Lifelong Learning (Higher Education Fee Limits) Bill

Matt Western Excerpts

2nd reading
Monday 27th February 2023 Commons Chamber

[Matt Western (Warwick and Leamington) (Lab)]

It is a pleasure to follow the Secretary of State. I share a lot of her view on the importance of lifelong learning and how it transform lives, and the passion with which she spoke about that. The policy areas that unite us in this House are few and far between, but as she demonstrated in her remarks, the principle of lifelong learning elicits widespread support across the House. That is because we all recognise the transformational potential of education and the fact that it should not be capped simply by virtue of a person’s age or life stage. My view, and that of the Opposition, is very much that education is an investment not just in the individual, but in human capital and society, and, de facto, in our economy. We all probably know a Mr Ashcroft, as the Secretary of State was describing; we have all been touched by someone who felt that they should perhaps be widening their skillset through their lives or careers.

The world is clearly changing fast. With the fourth industrial revolution, net zero and changing demographics on the horizon, the need for a flexible multi-skilled workforce is more important than ever before. The CBI estimates that nine in 10 workers will have to retain and reskill by 2030 as result of the digital changes seen in the world of work. Likewise, the Climate Change Committee estimates that 300,000 additional jobs will be created if we are to meet our decarbonisation targets by 2030. Many of those jobs will require skills not yet being taught—or skills that perhaps should have been taught in recent years—if we are to catch up on achieving our objectives .

For too long now, the drive for more widespread adult education—lifelong learning and reskilling—has been, at best, lacklustre. The Government have sat on the sidelines and overseen a decade of decline in skills. On adult learning, for example, a survey by the Learning and Work Institute revealed that only one in three adults self-reports any participation in learning—that is the lowest in 22 years. Between 2009 and 2019, Government spending on adult education fell by 47% and, according to the Institute for Fiscal Studies, adult education and adult apprenticeships will still be 25% lower in 2024-25 compared with 2010-11.

We often talk about the lost decade of wage growth, and that is a fact, but it is pretty hard not to see it as a lost decade of skills growth as well. Indeed, the Learning and Work Institute quantifies that loss as up to 4 million learners, which is a pretty damning indictment of the Government’s skills agenda for these past 13 years. Indeed, part of the problem in recent years has been the lack of priority and focus in the Department, as deckchairs have been shuffled, reshuffled and shuffled again. The figures are well known. We have had five Education Secretaries in the past year, a succession of Ministers responsible for higher education and a seemingly constant shifting set of responsibilities between Ministers. There has been a fatal lack of consistency at the heart of the Department. It must be particularly challenging for the Secretary of State to be witnessing that at first hand. That may well explain why there is a widespread lack of awareness among employers of the Government’s skills reform programme. Four in five employers said that they were unaware of the Government’s plan to introduce lifelong learning entitlement.

Having listened to the Secretary of State’s opening speech, however, I note her determination finally to kickstart the lifelong learning agenda, and I commend her for the work that she is doing. I commend, too, the work of the Minister for Skills, Apprenticeships and Higher Education, both from the Back Benches and as Chair of the Education Committee. It was my former colleague, Gordon Marsden who, as MP for Blackpool South, really started this agenda, recognising the need for lifelong learning in the form of Labour’s Lifelong Learning Commission report in November 2019. Labour is fully committed to supporting the Government in delivering lifelong learning, continuing the important work that Gordon Marsden put together.

None the less, there remain some significant questions over the Government’s stated policy. In a slightly unusual way, what we have before us is merely a frame with no content—an exoskeleton without a body, as it were. The Government launched a consultation 12 months ago on how the lifelong learning policy should be framed, which included who should be eligible; whether maintenance should be provided; what courses should be covered; what courses should be exempt; what changes to the regulatory framework are required; what incentives, support and guidance are needed to encourage prospective students; how students can stack up their credits or modules; and how course quality assurance is monitored. However, despite that, the Government have failed to publish their consultation response ahead of introducing this legislation, denying Parliament the full picture when scrutinising the Bill—and that consultation closed 10 months ago, in May last year.

The Cabinet Office regulation rules, published in 2018, state:

“Government responses to consultations should be published in a timely fashion.”

Ideally, that is within 12 weeks—I guess that is three months—of the consultation. If not, they should

“provide an explanation why this is not possible.”

I ask the Minister this: why has the response to the lifelong learning consultation not yet been published? When does he expect to publish it, and what explanation can he give for the delay?

This is important, because this skeletal Bill’s skeletal impact assessment states:

“A full and detailed quantitative assessment of impacts on learners, providers, employers, the Exchequer and the wider economy and society is…not possible because of two key sources of uncertainty”—

namely, broader lifelong learning entitlement policy and behavioural uncertainty. The impact assessment goes on to say:

“As some aspects of the broader LLE policy are still in development, it is not yet possible to accurately estimate these familiarisation costs.”

As a cherry on top, we are promised that an enactment impact assessment will be published after the Bill receives Royal Assent. One would have thought that the two sources of uncertainty—broader LLE policy and behavioural uncertainty—would have been addressed by the consultative process and the learnings from the pilot programme. But no, for some reason those are being kept from this House. That may have something to do with the fact that only 33 applications for student finance were made for the Office for Students short course trial, which is widely considered to be a failure.

Call me old-fashioned—I have only been in this place for six years—but I prefer to debate the policy underpinning parliamentary Bills and their potential impact while we still have a chance to get it right. It is incumbent on all of us to try to deliver the best legislation. That is in all our interests, particularly given the unanimous support for the principle behind this Bill. Instead, we, the sector and prospective students are waiting on tenterhooks for the final publication of the consultation response before we can make any well-informed assessment of the Bill and how it will interact with the broader lifelong learning policy offer.

In anticipation of the Minister delivering the much-awaited consultation response in the coming days, I will move on to our concerns about the principles of the Bill as drafted and about lifelong learning policy. Given the importance of getting the lifelong learning policy right for boosting the UK’s economic growth, productivity and workforce potential, there remain significant questions related to the deliverability of this reform. The Minister is committed to delivering lifelong learning by the 2025 academic year. However, as he well knows, it takes a considerable amount of time to make changes to the student finance system, the admissions system and the design of new courses. As a fellow pragmatist, does he genuinely believe that it will be delivered by the start of the 2025 academic year, or will it be delivered in a limited form?

Delivering that could prove groundbreaking in changing the post-16 education landscape, and Labour would continue to tailor it if in government. To borrow a sporting metaphor, the pitch needs to be rolled. That includes the need for more clarity on who will be eligible. Universities UK, the representative group of 140 universities, has called for broad and consistent eligibility criteria to ensure that as many future learners as possible can upskill and retrain in the future. Given this Government’s previous form on proposals to limit access to higher education, whether directly or indirectly, what plans does the Minister have to extend this policy offer to as many people as possible, including those who are most hard to reach? Ultimately, as I have said, education is an investment in people. Therefore, the lifelong learning entitlement should be viewed through the lens of educational empowerment, rather than restrictively controlled and micromanaged. Many of us have concerns about how this is going to be managed and delivered, particularly through the OFS.

Given the scale of the challenge and the reforms to the student finance system, it is also important that the Student Loans Company is adequately prepared to deal with this new funding model. I, and indeed the sector, have noted that there is little to no information on the financial cost for the Government in the event that the Student Loans Company requires a redesign in any document attached to the Bill. That could be significant, surely. Given that the SLC funnels £10 billion-worth of public money into supporting students undertaking higher education courses, what assurances can the Minister give the House that adequate preparation has been carried out to ensure that the SLC is prepared for the coming change?

The Bill gives a surprising amount of power to the Secretary of State to decide what fee method applies, the type of courses and activities it applies to, and the maximum amount of funding available for each module or course. Understandably, that has raised eyebrows. With so much power in the hands of the Secretary of State, depriving Parliament of the ability to hold the Government to account adequately, there are few brakes to prevent them from unilaterally deciding to redefine the nature of a credit or a module, and to make compliance with that change contingent on future funding. I am sure that the sector would therefore warmly welcome greater clarity in the Bill on key concepts such as credits and modules. That would go a long way to assuage such concerns, whether or not they are well founded.

It is also widely recognised among providers that running modular provision is more expensive, not least because of the need to provide additional wraparound support, including onboarding, mental health support and academic writing support. Clearly, it is important that a minimum fee level is set to prevent students from being unfairly charged more for modular study than for a traditional academic year of study. However, in the light of the financial pressures on institutions, what plans does the Minister have, if any, to address the cost burden for providers delivering those courses? Failure to understand how that will work on the ground runs the risk of providers shying away from running such courses because of their prohibitive expense. The Government’s own impact assessment stresses as much, stating:

“Some providers could receive less tuition fee income per student if some types of learners that are currently studying longer courses instead choose to study in a modular fashion”.

It would be deeply concerning if the policy behind the Bill further eroded the financial sustainability of the sector, and damaging to the UK’s economic outlook if providers ended up opting out of modular study. It is therefore vital that sustainable and adequate funding be available to providers, and that fees be proportionate to a full qualification with support to deliver wraparound support and high-cost modules. That is also why consultation and dialogue with the sector are so important during the setting of fee limits. In that vein, what plans does the Minister have to ensure that, when setting those limits, the Secretary of State has properly consulted those in the sector charged with delivering this model of teaching?

Finally, let me touch on how the policy underpinning the Bill will engage with the current regulatory landscape. Sector bodies and universities are clear about the need to minimise additional burden. As a result, it is important that the Bill builds on existing regulatory and quality-assurance mechanisms. That is important for employer and student confidence in the system. It is somewhat ironic therefore that the Government are currently validating the de-designation of the Quality Assurance Agency for Higher Education from the Office for Students. That could leave a quality assurance black hole when we most need an experienced quality assurance body. I would be grateful if the Minister set out what plans he has to ensure that regulatory burden is kept to a minimum during the implementation of LLE, and how modular-based courses will be assessed for quality harmoniously across the sector.

Although the Bill is the flimsiest piece of legislation, we will not oppose it. We will wait for the Government’s response to the consultation. I urge the Government to publish the consultation document way before Committee stage, so that we have access to it and can properly scrutinise the legislation in the context of the consultation and the Government’s response. On that basis, we will not oppose the legislation.

--- Later in debate ---

[Matt Western]

I have benefited from training courses and adult education throughout my career, as I am sure many hon. Members have. Although some of the skills that I developed may not have been directly relevant to my employment at the time, they proved incredibly useful later in life. Like the Minister and the Secretary of State, I am therefore a deeply committed believer in the power of lifelong learning.

I thank all right hon. and hon. Members who participated in the debate, although perhaps I will not refer to them all in my summing up. I was particularly interested to hear some of the historical perspectives from a century ago, or perhaps 40 years ago—certainly I remember Peter Walker from my youth. They give context to the fact that some of these challenges have been around for some time, and show how important it is that we address them collectively.

The hon. Member for Waveney (Peter Aldous), who is not back in his place, rightly raised the issue of productivity. I am particularly concerned about that and about how the performance of the UK economy has fallen back. As far as I am concerned, it is not a puzzle and there are easy ways to resolve it. The fact is, however, that our relative productivity is 20% behind that of France. He also raised questions about eligibility and maintenance support, especially for carers, which are concerns that the Opposition share.

I was interested to hear the discussion between the hon. Members for Stroud (Siobhan Baillie) and for Newcastle-under-Lyme (Aaron Bell) about debt. Of course, we have to put that in the context of debt for students being raised to £9,250, and the impact of that. We are now in a situation where maintenance loans are relatively frozen, which is frustrating, because it reduces the breadth and opportunity for people and reduces young people’s access to education.

The hon. Member for Worcester (Mr Walker) had certain queries and asked about the burden that might fall on the sector, which is a real concern that I also picked up on. The hon. Member for Twickenham (Munira Wilson) echoed my concerns about the mechanism of the Bill and the fact that there was no actual policy within it. She asked whether the Government would now abolish the ELQ rule, which is one of the many questions that we will put to the Government in Committee. I thank my hon. Friend the Member for Huddersfield (Mr Sheerman) for raising individual learning accounts. They were put forward by the Labour Government, but there were concerns and difficulties with them when they were introduced, because of some of the fraud that they led to.

As I alluded to in my opening speech, the need for lifelong learning is greater than ever. We have been on a slippery slope of economic decline for too long, with UK GDP per capita growing at an average annual rate of 0.5% in real terms between 2010 and 2021, according to the World Bank. The Labour party is resolute in its determination to reverse that trend, so much so that it is one of our guiding national missions. In that vein, we are prepared to support the Minister throughout the Bill’s passage, assuming that we see fuller detail in due course.

As I said in my opening remarks, however, there remain far too many gaps, questions and uncertainties at this critical stage. We have a frame, but the real work is yet to be done. In essence, it is a promise—not an empty promise, but a promise that needs substantiating. Many questions have been asked in this debate, such as about the fee setting for modules and courses; the quality and how the Government plan for that to be determined; and, in particular, the role that the OfS will have.

Many of those questions would be resolved if the Minister were prepared to finally publish the LLE consultation response. I raised many questions in my opening remarks that I very much look forward to hearing from the Minister about shortly, but my lasting message is to please publish the response to the consultation as a matter of urgency. I look forward to working with the Minister to flesh out this most skeletal of Bills, and I hope that we can work constructively in future.

[The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)]

I thank the shadow spokesman for the Labour party, the hon. Member for Warwick and Leamington (Matt Western), for the constructive way in which he has approached the Bill, and the shadow spokesman for the Liberal Democrats, the hon. Member for Twickenham (Munira Wilson). I knew Gordon Marsden well—he was my opposite number when I last held this post a few years ago. He is a good man and he knows the subject inside out.

The hon. Member for Warwick and Leamington asked about the consultation response. We have said that we will publish it before Report stage. He will know that it is not specifically aligned to the measures in the Bill, but about the wider policy of the LLE. He wants us to introduce the LLE at speed, which is exactly what we are trying to do, but we want to do it carefully and to make sure that we respond to the consultation following all the submissions that we had. As I say, it will be published by Report stage, if not before.

[Matt Western]

The Minister is a decent individual, so I ask that we have sufficient time to consider the response before Committee, given that it has been 10 months since the consultation.

[Robert Halfon]

I repeat that the consultation will definitely be ready by Report stage, if not before; I guarantee to the hon. Gentleman that it will be ready by Report.

The hon. Gentleman asked about fee limits. He will know that the Secretary of State can set fee limits as a result of the Higher Education Act 2004. The Skills and Post-16 Education Act 2022 built on that and allowed for flexible and modular learning. That legislation has long roots in the Augar report as well, so the Government have clearly set the direction of travel.

We will be having regular consultation with stakeholders as well. The hon. Members for Warwick and Leamington and for Twickenham asked about the hourly value of credits in the Bill. The Government feel that the number of learning hours in a credit is an area that should continue to be governed from a quality standards perspective, rather than from a fee limits perspective, and we have legislated accordingly. In the Bill, the credits are used to signify the total amount of learning time that a student would ordinarily be expected to spend to complete a particular course or part of a course. However, I can assure both spokespeople that further details on the number of learning hours associated with credits will be set out in the regulations. Where providers choose not to use credits in this way for certain courses, these courses will have the fee limit determined using a default credit value, but they will face no penalty or reduction overall as a result.

To turn to my successor as Chair of the Education Committee, my hon. Friend the Member for Worcester (Mr Walker) spoke quite interestingly about his father. I have read a book about his father, who was a very good man. My hon. Friend talked about the burden of regulation, and our intention is to simplify regulation, not to add to it. Of course, those institutions that offer the LLE will be registered with the OfS. He talked about partnerships between further education and higher education. I absolutely agree, and I think this policy will rocket-boost that. There are already examples, and I can give him the great example of Nottingham Trent University and the college in Mansfield. I repeat that the consultation will be ready by Report.

I have answered some of the questions of the hon. Member for Twickenham, but on the point about the equivalent learner qualification, I can only say that we will be able to tell her when the consultation has been published. However, I hope she will not be unhappy with that, and I appreciate her support. Again, on maintenance, I envisage a similar system to what exists now for the current student loan system, but the full details will be in the consultation on that.

My hon. Friend the Member for Waveney (Peter Aldous) made a very important speech, and he is passionate about further education and about championing it. He is absolutely right about employer investment. That is why we introduced the apprenticeship levy—it is not part of the Bill and it is separate, but it is very important—so that we would have business investment in skills. He talked about the disadvantaged, and he is absolutely right. They will be able to do modules and flexible learning, and they will have more access to courses they want to do than they otherwise would have had. One of the reasons for the decline in part-time learning is the three-year loan, and they will be able to do short courses or modules of courses. [Interruption.] Of course, I will give way. Sorry, I thought somebody was asking me to give way, but it was just my hon. Friend the Member for Lichfield (Michael Fabricant) being very noisy, as usual. I used to work for him many years ago, so I can say that. This will be published in the consultation, but the LLE, as has been highlighted, will concentrate on levels 4 to 6 and it will have a phased approach.

My hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) talked powerfully and spoke about good outcomes for students. Of course I will meet his new college group. On local business involvement in qualifications, that is entirely why we have the local skills improvement plans.

My hon. Friend the Member for Wantage (David Johnston) made a brilliant speech, as is his wont. He will know that we have introduced UCAS for apprenticeships and hope to expand that over the coming months and years. He is right that we should not just have been saying, “University, university, university”, but “Skills, skills, skills”.

