Higher Education and Research Bill

Liam Byrne Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Tuesday 19th July 2016 Commons Chamber

[Justine Greening]

The hon. Gentleman raises an important point. The real-terms ability of the maximum fee to keep up with inflation is enabling £12 billion of investment to get into higher education over the coming years. It is critical to make sure that students get value from the investment that they make in themselves and that teaching is of high quality. That is why the teaching excellence framework is such an important part of the Bill.

The proposed office for students is another part of the Bill that clearly shows that we are putting students at the heart of our higher education policy, as they should be. The creation of an office for students, which will be the principal regulator for higher education, will put students’ interests at the heart of regulation. It will have a legal duty requiring it to consider choice and the interests of students, employers and taxpayers, and it will look across higher education as a whole, with responsibility for monitoring financial stability, efficiency and the overall health of the sector.

The current system was designed for an era of direct Government funding of higher education when fewer people attended university. Higher education attendance is no longer a privilege of the elite. We lifted the limit on student numbers, meaning that more people than ever before have been able to benefit from a university education. The legislative framework needs to reflect that.

The office for students will create a new single register of higher education providers, replacing the current fragmented system and ensuring a single route into the sector. The simpler system means that this Bill will reduce regulatory costs on the sector and contribute to this Government’s deregulatory agenda. It also ensures that the requirements are clear and fair. Only those on the single register will be able to obtain degree-awarding powers, become universities or charge fees that attract student loans. Those providers will have to comply with conditions relating to, for example, their financial stability and the quality of their provision. The office for students will have powers to impose additional conditions—for instance, around access and participation for students from disadvantaged backgrounds—on fee-capped providers that wish their students to be able to access student support.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

Let me join in the congratulations to the Secretary of State on her appointment. Why is there no duty on the new office for students to promote collaboration? The crisis that we confront in this country is around technical education, not higher education. If we want to grow the number of students on level 5 apprenticeships, we need to transform the level of integration and collaboration that exists between further education and higher education. Why is that dual-track system not being encouraged by placing a duty to collaborate at the heart of the office for students?

[Justine Greening]

I take the right hon. Gentleman’s point, which is an important one. I want universities to continue to work hard on the ground in many of the local communities of which they are part, to encourage a pipeline through which children can come and apply. If the percentage of university students from disadvantaged backgrounds is to rise, that is incredibly important.

The right hon. Gentleman will be interested to know that an element of the Bill tackles collaboration, specifically with UK Research and Innovation, which I will come on to shortly. There will also be time to debate this in the Bill Committee. I absolutely agree with the sentiment that he has expressed, and it is important that universities engage with local communities beyond their own campuses and encourage young people.

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[Justine Greening]

The Bill puts in place the powers that we need to take a more flexible approach to funding. As the hon. Lady says, some students are less likely to want to take out a conventional student loan. We need to respond to that if we are to widen participation, and that is precisely what the Bill does. It will actually achieve the aims she talks about.

We will have transparency, which will require higher education institutions to publish application, offer and progression rates by gender, ethnic background and socioeconomic class. Across all its functions, the office for students will have to take into account the need to promote equality of opportunity across the whole lifecycle for disadvantaged students, not just access.

Academic autonomy is the bedrock of success for our higher education sector. The Bill introduces measures to safeguard the interests of students and taxpayers, while protecting academic freedom and institutional autonomy. It enables the OfS to be independent of Government and the sector, as a regulator should be. It will be an arm’s length non-departmental public body, just as the Higher Education Funding Council for England is now.

The office for students will operate a risk-based approach to regulation by concentrating regulation where it is needed and ensuring the highest standards are maintained across the sector, while reducing the regulatory burden on the best performing institutions. If a university is doing well, it should not have to worry so much about bureaucrats peering over its shoulder.

However, one important aspect of such risk-based regulation will be a more flexible approach to degree-awarding powers. We will move away from the one-size-fits-all approach, which currently requires smaller, specialist institutions to demonstrate that they can award degrees in any subject, and requires new providers—including some of the very best overseas institutions—to spend four years building up a track record in England, irrespective of a long record of excellence elsewhere in the global academic world.

