Higher Education and Research Bill

Debate between Lord Johnson of Marylebone and John Howell

3rd reading: House of Commons & Legislative Grand Committee: House of Commons & Report stage: House of Commons
Monday 21st November 2016 Commons Chamber

[Joseph Johnson]

New clause 1 relates to the Office for Students, which is central to the Bill and has quality, student choice, equality of opportunity and value for money at its core. Through the creation of the independent OFS, the Bill will join up the currently fragmented regulation of the sector—essential to ensure that students are protected, and that students and the taxpayer receive good value for money from the system. The Bill will boost social mobility and promote opportunity for all. It will drive up innovation, diversity, quality and capacity in our world-class higher education sector, while protecting academic freedom and institutional autonomy. The Bill will also create UK Research and Innovation, a new body with strategic vision for research and innovation in the UK.

I am pleased that the Bill received such thorough scrutiny in Committee. I have reflected on the points made by Opposition Members and I am pleased to present some important amendments today. We made it clear in our White Paper that the OFS will have responsibility for oversight of the financial health of the sector, and will monitor the sustainability of individual institutions. It is absolutely essential that all providers who are eligible to receive some form of public funding have sustainable finances to ensure value for students and taxpayers.

We have listened to stakeholder evidence and to the Committee debates. Stakeholders including Universities UK consider the Higher Education Funding Council for England’s holistic oversight of the health of the sector to be an essential part of the regulator’s role. I understand the importance of this oversight in maintaining confidence in the sector and preserving its world-class reputation. The stakeholders share the desire to make our policy intention in the White Paper explicit in legislation. This role will include financial oversight of all the institutions’ activities, spanning teaching and research.

[John Howell (Henley) (Con)]

I understand the need for monitoring the financial sustainability of organisations, but the new clause does not say what actions will result if some of them are found to be financially unsustainable. Would my hon. Friend comment on that?

[Joseph Johnson]

The duty of the Office for Students will be to ensure that it is monitoring effectively the overall financial health of the sector in such a way that it is able to inform the Secretary of State, so that the Government can take appropriate actions. It will not be the role of the Office for Students to bail out struggling institutions—if there are any such institutions. These are private and autonomous bodies, and it is important that the discipline of the marketplace acts on them. It will be the role of the OFS to assist them in transitioning towards viable business plans so that they can continue to provide high-quality education to their students in the medium and long term.

New clause 1 introduces a statutory duty for the OFS to monitor and report on the financial sustainability of all registered HE providers in England which are in receipt of or eligible for OFS funding or tuition fee loans.