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

Lord Parkinson of Whitley Bay Excerpts

Thursday 2nd July 2020 Lords Chamber

Moved by

[Lord Parkinson of Whitley Bay]

That the draft Regulations laid before the House on 4 June be approved.

Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee

[Lord Parkinson of Whitley Bay (Con)]

My Lords, we have all seen the devastating impact of Covid-19 around the world. Recovering from this will take time and Her Majesty’s Government are already providing an unprecedented set of measures to support the people of this country along the way. One such beneficiary of the support is our world-renowned higher education sector. My right honourable friend the Secretary of State for Education announced a stabilisation package for the sector on 4 May. This included the introduction of temporary student number controls, which relate to the regulations that we are debating today. I thank the Secondary Legislation Scrutiny Committee of your Lordships’ House for considering the draft regulations. I am pleased to see that one of its members, the noble Lord, Lord Liddle, is taking part in our proceedings.

To understand why these regulations are necessary, we must look at the potential financial consequences of the pandemic on higher education providers, their staff and, of course, their students. For instance, in the 2018-19 academic year, tuition fees from international students accounted for around £7 billion of the sector’s income. Realising the risk that a sharp decline in international students might pose, many providers have already responded by attempting to recruit more domestic students than normally they would. Some issued a record number of unconditional offers to encourage students to study with them. While seeking to ensure their own financial stability is only natural, this strategy, if replicated widely, could have unfortunate consequences for the sector as a whole—providers and students alike.

I shall first spell out the consequences for providers. There is already a finite pool of prospective students, made smaller by a 1.5% decrease in the number of 18 year-olds this year compared with last. In these exceptional circumstances, an unusually high number of offers made by a provider may attract more students than normal to that provider, but, therefore, away from others which would normally have recruited them, and which could not absorb the associated loss of income. Repeated across the whole sector, this could place some providers at risk of collapse. That would destabilise the sector, threaten staff livelihoods and, of course, leave many students without a provider in the middle of their education.

That leads me to the consequences for the students themselves. Different providers, rightly, have different entry standards. Every student is unique, with different academic abilities and needs. A positive student experiences is a vital and fundamental part of university life. It is to everyone’s benefit that there should be a range of providers, offering a range of different learning environments catering to different academic needs. The long-term consequences of the potential instability in the sector which we saw emerging earlier this year could far outweigh the short-term benefits to individual providers. It is for this reason, together with the need to avoid an unfair imbalance in public expenditure, that temporary number controls have been introduced, and that the associated regulations have been laid before your Lordships’ House to consider.

I turn to the regulations themselves, which, so far as higher education providers in England are concerned, will reduce the maximum amount of tuition fees that providers can charge in the next academic year but one—the academic year 2021-22—if they recruit more students than their allocated number in the coming academic year, 2020-21. As far as higher education institutions in the devolved nations are concerned, the numbers apply to England-domiciled students who start a course in Scotland, Wales or Northern Ireland. If an institution exceeds its number in the academic year 2020-21, the maximum tuition fee loan amounts available to such students—and ultimately to the institutions—starting courses in the academic year 2021-22 are reduced to the same extent as fee limits in England.

These short-term measures are necessary: should a provider recruit a higher number of students, it will receive a greater share of taxpayer funding. This will create an imbalance in the system between providers. By taking students, and therefore funding, away from other providers, they increase the risks that those providers will fail and give rise to a potential call on public funds. That is an exposure for which the Government must account, so it is right that the Government, and the taxpayers that we serve, should be able to redress that funding imbalance in the following academic year.

Therefore, this is about the Government using the mechanism of the taxpayer-funded student loan system to ensure the stability of the sector. The regulations do this by reducing the sums available to a provider which chooses to exceed its number through the student finance system in the subsequent academic year. I recognise the concerns that a reduction in the fees available to providers may itself place them under strain, but the scale of the reductions has been calculated in proportion to the extent by which a provider exceeds its number. Accordingly, there is a proportionate correlation between the amount of reduction and the additional income secured by the provider by recruiting in excess of its numbers.