The provision to vary degree-awarding powers will enable specialist institutions to gain such powers only in the subject areas in which they have an interest or a need. It will enable the office for students to give degree-awarding powers on a probationary basis to institutions that can clearly demonstrate their capability and have a credible plan to ensure they meet the full degree-awarding powers criteria after three years. As part of that, the OfS will require clear and robust protections for students when granting probationary degree-awarding powers.

[Liam Byrne]

The Secretary of State is being characteristically generous in giving way. Is it her expectation that many of our great further education colleges that are already providing higher education will be able to acquire their own degree-awarding abilities, in a much more generous way than is currently possible, as a result of this change?

[Justine Greening]

Broadly, the rule that 55% of students need to be studying on degree courses will remain. In the end, however, what we are trying to do more broadly with these changes is to open up the chance for new high-quality institutions to join existing high-quality institutions in our higher education sector in being able to offer degrees.

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[Mr Marsden]

My hon. Friend is absolutely right, and I intend to remedy that as best I can in my remaining remarks.

In the briefing for the Bill, the Office for Fair Access emphasises that it needs to retain the ultimate authority to approve or refuse access agreements. It is timely to emphasise that OfS board members should have expertise around social mobility and fair access. The Bill’s introduction of a transparency duty for higher education applications is positive, but as the Sutton Trust said in May, the Government’s record on improving social mobility is poor. We agree with the National Union of Students that the Government need to create a requirement for an annual participation report.

If we want the office for students to be a genuine office for students, there also needs to be a designated place on the board for a student representative. However, it is not only students who are key stakeholders but people working at all levels in our institutions, and that is why I particularly underline what Unison said about the lack of accountable strategic decision making around employers and students remaining a concern. That is something else that the OFS needs to look at.

We cannot get away from the fact that the student position is nowhere near as rosy as the Government are saying. For 20 years, the official position has been that maintenance support is not meant fully to cover the annual costs of living for full-time students. The loans are supposed to be supplemented by earnings or contributions from family. Too little attention has been paid to the other debts that students contract. The debate around increases to tuition fees is important, but the fundamental problem of sustainability also lies in maintenance support and student cost of living. That is why student dissatisfaction levels are so high and so alarming.

I turn now to the issues around the separation of regulation and funding between teaching at OFS and research at the new UKRI body. GuildHE says that it risks undermining some of the positive interaction between teaching and research. I have already set out the risks that allowing challenger institutions degree-awarding powers from day one could have on the quality of our institutions. The regulation needs to be robust, rather than just proportionate, but as I have emphasised when we debated the Government’s scrapping of student maintenance grants earlier this year, FE colleges are a key driver of social mobility. They deliver more than 10% of all HE courses in this country, often to the most disadvantaged students and often in places with a dearth of stand-alone HE provision and a history of low skills in the local economy. They span the country, from the NCG in the north-east to Cornwall college and my own excellent Blackpool and the Fylde college.

Last year, 33,700 English applicants were awarded maintenance grants for HE courses at FE colleges. One would have thought, therefore, that the Government would have seen them as a key element for expansion as part of their array of challenger institutions, yet hidden away in the annex to the impact assessment for the Bill is the Government’s forecast for the number of FE colleges that will be delivering HE as a result of the Bill. The forecast figure for 2027-28 is exactly the same as that projected for 2018-19, whereas other alternative providers are projected to more than double in number. It is true that the Bill will make it easier for FE colleges to get degree-awarding powers, but what comfort will that bring when systematic cuts to colleges’ ESOL provision, adult skills and other areas have reduced the capacity of FE to participate in HE expansion?

In addition, many key HE programmes on which both FE colleges and modern universities rely could be scrapped if up to £725 million of EU money currently going to local enterprise partnerships is lost—money that produces jobs and skills for them and their communities and on which hundreds of courses and staff depend.