I am delighted, as I say, by the positive response to the Bill. Universities UK has said that it is a welcome step with a more flexible system of opportunity at its heart, and I thank all Members who have spoken. As my right hon. Friend the Secretary of State mentioned, the Bill is a major step forward in our mission to revolutionise access to post-18 education and skills through the introduction of the lifelong loan entitlement.

I want to respond to an additional point about the number of adult learners. That number has increased by 4.3% from 2021-22 to 2022-23, and the hon. Member for Warwick and Leamington will know that many adults are now doing apprenticeships and different kinds of adult learning skills.

The Bill has just three clauses, but in supporting the LLE it will transform lives. It will transform the lives of working people on low incomes, it will transform the lives of carers who need to balance their commitments alongside study, and it will transform the lives of anyone who wants to upskill in their existing career or propel themselves into a new one. The LLE will enable access to modules and courses in a way that has not been possible before. It will provide individuals with a loan entitlement equivalent to four years of post-18 education to use over their working life. Regardless of background, income or circumstance, people will have access to a flexi-travelcard to jump on and off their learning as opposed to being confined to a single advance ticket. This is not just a train journey; it is a life journey.

The Lifelong Learning (Higher Education Fee Limits) Bill brings in the next piece of legislation to support delivery of the LLE from 2025. As my right hon. Friend the Secretary of State set out, the Bill has three core elements. First, it will enable limits for tuition fees to be based on credits. Currently, tuition fees are set for complete years of full courses only. This change means that short courses and modules will be priced appropriately in comparison with and alongside longer courses—for example, degree programmes.

Secondly, as was highlighted by my hon. Friend the Member for Wantage, this Bill introduces the concept of a course year. Currently, tuition fee limits are based on academic years of study. This change will allow fee limits to be applied more accurately to courses that are not aligned with traditional academic years.

Finally, this Bill allows for an overall maximum chargeable number of credits for each type of course. Currently, a maximum can only be set in relation to an academic year. This will prevent students being charged excessively for their studies. In sum, the Bill will lay the groundwork to ensure that fee limits are the same for a learner who completes a qualification by studying each individual module at their own pace as it would be for them to study a typical full-time course across three academic years.

Lifelong Learning (Higher Education Fee Limits) Bill (First sitting)

Matt Western Excerpts

Committee stage
Tuesday 21st March 2023 Public Bill Committees

[Robert Halfon]

Q Given what you say about HTQs, and level 4 and 5, do you foresee much greater collaboration between universities and further education colleges once the lifelong loan entitlement is up and running?

Professor Press: There will have to be, otherwise people will leave just with a series of certificates. The challenge is that employers will find it difficult to understand what those things mean. The lifelong loan entitlement provides an opportunity to build up micro-credentials and to stack them into qualifications, and that really matters. That will require collaboration between institutions, whether they are further education or higher education.

[Matt Western (Warwick and Leamington) (Lab)]

Q Good morning, professor. I will start with questions about the funding model for higher education institutions. What impact do you think the introduction of the lifelong loan entitlement and the proposed funding model in the Bill will have on higher education providers, particularly given the declining unit of resource?

Professor Press: I think the LLE will open up opportunities for part-time learners, and that is to be welcomed enormously. The unit of resource is fixed, as we know. You might come on to ask me about this, but the bit I find most difficult to understand is the difference between the credit-based and the fixed-mechanism methods of calculating the fee cap. I hope you will ask me a question about that; I think that needs a bit of clarification. However, the sector will continue to face challenges when it comes to delivering at quality, given that the fee cap is frozen. Nevertheless, the opportunity to open up learning to new groups of students is welcome, and will be beneficial to business and the country.

[Matt Western]

Q Do you mind expanding on that difference between credit-based and fixed fees, for the benefit of us around the table?

Professor Press: As I understand it—forgive me if I have got this wrong—it is up to the Secretary of State to decide which method will apply. My understanding of what the Bill is trying to do is this: in a sense, we should enable any credit to be costed at a credit fee’s cost, and it should be up to the providers to assess whether there is demand and supply—a demand for the learning at credit level—and whether, if that is opened up, businesses and employers will want to recognise the value of that. At the moment, it feels like a slightly false divide, and it leaves the decision as to what can and cannot be offered in a modular way to the Secretary of State. That is how I have understood it, but if I have got that wrong, I apologise.

[Matt Western]

Q May I pick up on the point raised by the Minister about collaboration between institutions, whether that is between FE and HE, or laterally, between HE and HE or FE and FE? You are in Manchester; you have a good cluster there. Do you think that this might work better in metropolitan, urban areas, but be much more difficult for a coastal or town-based FE college in a wider, open, more remote landscape?

Professor Press: For modular learning that is purely attendance-based, yes, I think you are right. I think it will be easier to operationalise in places such as Greater Manchester, and I suppose part of the learning that we will get as the LLE is phased in is an understanding of the obstacles that might exist. Then perhaps we can work out ways of addressing those in areas where there is not a large cluster of HE and FE providers. Of course, the largest university in the country is the Open University, and I think we have to think more flexibly about either blended or digital learning. There may be opportunities for institutions that are not clustered in the way that they are here in Manchester to take full advantage of partnerships.

[Matt Western]

Q So you would support remote learners being covered by this?

Professor Press: I would, because I think we should focus on the outcomes for learners, rather than the inputs to the learning.

[Sir David Evennett (Bexleyheath and Crayford) (Con)]

Q Good morning, Professor Press. We are grateful to you for being with us today. I have two questions. First, do you think this approach is exciting for universities and offers real opportunities for advance? Secondly, what administrative challenges do you foresee for your university arising from the introduction of this approach and the courses offered?

Professor Press: Those are great questions. I really do think it is exciting, because it provides learners with the opportunity to study in a different way, and the more we can do to encourage people to focus on their professional development, the better it will be for our businesses and employers across the country.

The key challenge, I think, will be around the information, advice and guidance that people get about what the opportunity is, particularly for adult learners, who may not be in institutions that are used to providing that sort of careers guidance. That will be a particular challenge for any institution. Who is responsible for doing all of that? There will be many partners responsible for doing that, and that really does matter.

The challenges for my university—I am answering as vice-chancellor, rather than as a UUK representative—will be the mechanics of how we do all this. We are used to recruiting, admitting, onboarding, educating and supporting with pastoral care students who come mostly for three or four-year programmes. We will have to evolve ways of doing that for students who come for 30-credit—or multiple 30-credit—modules. There will be an additional cost of doing that, so we will need to work out what we can offer that can be delivered sustainably, given the cost base. That means that there will need to be a sufficient supply of students wanting to take a particular module, and a demand from the workplace for those students to achieve a successful outcome. We will look very carefully at what we offer. This gives us a chance to tailor our provision to local demand from employers. It is not without its challenges, but it is an exciting prospect.

--- Later in debate ---

[Dan Jarvis (Barnsley Central) (Lab)]

Q I was interested to hear what you said about the link to local businesses, and you mentioned the city council. I am particularly interested in the skills and educational landscape at regional level. Greater Manchester is one of two trailblazer mayoral combined authorities; the other is the West Midlands. What is your sense of the role for the Mayor and the mayoral combined authority in all this?

Professor Press: In Greater Manchester, we have a civic university agreement between the five higher education providers and the Greater Manchester Combined Authority. We work very closely together. The proposed legislation gives us the opportunity to align much more closely what we can provide and the sorts of skills that the combined authority wishes to deliver, because of the benefit there will be to local businesses and employers. I am very positive about working with the combined authority. The key thing to note is that the relationships are good, the conversations take place and people know one another. That builds trust and confidence and enables us to have the right sorts of conversations that deliver positive outcomes.

[Matt Western]

Q Professor, could we come back to the financial implications and the administrative side of delivering this in institutions? Could you expand on how you think it will work? How much additional resource might be required in the delivery of short-length courses versus the traditional model for a higher education institution?

Professor Press: I have not done the modelling and am not sure whether anyone else has yet, but there will be an additional cost from doing this. It is clear that that is bound to be the case. If people are taking, for instance, four 30-credit modules rather than one level 4 or 5 programme, there will be onboarding and exiting costs associated with the student four times over compared with just once. As you will appreciate, Matt, universities spend a lot of time, effort and money on inducting, familiarising, briefing and onboarding students. We would have to do that every time a new student came to study a 30-credit module.

There will also be the costs and complexities associated with the production of the certificates, and if credit transfers were to take place with other organisations. It is going to be costly. I do not know what the exact costs are, so I am sorry but I am unable to answer your question in a quantitative way.

[Matt Western]

Q I understand that, and I do not think you are alone in not having done the modelling. I guess if you are talking about a 30-credit module versus a traditional year of, say, 120 credits, it would not necessarily be four times the administrative burden. It will not be four times 30, but it could be three times or two times or something like that. Do you think that is a reasonable assumption?

Professor Press: It would depend on whether a student is a returning student or in a new body of students, and on their particular needs. Some students will benefit from this. Thinking particularly about our local context, something like half our students here at Manchester Met are the first in their family to come to university, about a third of them come from families with parental incomes of below £25,000, and about a third are from black, Asian or minority ethnic communities where they had other responsibilities, such as working or care.

We put a lot of effort into supporting these students. We put millions into our student hardship fund to help these students. There are all sorts of other complexities in addition to the technical aspects, including onboarding and those types of things that cost universities money. We invest in our students because we believe in their futures. It is much more complicated than a simple “three times” or “two times” kind of numerical argument. I am going to have to go away and do some work on that.

[The Chair]

Given our time constraints, we have time for just one quick last question.

--- Later in debate ---

[Robert Halfon]

Q I think there will be a one-to-one service for those students, which is part of the Government service that exists already, but absolutely. I very much hope that not just UCAS but the National Careers Service, which we are doing a lot on, will have an important role in directing students to the training and retraining options that they might want to consider.

Do you not think that good employers will welcome this? We know that there is often not as much investment in training as they would like, but now students will be able to access short courses and modules, rather than having to do long courses. As you know, they will also have 12 entry points, rather than just four, throughout the year, which will make a difference. It may actually be that employers think this is a good idea and that a lot more employees are trained and retrained in the skills that employers need.

Ellen Thinnesen: I agree with you, actually. I think, from both an employer perspective and a further education college perspective, that it will allow greater agility to be able to meet the changing skills needs that are required. In Sunderland College, for example, we are evolving quite rapidly into electrification, but it is currently incredibly difficult to respond with agility and at pace in relation to the technical skills training needs that are required.

I do think we should be very careful, because the devil is always in the detail. We know that the Learning and Work Institute reported that employer investment in skills has fallen by 28% in real terms since 2005. We need to be really careful, as we culturally drive this change, that factors such as that are taken into account.

[Matt Western]

Q Thank you, Ellen. I am afraid you are very much the centre of our attention for the time being. I will ask specifically about quality, as I understand that you have a certain expertise in its delivery and measurement. How are we going to ensure that there is a consistent measure of quality across courses and providers with the LLE?

Ellen Thinnesen: That is a big question, and there are a number of answers to it. First, being very clear about what a credit is and what a student can expect to receive in that module—that credit—of learning is incredibly important. We know that the current system sets out the direct learning per credit that a student can expect to receive, as well as the demands on their indirect study time. We know that in the current system, as a student, you can go to two different but similar higher education providers that are delivering very similar modules. What you get in direct and indirect learning can vary considerably within that offer. So in the first instance, the publication of clear information for students about credits and what they can expect to receive in that module in teaching and learning is really important.

A significant amount of work needs to happen in colleges on the continued quality assurance of modulised study. For example, in a college, if we are to quality assure the teaching and learning, we will pay a visit to that programme to assess how well academic standards are being delivered. The quality of that provision to students becomes incredibly difficult and the logistics increase significantly when modules are happening across a year at any given time.

[Matt Western]

Q Should the Bill have written into it some sort of definition of what a credit is?

Ellen Thinnesen: My personal and professional opinion is that it should. If we are defining fee limits attached to credits, it is really important to communicate to a student what a credit means. Essentially, a student wants to know a number of things. First, how much is this going to cost me? Secondly, what will I have to expend in effort and energy to complete this module? Thirdly, what will I get for that module and those credits from the institution that I am choosing to go to? So transparency about the relationship of credit to fees, and of credit to module content and what is expected within that, is very important.

[The Chair]

Q Thank you. Before any further questions, I ask Liz Bromley and Alun Francis to introduce yourselves—in your case, Alun, reintroduce yourself—for the record, please.

Alun Francis: Apologies, everyone, for the technical hitch. I am Alun Francis, the principal and chief executive of Oldham College.

--- Later in debate ---

[Brendan Clarke-Smith]

Q Thank you. Ellen?

Ellen Thinnesen: You may be aware that colleges currently submit their data via something called the ILR—the individualised learner record—which is a piece of software that we use across the sector. That software allows us to submit data returns in an academic year. Obviously, with the implementation of credits, and a course year, that would require a change. The college systems will enable that to happen because we are able to adjust the years of start and end dates within our academic year returns.

The consequence of that, around the course year, will be in relation to the greater requirement regarding data management and monitoring, which is quite substantial. There will be hundreds and thousands more entries for students studying on credit-based provision on a college’s ILR data return.

[Matt Western]

Q Thanks very much; it is good to have you all on the call this morning. Thanks for joining us. This is really aimed at Liz and Alun: how might employer demand be measured in deciding what courses should be initially rolled out under this new system? We will start with you, Liz.

Liz Bromley: I think that employers are learning that they have a much more proactive role to play with the further education sector now, as we have moved towards local skills improvement plans and working with employers to deliver the right qualifications to deliver the skills that they need. I think that that is another conversation as part of this journey.

I am a great supporter of the principles of this Bill in its entirety. Flexibility for the learner, lifelong learning and smaller bites of learning? Absolutely. However, as I think you would expect, I am almost always focused on, “Well, where is this going to be difficult to implement?”

I suppose that my nervousness is about employer engagement. The good employers will see it as a real opportunity to enable their workforce to better themselves educationally, to give them time off to help them do that, and perhaps to co-fund some elements of the module. It will be great. They will work with the colleges and the universities, and it will fly. Where you have less scrupulous employers, I can see this as a really good opportunity to shift the burden of paying for continuing professional development from the employer on to employees, who may wish to better themselves and therefore take out a loan.

Again, it goes back to giving IAG—information, advice and guidance—to the student but also to the employer, to ensure that nobody is exploited and the qualifications that come onstream in the pilot phase will demonstrably have an impact for the employer and for employees who are developing themselves while working and learning.

[Robert Halfon]

Q Could I start with Alun Francis? It was good to visit your college a few weeks ago; I had a wonderful visit. What do you think, in terms of FE, about the impact of the LLE encouraging disadvantaged students—particularly those from low-income backgrounds—to take up the LLE? What impact will it have on colleges such as yours?

Alun Francis: Thank you, and thank you for coming to visit us; it was a very enjoyable visit. We see this as part of a package of reforms. Just to give the context, Oldham is an extremely deprived area. Nearly 80% of our learners come from the bottom 20% of deprived boroughs. The level of English and maths on entry is one of the lowest in the country. We do not have a big private sector economy. That all sets the context in which we work, and different colleges will have different contexts. It is important to say that.

I think that we see this as part of a set of reforms that help to rebuild the opportunities for those who do not want to, or cannot, follow the route to university at 18 or 19, which has almost become the default route for higher skills. What we have seen is the collapse in that period of part-time learning and the old HNC/HND route. These are all parts of the process of rebuilding that.

There are issues. The point was made very well about where the balance will lie in whether the learner or the employer will pay for higher skills, but we see this as an important way of opening up people’s choice when coming back into learning. There is an issue about the balance between these routes and the workplace routes of apprenticeships and the levy—for SMEs funded through other means. We believe that a significant number of adults want the choice to come back into learning—perhaps after having a family or other gap, or having done some low-skilled work and now wanting to improve their skills—and traditionally we have offered them foundation degrees or degrees. This allows us to offer them a wider variety of choices, and we think there is demand for that.

It will take time for the market to grow. It is not a quick hit. It needs good information, advice and guidance. People need to know with confidence that what they are paying for is worth the loan. That is why sorting out the credits and engaging employers, so they know they are getting qualifications that are worth it, is of absolute importance. Addressing those three issues will make this work best, but I do think there is demand. We have a significant number of adults who do not want to or cannot go back to university for the full three years. Without this approach, opportunities will not be open to them. It is much more difficult than we imagine. While this approach will not solve the whole problem, it will help to solve a considerable part of it.

--- Later in debate ---

[The Chair]

Q We now have Professor Sir Edward Peck on the line as well. Would you like to introduce yourself for the record, Sir Edward?

Professor Peck: Yes, sorry about that slight technical challenge. My name is Professor Edward Peck; I have not yet been knighted—but, of course, you live in hope.

[Matt Western]

It’s on the record!

[The Chair]

That’s twice today. I call the Minister.

--- Later in debate ---

[Robert Halfon]

Q You have a close relationship with the Mansfield college. I want to understand how you think the LLE will impact both on HE and FE and also in terms of franchising to other institutions, as in the way that you are doing.

Professor Peck: We have a very close relationship, whereby we do all the training and education for level 4 and above for the people of Mansfield and Ashfield and the college does level 3 and below. That means we can design the programmes in the college to have really easy pathways of progression from level 3 to level 4 and, in future, we will start promoting the options around modular provision in the programmes we already run at Mansfield, in things like computing, construction management and those sorts of areas, where there is a real demand for skills.

