Higher Education and Research Bill

Lord Watson of Invergowrie Excerpts

Committee: 5th sitting (Hansard - continued): House of Lords
Monday 23rd January 2017 Lords Chamber

[Lord Watson of Invergowrie (Lab)]

My Lords, I shall speak to Amendment 266, in the name of my noble friend Lord Stevenson, which I am pleased to hear that the noble Lord, Lord Lisvane, liked. Indeed, given the comprehensive manner in which he opened the debate, I have little to add.

Clause 40(10) provides for the OfS’s power to make an order authorising degree-awarding powers to be exercisable by statutory instrument. As the noble Lord, Lord Lisvane, said, it is unusual, to say the least, for the power to make statutory instruments to be conferred on organisations or people other than Ministers. I hope the Minister can explain to noble Lords why this departure from accepted practice is justified.

Amendment 266 would require the statutory instrument first to be approved and made by the Privy Council as an Order in Council. Many universities have degree-awarding powers that were awarded by the Privy Council, so the question for the Minister and the Government is: why take that away? In this amendment we are not asking the Minister to do something; we are asking him not to do something. We say that there have been no examples of universities clamouring for change, so why not leave things as they are?

My noble friend Lord Stevenson will speak in more detail about the Privy Council on a later group, but I want to stress now that it is an independent body, completely impartial and well respected. That is something not to be cast aside lightly. This is the established process for introducing new universities, and the current system has worked well over many years. We do not believe the case for such a radical change as handing all powers to the OfS has been made, but if the Privy Council is to be replaced, its replacement should be as rigorous as the Privy Council, and at least capable of building a reputation as strong as its reputation. The OfS cannot as things stand, and may not ever, achieve that status. It is essential to ensure scrutiny by the Privy Council of the power to grant awards.

The noble Lord, Lord Lisvane, as a member of the Delegated Powers and Regulatory Reform Committee, understandably quoted from that committee’s report on this part of the Bill. He commented, I think, on paragraph 30; I want to highlight what the committee said in paragraph 28, commenting on Clause 43, which enables the OfS by order to vary or revoke degree-awarding powers. Although exercised by statutory instrument, these powers would not be subject to parliamentary scrutiny. The DfE had sought to justify this to the committee, but the committee’s response was unequivocal. Paragraph 28 says:

“We are not in the least convinced by the Department’s reasons. We do not believe that the requirement for detailed consideration by the OfS, and the existence of a detailed procedure including rights of appeal, are incompatible with an order under clause 43 being subject to Parliamentary scrutiny … There is nothing on the face of clause 43 which limits the way in which the OfS is able to exercise the powers, leaving it wholly to the discretion of the OfS when and in what circumstances the powers should be exercised. We therefore recommend that the powers should be subject to Parliamentary scrutiny and that the affirmative procedure should apply”.


There is nothing I can add to that—an opinion reached after due deliberation by a committee with no political axe to grind. I imagine the Minister may feel more than a little uncomfortable at the fact that he and his department are effectively ignoring the judgment of noble Lords. They do not deliver such verdicts lightly, and I believe that the Minister and his team need to revisit the report and reconsider their position on the manner in which the OfS is to be permitted to act on varying or revoking institutions’ degree-awarding powers.

[Viscount Younger of Leckie]

My Lords, my noble friend Lady Goldie has asked me to apologise to the Committee as she has succumbed to her bad cold and I will be in the hot seat for the rest of the evening.

I entirely agree that we need to ensure that the processes around the award, variation and revocation of degree-awarding powers and the award and revocation of university title are sound and fit for purpose. I will explain why we believe the Bill does just that. However, we will continue to listen and reflect on whether there are further improvements that we can make to these processes. I say that at the outset.

I shall deal with the amendments to Clause 40. At the moment, we have a lengthy process for the award of degree-awarding powers, which involves the Privy Council seeking advice from the department, which in turn seeks advice from HEFCE and the QAA. This is unduly complex, and through our reforms we are seeking to streamline the process without lowering standards. This is why, under our plans, the OfS would run the whole process from application through to award. Decisions on degree-awarding powers would be taken by the OfS, as an independent, arm’s-length body, on the basis of published criteria set out in guidance, and should be made after having consulted relevant bodies such as the designated quality body. It is therefore only logical that the OfS would also make the order that grants degree-awarding powers. Adding the Secretary of State or Privy Council approval would, under the new regime, have little benefit other than complicating the process.

