Higher Education and Research Bill

Lord Young of Cookham Excerpts

Report stage (Hansard - continued): House of Lords
Monday 6th March 2017 Lords Chamber

[Lord Carrington of Fulham (Con)]

My Lords, this is a probing amendment to clarify a situation which concerns, pretty specifically and possibly uniquely, the Guildhall School of Music and Drama. The Guildhall school is a very unusual institution, partly because of its history, and partly because of its ownership. It is an unincorporated body. It does not have the legal structure common among higher education colleges. It was set up 137 years ago, in 1880, by the City of London Corporation as a conservatoire, and has never changed its corporate structure since. It is owned by the City of London Corporation, its court of governors is appointed by the City of London Corporation and close to a third of its funding comes from the corporation. It is, indeed, an integral part of the whole structure of the City of London, in the same way that Hampstead Heath, Epping Forest, and various other schools are run.

This gives the problem under the Bill that the Guildhall is a body that does not really fit into the definitions of what the White Paper was trying to create. The White Paper, which informs the Bill, indicates that the governance principles of the Office for Students, under the powers conferred on it under Clause 15, will be,

“comparable to those currently required of HEFCE-funded providers in line with the HE Code of Governance”.

This code has been developed by the Committee of University Chairs, and has been deployed successfully by the Guildhall. There is every reason to assume that the governance principles envisaged by Clause 15, which the Office for Students will be developing, can be applied to the Guildhall with equal success. The clause, however, introduces statutory backing for the principles, and the concern is that in moving to this more formalised position, some of the current flexibility will be lost and the ability to take account of the possibly unique governance structure of the Guildhall will no longer be applicable.

The amendment is to try to flush out whether it is possible to have sufficient flexibility under the new structure to enable the Guildhall to continue in the way that it has in the past—in other words, to be an integral part of the Corporation of London. I am trying to work out whether things can go on as they are or whether they have to change for the Guildhall, possibly with unfortunate consequences. On that basis, I beg to move.

[Lord Young of Cookham (Con)]

My Lords, I am grateful to my noble friend who, not for the first time, has raised in your Lordships’ House interests of concern to the City of London Corporation.

Clause 15 enables the OfS to take over the responsibility of scrutinising providers’ governing documents against the list of public interest principles. I can reassure my noble friend that we do not anticipate any impact on current higher education institutions being recognised by the OfS as higher education providers in the future. The intended practical application of the current and future list is to ensure best practice within already existing and recognised higher education providers’ governing documents, and it is not the intention of these principles to prescribe the corporate form of providers. I hope that gives my noble friend the comfort he is seeking.

The OfS must consult on the new list of principles. With the exception of the requirement that there should be a principle protecting academic freedom for staff, which I am sure the Guildhall has no difficulty with, the Bill does not prescribe what should be included in that list. There is nothing in Clause 15 that should concern the Guildhall School of Music, and it should be able to continue doing the valuable work it has been doing for so long. Against that background of assurance, I hope that my noble friend will be able to withdraw his amendment.

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[Lord Storey (LD)]

My Lords, I did not intend to speak on this issue but I want briefly to say something very important. If any of us had children who we sent off to higher education, we would expect that institution to give them the support and development they needed. There are private colleges that have their courses validated by individual universities. Of course, those private colleges could, under certain circumstances, get into difficulties and cease trading. What happens then to the students and to their student loans? As the noble Baroness, Lady Wolf, rightly said, we are seeing this already in further education, where training providers are going into liquidation. They are all right—they have gone into liquidation—but the poor student is left high and dry. I hope that when the Minister replies he might give assurances on this matter.

[Lord Young of Cookham]

My Lords, I am grateful to all noble Lords who have spoken in this debate, which has raised the important issue of student protection in the case of suspension of registration or indeed deregistration. I think that there is no disagreement that student protection is important, and that is why in this Bill we have gone further than ever before by including an express provision that will enable the OfS to ensure appropriate protections for students through a key condition of provider registration. The noble Lord and others have made some helpful suggestions regarding the likely content of student protection plans, which we agree need to be robust and comprehensive in their coverage. These plans are likely to include a diverse range of measures to protect students, as well as a diverse range of possible triggers for a student protection plan, including suspension of registration.

In response to the concerns that have been expressed in the debate, I can say that draft guidance will be prepared for consultation with the sector and with students as part of the regulatory framework consultation later this year. We would expect it to include information on how and when a provider should refer students to its student protection plan, for example during suspension of registration. It would be wrong to pre-empt the consultation by including these measures in the Bill itself, but I would seek to reassure noble Lords that the measures I have just referred to could include, for example, provision to teach out a course for existing students; offering students an alternative course at the same institution; making arrangements for affected students to switch to a different provider without having to start their course from scratch; and—in response to an issue raised by the noble Lord, Lord Watson—measures to compensate students who are affected financially. I hope that these examples provide some reassurance to noble Lords that we do have in mind the contingency arrangements they have outlined in the debate.

Clause 17 places a clear duty on the OfS to notify, through its maintenance of the register, when a provider has been suspended, and a similar duty is imposed on the OfS by Clauses 19 and 23 whenever providers are deregistered. The OfS already has the power, given in Clause 7, to require a provider’s governing body to make sure that students are promptly informed about its actions.

However, widespread publicity of preliminary compliance measures may not always be appropriate in every case. Before the OfS can impose a sanction of suspension and deregistration it must notify a provider of its intent to do so, unless an urgent suspension is being imposed, and then allow the provider the opportunity either to argue its case or to put matters right. As I am sure noble Lords will agree, the desired outcome for the benefit of students and the provider alike is that the provider takes the actions necessary to ensure that it complies with the conditions of registration that have been placed upon it, which would mean that no further action would be required.

There are also important matters of confidentiality at play here, which is a key concern that has previously been raised by Universities UK and a number of noble Lords in the debates in Committee. Higher education providers would not wish the OfS to announce that it was carrying out an investigation into a provider as this could lead to unnecessary reputational damage if the OfS subsequently decided not to take action. We must also be careful not to unsettle or panic students unnecessarily. Disclosing details of possible sanctions when the OfS has yet to decide to take action would not in our view generally be appropriate or helpful to students. It is the inclusion of the words “intention to” that I find real difficulty with in Amendment 56.

On Amendment 57, I have listened to the thoughtful debates we have had today, and indeed I read the debates in the other place, on the issue of student transfer. We tabled Amendment 100 on this important issue which we have already discussed. Our amendment will require the OfS to monitor and report on the provision of student transfer arrangements by registered higher education providers. It will empower the OfS to facilitate, encourage or promote awareness of these arrangements. In doing so, the Government are creating the conditions to allow the necessary flexibility for students to make the right choices for themselves and to have control over those decisions, whatever the reason for their transfer. The amendment that has been proposed and to which noble Lords have spoken would result in the OfS trying to make arrangements for students to be placed on other courses if their current course closed. However, the decision about what courses to offer falls within the institutional autonomy of each provider.

While I recognise the importance of students being able to transfer, particularly where their institution ceases to offer their planned learning, it is not and nor should it be in the OfS’s gift to determine whether institutions accept students from elsewhere. This has never been a role undertaken by the OfS’s predecessor, HEFCE, and there is no intention for it to be taken on by the OfS. It must surely be preferable for the sector to be in control of transfer processes, including where appropriate as part of the student protection plans, and for the OfS to play a greater role in facilitating and encouraging the availability and take-up of such arrangements.

In response to my noble friend Lord Norton, who was concerned that students would not know what protections they have, we have listened to concerns on this issue. That is why we brought forward an amendment in the other place to require plans to be published and therefore brought to students’ attention. This balanced approach is what our amendment sought to achieve. Against that background, I ask the noble Lord to withdraw Amendment 55.