[Liam Byrne]

Would my hon. Friend underline how important this point is? For many of the communities we serve, further education is the critical springboard into higher education. In the great city of Birmingham, we have the grand total of just 100 young people on level 5 apprenticeships. We cannot change that number unless we radically increase the way in which further education and higher education work together. That is why this element of the Bill needs highlighting as so important.

[Mr Marsden]

My right hon. Friend is so right; in his previous position at this Dispatch Box, he championed that position and continues to champion it excellently today.

We and many others, including the Royal Society, have major concerns about the merger of the science councils and the consequent tensions between the new UK model, English models and the devolved Administrations. It is an issue that seems to unite many people across the piece, whether it be the former President of the Royal Society, Sir Martin Rees, who has said that the plans were “needlessly drastic”; the Academy of Social Sciences, which fears that it will lose autonomy and weaken communication with academics over future research planning; or Paul Nightingale of the Science Policy Research Unit, who said that it was doubtful whether having an “extra layer of bureaucracy” would help.

We share the concerns of Cambridge University and others that there need to be stronger safeguards for dual funding and protecting the integrity of the QR. To deliver this dual support, there will need to be smooth interaction with the devolved Administrations, the Higher Education Funding Council for Wales, the Scottish Funding Council and the Department for the Economy in Northern Ireland. However, the Royal Society and others, and indeed the director of the University of Scotland, Alasdair Smith, are very concerned about how this will operate. These changes prompted the Lords Science and Technology Committee to write to the Minister to express its concerns. It has stated that it had serious concerns about the integration of Innovation UK into UK Research and Innovation. It is concerned that Innovation UK should retain its business-facing focus, and the recently distinguished Chair of the Science and Technology Committee, now the Under-Secretary of State for Health, the hon. Member for Oxford West and Abingdon (Nicola Blackwood), also asked for clarification on this point.

The proposed changes to the departmental landscape since last week split responsibility for research and teaching across UKRI and the office for students respectively. Two separate frameworks, the research excellence framework and the teaching excellence framework, both lack links to funding.

Now, of course, there are major concerns post-Brexit about how universities are going to fund that research. At present, UK universities receive 10%—just over £1 billion a year—of their research funding from the EU. The Times Higher Education says that 18 UK institutions face losing more than half of their research funding as a result of the decision to leave the European Union. This affects some of our newer universities as well as long-established universities in the Russell Group. That is why Professor Paul Nurse in his research review for the Government warned that leaving the EU jeopardised the world-class science for which the UK is known.

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[Mr Andrew Smith (Oxford East) (Lab)]

It is a pleasure to follow the right hon. Member for Cities of London and Westminster (Mark Field). Whatever we disagree about, I very much respect the fact that he has in the past pointed out the damage done to the higher education system by ill-thought-out commitments and policies on immigration. I hear his note of caution about the regulation of new providers. I will say a bit more about that in a minute.

As my hon. Friend the Member for Blackpool South (Mr Marsden) said in his excellent speech—others have mentioned this—the Bill comes at a time when universities and research institutes are reeling from the Brexit vote. The drafting of the Bill and the associated consultation clearly took place in the context of an expected remain result. The uncertainties about replacing EU research funding and the position of EU students now confronting the sector would be good enough reasons, in themselves, for putting this legislation on hold to give this House and the Government the opportunity to ensure that the framework for higher education and research is fit for purpose in a post-Brexit world.

There are other concerns about the Bill. While I do not have a problem, in principle, with facilitating new providers and more choice in the sector, there are strong grounds, as the right hon. Member for Cities of London and Westminster hinted, for proceeding more carefully than the Government propose, because it is likely that limited Government finance will be further stretched when funding per student is already under enormous pressure, and there is a risk that failure by new providers will be bad for students and damage the reputation of UK higher education more widely. Let us remember that UK universities and research are currently a huge national asset—an area of competitive strategic advantage that will be even more important, economically and culturally, as we strive to make a success of life outside the EU.

