Student Finance

Debate between Viscount Younger of Leckie and Baroness Wolf of Dulwich

Wednesday 11th October 2017 Lords Chamber

[Viscount Younger of Leckie]

First, I recognise—as the House will recognise—that there is concern about student debt. We know that some students have accumulated a considerable amount of debt. This is part of the reason for the announcement today and the Written Statement on Monday, thereby raising the threshold from £21,000 to £25,000 and freezing the increase. These changes are designed to be helpful to students.

The noble Lord is absolutely right about creating parity of esteem between vocational and academic entry. This is part of the range of educational reforms that this Government have been making and which we wish to continue. I know that the noble Lord has been at the forefront in trumpeting these issues.

Linking to that, whatever may be decided in terms of student funding will—or may—come out towards the end of the year as part of the regular reviews going on.

[Baroness Wolf of Dulwich (CB)]

My Lords, I too welcome the Minister’s Statement. I should like to follow up on what the noble Lords, Lord Hunt and Lord Storey, have already said.

There are two major issues on which I would certainly welcome clarification. First, what we have at the moment is unquestionably a system which is building up a vast amount of unrepayable debt which will fall on the general taxpayer and is very regressive. I would welcome clarification as to whether both the quantity of debt and its impact—on the people who are ultimately paying for it—are going to be addressed in this somewhat ever-receding review.

The second issue is equally important. The Minister repeated that this Government intend that technical education should provide new and improved routes—something I strongly welcome. However, I draw the Minister’s and the House’s attention to the fact that the only current funding system for people who are doing not university degrees but more advanced degrees of a technical sort is—increasingly—something called advanced learner loans. This system is in total collapse. I do not know why but, basically, it seems impossible for the Government to lend the money, which must mean that people cannot access it, that they do not think it is going to work, or that the terms are totally unacceptable. I would be grateful if the Minister could confirm whether or not this—and related aspects of the student finance system—will be covered fully and in depth in the review when it happens.

[Viscount Younger of Leckie]

I thank the noble Baroness for her point. We are alert to a certain number of students who have accumulated debt but the changes today—raising the threshold to £25,000, and at the upper level from £41,000 to £45,000—should and will help students and will provide some relief. We firmly believe that the tuition fee system is working. It has certainly enabled more people from disadvantaged backgrounds to go to university, which I think everybody recognises, and that must be an extremely good thing.

The advanced learning points that the noble Baroness has raised may well be included in the comments that will come out towards the end of the year. I hasten to add that the noble Lord, Lord Hunt, talked about a major review—yes, the Prime Minister did say that. The issue is that there is a constant review going on, so there will be some views coming out towards the end of the year. There will be no formation of a committee coming out of that review, however, just specific review comments.

Higher Education and Research Bill

Debate between Viscount Younger of Leckie and Baroness Wolf of Dulwich

Ping Pong (Hansard): House of Lords
Thursday 27th April 2017 Lords Chamber

[Viscount Younger of Leckie]

My Lords, our reforms are designed to make it simpler for high-quality providers to enter the higher education market, contribute to greater student choice, and ensure that our higher education sector remains innovative and can respond to changing economic demands. However, we have been clear that encouraging new providers cannot come at the price of lowering the quality bar for obtaining degree-awarding powers. We are absolutely committed to protecting the value of English degrees and, throughout the passage of the Bill, we have added to the legislative protections to achieve this.

At Report in this House, we tabled an amendment, based on a proposal from the noble Baroness, Lady Wolf, requiring the OfS to request expert advice from a “relevant body” on quality and standards before granting or varying degree-awarding powers, or revoking them on grounds of the quality or standard of provision. The role of the “relevant body” would be similar to that of the QAA’s ACDAP, and the system that we are putting in place will build on the valuable work that the QAA has been doing over the years. Our amendments further strengthen this requirement for expert advice. In particular, this amendment makes clear that if there is not a designated quality body to carry out the role, the committee that the OfS must establish to carry it out must feature a majority of members who are not members of the OfS. Additionally, in appointing those members, the OfS must consider the requirement that advice be informed by the interests listed in the clause. This will ensure that the advice is impartial and well informed. This amendment also makes it clear that the advice must include a view on whether the provider under consideration can maintain quality and standards. In line with the arguments put forward by the noble Baroness, Lady Wolf, it requires the OfS to notify the Secretary of State as soon as possible after it grants degree-awarding powers to a provider who has not previously delivered a degree course under a validation arrangement.

Let me be clear that, as is already the case, I expect the Secretary of State’s guidance to the OfS on degree-awarding powers to continue to require that a provider’s eligibility be reviewed if there is any change in its circumstances, such as a merger or a change of ownership. The OfS has powers under the Bill to remove degree-awarding powers from a provider when there are concerns as to the quality or standards of its higher education provision following such a change. I can confirm that we expect the OfS to seek advice from the relevant body on any such quality concerns before taking the step of revocation. I beg to move.

