Higher Education and Research Bill

Lord Watson of Invergowrie Excerpts

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

Moved by

[Lord Watson of Invergowrie]

124: Schedule 5, page 89, line 22, at end insert—
“( ) the suspected breach may constitute fraud, or concerns serious or wilful mismanagement of public funds,”

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[Lord Watson of Invergowrie (Lab)]

My Lords, the amendment standing in the name of my noble friend Lord Stevenson is really a probing amendment, designed to ask the Minister why we have Schedule 5 and why we need it. We have more than five pages on powers of entry and search, from the power to issue search warrants to those of inspecting, copying, seizing and retaining items. It all sounds terribly dramatic, and the reasons for it are not at all clear. Such a power was not in the 1992 Act and has never, as far as we or those connected with the higher education sector are aware, been necessary before. Perhaps the Minister can say whether there are problems that we are not aware of which are so serious that they demand a schedule all to themselves.

When it comes to Schedule 5, the Explanatory Notes refer us to the commentary on Clause 56. That does not enlighten us all that much, although it goes into slightly more detail:

“The warrant may permit or require a constable to accompany an authorised person and that constable may use reasonable force if necessary”.


That all sounds as though something serious is envisaged by the Government. Three-quarters of the Technical and Further Education Bill currently before your Lordships’ House is taken up with insolvency procedures—something that the Government do not envisage happening other than in extremely rare circumstances. Perhaps the Minister will say the same about Schedule 5. We certainly hope so, because we do not want these powers to be used at all, but certainly only sparingly. If entry and search is deemed to be required, it should happen only after a serious breach of a registration condition is suspected. That is why we set out fraud or serious or wilful mismanagement of public funds as conditions that must be met. Short of that, the vague conditions of the schedule do not meet the test. Can the Minister explain why this is necessary and in what situations he envisages where it might be necessary? I beg to move.

[Lord Young of Cookham (Con)]

My Lords, I am grateful to the noble Lord for the way that he posed his questions as to why we need these powers, and I agree that we hope that they will be used rarely. We are revisiting a debate that we had in Committee, and I am grateful to those who participated in that debate, particularly my noble and learned friend Lord Mackay.

In the light of the debate that we had in Committee, we have carefully reflected on the schedule, but remain of the view that it should stand as drafted. This will ensure that the Office for Students and the Secretary of State are able to investigate effectively if there are grounds to suspect serious breaches of funding or registration conditions at a higher education provider.

The proposed amendments would narrow these powers so they could be used only where there are suspicions of fraud, or serious or wilful mismanagement of public funds. We believe that most, but not all, cases where these powers would be used would fall into that category. However, narrowing the powers in the way proposed could affect our ability to investigate effectively certain cases where value for public money, quality, and the student interest was at risk, but where these might not clearly constitute fraud, or serious or wilful mismanagement of public funds at the time of the application for the warrant.

Higher education providers will be subject to OfS registration conditions. As an example, the OfS could put in place a condition to limit the number of students a provider with high drop-out and low qualification rates was able to recruit: for instance if the OfS considered that those performance issues are related to the provider recruiting more students than it can properly cater for.

[Lord Watson of Invergowrie]

My Lords, I hear what the Minister says. He is talking about low-qualification and high drop-out rates. Could it be that we have never needed this power until now because of the present university architecture, but given the expectation that there will be new arrivals on the scene, the Government are implicitly saying that they foresee dangers in future that have not been considered a threat hitherto?

[Lord Young of Cookham]

I will come in a moment to why at present there is not provision for these types of institutions, where there is for every other, and I hope that that may answer the noble Lord’s question.

I was explaining that a breach of such a condition may not clearly constitute wilful mismanagement of public money if the provider was using the tuition fees in line with their purpose—the provision of a designated higher education course to an eligible student. However, there is a significant risk that value for public money, quality of provision and the students’ experience will be seriously negatively affected. If the OfS has grounds to suspect that the provider is in any case undertaking an aggressive student enrolment campaign, it is important that evidence can be found swiftly to confirm this, and to prevent over-recruitment.

If the amendment were made, a warrant to enter and search may not be granted in cases such as that. The amendments would also amend the powers so that the search warrant must state that all the requirements for grant of the warrant specified in Schedule 5 have been met. My noble friend Lord Younger wrote to Peers at Committee stage to clarify that it is not usual practice within powers of entry provisions for the magistrate to certify that conditions for grant of the warrant have been met, and we are not aware of any examples of this.