Higher Education and Research Bill

Lord Young of Cookham Excerpts

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

Moved by

[Lord Young of Cookham]

101: Clause 38, page 22, line 11, leave out “or by another eligible higher education provider”

[Lord Young of Cookham (Con)]

My Lords, these minor and technical amendments simply clarify the drafting of the Bill; they ensure that it is consistent across the board and refine the consequential amendments relating to HEFCE ceasing to exist. Essentially, they tidy up the Bill. I would be happy to explain any of them, should noble Lords so require. I beg to move.

Amendment 101 agreed.

Moved by

[Lord Young of Cookham]

102: Clause 38, page 22, line 14, leave out “or by another eligible higher education provider,”

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[Baroness Wolf of Dulwich]

My Lords, this is a very small amendment and I rather hope that it is a tidying-up amendment that the Government will go away and decide to agree. At the moment, as part of the general rethinking of the sector, it is possible for institutions to apply for just bachelor-level degree-awarding powers, bachelor’s and master’s or bachelor’s and research, but one group is regrettably shrinking in size: foundation degrees. That is important because, in another part of the woods, we are trying to rethink and redevelop tertiary education, and foundation degrees are a sub-degree level to which there is a lot of business and employer input.

By what is to me is a strange quirk, although the Minister may be able to explain it, the only people who can have foundation degree-only powers are FE colleges. I cannot see why other institutions should not also in certain circumstances have those powers. My amendment would simply delete that restrictive clause and leave it to the OfS to give foundation degree-only awarding powers to any institution where that seems appropriate. I beg to move.

[Lord Young of Cookham]

My Lords, I am grateful to the noble Baroness for her explanation. She tried to link it with the amendments I just moved and put it in the same category as tidying up. Hers is a more substantial proposition than those that I just put to the House. I agree with the noble Baroness that foundation degrees are important and can be—indeed, are—awarded by a wide range of institutions, which includes but is not limited to the FE sector.

Under the Bill, subject to meeting registration conditions, institutions that provide higher education will be able to apply for TDAPs—taught degree-awarding powers. That is a broad suite of powers that includes the ability to grant foundation degrees. The ability to apply for the powers to award only a foundation degree was always intended as specifically relevant to the FE sector, and it has never been the Government’s intention to change this position under the Bill. The sector is defined by reference to Section 91(3) of the Further and Higher Education Act 1992 and includes further education corporations and sixth-form colleges.

We are mindful of the fact that the landscape has changed since foundation degree-awarding powers were first introduced almost a decade ago—in particular, with the introduction of providers such as institutes of technology or national colleges. On institutes of technology, it is envisaged that existing FE colleges or higher education providers will be part of the consortium that is the IoT, and they will be involved in the provision of higher education. Given that involvement, we do not envisage any impediment towards the ability of such providers to deliver courses leading to foundation degrees, should they wish so to do. Against that background, I hope that the noble Baroness will be minded to withdraw her amendment.

[Baroness Wolf of Dulwich]

I have to say that I do not find the answer satisfactory, because I still do not see why, in that case, one still has a foundation degree-only awarding power in the mix at all. I continue to feel that it is odd to bar the possibility of something which might be useful in this changing landscape. Nothing here says that you have to do it.

However, I accept that the Government are not minded to do this, at least on this occasion. I very much hope that they might think about it some more. On that basis, I beg leave to withdraw the amendment.

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[Lord Stevenson of Balmacara]

My Lords, they used to say that real tennis was the game of kings. I suspect that the game of Parliament is listening to noble and learned Lords tearing into a piece of badly drafted legislation. We have enjoyed that very much. I will add one point and make a concluding comment. Clause 46 is the first of two. I hope that the noble and learned Lord will accept that Amendment 123 to Clause 56 is consequential as it deals with exactly the same matter as Amendment 117. We do not wish to encourage noble Lords to repeat themselves—although that would be much more fun. Secondly, we were not able to sign up to this amendment because when it was tabled it was immediately snapped up by others. Therefore, we were not able to express our public opinion of it. However, should the noble and learned Lord wish to test the opinion of the House, we will support him.

[Lord Young of Cookham]

My Lords, looking at the names on this amendment, it is certainly a gold star amendment, to use the language of the OfS. When I looked at it, I was relieved to see that the name of my noble and learned friend Lord Mackay was not on it. Therefore, I was somewhat disappointed when he rose to his feet to lend his formidable support to the amendment.

I can see that these amendments stem from concerns that there need to be appropriate safeguards and checks on the OfS’s powers under Clauses 43, 44 and 54. We fully agree and have listened to the concerns expressed in Committee. As a result, we have tabled two sets of amendments. First, there is Amendment 116 after Clause 44 and related amendments, which we have just discussed in an earlier debate. These ensure that the OfS must seek expert advice before granting degree-awarding powers or varying or revoking them on quality grounds. Secondly, there are amendments to Clauses 43, 44 and 54, which we have just debated in the group with Amendment 107. These amendments clearly set out the limited set of circumstances where the powers of revocation can be used, such as in cases of serious quality concerns. These further strengthen already very robust safeguards, including statutory processes guaranteeing providers the opportunity to make representations and a right of appeal. By the way, there is nothing in the Bill to prevent further appeals to higher courts.

Noble Lords also suggested in Committee an annual report on how the OfS exercises its powers of revocation under Clauses 43, 44 and 54. I accept that this is a good idea and would contribute to greater transparency. I can therefore tell noble Lords that in respect of each year where the OfS has made use of its powers to revoke degree-awarding powers or university title, we will ensure that a report be laid before Parliament that includes information on how the powers have been used.

Turning turn specifically to the amendment, the grounds for appeal in Clauses 46 and 56 have been carefully chosen and are largely based on what a judicial review would take into account. Despite the noble and learned Lord’s disparaging remarks about judicial review, it is the way in which public bodies are held accountable. These are sensible and appropriate grounds which balance the need for a regulator to make robust and confident decisions using its unique expertise with the need to hold that regulator to account where it makes decisions that are not within the reasonable scope of its powers. The Bill as drafted achieves that balance.

An appeal can be brought on three grounds, as the noble and learned Lord outlined. The first is that the decision was based on an error of fact. This means that if the OfS based its decision on wrong or incomplete facts, it can be overturned by the tribunal. The second ground is that a decision was wrong in law. We have specified in our amendments, to which I referred a moment ago, exactly when the OfS can revoke degree-awarding powers and/or university title, and how it has to go about it. For example, if the OfS decided to take the step of revocation outside the circumstances we have now specified in the Bill, its decision could be overturned by the First-tier Tribunal. Likewise, Clauses 45 and 55 provide that the OfS must have regard to representations made. If it did not do so, this could amount to being wrong in law and would therefore be grounds for appeal. Lastly, an appeal can be brought on the grounds that the decision was unreasonable. A provider could appeal against the OfS on the basis that its decision was unreasonable, having regard to the facts of its case.

Those grounds for appeal are complemented by strong procedural safeguards, which, again, are clearly set out in the Bill. These ensure that any decision made by the OfS must be legally correct and factually accurate and reflect a reasonable judgment, the OfS having carefully considered the available facts and applied its expertise according to the law. That is a very high standard to which the Bill holds the OfS to account.

By contrast, there are real risks in taking the route mapped by these amendments. They propose a more general and much less clean-cut ground of appeal—namely, that an appeal may be brought when the decision of the OfS is “wrong”, as explained by the noble and learned Lord. That is far less certain for the provider, for the regulator and indeed for the tribunal. It would also expand the range of cases that could go to appeal. What is “right” from one angle might always be seen as “wrong” from another. For example, will a provider that has its degree-awarding powers revoked on entirely justifiable grounds ever see that as anything other than “wrong”? Surely that provider should not have an automatic right of appeal, with all the delay, uncertainty and cost that that involves. The amendment would appear to allow that, as the balanced limitations of factual and legal accuracy and reasonableness would have been dispensed with.