[Baroness Wolf of Dulwich]

First, I take the opportunity to thank the Minister in this House and the Minister for Higher Education very sincerely for listening so carefully and patiently to the arguments that I and many others put forward on these issues. I follow other noble Lords in saying that, while this has been a grind, it has also been something on which all parts of the House have found a great deal to discuss and agree. In that sense, it has been perhaps not enjoyable but certainly an educational and ultimately a positive process. I repeat that I appreciate the time that everybody in the Lords has put into this, and I very much appreciate the time put in by Ministers and the enormous work put in by the Bill team.

I am very happy to see the clause moving towards the statute book, but it seems to be slightly ill understood perhaps outside this Chamber and certainly outside this building. It might be worth my while reiterating what I think is important about it, and I would be grateful if the Minister would let me and the House know if he disagrees with anything that I am just about to say.

One of the major reasons why the Bill is so important is that it sets out what is happening in the sector, quite possibly for decades to come. That is why we have to take account of both whether it can provide innovation and new ideas and allow the sector to move and whether it can provide guarantees of quality and standards and protect students, many of whom take out large loans, and the whole country against what is always possible: that some institutions and people will not have the interests of the country and the sector at heart. Innovation is a very important part of it.

I also take this opportunity to welcome in this House the fact that the Government have recently given some money to the new model university that is being established in Herefordshire, which is enormously important because of the role it will play in helping to develop engineering skills and in working with small businesses and supply chains. It is the sort of institution that we need many more of, and I am really pleased that the Government have given their support.

It is worth remembering that one thing that has bothered us very much in thinking about how this Bill should go forward is our knowledge that it is only too easy to create a situation in which institutions arise and gain access to public funds but whose existence is very hard to justify and that can do enormous harm. It is not just this country—the United States has given us the largest and most catastrophic bankruptcies, leaving students stranded—but it is, after all, not very long ago that the Home Office moved to investigate and shut down higher education institutions in this country that were, not to put too fine a point on it, fraudulent.

This part of the Bill has always been enormously important. I am extremely happy, because it seems that this new clause will institute a quality assurance process that focuses the attention of the Office for Students on a number of critical issues when it is granting or varying awarding powers, and clarifies the importance of independent advice from outside an institution. This is always important, because an institution creates its own understandings and inevitably becomes defensive against the world. The potential strengthening and improvement of the advice that the OfS will get from outside, which will build on the QAA but will potentially be more independent and therefore both add an additional safeguard and add substantively to the process, is very welcome.

This clause also clarifies for the general public the way in which the Government envisage new institutions coming through. They clearly envisage two pathways. Many people will come through validation, a process that itself has grown up over the years with remarkably little scrutiny, but if an institution is to get degree-awarding powers from day 1, this is something of which the Secretary of State must be aware. The noble Lord, Lord Willetts, pointed out in earlier debates that anything that goes wrong tends to land on the Secretary of State’s desk anyway. What seems to be important here is that we have an extra element not just of formal accountability but one that will bring into the process both a clear ability for the Secretary of State to create a new institution that has degree-awarding powers, because that is seen as something of which they are capable from day 1, and something to make the process public and one that cannot slide through unobserved.

This is an area in which we have made enormous progress. Perhaps all this would have happened anyway, but I am extremely happy to see it in the Bill. I finish by expressing my gratitude once again to everybody who has worked on the Bill and listened to our concerns and my appreciation of all the comments, information and hard work that colleagues on all Benches of the House have put into it. I welcome this amendment.

Higher Education and Research Bill

Debate between Viscount Younger of Leckie and Baroness Wolf of Dulwich

Report: 2nd sitting (Hansard): House of Lords
Wednesday 8th March 2017 Lords Chamber

[Viscount Younger of Leckie]

There is no badge of shame. It is simply that we want to clarify that gold, silver and bronze occupy a particular platform of award level. Most international students would respect the fact that bronze is an award, not a badge of failure. But I want to clarify that there is a level below it, which is in effect a sort of non-level. I hope that that clarifies the position.

Let me move on. I appreciate that noble Lords want to ensure that whatever format the assessment takes, it is carried out rigorously and is based on reliable sources of evidence. I can assure noble Lords that the Government feel just the same. For example, we have already commissioned an independent evaluation of the metrics, which was carried out last year by the Office for National Statistics. Given that this evaluation has already taken place, repeating it, as proposed in Amendments 69 and 72, is unnecessary. The report proposed minor amendments to the metrics being used for the TEF, and the Government are already working with HESA and HEFCE on addressing those concerns for future TEF assessments. All of the metrics used for the TEF are credible, well established and well used by the sector.

