Higher Education and Research Bill

Baroness Brown of Cambridge Excerpts

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

Moved by

[Baroness Brown of Cambridge]

364: Schedule 5, page 85, line 14, at end insert—
“( ) the suspected breach may constitute fraud, or concerns serious or wilful mismanagement of public funds,”

[Baroness Brown of Cambridge (CB)]

My Lords, this amendment stands in my name and that of my noble friend Lady Wolf. It would limit the powers of entry and search to suspected breaches of registration concerning fraud and serious financial mismanagement of public funds. The relationship between the Office for Students and registered providers is basically a civil one, and indeed in many areas a supportive one, and criminal proceedings such as search and entry should clearly be used only in cases of very serious misconduct, as specified in the amendment.

I recognise that paragraph 1(3)(b) of Schedule 5 says that,

“the suspected breach is sufficiently serious to justify entering the premises”,

and I am sure that the intent is that powers of entry would be used only in exceptional circumstances. However, this part of the Bill has been described by the sector as draconian, and the amendment, in effectively defining what constitutes “sufficiently serious” breaches, would provide considerable reassurance to the sector. I beg to move.

[Baroness Goldie]

My Lords, I thank the noble Baroness for her contribution. Clause 56 and Schedule 5 as drafted will ensure that the Office for Students and the Secretary of State have the powers needed to investigate effectively if there are grounds to suspect serious breaches of funding or registration conditions at higher education providers. The amendment recognises that these powers are necessary where there are suspicions of fraud, or serious or wilful mismanagement of public funds.

As the noble Baroness indicated, we would expect the majority of cases where these powers would be used to fall into this category, but limiting the powers to this category would risk compromising our ability to investigate effectively certain other cases where value for public money, quality, or the student interest is at risk.

The OfS may, at the time of an institution’s registration or later, impose a “specific registration” condition. This is a key part of our risk-based regulatory framework. For example, an institution with high drop-out and low qualification rates could have a student number control imposed by the OfS if it considered that this poor level of performance was related to recruiting more students than the institution could properly cater for.

A breach of such a condition may not constitute fraud, or serious or wilful mismanagement of public money, as students will still be eligible to access student support. But there is a very real risk that students, quality, and value for public money will all suffer. If the OfS has reason to believe that despite, for example, the imposition of a condition that limits the numbers of students a provider can recruit the provider is nevertheless undertaking an aggressive student enrolment campaign, it will be important that evidence can be swiftly secured to confirm this. If the proposed amendment were made, a warrant to enter and search may not be granted in such cases. That would be an unfortunate and perhaps unintended deficiency in these important powers. I therefore ask the noble Baroness to withdraw Amendment 364.

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[Baroness Goldie]

My Lords, I totally defer to my noble and learned friend on these matters. I do not have the technical information that he seeks, but I undertake to write to him.

[Baroness Brown of Cambridge]

I thank the Minister for her detailed reply. I am not sure I understand what the grounds for search and entry in the case of a risk to quality might be. Indeed, as an engineer not a lawyer, I feel that taking a large number of students who you had been told you could not take when they were supported by government loans could count as wilful mismanagement of public funds, but I am sure others have a better understanding than I have.

However, when there is time, I ask the Minister to reflect that some of the clauses in the Bill seem rather draconian powers for a regulator whose general tone is about supporting the system to prosper and grow. But at this point, I beg leave to withdraw the amendment.

Amendment 364 withdrawn.

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[Lord Mackay of Clashfern]

I think that I am right in saying that some years ago it was decided that a statutory authority did not have power to charge fees unless it was expressly conferred on the body in question. As the noble Baroness said, this is the authority for this fee, so it is exceedingly important that we see that the authority is limited to what it ought to refer to. How exactly it should be dealt with in relation to unconnected matters strikes me as a little strange. I cannot see exactly why something completely unconnected should be regarded as something on which you can reasonably charge other people—taxpayers, or people applying for help.

The noble Lord, Lord Watson of Invergowrie, said that there was no reference to employees in this Bill, but I found one—and I found it a little unsatisfactory, and tabled an amendment to deal with it, Amendment 492. In a moment of reflection, he may see it and come to my help.

[Baroness Brown of Cambridge]

My Lords, I remind the Committee that the people who will pay these fees that the regulator is charging will be the students. Therefore, we very much need to make sure the regulator is charging the absolute minimum it can to perform its duties effectively.