Schedule 5 sets out the conditions that must be met for a warrant to be granted, and we have full confidence that this constitutes a strong and sufficient safeguard to ensure a warrant would be granted only where necessary. This is a standard approach used in existing legislative provisions relating to search warrants and powers of entry. Examples from recent legislation include the powers to enter and search within Section 39 of the Psychoactive Substances Act 2016 and the powers to enter within Schedule 5 to the Consumer Rights Act 2015.

To be clear, a requirement to state that conditions have been met would not provide an extra legal safeguard. The requirement for these conditions to be met already exists in the schedule as drafted. There are strong safeguards in place to ensure these powers are used appropriately—and, I hope, rarely. A magistrate would need to be satisfied that four tests were met before granting a warrant: that reasonable grounds existed for suspecting a breach of a condition of funding or registration; that the suspected breach was sufficiently serious to justify entering the premises; that entry to the premises was necessary to determine whether the breach was taking place; and that permission to enter would be refused or else requesting entry would frustrate the purpose of entry.

These criteria will ensure that the exercise of the power is appropriately limited. Further limitations are built into Schedule 5, including that entry must be at a reasonable hour and the premises may be searched only to the extent that is reasonably required to determine whether there is or has been a breach. Powers of entry, such as these, already exist for a wide variety of other types of education. Ofsted has inspection powers in respect of schools, colleges, initial teacher training, work-based learning and skills training, adult and community learning and education and training in prisons.

Local authorities have powers to enter the premises of maintained schools. Regulators of qualification awarding bodies also have powers of entry. So, to answer the noble Lord’s question, currently HE providers are an exception as neither the Department for Education nor the Higher Education Funding Council for England has a statutory right to enter an HE provider if serious wrongdoing is suspected. To that extent, we are bringing these institutions into line with other institutions in education, and indeed other fields. I therefore ask the noble Lord to withdraw this amendment, against the background of the reasons I have given for the schedule remaining as it is at the moment.

[Lord Watson of Invergowrie]

I thank the noble Lord for that, but I have to say that I am even less reassured than I was before moving the amendment. The Minister mentioned, as I did earlier, low qualification levels and high drop-out levels, and he then went on to talk about aggressive student enrolment campaigns. That conjures up images of press gangs going round the bars in ports and people being carried off, never to be seen again—or, in this case, to be seen again in a new higher education institution near you. It is a rather bizarre concept that I cannot quite picture in my mind.

The question is basically, “Why now and why not in the past?”. As far as anyone is aware, and the Minister has not suggested it, there has been no lacuna. The Minister said he is bringing this sector into line with parts of other education sectors. I do not know the detail on that, but my basic question is: where did the demand come from? Five pages in a schedule does not exactly suggest a tidying-up exercise, if we are allowed to use that phrase. It seems rather odd. However, I shall leave it at that. It does seem rather odd but in the circumstances, none the less, I beg leave to withdraw the amendment.

Amendment 124 withdrawn.

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[Lord Young of Cookham]

My Lords, might I respond to the points that my noble and learned friend has raised? In so doing, perhaps I will respond very briefly to the point made by the noble Lord, Lord Watson, in concluding the previous debate about why these powers were necessary and where the demands came from.

As I said, at present, neither HEFCE nor the Secretary of State has the statutory right to enter a HE provider to investigate if serious wrongdoing is suspected. This compromises investigators’ ability to obtain evidence of what may have happened and makes it harder to tackle rogue providers.

In its 2014 report on alternative providers, the National Audit Office said that the department has no rights of access to providers and that this affects the extent to which it can investigate currently. Therefore, we believe that these powers are needed to safeguard the interests of students and the taxpayer and to protect the reputation of the sector.

I apologise to my noble and learned friend, but I tried to address Amendment 125 when I—

[Lord Watson of Invergowrie]

I thank the noble Lord for giving way. I appreciate that he is taking the opportunity to clarify that last point, but to some extent he has stirred the pot again. He is talking now about rogue providers. My point was that, up until now, we have not been aware of rogue providers. There is clearly a fear that in the not too distant future there will be rogue providers, and that surely is a bigger issue than the question of having five pages in Schedule 5 to deal with them.

[Lord Young of Cookham]

No, the provisions are not required for the reasons that the noble Lord has suggested but because we believe they are necessary for the current institutions and in the light of the NAO report, which was written before these new providers came on to the scene. The department has no right of access to the providers. This affects the extent to which it can investigate currently rather than in future.

