Higher Education (Fee Limits and Student Support) (England) (Coronavirus) (Revocation) Regulations 2020

Baroness Berridge Excerpts

Thursday 29th October 2020 Grand Committee

Moved by

[Baroness Berridge]

That the Grand Committee do consider the Higher Education (Fee Limits and Student Support) (England) (Coronavirus) (Revocation) Regulations 2020.

Relevant document: 30th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Education and Department for International Trade (Baroness Berridge) (Con)]

My Lords, I will remind us of the background to these regulations and the circumstances leading to the introduction of student number controls. On 4 May 2020, my right honourable friend the Secretary of State for Education announced a package of stabilisation measures for the higher education sector in response to the Covid-19 pandemic. One such measure was the introduction of temporary student number controls.

As noble Lords may recall, following the onset of the pandemic, it was expected that fewer international students would travel to start their first year of study in England in the academic year 2020-21. This was in addition to an already known demographic low of 18 year-olds, and the risk of a high number of deferrals from domestic students. The real risk at the time was that our world-renowned higher education sector would have suffered a drop in fee income, which would have had significant financial implications for many providers.

Further, in the early part of this year, we became aware of aggressive recruitment practices being employed by some higher education providers, as they sought to make up the potential shortfall in student numbers and income by offering places to students to whom they would ordinarily not have made offers, for example, by making wholesale unconditional offers in March. While it is understandable that individual higher education providers would seek to ensure their own financial stability, this strategy could have had serious and detrimental consequences for the sector. It would have caused an uneven distribution of students, leaving some providers with even fewer students and income than they would have planned for, putting their financial sustainability at risk.

To counter this, higher education providers in England were allocated an individual student number control—a set number of students we believed constituted a fair maximum share of student recruitment for this academic year. To accompany this, we also made the Higher Education (Fee Limits and Student Support) (England) (Coronavirus) Regulations 2020. These regulations, which were the subject of rigorous debate in the House, provided that if providers exceeded their individual number, they would face a reduction in the maximum tuition fees they could charge for the academic year 2021-22. The purpose of this was to address the consequences of providers exceeding their allocated numbers, and thereby reducing the tuition fee income available to the sector as a whole, by reducing the sums available to the offending provider through the student finance system in the subsequent academic year.

Additionally, providers in the devolved Administrations which provided courses to English-domiciled loan-funded students were also allocated an individual student number control applicable to those students in the academic year 2020-21. In this case, the regulations provided that recruitment beyond this would result in a reduction in the maximum tuition fee loan available in the academic year 2021-22. The regulations—which we seek to revoke by the instrument we are debating today—set out in law what those reductions in the maximum tuition fee and tuition fee loan amounts would have been. These were short-term measures, to be in place for one academic year only, and were a necessary targeted response to the unprecedented circumstances caused by the Covid-19 pandemic.

However, as noble Lords will be aware, there were unexpected issues with the A-level grading, resulting in the decision to use centre assessment grades, where those were higher than the calculated grades that were initially awarded, so as to avoid some students receiving grades that did not accurately reflect their performance. It then became clear that an unexpectedly high number of students had met the grades required to meet the conditions of the offer for their first choice place at university. This was in large part an issue of timing, with the move to centre assessment grades coming shortly after higher education providers had allocated the majority of their places. As a result, many providers were oversubscribed and would have been at risk of exceeding their student number control if they honoured these offers, through no fault of their own. We therefore announced our intention to remove the temporary student number controls for the coming academic year, a decision that was widely welcomed by the sector and Members across both Houses.

The introduction of these regulations, revoking the original regulations, means that the temporary number controls that were previously notified to providers will no longer apply, nor will the financial consequences of exceeding their student number controls, which would be unfair in these unique and unprecedented circumstances. I beg to move.

--- Later in debate ---

[Baroness Berridge (Con)]

I am grateful to noble Lords for their contributions this afternoon. In the time available, I shall seek to deal with the many issues that have been outlined.

I say to the noble Baroness, Lady Garden, in relation to capacity for teaching, a £10 million capital fund was made available, recognising the issues that she outlined with physical capacity. The Office for Students oversees that funding, and universities are allowed to ask for additional funding. A number of noble Lords referred to the costs of teaching. Additional teaching grants have been given to subjects that are high cost, such as medicine, nursing and STEM subjects. However, it is important to note that a record number of disadvantaged 18 year-olds, at 23.1%, have gone to university this year. We pay tribute to their hard work.

