Higher Education and Research Bill

Baroness O'Neill of Bengarve Excerpts

Committee: 3rd sitting (Hansard): House of Lords
Monday 16th January 2017 Lords Chamber

[Lord Judge (CB)]

My Lords, I support what has just been said by the noble Lord, Lord Norton, and draw attention to my own interests in the register. We have a perfectly clear piece of legislation in Clause 2(1), in which Parliament tells the OfS what it must do and what it must have regard to. We then have the creation in Clause 2(2) to Clause 2(6) of guidance which has absolutely no parliamentary scrutiny, whether before or after the Secretary of State chooses to issue that guidance. It looks like legislation, because it is contained in Clause 2, but it is not legislation and it should be.

There is a remarkably strange feature if we turn 44 pages onwards to Clause 71, where we have the power granted to the Secretary of State to give directions. Of course, that is going to be a necessary ingredient of the Bill. The strange thing about it is that in the directions, Clause 71(2) is in identical terms to the guidance authorisation in Clause 2(3); Clause 71(3) replicates Clause 2(4); and Clause 71(4) replicates Clause 2(5). In other words, there are identical provisions in these two clauses: one creates the power in the Secretary of State to give guidance, the other gives the Secretary of State, after Parliament has agreed, the power to issue directions.

As far as I can see, there is no indication about the criteria which should be applied as to whether a particular directive by the Secretary of State should be treated as guidance or legislation. The fact of the matter is that there is now going to be power to give guidance with no statutory scrutiny and power or authority to give directions which will be subject to statutory scrutiny. There is no logical reason why we should have such an absurd situation. The amendment proposes simply that the guidance should be brought before the House at some stage in the process so that the House can have a look at it. We should have a chance to consider guidance issued by the department in this influential new arrangement.

[Baroness O'Neill of Bengarve (CB)]

I support the amendment. I think there are wider reasons for feeling that not everything can be well done by guidance. Among other things, guidance sits there in the cupboard, so to speak, and there is no reason for the Executive or Parliament to review it until somebody is tripped up in an unfortunate way.

Guidance seeks a sharper definition between what may and may not be done—between compliance and infraction—than is probably feasible. There is much to be said for a somewhat more formal procedure that will make it clear what has parliamentary backing, because it is a statutory instrument, and what does not. Excessive reliance on guidance would weaken the structure of the Bill and create a degree of persisting uncertainty. People are frequently being tripped up by guidance of which they have never heard which lives in an obscure place. That is unnecessary.

[Lord Willetts (Con)]

My Lords, perhaps I may briefly comment on these amendments by looking at them from the perspective of how the old system has functioned. We have been told about the powers of the OfS, and your Lordships are scrutinising those very carefully. I think that perhaps the powers of the old HEFCE have been understated. In reality, HEFCE was not only the funder but was using its funding power to be the regulator—a highly discretionary regulator that operated with very little transparency and few constraints.

HEFCE was the extremely successful buffer body between government and universities, and the Government communicated with HEFCE notably through the grant letter—and the grant letter, I suspect, is the origins of the guidance provision in front of us today. The grant letter is the way in which the Government have historically set out their policy, week by week, year by year, for universities, and so, for example, it has been historically possible for the Minister for Universities to go to the Chancellor and say, “High-cost subjects are not being sufficiently funded. We do not think that the extra costs of doing them are properly reflected in the higher cost bands. Will it be possible to have extra funding attached to that?”—and then in the grant letter to suggest to HEFCE, “In the light of the funding we have available, it would be excellent if HEFCE were able to identify and set aside more funding for high-cost subjects”. Indeed, I used to write such grant letters with my excellent former colleague Sir Vince Cable.

What is happening—this goes back to discussions we had last week—is that as we are now moving from that old discretionary high-trust system to a new rule-bound system with a regulatory function, quite understandably your Lordships, at each stage of the process, are trying to pin down what kind of decisions will be taken and how they will be taken. I think that a power to give guidance distinct from a power to give instructions, and a reasonable amount of flexibility for Ministers to use it so that they can communicate the same kind of messages that they used to in the old HEFCE letter, is in the interests of the sector as a whole.

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[Baroness Watkins of Tavistock (CB)]

My Lords, I draw attention to my interests, as declared in the register.

I support the amendment, to which I have added my name. As the noble Baroness, Lady Garden, has already pointed out, the majority of higher education will be undertaken in traditional higher education institutions, including further education colleges. Those institutions are accountable for innovative, appropriate curriculum design, as outlined earlier by my noble friend Lady Brown. It is appropriate that curriculum design includes enabling students to have degrees awarded when a proportion of their programme is either with employers or on placements. In health, for example, students need to learn in hospitals and communities, and some very innovative new approaches in higher education are associated with degree-level apprenticeships. At the University of Exeter there is an ambitious approach to the new degree-level apprenticeship schemes, which involve working with employers and their staff. The first of these programmes commenced in September 2016—a BSc honours in digital and technology solutions. It involves working with four employers, including IBM.