If I can give you one example, we are seeing really high uptake in a level 4 course we are running in retrofit green construction. There is a massive demand. Eighty per cent. of the houses that we will live in in 2050 are already built, and the challenge is to retrofit them to be greener and more energy efficient. We do not have a workforce to do that. We now have a level 4 course in Mansfield where you can study that particular skill and, in future, you will be able to study it on a modular basis, which will open it up to a greater range of people who do not want to study that particular course full-time.

[Matt Western]

Q Hello Professor—good to see you. Likewise, I was very impressed by Mansfield when I came to visit. I am just interested to know your thoughts on the rationale of having a minimum of 30 credits. Do you think we should be considering a lower threshold?

Professor Peck: It is a challenge we faced on the Augar review, when we considered what the credit basis should be of a lifelong loan entitlement. Thirty credits hits a compromise between having a level of granularity where the Student Loans Company can give and administer loans for both fees and maintenance, and the bitesize learning that people are going to want to do. Thirty credits is notionally 300 hours of learning. I think it is the best compromise to start off with between those two different pressures that drive in different directions—the SLC to make it bigger, and maybe some of the requirements of learners for more bitesized learning to make it smaller. I think it is one of those things where we should just see how it rolls out as we implement and then change it if it seems like we have not quite got the balance right.

[Matt Western]

Q Okay. I know that in Canada, for example, they offer 10, don’t they? That seems to be quite successful.

Professor Peck: Yes. You can bundle them, actually, can’t you? You can sign up for three 10-credit modules. It is slightly clunkier than the Canadian system, but again, I think it will give people a chance to do smaller bitesize modules without having to take a loan out for every 10 credits, which I think would stretch the capacity of the Student Loans Company. I heard my colleague talking about transaction costs. If you start to get down to 10 credits per module, the transaction costs of recruiting the student, inducting them and so on gets quite large in relation to the fee you might get, so there is an economy of scale for providers around 30 credits as well.

[Matt Western]

Q Finally, can I just ask you about the future of the apprenticeship levy? It is currently not written into, or not within, this legislation. How do you see that sitting alongside the lifelong loan entitlement and the role for employers?

Professor Peck: Yes; I do think many employers will make use of the modular learning that the lifelong loan entitlement will promote. I think many employers will pay for their staff to do some of this upskilling and reskilling as part of investment in their training more broadly, which takes place outside the levy. I think there are some challenges at the moment about the levy and its size, aren’t there? We might be getting to a point where much of the levy is now being committed around apprenticeships, which is a real success. The question is: how do we keep apprenticeships growing over the next five to 10 years? That is for a very different group of staff. Apprenticeships often are for new starters or people completely changing their career with an employer, whereas the LLE is about modules enabling people to upskill and reskill when they are already in the workforce and established in the workforce.

[Lloyd Russell-Moyle]

Q At the moment, students come and study part-time or via the workplace. Predominantly, who pays for those courses?

Professor Peck: It is a really mixed picture. Some are paid for by employers and some will be paid for by individuals who have the means to do so. Those are the two major sources that we currently accept.

--- Later in debate ---

[Mr Perkins]

Q Clearly, success partly depends on the number of institutions at which students will be able to access these courses. Rachel, will you spell out the incentives for higher education institutions to put on courses in a much more bite-sized model, and the barriers to them doing so?

Rachel Sandby-Thomas: I am glad you raised that because I think there are obstacles. I am not saying this to obstruct the policy; I am actually trying to be constructive. It will introduce a lot more complexity into the higher education system, both for the students and for the institutions, and at lots of levels. It will kick off with uploading the courses on to the UCAS site. That might not seem complex, but the modules, how they all fit together and how they potentially fit with other institutions’ modules will actually be complex. Then, it is about how we market that clearly, because as was said, rightly, communicating clearly with prospective students is key to the success of the system.

There will need to be a lot of advice and guidance given to prospective students, who will want to know whether their prior learning will be taken into account and whether what they have done before and are proposing to do will actually form a coherent structural programme that will be recognised. You will then have the admissions. We hope that there will be a greater volume of admissions, but each of those admissions will have to be looked at very carefully on an individual basis, because of the matters of recognising prior learning and so on.

Data is another big and complex area. At the moment, the Data Futures programme is trying to get rid of the need to return data on modules, whereas this will obviously need the return of data on modules. There is a tension there that needs to be resolved. I could easily see it going into an extra framework of data returns, so that will be an issue. There is a big issue with the student information technical services, called SITS—I was going to say “fondly called”, except it is not—which is very much programmed on a system’s architecture, which is based on programmes that comprise modules, but is at that programme level. That will have to be completely refigured, which will be timely and costly.

Of course, you then have the issue of services and all the wraparound support services that we offer students, which will see an increase in volume. There are also tricky issues about how long students will have access to them. Do we know when they leave the university; how do we know when they go elsewhere for university; and do they have some sort of associated student status for a while? None of us knows the answers, but they are all things that need to be worked out. I say this because there is little by way of incentive for a business case at the moment. While I completely understand—going back to the first question—not wanting to provide a disincentive for students to do a modular course, there is a business disincentive in terms of the cost to the higher education institutions, unless they are already doing lots of modular provision.

[Matt Western]

Rachel, I am keen to understand how you see this fitting within the current regulatory landscape for higher education, particularly in the light of what it is fair to describe as an increased regulatory burden on the sector in recent years.

Rachel Sandby-Thomas: I think there will have to be differentiation between the two systems. There are quite a lot of concepts in the current OfS regulatory system that sit unhappily with this new system. For example, the concept of the completion of an award is key to the current system, but of course a student might not be completing an award as such when they are doing a module at one’s institution, so that needs to be changed. In the current degree system, there is quite an emphasis, for perfectly understandable reasons, on continuation and the importance of having a student continue for a year from the beginning of the course. Quite a lot of judgment is implied in that continuation being a good thing, whereas actually whether or not a student completes a module within or outside a year is a neutral thing, judgment-wise, in a modularised approach.

We also have the question of who will “own” the student in terms of graduate outcomes. Who can claim success, or to whom can success be attributed? I am reminded of that lovely quote of how success has many fathers, but failure is an orphan. I think there might well be many fathers for these students. Again, none of these things is insurmountable by any means, but they all need to be thought about in an intelligent manner.

[Matt Western]

Q Who do you think is best placed to be providing the advice and guidance? Is it down to the individual institutions, or is there a role for the OfS?

Rachel Sandby-Thomas: I do not think it should necessarily be the OfS, because that is not its area of expertise. This is really tricky. An institution can do some advice and guidance, and obviously, if a student is going to do all of the modules within an institution, that is comparatively simple. It is trickier when it is inter-institutional, which is the purpose and intention behind this.

On an individual basis, when a prospective student comes, there will be quite a lot of work for the university looking at what that student has already got and their prior learning, recognising it, and seeing how it might fit into one of their degrees or whatever. However, in a way that does not help the student very much at the beginning of the journey, because they might well have embarked on a kind of pick and mix, which might not amount to something that will end with a degree, if that is what the student wants. I do think that there is a sector-wide gap in terms of information, advice and guidance, and I think it is completely key to get that right for the success of this policy.

[Matt Western]

Q Sir David, may I put to you a question that has been put to previous witnesses about the funding situation across the sector? Given that you have worked in the Department for Education and also given your role today, what do you see as the risks to the sector in terms of an additional financial burden?

Sir David Bell: Rachel has articulated very clearly some of the additional costs that will come to the sector. There is also a question, going back to the issue of demand, about this kind of course. Some of the questions that we always ask ourselves at institutional level when we are asked to put on new programmes are: what is the demand, what are the costs of implementation, and what is the likely return? We have to think in that way. I think this is why the focus on careers information, guidance, pathways and so on will be very important, because if I might use a Scottish-ism here, I think the case for demand is not proven.

[Matt Western]

Q Sorry to cut across you. I think that Lord Johnson—Jo Johnson—was calling for a further pilot. Do you think that would have been a good idea?

Sir David Bell: The risk is, of course, that you pilot and you pilot and you pilot, and you never get there; you never get to the destination, as it were. We are part of the Department’s pilot on a higher technical qualification, and that will be one of those courses presumably that would be subsumed in the period between, say, 2024-25 up to 2027. So it will be quite interesting to see how that works.

The problem we have, and I think that goes back to something that Rachel said, is that we will be operating this at considerable scale, because if we are going to do that modularisation and upload it all and make it all available, that is a really big job. It is a big technical job, but I am also worried, ironically, about choice. I am slightly concerned that people are overwhelmed by choice of modules and other kinds of study.

We also know from our previous experience—one might say our current experience—that asking careers or guidance professionals to be absolutely up to speed with new qualifications or new routes to qualifications is quite a task, and therefore there is a big training and development opportunity requirement for people who are going to be advising those who might want to follow this more modular route.

[Matt Western]

Q Thank you. I have a specific question, perhaps for you, Sir David. We heard a moment ago from Ellen Thinnesen from Sunderland College, and she was talking about just how well the college works not only with the university, but also with the Department for Work and Pensions and so on. In terms of what this Bill might offer, it is about getting people back into work by reskilling, retraining them and so on, which is terrific. However, in the Bill we are looking at a cut-off at age 60—I speak personally now—so do you think that, given the fact that retirement ages are getting later and later, that should be more flexible, or higher?

Sir David Bell: I am not sure whether I am required to declare an interest in this matter as well. [Laughter.]

[Matt Western]

As much as me!

Sir David Bell: It is a really interesting question, and I must say that that is one of the things that slightly surprised me about the cut-off. There has been a lot of debate recently about trying to encourage more people back into the workplace post 50. And I would have thought that the opportunities afforded by the LLE would be ideal for people who might have trained in one area and then, later in life, decided they want to do something else. A module would be absolutely the right size of qualification for them, so I wonder whether that is something that could be thought about.

I mean, it’s that old cliché that 70 is the new 50, as it were. So I think there is probably some consideration worth giving to that 60-to-70 age range, because I think we will see more and more people, for one reason or another, continuing in employment. And if they continue in employment, presumably they will want to continue to upskill and enhance their qualifications.

[Katherine Fletcher]

Q This is a very interesting debate. In terms of being overwhelmed by choice, perhaps I could start with ladies first again, but I would like both of your opinions. Is there a bigger role for employers? If I am bowling along and I have decided that my biology degree is not relevant to being an MP and I want to get a level 4, 5 or 6 qualification to be an MP—I look forward to that training course, by the way—I will come along, but I will be doing it because I am trying to gain a qualification that either helps me with existing employment or that helps me to gain new employment.

I am interested in what you will do to engage with employers, so that rather than people being overwhelmed by choice there are pathways that kind of say: “If you get to this level”—is that something that can be set out in advance? Also, are you set up to then track outcomes? That is, this suggested pathway has taken 20 people through it, and 20 people have gone on to work with Jaguar Land Rover, even when they were not employees, having gained this qualification. Is that something that you are set up to do—almost to narrow the choice of modularisation to aid industry?

Rachel Sandby-Thomas: We do a lot of work with employers, and we work with them a lot on degree apprenticeships, as you would expect, but, especially in our business school and in our Warwick Manufacturing Group, we work with employers to design courses that will be good for them. That would just be a variation on that. We would track the learning outcomes, as we call them. Again, that sits slightly oddly with this modularisation, but again, it should be able to be worked through. Those learning outcomes pertain to the student and the student’s progression. We do track the students, partly because they are our alumni and partly because of graduate outcomes and what they are doing. What we might not do, although we would probably measure it by repeat business, so to speak, is track how the employer thinks that it has helped the student.

--- Later in debate ---

[Robert Halfon]

Q I want to ask you both about credit transfer. It will obviously be for the institution to decide on this—where people move their courses if they decide to transfer. There are good examples of this taking place already, as you well know. How will this work in practice? Will it be embraced by colleges and HE institutions?

Rachel Sandby-Thomas: As you rightly say, we do credit transfer sometimes, but it tends to be in the minority of students. The 2+2 course is a good example of that—generally students will do two years at a college and come to us for the final two years—but we know that college well, we know what they are teaching and we know the standards the students get to at the end of their two years at college, and that makes for an easy progression to us. That makes it much easier. There will be a lot more work if this really takes off, because we will have to get to know, assess and understand that prior learning in order to be able to recognise it. It would be a short-sighted kindness to allow a student who is not properly prepared to come on to a module if they have not reached the standard needed for that module. It might seem a kindness, but it does them no favours at all.

Sir David Bell: Making credit transfer work is a very important requirement if the lifelong loan entitlement is to work, because people will want to move between institutions. If we hold the mirror up to ourselves, I think universities also have to be a bit more liberal in this regard; we can at times be a bit sniffy when it comes to the qualifications that have been accrued in another institution. As Rachel said, there are a lot of good examples of this happening where you know your partner institutions. As a sector, we have to show that we are engaged in this by having better credit transfer arrangements without putting enormous bureaucratic hurdles in the way of students, who think, “Why can’t I transfer from this place to that place?”

[Matt Western]

Q We heard from a previous panellist about the importance of confidence in any new scheme. I think about T-levels, which have not really taken hold in the way the Government had perhaps hoped. If we are looking at 2025-26 as the year that this system may start, how can the Government make sure that there is the massive take-up to ensure it is a success?

Rachel Sandby-Thomas: The T-levels example is an interesting one. The take-up has been disappointing, but most people I talk to do not really know what T-levels are. It is all about communication and understanding. There needs to be a massive, well-planned communications campaign. It will be trickier with this policy, because it is more complex than T-levels. There have to be lots of lessons learnt from T-levels and the fact that take-up has been disappointing, and those lessons can be applied to this. It will be about communication, communication, communication—and, just when you think you have drenched people, communicate a bit more. We know what needs to be done, but sometimes it is a bit hard to do it.

Sir David Bell: We have had experience before with things such as accelerated degrees, where everyone thought, “Oh, there will be massive demand,” but that really did not materialise, so perhaps the lessons to learn—

[The Chair]

Order. I am afraid that that brings us to the end of the time allocated to the Committee to ask questions, and indeed the end of this morning’s sitting. On behalf of the Committee, I thank our witnesses for their evidence.

Lifelong Learning (Higher Education Fee Limits) Bill (Second sitting)

Matt Western Excerpts

Committee stage
Tuesday 21st March 2023 Public Bill Committees

[Robert Halfon]

Q Yes. I want to put my final question to Simon. Simon, I again want to thank you for the AELP’s constructive support for the principles of the Bill. It would be helpful to understand what you think the impact of the Bill will be on your members. We have done a lot of work on further education and higher education this morning, but it would be good to understand the impact on your members and how they see it going forward.

Simon Ashworth: As you say, we are broadly in favour of the principles. We need a better mix between employer, state and individual investment in skills. For our members in the FE space, I guess awareness of the LLE is still underdeveloped. Probably the biggest impact for a lot of our members will be on those who already did not deliver advanced learner loan provision. That is a programme source that has diminished over the past few years as a result of the challenges around cost of living, and the free courses for jobs offer negating the need to take out a loan. We were particularly excited to see the move to offer a third pathway for regulation through the Office for Students. That is a really important move to ensure that our members are part of the landscape, and this does not just include an HE-provider dominated landscape; it is a true mix of FE and HE providers. Obviously, there is more work to do on what that registration process looks like, and to move more of our members to be recognised and regulated by the OfS outside the full degree-awarding powers piece.

[Matt Western (Warwick and Leamington) (Lab)]

Q Thank you both for joining us. Matthew, I have a couple of quick questions for you, and then I will come to Simon in a second. In the current economic environment, do you foresee a situation where a lot of employers, particularly small and medium-sized enterprises, will be cutting back on training? If that is so, what are the risks of this being very much individualised, by which I mean the training being left to the individual as opposed to the business? Obviously, what happens in most recessions—not that we are in a recession, but we are facing difficult times—is that training gets cut back.

Matthew Percival: We are certainly not meeting anybody’s growth ambitions. It is a difficult economic position. Added to that, we are seeing some squeezing of training budgets, but there are two factors to that. It is not just the traditional case of, “If there is a slowdown in the economy, do we see some cutbacks there?”—often it is about protecting jobs in those sorts of recessionary situations. The current one is a lot of pressure being put on employers’ budgets by things such as trying to do everything they possibly can to support employees with basic pay. I know a number of employers who have squeezed their training budgets and other discretionary costs like that in order to do everything they possibly can to support with a higher basic pay settlement at the moment.

From our own indications, the same survey I mentioned on our measurement of the extent of skills shortages still reports more businesses saying they intend to increase their spend on training than saying they would decrease it, and significantly so. But there is a weaker balance than the year before. The one bit of context I would add is that last year we saw a big spike to record levels of intent to increase, because the 12 months people were referring to previously was the heavily-disrupted period of the pandemic, and therefore that was a big increase.

Now we are back to levels in our surveys of similar intent as previous years, but I also note that our survey tends to end up being more optimistic of employers telling us their intentions for the following 12 months than official measures of skills spend would show. It feels like we are in a similar environment to the five years before the pandemic rather than a different position at the moment.

[Matt Western]

Q I have a very brief question, again to you, Matthew. To what extent should lifelong learning be aiming also to improve the productivity puzzle in the UK?

Matthew Percival: There is an important link between productivity and skills, more so in individual productivity than in a macro sense. I tend to think that the ways in which we do jobs, and the ways in which technology supports us to do jobs, create the productive potential of a job. Our skills are the extent to which we manage to realise that potential in any individual job. There is always a risk that sometimes we train somebody to do a job but do not consider how to change the job itself. We make a worker more productive, but not the jobs in the stock of our economy.

