Office for Students: Appointment

Debate between Lord Johnson of Marylebone and Robert Halfon

Monday 8th January 2018 Commons Chamber

[Joseph Johnson]

On the point of process, Mr Young’s appointment to the board of the Office for Students was made in line with the Commissioner for Public Appointments’ code of practice, and Mr Young was appointed following a fair and open competition. He was selected for interview based on the advertised criteria and interviewed by the same panel that interviewed all other board candidates. Sir Michael Barber, who is the chair of the Office for Students, was one of the panel members, along with a senior civil servant and an independent panel member from the higher education sector, and that panel found Mr Young to be appointable.

As for whether the Department for Education exaggerated Mr Young’s qualifications, it absolutely and categorically did not. Mr Young was a teaching fellow at Harvard and a teaching assistant at Cambridge, positions for which he received payment. The Department for Education never claimed that they were academic posts. As I have said, Mr Young is a Fulbright commissioner and co-founded the West London Free School, and that experience will be vital in encouraging new providers and ensuring that more universities are working effectively with schools.

[Robert Halfon (Harlow) (Con)]

The Minister will know that I am a supporter of his work and of universities, but things have gone badly wrong here. I accept that Mr Young has done great work on free schools, but so have many other people. I am not talking about the things he has done on Twitter; I am more concerned about some quite dark articles in which he talks about the disabled and the working classes. Much more significantly—I have the article here—in 2015 he talked about what he calls “progressive eugenics”, which is incredibly dark and dangerous stuff. I suggest that my hon. Friend look again at the appointment, because I do not think that it will give students confidence.

Student Loans Company

Debate between Lord Johnson of Marylebone and Robert Halfon

Monday 20th November 2017 Commons Chamber

[Robert Halfon (Harlow) (Con)]

I welcome the Minister’s efforts to reform the SLC, and he will know that our Select Committee on Education is doing a value-for-money inquiry into universities. As well as looking at the management of the SLC, will the Minister use this opportunity to look at reducing the rate of interest for students, which is much higher than in many other countries in the developed world?

[Joseph Johnson]

We keep all aspects of our student finance system under review, to ensure that it is fair and effective as a system, and that it is meeting our core objectives of removing financial barriers to access, funding our university system fairly, and sharing the costs of doing so equitably between individual students and the general taxpayer. The rate of interest is heavily subsidised. This is to be compared with unsecured personal commercial borrowings. The Bank of England benchmark reference rate for unsecured personal commercial borrowing would be well over 7%, and this is a particularly unique product, which is written off entirely after 30 years with no recourse to a borrower’s other assets, and it only enters the repayment period when people are earning more than £25,000. So it is a unique product, and it is not easy to compare any element of it with loan offerings from elsewhere in the commercial sector.

Higher Education Funding

Debate between Lord Johnson of Marylebone and Robert Halfon

Wednesday 11th October 2017 Commons Chamber

[Joseph Johnson]

I will answer some of the hon. Lady’s questions—in fact, all the questions. The normal, cross-Government processes were followed in the run-up to the announcements. The Department for Education worked closely with the Prime Minister’s team to develop those announcements. We are delighted to be able to announce the changes that she set out. I set out in the ministerial statement that I published on Monday the full details that the hon. Lady has just asked for. However, to recap, the threshold will rise to £25,000 from £21,000. That will put a further £360 in the pockets of graduates. We have taken stock of the views of parents, students and Parliament itself in coming to our decision to freeze tuition fees for the coming academic year. Therefore, we are listening and, where appropriate, we are taking action to ensure that our student finance system is getting the balance of interests right between those of students and those of the general taxpayer.

That is the core principle of our student finance system, which must achieve three goals. First, it must support access for the most disadvantaged, and it is achieving that with great success. Someone from a disadvantaged background is more than 50% more likely to go to a highly selective university than when the Labour party left office, and more than 43% more likely to go to university overall. Students are less likely to drop out, whether they are from BME, disadvantaged, mature or part-time backgrounds, than they were when the Labour party left office. This system is delivering participation and access in a way that alternative student finance systems never have.

Secondly, the system is working for universities. Our universities are 25% better funded per student and per degree than they were under the old student finance system, before the 2011 reforms. That is of fundamental importance. Does the Labour party really want our universities not to have the resources they need to do excellent teaching and to deliver great research? That is what it is proposing. It is proposing a return to the system that we saw in the run-up to the Dearing report in 1998, a system that saw a real-terms decline in university funding of almost 50%. Those are the changes that the Labour party will deliver if it has a chance to get into office.

Thirdly, our system is fair to the taxpayer. We keep the balance of funding under careful review. As the Prime Minister made clear in her party conference speech and in announcements in Manchester last week, we will announce further steps in that regard in due course.

[Robert Halfon (Harlow) (Con)]

I strongly welcome the measures that my hon. Friend has set out because we have to be fair to students and fair to the taxpayer, too. In the review, will he look at the high interest rate and at lowering the interest rate for students? On a wider issue, the Government announced a big boost to degree apprenticeships. Does he agree that we should be incentivising and putting all financial incentives into degree apprenticeships because the students earn while they learn, there is no debt, they get a job at the end and such apprenticeships help to meet our country’s skills deficit?

[Joseph Johnson]

We continue to keep all aspects of our student funding system under careful review to ensure that it remains fair and effective, and that we are getting the balance right between the interests of individual students, who go on to have far higher lifetime earnings, and the interests of general taxpayers, whose voices must also be heard in this debate. The interest rate that my right hon. Friend mentioned will be among the things that we will continue to keep under careful watch in the weeks and months to come. Degree apprenticeships are a very promising way of combining the best of higher education and further education. We want them to develop and grow, and we want more providers in the system to offer them. They have huge potential.

