Higher Education and Research Bill

Debate between Rupa Huq and Lord Johnson of Marylebone

Wednesday 26th April 2017 Commons Chamber

[Joseph Johnson]

I thank the hon. Lady for raising that point, which enables me to discuss the amendment that the Government have tabled precisely to address those concerns.

I am pleased to present to the House a series of amendments that demonstrate our continued commitment to developing the teaching excellence framework iteratively and carefully. We have consulted widely on the TEF, and we want to continue drawing on the best expertise as we develop this important scheme. That is why I am pleased to have tabled amendment (c) in lieu of Lords amendment 23, as it requires the Secretary of State to commission an independent review of the TEF within one year of the TEF clause being commenced. Crucially, the amendment requires the Secretary of State to lay the report before Parliament, ensuring parliamentary accountability for the framework as it moves forward.

The report must cover many aspects that have concerned Members of this House and the other place, including whether the metrics used are fit for use in the TEF; whether the names of the ratings, to which the hon. Lady alluded, are appropriate for use in the TEF; the impact of the TEF on the ability of providers to carry out their research, teaching and other functions; and an assessment of whether the scheme is, all things considered, in the public interest. I am happy to confirm that the Secretary of State will take account of the review and, if he or she considers it appropriate, will provide guidance to the OFS accordingly, including on any changes to the scheme that the review suggests might be needed, whether in relation to the metrics or any of the other items the review will look at.

We have also heard concerns about the impact of the link between TEF and fees. We recognise the important role of Parliament in setting fee caps. That is why I am also pleased to propose amendments (a) to (g) in lieu of amendments 12, 209 and 210, which amend the parliamentary procedure required to alter fee limit amounts, to ensure that any regulations that would raise fees would be subject, as a minimum, to the affirmative procedure. That provides a greater level of parliamentary oversight on fees than the measures originally put in place under the Labour Government in 2004. I have also today brought forward a further motion to disagree with Lords amendments 183 to 185, which are no longer required as a consequence of these amendments. That is a purely technical change as a result of the wider set of amendments regarding fee amounts.

Furthermore, today’s amendments demonstrate our commitment to a considered roll-out of differentiated fees. Amendments in lieu (c ) and (d) will delay the link between differentiated TEF ratings and tuition fee caps, so that this will not come in for more than three years, with the first year of differentiated fees as a result of TEF ratings being no earlier than the academic year beginning autumn 2020.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

If I have understood it correctly, the linking of the TEF and the fee level is just being postponed, and these things are not being completely decoupled. I wonder whether the Minister might be able to provide reassurance to the University of West London in my constituency, which has 17,000 students who are worried about this. They like Lords amendment 156, which relates to international students, and fear that they are going to go completely bankrupt if things are not kept as they are in the Lords amendment.

[Joseph Johnson]

I can reassure the hon. Lady that we are committed to ensuring that universities are able to increase their fees in line with inflation, provided they can demonstrate that they are delivering high-quality outcomes through the TEF. We are going to be introducing this scheme gradually and we are not going to be differentiating according to the fee uplift that institutions are able to get before the academic year starting August 2020; until that point there will be no differentiation of fee uplift based on performance in the TEF.

This means that differentiated fees will not be introduced until after the independent review has reported to the Secretary of State and to Parliament. Until that point all English providers participating in the TEF will receive the full inflationary uplift. It will be up to devolved Administrations, as before, to determine whether they are content for their institutions to participate in the TEF and what impact participation may have on their fees. I can confirm today that the ratings awarded under the TEF this year will not be used to determine differentiated fees, unless a provider actively chooses not to re-enter the TEF after the independent review. In practice, this means that this year’s ratings will only count towards differentiated fees if, after the review, a provider does not ask for a fresh assessment before their next one is due—that is an opportunity that will be open to all participants.

Before moving on to our other amendments, I would like to reiterate our commitment that the TEF will evolve to assess the quality of teaching at subject level, as well as institutional level. We recognise that subject-level assessments are more challenging, which is why I have already announced an extension to the roll-out of subject-level TEF pilots, with an additional year of piloting. This follows the best practice demonstrated in the research excellence framework, and means the first subject-level assessments will not take place until spring 2020.

Sale of Student Loans: Regulation

Debate between Rupa Huq and Lord Johnson of Marylebone

Tuesday 7th March 2017 Westminster Hall

[Joseph Johnson]

I have just given exactly those assurances. After the sale of this part of the student loan book, terms and conditions will not change as a result of any actions by the investors who go on to own them.