I consider these regulations to be a crucial part of the steps that we need to take to ensure the stability of our much-valued higher education sector, and I commend them to the House. I beg to move.

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[Lord Parkinson of Whitley Bay]

My Lords, as befits the higher education sector that it concerns, this debate has been a diverse but uniformly intelligent one. I thank all noble Lords who have taken part.

The noble Lord, Lord Bassam of Brighton, asked about consultation with institutions throughout the United Kingdom. I have very happy to confirm that my right honourable friend the Secretary of State and my honourable friend the Universities Minister have had a number of meetings with their counterparts, as have officials at the Department for Education with theirs, and have been consulting representatives of the sector, including Universities UK, which, as the name suggests, is UK-wide. He asked about the Chancellor’s Statement next week. I am afraid that he will have to wait with baited breath for that, but regarding research, I draw his attention again to the research package that was announced at the weekend by the Government, and which was noted by the noble Baroness, Lady Falkner of Margravine, who asked whether that is UK-wide. I am happy to confirm that yes, institutions in all four nations can apply to it.

Many noble Lords asked questions concerning devolution, so it makes sense to start there. These included concerns that the number controls and fee loan reductions do not respect the devolved nature of higher education, that the risk to the sector is particularly acute in England—and that therefore there should be an English solution to an English problem—and that to apply these conditions to English-domiciled students at institutions elsewhere in the UK is to place the sector in those parts of the United Kingdom under unfair strain. It is not the purpose of these regulations to disregard or interfere in the important principle of devolution, but to ensure the stability, financial and otherwise, of higher education in England. Central government’s mechanism for that is the student loans and tuition fees system. Student number controls for institutions in Scotland, Wales and Northern Ireland only apply to the number of English-domiciled entrants who will be supported with their tuition fees through Student Finance England.

The funding of English-domiciled students is not a devolved matter. It is right and fair that this policy should apply as consistently as possible wherever they are studying in the UK. I certainly agree with the noble Lord, Lord Bassam of Brighton, about the value of people studying throughout the United Kingdom in strengthening the bonds between our four nations. I note the amendment that he has tabled and acknowledge some of his concerns, but I must note for example that currently, Scottish providers can charge any amount they choose to an English student without the fee loan matching it—and choose not to. These eminent and, as the noble Lord, Lord Addington, pointed out, in many cases ancient institutions, place the welfare of their students and the attractiveness of studying in Scotland at the forefront of their recruitment practices. I do not expect that these regulations will cause them to change those practices to the detriment of students who might otherwise choose to apply elsewhere. Institutions in the devolved nations will continue to be free to set their own fees, as they do now.

On the question raised by the noble and learned Lord, Lord Wallace of Tankerness, the UK Government determine the level of student finance available to English-domiciled students. This is not a case of encroaching on devolution but an example of respecting it, while taking the necessary steps to ensure the stability of the higher education sector and value for money for the taxpayer and, above all, to maintain freedom of choice and a positive experience for students.

A second area which a number of noble Lords touched on was the impact on disadvantaged students. This was mentioned by the noble Lords, Lord Singh of Wimbledon, Lord Liddle and Lord Wood of Anfield, and the noble Baronesses, Lady Garden of Frognal, Lady Kennedy of Cradley, Lady Uddin, and others. The Government want to ensure that university places are available to everyone who is qualified by ability and attainment to pursue them and who wish to do so. We expect that higher education providers will continue to support students from disadvantaged backgrounds to take their part in higher education, and officials at the Department for Education are working with the sector to identify what steps may be necessary to help them do so. I draw particular attention to the £23 million per month funding currently available to help people with hardship, including, as the noble Lord, Lord McConnell, rightly points out, mental health needs which might arise from the current circumstances.