[Lord Willis of Knaresborough (LD)]

My Lords, I shall speak to Amendment 371. I hope that the amendment of the noble Lord, Lord Lucas, will not get lost in this group because what he raises is fundamental to the Bill and to the way we are going to improve the offer we make to students and the veracity with which we look at the higher education sector.

I have written to the Minister on this issue and raised it as a question earlier. I am referring again to the role of HESA and the role of data. Unless you have accurate data with which to interrogate, and unless they are consistent across all providers, quite frankly, they are pretty useless. At the moment, it is not simply that you cannot get at some of HESA’s data. I gave the Minister an example just this week. You cannot get the data because HESA simply says, “Different institutions collect them in different ways”. That is a brilliant cop-out for saying, “We can’t let you have it”.

The other cop-out, which occurs quite frequently, is to say that data are sensitive to the universities because they own them, and therefore could be damaging to their reputation. If we are to give students the sort of offer they rightly should have, and if we are to give taxpayers the confidence they rightly should have, data should not be hidden. Data are absolutely key to delivering a higher education system of the highest possible quality which will maintain the high quality we already have in the future. I urge the Minister, in reference to Amendment 371, to reflect on how we are to ensure that data are not just left to HESA, but that the Office for Students has powers to ensure their consistency and effectiveness to be interrogated.

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Moved by

[Baroness Brown of Cambridge]

420: Clause 64, page 40, line 26, leave out subsection (3) and insert—
“( ) The regulations may not provide for the fees to be calculated except by reference to costs incurred, or to be incurred, by the OfS in the performance of its functions connected with the institution in question.”

[Baroness Brown of Cambridge]

My Lords, in moving Amendment 420, which is in my name and that of my noble friend Lady Wolf, I will also speak to Amendments 421 and 421A in my noble friend’s absence.

These amendments bring us back to the discussion we had previously about the costs and charges of the OfS. The purpose of the amendments is to probe the issue of who will act to control the costs and charges of the regulator—the Office for Students. Higher education providers will pay these charges, and hence students, at the end of the day, will have to bear them. The OfS is referred to frequently as a regulator by Ministers and others talking about the Bill, but nowhere is it clear in the Bill whether or not the OfS will have to sign up to the Regulators’ Code, published by the Department for Business, Innovation and Skills in 2014. If it was clear that the OfS was covered by the code, it would provide some of the reassurance sought in a number of amendments to the Bill.

The code for example requires that regulators must consider how they can best minimise the,

“costs of compliance for those they regulate”—

the issue behind some of these amendments. They also,

“should avoid imposing unnecessary regulatory burdens”,

and,

“should carry out their activities in a way that supports those they regulate to comply and grow”.

As your Lordships can hear, the language of the Regulators’ Code is both clear and supportive. Can the Minister provide assurance that the OfS will sign up to the Regulators’ Code? It would be helpful in providing clarity and reassurance to the sector. I beg to move.

[Lord Lucas]

My Lords, I am greatly in sympathy with what the noble Baroness has just said. I very much hope that universities will carry those principles through into their current practice of taking lots of money off students who are studying humanities in order to give it to students who are studying sciences. The little bits of money being unfairly taken off students to fund the OfS are not a very substantial worry in proportion to what universities are already doing to students on different classes of course.

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It is the Government’s intention that these reforms should further strengthen the overall quality and diversity of our world-class HE sector. This is in the student interest and certainly in the interest of all providers. Sharing the costs of regulation between the Government and the sector is a more sustainable approach common to other regulators. It creates a strong incentive for providers to hold the regulator to account for its efficiency, and that efficiency is further assured by explicit safeguards in the Bill. The Government are absolutely committed to developing a charging system that is fair and proportionate, which is why we are consulting on this very issue. In these circumstances, having regard to my remarks, I ask the noble Baroness to withdraw Amendment 420.

[Baroness Brown of Cambridge]

My Lords, I thank the Minister for her detailed reply and her very strong assurances in this area. I thank noble Lords who have contributed to the debate. As the noble Baroness, Lady Wolf, said, a healthy relationship between the regulator and the sector will be hugely important to success. The assurances that the Minister has given us, and indeed her agreement to look further into whether the OfS should sign up to the Regulators’ Code, are extremely helpful. Again, speaking as an engineer and a former vice-chancellor, I think the language of the Bill is sometimes quite hard for a novice reader to understand. The language of the Regulators’ Code is excellent; it is clear and simple and is about building an effective relationship between the regulator and the regulated. It would be a real assurance for the sector if the Government looked hard at the OfS signing up to it. I thank the Minister for her reassuring response, and beg leave to withdraw the amendment.

Amendment 420 withdrawn.

