Higher Education and Research Act 2017 (Further Implementation etc.) Regulations 2019

Lord Bassam of Brighton Excerpts

Wednesday 5th June 2019 Lords Chamber

[Baroness Wolf of Dulwich (CB)]

My Lords, many noble Lords will remember that, as the Minister reminded us, the Higher Education and Research Act 2017 established a regulator with unparalleled and unprecedented powers. One of those powers is effectively to set its own budget by deciding what to charge universities for its services and activities. During the debates in this House, noble Lords pressed very hard for the Government to ensure that the Office for Students was subject to the Regulators’ Code, so I am delighted to see that it is being placed on a statutory basis. How, though, is the Office for Students expected to demonstrate that it is behaving in accordance with the Regulators’ Code? What sort of information does it provide to the Government on that basis and what sort of information does it provide to the public on that basis?

[Lord Bassam of Brighton (Lab)]

My Lords, I guess the Minister is really asking the House to accept that these regulations are tidying-up amendments. I am grateful to him for his explanation of this statutory instrument, which, as he said, is a consequence of HERA 2017. The majority of the amendments are consequential and replace references to now-defunct bodies or repealed legislation. They include HEFCE and the Office for Fair Access, or OFFA.

Looking at registration under these regulations, under the Act a new regulator was created, the Office for Students, to oversee and monitor the activities, including in relation to fair access and participation, of English higher education providers that register with it. The OfS currently regulates registered HE providers under transitional arrangements which were due to end on 31 July. Will the Minister advise the House whether the new regulatory regime is on schedule to be to be fully operational by then? In addition to retaining existing HEFCE and OFFA functions for the transitional period, the OfS has gradually begun to exercise its functions under the Act, including the power to create a new single register of higher education providers. OfS registration affects the HE provision that institutions can provide, specifically access to public grant funding, the fee levels they can charge and the levels of support students can receive. Indeed, institutions that are not registered cannot access OfS or UK Research and Innovation public grant funding or charge above the basic fee amount.

I understand that since January 2018, the OfS has registered more than 300 higher education providers. However, last month, it was reported that 19 colleges offering higher education courses were still waiting to be registered with the OfS, only months from a new term when student recruitment should be well under way. Against this backdrop, Student Finance England was advising that to ensure funding is received in time for courses commencing in autumn 2019, new students should complete and submit their applications by 24 May. That seems a rather strange process and period of delay for making the system work. Does the Minister agree that the fact that it has taken almost a year to complete this process suggests that there might be room for some improvement?

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[Viscount Younger of Leckie]

I thank the noble Lord, Lord Bassam, and the noble Baroness, Lady Garden, for acknowledging that these regulations are mainly technical. I am pleased that these are the final regulations that have come out of the Higher Education and Research Act. It was a major Bill to go through this House and I thank all noble Lords who were involved.

A good number of questions arose. Before I get into answering them, I would like to pick up on what the noble Lord, Lord Bassam, said. He is quite right: the whole House acknowledges—and we would like to confirm—that what is important is to uphold and improve the quality of our first-class universities and, in so doing, to ensure we give the best choice to students, including international students, and that they get best value for money. That is behind everything we are doing in relation to the regulations and the Act itself, and—I will touch on this in a moment—is the basis for the Augar review, the independent review that has just reported. As I said yesterday and will say again in a moment, we will look very carefully at all 53 recommendations and will report back at the spending review, but not before. I say this not, perhaps, to reassure but to reiterate the point I made yesterday.

I will get straight into answering some of the questions raised: first, from the noble Baroness, Lady Garden, on pension schemes. The department ran a consultation, as she may know, on the impact of increased employer contributions on all TPS employers—including state schools, further and higher education providers and independent schools—for 2019-20. The department has decided to fund schools to the tune of £830 million and further education providers to the tune of £80 million—and not universities—in 2019-20, with costs beyond that year to be agreed at the spending review. This decision was based on the strongly positive response to our consultation proposal and the fact that schools and further education providers are most directly funded by government grants. I will read Hansard tomorrow to look again at the detailed remarks that the noble Baroness made. I will check her questions against my answer and, if I am not satisfied, I will write; I am sure that she will press me if she is not satisfied.

The point the noble Baroness raised on data is important and, again, she had some detailed questions. Although I would like to write to give her some information in answer to her question about our plans for changes, I emphasise that these regulations do not extend access to data; they simply update the bodies between which data may be shared, replacing HEFCE with the OfS and HEFCE-funded higher education providers with OfS-registered higher education providers.

I welcome the noble Baroness, Lady Wolf, to her place. I was sorry that she was not present yesterday. I thank her, particularly, for her role in the production of the Augar review. I am sure she has read Hansard in detail for yesterday’s exchanges. She asked how the OfS will demonstrate that it complies with the Regulators’ Code. The OfS, as she may know, is required to report annually on the performance of its functions. This report is sent to the Secretary of State and laid before Parliament.

The noble Baroness, Lady Garden, asked why the Charities Act amendments in Part 4 were drafted in this way; she had a number of detailed, interesting questions. I am sure that I will not be able to answer them all, particularly the points raised about the differences between Oxford, Cambridge or Durham. Again, I will need to read Hansard. What I can tell her is that the Charities Act amendments reflect the existing drafting in the Charities Act, which lists certain specific institutions. The term “relevant higher education provider” is used to ensure that a provider is registered with the OfS. If the provider is removed from the OfS register, it will no longer be a relevant higher education provider. But I want to go further and say that deregistration by the OfS can happen only under very narrow circumstances, including: serious breach of registration conditions by a provider; where the provider requests that it is deregistered; or where a provider stops providing higher education in England.

I shall say a bit more about the Augar review, which was mentioned by the noble Lord, Lord Bassam, and touched on by the noble Baroness, Lady Garden. As I said yesterday, I am not able to give an opinion on what, if any, recommendations we will take forward. I said yesterday, and repeat again, that we need to look at the 53 recommendations “in the round”—that was the expression that I used yesterday—since many of them are interactive. For example, the proposal to reduce tuition fees from £9,250 to £7,500 needs to be taken into account along with the proposal to extend the payback period from 30 years to 40 years and the further proposals for changes to the in-study interest rates and beyond. These are matters that I am simply not prepared to comment on or make a judgment on.

[Lord Bassam of Brighton]

Does the Minister accept—I think this is overwhelmingly the view of those who have looked at the Augar review—that the proposed financial changes are regressive rather than progressive? That is an important point, particularly in respect of the 40-year payback period it recommends.

[Viscount Younger of Leckie]

Again, I am not prepared to say whether they are progressive or regressive; we are looking at the 53 recommendations, and we will decide by the spending review what we want to do.

I shall go a little further. The noble Lord mentioned the teaching grant. As I said yesterday, the question of—to use his words—making up the teaching grant is again something that we need to look at in the round. It is all interrelated. If the proposed reduction to £7,500 leaves a make-up to be made, we will need to look at that with a great deal of care. As I said at the beginning, it is important to ensure the financial sustainability of our very best universities, making sure that the quality is there, the choice for students is there and that it is affordable—I think that that is incredibly important.

I think that I have covered all the questions. As I said earlier, I shall read Hansard in particular depth on this occasion because of the detail of the questions, and I shall certainly write a letter if I have not covered everything.