Regarding other matters raised by noble Lords, my noble friends Lord Blencathra and Lord Cormack spoke about the quality of higher education that the Government expect. It is a condition of registration with the Office for Students that providers must deliver well-designed courses which provide a high-quality academic experience for all students. I draw their attention to my honourable friend the Universities Minister’s speech yesterday, which the noble Lord, Lord Chidgey, mentioned, which sets out a bit further the Government’s thinking on this.

I am very happy to confirm to the noble Baroness, Lady Quin, who asked about universities in our native north-east, that offers accepted before the notification date of 1 June 2020 will not be counted against a provider’s or institution’s number control. I think the noble Lord, Lord Wood of Anfield, asked about that as well.

My noble friend Lady Altmann asked a number of technical questions, and it might be better if I follow up on them in writing. She asked about appeals. Officials at the Department for Education will consider appeals on a case-by-case basis. She mentioned international students and their importance to the higher education sector, as did the noble Lord, Lord Bhatia, and many others. That is why we are simplifying the current requirements and the application processes for international students studying in the UK, significantly improving our global offering. The new graduate route which is due to open next summer is just one example of this. Students contribute to net migration and will therefore continue to be counted within the net migration figures, just as the independent Migration Advisory Committee suggests they should be.

The noble Lord, Lord Chidgey, asked about further education. The Government have an ambitious programme to reform and level up the FE sector. That will be set out in our White Paper, but I can certainly point to the plans which were announced in the Budget to invest £1.5 billion in England from 2021-22 to upgrade the FE college estate.

My noble friend Lord Holmes of Richmond, the noble Lord, Lord Goddard of Stockport, and others asked about apprenticeships. I can confirm that apprenticeships will be excluded from student number controls.

The noble Baroness, Lady Warwick of Undercliffe, asked about franchising. I am aware that some providers have raised concerns about franchising arrangements, but student number controls allow providers to recruit more students than they did in the 2019-20 academic year. Every student who meets the entry requirements for their course should be able access higher education, including those from disadvantaged backgrounds.

The noble Baroness, Lady Benjamin, mentioned a particular group of students and the important issue of those who do not hold settled status. The long residency eligibility category ensures that people who do not hold settled status but who have spent a substantial period in the United Kingdom are able to access support in line with most other students. To qualify for support, these people must have been in the UK lawfully for at least three years. We consider that this strikes a fair balance, but we will certainly continue to keep a close eye on the very important issue that she raised.

In concluding, as I fear I must, I return to the challenges that the sector currently faces. We must all work together as we seek to recover and rebuild after Covid-19. These regulations will help us to do that and to achieve that important goal. It is our hope and expectation that they will play a crucial role in stabilising the sector. The Government recognise that the pandemic will have an unparalleled impact on all elements of the UK and, indeed, global economy and that the higher education sector is no exception.

We have been working closely with the sector to monitor the impact of Covid on international student numbers, including restrictions on travel, but we understand that it poses significant challenges. That is why the Government have committed to ensuring that existing rules and regulations, including visa regulations, are as flexible as possible for international students in the current circumstances. Higher education providers have also confirmed that they will be flexible in accommodating applicants’ circumstances wherever possible—for instance, if people are unable to travel to the UK in time for the start of the academic year.

I hope that noble Lords will be encouraged by what the regulations signify: that the Government care about the HE sector and the range of opportunities available for all who use it; that we care not just about larger, more profitable providers but about smaller and specialist institutions that, as my noble friend Lord Norton of Louth rightly pointed out, so creatively cater to the needs of their students, and wish to see those providers survive; and that we care above all about students. Students are the lifeblood of our higher education sector, and that they should have a positive experience of higher education is of the highest importance, now as much as ever. The Government must play a part in that by maintaining a stable higher education sector for the benefit of providers, students and taxpayers alike. I am happy to confirm that student number controls are a temporary measure in place for one year only, and the regulations before your Lordships today are the mechanism by which we can do this. I therefore recommend them to the House.