[Baroness Wolf of Dulwich]

My Lords, I feel as though I must have read a different ONS report from the one given to the Minister. You can clearly identify the outliers in the NSS data, those at the bottom and those at the top, but the rankings in the middle are so uncertain that you cannot discriminate or put in order the vast bulk of English higher education institutions. So, to say that minor amendments were called for uses the word “minor” in a way that I personally would not.

[Viscount Younger of Leckie]

Perhaps I may move on to the NSS, in particular to the amendments spoken to by the noble Lords, Lord Bew and Lord Lipsey. I would like to reassure the House on some of the specific concerns that they have raised about the TEF in today’s debate, and I shall start with the NSS. While we recognise its imperfections—I did listen carefully to the speech of the noble Lord, Lord Lipsey—we consulted with the sector, which echoed the types of remarks made jointly by Professor Anthony Forster, vice-chancellor of the University of Essex, and Professor David Richardson, vice-chancellor of the University of East Anglia, who said:

“The National Student Survey (NSS) provides the most robust and comprehensive basis for capturing students’ views about the quality of their education and student experience”.


As I say, we recognise its drawbacks and we have put in place appropriate safeguards. For example, we use specific questions from the NSS that are directly relevant to teaching, not the overall satisfaction question, about which concern has rightly been raised.

I would also like to use this opportunity to do some further myth-busting about the TEF. First, the TEF is not just about metrics. Providers can give additional qualitative and quantitative evidence to the TEF assessors through their provider submission. My noble friend Lady Eccles alluded to the human element of the TEF, and she was right to do so. Secondly, the metrics are not worth more than the provider submission. The TEF assessors will consider both the metrics and the provider-submission evidence holistically before making a judgment. Thirdly, all assessors get contextual information about the providers they are assessing, including maps reflecting employment in the region and the make-up of the students studying at that provider. Fourthly, although I have made the important point that the metrics are not perfect, they are robust datasets which have been used by the sector for more than 10 years. This means that a TEF rating is not a box-ticking exercise and it is not an equation. It is a rigorous and holistic assessment process that is overseen by one of the sector’s most respected figures, Chris Husbands, vice-chancellor of Sheffield Hallam University. I know that he has been given fulsome praise by many in the House today, including the noble Lord, Lord Blunkett, and my noble friend Lord Lucas.

Highly qualified assessors, vice-chancellors, pro vice-chancellors and other experts in teaching and learning, as well as student and employer representatives, weigh up and test the evidence they receive before reaching a final judgment, which again reflects the human element. The noble Baroness, Lady Wolf, suggested that we should not throw away information. We are not throwing away information. The OfS will publish all the underlying metrics and provider submissions. However, composite measures have value. Why else would the vast majority of universities represented by noble Lords today award their students a specific degree class? We have to think about that.

I remind noble Lords that the Government listened carefully in Committee and made a number of important changes to the TEF in light of the suggestions made by noble Lords. We have slowed the implementation timetable and we have committed to revisit key concerns raised by the House in the lessons-learned exercise. I reiterate that the lessons-learned exercise will consider the following: the way in which the metrics have been used by the TEF assessors; the balance of evidence between core metrics and additional evidence; whether commendations should be introduced for the next round of TEF assessments; and the number and names of the different ratings and their initial impact internationally.

The lessons-learned exercise will survey all participating providers. The Department for Education will also collect feedback from panellists and assessors and involve further desk-based research. I am sure your Lordships will agree that the department has responded to the concerns raised by planning a thorough exercise.

Where we have not made changes we have done so with good reason. Following the Committee stage, we considered carefully the suggestion made by the noble Baroness, Lady Garden, that all those in universities must have a teaching qualification. However, such a requirement would fly in the face of the points that noble Lords have made about institutional autonomy. Indeed, the amendment agreed by noble Lords on Monday covers the freedom of English higher education providers to determine the selection and appointment of academic staff.

The amendments in this group challenge the fundamental nature of the TEF. The words in the manifesto were carefully chosen to echo the way that the REF is described. It said that the Conservative Government would,

“introduce a framework to recognise universities offering the highest teaching quality”.

A framework that allows only for a pass or fail assessment offers no gradients. A framework that offers no opportunity to recognise the highest teaching quality simply does not meet the Conservative commitment. I do not want noble Lords to misinterpret these amendments as offering constructive tweaks. They strike at the very foundations of what we want to achieve.

However, I reassure noble Lords that the Government remain committed to developing the TEF iteratively and working with noble Lords to do so. Developing the framework to date has involved two formal consultations and thousands of hours of discussions with the sector and with students, and we have only just begun. Universities UK has offered to engage with any noble Lord who wishes to provide input into its feedback to the department as part of this lessons-learned activity.

Many of the concerns we have heard throughout the course of the Bill were made in the early days of the research excellence framework introduced by a Conservative Government more than 30 years ago. We are still iterating that framework now. The noble Lord, Lord Bew, suggested that the REF was bureaucratic and encouraged gaming. We have designed something substantially less bureaucratic than the REF and have put in a number of safeguards at every stage to prevent gaming. I am sure the noble Lord has read the fact sheets, which I hope help him with his view on that.

