Higher Education and Research Bill

Baroness Wolf of Dulwich Excerpts

Report: 3rd sitting (Hansard): House of Lords
Monday 13th March 2017 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, this is a golden thread in our debate that has been pursued with considerable vigour by the noble Baroness, who has on every occasion, I think, asked difficult questions. In fact, she has been quite free with her favours, asking questions of me and of other noble Lords around the whole Chamber when we have failed to measure up to her high standards of accuracy and precision when mentioning the words “English”, “higher” and “education” in sequence.

Here we are at the crunch point. The noble Baroness has put down a very specific amendment that would have quite strong repercussions for any body attempting to recruit English higher education students, because along with students comes public money. The main argument as I take it—and we look forward to hearing about it from the Minister—is that we are risking public money on bodies when we have no certain knowledge about where and how they are incorporated and what rights and responsibilities they have to the students. She could have mentioned several other areas and it is important to get them on the record. Under the Consumer Rights Act, students are owed a duty of care by the providers of their course. Specific issues must be supplied by the institutions and remedies for students lie in legal protections, which would be exercised in court. If the bodies are not incorporated in the UK, how are they going to manage that? I think the Minister should respond to that in a positive way.

We are also concerned with insolvency issues. It is quite interesting and instructive that most of the Technical and Further Education Bill—which is accompanying this Bill through Parliament—is taken up with measures that apply if a college of further education goes into insolvency or is wound up. There is a special education administration regime with particular powers for the insolvency practitioner appointed to ensure that students rank above all other creditors and that their courses will continue, if possible, or be transferred to a similar institution if not. Creditors, who in insolvency law—as I am sure your Lordships’ House is well aware—are normally given primacy, are relegated to second place. We have no such system for higher education institutions in the UK. There is therefore no provision for what happens when a private company, in particular, decides it no longer wishes to teach its students. Where will the students seek redress? The cases mentioned by the noble Baroness are relevant in this jurisdiction as well as abroad. It will be very interesting to see how students will recover their loans and their opportunities if there is no incorporation which allows them to do so.

We are discussing this when there has been a change of ownership of a very distinguished private provider, BPP. That situation is not nearly so dire as the one I have been discussing but nevertheless reflects a very major arrangement. The ownership has changed. The senior management have decided to not continue and there is still uncertainty about how the overall firm will be run. This is a real situation involving large numbers of students, lots of money and very difficult legal and jurisprudential positions.

The Government are taking this seriously. I had a letter delivered to my hand as I walked into the Chamber. It deals in four pages with some of the issues that the noble Baroness raised. I am not in any sense wanting to make slight of the letter because it is useful to have it on the record, but the Government seem to be broadly of the view that the existing arrangements under which the Office for Students—surely we will be shortly be calling it the Office for Higher Education, as we prefer—will have responsibilities under the registration and degree-awarding powers will make sure that nothing untoward happens. That is not sufficient. We need greater certainty about what institutions are responsible for our students, how they are responsible, in what way they are incorporated and what the legal position is.

I look forward to hearing the Minister’s response, but I do not think that he will be able to measure up to some of the very strong critiques that have been made so far.

[Baroness Wolf of Dulwich (CB)]

My Lords, as the noble Lord, Lord Stevenson, has pointed out, we are in the strange position where one has far greater protection if one is studying for a higher education qualification in a further education college than if one is in a university, because there are very clear requirements, now going through this House, for what should happen if that institution becomes insolvent.

This issue has been raised on a number of occasions in this Chamber, where it has been argued that, although the Government have committed to a protection regime for students in higher education, it is not very clear or demanding, as far as we can tell. The amendment goes a step further, because it draws attention, as have my noble friend Lady O’Neill and the noble Lord, Lord Stevenson, to a situation in which, over and above issues relating to the institution delivering the education, there is an issue of ownership. It may mean that, in extreme situations, it is unclear where students would seek redress, never mind how.

The Government are aware of the new issues that have come about as a result of creating a sector in which providers can be bought and sold. In 2015, they asked HEFCE to look at this issue and, as a result, there are now some new regulations about the treatment of degree-awarding powers in the event of a change of ownership or legal status. In that situation, HEFCE must discuss the potential implications for degree-awarding powers, including continued eligibility to hold them, and must be assured that the original institution that was awarded the powers is in substance the same institution in spite of the change of ownership. That is what is happening with BPP at the moment and there is no reason to suppose that the institution will not continue to be a distinguished provider of higher education.