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Moved by

[Baroness Brown of Cambridge]

429: After Clause 69, insert the following new Clause—
“Transfer of regulatory functions relating to higher education providers and students from Competition and Markets Authority to Office for Students
On the establishment of the OfS—(a) the OfS assumes responsibility for the regulatory functions in respect of higher education providers and students enrolled on higher education courses hitherto performed by the Competition and Markets Authority; and(b) the Competition and Markets Authority ceases to have responsibility for those regulatory functions.”

[Baroness Brown of Cambridge]

My Lords, Amendment 429 is in my name and that of the noble Baroness, Lady Wolf. This is a probing amendment to investigate the relationship between the two higher education regulators—the Office for Students and the Competition and Markets Authority. The perception of overlap between the two regulators, the potential for conflicting advice and requirements, and the perception of the difficulty of collaboration under Competition and Markets Authority regulation are all issues causing concern in the sector. As an aside, this is part of the reason behind our desire for the OfS to promote both competition and collaboration.

I ask the Minister: would it not be possible for the sector to work with a single regulator, the OfS? If this cannot be the case, will she explain how the two regulators will work together with the sector to ensure they support,

“those they regulate to comply and grow”,

as the Regulators’ Code says? I beg to move.

[Baroness Wolf of Dulwich]

My Lords, I strongly support what my noble friend Lady Brown said. Up until now, higher education has been fortunate in that it has had relatively few different regulatory authorities. The OfS will be quite different from anything that we have had before.

I refer to other sectors. I personally know the social care sector quite well. Those of us who have worked with or in this sector or the health sector, for example, know that, when you have more than one regulator, if they overlap or if it is not really clear who is responsible for what, you get regulatory and expenditure creep. This is not necessarily what the regulators mean—at least, not at the top level—but it is very much the experience that one has. The noble Lord, Lord Willetts, referred to this earlier in our deliberations. He talked about the problems that you could have in the health sector as a result of Monitor thinking that bringing institutions together was not a good idea when other people thought it was.

This is a probing amendment to ask for clarity, if not total simplicity, because there are very real costs when a sector does not have it.

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I turn now to the enforcement of consumer protection law carried out by the CMA and other such enforcers such as trading standards. Students can have consumer rights and, as such, are protected under law. As outlined in our White Paper, we want the OfS to be a consumer-focused market regulator putting students’ interests at its heart. This includes looking after their consumer rights, ensuring the right information is available for them at the right time and making sure they have a route of redress should something go wrong. Compliance with consumer law is important not only in protecting students, but in maintaining student and public confidence in the higher education sector. I know that higher education institutes have been working hard on meeting their consumer rights obligations. I remind noble Lords that the CMA operates extremely effectively alongside a wide range of sector regulators such as Ofcom, Ofgem and Ofwat. I am grateful for the continued involvement of the CMA in preparatory work to establish the OfS. Its experience is valued tremendously. With that short explanation I invite the noble Baroness, Lady Wolf, to withdraw her amendment.

[Baroness Brown of Cambridge]

I thank the Minister for his explanation and the further detail he supplied. I would be interested to know whether there is any thought that there might be an MoU between the regulators. I also ask him to encourage the CMA to produce some advice for universities in simple language to explain its role and how it works alongside the OfS. I very much hope that we will hear more about a potential MoU and, in the light of his detailed explanation, I beg leave to withdraw the amendment.

Amendment 429 withdrawn.

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[Baroness Smith of Newnham (LD)]

My Lords, I declare my interests as someone employed at the University of Cambridge. One of my roles is as co-director of the Master of Studies programme, which brings in international students on a regular basis. They come not for a year or two at a time but for temporary periods, yet they have to go through the whole visa regime, which is long and complicated. One of the things that is so difficult in higher education and recruitment is that over the years UKBA has made it so difficult for students to come here. The procedures are lengthy and time-consuming, and very often are done out of country. Yesterday I talked to one of my tutees who said that from Kazakhstan she has to apply for a visa in the Philippines—not necessarily the most obvious thing to have to do.

In many ways, part-time students have an easier time than full-time students because most of them have full-time employment so can fulfil visa requirements quite easily. However, as the noble Lord, Lord Hannay, said in his opening remarks, there is something very strange about treating international students as economic migrants. Normally we think of economic migrants as people coming to work and taking jobs. That may be a good thing or it may be bad, but it is very specific. International students are paying fees. They are contributing to the local economy, contributing jobs and making a real difference. Yet time and again, usually led by the Home Office, we get decisions that make it harder for us to recruit international students.

