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

Emma Hardy Excerpts

Wednesday 1st July 2020 General Committees

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

Briefly, I thank the higher education sector for its incredible work throughout the covid-19 pandemic on research, providing students for the frontline and creating personal protective equipment, while rapidly switching to online provision, supporting students and meeting the greatly increased demands on hardship funds and welfare services. It has done an incredible job.

The expected fall in the number of international students has led to a predicted loss of up to £2.5 billion, and the Office for Budget Responsibility identified higher education as the sector most likely to take the hardest hit from the crisis. That led to calls for some form of student recruitment controls from English universities alarmed at the news of a dramatic increase in the number of unconditional offers being given out by a handful of institutions.

The calls for a cap were formalised in the Universities UK sector-wide support proposals “Achieving stability in higher education sector following Covid-19”. Labour supports the principle of the cap. Indeed, evidence was emerging that aggressive recruitment was beginning to occur. However, we have concerns about the implementation and criteria for setting the cap in the regulations, so we seek reassurances and clarification from the Minister on a number of points.

The UUK proposals were for English universities only; there had been no call from anyone in the sector for an extension of the cap on English domiciled students to Welsh, Scottish or Northern Irish universities. Will the Minister outline what actions the UK Government are taking to prevent further changes to student number controls being imposed on Welsh and Scottish universities without adequate consultation? What discussions occurred before the laying of these regulations?

The calculation of student number controls is not equitable across the nations. In the case of English institutions, the data used for setting the SNC—we are all fine with that acronym—come from the higher education students early statistics survey for 2019-20, and the base growth rate for each university was derived from forecasts submitted by English providers to the Office for National Statistics as part of their annual financial returns. However, such individual forecasts were not available for Welsh, Scottish or Northern Irish institutions. Instead, their base growth rate was set at 1.5% across the board, with the figure derived from an average of the HESES19 data provided to the Office for Students by English universities. I know of no justification for using data for English universities to set limits for those from Wales, Scotland and Northern Ireland apart from no other data being available. Will the Minister clarify whether any attempts have been made to establish direct equivalence or to make adjustments that might be necessary?

This year, covid-19 delayed student recruitment activity across the sector, so UCAS extended the usual May offer deadlines so that students and institutions alike had a little more time to respond. There are concerns that, having not waited for the UCAS deadline—the point at which universities make offer decisions and applicants make choices—the safeguard algorithm for the SNC has created an unfair admissions process for students who might take longer to make their decisions. Statistically, such students are disproportionately from widening participation backgrounds. Will the Minister reassure us that her Department will analyse the impact of the SNC on students from widening participation backgrounds and take any mitigating steps needed?

The proposed penalties for exceeding the SNC for institutions are incremental reductions in the maximum allowed fee level on all entrants in the following year. An over-recruitment of English domiciled students of between 0% and 6% results in a 3% reduction, over-recruitment by 6% to 12% results in a 9% reduction, and over-recruitment by more than 12% results in a 15% reduction in the maximum fee level in England or the loan amount in Scotland, Wales and Northern Ireland for 2021-22.

The draft explanatory memorandum accompanying the legislation states:

“An Impact Assessment has not been prepared for this instrument because, while the fee reductions are judged to have a financial impact on those higher education providers that exceed their SNC, the direct effects of the instrument will last for less than 12 months.”

That is a little surprising. Will the Minister explain what consideration has been given on the effects of SNC on student growth in 2021? The proposed sanction of a cut in maximum fees makes the affected institution a cheaper option for students in 2021, and it should be remembered that the cost of additional students is affected by scale—that is to say, the cost of 100 students is not necessarily twice that of 50 students; there are economies of scale to be made. In fact, recent analysis showed that certain institutions could deliberately over-recruit this year and still come out of the process ahead financially. Those in the study who potentially stand to gain by breaking the cap are large providers with sizeable international recruitment in a normal year who have experienced year-on-year growth in English domiciled recruitment in the past few years. Can the Minister give a detailed justification for choosing this method of tuition fee reduction as a sanction for exceeding the SNC? What understanding does she have of the effect of the proposed sanctions, and how can she ensure that the right levels are fixed to act as an effective deterrent?

Although this is beyond the scope of the SI and is not mentioned in the draft explanatory memorandum, it should be noted that the OFS has had the power to levy sanctions on institutions not acting in the best interest of the sector since it was formed. What conversations has the Minister had with the OFS to ensure the proposed deterrent works, if she is allowed to reveal them?

The original calls for SNCs came from English universities only, so I would like to hear from the Minister a meaningful justification for their extension to Wales, Scotland and Northern Ireland. I note with concern the possible unintended consequences of the SNCs as applied, damaging the opportunities of children from disadvantaged backgrounds through their effect on widening participation, and would like the Minister to assure us that those unintended consequences will be analysed and mitigations made. Similarly, I note the possible opportunities for some institutions to game the SNCs to their advantage, to the detriment of others, and invite the Minister to explain how she will ensure that this does not happen. The SNCs called for by the sector were to be temporary and limited to this year only, so I ask the Minister to reiterate that this will remain the case.