A degree-level apprenticeship offers a new route to achieving a university degree in collaboration with employers. Apprentices are full-time, paid employees of the business partner, but a proportion of the student’s time is spent participating in a programme, using blended learning, residential teaching blocks and assessed projects and placements.

Therefore, it is imperative that we are clear in the Bill about the definition of higher education and that we recognise that, whether it is in health or industry, part of students’ higher education experience is increasingly in a workplace. Amendment 72 would encompass, and make provision for, this approach through the definition that it provides, thus strengthening the Bill at this point.

[Baroness O'Neill of Bengarve]

My Lords, when the Minister replies, can she clarify a key term of the Bill—namely, the English higher education provider? I think we all understand—and this clause makes it very explicit—that we expect a diversity of institutions to provide higher education in England. What is unclear to me is whether English higher education providers have to be incorporated under English law. May they, for example, be incorporated under the law of the Cayman Islands? If they are for-profit organisations, may they pay their taxes—if any—there? It would be clarifying to know whether English higher education providers are to be incorporated under English law.

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It is only fair that when we make laws in Parliament and impose important obligations on bodies, they are very clear as to their extent. There is a real concern that what we have here can lead to confusion. Although there is a considerable overlap here, it does not go as far as the Equality Act 2010. I think it would be regrettable—I hope it is not the Government’s intention—if the obligations of the 2010 Act were diluted in any way for higher education institutions. I beg to move.

[Baroness O'Neill of Bengarve]

My Lords, we need to clarify a point that I have raised a couple of times already, which is whether English higher education providers are indeed public sector bodies and therefore fall under the 2010 Equality Act. I speak as a former chair of the Equality and Human Rights Commission. That legislation, which I think is better than it is usually given credit for, is very clear that it applies to public sector bodies. We do not yet know whether the definition of an English higher education provider in the Bill means a higher education provider that is a public sector body or even whether it has to be incorporated under the laws of England.

I suspect that there will be many overseas higher education providers which are extremely tempted by the high prestige, the system and the fact that students here are entitled to student loans, to seek to become higher education providers in England without being incorporated under English law and certainly without being public sector bodies, as the 2010 Act would require them to be to fall under this legislation.

Even were we talking only about a subset of English higher education providers that are incorporated under English law and that are going to fall under that Act, I am not sure that we would want all nine protected characteristics to carry the same weight. In particular, one has to think extremely carefully about age. It is not, of course, right to discriminate against people on the ground of their age, but to refer to disproportionality in the age distribution of a student body of an institution might seem ludicrous in view of the fact that, on the whole, people seek their higher education before they seek their careers.

There may be other difficulties here. I suspect that many people discussing equality fail to note that the 2010 Act sets out “due regard” duties. Those duties are met providing someone has due regard to the different characteristics at the point of making a decision. That seems to me to be correct, but it has no read-across to the question of proportionality and disproportionality, although that is a common misunderstanding. Perhaps we need not worry about the obvious implications of thinking that the proportionality would be an important consideration in these matters in that the fact—they are now facts—that more young women than young men go on to higher education in the UK and in England and that poor white boys and poor boys in particular, but not other ethnic minority students, are less likely to go on. It is quite surprising when one looks at the profile of different groups going on to higher education. I suspect that this is something that we need to untangle before we go any further.

[Lord Willetts]

My Lords, that fascinating intervention gets to the heart of the direction of travel that is being debated in many different amendments this afternoon.

My understanding—I am sure the Minister will correct me if I am wrong—is that universities and higher education institutions are not public sector bodies. Nevertheless, in a range of different contexts, Parliament has decided to impose on them the obligations they would have if they were. The public sector equality duty could be one example. Freedom of information is another example. My concern—here I am a bit of a purist—is that universities are not part of the public sector and it is quite important for universities that they are not. If I were running a university—which I am not—I would start feeling two kinds of pressures on me. On the one hand, a significant number of Members of this House and elsewhere want to treat universities as if they are public bodies, so that whenever there is a nice public sector duty around they say, “Let us add it to universities although they are not part of the public sector”. Both FoI and public sector equality are examples. On the other hand, at the same time the Government—and this process goes back before 2010—are saying, “There is a private contractual obligation to deliver a service to a student so really they have got to be subject to competition law and the CMA and so on”. They end up being subject to a pincer movement, where they have got all the private obligations as if they were a company that needs to be competing, plus we throw in all the public obligations as if they were in the public sector when they are not.

The dynamic of these debates begins by saying we must do more to preserve the autonomy of universities and then spend the rest of the time adding extra obligations we would like them to comply with. If at the end of the legal process of preparing what will become an Act of Parliament we have ended up with more obligations on the universities, making them subject to the CMA, and more public sector duties despite them not being in the public sector, we will leave universities even more burdened than they are at the moment. We require some self-denying ordinance so that we do not keep piling more obligations on them. We have already imposed on them a range of obligations that go way beyond what any other private body is susceptible to. At some point there is a danger that universities will end up in the public sector. There is a danger that we all talk about them as if they are part of the public sector and treat them as if they are hospitals, schools and so on. They are not. They are independent bodies outside the public sector and we should be wary of imposing obligations on them as if they are inside, especially when we are in parallel and subject to greater market competition as well.