I do not see that, though, as the principal objective of the LLE, because it feels like the LLE is more about how we help individuals to navigate their path through the labour market, rather than that in-role piece. If an employer adopts a new piece of technology or a new way of working that requires a skills investment to get the benefit of it from their workforce, I would expect to see that being picked up more by the employers rather than through the LLE.

[Matt Western]

Q Simon, could I briefly ask you what role the new platforms might play—online platforms particularly—in the delivery of LLE? How do we ensure that any new providers coming into this area provide quality?

Simon Ashworth: That is a really good question. You can look back in history at the individual skills accounts and some of the challenges. We have moved forward significantly and have some learnings, including ensuring that we have regulated providers who are delivering from a regulated list of qualifications. Some online platforms now negate some of the challenges we had historically around a paper-based system, which was probably a little bit of its time. There are key principles there around the controls and the providers.

As I said, the Office for Students regulates the provider base. I think we have moved on significantly from where we were previously in terms of access to providers and how the system can and does work. The whole concept of empowering learners and giving them an individual lifelong learning account is a really exciting move. It gives them much more control over where they access their provision, who they choose and when they choose it. I think it is a real game-changer for the individual. I would be less worried about some of the challenges we saw 20 years ago when we moved to a similar approach.

[Mr Toby Perkins (Chesterfield) (Lab)]

Q Matthew, we always seem to talk about skills shortages, and it feels like the sense among employers that there are skills and labour shortages now is stronger than ever. However, a recent National Audit Office report showed that in 2018-19, businesses were spending less on training than they had been nine years before. What is your sense as to why employers who recognise there are massive skills shortages are at the same time not spending the extra amount you might expect on training in comparison to 10 years before?

Matthew Percival: There is an interesting dynamic at play, particularly at the moment, around labour shortages. Given the extent of the skills and labour shortages, there is a stronger incentive and a stronger need than ever to be able to meet your skills needs, yet, at the same time, there are forces pulling in the opposite direction. I mentioned that in this environment, we have had a lot of job-to-job moves within our labour market. People have been able to move into different roles for more money, and there is pressure around salaries on hiring and salaries for retention. If you do not do something on retention salaries, you incentivise everybody to move more and to swap employers, so you get that element of the squeezing of budgets.

There are other things that we see going on in relation to the current shortage environment. There can be an element of the off-the-job opportunity cost of a worker going off to do training. When you are already short on the frontline, it is even harder to free somebody up to go and put the time into the training, and we see a number of the providers in our membership—we have a mix; as well as the plcs that we are most synonymous with, there are universities, colleges and independent providers in our membership—particularly the colleges feeling the pinch when there are these shortages. They also have their own workforce challenges, which often make it so much more difficult to be able to provide the training where the employer is willing to do so. It is more important than ever to be able to address the skills gaps, but it is also more difficult to be able to deliver that at the same time, rather than a universally positive driver towards unlocking more investment than we have.

I think we miss a trick in terms of policy to be able to think about the question of what it would take to create an environment to unlock higher levels of business investment in skills. A lot of our political debate around skills often gets focused on what the state will buy for the individual, rather than on how the state could play a role in creating an environment for higher levels of business investment. An imperative for us would be to have more of that conversation.

--- Later in debate ---

[Robert Halfon]

Thank you.

[Matt Western]

Q Sir Philip, thank you for joining us and for all your work on this subject with your panel members. I am interested to know whether you have any thoughts about or concerns over the financial ramifications of what this might mean for institutions—as we currently have funding within this £37,000 budget. Do you have any views on financial sustainability?

Sir Philip Augar: I missed a word there. Is your question about the impact on institutions?

[Matt Western]

Yes.

Sir Philip Augar: I think, potentially, this could be very significant. It is a significant opportunity for independent providers. It is a significant opportunity for FE colleges, which could really see them enter the mainstream. I will be interested to see how the universities respond. For the next few years, there will be pressure on places, as the population of 18-year-olds increases. When that turns down in 2030, there might well be places at universities that require filling, and this modular approach could be a really good way to do that. I think there are positives, actually, for all types of institutions.

[Matt Western]

Q Thank you. On the Bill, we have a figure of £37,000 as the envelope for the personal lifelong loan entitlement. Say we are in 2033, 10 years from now: should it still be £37,000, or should we be, in some way, linking that to inflation? Clearly, someone could be doing a couple of modules now, and some in five years’ time and in 10 years’ time.

Sir Philip Augar: The panel that I chaired recommended that the total unit of resource—the amount allocated to each student—should remain frozen until 2025. We recommended a slight variation in the mix between the loan and a direct grant, but we felt that, by 2025, there would be a case for having another look at whether the unit of resource was right. That will be at £9,250.

Since then, we have had a period of substantial inflation. That would be the right moment to have another look at this to find out whether providers are spending the money wisely and frugally in the public interest. Without carrying out that piece of work, I would not really like to say what the fee should be 10 years out, but, clearly, one would expect that inflation would have been reflected in it to some degree

[Matt Western]

Q But given the nature of what LLE is trying to deliver, it could be over a 20-year span, in terms of someone taking up their £37,000—

Sir Philip Augar: That seems a pretty reasonable assumption, given where we are with inflation.

[Matt Western]

Q Fine. Finally, can you give any thoughts about an individual trying to assess the choice of course they may undertake? How should we be measuring the relative quality of the modules?

Sir Philip Augar: That is a really good question. For this to work, we need a number of parties to respond to the opportunity. We clearly need providers to respond. We need them to understand the needs of the economy—the national and local economies—and to put on modularised courses. We need schools and colleges, in the form of their careers advice—the information and guidance that they give—to actually broaden that advice from what is currently; it is not just about universities.

We also need employers to step up to the plate. The local skills improvement plans are—and potentially could be even greater—a forum where employers can understand the needs of their local area. FE colleges are now obliged to take that into consideration, so we potentially have a joined-up system in place here. I think all that needs to happen before learners—and I suppose parents—can make a balanced judgment of the next, best step to take.

[Matt Western]

Thank you.

[Mr Perkins]

Q There are several things that could result in this not leading to the amount of take-up that we all hope for, and one of those is not enough institutions actually offering courses in this format. You spoke in your review about the incentives for higher education institutions needing to change, and those changing their behaviour. At this stage, are you able to see whether there is enough in this to mean that we are likely to get the enough course availability for people for this to be the game changer that you hoped?

Sir Philip Augar: That is a question that I ask myself quite a lot, Mr Perkins. It is hard to come up with a definitive answer. Obviously, for the independent providers and FE colleges, this is a massive opportunity. This is a chance to completely expand their market, and I would have thought that they are already on to it. For the universities, I am not so sure, because there is considerable demand from domestic and overseas students for the full three-year degrees.

I would hope that the forward-thinking institutions are looking at that demographic downturn in 2030 and thinking that it is not far away. This will come by very quickly. The cohort that starts in 2025 will have its three years and then we are into it. I hope that the forward-thinking institutions—the type that will be interested and able to offer modularised, credit-based lifelong learning—will be thinking about this: if not now, then pretty quickly.

--- Later in debate ---

[The Chair]

We are coming to the last couple of minutes. A brief question from Matt Western.

[Matt Western]

Q Just a brief question in the remaining seconds. I am not asking this for personal reasons, but do you have any views on the age cap of 60 for accessing the lifelong loan entitlement? Given some of the skills shortages, the expertise and the Government talking about returnerships, do you think there would be an advantage in making it later than 60?

Sir Philip Augar: If I were thinking of a lifelong loan, I am afraid I would be excluded by that barrier. We live in the real world. It would be great to extend it right through for much longer than that, but if these loans are not repaid, they are picked up by the general taxpayer. We have to be realistic about that, and 60 seems to me to be a reasonable number. It could be a little higher, but it seems a reasonable number.

[The Chair]

Thank you very much, Sir Philip.

Examination of Witness

David Hughes gave evidence.

--- Later in debate ---

[Robert Halfon]

Thank you.

[Matt Western]

Q Thank you for joining us, David. I am concerned that, although there will clearly be some advantage in terms of driving and hopefully improving the numbers who access FE and HE through this route, there are, as we heard from previous witnesses, costs associated with delivering this proposal, in terms of the administration not only for students but more widely. Given the financial circumstances of colleges, to which you alluded, what should be the concerns? Does this idea need much more funding to make it viable?

David Hughes: The problem colleges have is that they do not have any of what the private sector might call risk capital: they cannot set up new courses unless they are absolutely certain that those courses will be successful. I think that will make them cautious, and when you are trying to introduce a very different type of higher education, caution is a real barrier. I would love to see the Department for Education supporting colleges to share some of the risk and to pilot courses.

One of the things that colleges do really well is work very closely with local employers. It would be lovely to see some more work, in specific sectors of the economy where there are skills shortages, to pilot colleges and employers working together to develop modules that are attractive to individuals and that help them to get into those skills-shortage jobs. To imagine that will happen just by chance is stretching reality; I do not think it will require tens or hundreds of millions of pounds, but it will need investment to make sure the risk is shared. If we do that, we could really get the ball rolling and show it works, and then more organisations—more colleges and employers—would engage. It is incumbent on the DFE to really start with that investment and risk sharing.

[Matt Western]

Q You mentioned that you would like to see, as I think we all would, greater progression from levels 1 and 2; what more should be done to encourage progression from those levels to level 3 and maybe level 4?

David Hughes: The investment in adult education has plummeted over the past 12 years, so there are fewer opportunities now than there were in 2010. That is a major problem. The funding rate for colleges has not changed for 10 years. That is a major problem. We need more investment in colleges just so that they can recruit the skilled staff to be able to deliver.

There is an investment question, then, but there is a pathway issue as well. We need to make it much more straightforward for people to understand how they can get from wherever they are—whatever level—through to the sort of skills acquisition that really works in the labour market. Adults with children, mortgages, car loans and whatever other responsibilities need to see a return on their investment. The LLE is a fantastic opportunity, but it is not going to be taken unless it is super clear that getting that level 2, level 3, level 4 or level 5 will actually make a difference to a person’s chances in the labour market and, let’s face it, to their income to help with the cost of living crisis.

[Gill Furniss]

Q You have more or less answered quite a few of my questions. My concerns are about the disparity in pay between school and FE and between FE and HE. It worries me that this proposal cannot be successful unless the Government put in some investment to make it more equitable, because, as you say, recruitment and retention is a massive difficulty, particularly in specialist subject areas where people can earn far more in business. Do you agree?

David Hughes: I completely agree, and it looks as though it might get worse in the short term. The Government are negotiating with the teachers’ unions at the moment; if teachers get a better settlement, the gap between schoolteacher pay and college lecturer pay will get wider. It will get even more difficult. I know that the Minister is aware of that; I have talked to him about it. It is a difficult one, but we absolutely need college staff to be paid the right wage to attract and retain them.

--- Later in debate ---

[Mr Perkins]

Q On your own institutions providing level 4 and 5 courses—with level 6 coming further downstream—do you anticipate offering significant numbers of those courses, or will you wait predominantly until the level 6 offer?

Professor Rigby: All undergraduate degrees tend to be 4, 5, 6. We currently accept top-ups into 5 and into 6, but there is limited demand at the moment for that provision. The real opportunity here exists in growing this ecosystem almost organically, and colleges working with their cognate universities—we are federated with Bath College, for example, and New City College in London. We are developing novel provision in that space, assuming that the funding will permit it. There is little that the funding will not permit; it is just not so obvious to the person in receipt of it. There is little in terms of top-up, one-year, short courses that we cannot do currently, but we sometimes have to look for something from commercial entities, rather than individuals taking out loans.

[Matt Western]

Q May I start with a couple of questions to you, Professor Rigby? On how the legislation is written, I have sensed concern elsewhere about giving the Secretary of State powers to remove modules or to say that they will not be funded. What is your view of how such powers might be exercised were we to have an institution or organisation where there is, not a vendetta, but a certain sense of action against it?

Professor Rigby: As I read the Bill as written, nothing gives me direct cause for concern, but it does give permissions for things to happen down the line that are not part of what is conceptualised at the moment in the lifelong learning entitlement. For example, nothing in the Bill would stop the Secretary of State in future refusing to fund a module or course in a particular discipline. Universities are worried about that, because we have seen the removal of extra funding for courses such as archaeology and design over the past few years. It makes us conscious that the Bill, while not designed for that function, gives permission to the Secretary of State to set fees at whatever level they might want for a degree that they might like, or to refuse funds at any level for a degree that they do not like. All of us around the table might worry about archaeology—notwithstanding that you did it; people do move on later—but most of us would see that design is something that is broadly useful to the economy.

[Matt Western]

Q For the measurement of quality, how do you see modules being given some sort of sense of currency by OfS or whoever?

Professor Rigby: The geek in me would say that all modules have currency because they count for credit. We already have transfer schemes between colleges and universities and between universities—one with another—that will accept aliquots of credit at a particular level and allow that to stand in lieu of partial learning. So I could take half a year’s work, I could get entry into a different university and I could be let off that half-year of study, despite the fact that the curriculum might be slightly different.

To an extent, any 30-credit module taken under the lifelong loan entitlement will have currency. It would be useful to badge or brand them with a series of designations that would make a lot of sense. If I turn up and say I have a 30-credit module at level 6, you are probably not that impressed, but it is about the same amount of effort as an A-level, for example, and at a higher level of intellectual demand. It would be useful to badge and brand these things so that they made sense to everybody. However, in their raw form, as long as they carry credit, that will make sense not just here but internationally, so you can go through the four nations and into Europe with that attribution of credit.

[Matt Western]

Q Dr Norton, do you want to come in on that? Then I have a specific question for you.

Dr Norton: I was just going to say that the LLE consultation response document says that there are plans for transcripts to be standardised. If that could be integrated into the LLE gateway system, along with advice and guidance, it would give a lot more clarity to students and employers. There is a real issue of brand recognition, I think, in the value of modules, especially to employers, who might view 30 credits differently to how we in the sector do.

[Matt Western]

Q The sector has made it clear that some of the regulatory burden it faces is far greater than it was, say, five years ago. What concerns do you have about the introduction of the LLE in terms of the additional administrative burden it might bring on an institution? I am conscious, Dr Norton, that Coventry is at the vanguard as one of the early adopters of modularised learning. What, in your experience, does that look like in administrative terms?

Dr Norton: We in Coventry have an open-framework approach to certain areas of provision. The one that springs to mind is a professional development course that ends up in a BA or BSc for professional athletes. Through that approach, all the different campuses within our group structure are open to students, who can take modules from across the spectrum of what we deliver: sports science, business management, and exercise and life sciences. Students can complete over six years, allowing them to continue their sporting career, because obviously time is important to athletes in terms of completing their career. It is more about having standardised processes.

There is administrative burden, but it is more in terms of curriculum transformation. Adaptations will also have to be made again in advance of the LLE, once the Secretary of State has made decisions about which subjects are to be prioritised and things like that. The main burden I am worried about is financial forecasting and the behaviour of students towards admissions. We do not really know yet how popular this offer is going to be. At the moment, we run on five-year financial forecasting and have largely three-year cycles. It becomes extremely difficult to plan if you are only taking modules. So we do not have an idea of learner demand fully yet. Although we are at the vanguard of LLE provision, as you kindly say, it is only a small part of our portfolio at the moment.

[Matt Western]

Q Related to that financial forecasting, one concern that the Government have been raising in the last year or so has been about continuation completion. What is your experience with modularisation? Are you seeing lower, higher or similar numbers of drop-outs?

Dr Norton: I am afraid that I would have to come back to the Committee with actual student figures on that. I do not have access to them here, but I would be happy to submit them as evidence.

Professor Rigby: Can I briefly come back on those questions? In terms of the regulatory burden, it is significant. I would estimate that the cost of regulation to my university over the last year has been in excess of half a million pounds. We might have been lucky or unlucky—I do not think that data is collected across the sector.

Once we break that down into subject areas—I run around 80 different subject areas—we amplify that level of bureaucratic oversight potentially by 80. Breaking that down into modules means that every one of my degrees, which at the moment are a unitary entity, is broken down into 12 pieces, any one of which could be the focus of oversight by the Office for Students. You are amplifying my administrative or overhead burden of regulation by 80 times 12, which is significant, given that it is not cheap.

Everybody wants to be well regulated. No university is trying to escape its burden, but I think that that burden is worth considering because the metrics on which the risk assessment is based for universities will not operate for a module. I cannot come here and pretend that one 30-credit module will change someone’s entire career. I cannot assume that the progression for a module will be as high as it would be for an entire degree, mainly because the demographic of students taking a single module will be very different to the demographic of students taking a full degree. We are in different regulatory risk metrics; the risk is that those metrics will then be less broadbrush than they currently are, and there will be another amplification of the regulatory burden. So it is something that is worth considering, even if you fillet out from that the natural excesses of a vice-chancellor getting regulated.

[Katherine Fletcher (South Ribble) (Con)]

Q Listening to what you are saying, I am trying to chase through a real-world example because I do not have your expertise in the field. I am hearing that we need some kind of standardisation within the modules that allows for a certain transferability. For example, if you are doing artificial intelligence, a basic tick-box, “I understand what a black box AI system is,” would be worth 30 credits in theory, and would be applicable across the piece. I am also hearing that to get to that level of granularization across your full curricular suite is going to be burdensome.