I think that everybody in the sector who is providing good-quality education, whether they are private or not for profit, would agree with that. However, what the regulations do not get to the heart of is how, if an institution is owned by a company or body overseas—it may be somebody who has taken the entire institution into private ownership—the OfS will be confident that it can make sure that the institution complies with the conditions of registration. An institution may change hands regularly—I give the example of the University of Law, which in the three years after it moved from being not for profit to being a for-profit company changed hands twice. How in that situation will we operate if we find that students are in effect left without not only the institution in which they enrolled but any clearly identifiable body to which they can have recourse and which the OfS can—bluntly—bring to court and demand that it do what it should do?

This is a major issue. The amendment would make sure that there was a body to which students and the Government could address themselves if a catastrophic event, which I am sure would be extremely rare, occurred. Setting up a subsidiary company in this country is generally not a very complicated or time-consuming affair. It cannot be beyond the power of the Government and it would not distort the underlying objective of the Bill to ensure that any institution offering higher education to students receiving loans subsidised by the taxpayer is clearly identifiable in the case of students being left without an education and creditors being left without obvious recourse.

Higher Education and Research Bill

Baroness Wolf of Dulwich Excerpts

Report: 2nd sitting (Hansard - continued): House of Lords
Wednesday 8th March 2017 Lords Chamber

[Baroness Wolf of Dulwich (CB)]

My Lords, I do not want to say very much about this. I did not withdraw the amendment which my noble friend Lady Brown and I originally tabled and which the noble Lord, Lord Stevenson, kindly introduced, because I wanted the opportunity to say in the House how very much we appreciate the fact that the Government listened to us on this and how convinced we are that introducing the Regulators’ Code into the OfS’s actions will be entirely for the good. It will take care of a great many anxieties we had about details in the Bill and we are truly appreciative of that.

I also want to agree with what the noble Baroness, Lady Deech, said about the realities of dealing with students who are in a university and how you cope with problems, complaints and all the issues which come to the Office of the Independent Adjudicator. It is really important that the Government take account of the fact that this is not like a situation where you buy a coffee and if you do not like it you go and buy another coffee. My noble friend spoke very eloquently. I hope the Government will listen to her on that as much as they listened to us, and I thank them very much.

[Lord Young of Cookham]

I am grateful to noble Lords who have spoken to these two amendments for their contributions to this debate. I shall deal with the easy one first.

My noble friend explained in his letter earlier this week that he had listened to concerns around the regulatory powers of the OfS and the assurance that noble Lords, many of whom have spoken in this debate this evening, are seeking around its adherence to the Regulators’ Code. As already stated in the Bill, under Clause 3(1)(f), we share the aspiration that the OfS should comply with recognised standards of good regulatory practice. We remain wholeheartedly committed to the principles of the Regulators’ Code, and because the OfS is the sector regulator, we agree that it should sign up to the code. I am therefore pleased to confirm the announcement made on Monday that the OfS will voluntarily commit to comply with the code, with a view to its regulatory functions being formally brought into scope when the list is next updated via statutory instrument.

I now turn to the more difficult amendment about the respective roles of the CMA and the OfS and what the interface is between the two. In his letter to noble Lords earlier this week, my noble friend recognised the concern over the respective roles and responsibilities of the CMA and the OfS. I will explain why we believe that this a not a substantiated concern. I think that the noble Baroness, Lady Deech, used the right expression when she said, “We expect collaboration”. That is exactly what we expect.

The CMA is not a sector regulator but an enforcer of both competition and consumer protection law across the UK economy. The CMA has the specific role and specialist expertise to enforce competition law and consumer protection across the whole of the UK economy. It would be unprecedented, as has been suggested at times, for the competition and consumer enforcement functions of the CMA to be transferred entirely to a sector regulator. Even where sector regulators have enforcement functions, the CMA retains powers as an enforcement authority, with appropriate arrangements for co-ordination of concurrent functions.

In the past the CMA has provided general advice to HE institutions on complying with consumer law. In addition, its consumer enforcement powers have been used in relation to the sector. Specifically, it has received undertakings from providers around, for example, academic sanctions for non-fee debts, such as accommodation debts; information for prospective students on additional non-fee costs; terms and conditions on fee variations; and fair complaints procedure.

HEIs are expected to comply with consumer law, enforced by the CMA. The OfS will be expected to take on board the CMA’s guidance and best practice when it develops the details of the regulatory framework. It is perfectly usual for an organisation that is subject to sector regulation to be required to comply with legal requirements that are enforced by bodies other than the sector regulator. For example, even in regulated sectors the Environment Agency carries out regulatory and enforcement activity in relation to the environmental aspects of an organisation’s activities—for instance, as regards waste and contaminated land—and the Health and Safety Executive enforces health and safety requirements.