I was going to refer to “global Britain” but the noble Lord, Lord Patten, has already mentioned it. So I will not go much further, except to say that there seems to be something very odd when a Government who are saying, “We want to make a success of Brexit and are looking for international opportunities”, do not see international students as a major opportunity.

Should the Government not be thinking of the situation for EU students? The noble Baroness, Lady Royall, has already mentioned them. At present EU students are treated as home students. Presumably on the day we leave—we keep being told that nothing changes until that day—EU students become international students. Are they then going to become part of our immigration target? Are we then going to say that EU students appear even less welcome than students have traditionally done? What are we saying? What sort of message is going to be given? What opportunity can we as Members of your Lordships’ House offer to assist the Government and the Minister of State in getting the rules changed?

In a Question for Short Debate a few weeks ago, the noble Lord, Lord Lucas, asked, “What is the problem?”. In the past, under the coalition Government, the problem appeared to be the then Home Secretary, who was not very keen to liberalise international student numbers. That former Home Secretary is of course now the Prime Minister, and she does not seem to have changed her mind.

The noble Lord, Lord Hannay, referred to all corners of this House supporting the amendment. When I made my maiden speech, I was sitting exactly where the noble Lord is sitting now. I spoke on European matters and said I looked forward to working on them with Members from all parts of your Lordships’ House. All parts of your Lordships’ House appear to be in agreement on this amendment, with one exception: some Members on Her Majesty’s Front Bench. Can we find a way of persuading the Government to accept this amendment, take international students out of the immigration figures and accept that international students are an export and are not about economic immigration?

[Baroness Brown of Cambridge]

My Lords, we have heard about the importance of international students in the context of soft power and global Britain. I want to talk about the importance of international students from my perspective as an engineer. They are crucial to the delivery of our industrial strategy and to the UK being able to develop the STEM skills that it will need to deliver that strategy.

When I was principal of the engineering faculty at Imperial College, many of my engineering courses had more than 50% overseas students. Those students were not taking the places of UK students; they were providing the additional fee income that enabled Imperial College to provide the outstanding facilities to train UK students in key engineering disciplines. Some of those courses would not have been sustainable without the income from our overseas students. The noble Lord, Lord Lucas, has highlighted to us a number of times that universities have used additional funding that they now get for arts students in order to subsidise the high-cost subjects.

An outstanding institution such as Cranfield, for example, relies on overseas students to run the wide range of industry-focused Master’s programmes that are of huge benefit to UK industry. Again, those programmes would not be sustainable without the higher levels of overseas student fees that they can charge. These overseas students are critical to enabling us to maintain the quality of engineering education in our universities that will enable us to ensure that UK students can develop the STEM skills that we will need in future.

[Lord Rees of Ludlow (CB)]

My Lords, I support the amendment. I do not have much to add to the eloquent comments that have been made by the noble Lord, Lord Hannay, and other speakers. I would like to express bafflement that we are still banging on about this issue, which surely has been a compelling argument for more than two years. In the time of the coalition there was already discussion about this but the Government resisted, although there was clearly support for this within BIS.

It is clear that what is happening is an own goal in a number of ways. We need these students in our universities for academic reasons, to sustain specialised courses, to maintain academic quality and to make friends in the long term. It is a matter of perception as well as reality. The reason why the numbers from India plummeted more than from China was that the Indian press were able to present the message that students were not welcome any more in the UK. So perception is very important. We will lose a great deal of soft power in the long run if we maintain this perception. The present Government’s policy is baffling, not only to many of us on the Cross Benches, but to many people within the Government and on the Conservative Benches. George Osborne expressed concern about this, and other Ministers have too.

There is the separate issue of whether we should be more liberal in allowing graduates with talent to stay in this country. Our policy has been strongly attacked by James Dyson, one of our leading entrepreneurs, who presented a report for the Conservative Government.

On all these grounds, I support this amendment and renew my bafflement that it is—at least up till now—meeting so much resistance from the Government. I hope that there will be a change of view and a realisation that it is an own goal to sustain this policy.

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Moved by

[Baroness Brown of Cambridge]

470: Schedule 8, page 96, line 3, at end insert—
“(4) The Secretary of State may by order provide for a research institution which offers research degrees accredited by a higher education institution to become a higher education corporation.”