The sale process we have launched covers loans issued under the previous system, which operated before 2012. Specifically, the loans in scope are those issued by English local authorities only, and which entered repayment between 2002 and 2006. A loan enters repayment the April after the student leaves his or her course, so most of the loans in the scope of the sale were taken out between 1998 and 2002. Some loans taken out after that date might also be in scope if they entered repayment in 2006. Loans issued by the devolved Administrations are not in scope, and nor are loans to EU borrowers, who became eligible to apply for a student loan from an English local authority only in 2006.

[Dr Huq]

Has the Minister has seen the Financial Times article from 8 February, which says that the Government are in a unique position to be the lender because they are able to monitor graduates’ earnings? How will private companies do that? The article’s headline is, “Selling off student loans makes no sense”. Does the Minister have any comments on that? That was not the Socialist Worker, but the Financial Times.

[Joseph Johnson]

I cannot be held accountable for the views of the FT. The Government have made it clear that we will proceed with a sale only if it represents value for money. There will be a rigorous assessment, and, as per the Sale of Student Loans Act 2008 passed by the last Labour Government, the Government will be obliged to produce a report to Parliament within three months of the sale explaining the whole process. Parliament will have an opportunity to assess that point in great detail.

The sale will comprise the future repayments on the outstanding balances on a selection of these loans, which have a total face value of about £4 billion. The retention value to the Government is lower and is calculated using the standard Treasury Green Book methodology that was developed for asset sales. It also accounts for Government subsidy of the student loan system. The loans that are being sold have already been in repayment for 10 years or more, and therefore much of their original value has already been paid back to the Government.

A securitisation structure will be used for the sale to enable the Government to maximise value for money for the taxpayer. Under that structure, the loans will be sold to a new independent English-domiciled company known as the issuer, whose sole purpose is to own the loans on behalf of investors. Investors will purchase notes issued by the issuer, and the issuer will make payments on the notes using the repayments made on the underlying loans. The sale is a competitive process open to all eligible investors. Market testing reassures us that the different tranches of notes are expected to be attractive to a range of potential investors, thereby promoting an efficient market and optimal pricing.

I emphasise that the sale will not affect the position of graduates or students. Her Majesty’s Revenue and Customs and the Student Loans Company will continue to service loans in the scope of the sale on the same basis as equivalent unsold loans. As I said earlier, investors have no right to change any of the current loan arrangements or directly to contact people with student loans, including those in the scope of a sale.

Higher Education and Research Bill

Debate between Rupa Huq and Lord Johnson of Marylebone

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

[Joseph Johnson]

Indeed. The Government fully agree with the hon. Gentleman that international students bring a lot to our higher education system. They bring income, valued diversity, and many other benefits to our universities. We welcome them, and we have a warm and welcoming regime to accommodate them.

Let me now deal with Government amendments 1, 12 and 13. Academic freedom and institutional autonomy are keystones of our higher education system, and the Bill introduces additional protections in that area. In his evidence to the Bill Committee, Professor Sir Leszek Borysiewicz, vice-chancellor of the University of Cambridge, said that he particularly liked the implicit and explicit recognition of autonomy in the Bill. However, I wanted to make absolutely clear how important it is for the Government to protect institutional autonomy, which is why I proposed a further group of amendments to strengthen the protections even more.

I recognise the concerns expressed in Committee and in stakeholder evidence that allowing the Secretary of State to give guidance relating to particular courses might be perceived as leaving the door open to guidance calling specifically for the opening or closing of particular courses. One of the real strengths of our higher education system is diversity and the ability of institutions to determine their own missions, either as multidisciplinary institutions or as institutions specialising in particular areas such as the performing arts or theology. To avoid any confusion, I proposed the amendments to add an additional layer of reassurance regarding the protections given to institutional autonomy. They make it clear that the Secretary of State cannot give guidance to, or impose terms and conditions or directions on, the OFS which would require it to make providers offer, or stop offering, particular courses.

Our reforms place students at the heart of higher education regulation. I agree with Labour Members that it is important to build the student perspective into the OFS. Government amendment 21 clarifies beyond doubt that at least one member of the OFS board must have experience of representing or promoting the interests of individual students or students generally.