The TEF has already started to change sector behaviour for the better and, given the same opportunities as the REF, will propel the quality of higher education teaching to new heights. I hope that this House will be able to look back 30 years from now with pride at what the TEF has achieved. I ask that the amendment be withdrawn.

--- Later in debate ---

[Baroness Wolf of Dulwich]

My Lords, I agree with what the noble Lord, Lord Stevenson, has said and with his response to the letter, which is encouraging. I am particularly encouraged by the fact that there will be better consultation. Although I agree that we need a final long stop, what we have at the moment is that the regulator has to put itself on the register and then award degrees, and that could be addressed with a little more care.

[Viscount Younger of Leckie]

My Lords, we recognise that many validation arrangements are highly successful and beneficial to the institutions involved and to students. Validation will remain the chosen route to entry for many under the new regulatory framework. Under our reforms we plan to put in place an alternative route for high-quality providers to obtain DAPs without a track record, but this will not be the right route for everyone. We want providers to be able to choose the right option to meet their specific needs. It is therefore important that the validation services on offer are comprehensive and accessible to providers.

Unfortunately, this is not always the case at the moment, as Members of this House have recognised. In compiling his review of higher education funding, the noble Lord, Lord Browne, said he and his panel spoke to many organisations and found that in many instances validation arrangements simply did not work. Highly lucrative for the established providers, they created a closed shop that stifled innovation and competition among new entrants and, as a result, reduced student choice. As the noble Baroness, Lady Garden, acknowledged, protectionist practices are sometimes adopted when it comes to current validation arrangements. This is why the Bill enables the OfS to take concrete steps aimed to improve validation services. Should this prove to be insufficient, the OfS may enter into commissioning arrangements with other providers.

The OfS cannot force registered higher education providers to enter into such commissioning arrangements. However, once a provider enters into the arrangements, the OfS could then require that provider, in line with the terms of the arrangement, to offer to validate. This is not unlike other arrangements where, for example, a party to a contract may require, in line with the terms of the contract, another party to do something. We in no way expect the OfS as part of this arrangement to require validation where the provider had legitimate concerns regarding the quality of provision. I cannot imagine a scenario where a provider would agree to such terms or where anyone would think it beneficial. Clause 3 sets out clear factors that the OfS must have regard to when exercising its functions, which include the promotion of quality.

The protections set out in Amendment 117A are therefore not required. Remedies for failing to act in accordance with the arrangements and for resolving disputes about them are expected to be provided for in the commissioning arrangements. Where they are not, other laws, such as the law of contract, may apply.

Turning to Clause 48 and Amendment 119, we anticipate that in the event that the OfS is still unable to address significant shortcomings in the validation market through other means, the Secretary of State may make regulations to allow the OfS to become the validator of last resort. I understand that there are still concerns about how this would work in practice and how the OfS would set up such a function. Let me help to this extent. Noble Lords may have received a letter I circulated today. I wish that this letter could have been circulated earlier. For very good reasons it was not able to be. To that extent, I apologise to the House.

I can confirm that, as part of the regulatory framework consultation, we will consult on how the OfS could best establish a validation service to ensure it is underpinned by the necessary expertise and that it is delivered in a way that prevents or effectively mitigates any conflicts of interest. This would enable the OfS to have a blueprint that has been stress tested with the sector through consultation and to be ready to act, subject to Secretary of State and parliamentary approval, as a validator of last resort should this become necessary. I stress that these regulations are subject to parliamentary scrutiny, so there will be an opportunity to scrutinise these powers. We expect the OfS to make a case to the Secretary of State as to why it is necessary for it to act as a validator of last resort, clearly setting out the nature and severity of the issues in the validation market.

There are further safeguards, in that the Secretary of State may attach conditions, such as ensuring that the service the OfS provides is underpinned by the necessary expertise and is sufficiently independent from its regulatory function, for example by being housed in a separate division. We have heard arguments that this would be unprecedented, but that is simply not true. For example, the Bank of England regulates many aspects of the financial sector to maintain financial stability in the UK, but in extremis will also act as the lender of last resort, or a market maker of last resort—that is, buying and selling assets such as government bonds to provide liquidity—at a time of financial stress.

There are also strong mechanisms in place to ensure that the quality of the OfS’s validation provision is high. We would expect the OfS’s advice to the Secretary of State to clearly set out how it will ensure its validation service is best in class. This could, for example, involve the OfS drawing on sector-recognised best practice principles, exemplar templates and processes. If the Secretary of State designates a body to fulfil the OfS’s quality assessment function, I would also expect the OfS to draw on information from the designated quality body to help formulate its advice and recommendations to the Secretary of State, and to help inform how it can develop the capacity and reach of existing validation services while safeguarding the quality and standards of awards granted. These would be nominally in the OfS’s name, but, importantly, would bear the overall branding of the institution being validated, which answers some of the questions that were raised. I hope that full explanation also answers the question my noble friend Lord Willetts asked about what “last resort” means.