Furthermore, the amendment would require the court to decide whether it agreed with the expert judgment reached by the OfS. Such an exercise would allow—indeed, it would require—a tribunal to put itself in the regulator’s shoes and then substitute its judgment for that of the OfS. I have to ask whether that is really the right place for the tribunal to be—asserting expertise in higher education rather than, in a more focused way, looking at lawfulness, factual accuracy and reasonableness. I respectfully suggest that it is not. Changing the grounds of appeal in this way would risk creating a process whereby the tribunals, rather than the OfS, regulated the HE sector. That is a powerful argument which noble Lords have so far not addressed.

I do not believe that the amendments are the right way to go—although they are well meant, I do not think they will take us in the right direction. Therefore, with respect, I ask the noble and learned Lord, Lord Judge, to withdraw his amendment.

[Lord Hope of Craighead (CB)]

Is the noble Lord able, with the resources at his disposal, to give any examples of this formula being used in the case of other regulators? We are contemplating a process that challenges a decision taken by a regulator, so it would be helpful to know whether this is the normal pattern or whether the suggestion of the noble and learned Lord, Lord Judge, is the normal pattern.

[Lord Young of Cookham]

The noble and learned Lord qualified his question with the remark “with the resources at my disposal”. The answer is that I do not have that answer at my disposal, but I will of course make inquiries and write to him.

[Lord Judge]

My Lords, we have just heard an utterly reasonable argument but, with great respect, it is wrong, and that is the issue the amendment is intended to address. Reasonable decisions may be wrong. Looking at this issue in depth, one hopes that the power will never have to be exercised. However, if it is, it will be an extraordinary power wielded by the OfS and it will not be open to the university in question to say, “We agree. All your facts are well set out but you have reached the wrong conclusion”. That seems to be a ground of appeal that ought to be available.

We need not worry that amending the clause in the way we have respectfully suggested will lead to a huge torrent of cases. We hope that there will be no case at all but, if it arises, the straightforward way to go about it will be to say to the tribunal, “We are arguing that this was wrong”. The tribunal is well able to assimilate the reasons why the OfS reached the decision it did, and will hear argument on behalf of the university. I propose to ask for the opinion of the House.

Higher Education and Research Bill

Lord Young of Cookham Excerpts

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

[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.

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[Lord Mackay of Clashfern]

I think that that is certainly so; my understanding of time and practice here suggests that it is. Perhaps I may continue.

The noble Baroness, Lady Brown, made the point that the noble Lord was making on the previous amendment: that this is really rather novel. You can imagine the effect on a higher education provider if it appeared in the newspaper that, the night before, a search warrant had been issued for its headquarters. In answer to that, my noble friend Lord Younger of Leckie said that the conditions are very strict, and he read out the fairly detailed conditions. I thought it might be a simple safeguard to require a signature to say that these conditions had been met. I got a letter the day after that suggesting that this was an unheard of stipulation. As you can imagine, that slightly worked me up to see what I could do about it.

The provisions say that a search warrant must specify the name of the authorised person who applied for it and so on, and,

“state that it is issued under this Schedule”.

That is a fairly important provision. It occurred to me that all one had to do was add after that the following simple words,

“and that all the requirements for the grant specified in this Schedule are met”.

That seems very straightforward and easy.

Look at how these magistrate’s search warrants are granted. One must remember that where the conditions in a particular provision are important, the magistrate may not have in his head exactly what the conditions are. Therefore, I suggest that this amendment is a rather easy and convenient way of making sure that the magistrate’s attention is directed to the detailed requirements of the schedule, which have to be met before the warrant can be granted. That seems very straightforward and I cannot see anything wrong with it. So far, I have not heard any reason why it would not work. Therefore, I beg to move this amendment.

[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.

[Lord Mackay of Clashfern]

I am very sorry, but it strikes me as absolutely essential that the warrant be signed. I do not think that there is any question but that the magistrate has to sign the warrant. Given that the warrant has to contain a statement that it is under the schedule—in other words, the magistrate has to say that it is under the schedule—it is only common sense. There are special conditions here, which my noble friend relied on as justifying the proposition that they should have this provision, in spite of what the noble Baroness, Lady Brown, said about how detrimental it might be to a higher education provider. I am not disputing the need for the warrant at all; all that I am suggesting is that it would be a very important safeguard that magistrates’ attention would be drawn specifically to these quite elaborate conditions. They are quite detailed, and I do not think that it is likely that a magistrate will have them in his head, or her head, as they approach the grant of a warrant, when whoever it is comes along and applies for it.

Therefore I am not asking for any separate signature—one signature is enough—but the signature would include the phrase that I have put in this amendment, after the fact that it is under this schedule. That seems to be absolute common sense, and I am extremely sorry that the Government have not had the willingness to accommodate this, which occurred to me in the course of dealing with the matter here. Surely, that is what Committee stages are for. If the Government are to cast aside what I have suggested, given that I have a certain amount of experience of magistrates’ warrants and so on, I sincerely hope that before Third Reading this is taken into account. Otherwise, it seems to me an absolutely idiotic attitude from the Government to simple improvements suggested in the course of the discussion.

[Lord Young of Cookham]

I am grateful to my noble and learned friend, and of course I will with my colleagues have a look at this between now and Third Reading, but what we have done here is to take a standard approach used in existing legislative provisions relating to search warrants and powers of entry. We are simply seeking to replicate the procedure that already exists in similar circumstances, when for whatever reason powers of entry are required. We are simply applying best practice and extending to these institutions powers that already exist to institutions in the educational field. However, in view of the very strong feelings that my noble and learned friend clearly has on this, and in view of his greater knowledge than mine in matters judicial, of course we will take it away and have another look at it. Against those undertakings, I hope that my noble and learned friend might feel able to withdraw his amendment.

[Lord Mackay of Clashfern]

Certainly, with that understanding, I am prepared to withdraw the amendment and I sincerely hope that wise counsels will prevail by the time we come to Third Reading.

--- Later in debate ---

[Lord Stevenson of Balmacara (Lab)]

My Lords, I support the amendments in the names of the noble Lords, Lord Lucas and Lord Willis, which were explained very well by the noble Lord. They would contribute to a better understanding of all the issues that have arisen during the course of the Bill and would be a source of good data for the future as we see how the system being brought into play works in practice.

My Amendment 130 stems from Clause 61, which would place a duty on the relevant body or the Office for Students to put in a series of measures in relation to data that are to be published. The requirements are not very detailed—there is broad discretion—but the broader areas relate to student entrants, the number of education providers of different types, the number of persons who promote the interests of students and a good range of other things. Curiously, it does not really go down into the detail of some of the mechanics mentioned by the noble Baroness, Lady Garden, when she spoke on behalf of the noble Lord, Lord Willis, and these are the issues picked up in my amendment. It happened to be topical because, when the Committee stage took place, there was an investigation into the use of part-time, non-permanent and permanent staff in higher education on zero-hours contracts—I think that was the term used. This amendment at least points in that direction but I think that it has a wider resonance, and I look forward to hearing the Minister’s response.

[Lord Young of Cookham]

My Lords, I am grateful to those who have spoken in this debate for addressing data issues. I entirely share the view of my noble friend that as much data as possible should be made openly available as soon as possible, and I have no difficulty in endorsing the broad principles that he enunciated.

However, I do not think that the issue here is about the powers to obtain data under the Bill. The current drafting already enables the OfS to make data available in connection with the performance of its functions and it also gives the Secretary of State the power to require application-to-acceptance data for qualifying research purposes. I am sure my noble friend will accept that, however we draft the powers of the OfS, data protection rules will necessarily mean that open data are subject to restrictions on sensitive and personal data.

With regard to the amendment in the name of the noble Lord, Lord Willis, although I sympathise with its intent, the OfS will be a regulator of HE providers, with the power to require such information from them as is required to perform its functions. However, it is not feasible to expand its remit to impose conditions on private companies that it does not regulate and with which it has no regulatory relationship.