Is there an argument that says we start small, by introducing it only for level 4 and 5, with level 6 to come, and that we focus on the more technical, easy-to-define areas of study at levels 4 and 5? They also have the happy coincidence of being in demand in the job market. Is it possible that we could go some way without having to modularise, for example, archaeology? I love archaeology, but you know what I mean. Can you help me understand what I have got wrong in that sentence?

Professor Rigby: Modularising a degree is easy. We did it at Bath Spa just for fun, to see what the answer to your question would be. We took it right through the formal processes. We have a fully stackable, modularised degree on our books, where every module has individual value. The solution to your problem is that in any degree, there are core modules that you have to do, and optional modules that you choose to do. You make sure that your core modules are, for example, your black box AI at levels 4, 5 and 6, and then your options can change over time and keep current. If ChatGPT was not part of your degree four years ago, you can do a module on it now. You can slot that in at the right academic level, and when you have enough tokens, you automatically get the next qualification, whether that is a year of study, a diploma of higher education, a certificate of education or a degree. That is easy. It is also easy to modularise every degree that is not taught by Oxford, Cambridge or a medical school, because they all bear credit, so they are already modular. What we cannot pretend is that some of our later modules have standalone value irrespective of earlier-level modules. You cannot just drop in to a third-year module on advanced ecology unless you have done it in second and first year. That is where we need to be clever, because if people are taking time out of the workforce, they cannot necessarily come back in.

You are absolutely right. The easiest thing is to start with the equivalent of first year at university—level 4—and then develop on, but you can do it through a series of generic technical qualifications from now. You can devise a degree in health or computing or business. Those things are amenable to immediately meeting all the LLE requirements. It is just a matter of good design in the background. If we can do it, so can any university.

Lifelong Learning (Higher Education Fee Limits) Bill (Third sitting)

Matt Western Excerpts

Committee stage
Thursday 23rd March 2023 Public Bill Committees

[The Chair]

I have a few preliminary reminders for the Committee. Please switch electronic devices to silent. No food or drink is permitted during sittings of the Committee, except for the water provided. Hansard colleagues will be grateful if Members email their speaking notes to [e-mail].

We will now begin line-by-line consideration of the Bill. The selection list for today’s sittings is available in the room. It shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or similar subjects. Please note that decisions on amendments do not take place in the order that they are debated; they sometimes appear later than on the final list. The selection grouping shows the order of debates and decisions for each amendment.

A Member who has put their name to a leading amendment in the group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in the group. A Member may speak more than once in a single debate. At the end of the debate on a group of amendments, I will call the Member who moved the leading amendment. Before they sit down, they will need to indicate whether they wish to withdraw or seek a decision on the amendment. If any Member wishes to press any other amendment in the group to a vote, they need to let me know.

Clause 1

New method for determining fee limit

[Matt Western (Warwick and Leamington) (Lab)]

I beg to move amendment 3, in clause 1, page 2, line 5, at end insert—

“in consultation with relevant higher education sector stakeholders.”

This amendment would ensure that in determining whether the credit-based method or the fixed method is to be used, the Secretary of State will consult relevant higher education sector stakeholders.

[The Chair]

With this it will be convenient to discuss amendment 5, in clause 1, page 2, line 34, at end insert—

“(3A) In determining which activity is to be regarded as a ‘credit-differentiated activity’ under subsection (3), the Secretary of State must consult the relevant provider, relevant higher education sector stakeholders, and any other sector stakeholders relevant to the credit-differentiated activity in question.”

In determining the nature and extent of “credit-differentiated activity” and the number of credits associated to it, the Secretary of State must consult the provider in question, higher education stakeholders, and other stakeholders to which the credit-differentiated activity relates to, for example, NHS Trusts or other representative bodies.

--- Later in debate ---

[Matt Western]

Thank you, Sir Robert, in advance of this morning’s sitting, and thanks to the Clerks for all their work hitherto.

I thought that the evidence sessions the other day were useful. The contributions of the Government witnesses, as well as those whom we had proposed, were extremely helpful. What we heard consistently was that the previous consultation was healthy, but we did not have the report back until relatively late. Perhaps there could be greater consultation.

The purpose behind the two grouped amendments 3 and 5 is to incorporate more consultation in the Bill and in particular the need for the Minister to consult stakeholders when deciding what method should be used to determine the fee limit. A second expectation to be included would be that the Minister consult the provider in question, higher education stakeholders and other stakeholders relevant to how many credits are attached to the credit-differentiated activity—that is the term used to describe non-traditional modes of teaching, or placement.

I start with amendment 3. The Bill gives the Secretary of State sweeping powers to decide unilaterally what method to apply to courses in determining the fee method, whether the credit-based method or the fixed method. In the evidence sessions, we heard from Professor Press, the Vice-Chancellor of Manchester Metropolitan University, who has done a lot of work in this area. In what was not so much a confession as a revelation, he said that

“the bit I find most difficult to understand is the difference between the credit-based and the fixed-mechanism methods of calculating the fee cap.”––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 5, Q4.]

In addition, we also helpfully heard from Julie Charge, the deputy chief executive officer at the University of Salford, about their experience of the Office for Students’ short-course trial, as it was the Office for Students that conducted the trail. We heard that that might have been better had it been undertaken by the Department for Education itself. Salford’s experience revealed two significant cohorts of people taking the loan: the 26 to 30-year-olds in one; and the 36 to 40-year-olds in the other. That is valuable data for the Government. I like to think that that will provide behavioural insight into how the opportunity for lifelong learning will apply, because there seems to be a market and a need for such provision among those cohorts. I hope that the Minister will be interested in learning from the trial and implementing it when deciding many of the things that he has the power to do in regulations.

The memorandum from the Department for Education to the Delegated Powers and Regulatory Reform Committee states that the fixed method will be used only

“for courses which do not easily lend themselves to the credit-based system”.

However, the Bill grants sweeping powers to the Secretary of State to decide what method should be used, irrespective of whether the fixed method should be used exceptionally. There is a concern here. If it is decided that the credit-based method should be used, it is important that that does not lead to unintended consequences for providers or learners. The Minister would therefore surely accept that there is a real benefit to sector consultation.

The importance and relevance was underlined by the fact that the Russell Group has expressed its support for the amendment, as it believes universities should have autonomy on all decisions relating to the types of courses and provision offered, and whether or not to modularise the courses and the associated credit. I expect the Minister might not want to include sector stakeholder consultation in the Bill, but, if he does not, what assurances can he give the sector that, first, there will be an avenue for sector stakeholders to contribute before the Secretary of State decides on the fee limit to be applied? Secondly, universities will have the ability to express an opinion as to what type of courses

“do not easily lend themselves to the credit-based system”,

and the Secretary of State will take that into account in deciding what method to apply.

[Mr Toby Perkins (Chesterfield) (Lab)]

My hon. Friend raises an important point. The consultation that he refers to sets up an opportunity to debate clause 1. For me there were two key concerns that came out of the evidence sessions on Tuesday. The first was whether the policy would lead to a shift from employers having responsibility for their staff’s learning to employees now being expected to take responsibility. The second was whether that would be attractive enough for institutions to take them on, and whether the concerns about the financial stability of the sector had been considered in the Bill. The evidence sessions showed why it is so important that we have a full consultation on the issues.

[Matt Western]

My hon. Friend is right that we heard quite widely from all the witnesses. Over the last 30 years, there has been a significant fall-off in the provision of adult education and of education or training through employers—we heard that from the CBI and others. There is a real concern about whether the proposal will lead to an individualisation of the responsibility for all training and skills, which would be to the detriment of what is needed for us economically as well as socially. I agree with his point about whether what is being proposed might be a burden in the context of the current education landscape and the financial precarity, which we particularly see in colleges and also in higher education institutions. We will come on to that when we discuss other amendments.

I will come back to the assurances I am seeking from the Minister on the need for consultation. I spoke of two. The final one I want to raise is that there was seemingly some confusion among the witnesses we heard from on Tuesday. These are heavyweight college leaders, who are widely respected across the sector. I am really seeking assurance from the Minister and his team that he himself will reassure the sector on the difference between the two fee limit methods.

I will turn to amendment 5. In the Bill, “credit-differentiated activity” is the term used to describe non-traditional learning activity, such as placements with employers. That is not a term that a lot of people will be familiar with; I am not sure if you, Sir Robert, or others would have been familiar with it ahead of getting involved with this legislation. An obvious example is in hospitals, where placements are a vital part of nursing degrees and other medicine-related courses.

Providers may wish to define future courses with a placement element to them or that include engagement with employers. That is to be welcomed, of course; it is a vital part of the learning experience—the direct, practical experience—that a person can have by being in that place of work and learning very much on the job alongside the theory they may have learned in the classroom. That is a vital part of their training—understanding not just the theory but how that relates in practice to the workspace.

The Bill currently allows the Secretary of State to set down in the regulations the description of the credit-differentiated activity to be undertaken and make provision about the number of credits attached to that type of activity. Given the vast range of areas that such activity could fall in and the number of sectors and bodies that could and, I believe, should be engaged—national health service trusts, other sector-representative bodies involved in course provision and qualification bodies—would it not make sense to ensure they are consulted before the Secretary of State puts a number of credits on the activity?

The amendment also includes consultation with the provider, which is important. Let us take the worst-case scenario. Say that a provider allows a student to undergo a placement during a course year: the Secretary of State provides for that activity to be 20 credits—i.e. 200 hours —but say, in reality, the placement is much more onerous, and the university envisaged that the student would spend 300 hours on placement, or 37.5 hours for eight weeks. That example illustrates that there would be a clear discrepancy. What mechanisms are in place in the legislation to prevent that happening? Would consultation with the provider not be sensible?

We also heard from Simon Ashworth of the Association of Employment and Learning Providers that

“awareness of the LLE is still underdeveloped.”––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 39, Q78.]

That is backed up by the CBI’s education and skills survey 2022. We heard from Matthew Percival about that, and he explained that the survey revealed that four in five respondents were totally unaware of the plans to introduce the lifelong loan entitlement. We also heard examples on Tuesday of how previous Government initiatives in the skills space have massively underperformed the expectations of Government. I do not mean to criticise that, because some of the initiatives have been very positive, but it demonstrates how difficult it is to get some of those new initiatives up, running and accepted by institutions, and understood by employers and learners. We have seen that with T-levels and accelerated degrees.

--- Later in debate ---

[Matt Western]

My hon. Friend understandably has a different perspective on the sector and he has real expertise. With some of the initiatives—I am thinking of T-levels and how the Government sought to remove BTECs—there has been resistance, and a difference between what the Government and colleges and employers believe worked successfully. The introduction of any new approach brings massive challenges. As the Minister knows, the Opposition are in favour of lifelong learning, but it is important that the delivery of it is successful, and there is not a failure from the start. We are at this stage in the Parliament, and there is a lot of work to be done if the measures are to be successful.

One benefit of consultation is engagement. There has been a desire across the sector to have more engagement with the Government, but it has been made difficult. I welcome the Minister to his place; he is a decent individual with expertise and knowledge about the skills sector. There has been such upheaval and turmoil across the ministerial line-up that I think it has made it very difficult. We are five years on from the 2018 Augar report. There needs to be consistency and stability across the ministerial line-up to deliver some of these ideas.

[Andy McDonald (Middlesbrough) (Lab)]

Does my hon. Friend share my perception of the role of the local skills improvement plans in this area? From my own experience, it would appear that there is a degree of frustration in those who are seeking to drive the plans when gaining qualitative information from employers. I wonder whether that is indicative of well-intentioned plans not being thought through thoroughly, and not being coherent, intelligible and effective.

[Matt Western]

My hon. Friend has a lot of experience as a Member of Parliament for Middlesbrough, and understands how important it is, with economic change and new sectors emerging, that training and skills provision is available and co-ordinated. I worked with my hon. Friend the Member for Chesterfield on the Skills and Post-16 Education Act 2022; the introduction of local skills improvement plans was seen as a good proposal, but it is about delivery and making it work. It is important to have the right people involved in those plans, who are acting not simply out of self-interest but in the interests of the long-term—10 or 15 years hence. I still believe there is much work to be done on that.

Our amendment would bring all the relevant stakeholders together, simultaneously limiting unintended consequences and engaging the relevant groups with the policy while boosting awareness of the lifelong loan entitlement policy. I think this is a very sensible suggestion, but I guess I would say that.

So, on behalf of the sector, I just ask the Minister to provide some assurances that decisions made under clause 1(4) will not be implemented without sector and representative consultation and approval, and that is what these two amendments seek to ensure.

[Mr Perkins]

I do not intend to dwell on these two amendments; my hon. Friend the Member for Warwick and Leamington has forcefully set out their purpose. Regarding the consultation, given what we heard in the evidence session, it is important that the sector is engaged. There is a real concern that until there is clarity about a new method of funding further education and skills, which we know will be more expensive for providers to provide, although—quite rightly—it will not be any more expensive for learners to learn, there will be a gap there. So, unless someone steps forward, there is a real danger that an excellent opportunity will be created for learners that they will not actually be able to access in their local area.

On the subject of the definition of a credit, it is important to remind the Committee what we heard in the evidence session. My hon. Friend asked:

“Should the Bill have written into it some sort of definition of what a credit is?”

Ellen Thinnesen from Sunderland College responded:

“My personal and professional opinion is that it should. If we are defining fee limits attached to credits, it is really important to communicate to a student what a credit means. Essentially, a student wants to know a number of things. First, how much is this going to cost me? Secondly, what will I have to expend in effort and energy to complete this module? Thirdly, what will I get for that module and those credits from the institution that I am choosing to go to? So transparency about the relationship of credit to fees, and of credit to module content and what is expected within that, is very important.”––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 12.]

It was crucial and right that she said that, with her understanding of what motivates learners. It is also important, of course, that future employers understand what those credits mean; other witnesses referred to receiving a handful of certificates, but said that there was no clarity about what those certificates meant.

Alun Francis from Oldham College responded to a question from the hon. Member for Bassetlaw by saying:

“The more important questions will be about the standardisation of the credits…so that learners know what they are getting and paying for. That needs to be absolutely transparent.

It is also important to say that in these technical areas there is a big difference between what learners pay for here and in a traditional degree, because some degrees are positional goods—they are paying for the credential as much as the content—but in these qualifications they are paying for the content. Learners therefore need to be clear that what they are getting is what it says on the tin. The other aspects, I think, we will just get used to.”––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 13.]

Those are very powerful voices from the sector speaking in support of my hon. Friend’s amendment and if the Minister is not minded to support it, we will need real clarity for the sector as to how the definition of a credit will be assured if it is not in the Bill.

[The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)]

I thank the shadow spokesman, the hon. Member for Warwick and Leamington, for tabling his amendment and for his comments on it. He talked about the timing of the consultation and he said that it came out quite late. It came out quite late because we wanted to make sure that we got it right: we were having extensive consultation with the sector and with other stakeholders, as he rightly wants, and we wanted to make sure that we responded carefully. I do not know if he has seen the recent tweet by the vice-chancellor of the Open University, who said that he welcomed the engagement with the Government. There has been an LLE roundtable with previous Ministers and officials. I attended one such meeting only a few days ago on the LLE.

[Matt Western]

Will the Minister give way on that point?

[Robert Halfon]

Yes, of course. I will come on to deal with some of the hon. Member’s remarks.

[Matt Western]

It would have been really helpful if the Minister had been in post in March last year, because we might have got to this a lot sooner—that is the point I was making. I am sure that the intention was there in the Government, and of course the Augur report was published five years ago, but I have lost count of how many people I have stood opposite here in this past year. Had this Minister been in place, I am sure we would have had this Bill Committee in the autumn of last year.

[Robert Halfon]

The hon. Member is very kind, as always. I cannot speak for the past; I can just speak for the present and the future. My intention is to get this Bill right, which is why this Bill Committee is so important.

The hon. Member opened by saying that there was some confusion about the fixed-rate method and modules and credits. He mentioned Professor Malcolm Press. Universities UK has strongly welcomed the lifelong loan entitlement; I noted that point on Second Reading.

I will just clarify, for the benefit of the Committee, that the Government intend for all courses offered under the LLE to use the new credit-based system for calculating fee limits. That includes longer programmes, such as three-year degrees, as well as short courses or modules, regardless of whether they are studied on a full-time, part-time or accelerated basis.

There may be some courses that are more suited to annual fee limits than credit-based fee limits, for example postgraduate certificates of education or first degrees in nursing. Where that is the case, the intention is that the Government will set fee limits using a consistent rate of 120 credits per year. That includes for Oxbridge, where there is no credit system for degrees; there will be a default credit system for those universities.

The Government intend to retain the ability to set fee limits using the current yearly fee system as well as the new credit-based system, but would use this ability only by exception. These exceptions will be set out via regulations, using the affirmative procedure.

Let me go through the amendments in a little more detail. They focus on the Government consulting with stakeholders regarding the fee limit method and credit-differentiated activities. We have engaged with a wide range of stakeholders to gather input to inform policy development and believe it is absolutely critical that we continue to engage with stakeholders all the way through. I mentioned the vice-chancellor of the Open University. He said:

“The Lifelong Loan Entitlement... has the potential to enable people at any stage of their working lives to improve their knowledge and skills and drive productivity and growth.”

The Government’s consultation on the lifelong loan entitlement included a question specifically on the issue suggested by amendment 5—whether any courses should be on the per academic year, or fixed, method of funding. We intend for all courses under the LLE to use the new credit-based method for calculating fee limits.

We understand, following the consultation and engagement with the sector, that there may be some courses that would be more suited to annual fee limits, such as nursing. In those cases, as I have said, the Government will set fee limits using a consistent rate of 120 credits per year for full-time courses. That will create parity with the current yearly fee system, but via a credit-based mechanism.