Labour Members tabled amendments 36 and 48, which relate to higher education staff representation. We share the view that the OFS board should benefit from the experience of HE staff. However, the Bill already requires the Secretary of State to have regard to appointing board members with experience of the broad range of different types of English providers in the sector. We are therefore confident that a number of OFS board members will be, or will have been, employed by HE providers, and we do not believe that we need to make an additional requirement in legislation.

Students make significant investments in their higher education choices, and it is right for them to be aware of what would happen if their course, campus or institution were to close. That is what Government amendment 4 will achieve. We expect all providers to make contingency plans to guard against the risk that courses cannot be delivered as agreed. The requirement for providers to produce student protection plans would be a condition of regulation. I listened to points made in Committee, and have reflected on the need to strengthen the power of the OFS to ensure that there is transparency in student protection measures, and that is exactly what the amendment does. It enables the OFS to require providers not only to develop student protection plans but to publish them, and we would expect providers to bring them to students’ attention.

The Government believe in opportunity for all and through the Bill we are delivering on that. We believe that transparency is one of the best tools we have when it comes to widening participation. Universities have made progress but the transparency duty will shine a spotlight on those institutions that need to go further. That is why I am pleased to propose amendments 2 and 3, which change the language in the Bill to make it clearer that the OFS can ask HE providers to publish and share with the OFS the number of applications, offers, acceptances and completion rates for students, each broken down by ethnicity, gender and socioeconomic background.

The Bill will also give the OFS the power to operate the teaching excellence framework. Thirty years of the research excellence framework and its predecessors have made the UK’s research the envy of the world but, without an equivalent focus on excellence in teaching, the incentives on universities have become distorted.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

The Minister mentioned the TEF and the REF. Does he agree that the REF took several years to bed down and to become a measure of research, and that a lot of institutions feel that the TEF is being rushed through, particularly the link between teaching excellence and fees? I have been emailed by the University of West London, which has asked me strongly to oppose that. The TEF will be done on an institution-by-institution basis, not, like the REF, by department. Courses can vary widely in quality. Will he think again in relation to those points?

[Joseph Johnson]

The TEF is not being rushed; it is being piloted for the first two years. Awards will not be differentiated until 2019-20, with effect from the 2019-20 academic year. That is a significant period for the reforms to bed in. The university sector has welcomed the link to fees. Universities UK has recognised that there is a need for such a link and that we need to fund on the basis of quality as well as quantity. There is no attempt by the sector to separate the link.

Education, Skills and Training

Debate between Rupa Huq and Lord Johnson of Marylebone

Wednesday 25th May 2016 Commons Chamber

[Joseph Johnson]

I hope that my hon. Friend will be proved wrong, but I suspect that he may be proved right during proceedings on the Bill, as we discover the Labour party’s true colours and the reality of its desire to see competition injected into the sector, which I somewhat doubt.

The former Business Secretary is right. The Higher Education and Research Bill, which we introduced last week, represents an ambitious agenda for social mobility. Some, including Labour Members, said when we reformed student finance in 2011 that participation would fall. In fact, the opposite has happened. We have a progressive student loans system that ensures that finance is no barrier to entry, and it is working. Students from disadvantaged backgrounds are going to university at a record rate—up from 13.6% in 2009 to 18.5% in 2015. Labour Members were wrong then and they are wrong now. Individuals from disadvantaged backgrounds are 36% more likely to go to university than they were in 2009. If the hon. Member for Wallasey wants to come in on that point, I will happily take an intervention. No? Okay. We are not complacent. The Prime Minister has set us the rightly challenging goal of doubling the participation rate for the most disadvantaged students by 2020.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

Has the Minister seen the figures from the Sutton Trust that show that only 3% of disadvantaged young people go to the most selective third of universities, compared with 21% from the richest neighbourhoods? Is he proud of that record?

[Joseph Johnson]

Yes, indeed. That is why I have just written to the director of fair access, Les Ebdon, giving him all the political cover that he needs to drive further progress in widening participation at the most selective institutions.

We are strengthening the system of access agreements. They will now cover both access and participation, so that students receive the support that they need right the way through their courses, not just at the point of entry. We will give the new director of fair access and participation, who will be part of the new office for students, a greater set of sanctions to help to ensure that universities deliver the agreements they have made with him.