Before I finish, I shall briefly address Amendment 118 and—without too much surprise, I hope—reassure my noble and learned friend Lord Mackay that Clause 48(6) replicates a standard provision relating to the awarding of degrees. These powers are simply designed to enable the degree-awarding body—in this case the OfS—to deprive students of their degree should this become necessary: for example, if it is discovered that it was wrongly obtained, such as through plagiarism.

Without Clause 48, the OfS would be left without adequate powers to ensure full and ongoing provision of good-quality validation services. As I said earlier, we will consult on how the OfS can best establish a validation service as part of the regulatory framework consultation, which will enable further input from the sector. With that explanation, I hope the noble Baroness will withdraw Amendment 117A.

[Baroness Wolf of Dulwich]

I thank the Minister very much for his words, which I have listened to with interest and optimism. On that basis I am very happy to withdraw the amendment.

Higher Education and Research Bill

Debate between Viscount Younger of Leckie and Baroness Wolf of Dulwich

Report stage (Hansard - continued): House of Lords
Monday 6th March 2017 Lords Chamber

[Baroness Wolf of Dulwich (CB)]

I support the proposition. When we discussed the matter in Committee, the Minister said that he saw no reason why there should not be a wider range of penalties at the disposal of the Office for Students. It would be very helpful to have that confirmed in the Bill, otherwise there is the possibility of challenge of the OfS exceeding its powers if it moved to restrict the number of students in a way that would seem on many occasions entirely appropriate.

[Viscount Younger of Leckie (Con)]

My Lords, the noble Baroness, Lady Wolf, expressed these concerns in Committee, and I listened carefully to her very short speech just now. The noble Baroness, Lady Garden, and the noble Lord, Lord Watson, also spoke in Committee on the subject. This is the concern that the OfS would not have appropriate powers to restrict student enrolment at a registered higher education provider in the event of a breach of registration conditions, and would instead be compelled to either impose a monetary penalty or deregister the provider, both of which would have a negative impact on a provider’s enrolled students. It is our intention that such sanctions would be imposed only in exceptional circumstances. The OfS will operate a risk-based regulatory system, whereby any regulatory action is to be proportionate to the nature of the breach of a registration condition. The OfS will have an escalating suite of actions open to it, ranging from compliance measures, such as agreeing a support strategy with a provider or directing that certain actions should be taken, through to imposing specific ongoing registration conditions, and finally to sanctions.

The imposition of a student number control is precisely the sort of regulatory action that the OfS can use under the powers already contained in Clause 7, which allows the OfS to impose “specific ongoing conditions”. Imposing a student number control would not be to the detriment of students already studying with a provider and would help to ensure that new students who were subsequently enrolled would enjoy high-quality, suitably resourced teaching and learning. It is clearly not our intention that the OfS de-register institutions or impose monetary penalties, apart from in exceptional circumstances that merit such an intervention. We anticipate that such action would rarely be in the best interests of the student, the provider or the taxpayer. We have considered whether it would be appropriate to provide a specific power in the Bill for the OfS to impose student number controls. On balance, however, we believe it is unnecessary, as the Bill already provides the OfS with the powers necessary to limit student numbers where appropriate. With that explanation, I ask the noble Lord to withdraw his amendment.

Higher Education and Research Bill

Debate between Viscount Younger of Leckie and Baroness Wolf of Dulwich

Committee: 6th sitting (Hansard): House of Lords
Wednesday 25th January 2017 Lords Chamber

[Viscount Younger of Leckie (Con)]

My Lords, I thank noble Lords for the opportunity to discuss validation arrangements. We believe that they are essential to a fully functioning higher education sector. We have listened to the concerns raised around the potential for Clause 47 to create a conflict of interest. However, I believe that a more substantial conflict of interest already exists within the sector.

At the moment, new providers usually have to find a willing incumbent provider to validate their provision. This gives those incumbent providers significant levers to control which new providers can enter the market, and what kind of provision they offer. Even if established providers are willing to help new providers get a foothold in the sector, there is an inherent conflict of interest if the proposed new provision would directly compete with one of their own courses. Of course, conflicts of interest are not the only problem validated providers can face. We know that some providers still find it difficult to find a partner that is willing to enter into validation arrangements with them, or have established arrangements unexpectedly withdrawn, and not because they are considered poor quality.

The noble Baroness, Lady Garden, stated that there was no evidence, but I have to put her right. We only need to look at events at Teesside University last year. Following a change of leadership, the university unexpectedly withdrew important validation services to 10 local colleges, based on a change of strategic direction and not as a reflection of the quality of the provision. Ensuring new and existing high-quality providers are not locked out of the market via their preferred entry route is essential to ensuring that students are able to access the right type of higher education for them.