On amendment 3, I will provide some additional detail on credit-differentiated activities. A credit-differentiated activity is intended to be a period of study or other activity that has a different fee limit rate to another period of study within the same year—for example, a year containing substantial periods of taught study and time abroad. Credit-differentiated activities make it possible to set fee limits on sandwich placements and overseas study in a more flexible way.

Currently, placements and overseas study have a reduced fee limit rate, but that reduced rate can only be applied to a full year at a time. We are trying to make it possible to fee cap shorter periods of mobility in the year that they actually take place. Where I disagree with the hon. Member for Warwick and Leamington is that an explicit requirement to consult on the detail of credit-differentiated activities is not necessary and potentially burdensome.

--- Later in debate ---

[Robert Halfon]

I thank the hon. Member for his question. As he knows, a credit is a unit of learning time. We are using the standardised system that exists already, but breaking it down into modules. As I said, the maximum will be 120 credits per year. In terms of the modules, there will be a minimum of 30 credits. If providers want to charge for more credits, that is up to them, but the student will not pay for those extra credits that they charge for. We are just breaking down the existing system to ensure that we can introduce modular and flexible learning.

[Matt Western]

I thank the Minister for his comments. However, we will press the amendment to a vote.

Question put, That the amendment be made.

Division 1

Ayes: 5

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Labour: 5

Noes: 9

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Conservative: 9

[Matt Western]

I beg to move amendment 4, in clause 1, page 2, line 10, at end insert—

“(1A) The definition of credit must follow sector-recognised standards.”

This amendment would ensure there is a sector-recognised, standard definition of credit, consistent with the Quality Assurance Agency for Higher Education (QAA) Higher Education Credit Framework.

[The Chair]

With this it will be convenient to discuss amendment 9, in clause 1, page 4, line 33, after “course” insert

“as specified in a standardised transcript.”

This amendment would ensure that there is consistency amongst the academic record of students wishing to transfer between providers through a standardised transcript.

[Matt Western]

The amendments seek to incorporate two elements into the Bill. The first would ensure that the definition of a “credit” is aligned with sector-recognised standards, and the second would ensure that the definition of a “transfer case” includes reference to the need for a standardised transcript. This is particularly important for ensuring consistency and quality.

Let me start with amendment 4. The sector has clearly done a huge amount of work in this space, and we heard from Professor Sue Rigby of Bath Spa University, who was responsible for rewriting the Quality Assurance Agency for Higher Education’s credit framework alongside Ellen Thinnesen of Sunderland College, who was an advisory member for the development of the QAA’s quality code for higher education. Ellen made it very clear in her evidence that being precise on the face of the Bill about what a credit is would be a really important step. Interestingly, she said that it would provide clarity about the relationship between credits, fees and module content. As I said in my opening remarks, the concept of a credit—both as a term and as a currency—is alien to the wider public, which is an issue. The public’s understanding about what a T-level is and its value is not well appreciated, which, sadly, may devalue it in the eyes of employers or others. That is why we believe that the definition of credit should be on the face of the Bill.

The term is certainly understood by the sector, with one credit equating to 10 notional hours of learning. The minimum proposed 30-unit course available to a student benefiting from their LLE would therefore equate to 300 hours of notional learning.  Without a clear commitment to a sector-recognised definition of credit on the face of the Bill, what is to stop the Government amending the value of a credit without any proper scrutiny? I was pleased to see reference to credit in the explanatory notes, which define one credit as representing 10 hours of notional learning. Elsewhere, this understanding or valuation of a credit is found in Ofqual’s conditions of registration and the Office for Students’ sector-recognised standards, as well as in the QAA’s higher education credit framework. 

I think it is the sector’s definition to own. In not making it clear on the face of the Bill, the inevitable concern is that Ministers may well step in and start amending the value of a credit, which has implications for the fee cap that providers are able to charge. What assurances can the Minister give us that a credit is to be aligned with sector-recognised standards? 

Of course, the benefit of our amendment is that it would provide flexibility: should the sector decide to amend its definition of a credit, that would be updated in the Bill. Our amendment would simply enshrine the autonomy of providers against potential interference by the Government, and I think most of us would say that that is a very healthy place to be, irrespective of where we sit in the Chamber. The context is the creeping Government interference that we have seen within the Office for Students, so it is really important that the definition of a credit is transparent and owned by the sector.

On amendment 9, I thank the Minister for publishing the consultation ahead of Report, following cross-party representations on Second Reading from me, the hon. Member for West Worcestershire (Harriett Baldwin) and the hon. Member for Twickenham (Munira Wilson). The publication of that report has invariably improved the quality of debate. The amendment is inspired by the Government’s own commitment, in their response, to introduce the requirement for providers to give standardised transcripts to learners on completion of their modules. That is a good thing. During the evidence session, we heard several concerns about how transfer cases would work. Julie Charge, for example, raised concerns about how they would work in practice and who would be the awarding body. That is certainly not clear.

We also heard from Rachel Sandby-Thomas, who explained that in transfer cases the providers involved currently have a good relationship. It is really important for there to be trust and an appreciation of the values and standards of the institution that is transferring out as well as an appraisal of the relative standards. It will take time for providers to build up such relationships when, in theory, students will be able to transfer from any provider to another. That is why the issue is so important. A standardised academic transcript would give value and credit to the qualifications achieved by a learner.

[Andy McDonald]

Could I take my hon. Friend back a step to the level of requirement on providers to settle a standardised script? One of my local colleges has got in touch to say that although it welcomes the idea, it understands that there are no plans to make it a firm requirement of higher education providers. Instead, they will be encouraged only to consider standardised transcripts. Does that accord with my hon. Friend’s understanding or is there something stronger in the Bill that we have not seen?

[Matt Western]

It is interesting to hear the voice of one of my hon. Friend’s local colleges in Middlesborough. The need for standardisation is at the heart of the issue; as I say, where this is working currently there is an existing relationship between education providers—whether colleges or higher education institutions—when it comes to the person who may be transferring out or in and what they will have attained by arriving at the other institution. That is really important.

We have to establish a currency or there will not be trust between the institutions when it comes to taking people on—they might not appreciate the value or standard that the learner may have previously achieved. It will take time for providers to build up these relationships and that is why standardised academic transcripts are important.

[Mr Perkins]

In the evidence session, we heard the Minister at pains to encourage our witnesses to say that as a result of the new approach there might be greater collaboration between the further and higher education sectors. We all recognise that that would be a good thing, and my hon. Friend and I have seen good examples of that. Does amendment 9 not give the opportunity for that collaboration to be far more consistent than it currently is? If someone has clarity about what they are getting at every stage, about the transfer and about where the responsibilities lie in the learning, it is much easier for those partnerships to form.

[Matt Western]

My hon. Friend is absolutely right. It is important that these relationships form—and they are relationships of trust, really. That is why consistency and a standardised approach are really important to give substance to that trust and relationship.

We also heard from Coventry University, which is very much at the vanguard of modular study. We heard from Dr Norton, who was concerned about how stackability might actually work in practice. She was keen to ensure that credits are widely recognised and that there is a currency across the sector. She suggested that standardised transcripts would provide the absolute clarity and brand recognition—perhaps acceptance—that are needed. I would be grateful if the Minister can explain a bit more about what a standardised transcript looks like, what it could include and, importantly, what value it will hold.

--- Later in debate ---

[Matt Western]

I hear what the Minister has said. I would like to believe the point about what might happen with the credit definition, and I appreciate that it is referenced elsewhere, but it would still be healthy to have it defined in the Bill.

On the standardised transcript issue, I certainly understand the problem with what he was describing as a full course as opposed to a module. A full course is understood, because there is a defined quantification and qualification on what has been studied. That is well understood. The issue is that, with modules, it will be much less understood.

The full course may typically be undertaken at or provided by one institution; we are talking about the movement of people over time or place, between institutions. Some standardised transcript would be in everyone’s interests, whether that is the employer, in understanding what someone has attained, the incoming institution, or, most certainly, the learner.

For those reasons, we will push both amendment 4 and amendment 9 to a vote.

Question put, That the amendment be made.

--- Later in debate ---

Division 3

Ayes: 5

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Labour: 5

Noes: 9

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Conservative: 9

[Matt Western]

I beg to move amendment 2, in clause 1, page 3, line 16, at end insert—

“(4A) Regulations made under this paragraph must provide for the default number of credits to be no more than 10 credits.”.

A probing amendment to ascertain the extent to which the Government is prepared to extend the lifelong learning entitlement to modules worth 10 credits.

[The Chair]

With this it will be convenient to discuss amendment 6, in clause 1, page 3, line 16, at end insert—

“(4A) Regulations made under this paragraph must provide for the default number of credits to be no more than 20 credits.”.

A probing amendment to ascertain the extent to which the Government is prepared to extend the lifelong learning entitlement to modules worth 20 credits.

[Matt Western]

It might be disappointing that my hon. Friend the Member for Brighton, Kemptown cannot be with us today, but it is probably in all our interests that he did not come in, given what he described to me earlier. However, he would have been keen to speak to amendment 2, tabled in his name. In particular, I think he would have had real validity in moving the amendment, given his personal expertise and experience of having delivered courses—that is why he believed that it was important to include the amendment in the Bill.

We are trying to understand the Government’s justification for choosing the minimum number of credits available, which they have set at 30. On the face of it, 30 may appear to be an arbitrary figure. The amendments are not intended to represent our specific view on whether the minimum should be 20 credits or 10 credits; they are very much intended to open a debate on the benefit of having smaller credit blocks available to learners and encourage a culture of bitesize learning.

In the evidence we had on Tuesday, Professor Edward Peck of Nottingham Trent University felt that the 30-credit minimum hit the balance between not overwhelming the Student Loans Company and meeting the needs of learning. On this side of the House, we want to ensure that the balance has been struck at the right point. I appreciatethat the Augar review recommended that the minimum should be set at 30 credits for much the same reasons given by Professor Peck who, of course, was on the panel working alongside Sir Philip Augar. I understand that position.

However, we have also received evidence that 30 credits may still be too high a minimum. For example, I was particularly struck by the view of ResPublica in its submitted written evidence, which expressed concern about the 30-credit minimum. It noted that

“the evidence strongly suggests that learners and employers value shorter courses, and would therefore advocate a 10 credit minimum threshold”,

which is the position that my hon. Friend the Member for Brighton, Kemptown wished to speak to.

Interestingly, as it happens, I think we can learn a lot from the Canadians, but the Canadian Government offer modular lifelong learning on a micro-credential level, offering 10-credit unit courses. Why are they able to set the minimum at a rate three times lower than our minimum? Does the Minister think that the Student Loans Company would be really overstretched in delivering that, or are there other reasons?

[Mr Perkins]

My hon. Friend raises an important point. In this place, we often talk about the cost of learning as if the major cost to an employer is paying for the training. Of course, one of the other costs to an employer is the amount of time that an employee is out of the workplace in the learning institution. That is a very real consideration for many employers. For precisely that reason, a shorter-form commitment is often very attractive to employers, but it might enable their employee to develop skills that will either help them in their current job or help them into their next job. Particularly given that as a country, we are way below the OECD average in the amount that employers spend on training their staff, anything that can be done to make it more affordable for employers to let their employees have time away from work should be encouraged. Does my hon. Friend agree?

[Matt Western]

It may come as no surprise that I often do agree with my hon. Friend. He genuinely has insight into and expertise in this sector.

I have a particular concern from not only the evidence that we heard from Matthew Percival of the CBI but my anecdotal experience of talking to businesses in my constituency, the Federation of Small Businesses, the chamber of commerce and others. There is a desire to upskill and improve the training provided to employees, but small and medium-sized enterprises face a particular challenge in doing so. There is a barrier to their taking up opportunities because the size of the course, the commitment and the financial obligations are just too much.

--- Later in debate ---

[Robert Halfon]

Under the current loan system, the loan would be divided up in proportion to the 30 credits that the student was taking. It would depend on whether the credit is charged at £77 or £60, which would depend on whether the provider had a teaching excellence framework or an access and participation plan. If the credit was charged at £77, it would be £77 times the 30 credits. It would then be up to the student to decide whether they wanted to do the course.

To return to amendment 2, to cap all default values at 10 credits would make them unfit for purpose, as a full-time year is 120 credits. With that in mind, the Government cannot support the amendment.

[Matt Western]

I hear what the Minister says but am disappointed. I would have liked him to say that, within a year or two of the scheme being in operation, this idea might be up for review. We do buy into lifelong learning, and the Minister is right in what he says about Gordon Marsden, a former colleague, and the work done by the Augar review. However, although the intent is right, we need to consider the delivery and maximising the opportunity, which is why we think there is a real opportunity for the Government, at a certain point, to review the merit in lowering the default so that the minimum is not 30 bundled credits.

There is a huge need to address this country’s training and skills gap, and particularly to be more supportive of small businesses such as those represented by the Federation of Small Businesses, to help them with the training of their staff. We will not push the amendment to a vote, but I ask the Minister to reflect further. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Matt Western]

I beg to move amendment 11, in clause 1, page 3, line 18, at end insert—

“(6) In determining the maximum number of credits for a course year, the Secretary of State must—

(a) have regard to the impact on the variety of courses on offer from providers,

(b) prepare and publish an equality impact assessment, and

(c) have regard to the impact on student numbers.”

This amendment would ensure that in setting the maximum cap of credits per course year, the Secretary of State takes a variety of steps to ensure there are no unintended consequences of setting the cap at a certain level.

The amendment relates to maximum credit cap considerations and aims to ensure that the Secretary of State has regard to the wide variety of courses on offer, the impact on student numbers and the need to publish an equality impact assessment when determining the maximum number of credits for a course year. I will take each of those in turn.

The paragraph on the impact on the variety of courses on offer will ensure that when the Secretary of State decides on the maximum number of credits for a course year, they do so in a way that does not unintentionally choke off the provision of certain courses that do not fit the traditional 120-credit structure. I am thinking mainly of accelerated degrees, which often equate to 180 credits and require the learner to spend more notional learning time to complete their degree in just two years instead of three.

As I have said, the uptake of accelerated degrees has perhaps not been as high as desired or met the Government’s ambition. That is not to say that the offer of accelerated degrees does not have potential, but it has certainly not been as successful as we or the Government would have hoped. For such degrees, a fee capped at a maximum of 120 credits a year would make it financially unsustainable for providers to continue to run courses and they would no longer be offered.

Not a huge number of people have taken up accelerated degrees. Perhaps the Minister has better data than I do, but I think that, nationally, we are in the five digits—maybe the 10,000s or 12,000s. It is not a great number, but it is a good and important offer that perhaps requires further development. It works for a particular population of students who, depending on their personal circumstances, or perhaps their employer, see the advantage of getting through a degree in a shorter period.

If the Secretary of State was required to have regard to the need to protect provision, it would prevent any unintended consequences from arising from ministerial decision making. That is another good reason why we think consultation is so important; I refer back to my previous amendments, which related to involving stakeholders across the piece in the process.

On the point about publishing an equality and impact assessment, if the setting of the maximum number of credits for a course year were to have an impact on the provision and availability of courses, that in turn would inevitably have an impact on student choice. That is a concern, and we absolutely want to ensure that it does not happen.

Students are not as homogenous a group as they are sometimes portrayed; people arrive into education at all stages of life, with different demands and different needs. We need to ensure that there are no barriers to their pursuing higher education as they need and wish to, whether that is for their careers or because their life circumstances have changed.

[Andy McDonald]

My hon. Friend is making an important point about the lifetime nature of study. There is some confusion: I do not know whether he can assist me on this, but apparently the loans will be made available up to the age of 60. That is revealed in the consultation. On the same page, however, it also states that a reduced rate maintenance loan will continue to be available for those over 60. Does that mean that over-60s can continue to receive the funding, or is it only for those who started before the age of 60? I am somewhat confused. Can my hon. Friend clarify? Perhaps the Minister will when he sums up.

[Matt Western]

My hon. Friend makes an important and pressing point, which is perhaps more pressing to certain of us than others—

[Andy McDonald]

Well, I might have a future career ahead of me!

[Matt Western]

In all seriousness, the issue was discussed at the evidence sessions on Tuesday and there seems to be an anomaly. I am sure that the Minister will want to address that.

Listening to the witnesses the other day, I think there was some concession. If we have rising pension thresholds and we want to re-involve a sector of our population that has withdrawn from employment and the economy —we heard in the last few days about the Government’s intention regarding returnerships—people need to be able to access this provision; I am also thinking of the WASPI women. People suddenly find that they do not have the incomes they need to sustain themselves. The sorts of work they previously were involved in might no longer be open to them, and they might need to retrain. Age 60 is an arbitrary guillotine, and it is not necessarily appropriate. I very much hope that the Minister will clarify the issue for my hon. Friend the Member for Middlesbrough and the rest of us. Perhaps he might reflect on the economic needs, as well as the social needs, that such a change would meet.

It is important that Ministers should be confident that there will be no disproportionate effect on certain groups of students, some of whom we have mentioned, including those from disadvantaged backgrounds. I am thinking in particular of those mentioned in the evidence sessions—those with particular responsibilities, financial challenges, social and domestic challenges, caring responsibilities and so on. In the evidence sessions, I was pleased to hear from Professor Sue Rigby from Bath Spa University, who endorses the plan to ensure a risk analysis of the unintended consequences for students.