Although the CMA and OfS share areas of common interest in relation to competition and consumer matters, their roles are distinct and complementary, not contradictory. This is the joint view not just of Ministers but of the CMA. So we expect the CMA and the OfS to work productively together, just as the CMA works well with other regulators—indeed, as it does with HEFCE at the moment—and we see no reason for this to be different once the OfS is established. There will be a further opportunity to explain respective roles and responsibilities, as necessary, as part of the consultation on the regulatory framework this autumn.

Students—in addition to being students—have consumer rights, and universities and other higher education providers that do not meet their obligations to students may be in breach of consumer protection law. Compliance with that law is important not just to protect the students but to maintain student confidence and the reputation of the HE sector, and to support competition.

The noble Baroness asked whether there was confusion about the regulatory roles of the CMA, the OfS and the OIA. I applaud the work that she did at the OIA. As I think I said a moment ago, subject to the passage of the Bill, the OfS will be the regulator for higher education providers in England. The OIA will continue to operate as the body designated by government to operate the student complaints scheme in higher education, so it is not a regulator and it will continue to deal with individual student complaints. The CMA is not a sector regulator but an enforcer of both competition and consumer protection law across the UK economy, and it has the specific role and specialist expertise to enforce competition law and consumer protection across the whole of the UK economy. So there is no overlap of responsibility between the CMA, the OfS and the OIA, although the OfS will be expected to take on board the CMA’s guidance and best practice when developing the regulatory framework.

As I said, there will be an opportunity, as part of the consultation on the regulatory framework this autumn, to explain, discuss and identify the respective roles and responsibilities of these three bodies as necessary. In the meantime, I ask the noble Lord to withdraw his amendment.

Higher Education and Research Bill

Baroness Wolf of Dulwich Excerpts

Report stage (Hansard - continued): House of Lords
Monday 6th March 2017 Lords Chamber

[The Earl of Dundee (Con)]

My Lords, within this part of the Bill concerning registration conditions and their enforcement, so far it appears that there is nothing much about restricting enrolment. Clause 16 enables monetary penalties where necessary and, in various other respects, Clauses 17 to 22 inclusive provide powers to correct and adjust, if and when desirable. Yet the latter will constitute relevant actions in the second place, and thus subsequent to the central matter, which is enrolment in the first place. In this context, by contrast, thus it appears anomalous that enrolments, and in certain circumstances a useful scope for their restriction, should so far not have been addressed at all. However, the proposed new subsections of the noble Lord, Lord Stevenson of Balmacara, redress that omission. His amendment is timely and very much worthy of support.

[Baroness Wolf of Dulwich (CB)]

I support the proposition. When we discussed the matter in Committee, the Minister said that he saw no reason why there should not be a wider range of penalties at the disposal of the Office for Students. It would be very helpful to have that confirmed in the Bill, otherwise there is the possibility of challenge of the OfS exceeding its powers if it moved to restrict the number of students in a way that would seem on many occasions entirely appropriate.

[Viscount Younger of Leckie (Con)]

My Lords, the noble Baroness, Lady Wolf, expressed these concerns in Committee, and I listened carefully to her very short speech just now. The noble Baroness, Lady Garden, and the noble Lord, Lord Watson, also spoke in Committee on the subject. This is the concern that the OfS would not have appropriate powers to restrict student enrolment at a registered higher education provider in the event of a breach of registration conditions, and would instead be compelled to either impose a monetary penalty or deregister the provider, both of which would have a negative impact on a provider’s enrolled students. It is our intention that such sanctions would be imposed only in exceptional circumstances. The OfS will operate a risk-based regulatory system, whereby any regulatory action is to be proportionate to the nature of the breach of a registration condition. The OfS will have an escalating suite of actions open to it, ranging from compliance measures, such as agreeing a support strategy with a provider or directing that certain actions should be taken, through to imposing specific ongoing registration conditions, and finally to sanctions.

The imposition of a student number control is precisely the sort of regulatory action that the OfS can use under the powers already contained in Clause 7, which allows the OfS to impose “specific ongoing conditions”. Imposing a student number control would not be to the detriment of students already studying with a provider and would help to ensure that new students who were subsequently enrolled would enjoy high-quality, suitably resourced teaching and learning. It is clearly not our intention that the OfS de-register institutions or impose monetary penalties, apart from in exceptional circumstances that merit such an intervention. We anticipate that such action would rarely be in the best interests of the student, the provider or the taxpayer. We have considered whether it would be appropriate to provide a specific power in the Bill for the OfS to impose student number controls. On balance, however, we believe it is unnecessary, as the Bill already provides the OfS with the powers necessary to limit student numbers where appropriate. With that explanation, I ask the noble Lord to withdraw his amendment.