Some students face additional barriers to accessing higher education because their religious beliefs mean they are unable to take on interest-bearing loans. That is why, subject to Parliament, we will be the first Government to introduce an alternative student finance product that will support those students into higher education. That, combined with other measures, will help us to meet our goal of increasing the number of people from black and minority ethnic backgrounds—one third of whom are Muslim—who go to university. We are committed to an increase of 20% in the number of BME students by 2020.

Education (Student Support) (Amendment) Regulations 2015

Debate between Rupa Huq and Lord Johnson of Marylebone

Thursday 14th January 2016 General Committees

[Joseph Johnson]

Yes, indeed it does, and is motivating our decision to increase the amount of support that will be available to students going into higher education in this country. We want everybody who can benefit from higher education to be able to go to university.

We are delighted to see more people applying to university, more people getting in and more people getting on to their first-choice courses than ever before. Critically, we are delighted that more people from disadvantaged backgrounds are applying and going to university than ever before, and we want those trends to carry on.

[Dr Huq]

Has the Minister seen the research on these new arrangements for the Institute for Fiscal Studies? The poorest 40% will graduate with debts of up to £53,000 a year, as opposed to £40,000 at the moment. How does that square with his party’s claim to be the party encouraging fiscal responsibility and social mobility?

[Joseph Johnson]

Accessing university is a transformational experience for many students, especially for people from disadvantaged backgrounds. We want more people from disadvantaged backgrounds to go to university and receive the benefits that can bring. I will now explain exactly why—

--- Later in debate ---

[Joseph Johnson]

I am going to press on and conclude my remarks, because the shadow Minister needs to make his closing remarks, too.

Those who disagree with the provisions contained in the regulations should submit their proposals to generate equivalent grant savings from elsewhere. I note that the Labour party has in the past year proposed competing higher education funding policies, although they share one common feature—their significant cost to the taxpayer. Labour’s leader said in July that fees should be removed completely, with grants retained. That was costed by the Labour party itself at £10 billion. Ahead of the election, it was briefly proposed that fees be reduced to £6,000, which would have cost £3 billion. Those policies move us backwards. They are unsustainable.

I was therefore particularly interested to read Ed Balls’ comments in this week’s Times Higher Education, where he spoke about the “blot on Labour’s copybook”:

“We clearly didn’t find a sustainable way forward for the financing of higher education.”

He said that if the electorate

“think you’ve got the answers for the future, they’ll support you.”

We have set out a clear plan for the future to ensure that higher education finances are sustainable and that more people can benefit from higher education. Has the Labour party decided on its approach?

When the tuition fee reforms were made in the last Parliament, there were those who predicted a sharp fall in participation in higher education, particularly by those from disadvantaged backgrounds. However, that did not come to pass, and the latest application figures from UCAS, although provisional, show that, in spite of our proposed changes to maintenance, application figures are similar to last year’s figures.

The hon. Member for Blackpool South referred to the grant-to-loan switch in FE. Loans were introduced in the further education sector in 2013-14 to remove the barrier of meeting the upfront cost of tuition fees; we are debating loans for living costs in HE, and I do not believe that is a valid comparison.

[Dr Huq]

Will the Minister give way?

[Joseph Johnson]

I have only one or two minutes, so I will not give way. We should remember that switching support for living costs from grants to loans allows us to increase the upfront support provided to students from the lowest income backgrounds. In taking the decision to proceed with this policy, the Secretary of State and I considered an equality impact assessment, which we have published. That impact assessment sets out the risk to protected groups. It also explains that those risks will be mitigated by a number of factors, including the 10.3% increase to the maximum loan for living costs for the lowest income students, the repayment protection for low-income, low-earning graduates and the high average returns to higher education.

We will, of course, monitor the outcome of the policy through the data available from the Higher Education Statistics Agency and the Student Loans Company and the work of the Office for Fair Access. We will also continue to listen to stakeholders and colleagues in the House and the other place. In the meantime, I am grateful for the points that have been made by hon. Members today. However, the evidence from the coalition’s fee reforms has been that participation is fairly insensitive to greater debt. The equality analysis made the point that such changes have a

“limited impact on students decision making”.

Students understand that graduate debt is not the same as commercial debt. Graduate debt is paid back through a repayment system that takes account of ability to pay and, crucially, it allows individuals to make one of the best investments—in undertaking higher education.

The instrument allows us, in a time of fiscal restraint, to ensure that universities remain well funded so that they can continue to act as engines of our economy and of social mobility in a time of increased student numbers. For those reasons, I commend the regulations to the House.