The OfS cannot force providers to enter into validation arrangements. If insufficient providers are entering into validation agreements with each other or into commissioning arrangements with the OfS, or these fail to correct the problem, the OfS will need to find another way to promote competition and choice. Without further powers, the OfS could potentially be forced to stand by and watch while good-quality providers that do not want to seek their own degree-awarding powers remain locked out of degree-level provision indefinitely.

The OfS will, if it performs any validation function, have to have regard to the need to encourage competition among higher education providers in England. Its aim will not be to compete with the other higher education providers with a view to diminishing their attractiveness or their ability to offer validation services. It will only offer these services if there is demonstrable evidence that validation services are failing to support the sector. A regulator needing to take a role in the sector it regulates is not totally unprecedented. For example, the Bank of England regulates many aspects of the financial sector in order to maintain financial stability in the UK. In extremis, however, it will also act as the lender of last resort, or a market-maker of last resort, for example by buying and selling assets such as government bonds to provide liquidity at a time of financial stress.

Noble Lords might wish to read an interim report by the Open University and Independent Higher Education on a joint project piloting a streamlined approach to validation. The report highlights several perceived obstacles for providers in developing successful validation partnerships, including restrictive behaviour on the part of some validating universities and,

“insufficient support for alternative delivery models including accelerated and more work-based degrees”.

While the report accepts that this is not representative of all validation partnerships, it recognises the importance of validation as a route into the higher education sector and the need to fix problems which, if left unchecked, could have an adverse impact on student choice.

The report says:

“Validation stands as a critical part of the regulatory infrastructure, and its role as a gateway into the higher education sector means that any dysfunction will have a substantially negative impact on the diversity and quality of provision available to students”.


Relying on incumbents to shape the future of higher education can also curb innovation and result in the entrenchment of the same model of higher education, as providers may be hesitant to validate courses that do not conform to their usual modes of delivery. As the noble Lord, Lord Browne, said, validation can create a closed shop. As part of its work on improving validation services, we would expect the OfS to draw and build on this and other work already carried out.

I also noted the suggestion in the previous debate to create an independent central validation body akin to the CNAA model. As a regulator of the higher education sector, the OfS is ultimately responsible for ensuring that the regulatory framework and its supporting processes are functioning effectively. As the noble Lord, Lord Browne, said, it therefore makes sense for the OfS to have a role in determining how validation problems that could prevent it from fulfilling its responsibilities, such as ensuring that market entry routes and related processes are functioning effectively, are actually fixed.

The OfS’s broader strategic role makes it best placed to identify emerging trends in validation services across the sector and to monitor the impact of whatever solution it puts in place to correct any problems. It will be able to draw on information and advice from all its designated bodies and stakeholders to develop a robust evidence-based approach to address any serious validation failings. I reassure noble Lords that this is not a power easily given or used. We envisage that the OfS would be authorised as a validator of last resort only if it was absolutely necessary or expedient after other measures had been tried and failed.

The noble Baroness, Lady Wolf, said that this would be based only on anecdotal evidence. The Secretary of State may exercise this power if she considers that it is necessary or expedient to do so, having taken OfS advice. That advice is most likely to come in the form of an evidence-based report.

The Secretary of State would need to lay secondary regulations in Parliament. As we all know, it is common practice for these regulations, which use the negative procedure, to be laid before Parliament 21 days before coming into force, giving Parliament the opportunity to see these conditions. As always, Parliament retains the power of veto.

The regulations, should they be deemed necessary, are expected to set out the terms and conditions of any OfS validation activity. I would expect the OfS, as the overall regulator of higher education quality and champion of students’ interests, to be best in class in terms of demonstrating that its validation services abided by best practice validation principles and delivered to the highest standards. I would also expect the OfS to put in place appropriate governance arrangements ensuring that an appropriate level of independent scrutiny was applied to the validating arm of the organisation and the safeguards to protect student interests.

The noble Baroness, Lady Wolf, asked how this would work, who within the OfS would do the validating and whether they would have the requisite skills and qualifications. The regulations by the Secretary of State could attach certain conditions to ensure that the service set up by the OfS was underpinned by the necessary expertise. As we expect members of the OfS board to have between them experience of providing higher education, the organisation will have the necessary expertise to recruit the staff needed to set up a validation function. For further detail on how the OfS validation arrangements would work, I again refer noble Lords to my letter of 19 January enclosing a factsheet published by the Department for Education on validation. With that, I move that this clause stand part of the Bill.