--- Later in debate ---

[Lord Norton of Louth (Con)]

My Lords, I support Amendment 57. At earlier stages of the Bill I have welcomed the provisions of Clause 13, which provide that the Office for Students can generate student protection plans. That is to be welcomed but, as the noble Lord indicated, the problem is that we do not know what form that protection will take and more needs to be set out on the face of the Bill. I moved an amendment in Committee to try to address this issue but, at that stage, the Government were not receptive. Therefore, we really need to come back to it.

As the noble Lord said, it is the Office for Students—students are meant to be at the heart of this measure, yet they will have no idea of what protection they have when they undertake a course of study. When it comes to protection, Clause 13 gives the example of a course failing to be provided. So precisely what protection is being accorded to students? They need that reassurance if they are to sign up for and pursue courses in the first place. Amendment 57 gets at this problem and I welcome the fact that we are again considering it. As I said, students deserve to have some idea of what protection they will have when they undertake a course of study.

[Baroness Wolf of Dulwich]

My Lords, I support the amendments to which I have put my name and agree with everything that both noble Lords have said so far.

When the Higher Education and Research Bill was first introduced, both Ministers pointed out that the environment in which higher education takes place has changed dramatically in recent years, and indeed it has. Very large numbers of students now take out large loans in the belief, and with the confidence, that the institutions they attend have in some sense been guaranteed by government—that what they are doing is safe in that they will be able to complete their studies. Fortunately, in most cases that is true, but of course it is not always or necessarily true. Anybody who looks at the experience in other countries will realise that institutions do fail, and indeed some of our non-degree-awarding institutions have failed in the past. The Competition and Markets Authority says cheerfully on its website that the sign of a healthy sector is that some exit occurs. Exit sounds quite cool—unless you happen to be one of the students in an exiting institution.

At the same time as this Bill is going through, the Technical and Further Education Bill is being debated, mostly in the Moses Room. As I attend the sittings of both Bills, part of the time I whinge but mostly it is a very informative exercise because we now have a tertiary sector as much as anything else. However, the protections being introduced for students in further education colleges go well beyond anything that has been specified for students in higher education, and that is highly regrettable. It is really important that in this new and changed environment, we realise that students need new and changed protection.

To give an example, for a long time the training sector has had many quite small, and sometimes quite large, rapidly changing institutions. Just before these Bills were introduced in the House, we heard the first story of a training provider that went into liquidation, leaving many people with outstanding loans and no obvious recourse. In the few weeks that both Bills have started to work their way through the House, there have been two other such failures. I shall be happy to give their names to anyone who is curious to know them, but, once again, we are left with, in this case, adult learners who have loans but no ongoing course.

When I raised this issue with the Minister and officials, I was told that the risks were lower for university students because they were more mobile and less local. However, that really is not true. It is not true of my own, but it is true of many of our university institutions that they have home students who are almost all highly local—often because they come from less advantaged families and are very unhappy about taking out major maintenance loans. So they are very local, and if their institution fails, they do not have anywhere else to go.

I hope very much that Ministers feel able, ideally, to accept Amendment 57, which seems to me the least that we can do in an environment where we are, in effect, making a promise to students. If it turns out that, for good reasons, that promise cannot be kept, they ought to be looked after.

[Lord Bilimoria (CB)]

My Lords, I have spoken before in this context as chancellor of the University of Birmingham, chair of the advisory board of the Cambridge Judge Business School and an alumnus of Harvard Business School. However, years ago, when I was qualifying as a chartered accountant with the Institute of Chartered Accountants in England and Wales, I spent a year at what is now the London Metropolitan University, where I would later spend time as a visiting professor. I want to draw an analogy. In 2012, the London Metropolitan University lost its right to recruit international students. At that time there were 2,700 international students with valid visas, who had come here in good faith. They were given 60 days to find a place at another institution. That not only jeopardised their lives and futures but jeopardised and placed in crisis an institution with 30,000 students and 2,000 staff. That has implications for not only the institution but international students—as I know as the president of UKCISA, the UK Council for International Student Affairs.

Today, Universities UK has released a report showing that there are almost 450,000 students in the UK, of which almost 130,000 are from the European Union. The contribution they make to the British economy in gross terms—what they spend directly and indirectly— is £25 billion. With Brexit coming up, the uncertainty for international students, let alone EU students, is already there. It is not right that they have the added uncertainty that if, for whatever reason, the institution they join fails, they will be left high and dry. It will affect our economy and our ability to recruit international students. As it is, we have immigration rules that are against international students, which we will talk about later on Report.

