Technical and Further Education Bill

Debate between Lord Storey and Baroness Wolf of Dulwich

Report stage (Hansard): House of Lords
Monday 27th March 2017 Lords Chamber

[Baroness Wolf of Dulwich (CB)]

My Lords, I also support the amendment and share its concern for the small but important group of young people who may be denied an apprenticeship. I will also speak to Amendment 16 tabled in my name and lend strong support to the general argument that we must provide financial guarantees and security to young people in the training field. I declare an interest that, as a member of the Sainsbury review, I was part of the panel which lies behind other parts of the Bill. I also strongly welcome the provisions to ensure that, should an FE college fail, special arrangements will be in place to make sure that students are looked after; that clearly set out procedures will swing into place; and that they will not just go to the bottom of the list after creditors, in the hands of administrators whose responsibilities and skills are essentially commercial. It is absolutely right that the Government have recognised this as their duty. It is their duty because, by funding young people and adults, encouraging them to enter training—and, in very many cases, to take out loans—the Government have implicitly promised that an institution to which they are lending money will give a good-quality education and will endure to see students through. The introduction of loans is a mammoth change and lies under much of the Government’s conviction that they need to change the HE regime. We must recognise that the Government’s ambition for huge increases in adult learner loans changes the environment in which young people and adults are studying and training.

Many noble Lords will know that failures are not unheard of—one wishes that they were. In the United States, huge companies have gone under, leaving many thousands of people with loans. These are not all at degree level; they are often at associate-degree level, which comprises two-year courses. On the one hand, therefore, it is very welcome that we have these provisions for FE colleges, but, on the other, I find myself completely unable to understand why equivalent protections should not be introduced for people training and studying in institutions which are not FE colleges and which also offer—and are being funded to offer—technical education. Many of these people have loans, and many of them are not mobile. The loans represent large sums of money for them, and they have made big changes in their lives to undertake this form of training. Again, it is tremendously welcome that the Government are putting so much effort and money into technical education. However, we have to ensure that the promise, encouragement and—sometimes—pressure to enter technical education is matched by a guarantee that the Government will deliver on their implicit promise.

Against this background, the repeated failures—that is what it has felt like—in recent weeks of a number of private training providers should make us aware that this is not a hypothetical situation. Like the noble Lord, Lord Watson, I was not very convinced by the letters from the department and the SFA. My noble friend Lady Watkins will speak in a moment. She and I had a very productive meeting with the Bill team. We appreciated their willingness to listen to our arguments. However, the letters that we received seemed to amount to a combination of the statements, “We are muddling through” and “There aren’t very many of them anyway”. That is not adequate at a time when we are embarking on a major rethink—and, I hope, a major expansion—of technical education.

In Committee, the Minister noted that you cannot treat private businesses as though they were public organisations. That is indeed true. Although many private training providers are small charities, many others are commercial organisations, as the noble Baroness, Lady Cohen, said. Many of them survive entirely on government contracts and are very small. That is why I have proposed a mechanism which I think would be entirely appropriate for this situation. We have heard about it already, and I thank the noble Baroness, Lady O’Neill, for first bringing it to my attention. It is well established, costs the Government nothing and would not cost providers anything that would begin to wipe out their margins. It is well and frequently adopted in other sectors and I cannot see why it should not apply here.

That brings me to my final point—the idea that we do not need to worry about this matter because only a few people are involved and the risks of failure are quite small. Even if the figure is less than 1%, that is hundreds of people a year on current levels of loans. If we have the expansion that we hope for, thousands of people a year will be affected. To give a medical analogy, if 1% of life-changing operations were cancelled and eventually lost because people got older and were never able to have their operations and had to go back to the bottom of the waiting list, I do not think that anybody would find that acceptable. Therefore, I strongly hope that the Minister will assure us that at Third Reading he will be able to bring concrete proposals to this Chamber and that we will see the same acceptance of the importance of looking after students in the entire technical education sector that we so happily see in further education colleges.

[Lord Storey (LD)]

My Lords, I will speak to Amendment 14 and to Amendment 16, which is linked to that, and will say a few words in support of Amendment 1.

It is interesting that a large part of the Bill is about insolvency—what happens if a college becomes insolvent. Yet it does not say very much about what happens if a poor student, through no fault of their own, becomes insolvent because of debt problems arising from the fact that their college no longer exists. We also encourage private providers—I say right at the outset that there are many good private providers, who have an exemplary record and are very worth while. Sadly, however, some providers have caused immeasurable harm to young people, and we need to ensure that there is a proper safety net for those young people.

