Office for Students

Lord Willetts Excerpts

Thursday 30th January 2025 Grand Committee

Asked by

[Lord Willetts]

To ask His Majesty’s Government what discussions they have had with the Office for Students about (1) its strategy for 2025 to 2030, and (2) its decision to pause applications regarding registering institutions, degree-awarding powers and university titles to allow greater focus on the financial sustainability of the sector.

[Lord Willetts (Con)]

My Lords, I am delighted to open this debate and to give a warm welcome to the Minister opposite, the noble Baroness, Lady Anderson of Stoke-on-Trent. She is the Education Whip in the Lords. I had over two years as a Whip in the other place during which time I had to remain totally silent, which was extremely frustrating. It is yet more evidence of the more liberal and tolerant approach in your Lordships’ House that we will hear directly from the Education Whip. We are all looking forward to that, especially as today is the day when she became engaged, on which many congratulations.

I declare my interests as a visiting professor at King’s College London, a member of the council of the University of Southampton, and for helping Norland College to grow in Asia.

This debate in many ways picks up from one of the very last debates of the previous Parliament. Indeed, in Grand Committee in this very Room on 21 May 2024, we debated the powerful report by the Industry and Regulators Committee on the Office for Students. In that debate there was a particularly trenchant contribution from my noble friend Lord Johnson of Marylebone. I know that he very much regrets that, because of a commitment to the British Council, he is unable to be with us today.

Since then, the Office for Students has produced its new strategy for consultation, with the priorities of quality, the student interest and resilience. Those are absolutely understandable priorities. Then, on 2 December, came its announcement of a pause in some of its key activities, including registering providers and considering new candidates for degree-awarding powers and for university status. Its argument was that focusing on those responsibilities was inconsistent with its priorities, as set out in its strategy. That is a deep misunderstanding of the implications of those priorities; it is also a regrettable failure to discharge one of its statutory obligations.

The task of registering higher education providers and considering them for degree-awarding powers and university titles is fundamental. Ironically, that is made clear by a third announcement—today’s announcement by the Government about tackling the understandable problem of franchising not always leading to high-quality provision. I completely support their engagement with that problem, which is a real problem. They say that they are—and this is out for consultation—proposing

“a requirement that franchised providers with 300 or more students should be directly regulated by the Office for Students”.

That will, of course, require yet more registration activity by the Office for Students, which then says, slightly shamefacedly, that after the pause it expects to start engaging in even more activity, registering those franchised providers. There could be dozens of those—it would be interesting if the Minister could tell us more about them—if not over 100. But my understanding is that, in the last year, it managed to register 12 new providers, so all that is happening is that the backlog of important work is getting worse and worse.

Will the Minister assure us that the OfS will return as soon as possible to its key statutory responsibilities in this regard, and explain to the Committee why it can suspend its discharge of a duty set in legislation? I remember debating this issue at considerable length when the original legislation went through in 2016-17.

Hardest hit by this pause in the process are providers which had been applying to register for degree-awarding powers. It looks as if the pause may mean that some of them have to go back to the beginning. The evidence that they are submitting will have become out of date. They will have to start all over again. This would be very regrettable. It looks from some of the OfS’s comments as if some of the existing cases under consideration will continue. Will the Minister ask the OfS at least to complete the consideration of applications that have already been submitted to it?

The OfS says that it does not have the resource to do this and that it has to focus, therefore, on financial pressures facing universities. This is yet more evidence, of course, of the financial issues that universities face, and I, for one, think there is one obvious solution to this, which is to start once again raising fees, in line with inflation as a minimum, as the previous Labour Government did with surprisingly little fuss.

However, there is a connection between financial resilience, the financial difficulties facing the sector and the registration function of the OfS, because some universities and other higher education providers that get into financial difficulties may then look at a rescue package that includes the reallocation of degree-awarding powers, a new partner entering the registry or a new entity being created, perhaps as a result of a merger or something else, which itself requires registration. The degree-awarding powers and university title are assets that a university could deploy if it were trying to avoid the total disaster of running out of money and going bankrupt, so these provisions for permitting new degree-awarding powers registration may be exactly what is needed as part of a financial rescue package for providers in difficulties. Will the Minister assure noble Lords that where a rescue package for a higher education provider in financial difficulties involves some transfer of degree-awarding powers or university title, or some other creation, perhaps of a new body on the register, that she will request the OfS as a matter of urgency to engage in the necessary process to consider that application?

Finally, as time is tight, I just want to make one wider point about how the Department for Education and the OfS see higher education. There is a big, wide world of higher education out there, which includes very substantial global chains. I am a believer in the growth of higher education, and it seems to me very likely that part of the growth of higher education is bringing in much more professional management. Access to external finance involves those types of business models in higher education. They have not so far taken off in Britain—from a global perspective, ours looks like a cottage industry—but there are global chains of higher education providers that are very keen to invest here. I hope to see British higher education providers growing to a global role.

For example, one of the bids reportedly delayed is an application by the Engineering Institute of Technology from Australia, which is a substantial provider of engineering courses and already has an engineering college of technology here. My understanding is that it was applying for degree-awarding powers, but that application has been paused. OMNES in France is a group of 12 French universities. It wanted nine further international campuses. It has been seeking to register and get degree-awarding powers for more than a year, but that is apparently paused. The IU group in Germany has a range of campuses with 150,000 students currently enrolled. It was trying to set up in Britain. We should be open to this type of high-quality provision. I completely accept that in some of the supply-side reforms that I tried to promote as a Minister, as did subsequently my noble friend Lord Johnson, sometimes the quality was not good enough, and it is right to crack down on that. I very much regret that we did not have a regulatory regime in those early days, but when we have got these big global chains coming in, surely we should welcome them. There are also some British potential candidates; the Oxford International Education Group, for example.

I have been reading the Chancellor’s excellent speech, made yesterday, about the Government’s commitment to growth and their commitment that regulators should not stand in the way of growth opportunities. I wonder what would happen if these international higher education providers that want to invest in Britain, want to come and provide higher education in Britain, were to approach the Minister’s colleague, the excellent noble Baroness, Lady Gustafsson, who is the Minister for Investment and is supposed to be attracting international investment. How will the DfE and the OfS explain that, meanwhile, they are busy refusing to consider applications for international investment in a significant British growth sector? I think that we should honour the spirit of the Chancellor’s excellent speech yesterday and not allow the OfS to stand in its way.