[Baroness Wolf of Dulwich]

My Lords, I thank the Minister for his full reply, though if anything I am now more confused than ever. Either the validation issue is a serious one, in which case presumably the OfS will be giving out degrees in large quantities, or it is not, in which case I am not quite sure why we have these massive powers. I hope the Government revisit the whole validation issue. I actually have no idea when it appeared on the scene; it was not the case for many years, and I assume it was created by government for a purpose. This is an issue we will want to return to on Report, but at the moment I am happy to see the clause stand part of the Bill.

Higher Education and Research Bill

Debate between Viscount Younger of Leckie and Baroness Wolf of Dulwich

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

[Viscount Younger of Leckie (Con)]

My Lords, the Bill creates the conditions to improve the overall quality and diversity of the higher education sector, creating a level playing field through a risk-based approach to regulation. Clause 6 enables the OfS to impose specific, ongoing registration conditions on a provider. The practical effect of this is that the OfS will assess the compliance of all higher education providers with the appropriate conditions and will adjust its regulatory approach accordingly. This is central to the risk-based approach to regulation that the OfS is being established to provide.

In practice, we envisage that, if the OfS considers that an institution or an element of an institution, such as its financial sustainability, poses a particularly high risk, it can add, change or tailor the registration conditions applicable to that provider to address that risk. I hope I can reassure noble Lords that the Bill already provides for the OfS to set a student number control condition in cases where it is appropriate and proportionate; for example, an institution that the OfS considers may be in breach of registration conditions that relate to quality of provision could have a student number control imposed by the OfS as an additional specific registration condition, if the OfS believes that such action is reasonable and proportionate. The OfS may also exercise this power if it considers that there is a risk that the provider is recruiting more students than its student protection plan can properly cater for.

I am in complete agreement with the noble Baronesses, Lady Wolf and Lady Garden, about the importance of providing the OfS with the tools it needs to ensure the quality of higher education provision. However, given the powers already conferred on the OfS through Clause 6, it is unnecessary to include in the Bill one example of the conditions that could be imposed. Indeed, including one example of such a condition might appear to exclude other conditions which might be more appropriate in the circumstances of a particular provider, including those which have no plans to increase their student numbers. However, I appreciate the noble Baroness, Lady Wolf, raising this and I hope I can provide some further reassurance for her, focusing particularly on overseas providers, which she mentioned. Our plans will speed up and streamline process without lowering standards. In order to become eligible for degree-awarding powers, any provider must register and pass rigorous entry requirements. It is a high bar which only high-quality providers will be able to meet. We welcome overseas providers which meet this test increasing choice for students. Providers that cannot meet the rigorous entry criteria will not be able to become registered or obtain access to degree-awarding powers or university title.

The noble Baroness, Lady Wolf, asked what sanctions are available to the OfS. I start by saying that the best principles of regulatory practice will be adhered to. These include transparency, accountability, proportionality, consistency and, where issues are targeted, targeting only cases where action is needed. Specifically, the escalated suite of actions and sanctions available to the OfS includes: putting in place a support strategy or issuing a direction for a provider to take specified actions; imposing additional specific ongoing registration conditions—for example, as I mentioned earlier, student number controls; or imposing a monetary penalty. We envisage that most often this will be used where a breach has occurred but has now been remedied, but it can also be used alongside a suspension. Also—and by the way, this is as a last resort—the OfS can order deregistration. To further reassure the noble Baroness, this will be where all other efforts have failed or it is clear that imposing monetary penalties or suspensions will simply not be sufficient to deal with the provider. I hope that, with those reassurances, the noble Baroness will withdraw her amendment.

[Baroness Wolf of Dulwich]

I thank the Minister most sincerely for what he has just told us and for—I do not want to call it a gloss—the additional information he has provided. I am extremely relieved to know that it is clearly the intent of the Government that the OfS should have a wide range of actions and get deeply involved not merely in risk regulation but in avoidance of catastrophe, which I have alluded to. I am extremely grateful to the Minister, I am delighted to have had the points of fact he has just given us placed on the record, and I beg leave to withdraw the amendment.

Higher Education and Research Bill

Debate between Viscount Younger of Leckie and Baroness Wolf of Dulwich

Committee: 1st sitting (Hansard - continued): House of Lords
Monday 9th January 2017 Lords Chamber

[Baroness Wolf of Dulwich]

It looks like I am going to be the last speaker, noble Lords will be relieved to know. I support the general tenor of all the amendments in this group, particularly Amendment 7 and the idea that people’s experience should be current or recent. That is extraordinarily important, particularly in an area such as higher education which changes very fast. A number of noble Lords have talked about the importance of further education and the importance of—and decline in the number of—part-time students. We are concerned about these extraordinarily important things, yet it seems that none of the current authorities and institutions which deal with higher education has much idea about why this has happened. We did not intend to have the decline in part-time students that we have. Government after Government have talked of the importance of increasing the role of further education colleges in higher education, because they are central to the availability of part-time courses, retraining and lifelong learning. Yet the role of further education has not in fact increased. The numbers have not increased and the proportion has tended to decline.