University Vice-Chancellors: Pay

Debate between Lord Johnson of Marylebone and Robert Halfon

Wednesday 11th October 2017 Commons Chamber

[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

I congratulate my hon. Friend the Member for South West Wiltshire (Dr Murrison) on securing this important debate on university vice-chancellors’ pay. I am grateful for the opportunity to set out how the Government have prioritised value for money in the higher education sector, and to touch on our plans to address the issue of senior staff pay.

With students and taxpayers heavily invested in our world-class higher education system, the Government are determined that value for money should be a key priority. To that end, the Higher Education and Research Act 2017 introduced reforms to increase competition between providers and to promote greater choice for students.

The Act introduced a new regulator for the higher education sector, the Office for Students. Once it comes into being next year, the OfS will develop a new risk-based approach to regulation. For the first time, all registered higher education providers in England will be part of the same system. This new regulatory framework will promote diversity and innovation in the higher education sector in the interests of students. It will drive up quality and standards, incentivise better teaching and learning, and inspire the growth of sector-relevant skills to increase employability.

Under the Act, one of the duties of the OfS is to have regard to the need to promote value for money in the provision of higher education by English providers. It will ensure more transparency for students so that they can have greater confidence that their money is being well spent.

We introduced the Teaching Excellence Framework with the intention of raising the standard of teaching in higher education and giving students clear information about where they are likely to receive good teaching and to get great outcomes from their time at university. Almost 300 providers took part in the first trial year of the TEF, including all but two English universities and more than 100 colleges and private providers. Excluding those with provisional ratings, roughly 75% of entrants received either a gold or silver award.

We are making it a priority for students to know their rights and to have fair contracts that enable them to take action if the reality of their experience does not match what was advertised. With a view to ensuring students obtain value for money, the OfS will use its powers, including setting a regulatory condition for providers to create an environment in which providers fully meet their obligations to students as consumers, and students will be able to build an understanding of their corresponding rights.

If a student is not satisfied with their course or provider, they may wish to switch to a different one. That has been difficult for many students up until now. The Act places a duty on the OfS to monitor and report on arrangements for students to transfer, and empowers the OfS to facilitate, encourage and promote such arrangements.

The Department for Education will shortly be launching a consultation on behalf of the OfS. That will include a proposed condition of registration requiring providers to publish information on their student transfer arrangements.

Many universities are large and complex organisations. Highly skilled and talented individuals are needed to run these organisations effectively. In some cases, universities may be competing internationally to secure the right managerial expertise. Higher education providers are rightly private, autonomous and independent institutions—they are not in the public sector and they are not really in the quasi-public sector—and they are solely responsible for setting the salaries of their staff. Nevertheless, these providers also have a public service mission, as my hon. Friend mentioned. With public funding providing the sector’s most significant single source of income, there is a legitimate public interest in promoting the efficiency of providers. This must include senior staff pay.

There is a risk that increasing salaries diverts money away from a provider’s core mission of teaching and research. Exceptional pay can only be justified by exceptional performance. The Government have consistently used their annual grant letter to HEFCE to call on universities and their remuneration committees to exercise restraint on senior staff pay. In my most recent letter, I made it clear that efficiency must include demonstrating restraint in setting senior pay. The Department’s consultation will contain proposals reflecting my requests that the OfS introduces a new condition of registration requiring the governing bodies of providers with access to student support to publish the number of staff paid more than £100,000 a year. For staff paid more than £150,000, providers will be required to publish their justification for these salaries. In the event that a provider fails to meet the requirements of this condition of registration, the OfS will be able to use its powers, which include monetary penalties, to take action.

The OfS will also issue guidance to help providers to meet the requirements of the condition of registration, and use its power to investigate the governance of an institution through assessments of management effectiveness, economy and efficiency where there are substantiated concerns.

[Robert Halfon]

I thank my hon. Friend for his work on this. Will the consultation also look at potential gender-related pay disparities?

[Joseph Johnson]

I am grateful to my right hon. Friend for mentioning that because we do indeed plan to ensure that such issues are considered by the OfS.

Arrangements will also be made to compile and publish data on the levels of HE senior staff remuneration beyond what is required by the registration condition, with a particular focus on protected characteristics such as gender and ethnicity. Further to this, I have called on the sector to work through the Committee of University Chairs to develop and introduce its own remuneration code. Such a code should encourage greater independence of remuneration committees, the publication of the pay ratio of top to median staff pay and explanations of top pay increases that are greater than increases in average pay in an institution as a whole. I am pleased that the CUC has confirmed that it plans to take forward the development of this code.

I am confident that these actions, in addition to our wider reforms to the higher education sector as a whole, will deliver much greater transparency and accountability, as well as improved value for money for taxpayers and for students. We have legislated to facilitate greater competition within the sector and choice for students. We have successfully promoted measures such as the TEF to help to students to make better informed decisions that affect their futures and enhance teaching quality, and we have acted to address escalating senior staff pay.

Let me be absolutely clear, for the avoidance of all doubt, that I want to see the relentless upwards ratchet in senior staff pay come to a halt, and I am confident that the measures the Government have put forward through the OfS will achieve that. I hope that my hon. Friend the Member for South West Wiltshire is reassured by the Government’s strong action and, once again, I congratulate him on securing this important debate.

Question put and agreed to.