I turn to the amendments that would ensure that orders varying or revoking degree-awarding powers and revoking university title have to be made by the Secretary of State, who would also deal with the processes of variation and revocation. Giving order-making powers to persons and bodies other than the Secretary of State or the Privy Council is not unprecedented—for example, Ofcom has order and regulation-making powers. The OfS, as an independent regulator, is best placed to make an assessment as to whether degree-awarding powers or university title should be awarded, varied or revoked. It will have much better insight into the provider in question and the sector as a whole than the Secretary of State ever could. Therefore, our intention is that these decisions are taken by the OfS on the basis of published criteria set out in guidance, the detail of which the department intends to consult on.

Let me provide some further reassurance that these powers are not intended for everyday use. We intend that the OfS and the new quality body will work with providers to address any emerging problems early on. Removal of degree-awarding powers or university title is therefore likely to be a rarely used, but necessary, safeguard for quality in the system. In addition, the OfS would always, in accordance with its general duties listed in Clause 2, have regard to important factors, which includes the need to promote quality. These are additional safeguards to ensure that the OfS’s powers are not abused. Any decision to subsequently revoke degree-awarding powers or university title will be regulatory decisions. We think it is right that they should be taken by the regulator, not a Minister. However, we recognise the significance of these powers and have therefore made sure that there are appropriate safeguards in place. These are set out in Clauses 44, 45, 54 and 55. They include the OfS having to notify the provider of its intentions and to give reasons; the OfS having to give the provider a chance to respond and take account of that response before making a decision; and, as the Committee will know, a right of appeal to the First-tier Tribunal. This safeguards against any undue interference with the institutions’ autonomy. We believe that an appeal to the First-tier Tribunal provides for the most independent review of a case.

I address a point raised by the noble Lord, Lord Lisvane, about providers with royal charters. I will explain how the process would work in that case. We do not envisage a scenario where the use of powers in Clause 110 would result in the revocation of an entire royal charter which established the institution. The Secretary of State can amend royal charters where appropriate so that the charters operate smoothly, but only where they reflect any changes made by the OfS to degree-awarding powers or university title contained in the royal charter—for example, a revocation of university title. This is not a general power to amend but must be linked to changes made by the OfS in relation to degree-awarding powers and university title. Importantly, I reassure noble Lords that any amendments or revocations made by the Secretary of State would be subject to parliamentary scrutiny via the affirmative procedure, which I think, and hope, that the noble Lord, Lord Lisvane, mentioned and acknowledged. If we were to introduce parliamentary scrutiny for the orders on top of this already very strong, but also lengthy process of appeals, as suggested by Amendments 511 and 512, we would further delay the implementation of any decision, and thus potentially put students at risk. It would also introduce unnecessary complexity into the system: how would parliamentary scrutiny work alongside an appeals process and what if they reached different conclusions? Again, I emphasise that we have designed the processes in such a way that there is no need for Ministers to get involved. It will be a regulatory process, instigated by the regulator and decided by the independent judiciary.

While I understand the intention behind these amendments, I believe that the controls and protections in place are adequate and therefore the amendments are not necessary. However, as I said at the beginning, I will reflect on any further improvements that could be made. In the meantime, I ask the noble Lord to withdraw the amendment.

[Lord Watson of Invergowrie]

I understand that the Minister will reflect on this, and no doubt the department is preparing its response to the Delegated Powers Committee’s report. I wonder whether the Minister will take the content of this short debate and feed it into that process, so that it might carry some weight in deciding the government position.

[Viscount Younger of Leckie]

Indeed, the noble Lord makes a good point. I am sure that will be taken into account in terms of any further improvements we might wish to make.

--- Later in debate ---

Moved by

[Lord Watson of Invergowrie]

282: Clause 43, page 25, line 34, at end insert?
“( ) A statutory instrument containing an order under subsection (1) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

[Lord Watson of Invergowrie]

My Lords, I am moving the amendment in the name of my noble friend Lord Stevenson. The amendment intends to establish the principle that a statutory instrument containing an order to revoke an institution’s authorisation to grant degrees must be an affirmative statutory instrument. We believe that such a draconian action as revocation—which in some circumstances is potentially fatal to the institution concerned—should not simply be left to the OfS to issue as a statutory instrument. I take on board the points the Minister made in respect of group 13 a few moments ago, when he talked about the OfS being an independent body. That also applies to the Privy Council, but it has been written out of the equation. It should not be possible for such a statutory instrument to be made unless a draft has been laid before and approved by a resolution of both Houses of Parliament.

