, there needs to be a key focus on what students want, including getting their essays and assignments back quickly. Students deserve to get the information they need to make what is a significant life decision. What conversations has the department had with the regulator to ensure that this now happens?

The noble Lord, Lord Freyberg, spoke powerfully about the impact of the cost of living on students, which leaves them with a shocking shortfall. Many have to work, and prioritise work, in order to get by, and the pressures can cause students to drop out. Surely an office that is genuinely for students must address these concerns. Labour believes that regulation matters, and questions of what regulation should look like have come up throughout the debate. As my honourable friend the Member for Warwick and Leamington, Matt Western, said in a Westminster Hall debate last year, we need

“good, fair-minded, proportional regulation, which is needed in any sector, especially the higher education sector. For a sector that benefits from £30 billion in income from public money, educates over 2 million students and contributes £52 billion to our GDP, supporting more than 800,000 jobs, the need for regulation is clearly self-evident”.—[Official Report, Commons, 26/4/23; cols. 427-28WH.]

The need for proportionate, appropriate regulation was a point made succinctly by a number of speakers today, including the noble Lord, Lord Norton, who stated that the starting point is that regulators need a mindset that gets the best out of bodies. I welcomed the point made by the noble Lord, Lord Willetts, that this committee’s view on regulation should be taken seriously because it knows what it is talking about and this is its area of expertise. The committee report found that the regulatory framework has become overly prescriptive over time, and the OfS is too willing to direct higher education providers’ operations and activities, showing little regard for the need to protect institutional autonomy.

Of particular concern is the lack of co-ordination by the OfS with other regulators in the HE space, in particular in relation to degree apprenticeships. The committee recommended that the DfE should reconvene the Higher Education Data Reduction Taskforce—although a better acronym could probably be found—to address duplication and unnecessary burdens on providers. Can the Minister confirm whether the DfE will be doing this? Is she satisfied with the quality assurance agency now also being the regulator? Does she agree with the committee, and a number of speakers today, that this is a concern?

A thread through this debate has been the growing concern over recent weeks and months about the financial instability of the sector. This was also the subject of a Question that raised cross-party concern in your Lordships’ House this afternoon, following the recent report published by the Office for Students. My noble friend Lord Parekh spoke of an ambivalence towards overseas students, and a number of noble Lords —including, among others, my noble friend Lord Parekh and the noble Lords, Lord Clement-Jones and Lord Norton—spoke about the sector’s overreliance on international students, where their fees currently act as a subsidy for domestic students; the noble Lord, Lord Agnew, likened this model to a Ponzi scheme. What conversations has the DfE had with the Home Office on the implications for our HE institutions of further limits on international students? Even the rhetoric around limits on international students appears to be having an impact already.

The noble Lord, Lord Norton, said that the Government are sending out all the wrong signals on overseas students. Does the Minister agree with that point? Is she concerned by the fact that the Office for Students did not share the committee’s concerns on the financial health of universities just over a year ago but now judges that, as my noble friend Lady Taylor said, 40% of universities are expected to be in deficit? Can the Minister outline what more the Government are doing to ensure that the unsustainable financial situation facing many higher education institutions is resolved? Does she agree with the Office for Students’ report that we might see some changes to the shape and size of the sector, for example through mergers, acquisitions or increased specialisation? Does she agree with the noble Lord, Lord Johnson, that the Office for Students should be doing more to promote innovation and new forms of provision?

During today’s debate, there were varied views on how universities’ financial management is in practice but it is clear that cuts alone are not the solution. Many higher education institutions have already made fairly drastic efficiencies. Labour will reform the higher education funding system. It is looking at ways to make the system fairer and more progressive; it will change the system to give students, graduates and universities the support they need.

My final point is that an independent regulator must have the trust and respect of the sector in order to succeed. It was clear from most of those who gave evidence to the committee that the Office for Students does not have the respect of the sector and is not giving students the voice they need. There is considerable suspicion of the OfS’s relationship with government; this appears to be in large part down to the belief among the sector and other stakeholders that the OfS is too close to government and is, in effect, acting at its direction. The noble Viscount, Lord Chandos, described this as a lack of distinction between government and the regulator; he also referred to a lack of transparency. I appreciate the fact that the Government’s response to the committee indicated their view that there are already established and sufficient protections to ensure that the OfS operates independently of government; none the less, I ask the Minister to take this view seriously and ask the department not simply to dismiss this view as erroneous or unfair.

The regulator cannot succeed unless vital relationships are reset as a matter of urgency, trust is restored, and it is seen and believed to be delivering for both students and the sector as a whole. I welcome my noble friend Lady Taylor’s commitment that the committee will return to this subject in future. This was an enlightening and hard-hitting report demonstrating the value of the work of the committees in your Lordships’ House. I look forward to the Minister’s response.