[Baroness Brown of Cambridge]

My Lords, noble Lords will be glad to hear that I will move Amendment 470 in my name and that of my noble friend Lady Wolf as quickly as possible. This is a probing amendment with a simple purpose. We have many distinguished research institutions with long track records of PhD students receiving excellent support. However, some of these institutions are not able to award their own research degrees but have to do this through university collaborators. Examples, I believe, include the John Innes Centre and Rothamsted Research for plant sciences, and Pirbright Institute and the Moredun Institute for animal diseases.

The purpose of the amendment is to ask the Minister to think about whether there is an appropriate route to offer these institutions a path to research-degree awarding powers, should they wish to obtain them. There is a very strong focus in the Bill, understandably, on what is required for new institutions to get taught-degree awarding powers. These institutions come into a very different category. They are typically smaller and with smaller numbers of research students. Will the Minister be happy to think about whether there is an appropriate route to research-degree awarding powers for these institutions? I look forward to hearing the Minister’s thoughts. I beg to move.

[Lord Watson of Invergowrie]

My Lords, Amendment 471 in this group is in my name. It seeks to remove part of new Section 123B on supplementary powers of a higher education corporation in England:

“A … corporation in England has power to do anything which appears to the corporation to be necessary or expedient for the purpose of, or in connection with, the exercise of any of their principal powers”.


We want to withdraw this because we do not see why it should be necessary. It seems almost nonsensical. It is completely open ended. It would be interesting for the Minister to tell us to what he thinks it refers or might refer. I feel like coming out with a list of ridiculous examples of things that a corporation might choose to do that may be within the law and indeed within the exercise of its principal powers. I am not going to do that but just in the last few minutes we have had a couple of examples. What if a corporation decided to turn a blind eye to the sort of activities that the noble Lord, Lord Storey, outlined in terms of plagiarism and so on? What if a corporation thought, “Well, that helps our pass rates”? It is not illegal as yet—I hope it will be. In the amendment the noble Baroness, Lady Deech, just spoke to about free speech, the corporation could take action or not which may be seen to be offensive by students, staff or the public where the university or college was situated. I say to the Minister: what is this about? Why is it necessary and really should it not be deleted?

[Viscount Younger of Leckie]

The noble Lord has set me a task. I will keep my response suitably short, given the lateness of the hour. The Bill amends the Education Reform Act 1988 to deregulate the prescriptive statutory requirements that apply to higher education corporations in England, while ensuring that the route for FECs to achieve HEC status is kept open. The noble Baronesses, Lady Wolf and Lady Brown, suggested that research institutes should be given a similar legislative route. However, dozens of collaborative relationships exist between universities and research institutes across the country and they do not agree that these relationships are a shortcoming. For example, one such institute, the Laboratory of Molecular Biology, says on its website:

“This relationship, between the LMB and the University of Cambridge, gives our graduate students membership of two of the world’s leading research institutions”.


Further, there is no legislative barrier in this Bill that would, in principle, prevent an institution that provides supervised programmes of research embarking on the process of achieving registered higher education provider status, and ultimately seeking to gain its own degree-awarding powers, if it wished to do so and could meet the applicable requirements.

I turn to Amendment 471, spoken to by the noble Lord, Lord Watson. I begin by offering reassurance that these provisions are not new and nor do they allow a HEC to do whatever it pleases. The provision’s wording is the same as that already contained within existing legislation on HECs—specifically, Section 124(2) of the 1988 Act.

All the Bill does is remove the list of ways this power to do what is necessary or expedient can be exercised. This might include, for example, the power to supply goods and services, to enter contracts, or to acquire land or property. This list is detailed and non-exhaustive, and setting out specific powers in this way is perceived as outdated and unnecessarily restrictive. As a consequence, there is a risk that it stifles innovation and growth and slows down institutional change. It is also inconsistent with the Government’s commitment to establish a more level playing field in higher education.

We want to allow HECs the power to do anything that is necessary or expedient to further their objects, as many of their counterparts established under different corporate forms can do. For example, higher education institutions that are incorporated as companies under the Companies Act 2006 do not have their specific powers listed in legislation in this way.

I wish to reassure noble Lords that this will not give HECs an unfettered ability to do anything. A HEC’s powers must be permitted by law and exercised in furtherance of its objects. We also understand that HECs may wish to explicitly specify some or all of their powers, and they will be able to do this in their articles of government.

With that short explanation, I hope that the noble Baroness will withdraw her Amendment 470.

[Baroness Brown of Cambridge]

I thank the Minister for his response. I am disappointed that he does not recognise that the content of the Bill is somewhat heavyweight for the kinds of institutions with existing track records to which I was referring. However, in the light of his explanation, I am happy to beg leave to withdraw the amendment.

Amendment 470 withdrawn.