Higher Education and Research Bill

Debate between Lord Storey and Baroness Wolf of Dulwich

Report: 2nd sitting (Hansard): House of Lords
Wednesday 8th March 2017 Lords Chamber

[Baroness Wolf of Dulwich]

My Lords, I reiterate my support for the government amendment to which I have put my name because this is actually a big move forward in clarifying in the Bill what is needed to ensure that, as the sector grows, we have really high quality. However, something more is needed. The Bill sets forth the whole environment for the sector, possibly for decades to come. Over the years we have moved to a situation where most people do not understand what is going on. I know that this sounds very strange but it is true. People do not understand—and I include myself in this much of the time—how degree-awarding powers can be given, where powers lie, and what can and cannot be varied.

My Amendment 116A is intended to complement and add to the improvements that the Government are proposing by modifying somewhat and clarifying the process by which new institutions may receive degree-awarding powers, ensuring that these are clearly understood—because they are in the Bill—and to further reduce, to a very low level indeed, any remaining risk that students may end up with degrees from institutions that failed early in their existence and are therefore effectively devalued in the labour market. I do not think that a degree awarded by the Office for Students is likely to be understood or valued, and we should be thinking about two clear alternatives, which are set out in my amendment. These are that,

“the provider has been established for a minimum of four years with satisfactory validation arrangements in place, or … the Quality Assessment Committee is assured that the provider is fully able to maintain”—

from day one—

“the required standard expected for the granting of a United Kingdom degree … and may therefore be authorised to grant taught awards or research awards … and has reported to the Secretary of State”.

I will come back to why I think that is important. The OfS should also be assured,

“that the provider operated in the public interest and in the interest of students”.

There are a few points that I want to underline. First, thinking in terms of four years is really quite important. I would like to see that in the Bill for institutions that come through the validating requirements. The reason for that is, as the Government have frequently said, we want to know whether or not an institution works and is deserving of degree-awarding powers. That means that it needs to have gone through the process of educating people and giving them degrees and those people need to go out into the labour market. We need to see whether their degrees are robust and still stand up and bring them labour market recognition and labour market power. My sense is that four years is actually a pretty good number and that is why we have had it up to now. We should recognise that it is a number that has worked and put it in the legislation and have done with it. One thing I have discovered is that there is an extraordinary ability to vary things through guidance, and my sense is that the four-year figure really matters.

The other change is in giving degree-awarding powers without a validation period. There are cases where this is clear and important, but it should involve the Secretary of State. The reason is that, again, having degree-awarding powers is a really valuable thing. That is why private companies buy and sell universities; they think that they can do very well out of them. If you move to being able to do this straightaway, then you need to be quite secure that it can be done. I would not argue that everybody should have to have a validation process. That is not the case in the statute at the moment and certainly was not the case when many of our best younger universities moved straight to being universities, as many people including the noble Lord, Lord Willetts, pointed out in Committee.

One of the more informal questions that often comes up is: supposing that MIT wanted to set up here? I do not think that MIT probably would want to, but one day, if my dreams come true, the Government might want to create the equivalent of Caltech here—something really new, exciting and very different, which could become a university straightaway. If we were asked whether we wanted to validate anybody like that who came along, there would be a competitive, fighting queue around the block. If future Governments realise that their higher education policy needs to be more active and in some ways more interventionist about meeting the needs of the future, as the noble and learned Lord, Lord Mackay, pointed out on Monday, then they will need to be able to do that.

Why do I also suggest that the Secretary of State has to come into this? As I said, creating something which can go straight out and give degrees to students is a big thing. The Secretary of State is the accountable one. A regulator is not accountable, or the same thing as an elected politician. If you made sure that this was happening, most of the time it will be fine—of course it will—but the reality is that, a few years from now, the caravan will have moved on and people will not be looking at things with the same clarity. If there is this possibility, any new institution coming about in this way must be of very high quality. We need to be absolutely sure of that, and it seems not unreasonable to suggest that the elected, accountable Secretary of State should be involved in some way in that decision.

I have added my amendment to the government amendments, which are excellent, as I said, because this is an opportunity to have a clear set of rules and possibilities for the next few decades, and we still need to tidy some of this up. I also consider that the deletion of Clause 48, which suggests that the OfS can put itself on the register and award degrees, is consequential to this amendment. I would be grateful if the Minister could confirm whether this is the case.

[Lord Storey]

My Lords, I too thank the Government for their amendments, which are much needed and beneficial. I have put my name to Amendment 116A because the four-year period is absolutely right. As the noble Baroness, Lady Wolf, has said, it would enable students to go through a cycle of university education and into the labour market. There would then be feedback and we could see clearly whether any issues needed ironing out before that awarding status is given. Feedback should also include things such as facilities: for example, the quality of the library and, dare I say it, perhaps the quality of teaching as well.

I apologise for just throwing this out—it may be that I have missed it—but perhaps I may take the liberty of asking the Minister this. If a private provider gets degree-awarding status and, goodness forbid, that provider goes into liquidation, what happens to the student loans that have been taken out? Will the Government guarantee that they can get those loans back, so that they can pay for the course somewhere else?