Although I do not believe that these amendments are the answer to overcoming barriers to accessing data, I agree that greater collaboration between sector bodies on sharing and making comparable data available to students and researchers is something that we must continue to strive for. We would expect the OfS and the body designated to compile and publish higher education information on behalf of the OfS to play a part in encouraging that collaboration. The requirement to consult on what, when and how data are published will ensure that the interests of the sector, as well as those of students and prospective students, as called for by my noble friend, are taken into account. Moreover, in the spirit of co-regulation we must also recognise that the sector is already taking measures to address the points raised by my noble friend through the recently published HESA open data strategy, along with the recommendations made in the Bell review around the co-ordination of data.

I turn now to Amendment 130, which relates to an issue raised by the noble Lord, Lord Stevenson, in Committee. I understand his concerns about the job security of higher education staff and I can reassure him that the Government value the crucial contribution of HE staff. I remind the noble Lord that we are not seeking to determine on the face of the Bill exactly which data must be collected. Data requirements and needs evolve over time. The relevant data body needs to maintain the ability to adapt to changes and therefore data requirements will be decided through a period of consultation. The OfS will have a duty to consult on data collection and publication in conjunction with the full range of interested parties. In respect of the publication duty, the OfS will also have the discretion to consult persons that it considers appropriate, including any relevant bodies representing the staff interest. It would be inappropriate to specify workforce data when all other data requirements will be agreed through a period of consultation. It also risks pre-judging the consultation process.

However, I can offer the noble Lord some reassurance on workforce data. The current data body, HESA, already collects data on so-called “atypical” academic staff whose working arrangements are not permanent. This is governed by the code of practice for higher education data collections. Discussions were held last year between the trade unions, employers’ representatives and HESA on improving understanding of employment patterns in the HE workforce. This has led to proposed improvements to the HESA staff record. These are currently going through consultation with a view to being implemented in 2017-18. We are confident that this issue will be considered as part of the data consultation and that the OfS will want to build on HESA’s positive action in this area. I would therefore ask my noble friend to withdraw his amendment.

[Lord Lucas]

My Lords, I am grateful to my noble friend. He has answered all the points I raised very satisfactorily.

I am delighted that the noble Lord, Lord Stevenson of Balmacara, spoke to his amendment as well. There are datasets that are not obvious but which can have a great effect on the way the sector progresses. If the sort of information he is suggesting is made public, there will be a trend towards better behaviour. Students care about these things. If you are considering a university, you care about who is going to be teaching you and what sort of workforce it is. Also, the fact that a university has a strong cadre of highly valued permanent staff who have been in post for a long time is something that can be used in its recruitment policy. It is the sort of thing that students like to know, so I would encourage the OfS to look wide in its definition of data, and certainly to include things like gender relationships and relationships in general between students and staff. That sort of thing is a great driver of good behaviour. From time to time we hear stories of bad behaviour, so unless the information is surfaced and it becomes commonplace for higher education institutions to have to tell people what is going on, these things can too easily be hidden.

I commend the Government for their attitude to data and I look forward to the OfS following the diktat that my noble friend has just outlined. With that, I beg leave to withdraw the amendment.

--- Later in debate ---

[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.

--- Later in debate ---

[Baroness Wolf of Dulwich (CB)]

My Lords, I do not want to say very much about this. I did not withdraw the amendment which my noble friend Lady Brown and I originally tabled and which the noble Lord, Lord Stevenson, kindly introduced, because I wanted the opportunity to say in the House how very much we appreciate the fact that the Government listened to us on this and how convinced we are that introducing the Regulators’ Code into the OfS’s actions will be entirely for the good. It will take care of a great many anxieties we had about details in the Bill and we are truly appreciative of that.

I also want to agree with what the noble Baroness, Lady Deech, said about the realities of dealing with students who are in a university and how you cope with problems, complaints and all the issues which come to the Office of the Independent Adjudicator. It is really important that the Government take account of the fact that this is not like a situation where you buy a coffee and if you do not like it you go and buy another coffee. My noble friend spoke very eloquently. I hope the Government will listen to her on that as much as they listened to us, and I thank them very much.

[Lord Young of Cookham]

I am grateful to noble Lords who have spoken to these two amendments for their contributions to this debate. I shall deal with the easy one first.

My noble friend explained in his letter earlier this week that he had listened to concerns around the regulatory powers of the OfS and the assurance that noble Lords, many of whom have spoken in this debate this evening, are seeking around its adherence to the Regulators’ Code. As already stated in the Bill, under Clause 3(1)(f), we share the aspiration that the OfS should comply with recognised standards of good regulatory practice. We remain wholeheartedly committed to the principles of the Regulators’ Code, and because the OfS is the sector regulator, we agree that it should sign up to the code. I am therefore pleased to confirm the announcement made on Monday that the OfS will voluntarily commit to comply with the code, with a view to its regulatory functions being formally brought into scope when the list is next updated via statutory instrument.

I now turn to the more difficult amendment about the respective roles of the CMA and the OfS and what the interface is between the two. In his letter to noble Lords earlier this week, my noble friend recognised the concern over the respective roles and responsibilities of the CMA and the OfS. I will explain why we believe that this a not a substantiated concern. I think that the noble Baroness, Lady Deech, used the right expression when she said, “We expect collaboration”. That is exactly what we expect.

The CMA is not a sector regulator but an enforcer of both competition and consumer protection law across the UK economy. The CMA has the specific role and specialist expertise to enforce competition law and consumer protection across the whole of the UK economy. It would be unprecedented, as has been suggested at times, for the competition and consumer enforcement functions of the CMA to be transferred entirely to a sector regulator. Even where sector regulators have enforcement functions, the CMA retains powers as an enforcement authority, with appropriate arrangements for co-ordination of concurrent functions.

In the past the CMA has provided general advice to HE institutions on complying with consumer law. In addition, its consumer enforcement powers have been used in relation to the sector. Specifically, it has received undertakings from providers around, for example, academic sanctions for non-fee debts, such as accommodation debts; information for prospective students on additional non-fee costs; terms and conditions on fee variations; and fair complaints procedure.

HEIs are expected to comply with consumer law, enforced by the CMA. The OfS will be expected to take on board the CMA’s guidance and best practice when it develops the details of the regulatory framework. It is perfectly usual for an organisation that is subject to sector regulation to be required to comply with legal requirements that are enforced by bodies other than the sector regulator. For example, even in regulated sectors the Environment Agency carries out regulatory and enforcement activity in relation to the environmental aspects of an organisation’s activities—for instance, as regards waste and contaminated land—and the Health and Safety Executive enforces health and safety requirements.

Although the CMA and OfS share areas of common interest in relation to competition and consumer matters, their roles are distinct and complementary, not contradictory. This is the joint view not just of Ministers but of the CMA. So we expect the CMA and the OfS to work productively together, just as the CMA works well with other regulators—indeed, as it does with HEFCE at the moment—and we see no reason for this to be different once the OfS is established. There will be a further opportunity to explain respective roles and responsibilities, as necessary, as part of the consultation on the regulatory framework this autumn.

Students—in addition to being students—have consumer rights, and universities and other higher education providers that do not meet their obligations to students may be in breach of consumer protection law. Compliance with that law is important not just to protect the students but to maintain student confidence and the reputation of the HE sector, and to support competition.

The noble Baroness asked whether there was confusion about the regulatory roles of the CMA, the OfS and the OIA. I applaud the work that she did at the OIA. As I think I said a moment ago, subject to the passage of the Bill, the OfS will be the regulator for higher education providers in England. The OIA will continue to operate as the body designated by government to operate the student complaints scheme in higher education, so it is not a regulator and it will continue to deal with individual student complaints. The CMA is not a sector regulator but an enforcer of both competition and consumer protection law across the UK economy, and it has the specific role and specialist expertise to enforce competition law and consumer protection across the whole of the UK economy. So there is no overlap of responsibility between the CMA, the OfS and the OIA, although the OfS will be expected to take on board the CMA’s guidance and best practice when developing the regulatory framework.