In response to an earlier amendment before the dinner break the Minister stated that requiring the affirmative principle would delay a decision that had been recommended by the OfS. If that is the case in certain situations, so be it. If ever there was a case where the maxim “Better to get it right than to get it right now” applied, this is it. Depriving an institution of degree-awarding powers is sufficiently important for Parliament to have its say, and any delay that results is surely justified in terms of due process.

I made my remarks on the importance of retaining the Privy Council in the debate on the group containing Amendment 266, and I shall not repeat them. However, I shall again draw to your Lordships’ attention the fact that the Delegated Powers and Regulatory Reform Committee made a further comment on Clause 53, which impacts on this group. I will not repeat what the noble Lord, Lord Lisvane, said at that time. But the committee made it very clear that it took the view there were significant new legislative powers being given to the OfS that are not subject to any limits to their exercise, and that there should be parliamentary scrutiny with the affirmative procedure applying. I think that is a very important point to make. I know that the Minister is considering this and other aspects of the committee’s report but, in the meantime, I beg to move.

[Lord Judd (Lab)]

My Lords, I speak to my Amendment 298A, which is on the Marshalled List. At this stage of the proceedings, as an older Member of this House, I must be allowed to make an observation. We have gone a long way down the road I predicted. We are trying to make the best of this legislation. We are trying to engage in damage limitation, which becomes almost a cause. As an older man, I grieve at how far we have drifted from the concept of a university as an international community of scholars awarding degrees, based on the distinction of the university. This is a sad road we have taken, and we are dealing with the consequences: the commercialisation and marketing of the whole concept of universities and higher education. I have great difficulty in coming to terms with this language of markets and of students as consumers, as distinct from students as contributors to a community of scholars. It is a sad situation, but we are in the situation we are in, and we have to try and make it as acceptable as possible.

Under my last amendment, I talked about fairness, justice, transparency and accountability, and this amendment is about exactly the same theme. I talked previously about decisions not to register or to suspend, and now I want to talk briefly about why it is that there are no rights of appeal against the OfS refusing to authorise providers to grant degrees. Apparently, by this legislation, rights of appeal are allowed only when the OfS decides to vary or revoke such an authorisation. However, the decision to authorise or not in the first place is a significant decision and a significant exercise of power, which will determine whether a provider could enter the market—here I go using the word myself—or not. There seems no justification to deny a right of appeal where the OfS has decided not to grant authorisation.

There must be transparency and accountability. I absolutely understand and relate to the noble Lord, Lord Lucas, when he says that we cannot have institutions below the grade granting degrees. If we go down that road, there will be a temptation for people who are just opportunist money-makers to get into the money-making business by awarding degrees. We know this, so we have to have safeguards—of course I understand that. But I also understand the Minister when, in the logic of his position as he sees it, he says we cannot rule out the possibility that there will be newcomers to the field who will bring something new, fresh and challenging and who ought to be taken very seriously. I understand the logic of that point, and my amendment tries to take that point on board.

We cannot have an alienated public who think that there are high-handed university administrators and regulators, as well as universities themselves, making these strategic decisions without having to explain to those involved, let alone the wider public, why they have come to particular conclusions. Indeed, I can see a case for saying that, if what I advocate comes to pass, it will be a very educative experience for the public, because there will be an explanation of why a particular authorisation cannot be allowed. I think that the amendment and the principles behind it matter, and I am aware that I am becoming a collaborator in damage limitation.

--- Later in debate ---

[Viscount Younger of Leckie]

I note the point the noble Lord, Lord Adonis, has made and that will definitely be part of our general reflection.

I now turn to the processes and safeguards. The OfS, as an independent regulator, will be best placed to make decisions on whether to vary or revoke an authorisation to grant awards or revoke a university title. However, there is a statutory process that must be followed. Clauses 44 and 54 provide that the OfS give appropriate notice to the governing body of the provider, set out its reasons why it considers it necessary to take the step of variation or revocation and must have regard to any representations made by the provider before proceeding. I agree that the OfS should be able to draw on all relevant information, including from other parties. Clause 58 enables that already.