Further, specific, concerns have been drawn to my attention by Oxford University. Clause 23, which provides for the assessment of standards as well as quality, is an extension of regulatory power that infringes institutional autonomy. The Government need to tell us what its purpose is and how it will be used. Clause 43 empowers the office for students to revoke by Order the Acts of Parliament or royal charters that have established our universities. The ability to dismantle so much with so little by way of parliamentary scrutiny cannot be right, and much stronger scrutiny and protection is needed.

[Liam Byrne]

Is it not incumbent on the Minister to give a categorical assurance to the House that where rights and entitlements proscribed in royal charter are deleted, they will be reinstated by the Government?

[Mr Smith]

Yes, indeed. As I have said, there must be full scrutiny by this House. These are Acts of Parliament that are being overturned by an Order—it is absolutely extraordinary.

There are further worries on the structure of research funding. It took the Secretary of State an awfully long time to get on to research. While the Government’s stated intention is to keep the dual funding principle, all research funding is to be the responsibility of the proposed UK research and innovation body, and there is no explicit provision for ring-fenced funding for anything other than specific pieces of work. It is therefore not clear in practice how dual funding is to be delivered. The call in the Bill for a “balanced funding principle” to which the Secretary of State must have regard is vague. I put it to the Government that it is crucial to future UK research capacity that the Bill strengthen the commitment to dual support.

I am also concerned that the Bill does not mention the higher education innovation fund. The Bill artificially divides teaching and research, when in practice the two often go together, especially at the highest levels, including in the work of museums and the well-founded laboratory principle. There really needs to be proper recognition of that in the Bill.

Similarly, there is a huge omission in there not being any requirement for UK Research and Innovation to provide for postgraduate research education and training, which is crucial for graduates moving into the high-tech sector. That was previously regarded, and rightly so, as being so important that the research councils had it written into their royal charters, so why is it not in this Bill? It certainly should be.

I am also alarmed that under clause 84, research councils could be abolished or merged by order. That could affect whole areas of research, so surely it is sufficiently serious that Parliament should have proper oversight.

There is much that is wrong with this Bill, and it is spectacularly ill timed. The Government should take it away, consult and think again.

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[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I want to pick up where my right hon. Friend the Member for Oxford East (Mr Smith) left off. The truth is that much in the Bill is long overdue. Much of the proposed legislation is necessary, but the truth is that the Bill was written for a very different time and in a very different era. The risk is that the Minister is presenting to the House a halfway house that will leave us with the task of having to come back to some big strategic questions to finish the job.

The Secretary of State was absolutely right to underline the necessity of the Bill. We need the strength of our higher education institutions today like never before. In this post-referendum era, we will have to get a lot better at making things a lot more efficiently. The level of productivity growth that blights our economy today is actually worse than it was at the end of the 1970s, when we used to call it the British disease. The problem with the Bill, however, is that it does nothing to address the big strategic challenges that confront students, our science base and our skills system. I will touch quickly on each.

First, let me talk about students. We all know that there is still a big debate to be had about the financial viability of the student loan system. This afternoon is not the occasion to rehearse the fragility of the Ponzi scheme that now underpins that system, but I often used to debate with the Minister’s predecessors whether Britain could look forward to a debt write-off of £70 billion or £80 billion. The basic message was pretty simple: the student loan system as currently set up is not fit for purpose, and it is certainly not fit for the future.

The Minister has proposed a number of measures to ensure a degree of transparency, not least freezing the thresholds for student loan repayments, but the truth is that we need a wholesale overhaul of the transparency of the system. We need the system to work well, but, quite frankly, too often we are looking through a glass darkly when we try to figure out what is going on.

Like many right hon. and hon. Members, I am disappointed that there is not enough in the Bill about lifelong learning, and I am very disappointed that there is nothing in it about workplace learning. I would like a bold revolution in the way we bring together Unionlearn, the Workers Education Association and the Open University, so that it is possible for workers to go from ABC to PhD in their workplace. In a world where someone can get a massive open online learning course beamed to their smartphone, that is surely possible, but we do not have the qualifications system we need to make that a reality, nor is policy in the right place.