As I said, there will be an opportunity, as part of the consultation on the regulatory framework this autumn, to explain, discuss and identify the respective roles and responsibilities of these three bodies as necessary. In the meantime, I ask the noble Lord to withdraw his amendment.

[Lord Stevenson of Balmacara]

I thank the Minister for that reply. On the relatively simple question—the good news, as he called it—of Amendment 135, I echo the remarks of the noble Baroness, Lady Wolf. We are very grateful for the listening and reflecting that has taken place. The end-result is exactly as we would want it. This is a body that will be carrying out regulatory functions. It would be better if it were fully subscribed to the Regulators’ Code. I understand that there will be a transitional arrangement. If that is the intention, we wish it well and that will be the right solution for that.

However, I am a bit more puzzled about the question of the overlap and links between the CMA and the Office for Students, particularly in relation to the very powerful case made by the noble Baroness, Lady Deech, whose experience in the OIA leads to real and very important questions about where this is all going to go. As she pointed out, and I do not think was picked up by the Minister in detail—although I will read what he said in Hansard—there are three bodies with very different functions and aims. They have very different cultures, missions and outturns that they will be looking for. I do not quite see how that all fits together.

I understand that there will be a consultation period, but we are starting from a very odd position. With the competitive focus and the competition issues—the possibility that institutions might seek to challenge the work being done by other higher education institutions through the Competition Appeal Tribunal—this is a new world that is going to cause quite a lot of concern, worry and cost. It is certainly a deflection from their main purpose of the higher education institutions engaging in this. That has not been dealt with, and I wonder whether it might be possible for more information to flow our way.

On the detailed precision about where the CMA sits in relation to the Office for Students, I understand that will have to evolve. I am not in any sense being critical of that, and I have already admitted in my opening statement that we understand the role that Parliament has given to the CMA. That cannot be taken away but, surely, there is a case here for a memorandum of understanding at least—some sort of written documentation so that we would at least have a baseline on which to operate. I did not hear that from the Minister. Perhaps he could reflect on that and write to me about it.

It was a good aphorism to say that these are complementary but not contradictory groups working here, but it will be very difficult to see for a few years where this will all settle down. He may be right in what he asserted: it may be that this is in the best interests of students, but it is a bit hard to see that at the moment. While I see no particular case for progressing this amendment, or any others related to it, to improve the Bill, I wonder whether it might be sensible to have a quick meeting about this. Those who are keenly involved in this might just share experiences about where our nervousness comes from to ensure that there is nothing to be picked up, at least by a statement about a way forward to set out the broad understandings under which we will start the system before we get to Third Reading. With that, I beg leave to withdraw the amendment.

Higher Education and Research Bill

Lord Young of Cookham Excerpts

Report: 3rd sitting (Hansard): House of Lords
Monday 13th March 2017 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, with all the voices in accord around the Chamber it seems almost otiose for me to join in and add my support. I had a conversation with the noble Lord, Lord Sharkey, just after he had tabled his amendment; I suggested that it was a rather weak amendment and he ought to sharpen it up because I thought there would be a lot of interest around the House. I have been proved right in that, to the point where a vote would perhaps be sensible. I am sure his intention in speaking today is not to force a Division on the House because the arguments are so all-encompassing and completely unanswerable.

I hope the Minister will be able to make a firm commitment, as previously suggested: first, that he supports the intention of introducing this measure as quickly as possible; and, secondly, that he will not allow the apparent problems with the supply line to hold up the provision of sharia-compliant loans. After all, a touch of competition from those experts in the field who might be able to step in might be a way for the Government to get themselves out of the hole. But it is a very sorry tale. The idea that students who could benefit from these loans cannot because of a conflict between faith and their ability to operate within the system that is currently available seems so utterly shocking that it just needs the Government to say that it will change.

[Lord Young of Cookham (Con)]

My Lords, the noble Lord, Lord Sharkey, is to be commended for his continued work to emphasise the importance of the Government’s plans to put in place a viable system of alternative student finance. I know that he has had a useful discussion with the Minister, my honourable friend Jo Johnson, and my noble friend Lord Younger.

I am grateful to my noble friend Lord Sheikh, who reminded us of the history of this commitment and the objectives of further opening access to higher education to more people who might be unable to access it at the moment. His points on the importance of Islamic finance in this country, particularly on the potential benefits of alternative student finance, are well made. We will consider carefully the correspondence that he has sent on to us. I am also grateful to the noble Baroness, Lady Cohen, for reminding us of the adverse impact of the current regime on women, and to other noble Lords who came in on this debate.

In response to the noble Lord, Lord Hussain, who is worried that this might be more expensive, I have looked quickly at page 53. Clause 82(7) would insert new subsection (11), which says that,

“the person making the regulations concerned, achieves a similar effect to a loan under this section”,

so the idea is that it should be neither more nor less expensive than the equivalent finance under a conventional student loan.

During debate in Committee, my noble friend sought to assure noble Lords that the Government are fully committed to delivering alternative student finance. We are the first Government to legislate to make such alternative finance possible, and have legislated at the first opportunity. As the noble Lord, Lord Stevenson, has just reminded us there is no disagreement at all about the policy and the objective. Introducing alternative student finance is one of our priorities for the student finance system. We are working to expedite its delivery. We want this new alternative system to be available to students as soon as practicable. In response to the questions posed by the noble Lord, Lord Sharkey, and other noble Lords, I can inform the House that subject to parliamentary processes, we are currently working towards it being open to applications from the first students within this Parliament.

I can see that there is interest in more information on our progress but I am afraid that a quarterly report, as required in the amendment, would be an unusual and unwarranted step. It would be onerous and, I suspect, of limited value to the people we are trying to support. The Bill is not the place to set out administrative processes around policy development; it is about the legislative framework needed to bring in alternative student finance. I am very happy to give an update on our progress here today, in the light of the clear interest shown. I have detected a note of impatience in the speeches we have heard this afternoon. Noble Lords will of course have an opportunity to hold the Government to account through the usual processes, whether by tabling questions or scrutinising the regulations that we intend to bring forward using the powers within the Bill.

Officials in the department are co-operating closely with counterparts in delivery partner organisations. Together, they are working through the requirements for the new alternative student finance system. We have started the process to engage dedicated experts in Islamic finance to work for the Government and support the detailed implementation of alternative student finance. We are also commissioning research that will explore the views of Muslim prospective students, and their non-Muslim peers, to help ensure that alternative student finance will meet their needs. I also assure noble Lords that we are actively considering how best to bring alternative student finance to the attention of prospective students in England in the run-up to its launch. We will want to ensure that we reach prospective students studying in a variety of settings, or indeed not currently studying at all.

It is only by working hard to develop and deliver complex and detailed plans that we will be able to meet our policy objective—a shared policy objective—of supporting participation in education. This careful, sensitive and important work has to be done properly first time. It takes time but I reassure all noble Lords who have spoken that it is one of our top priorities.

As a final point of reassurance, I note that in Amendment 208 the noble Lord, Lord Sharkey, has sought to ensure that his proposed new clause in Amendment 144 would be commenced on Royal Assent. I assure noble Lords that although the Government’s clauses enabling alternative student finance are to be commenced by regulations and not directly on Royal Assent, this is consistent with the rest of the Bill and should not in any way be considered as an impediment to the Government’s commitment to making alternative student finance available as soon as practical.

In light of the progress that I have set out here, and of the commitment that we have given about the timing of the introduction of this important new initiative, I hope that noble Lords will feel that a reporting clause in this legislation is not required. I therefore ask respectfully whether the noble Lord might withdraw his amendment.