I urge the Government to take this measure very seriously. It will give security to our domestic students and it is important for our international students and our reputation around the world.

Soft Power and the UK’s Influence (Select Committee Report)

Baroness Wolf of Dulwich Excerpts

Tuesday 10th March 2015 Lords Chamber

[Baroness Wolf of Dulwich (CB) (Maiden Speech)]

My Lords, it is an enormous honour and privilege to join your Lordships' House and speak in this debate. I would like to express my gratitude for the welcome and kindness shown to me by everyone here since my arrival. Preparing for today I was also greatly relieved to discover that a large number of other people also spent their first few weeks discovering that they had no sense of direction. If it were not for the outstanding staff here, I would probably be wandering the corridors still.

I also thank my two distinguished supporters, the noble Lords, Lord Sutherland of Houndwood and Lord Rees of Ludlow, for their help and support. Both, as I am sure noble Lords know, are eminent academics. I should explain perhaps that I am also an academic and a social scientist. My own work is largely on vocational education and training, and higher education.

I thank the noble Lord, Lord Howell of Guildford, for securing and introducing this debate and for giving me the opportunity to say a little about universities and soft power. Professor Joseph Nye, whose work first defined the idea of soft power, believes that the role that Britain plays in educating people in British universities is a major soft power resource for this country. The committee agrees, and I am more than happy to agree myself. However, I was surprised at how little was said by witnesses to the committee about what universities actually do that translates into soft power in this way. A few—very few—individual witnesses talked of how our universities exposed students to British values and shaped the thoughts of the world’s future elites. However, the research councils mostly emphasised international research collaborations, and the membership organisations tended to dwell more on numbers, money and, of course, visas.

Universities UK offered one anecdote about a Chinese central banker with a Cambridge PhD, who said that in negotiations with the Bank of England he was “emotionally bonded” to the UK. That is wonderful, but I think most noble Lords would agree that this could reflect memories of happy days on the river and friendships made, rather than anything important that we, the universities, actually did. And so I should like to take this opportunity to spell out in a little more detail what goes on in universities—week after week, year after year—that can make them an important source of soft power for this country.

I know that many noble Lords are, like me, academics by trade, and what I say will therefore sound very familiar. I should like to start with my own recent week. Last week was when our course teams at my university, King’s College London, finalised and agreed the questions on summer examination papers and drew up indicative answers that would go out to external examiners. In doing so, it was striking how often we would require students to “examine critically” a particular statement or question. We would demand that they contrast and evaluate opposing views. We would reiterate in our notes the importance for a good answer of both tight theoretical argument and the marshalling of empirical evidence.

Last week, I was also marking and commenting on coursework—that is, the long written papers that in almost every university now contribute substantially to a final degree. Among the most important coursework marking criteria in every British university I know are, first, a full bibliography, properly set out; and, secondly, that all assertions made are properly and fully referenced and supported. Any quote must be easily traced by provision of the exact page or other reference marker. Our students, understandably, often find us compulsive and nitpicking on this point. But this is fundamentally how we convey and hopefully instil some core values. This is about respect for evidence—all evidence, not just the evidence in one’s own comfort zone. It is about accuracy, scrupulous attention to detail and transparency. We also reward independent judgment, but provided it takes place within those bounds. This, I have to say, is far from universally true across the world.

In UK universities today, there is a real tension between the demands of research, the pressure to expand numbers and the labour-intensive process of teaching, marking and feedback that I have just described. But this latter process is central to how we instil norms and values. They, in turn, are a critical part of our universities’ potential for soft power.

We tend to talk about power as a zero-sum game—“If I have some, you have less”. But there are important aspects of the world where things are not zero-sum but, on the contrary, can make life better for everyone. I do not think that I am contravening the rule for maiden speeches in suggesting that that is true of the values that I have described. They are good for the whole planet. They are good for everyone. If people respect evidence, can formulate a logical argument and take for granted the importance of considering opposing views and justifying their disagreement, this has to be a good thing for the world.

Professor Mary Kaldor of the LSE, in her written evidence, told the committee that British universities “are global institutions” that “contribute to global debates about the construction of rules and norms”. It would clearly be naive to think that by educating many of the world’s future elite here, as we do, we would automatically spread peace, good will and collaboration across the planet. However, conveying academic values by the way we teach, assess and respond to students is a core part of what all British academics are, and should be, about. It is very important, and I hope that in any discussion of university soft power noble Lords will duly give it centre stage.

In conclusion, I again thank noble Lords for their welcome and support, and I look forward very much to contributing to the work of this House in years to come.