The second big challenge we confront is on the science base. Quite frankly, although we are all grateful to Sir Paul Nurse for the heroic job he has done in overhauling the governance of the science base, there is nothing in the Bill to confront the big strategic challenge for science in this country, which is the fact that we are plummeting down the league tables when it comes to science spending. A few years ago, the Royal Society put it rather well, when it said that

“unless we grow smarter, we will grow poorer”.

If the global race is anything, it is a science race, and today we are falling behind. By 2019, China will become the world’s biggest science player. Right now, we are already losing the race for the good high-tech jobs of the future. We will not fix such a strategic challenge if we are languishing at 23rd out of 33 OECD countries. Our big competitors around the world—Japan, Korea and countries in Scandinavia—are now spending 3% of GDP on science each and every year, while we spend something like 1.3% of GDP on science. In fact, we would need to crowd in funding and add public spending totalling £23 billion if we were to bring science spending in this country up to the level of our strongest competitors. It is not even clear to me whether we have a 10-year framework for science funding any more. I certainly see nothing in the Bill about how we will strengthen a position that is becoming extremely serious. At a time when so many of our universities are having huge holes punched in their science base and science funding because of the decision to come out of Europe, we needed an awful lot more from the Secretary of State this afternoon about how we will tackle the looming crisis.

The third challenge that I want to touch on briefly is the one that troubles me most: why is there nothing in the Bill to address the revolution that is needed in the technical education system in this country? We know how to design good dual-track technical education systems. How do we know that? Because we did it for Germany after the second world war. We just forgot to do it for ourselves. The noble Lord Percy reported to this House in 1944 that

“the position of Great Britain as a leading industrial nation is being endangered by a failure to secure the fullest possible application of science to industry…and…this failure is partly due to deficiencies in education.”

The problem is that what was true in 1944 is true today. We do not have a strong dual-track system that takes a student in a constituency like mine and leads them on to the very highest level of technical education. We have a rise in unqualified science teachers in our classrooms; a careers service that the CBI says is on “life support”; a further education system that was cut by 40% over the course of the last Parliament; and an apprenticeship system that is growing the number of level 2s, but delivering the grand total of just 100 apprentices on level 5 in my home city of Birmingham. Today, just 2% of apprentices go on to level 5 study, and there has been a 40% fall in the numbers on HNCs, HNDs and foundation degrees. Those who are seeking a professional and technical path to higher education from the age of 14 up to the age of 21 go through a system that is overseen by Ofqual, Ofsted, the AQA, the Education Funding Agency, the Skills Funding Agency and now the office for students. It is, quite frankly, a dog’s breakfast.

We need a holistic review to put in place a single, comprehensive dual-track system for technical education. That means everyone from the age of 14 learning some kind of technical education; it means rebuilding the careers service; it means high-quality, gold-standard apprenticeships with everyone studying English and maths up to the age of 18; it means a new degree of specialisation in our colleges, with the creation of institutes of technical excellence; and it means an apprenticeship system that gives at least half of our young people the chance to take a technical apprenticeship up to level 5. We know how to run those apprenticeship schemes because great British companies such as Jaguar Land Rover and BAE Systems are doing so. The only problem is that they are harder to get into today than Oxford University.

Crucially, we need a new partnership between further education and higher education. We should be emulating the best practice in the United States, where it is possible to do the first couple of years of a degree at a further education college before moving on to finish it in a couple of years at a world-class higher education institution. That is why the duty to collaborate is so vital, and why it is such a problem that it is missing from the Bill.

We have been burying our scientists with our sovereigns since the death of Sir Isaac Newton. There is no other country on earth that would get BAFTAs for films about its great scientists. We are one of the world’s great science powers, but our position is in jeopardy. That is why we needed more than a halfway house from the Secretary of State this afternoon; we needed a Bill that repositioned higher education as the powerhouse it needs to be for our country’s future.