--- Later in debate ---

[Lord Willetts (Con)]

I shall very briefly comment, as I have had my arguments referred to by the noble Lord opposite. The graduate repayment scheme is neither conventional public spending, nor is it a commercial loan. All three parties, when faced with the question of how you finance higher education, have concluded that the best way forward is through such an arrangement. If it is public spending, it will be a low priority, and the funding of universities will suffer. If it is a commercial loan, which now appears to be what the Labour Opposition are calling for, and if we really were to have it regulated under the terms of the convention on private loans, one of the first requirements would be the requirement to know your customer—to make an assessment of an individual recipient to see whether they have the capacity to repay a student loan. The agencies would have to decide whether to lend to any one individual or not, and disadvantaged students would certainly lose out from such an assessment. That is why this scheme is a midway house between two unpalatable alternatives, and why all three parties have backed it.

As part of that arrangement, it seems legitimate that Governments should be able to decide—I have always thought every five years, in an explicit public review—the balance between repayments by graduates and the remaining burden being borne by the generality of taxpayers, as the loans are paid off. That seems a sensible arrangement, bringing necessary flexibility into the system, and it is why it has always been made clear to students that Governments have the right to change the repayment terms as they wish. That seems a sensible feature—and if we go down the route of treating it like a private contract and repayment, it will have consequences which all of us in this House, particularly the party opposite, will come to regret.

[Lord Young of Cookham]

My Lords, I share the concern of the noble Lord, Lord Watson, that students should be entitled to protection when they take out student loans. Protections are already available in law and take account of the particular nature of these loans. Student loans are not like the commercial loans of the sort regulated under the Consumer Credit Act; they are not for profit and are universally accessible. Repayments depend on the borrower’s income, not on the amount borrowed, and the interest rate is limited by legislation. I am grateful to my noble friend Lord Willetts for summarising the excellent speech that he made on this subject in Committee, and putting forward powerful reasons for not treating these as commercial loans.

I turn first to the issue of the threshold freeze. To put higher education funding on to a more sustainable footing, we had to ask those who benefit from university to meet more of the costs of their studies. This enabled us to remove the cap on student numbers, enabling more people to get the benefit of a university education. When the current system was first introduced, the threshold of £21,000 would have been around 75% of the projected average earnings in 2016. Since then, updated calculations, based on ONS figures for earnings, show that figure is now 83%, reflecting weaker than expected earnings growth since 2012. Uprating the repayment threshold in line with average earnings would cost around £5 billion in total by April 2021 compared with the current system. The total cost of uprating by CPI would be around £4 billion over the same period. The proportion of borrowers liable to repay when the £21,000 threshold took effect in April is therefore significantly lower than could have been envisaged when the policy was originally introduced. The threshold would now be set at around £19,000 if it were to reflect the same ratio of average earnings. The current £21,000 threshold remains higher than the £17,495 threshold that applies to loans taken out under the system left behind by Labour in 2010. Low earners remain protected. Borrowers who earn less than £21,000 a year repay nothing, while borrowers earning more than this repay 9% of their earnings above the threshold, irrespective of how much they borrowed. Any outstanding balance on the loans is written off after 30 years with no detriment to the borrower and no effect on their credit rating. This Bill makes no changes to any of these arrangements.

It is important that, subject to parliamentary scrutiny, the Government retain the power to adjust the terms and conditions of student loans. As I said a moment ago, I fully share the noble Lord’s desire to ensure that students are protected and that is why the loan terms are set out in legislation.

[Lord Watson of Invergowrie]

If the situation had been reversed, and earnings had risen by more than had been anticipated, would the Government’s ability to vary the loans have been carried out in a manner which benefited students, rather than as has happened on this occasion?

[Lord Young of Cookham]

Perversely, the noble Lord’s amendment would prevent the Government making any changes to the loan agreement that would favour the borrower. In other words, one of the effects of the amendment would be that we would not be able to alter the terms to the advantage of the borrower if the situation changed.

[Lord Watson of Invergowrie]

As I said earlier, that is what the amendment is designed to do. The point is, when you reach an agreement you stick by it; you do not vary it either way. I am certainly not advocating that it should be varied the other way. My question was whether the noble Lord and his Government would be prepared to vary it the other way, had earnings risen by more than had been anticipated.

[Lord Young of Cookham]

My response was that we would not be allowed to under the terms of the amendment. We have flexibility, which the noble Lord would deny us. The amendment would mean that future cohorts of students and taxpayers would have to bear the risks of the scheme, because it would insulate current students from any change. Perhaps that is why the Labour Party did not legislate to prohibit changes to the terms and conditions of existing loans when they introduced the system of income-contingent loans in the late 1990s. As I said, his amendment would prevent the Government making any change to the loan agreement that would favour the borrower, were this ever to be necessary.

It is also important that the Government should continue to be able to make necessary administrative amendments to the terms and conditions to ensure that the loans can continue to be collected efficiently. An example of this was the repayment regulations having to be amended in 2012 to accommodate HMRC moving to an electronic system to collect PAYE income tax through employers. Not being able to make this type of technical change to the regulations would eventually affect our ability to collect repayments through the tax system.

Having reflected on the question that the noble Lord asked me twice, the best answer is that I am reluctant to comment on a hypothetical question.

I turn to the regulation of student loans. The current student loan system is heavily subsidised by the taxpayer, and is universally accessible to all eligible students regardless of their financial circumstances. As my noble friend has just reminded us, taking out a student loan is in no way the same as taking out a commercial loan, and it should not be regulated as if it was. This fact was recognised by Labour when it legislated to confirm this exemption in 2008.

The key terms and conditions are set out in legislation and are subject to the scrutiny and oversight of Parliament. Extending a system of regulation designed to regulate a competitive market in personal finance to a system of subsidised loans whose terms are set by Parliament would be impractical, expensive and fundamentally ill conceived. The additional costs of the regulation would need to borne by borrowers and taxpayers and would not be in their interests.

I return to the point that this is a heavily subsidised government loan scheme, and it remains right that Parliament should continue to have the final say on the loan terms and conditions, as it is best placed to balance the interests of taxpayers, borrowers and students. We are committed to a sustainable and fair student funding system. Our system allows the Government, through these subsidised loans, to make a conscious investment in the skills of our citizens. We are seeing more young people going to university than ever before, and record numbers of 18 year-olds from disadvantaged backgrounds. Our funding system has enabled us to lift the cap on student numbers and, with it, the cap on aspiration.

I hope that this addresses the concerns raised by the noble Lord, and I therefore ask him to withdraw Amendment 145.

[Lord Watson of Invergowrie]

My Lords, I thank the Minister for that reply. Some of his comments about the Government’s commitment to student loans would have carried more weight had they extended as far as sharia-compliant loans; we know from the previous debate that that is not the case. Although I take on board the points made by the noble Lord, Lord Willetts, he did not address the major point of this amendment: challenging the fact that the Government have changed the rules of the game after the game has begun, leaving a huge number of students worse off financially as a result of their actions. That is not acceptable. I have heard nothing from the Minister that suggests that the Government regret the move that they have made. In fact, they have said quite clearly that it was done for financial reasons. Those financial reasons are impacting on students. We believe that is unacceptable, and I wish to test the opinion of the House.

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[Lord Stevenson of Balmacara]

My Lords, I think that we are all very grateful to my noble friend Lord Dubs for bringing back this amendment in an amended form. We should also credit the Minister for arranging a meeting with his counterpart in the Home Office, the noble Baroness, Lady Williams, which was extremely helpful in identifying two things that allowed us to make progress. One was that the original drafting seemed to imply a much larger number and a much larger problem than could have been resolved within the scope of the clause as originally proposed and amended. After a very good discussion, we were able to get that down to a very narrow point. It seemed to be a point of considerable unfairness in relation to the people whom my noble friend mentioned. I also thank the Home Secretary, to whom reference has been made, for taking the trouble to see my noble friend Lord Dubs today to make sure that he understood the context within which the decision, which we hope to hear shortly, has been made.

