Higher Education (Monetary Penalties and Refusal to Renew an Access and Participation Plan) (England) Regulations 2019

Lord Storey Excerpts

Monday 20th May 2019 Lords Chamber

As the Minister said, in recent years, significant progress has been made on widening access to higher education. It would be a real retrograde step if the Government accepted a recommendation from the review that would undermine that progress in any way.

[Lord Storey (LD)]

My Lords, we obviously welcome this statutory instrument. I have three very brief questions. First, we have of course talked about disadvantaged and underrepresented groups, but what about dis- advantaged schools? How do we ensure that we break the cycle of the top independent schools sending far more pupils to some of our top universities than your average maintained school? Are we ensuring that the gap between independent schools, maintained schools and academies is included?

Secondly, do the access and participation plans include numerical targets for each university? Thirdly, I am quite taken with my noble friend Lady Garden’s point about the fines not going into some black hole in the Treasury. You could do quite a lot in disadvantaged areas with schools doing outreach work to encourage young people to go to university. If there was money available, it would be a much easier proposal to operate.

[Viscount Younger of Leckie]

I thank all noble Lords for their participation in this fairly short but interesting debate. I will do my best to answer in short order the questions that were raised on these Higher Education (Monetary Penalties and Refusal to Renew an Access and Participation Plan) Regulations.

I thank the noble Lord, Lord Bassam, and all other noble Lords for being broadly supportive of these regulations. I welcome the remarks that the noble Lord made towards the end of his speech, saying that it is welcome that more efforts are being made towards access and participation to ensure that more disadvantaged pupils go to university. He is right that there is more to do; I think I said that in my speech.

The noble Lord, Lord Bassam, and the noble Baroness, Lady Garden, raised a point about impact assessments on the fees and penalties. I will spend a little time on that. There was a full consultation on the penalties. The maximum level of penalty is set at 2% of the income that the provider receives through grant funding from the OfS and from tuition fees in a 12-month period, or £500,000. To clarify, by this I mean that the maximum level of penalty is 2% of income, unless that calculation produces a figure that is less than £500,000. If that is the case, the maximum is £500,000. The maximum penalty is set at a level to allow the OfS to ensure that there are visible and meaningful consequences for a provider that is in breach of an ongoing registration condition, without being unduly punitive. The OfS has discretion as to whether to impose a monetary penalty and to set the level of that penalty up to the maximum mentioned.

It is envisaged that the OfS would impose the maximum level of penalty only in the most exceptional circumstances. These regulations set out the factors that the OfS must consider. These factors are intended to help ensure that the imposition of a monetary penalty and the amount of any penalty is appropriate, reasonable and proportionate, given the circumstance of a particular breach of a registration condition. There was broad agreement on these factors in the consultation response. On the question of whether a higher maximum was suggested in the consultation, I can say that no provider suggested a higher maximum penalty in the consultation.

The noble Lord, Lord Bassam, asked about the appointment of a statutory reviewer. I can reassure him that a statutory reviewer has already been appointed to focus particularly on access and participation. This appointment is in line with the principles of public appointments and will be under review. She is getting up and running; we will see what other resources she might need—at the moment, we are perfectly happy that she has a role, but of course it will depend slightly on what the demands of her role are. I hope that is understood.

The noble Baroness, Lady Garden, asked where the money from the penalties will go. Money from monetary and financial penalties, as well as income derived from interest, is required under the Act—under HERA—to go to HM Treasury’s Consolidated Fund, from which government expenditure is funded. This prevents the OfS from imposing penalties or charging interest to raise income. That is a long-winded way of saying that the money goes to the Treasury, which I suspect is an answer that she—

[Viscount Younger of Leckie]

I understand exactly the point that the noble Baroness is making. I can certainly take that back to the department, and possibly to the Treasury, but I am pretty sure it is a matter which is tied down; as I have made clear, it is tied down in legislation, and was set out in the Higher Education and Research Act. However, the point is well made.

The noble Lord, Lord Bassam, asked about an impact assessment. No impact assessment was prepared for this instrument because these regulations do not introduce further burdens that would have an impact on businesses, charities or voluntary bodies. A provider’s compliance with its registration conditions—and so avoiding OfS sanction—is within the provider’s own control.

It is worth noting that the mandatory factors in Regulation 4 require that the OfS must have regard to the impact of imposing a penalty on higher education students at the provider in question and on higher education students more generally. The OfS will also take into account other matters that it considers to be relevant, including financial stability. However, with the greater emphasis that the OfS has given the regulator in terms of looking at the providers and their progress or otherwise, there is a process which the noble Lord will be aware of, to the extent that the financial sustainability of the providers is monitored very closely indeed. If there is any hint of difficulties, much closer monitoring will take place. I hope that is helpful.

The noble Lord, Lord Storey, asked about disadvantaged schools and the targets. The OfS is encouraging all the providers to work with schools through outreach access and participation plans, which should include targets set by providers and agreed by the OfS.

In terms of the help that independent schools can give to maintained and secondary schools, the noble Lord will be aware that—I am pleased to say—much work is going on between and by independent schools to ensure that resources, including teaching resources, are given where appropriate to secondary or maintained schools in a particular area. That is deliberately to help to raise standards within the community and give those who are less advantaged a greater chance to go on to either vocational training or a university.

[Lord Storey]

Are those numerical targets?

[Viscount Younger of Leckie]

Yes, they are numerical. I will certainly write to the noble Lord with more information about the targets that we have in mind.

I believe I have covered all the questions that were raised—