Finally, I believe there is a need to have regard for the impact on student numbers. I was intrigued to hear the suggestion from Sir Philip Augar, whom I respect greatly. He suggested that, with a declining population rate, “forward-thinking institutions” may see this route as a viable one to attract more students. A pessimist might say that, given a declining post-18 population rate post 2030, some institutions may see this route as a way to boost their declining student numbers. Although it might seem like a problem for the future, that future does not seem that far away—particularly in terms of electoral cycles. It might not be a problem that we envisage in the immediate short term, but modular study surely should not be seen simply as an avenue through which providers can boost student numbers, being purely driven by their own financial interests.

Sir David Bell of the University of Sunderland raised the prospect of the learner being overwhelmed by choice and he has a very real point. The choice on offer should always be a choice in the learner’s interest, and the Secretary of State would be wise to have due regard for how student numbers might be impacted in setting the maximum number of credits.

Amendment 11 seeks to avoid the unintended consequences of the 120 limit, which is a particular issue for accelerated learning courses, which give an offer to a particular population for whom getting through a qualification in a shorter period of time is really vital, or perhaps vital for the organisation that employs them. That is why we think amendment 11 should be accepted.

[Robert Halfon]

I thank the hon. Gentleman for his amendment. On his question about the maintenance loan, I confirm that the LLE tuition loans will be available up to the age of 60. We believe that is fair to students and fair to the taxpayer. Currently, just over 3,000 people—from memory, it might be 3,500 people—aged 60 take up student loans. However, learners near retirement or in retirement are likely to repay a very small proportion of their loan and their maintenance support will be subject to taper from the age of 60. I think that is what the statement refers to, but of course I am happy to write to the hon. Gentleman with clarification if he would like.

I can confirm that the setting of the maximum credits per course year will be based on robust analysis of any impact on learners and providers. More importantly, I can confirm that there is absolutely an opportunity for the sector to provide feedback on the proposed maximum values before regulations are laid. I can also give the assurance that regulations on maximum credits will have to follow the affirmative resolution procedure, so that Parliament will always get the chance to debate and approve formally any maximum credit values before the law is made or changed.

The regulations will cap the number of credits that providers can charge for within a given course year and for the course overall. That is to prevent providers from adding unnecessary credits to courses in order to raise tuition fees. The cap ensures value for money for the student and the taxpayer. The fee limits will remain aligned with the current rates, based on standard practice. A certificate of higher education will be capped at 120 credits; a diploma of higher education will be capped at 240 credits.

Regarding the hon. Gentleman’s point about the accelerated degrees, we intend all courses offered under LLE to be used under the credit-based method. That includes accelerated courses. The limit on credits will be set at 180 a year. Providers can offer more credits than the maximum, but cannot charge for them. That is in line with the current system, where providers offering the usual number of credits have the same annual fee limit as those offering more for the same type of qualification.

The Government are already factoring in the impact of these reforms on students and providers. That is why we resist the amendment.

[Matt Western]

I appreciate what the Minister says. It is encouraging to hear that those learners and the accelerated courses will be protected. However, we would like this amendment to be incorporated into the Bill, so we will put it to a vote.

Question put, That the amendment be made.

Lifelong Learning (Higher Education Fee Limits) Bill (Fourth sitting)

Matt Western Excerpts

Committee stage
Thursday 23rd March 2023 Public Bill Committees

Division 5

Ayes: 5

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Labour: 5

Noes: 7

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Conservative: 7

[Matt Western (Warwick and Leamington) (Lab)]

I beg to move amendment 7, in clause 1, page 5, line 3, at end insert—

“(4) When making regulations under paragraph 1B, 1C or 1F, the Secretary of State must have regard to the additional costs associated with the delivery of the course.”

This amendment would ensure that when exercising the powers granted in this Bill, the Secretary of State has regard to the additional costs associated with the delivery of modular study.

[The Chair]

With this it will be convenient to discuss amendment 8, in clause 1, page 5, line 3, at end insert—

“(4) When making regulations under paragraph 1B, 1C or 1F, the Secretary of State must have regard to the financial sustainability of providers.”

This amendment would ensure that when exercising the powers granted in this Bill, the Secretary of State has regard to the financial sustainability of providers.

[Matt Western]

It is a pleasure to serve under your chairship this afternoon, Mrs Cummins, and to welcome everyone back for this second sitting of the day. We had a constructive discussion on our various amendments under clause 1 this morning. We continue now with amendments 7 and 8, which have rightly been grouped together as they address a pretty thorny issue: financial sustainability. The amendments set out that in exercising their powers under clause 1, the Secretary of State should first have due regard to the additional costs associated with delivery and secondly look at financial sustainability in the round.

On the additional costs associated with the delivery of modular learning, we heard collectively a plethora of evidence from our witnesses during Tuesday’s sitting about how the impact of lifelong learning might affect providers. Indeed, when it comes to higher education providers, Professor Press from Manchester Metropolitan University made it clear that there were difficulties for institutions in the “mechanics” of the delivery of lifelong learning, partly due to the additional cost of delivery when moving from a full year or full three years of a course to a module. Quite understandably, that will introduce an additional cost burden, whether that be costs of onboarding or administrative processing. Worryingly, given the take-up for lifelong learning is so uncertain—the pilot programme did not attract high numbers at all—Professor Press found it difficult to predict what precisely the costs would be. That is concerning.

It is important that we have seen that uncertainty, seen what it might mean and seen the additional costs. There has been very low take-up of the apprenticeship levy, T-levels and accelerated learning. Accelerated learning and the apprenticeship levy certainly have real merits, but they can bring an additional cost burden, and a restructuring or reshaping of courses for institutions. That means more financial pressure on institutions when things are already difficult—as I am sure, Mrs Cummins, you will be aware, given that you have a university on your doorstep.

The effect may be far worse for colleges, as acknowledged by Liz Bromley of Newcastle and Stafford Colleges Group and David Hughes of the Association of Colleges. Colleges clearly have already been facing a dire financial settlement over the past 13 years—a point that I am sure my hon. Friend the Member for Chesterfield will want to build on and explore thoroughly in his comments, given his expertise in and knowledge of the sector. Certainly, almost all the witnesses representing the further education sector whom we heard from on Tuesday called for an injection of cash—presumably, to combat a gradual decline in the real-terms funding settlement for further education colleges. Lecturer pay, workload, staff retention, the administrative burden and regulatory costs were all cited as reasons why modular provision in the form of lifelong learning may hit roadblocks in the years ahead. The recent decision to take the further education sector into the public sector, denying colleges the ability to borrow and limiting their access to risk capital, will also dampen the supply of new course provision.

In the impact assessment as published, there is an estimated cost of £211,000 for all providers to familiarise themselves with lifelong learning, although it is worth pointing out that the Russell Group thinks that that is a large underestimation. Perhaps the Minister can explain how the figure of £211,000 was arrived at. When we look at how many institutions we have, whether they be further education colleges or higher education institutions, that figure probably works out at about 300 quid each. I am sure the Minister can explain how the figure was arrived at and, indeed, what the approximate cost will be for those institutions, but even that rough calculation suggests that the cost is massively understated by the Government in their impact assessment. That is concerning, because we all want to start this scheme on solid ground and ensure that it is being approached correctly and has the best chance of delivery and success. That example suggests that it has not been accurately thought out, but I will wait to hear what the Minister has to say.

Not only does the financial capacity of the sector affect the provision of courses; it also risks the financial sustainability of the whole sector. On Tuesday we heard from Dr Norton of Coventry University, who helpfully demonstrated that higher education providers work on a five-year forecasting model, which is made harder if students are opting for modular study over a several-years-long course. At a time when over one in three higher education providers are reporting a deficit, the real-terms value of tuition fees has crumbled to below £6,750—my understanding is that it is probably more like £6,400—and the Government’s own policy impact assessment for the Bill admits that the lifelong learning entitlement

“could result in providers having less financial certainty”,

the concern is that this mammoth reform may well be the straw that breaks the camel’s back. There is a real concern that it could bring down institutions in the sector. As of today, I am not entirely sure of the level of Government concern at that prospect. I hope the Minister will reassure us with his perspective of financial sustain-ability versus precarity of institutions in the sector—higher education and further education colleges alike.

This skeletal Bill introduces sweeping reforms to the way in which the student finance model works, and I would hope that the Minister would be totally assured that the reforms will pose as little risk as possible to institutional financial sustainability. That is why I was so concerned to read what I did in the impact assessment. What stress tests have the Department conducted ahead of implementation to ensure the sector can cope with the changes introduced in the Bill? What additional financial support, if any, does the Minister intend to provide to higher education providers and colleges seeking to implement modular study, given the limited financial capacity of the sector?

The amendments are important in establishing what risk there is to the wider tertiary education sector, and in ensuring sustainability. It cannot be logical that the costs per student unit will remain the same for modular learning provision. There will be a significant increase in the cost burden to institutions through the delivery of courses, but also in the administration and onboarding of students, and in managing departing students, and all the data needs around those changes. As we heard in our witness sessions, we have not even got to the wraparound support that students may require.

[Mr Toby Perkins (Chesterfield) (Lab)]

Has my hon. Friend reflected particularly on the evidence from Professor Rigby in the evidence session? She went into quite some detail about the administrative costs and the regulatory burdens of the modular approach, and the costs that that approach is likely to add to providers. Does my hon. Friend share my concern that the result of those administrative burdens might be that, without the additional funds he is asking for, colleges will find these courses unsustainable to run, and we will not get the amount of provision that we all want to see?

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[Matt Western]

My hon. Friend is right to cite the evidence of Professor Rigby, and we heard from others on this point. There is a very real risk here, and none of us should underestimate that. We support the Government and the purpose of a lifelong learning entitlement—there is a need for it, in society, and also economically—so it is important that provisions are brought in, but they should succeed, and the delivery is really important in that regard.

To pick up on the point made by my hon. Friend the Member for Chesterfield, an interesting parallel is degree apprenticeships. We see real interest in them, but there are significant costs associated with their provision, including the regulatory burden, of which my hon. Friend will be more than aware. Involving employers in designing those courses and so on is intensive for an educational institution. The implementation—getting the course up and running—is a significant process.

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[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

The salaries of further education providers and lecturers is far less than school teachers and university providers. I asked one of the witnesses in the evidence session whether the lack of the injection of cash mentioned by a previous witness would make these measures unsustainable. There is a problem with recruitment and retention, and many people can get better money out there actually doing vocational jobs, but we need these people to teach others vocational skills such as construction and hospitality. We already know that there is a skills shortage. Why are we not looking to address those particular issues, so that we can get our economy up and running? We support this legislation, but we have to hope that the finances are appropriated in the right places.

[Matt Western]

My hon. Friend is totally right that one of the huge issues in the sector is the paucity of remuneration to further education college lecturers and staff. While going around the country, I have heard lots of anecdotal evidence about how difficult it is to recruit good staff. We clearly want the best, most inspiring people to deliver and impart information through their teaching. Whether it be in pure vocational education or in academic subjects, we want the best people, with expertise and talent, who can really inspire others to get into that subject and to succeed.

I hear, from talking to establishments around the country, that there is a huge remuneration or salary disadvantage—a difference between what people can earn vocationally in roles versus what they earn as lecturers in colleges. What I am hearing indicates that there is a 40% difference in pay between delivering a vocational role and teaching. That is really to the detriment of the next generation, and it is why we do not have the number of people coming into teaching as we should have across the board. I totally agree with my hon. Friend’s points, which highlight another immense challenge for the sector in the financial burden; the remuneration would ideally be greater.

Amendments 7 and 8 identify a real pressure point for the sector, in terms of the burden from this Bill. As I evidenced through the degree apprenticeships, institutions have to bear additional costs to deliver good-quality courses, but the yield—the cost cover—is not there. It is actually to the cost of the institution to provide them; it is the right thing to do, but it is coming at great cost to them to do that. With that, I will end my remarks.

[Mr Perkins]

It is a great pleasure to serve under your chairship, Mrs Cummins. I rise to speak to my hon. Friend’s amendments. I think that he has already made the case well, but there are a few points that I would like to add, particularly regarding the financial sustainability of further education colleges and independent learning providers.

The amendments absolutely speak to the heart of our reservations about the approach being taken. They are quite modest in their scope, but given the evidence that we heard in the evidence sessions, which was touched on in earlier discussions on other amendments, they do, as I say, cut to the heart of our concerns. Amendment 7 asks the Secretary of State to have regard for additional costs associated with the delivery of the course, and amendment 8 asks the Secretary of State to have regard to the financial sustainability of providers.

I will speak to amendment 7 first. In the evidence session, David Hughes explained that colleges,

“do not have any of what the private sector might call risk capital”.––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 50, Q105.]

Given that FE college funding has fallen by 27% in real terms between 2010 and 2019, according to the House of Commons Library, and given the increasing financial pressures—with the booming energy prices and wage inflation all affecting colleges too—the financial picture for many of our colleges, crucial as they are, is very difficult indeed.

For that reason, David Hughes told us that the risk appetite of colleges for putting on courses that they do not know that anyone will study is likely to be pretty limited and restrained. As my hon. Friend the Member for Warwick and Leamington said, with colleges now being inside the public sector and therefore unable to seek private-sector borrowing, and being forced to run balanced budgets, colleges will just not be able to run courses that they cannot be pretty certain will have learners taking them.

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[Robert Halfon]

These things will be decided in future spending statements, and I have highlighted the extra money going into further education over the Parliament and over the coming Budget period.

The pilot scheme was mentioned briefly. I strongly recommend an article about the pilot scheme—the hon. Member for Warwick and Leamington has probably read it—by a witness to our Committee, the vice-chancellor of Nottingham Trent University, who says that the whole purpose of the scheme was to show the system working. It was not about quantity, even though there are 100 available courses. He writes that

“the effective administration of those received shows that SLC systems and processes are ready to support modular study.”

In the rest of the article, which I will not detain the Committee by quoting at length, he mentions all the other courses and pilots on modular learning that there have been, stating:

“The In-Work Skills pilot was also a pathway policy for the LLE. Delivered by Institutes of Technology (IoTs)…10 IoTs delivered the In-Work Skills pilot, which was a 1-year pilot that delivered high quality, higher technical short courses…The IoTs delivered a total of 59 short courses to 3,060 learners”.

He also cites other figures to show the extent of the move towards flexible and modular learning.

Importantly, as the hon. Member for Warwick and Leamington will know, the strategic priorities grant provides Government funding on an annual basis to support higher education providers’ ongoing teaching, and of course funding levels will be considered in the round at the next spending review, with the LLE in mind. Therefore, as the Government have been mindful of these concerns throughout the development of the LLE, and are confident that providers will be able to consider their own financial sustainability and costs when deciding which courses and modules to offer, we will not support the amendment.

[Matt Western]

We have had a pretty healthy debate on the amendments. I particularly appreciated the contribution of my hon. Friend the Member for Chesterfield, who has expertise specifically across the further education sector, but also in the delivery of apprenticeships.

I hear what the Minister says about the Government being mindful of the costs and so on, but when I look at the provision of further education and the costs at FE colleges, I wonder whether the Government are really being mindful of the cost pressures for them, and I wonder whether they are being mindful of the cost pressures that face the higher education sector, in which 32% of providers are currently in deficit, or of the cost of delivering degree apprenticeships.

[Mr Perkins]

This is a crucial point. We have already heard about the 27% cuts to the further education sector between 2010 and 2019. The Minister was at pains to say, “Well, there are some pots of money that we are looking at,” but he has also made it absolutely clear that, as things stand, this is being handed over to the next Government with an additional price tag on it and no money allocated. That is what we have heard in today’s debate.

[Matt Western]

Indeed, which is why the amendments are important. We want to start this policy on solid foundations, because we buy into and support it, but currently it just does not have the financial structure to make it deliverable, because these institutions are already facing massive costs. As my hon. Friend said, there are pots of money, but they are small pots of money when the sectors—particularly the further education sector—are already at a significant disadvantage.

I admire the Minister’s ambition in wanting to increase the retention of staff across the further education sector, but we are also seeing in schools a massive haemorrhaging of the staff—expert teachers and lecturers and so on—and the technicians who support so many of these courses, because they just are not getting the remuneration that they deserve so are leaving. To retain people, we must give them the right reward, and they currently feel massively undervalued by the way the Government are doing things.

As the Minister said—he mentioned his two favourite words—he believes in the sector and its value. I urge him, in future Budget negotiations, to get the support that education needs, particularly in respect of the sectors we are discussing. Too often, they are described as the Cinderella sector, and it is just not good enough. We absolutely must believe in delivering proper education, whether it be technical or otherwise, across society, and presently that is just not happening.

My hon. Friend the Member for Chesterfield reminded us of the issue of risk capital, as described by David Hughes, and the situation we have with the reclassification of debt. I am sure the sector feels completely financially handcuffed by where it is, because it just does not have the funds to do what it needs to do.

On top of that, my hon. Friend reminded us of the statement from Professor Rigby. When we think of an institution delivering a course once or twice a year—with a September, October or January start date for the delivery of courses—and suddenly increasing that from two to 12, it has six times as many. How does an institution staff that? How does it make that happen, as opposed to having modules and courses delivered by a certain number of staff at those start dates? It must lead to a multiplication of the resource, which comes with a significant financial burden. I just do not believe that the impact assessment underlines the reality of what the sector will face. As my hon. Friend reminded us, the context is the 27% reduction in real-terms funding in the FE sector between 2010 and 2019, which has made it all the more difficult.