[Lord Young of Cookham]

My Lords, I begin by thanking the noble Lord, Lord Dubs, for bringing forward this amendment and, with others, I commend him for his tireless campaign on behalf of a group of vulnerable people. This is an important issue and our short debate today, coupled with our debate in Committee, have demonstrated wide support and compassion for those who seek our protection. The UK has a long and proud history of offering sanctuary to those who genuinely need it. The Government take our responsibility in asylum cases very seriously.

Those who come to this country and obtain international protection are able to access student support and home fee status. Uniquely, those who have been granted refugee status and their family members are allowed access to immediate and full support. This includes access to tuition fee loans, living costs support and home fee status at higher education institutions. This is a privilege not extended to others, including UK nationals who have lived overseas for a few years or EEA nationals, all of whom need to have lawfully resided within the EEA for at least three years prior to commencing study.

The requirement for three years’ lawful residence was put before the Supreme Court only two years ago, in the case of Tigere. The Supreme Court upheld as fully justified the Government’s policy of requiring three years’ ordinary residence in the UK prior to starting a course. The Supreme Court also upheld the Government’s case that it was legitimate to target substantial taxpayer subsidy of student loans on those who are likely to remain in this country indefinitely so that the general public benefits of their tertiary education will benefit the country.

Noble Lords have expressed sympathy and compassion for people who have entered the UK under the Syrian vulnerable persons resettlement scheme and the vulnerable children’s resettlement scheme who are currently granted humanitarian protection. The Government share that sympathy and have taken a number of actions to support those on the scheme. The Government are not persuaded of the need to treat persons given humanitarian protection more favourably than UK nationals for the purpose of student support. The noble Baroness, Lady Lister, raised some wider issues, and I confirm that we are looking at them in the round.

UK nationals arriving from overseas must wait three years before accessing student support, regardless of their personal circumstances, and so must nationals of British Overseas Territories. That is not a lack of compassion but a fair, objective and non-discriminatory rule to demonstrate the lasting connection to the UK upheld by the Supreme Court in the Tigere case.

Turning to the specific group whose cause the noble Lord, Lord Dubs, has championed, I know that the Home Secretary has met him to discuss how we can progress the issue of access to higher education and that she shares my sympathy for the matters presented by the noble Lord. The Government understand the importance of accessing higher education as soon as possible for those on the Syrian vulnerable persons resettlement scheme and the vulnerable children’s resettlement scheme and are looking very carefully at this issue. I hope that the noble Lord will understand that I cannot say more than that today. I know that he will continue to engage with the Home Office on this issue over the coming weeks to resolve some of the complexities in the determination of refugee status to safeguard the UK’s proud history of offering sanctuary to those who genuinely need it.

I was not at the meeting which the noble Lord attended earlier today, but if he came away from that meeting with a spirit of hope and optimism, it is no purpose of mine to do anything to take away from that. In the light of the ongoing discussions that are under way with the Home Office, and against a background of the spirit of hope and optimism mentioned by noble Lords, I hope that the noble Lord might feel that this is not an amendment that should be pressed to a Division at this stage.

[Lord Dubs]

My Lords, I hope I have not gone over the top in my sense of optimism. It is not something I normally do in relation to this Government, and I have had experience to the contrary on other, related issues. However, I take a little bit of comfort from what the Minister said. I took more comfort in my earlier meeting today, but that is not on the record for our debate now. However, the Government speak with one voice, both privately and publicly, and I am hopeful that they will be able to deal before too long with what is an acknowledged anomaly.

It is unfair that if people who have missed out on education and had enormous difficulties in their life want to make some sense of their life, they have to wait three years to access higher education. It is an appallingly long time. What are they supposed to do in those three years—sit at home and watch television? It is a real indictment when these people want to move forward. I accept that other groups are also penalised in this way—they should be looked at in the same way—but if people are going to make a positive contribution to this country, it is right that we should not withhold higher education from them. That way, they can make a much bigger and more positive contribution to this country. I beg leave to withdraw the amendment—but on the understanding that, at intervals, the Government will let us know how they are getting on with looking at this.

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[Lord Watson of Invergowrie]

My Lords, I support the amendment in the name of the noble Lord, Lord Storey, and I spoke in support of the same amendment in Committee. This is a problem of some seriousness and I think it is understated. We heard in the previous debate that the QAA was not taking it particularly seriously and had no legal or regulatory powers to take action against an individual student who was found to have cheated in whatever way. The noble Lord, Lord Storey, told us at that time that it was rather offhand about the fact that only 17,000 students had been caught cheating. The fact that that was the tip of the iceberg seemed not to be a major issue.

It is a major issue if there is such an amount of this going on that Professor Newton—to whom the noble Lord, Lord Storey, has referred in the past—has carried out a survey by interviewing students and those providing such services, which came up with a whole list of how long it took for an essay, a dissertation or whatever. If it is even worthy of academic study, it has to be a problem of some substance. The noble Lord quoted Professor Newton and said that he had been advised that if the word “intent” had been taken out of the amendment it would have strengthened it. I am not quite clear about how it would have strengthened it. I think the noble Lord said it would have given it more power, but that has not been done. Will the noble Lord explain why the amendment has been submitted in the same form?

The noble Baroness, Lady Goldie, is in her place. She was the Minister who responded to this debate in January. As we were together in the Scottish Parliament many years ago, I hoped that she might respond to this debate, but I see that—forgive me—silence is Goldie and the noble Lord, Lord Young, will respond. Will he pick up the point that the noble Baroness, Lady Goldie, made in her response in January that the Government were on the point of announcing a new initiative on this? The noble Baroness, Lady Goldie, said it would be with us,

“Within the next few weeks”.—[Official Report, 25/1/17; col. 765.]


Seven weeks have ticked by since we last discussed this, so we must be very close to it now. Perhaps the Minister will tell us whether he has a date for the publication of this new initiative, which I think was to involve the QAA, the NUS, HEFCE and UUK—a whole lot of acronyms. It would helpful and would perhaps deal with this issue, at least in the interim, as I accept that we are short of a position where legislation is required.

[Lord Young of Cookham]

My Lords, I am grateful to the noble Lord, Lord Storey, for his extensive work on this issue. I am grateful for his contribution to the round-table discussions with the QAA and his continued engagement on this matter. He touched on the problem of foreign students. The evidence presented in the QAA’s report on plagiarism indicates that cheating may be more prevalent among international students. However, we recognise that plagiarism is a wider issue, so our approach is to look at the sector as a whole. We will be working with the QAA and other sector bodies to develop a co-ordinated response across all students and providers.

As my noble friend Lady Goldie said in Committee, plagiarism in any form, including the use of custom essay-writing services, or essay mills, is not acceptable and the Government take this issue very seriously. Having said that, I am afraid that I am going to plagiarise much of the speech which my noble friend made in Committee when she dealt with this amendment. My noble friend announced that the Minister, my honourable friend Jo Johnson, would be launching a co-ordinated sector-led initiative to tackle this issue, working with the QAA, UUK, NUS and HEFCE. In response to the question just posed by the noble Lord, Lord Watson, this initiative has now been launched.

The Minister has asked sector bodies to develop guidance with tough new penalties as well as information for students to help combat the use of these websites as well as other forms of plagiarism. This new guidance for providers should ensure that a robust approach with tough penalties can be embedded across the sector. In developing the guidance, the Minister has asked sector bodies to bear in mind that, for any enforcement to be effective, the penalties imposed must relate to both the gravity of the offence and the likelihood of an offence being discovered. The new sector guidance and student information is expected to be in place for the beginning of the 2017-18 academic year.