I turn to my noble and learned friend. I am not sure that I can usefully add to what I said earlier. I would not of course challenge for a moment what he said about practice in the judiciary. My understanding is that it is not usual practice within powers of entry provision for the magistrate to sign a certification document, and we are still unaware of any examples of this. The relevant clause in the Bill, as I think I said a moment ago, sets out the considerations that magistrates would have to take into account when making their judicial decision to grant a warrant, and we have full confidence that this constitutes a sufficient safeguard to ensure that a warrant will be granted only where necessary. For that reason, we are not persuaded that his amendment, in saying that it would have to be signed, constitutes an extra safeguard to ensure that a warrant would be granted only where necessary. I hope that, against that background, my noble and learned friend will feel that he does not have to press his amendment.

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Moved by

[Lord Watson of Invergowrie]

131: Schedule 6, page 94, line 27, at end insert—
“( ) a number of persons that, taken together, appear to the OfS to represent, or promote the interests of, higher education staff,”

[Lord Watson of Invergowrie]

My Lords, Amendments 131 and 132 mirror those that we brought forward in Committee. They concern the entitlement of higher education staff to be consulted prior to the OfS making a recommendation of a body suitable to perform the data functions. In such situations, this schedule provides for a number of registered providers of higher education, covering a broad range of different types of providers, a broad range of students on higher education courses and a broad range of employers of graduates, which is perfectly understandable and acceptable.

That is it, apart from the catch-all,

“such other persons as the OfS considers appropriate”.

In Committee, the Minister said that the Government did not think it appropriate to restrict the ability of the OfS to consult such other persons as it considered appropriate. These amendments do not do that. If we had extended them to delete the reference in the schedule to “such other persons”, that would have closed things down. However, we are not doing that; we are leaving it there and suggesting that we should add another provision to ensure that staff working in higher education are part of the process. That does not mean only academic staff but includes all categories of people who contribute to making the experience of students fulfilling in every way possible. These people know higher education and the way in which institutions work, and so caretakers, catering staff, IT support, technicians and other categories should be asked to bring the benefit of their experience to bear in the decision either to designate a body or to remove that designation.

The Government do not give adequate consideration to the role that staff working in higher education can play. They have a contribution to make and they should be enabled to make it. This is not a radical suggestion—it certainly ought not to be—and adding one more category to those who must be consulted would certainly not be onerous for the Office for Students. I beg to move.

[Lord Young of Cookham]

My Lords, I repeat what I said in an earlier debate: we appreciate the role of all HE staff and there should be no imputation to the contrary.

This is another issue which we discussed in Committee. The amendments would require the OfS to consult HE staff on designation of the data body and would require the Secretary of State to consult HE staff before removing such a designation. We are committed to a system of co-regulation for the designated bodies, and this means that both the OfS and the sector should have confidence in the designated data body. Therefore the Bill already contains a requirement for the OfS to consult a broad range of registered HE providers on designation of the data body, and the Secretary of State must also consult before removing such a designation.

Providers are, of course, made up of HE staff, and in consulting HE providers we would expect their responses to be inclusive of the views of their staff, not only the academic community at that institution but the administrative and support teams, who in many cases directly gather and then submit the data required. So we expect that the views of staff on data and designation will be represented in their institution’s response.

However, there is nothing in the Bill to prevent direct consultation with staff groups. The OfS and the Secretary of State will have the discretion to consult any person, including a staff representative body. We would expect it to adopt an open approach, and we bear in mind the remarks that have just been made by the noble Lord.

The legislation must be broad and flexible to stand the test of time and therefore, despite the urging of the noble Lord, we should resist specifying this sub-group, or any other group with an interest, in the list of consultees when the current drafting of the Bill is sufficient to ensure that the views of HE staff will be represented both in the designation process and in the removal of designation. Against that background, I ask the noble Lord to withdraw his amendment.

[Lord Watson of Invergowrie]

My Lords, I find that partially encouraging. The Minister’s initial remarks will be noted by those who represent staff—trade unions and other organisations—and in future will be shown to the management of higher education institutions when the time comes for them to be consulted on designation or “dedesignation”, if there is such a word, in this context. I am sure the Minister did not mean to be disparaging, but for the staff to be described just as a “sub-group” undervalues the role they play in the running of an institution. That is why we believe there is a case to add one more provision, while still leaving it open for anybody else to be included.

However, the Minister’s remarks have been helpful. It would be even more helpful if at some stage they could be issued as some form of guidance to higher education institutions, but it is up to staff representatives, trade unions or whoever to use those remarks and ensure they are turned into meaningful representation within higher education institutions. On that basis, I beg leave to withdraw the amendment.

Amendment 131 withdrawn.