So these are real challenges. But it also seems to me that one of the reasons we have got ourselves into this situation is that we do not have enough people with current and recent experience involved at the highest levels of policy-making. Therefore, of all these amendments, I most strongly support the proposal that the Office for Students should look for people to join its board who are deeply involved in the sector in the areas which it is looking for, not people who can tick a box because 20 years ago they were on the board of governors of something. I hope very much that the Minister will take that point away and think about it. I cannot see any way in which it undermines the purposes of the Bill and of government policy. That one small thing might make a big difference to the effectiveness of the Office for Students.

[Viscount Younger of Leckie]

My Lords, I say at the outset that once again I have shortened my comments, bearing in mind the hour. Nevertheless, these amendments need to be properly addressed, so I hope that the Committee will bear with me.

I reassure noble Lords that the Government are committed to a fair and open appointment process for the OfS chair. The final appointment will be made by the Secretary of State, but the process will allow for scrutiny of the appointment by Parliament. We have previously stated our openness to a committee of Parliament scrutinising the nomination of the chair of the OfS before the final appointment is made. I confirm that there will be this opportunity for parliamentary scrutiny in the appointment of the first chair—for whom the selection process is well under way, as noble Lords may know. I note that the noble Lord, Lord Liddle, agrees that the chair of the OfS should not be ratified by a resolution of Parliament but that there should be parliamentary scrutiny. That is correct, despite some comments made this evening that were not particularly in favour of that.

Amendments 4 and 18 would be a departure from the accepted practice set out in the governance code. It is standard practice for the chairs of regulators to be appointed by the respective Secretary of State. We believe that our plans for scrutiny are sufficient and that it is right that the Secretary of State should retain the power to appoint the chair of the OfS board.

Throughout the development of this legislation, the Government have engaged and consulted widely with students and their representatives and we are committed to ensuring that this approach is reflected in the final OfS structure and arrangements. We have already amended the Bill in the other place to ensure that at least one of the ordinary members of the OfS must have experience of representing or promoting the interests of students.

As regards the comments just made by the noble Baroness, Lady Wolf, and the noble Lord, Lord Stevenson, requiring one member of the OfS board to be currently engaged in representing students, as proposed by Amendment 5, would narrow the choice of potential candidates for this role. It could potentially exclude someone who has excellent recent experience of representing students but who has since gone into the working world or further study, thus gaining valuable experience and skills. Furthermore, the standard length of term for public appointments is four years. As such, insisting that the student representative be a current student risks being incompatible with the standard time lines of most courses of study or sabbatical roles as student representatives. That is why we chose the form of wording that we put forward on Report in the other place.

I turn now to the desirability criteria for the OfS board appointments. The Government believe that it is essential that the OfS board should be representative of the broader range of stakeholders in the higher education system. The current legislation that sets out the appointment process for appointments to the current HEFCE board requires the Secretary of State to have regard to experience of higher education, business or the professions. I reiterate that this has worked well for many decades. None the less, this legislation goes further in ensuring a diverse range of board members by setting out seven desirability criteria. These include experience of providing higher education and experience of creating, reviewing, implementing or managing a regulatory system. The seven criteria have been framed broadly so that they allow for flexibility to include board members with the breadth and depth of experience and skills. The Bill in its current form preserves the crucial flexibility for the Secretary of State to constitute the OfS board in the most appropriate way for the challenges and opportunities of the particular day. I reiterate that we need to form a framework that allows us to look ahead a long period of time.

Private Colleges

Debate between Viscount Younger of Leckie and Baroness Wolf of Dulwich

Wednesday 21st December 2016 Lords Chamber

[Viscount Younger of Leckie]

One of our reforms is to set up the Office for Students, as I mentioned earlier. It will provide one register to set a level playing field. This means that if, in what would perhaps be an unusual case, a private provider does not meet the standards required, there are student protection processes in place. That is an important part of our checks and controls.

[Baroness Wolf of Dulwich (CB)]

My Lords, as the Minister will know, additional powers were taken recently to allow the Home Office and what was then BIS to place caps on numbers where there were concerns about quality and recruitment among private providers. It appears that that power will be lost under the provisions of the Higher Education and Research Bill, which will impose quality restrictions but, if provisional degree-awarding powers are given, will set no caps on numbers. In other words, the Government are actually getting rid of some of the powers that they have taken in recent years. I would be grateful if the Minister could clarify if this is indeed the case and whether it would not be wise to retain for new institutions the ability to place a clear cap on student recruitment numbers.

[Viscount Younger of Leckie]

The new alternative providers, such as the recently announced Dyson Institute, will include some student number controls, but there will be a rigorous risk-based approach to quality assurance and a moratorium on the designation of new higher national courses. There will also be a fit-and-proper-person test for the running of APs. The noble Baroness and I will meet later and I look forward to talking further to her about that issue.