As part of this initiative, the QAA has also been tasked with taking action against the online advertising of these services and to work with international agencies to deal with the problem. The QAA has already started to progress these actions, including making a formal complaint to the Advertising Standards Authority, asking it to investigate the essay mills sector on a project basis.

We believe this sector-led, non-legislative initiative is the best approach to tackling this issue in the first instance. We will, of course, monitor the effectiveness of this approach and we remain open to legislation in the future should the steps we are taking prove insufficient. If legislation does become necessary, it would be crucial that we get the wording of the offence right. In the amendment tabled, it is unclear who would be responsible for prosecuting and how they would demonstrate intent to give an unfair advantage. As currently written, there is also a risk that the offence could capture legitimate services, such as study guides, under the same umbrella as cheating services.

The effectiveness of a legislative offence operating as a deterrent will depend on our ability to execute successful prosecutions and we would need to take care to get it right. This was acknowledged by the noble Lord, Lord Storey, in Committee, who said that,

“this should not be rushed and we should get it spot on”.—[Official Report, 25/1/17; col. 766.]

We do not believe that legislative action is the best response at this time, and I have outlined the steps that are being taken. Against that background, I hope that the amendment will be withdrawn.

[Lord Storey]

My Lords, I am grateful for the Minister’s reply and for the opportunity to talk over the issues with the Minister for Universities. The Minister is right to say that this should not be rushed. It is interesting that this issue started from a very small complaint and has become such an important matter that we now want to deal with. It shows that when we collectively share our thoughts and ideas we can get a result—I hope.

I was quite shocked to see in the QAA’s briefing that a 3,000-word dissertation in law can be done for just £6,750. I am delighted that the Government take this seriously. There is a need for a co-ordinated response. The penalties will be important. It is important that students know what is happening, and I suppose that if students do not wish to have penalties levied against them, the companies will wither on the vine. I look forward to seeing how this develops over the next few years. I was pleased to hear the Minister say that if this joint co-ordinated initiative does not prove effective, the Government will be open to legislation. I beg leave to withdraw the amendment.

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[Baroness Lister of Burtersett]

My Lords, I am pleased to support the amendment and to follow the noble Baroness, Lady Hamwee, who, as she noted in Committee, joined the Joint Committee on Human Rights just as I left it. In Committee, I reminded noble Lords of the concerns raised across the House during the Counter-Terrorism and Security Bill about the application of the Prevent duty to higher education institutions. As we have heard, the present amendment does no more than call for an independent, authoritative review of how the duty now operates in those HE institutions. This would respond to concerns raised more recently by a range of organisations, including, as my noble friend Lord Dubs said, the Home Affairs Select Committee. These concerns include: possibly discriminatory impact; the question of the adequacy or otherwise of the training given to academics; and the human rights implications, echoing earlier concerns of the JCHR.

In Committee, the noble Baroness, Lady Goldie, said that,

“we welcome discussion about how to implement Prevent effectively and proportionately, but … we consider blanket opposition to the duty unhelpful”.—[Official Report, 25/1/17; col.762.]

As we have heard, the amendment no longer proposes blanket opposition. Surely, in order to have a well-informed discussion, as called for by the noble Baroness, it makes sense to have an independent review of how the policy is operating, as called for in the amendment, to inform that very discussion. I can understand why the Minister opposed the original amendment, even though I disagreed with her, but I can see no justification for opposing this much more modest, and I hope helpful, amendment as a basis for the discussion that she said the Government would like to see.

[Lord Young of Cookham]

My Lords, I am grateful to all noble Lords who have spoken to this amendment and for the measured way in which they have put forward the case. I hope we will all agree we cannot ignore the increasing threat to the UK from terrorism. This is currently assessed as severe, meaning an attack is highly likely. We cannot simply wait for attacks to happen. We cannot stand by and do nothing while vulnerable individuals are targeted for radicalisation and drawn into terrorism, so we must have a strong and robust strategy to prevent this.

Prevent was discussed in Committee, and I am particularly grateful for the input at that stage from the noble Baroness, Lady Deech, who recognised the importance of Prevent in higher education. The Prevent programme is designed to safeguard vulnerable individuals from all forms of radicalisation in a variety of institutions. It is an important safeguard for our domestic students but also for the thousands of international students who choose to study here each year. Setting off to university can be a big transition in the lives of many people, and it is vital that universities safeguard their students during what can sometimes be a very challenging time for vulnerable individuals. The coalition Government introduced a clear legal duty to ensure universities recognise and act on this responsibility.

Preventing people being drawn into terrorism is difficult and challenging work, but Prevent is working and making a positive difference. In 2015, more than 1,000 referrals of vulnerable individuals were made to Channel, which enabled them to access support to try to divert them away from radicalisation. The vast majority of the individuals who choose to participate in Channel leave with no further concerns about their vulnerability to being drawn into terrorism—so as I say, Prevent is working.

Of course, this amendment is aimed at reviewing the operation of Prevent in the higher education sector, but this is already happening. Following consultation with the sector, HEFCE, which I believe to be independent of government, launched its monitoring framework last year and has had 100% engagement. In its report published in January, HEFCE found that the vast majority of institutions are implementing the Prevent duty effectively.

HEFCE has seen higher education providers increasingly improve their awareness of the risks to vulnerable students, and there have been some highly encouraging examples across the sector of how they mitigate these risks in a sensible way. The HEFCE report highlights numerous cases of good practice in the sector, and the steps being taken by institutions, from our oldest institutions through to newer providers. To give just one example, HEFCE found that the University of the West of England hosted a joint consultation with its students’ union on the implementation of the Prevent duty. This included open debate between students and Prevent partners with an opportunity for all students to view and comment on draft policies and procedures. This demonstrated a real understanding of the importance of engaging and collaborating with the student body to effectively implement the duty.

Finally, I know that noble Lords are concerned about the interplay between Prevent and freedom of speech, something the higher education sector rightly holds dear, and which we touched on in an earlier debate. Prevent does not stop lawful debate. In higher education, providers that are subject to the freedom of speech duty are required to have particular regard to this duty when carrying out their Prevent duty. This was explicitly written into the Prevent legislation to underline its importance as a central value of both our higher education system and indeed of our society. HEFCE’s monitoring shows that higher education providers are balancing the need to protect their students and their obligations under Prevent while ensuring that freedom of speech on campus is not undermined.

I say to the noble Lord, Lord Dubs, and those who have taken part in this short debate that the Government are grateful for the opportunity to discuss this vital duty that stops vulnerable individuals being drawn into terrorism. Prevent is being implemented effectively and pragmatically in the higher education sector and we want to maintain this momentum. We know it is both effective and pragmatic from the monitoring that HEFCE does. Against that background, I hope the noble Lord might feel able to withdraw Amendment 154.

[Lord Dubs]

I am grateful to the Minister for his response and to those noble Lords who have spoken in this short debate. I am not quite sure that the HEFCE review the Minister spoke about goes as wide as I would have wished—certainly the amendment would have gone much beyond that—nor am I sufficiently aware of the details of the results to see whether they would meet the concerns that many people have expressed to me. Given that we got something, though, I think we will return to this before too long. I think in the end, the Government will have to do a full and totally independent review of the Prevent strategy in higher education; there is too much at stake, it is too contentious, it is not as easy a situation as the Minister suggested and the concerns are much more widespread. On that basis, I beg leave to withdraw the amendment.

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Moved by

[Lord Young of Cookham]

155: Schedule 8, page 104, line 6, at end insert—
“23A  (1) Section 78 (financial years of higher education corporations) is amended as follows.(2) In the heading, at the end insert “: Wales”.(3) In subsection (1), after “higher education corporations” insert “in Wales”.(4) After subsection (2) insert—“(3) In this section “higher education corporation in Wales” means a higher education corporation established to conduct an institution whose activities are carried on, or principally carried on, in Wales.””