Turning to Amendments 282 and 347A, we want to move to a system where quality, rather than the age of an institution, will be the yardstick and where the OfS has powers to vary or revoke degree-awarding powers and to revoke the university title of any institution, no matter how they were obtained. This is essential to achieve a level playing field among providers.

Amendment 282 would unlevel the playing field for revocation of degree-awarding powers. We included a right of appeal for any revocation decision because we felt that this was the most appropriate and independent review, and that it would therefore be the best way to safeguard the interests of the provider, including its institutional autonomy. An appeal to the First-tier Tribunal is an opportunity for a provider to present evidence to support its case. It provides for a politically neutral and objective judgment of the merits of the case. I see the logic behind these amendments and we value the expertise of Parliament, as well as the important scrutiny functions. However, on matters of regulation, we believe such scrutiny and safeguards are better provided by the courts, rather than by Parliament. The regulatory framework will apply to all providers equally. If we accept this principle when it comes to other rights and obligations, I find it difficult to justify treating a provider that got its degree-awarding powers in the 1970s—such as the University of Buckingham, for example—differently from one that gets them in 2020.

Before I finish, let me briefly address the amendment of the noble Lord, Lord Judd, which would allow for appeals against unsuccessful degree-awarding power applications. There currently is no such provision and the appeals provision in the Bill has been drafted to cover scenarios where the OfS makes a decision that deprives providers of a status or powers, or imposes a monetary penalty. I can provide some reassurance: we expect that there will continue to be internal complaints mechanisms similar to those run by the QAA at present. The amendment is therefore not needed.

I am afraid there is no time to address the thoughtful points raised by the noble Lord, Lord Judd, on the path universities are travelling down. I say only that there is undeniably an important, international market where we are in the business of attracting students who realise that they have a choice. We have to be realistic and remember that.

As I said, we appreciate the need to get the safeguards right. While we feel we have struck the right balance, we will continue to reflect on any areas of improvement. In the meantime, I ask the noble Lord, Lord Watson, to withdraw Amendment 282.

[Lord Watson of Invergowrie]

My Lords, I thank the noble Viscount for his response and noble Lords who have participated in this short debate. It has been quite lively, with some interesting points made. On the points made by my noble friend Lord Liddle that the OfS should set out its reasons, allowing Parliament to debate its report annually, there seems to be no rational reason why that should not occur, because it does for several other regulators—although, is the OfS a regulator? That debate is continuing. I heard the noble Viscount say that he will consider that and we will return on Report, but whether the reports would be dull or refer to events that had happened frequently is not quite the point. We are all grateful to my noble friend Lord Adonis for drawing attention to Schedule 1’s requirement for an OfS report and welcome the Minister’s willingness to consider that before we move on to Report.

The noble Viscount—a man we are increasingly coming to recognise as the man of letters—said that Amendment 282 would “unlevel the playing field”. I am not sure whether that is a new verb added to our language, but none the less, as I understand it that compares existing providers with new arrivals. I do not see that it would necessarily do that. He mentioned the University of Buckingham. Yes, that has been there some 50 years outwith the system, because it was not part of the mainstream for many years, but the argument we had on the new providers needs to be separated from the situation of those that have held degree-awarding powers for a long time, rather than those that have recently got them and may be deprived of them for good reason, inasmuch as it could be said they should not have had them in the first place. That may be correcting an award that was done earlier than would have been appropriate.

The internal complaints mechanism to which the noble Viscount referred also needs to be looked at again. He said in response to my noble friend Lord Judd that there is an appeal provision against the decision of the OfS to vary or revoke degree-awarding powers, but not for those trying to have those powers granted. This impacts on a discussion we had earlier when the noble Viscount used terminology along the lines of, “It’s different if they’re in the system”, as opposed to being outside, and that they have to be treated differently if they already have the powers, as opposed to just seeking them. There is a basic justice issue there of an individual or organisation having the right to appeal against a decision that affects them adversely. A provider without degree-awarding powers would by definition not be part of the internal complaints mechanism to which the noble Viscount referred. I do not think he has answered my noble friend’s point. Again, I am sure this is something to which we will want to return on Report.

I welcome the fact that the noble Viscount has taken on board the points made. I look forward to returning to them. On that basis, I beg leave to withdraw the amendment.

Amendment 282 withdrawn.