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.

European Union Referendum (Date of Referendum etc.) Regulations 2016

Lord Willetts Excerpts

Wednesday 2nd March 2016 Lords Chamber

[Lord Willetts (Con)]

My Lords, it has been an extraordinarily lively debate. My noble friend Lady Anelay said at the beginning that we would be trying the patience of the voters if the referendum were held any later, but I feel that I might try the patience of this House if the debate concludes any later. I would like to briefly reflect on the debate, especially on the very lively and powerful interventions that we have had from the Privy Council Bench—many generals under whom I served as a foot soldier in battles in the past.

The interventions have often concerned our economic relationship with the EU. As we come towards the end of the debate, the options are becoming clearer. There is some kind of Swiss or Norwegian option, involving joining the European Economic Area. The exact terms of that would have to be negotiated, but it would very probably involve accepting all the major freedoms of the single market. Indeed, the former Swiss Prime Minister has put it as follows:

“It therefore seems very optimistic to me for Leave campaigners to suggest that EU member states would simply grant the UK full access to the Single Market while allowing you to opt out of free movement”.

There is, therefore, some kind of deal on offer, but it involves accepting the product regulations and the four freedoms that come with membership of the European Economic Area. We do not have to go down that route if we leave. There are alternatives—and in several powerful interventions we have been told that the alternative is to look at the US relationship with the EU. That would indeed be a different model, which would not involve our joining the European Economic Area. The US-EU relationship still involves tariffs on US goods coming into the EU and vice versa. It involves customs controls on goods moving back and forth. In many ways, it would involve an increase in the red tape facing British businesses as they went through the same kind of hassle that US businesses now face. You have to comply with EU product regulations. That is why Lincoln Continentals are not cruising up and down the streets of Mayfair: they do not comply with EU regulations.

When it comes to services, the EU is absolutely clear—even clearer after the financial crisis—that if you wish to offer financial services in the EU you have to be based and regulated in the EU. Iceland is a warning about people offering services in the EU without being properly regulated in the area. Many American banks are located in London because—one among many reasons—that is how they access the EU market. Clearly, in a negotiation that led to our having a similar kind of relationship with the US, the EU would expect that type of arrangement. That is not because the EU is an unusually protectionist power. Let us be frank: the US similarly has a very protectionist attitude to competition from European countries, including ourselves. It is clearly in the British interest that these barriers between the EU and the US be reduced, and there is currently a negotiation aiming to do exactly that—TTIP. I do not believe that there is any prospect of any improvement in trade relations that could do better than the mutual powers of negotiation now happening between Europe and America. If America is to make any concessions to anyone for access to its markets, it will be to the EU and vice versa, so the best thing we can do is play a constructive role in those negotiations.

Another aspect of the relationship is the eurozone, on which the British Government have taken a strategic decision. Our approach to Europe was once described as, “Britain should be in the fast lane, but driving very slowly with everyone else flashing their lights behind us”. What we have decided to do with the eurozone is pull over and allow them to accelerate. There is an argument that this was a mistake, but my view is that if the eurozone is to succeed—it is clearly in our interest for it to succeed if at all possible, although it is a very confused and risky economic experiment—the deal is, “You go ahead; if you need to integrate, do so, but preserve our full rights as a member of the single market”. That is what has been secured.

It is not just a matter of economic arguments, though. We have also heard about democracy and democratic deficits. Very few people have put that argument more powerfully than my right honourable friend in another place, Michael Gove, in an excellent article setting out his views. I pulled up short when he said:

“EU rules dictate … the distance houses have to be from heathland to prevent cats chasing birds”.

He said that there is an EU rule that they have to be five kilometres away—an example of the trivial interference that we have from the EU. I have looked into this. There is indeed an EU habitats directive. It does not specify any five-kilometre rule about the location of housing next to heathland. That comes from Natural England, as it decides how it will interpret this EU directive. The five-kilometre rule is planning guidance—not legally obligatory—proposed by a UK agency when it thinks about what this rule should mean. The lesson I conclude from this is that a lot more of what we do lies in our own hands than we sometimes admit. Speaking as a former Minister, maybe we sometimes use the European Union as an alibi when it is a matter of domestic responsibility for domestic policy and domestic legislation. Britain is indeed a proud and self-confident country and we often still have the capacity to make our own decisions. We should celebrate that power and I do not believe our membership of the European Union is a significant threat to it.

[Lord Pearson of Rannoch]

Would the noble Lord accept that only about 9% of our economy and 9% of our jobs come from sales and trade to clients in the European Union, and that that is declining in deficit? Would he agree that 11% of our economy goes to the rest of the world and that the remaining 80% stays in the British economy? Does he accept that the whole of that 100% is afflicted by EU regulation? Would he care to answer that?

[Lord Willetts]

I would not.