Higher Education and Research Bill

Lord Watson of Invergowrie Excerpts

Committee: 3rd sitting (Hansard): House of Lords
Monday 16th January 2017 Lords Chamber

[Lord Willetts (Con)]

My Lords, perhaps I may briefly comment on these amendments by looking at them from the perspective of how the old system has functioned. We have been told about the powers of the OfS, and your Lordships are scrutinising those very carefully. I think that perhaps the powers of the old HEFCE have been understated. In reality, HEFCE was not only the funder but was using its funding power to be the regulator—a highly discretionary regulator that operated with very little transparency and few constraints.

HEFCE was the extremely successful buffer body between government and universities, and the Government communicated with HEFCE notably through the grant letter—and the grant letter, I suspect, is the origins of the guidance provision in front of us today. The grant letter is the way in which the Government have historically set out their policy, week by week, year by year, for universities, and so, for example, it has been historically possible for the Minister for Universities to go to the Chancellor and say, “High-cost subjects are not being sufficiently funded. We do not think that the extra costs of doing them are properly reflected in the higher cost bands. Will it be possible to have extra funding attached to that?”—and then in the grant letter to suggest to HEFCE, “In the light of the funding we have available, it would be excellent if HEFCE were able to identify and set aside more funding for high-cost subjects”. Indeed, I used to write such grant letters with my excellent former colleague Sir Vince Cable.

What is happening—this goes back to discussions we had last week—is that as we are now moving from that old discretionary high-trust system to a new rule-bound system with a regulatory function, quite understandably your Lordships, at each stage of the process, are trying to pin down what kind of decisions will be taken and how they will be taken. I think that a power to give guidance distinct from a power to give instructions, and a reasonable amount of flexibility for Ministers to use it so that they can communicate the same kind of messages that they used to in the old HEFCE letter, is in the interests of the sector as a whole.

[Lord Watson of Invergowrie (Lab)]

My Lords, the group contains several common-sense amendments that would strengthen the Bill and one of the amendments within this group seeks to ensure that the Secretary of State should have regard to any advice given to her or him by the Office for Students. The Government are placing a huge amount of faith and power in the Office for Students and it makes sense that the Secretary of State should not only give guidance to that body but should have regard to what the OfS says to her or him. Why would it not be sensible to do so?

It is not enough for the Minister to say, as he did several times in Committee, that he does not want to see too much detail on the face of the Bill. In effect, he is saying, “Trust me. There is no need for it. Everything will be fine”. With the greatest respect, even were we to accept that from such a find upstanding Member of your Lordships’ House as the noble Viscount the Minister, he cannot of course bind his successors, who, I suspect, would not be willing to be bound by him and his colleague Mr Johnson. Who knows what might or might not follow in the months and years after this Bill passes into statute? For that reason, it is helpful to have this sort of detail in the Bill. At the end of the day, it is only a question of having regard to what the OfS says, but it will have built up considerable experience and wisdom over time and the Secretary of State should surely benefit from that.

There are also amendments from the noble Baronesses, Lady Garden and Lady Wolf, and the noble Lord, Lord Storey, on the need to ensure that the Secretary of State does not take any action that would prohibit the Office for Students from funding a particular course of study. The noble Lord, Lord Storey, eloquently explained the reasons behind that and there was some discussion on this last week as well. I trust that the noble Viscount has taken note of the arguments advanced in support of those amendments.

The most important amendments in this group are Amendments 69 and 510, which seek to make the Secretary of State’s power to give guidance to the OfS exercisable by statutory instrument. Last month, the Delegated Powers and Regulatory Reform Committee of your Lordships’ House reported on its consideration of the Bill. When commenting on Clause 2(2) which requires that the OfS,

“In performing its functions … have regard to guidance given to it by the Secretary of State”,


the committee said:

“There is no Parliamentary scrutiny of the guidance and there is no requirement for it to be published. The absence of any Parliamentary scrutiny is explained in the Department’s memorandum”,


but that,

“We are wholly unconvinced by the Department’s reasons”.


However, it did not stop there. In summation of its consideration of that part of the Bill, the committee concluded:

“The wide range of functions which are being conferred on the OfS will give it the ability to bring change to the whole of the higher education sector. We consider that the guidance issued by the Secretary of State under clause 2 will act as a significant control over how the OfS exercises its functions. Therefore, far from having no Parliamentary scrutiny, we recommend that guidance issued under clause 2 should be subject to Parliamentary scrutiny and that the affirmative procedure should apply”.


That does not leave much room for doubt, and I am not aware that the Government have yet responded to the committee’s report, but I hope that they will be able to take such trenchant criticism on board—or will this be yet another example of the Government saying in effect that, “We know best. We have a monopoly on wisdom and we intend to plough on regardless”? I certainly hope not. The Delegated Powers Committee is of course cross-party and in this case was actually chaired by a Conservative. If its role is to be treated with respect, its considered view should surely be weighed heavily by the noble Viscount and his colleagues.

Last week the Minister undertook to reflect on the amendments debated and it is to be hoped that, as regards Amendments 69 and 510, the issue really is rather a black-and-white one. I hope that he will be able to give a considered response to it when he rises to speak in a few moments.