In answer to the noble Lord, Lord Loomba, we are regularly in touch with the devolved Administrations. As the matters are devolved, there are still some funding arrangements and number controls separate to the student number caps in these regulations which are relevant in that regard. In relation to exams next year, on 12 October we announced that there would be a three-week delay. Next month, we anticipate further guidance and information on contingency plans in relation to next year’s exams, should there be a wave of the virus. We regularly discuss matters with the devolved Administrations.

On the points raised by about finance, particularly by my noble friend Lord Forsyth—I pay tribute to his work on the Economic Affairs Committee—we must remember that universities are autonomous institutions; they are not like schools. Fees are a contractual arrangement between an institution and students—but, of course, the Office for Students is there as a regulator. My noble friend will be aware that only high-earning borrowers repay all the interest on their loan. The majority of borrowers do not fully pay back their loans, with borrowing written off at the end of their loan term. That means that reducing the interest rates would in practice benefit only higher earners and reduce the progressive nature of the student loan system.

On the point raised by the noble Baroness, Lady Garden, we want to see an increasing number of students going to university and taking advantage of that offer when it is appropriate for them. I am pleased to say that we have the admissions data for this year and more than 371,000 English-domiciled students have taken up a place at university.

Once again, I am sad to say, I have to disagree with the noble Baroness, Lady Bennett. Universities have a variety of structures: many of them, as noble Lords will be aware, are charitable in their foundation and have great endowments, and they award degrees and have degree-making powers. Many universities do collaborate, and that is not just something we see with the Russell group. There are many regional collaborations between universities, and many of them are involved very closely with LEPs and institutes of technology and are playing their wider part in the system. Of course, at the moment—this perhaps goes without saying, but I do want to say it—they are at the front line of trying to find a Covid vaccine for us, and they deserve our support.

This is the first time that I have had the pleasure of hearing the noble Baroness, Lady Fox, address your Lordships’ House, to which I welcome her. As we know from schools, there is no replacement for the face-to-face nature of teaching, and I commend the work of the University of Buckingham, which is one of our private universities. In answer to the question raised by the noble Lord, Lord Storey, I say yes: any other institutions in the higher education sector that were regulated by the Office for Students, including private providers, were subject to the cap. The noble Baroness is right that the blended offer is the best offer, and we commend that best practice to other institutions.

On the question from the noble Lord, Lord Liddle, unfortunately we cannot provide guarantees and certainties in any area of life at the moment, but we did bring forward millions of pounds of tuition fees to help the cash-flow situation of universities. We do not know what position we are currently in formally. Obviously, we know the admissions data for English-domiciled students, but, as noble Lords will be aware, many international students start their courses in January, so we do not know the full position of universities’ finances. Along with the Office for Students, we are monitoring this, and there has been the offer of restructuring—thankfully, at the moment, no institution has come forward needing that support. As part of the wider post-18 education review, the Government are carefully examining the Augar report and its recommendations. We are considering our response to that along with the spending review, and the upcoming further education White Paper will be part of our response to that. Hopefully, this will give some certainty to providers and students.

Regarding the behaviour that we saw earlier in the year from some institutions, it is important to remember that one of the fundamental concerns of government was that this was not in the best interest of students, who, at that point in time, were put under pressure to accept an unconditional offer, which perhaps might not have been the one they wanted. We wanted to guard against that.

On the mental health and welfare of students, which many noble Lords have mentioned, the Minister for Universities in the other place, Michelle Donelan, has written to universities outlining their responsibilities in relation to the mental health and welfare of students, particularly those who are self-isolating. There has been £256 million of funding for this academic year in relation to students’ mental health.

Of course there are no maintenance grants anymore, but there is a comprehensive system of maintenance loans, and, as I say, the figures for disadvantaged students going to university mean that we have not seen a drop-off in the numbers of people going to university from those backgrounds, which is of course very important.

Finally, I turn to the comments of the noble Lord, Lord Bassam. Yes, there will have to be particular arrangements in relation to Christmas, but, as I say, we do not know the situation in relation to overseas students. We are in dialogue with the devolved Administrations on the various matters, and we commend all the work that universities have been doing in order to make the offer. Many universities and students have shown enormous resilience. Obviously, this current situation is not ideal for them to study in, but, unfortunately, every sector in our society has been drastically affected by the pandemic, and we are doing what we can to support the sector, offering advice, guidance and restructuring, should any institution need that, as I have said. Therefore, it is right that we take this action to revoke the fee limit regulations in relation to student numbers. I commend these regulations to your Lordships.

Motion agreed.