Let me go back to the Minister’s point, because I love the words “degree apprenticeships” as well. They are fantastic programmes, but as I understand it the problem is that we are seeing a tailing off, and institutions are already saying they will not expand the programmes because of the associated costs. That gives the lie to the ambition, because if that is already beginning to reduce, what chance does this policy have? We will face the same sorts of challenges with lifelong learning, as it is currently set out, that institutions face with the delivery of degree apprenticeships.

[The Chair]

Does the Member want to press the amendment to a vote?

[Matt Western]

I do.

Question put, That the amendment be made.

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In conclusion, I trust that the Government will accept the need to have that clarity on the face of the Bill so that the necessary assurance is plain to see for learners at the outset and so that they are not deterred at the first hurdle by any doubts about their ability to access the entirety of their lifelong learning programme.

[Matt Western]

I thank my hon. Friend the Member for Middlesbrough for tabling this amendment and arguing for it so well. He is quite right that, given what we have been through over the past decade or so, the effective freeze in tuition fees has led to a significant decline in the value of the unit of resource, and he is right about the need for some form of futureproof guarantee that, should there be a rise in tuition fees, that should be matched by a consequent rise in the value of the lifelong loan entitlement.

Over the last decade, we have seen tuition fees reach £9,250 but they have essentially been frozen for the last five years, having had, as my hon. Friend explained, a marginal reduction back in 2017. We have seen a real-terms decline in their value. Indeed, Universities UK calculated that by the end of the 2024 academic year inflation would reduce the value of the annual tuition fee to £6,600 based on prices in 2012, when the fees cap was trebled to £9,000. That is a reduction of almost £2,500 in the unit of resource to an institution, which is putting huge pressures on those institutions. That was the point we were making in the debate on amendments 7 and 8. Institutions are under real financial pressure as there has been such a massive decline in the value of that unit of resource. London Economics has estimated that over the past decade, the overall income for students per unit of resource would be back at 2006 levels, when fees were £3,000. That gives some context as to just how much the sums involved have been devalued over time.

As I mentioned earlier, that devaluation is having a tangible effect on institutional financial sustainability, with many institutions reporting deficits and having to cross-subsidise their courses, take on more international students or borrow from the private sector. The amendment would seek to tie the lifelong learning loan to any rise in the value of tuition fees, as I have said. The point is that if this really is to be a lifelong loan entitlement, it is important that learners who benefit from a module in, say, two years’ time and who wish to return to studying 20 years later, in 2045, have access to the same quantity of learning as they would have done 20 years before. Otherwise, we will see the risk of individuals using their entitlement very early on in their lives paying the price of that and not being able to access further training or tuition later in life because they have used up their entitlements.

Given that there is a real need to make this work and to make the system as attractive as possible, we urge the Government to consider some form of indexation. Sir Philip Augar described this system as having

“the potential to be a game changer”––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 45, Q89.]

We have heard that description before. But that potential can be realised only if the system is protected against the real risk of inflation. We saw inflation peak yet again yesterday—to, I think, 10.6%.

[Mr Perkins]

I want to come in at this moment, because we would all hope that learners who are looking for work and on universal credit might, as part of their efforts to get another job, take on courses and develop their skills. During the progression of the Bill that became the Skills and Post-16 Education Act 2022, we highlighted issues about the entitlement to study for those in receipt of universal credit, and amendments to the skills Bill in both the Commons and the Lords would have enabled some people in receipt of universal credit to study. Those were removed by the Government, but at the time, they offered the reassurance that they were consulting with the Department for Work and Pensions about the issue. I have heard nothing more since, so I hope the Minister might be able to tell us what happened with that consultation. Does my hon. Friend agree that in order for this measure to be as transformational and game changing as we hope, people who are in receipt of universal credit must be able to access a loan to develop their skills in order to get into another job, rather than being told, “No, you can’t do that because you’re not spending enough time looking for another job”?

[Matt Western]

My hon. Friend brings up a valid and pertinent point about the reality for so many people. The intent behind this legislation and policy is a good one, and it should be there to assist people in that particular predicament, but, as he says, it does not seem that that will necessarily be the case. However, I am sure that the Minister listened to his points and will address them in his response.

This amendment would ensure the long-term sustainability of the lifelong learning model and allow students who “bank” their credits to have the same chances later on in life to add to that bank. I will understand if the Minister is unable to accept the amendment as drafted, but given that he is planning on introducing long-lasting reforms to be used by people in the course of their lives, I would like to press him on how he envisages the value of the LLE being maintained over the years.

[Robert Halfon]

I congratulate the hon. Member for Middlesbrough on his amendment and his kind words. I am absolutely with him on the Open University, which many of my constituents in Harlow have had incredible value from. It is one of the great education reforms of the last century, without a shadow of a doubt. As an anoraky child, I watched some of its content on television —now it is all on the internet—late at night, because I was at home a lot, growing up. I therefore have complete sympathy with his remarks.

It is worth mentioning that the lifelong loan entitlement is intended to replace, as we have discussed throughout today, the current student finance system. As a result, from 2025 onwards, the fee limit rate and the per-credit fee rate will be exactly the same thing. It may help if I provide further detail about paragraphs 1D, 1E and 1I, which set out the fee limit calculation for credit-bearing and non-credit-bearing course years, and introduce the per-credit method into existing clauses in schedule 2 that set out how the four different fee rates are applied. Essentially, they set out how the credit-based fee limit method will work.

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[Robert Halfon]

This has been a good debate on clause 1, which enables tuition fee limits for higher education courses and modules to be calculated using a per-credit method under the Higher Education and Research Act 2017. The current tuition fee limits system, where fees are determined per academic year, cannot be applied appropriately to the short courses and modules that are integral to flexible lifelong learning and the wider LLE. If HERA is not amended, students who use the LLE to study shorter programmes could face tuition fees that are disproportionate to the size of their course. For example, a single parent studying one 30 credit module in social care could be charged £9,250 per year—the same as a student studying a full year of a degree programme.

The new per-credit method introduced by this clause will ensure that fee caps can be applied fairly to all types of learning under the LLE, whether the learner chooses to build up a qualification at their own pace or undertake the entire qualification in one go. Therefore, the single parent studying the 30 credit module will pay a proportionate amount compared to a larger programme, making it more affordable for them to space out their studies and learn at a pace that is right for them.

The principle of the credit-based method is set out in the Bill in new paragraph 1D, which is that fee limits will be set at the number of credits undertaken by the student, multiplied by the relevant per-credit limit. That is supplemented by the new powers in paragraph 1C, which ensure that the necessary numerical details can be set out in the regulations, as they are now, which Parliament will be able to scrutinise under the affirmative procedure.

To introduce the per-credit fee limit method, clause 1 includes three key measures. First, in new paragraph 1A, it introduces the concept of the credit as the basis of a new fee-limit calculation. Credits are defined in the Bill, in accordance with their current usage across further and higher education, and are already a popular measure of learner time.

Secondly, clause 1(2)(b) introduces the concept of a course year as the period to which fee limits are applied. The course year offers far more accuracy than the current academic year, as it can start on the first of any month in a year. That means fee limits for short courses and modules can be set with greater precision. Currently, if a course begins in November, its fee limits are applied from the 12 months beginning on 1 September. Under the course year system, courses will be capped from the start of whichever month they begin. That more precise approach will be needed to accurately fee cap the shorter periods of study that the LLE seeks to encourage.

Finally, as set out in new paragraph 1C, the clause enables the Secretary of State to limit the number of credits that can be charged for each type of course. Providers would not be able to charge for more than 360 credits for a three-year bachelor’s degree with honours. As in the current system, they may still offer more than 360 credits for the degree, but would not be able to charge the student extra fees, preventing students from being charged unfairly for their studies.

The clause is an integral part of the Government’s transformation of student finance, giving people a real choice in how and when they study, so that they can acquire new life-changing skills.

[Matt Western]

As I said at the outset and on Second Reading, we agree with the essence of this Bill. We certainly agree with the purpose behind introducing lifelong learning, but, for the reasons outlined in our amendments, we have real concerns about its delivery and whether it will be successful. I am sure that the take-up of recent initiatives such as the T-level programme and accelerated degrees is not as high as the Government wanted it to be. We fear that this measure will not be successful either, for all the reasons given today and on Second Reading.

Picking up on the points made in Tuesday’s witness sessions, we believe that there needs to be more consultation with all stakeholders—not just the education providers, but all those involved in the design and provision of training, particularly vocational and skills training. I am disappointed that those amendments were not agreed to.

We have made an important point about the definition of credits and the standardisation of transcripts relating to students moving between courses and providers. That should be reflected in the Bill. It is vital that the sector and the institutions have confidence in this programme and that they trust each other and the standard of the qualification with which individuals come to them. They already have those sorts of arrangements, but they are very much bespoke and ad hoc and have been built up over time. Suddenly, this is going to be opened up considerably. I am sure that the sector is very nervous about what that will mean for the onboarding of students into institutions.

We addressed financial sustainability at some length. The pressures faced by the sector—including FE colleges and higher education institution providers—cannot be exaggerated. The Minister said that there is no need to increase the unit of resource, but the fact that 32% of higher education providers are already in deficit really should be ringing alarm bells in the Department for Education regarding what our educational landscape will look like over the next few. That is why our amendments were important—they would have ensured that the Minister and the Department had due regard to the financial pressures faced by the sector.

I am disappointed that the amendment on minimum credits was not accepted, but I very much hope that the Minister will reflect on it, given that the purpose behind it is to reskill, retrain and help people back into the workplace. It would also have benefited the plethora of organisations of different shapes and sizes that the economy will support in the future, which will require a very different training model as they address social need. That is why I think that challenging the 30 credits was the right thing to do. I very much hope that the Government will remain open to thinking about how that might work, rather than just having a bundle of three 10-credit modules in future. We support the Bill, but we will abstain on the clause.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Related amendments

[Matt Western]

I beg to move amendment 10, in clause 2, page 6, line 18, after “courses” insert—

“which are defined as modules under subsection (6A)”.

This amendment would ensure that the Secretary of State is unable to treat modular courses and other modes of study or subjects differently from one another for the purposes of the fee limit.

[Matt Western]

Our amendment looks at the funding of modular study versus yearly study and seeks to incorporate into the Bill a greater assurance that the Minister cannot discriminate in granting funding to different types of courses or modes of study.

Numerous concerns have been expressed to me about proposed new subsection (7A), to which the amendment applies. In particular, providers are worried that it will give Government the ability to introduce variable fees by subject or mode of study. By extension, they are worried that the proposed new subsection could also pave the way for differential fees for undergraduate courses, depending on subject and institution.

We have already seen hints of that in recent years, with the Government deriding certain courses, labelling them with the names of all sorts of cartoon characters and reprioritising the strategic priorities grant away from arts-based courses towards STEM subjects. That has received widespread reaction and rejection, because of the importance of the arts and humanities not just to us socially but to the UK economy, whereby our soft power in the creative arts and commercial applications do so well.

The result of such changes has been uncertainty in the sector, with the closure of several renowned departments and increasing hostility from Government about the value of the arts. It would therefore be of great reassurance to the sector if the Minister could today provide a cast-iron guarantee that the Government have absolutely no intention of introducing variable fees based on course type or mode of study.

[Robert Halfon]

I am pleased to speak to the amendment. If the Committee will permit, I will provide some background information on what proposed new subsection (7A) is intended to achieve.

Section 10(7) of the Higher Education and Research Act 2017 sets out that if fee limits are set on one type of course, they must also be set on other courses of a similar type at the same or comparable level. The Bill makes a technical change to section 10 to put beyond doubt that the Secretary of State will not be required to place fee limits on courses and modules that are not designated for student finance.

I want to make it clear that that original section does not restrict the Secretary of State from setting differential fee rates for different subjects. That ability is provided for elsewhere in the Higher Education and Research Act, specifically through the power in section 119(5)(a) and schedule 2, which allow the Secretary of State to make different provision for different purposes, cases or areas. That power means that the ability to set different fee limits for different courses is already in the primary legislation.

Section 10(7) is specifically in reference to which courses have fee limits, and which do not. The amendment therefore could result in an LLE non-funded course being subject to fee limits even if the course were not designated for loan funding at all. For example, a university summer course could be forced to comply with per-credit fee limits rules, even though students on the course are not LLE-funded and they self-finance. That scenario would not be fair on providers, which is why we cannot support the amendment.

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[Matt Western]

I hear what the Minister says, and I will look again at that. I take what he says on face value, and on that basis I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[Robert Halfon]

Clause 2 further supports clause 1 in ensuring that fee limits can be proportionate to the amount of study taken by students under the LLE. It makes further technical but necessary amendments to HERA 2017 as a result of the changes to legislation made in clause 1.

Clause 2 amends existing reporting duties on the Office for Students and providers so that the duties include the new credit-based fee limit amounts, in addition to any per-year fee limit amounts that apply. That is not intended to add any unnecessary burdens; it only adjusts the duty to reflect the new fee limit method. Subsections (2) and (4) provide explicit powers for the OFS to regulate fee limits at third-party providers, which will ensure that students cannot be charged thousands of pounds extra for choosing to study at a franchised provider.

Finally, clause 2 makes express provision in section 10 of HERA 2017 to allow the Secretary of State to set fee limits only on those courses and modules that are in scope for LLE funding. That will ensure that fee limits are not required for every single module of higher education, regardless of whether it attracts LLE funding.

The clause is an important part of the Government’s transformation of student finance. The LLE will give people a real choice in how and when they study so that they can acquire new life-changing skills. I commend the clause to the Committee.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clause 3

Extent, commencement and short title

[Matt Western]

I beg to move amendment 12, in clause 3, page 8, line 36, after “may” insert “until 31 January 2024”.

This amendment would ensure that the transitional or saving provisions available to the Secretary of State are only available until 31 January 2024.

Amendment 12 seeks to incorporate in the Bill a limitation on the Secretary of State exercising the saving and transitional provisions after 31 January 2024. It is a very simple amendment that aims at a compromise: to give the Secretary of State and the Minister just under a year to get this through and operationalised, and to give providers around 18 months to plan and anticipate how they might respond.

We have already seen delays to the lifelong learning policy, including in relation to the report by Sir Philip Augar in 2018, and not least the almost year-long wait between the consultation and the Government publishing their response. As I said earlier, that might suggest that the turmoil in the Department for Education has meant that this issue has very much fallen to the wayside and not been seen as a priority. Indeed, the Schools Bill was introduced, but also fell by the wayside. So much of the initiative and need to modernise education has been deprioritised by the Government over this last year in particular.

As my hon. Friend the Member for Sheffield, Brightside and Hillsborough mentioned on Tuesday, we have had a skills shortage in this country since time immemorial. If the reforms promised in this policy are to be revolutionary, we need to press on and advance this programme, because we suffer a significant skills shortage, certainly compared with our major European and global peers. One has only to look at Germany, France or Italy, which are significantly ahead of us.

It is also important that the provisions in this Bill are not implemented in a haphazard way, and that the reforms that they make to the student finance package are absolutely coherent. Therefore, if the Minister will not accept this amendment, I would ask him to explain where he envisages needing to delay the enactment of provisions in this Bill.

I am sure that the sector would welcome a clear timeline from the Minister on when he expects the framework within this Bill to be in place, subject to Parliamentary scrutiny, not least because of the institutional financial planning restraints that we heard about, particularly from Dr Norton, from Coventry University and Professor Rigby from Bath Spa University. Given those financial challenges, the additional administrative burden, and the costs to the institutions, it is vital that this is laid out clearly to ensure a managed transition to 2025. I hope that the Minister, in his response, will set out what that framework will look like.

[Robert Halfon]

Amendment 12 would require any regulations on transitional arrangements in connection with the coming into force of the Bill to be laid before the end of January 2024.

Due to the complexity of the regulations required, and consistent with our plans to introduce the LLE from 2025, we are not intending to lay the broader suite of regulations to enable the LLE until after January 2024. Part of those regulations will include transitional and savings provisions that are needed in relation to the new powers in clauses 1 and 2.

The LLE is a long-lasting systemic reform, as we have discussed today, set to affect generations of future students. It is imperative that we get this right, and that utmost care is taken of both the nation’s finances and our future learners, giving them the consideration they deserve.

We have already published clear directions for the LLE in the consultation response and we will continue to engage closely with providers as the remaining aspects are developed. The consultation response sets out specific areas where we will engage with them in the future, such as the additional entitlement issue. That is why the Government cannot support the amendment, because we need to get this absolutely right and ensure that these regulations are done carefully.

[Matt Western]

I would like to take the Minister at face value. I am sure that that is the Government’s intention, but, as I say, given some of the programmes and initiatives that have been introduced recently and the chaos and turmoil that we have seen within the Department for Education over this past year, I am not assured by what the Minister has said. On that basis, we will be pushing the amendment to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Robert Halfon]

Clause 3 provides for the territorial extent of the Bill, its commencement and the short title. The clause outlines the territorial extent of the measures, with the Bill extending to England and Wales. However, as education is a devolved matter, the Bill applies only to England, and the amendments made by clauses 1 and 2 apply only to English higher education providers.

Commencement of clauses 1 and 2 will be confirmed by regulations made by statutory instrument. The overall reforms to the student support system, along with the changes to be made as a result of the Bill, will not start until the academic year 2025-26, and we currently anticipate making the necessary secondary legislation over the course of 2024. Once enacted, the Bill will be known as the Lifelong Learning (Higher Education Fee Limits) Act.

I thank the Opposition for the way they have approached the Bill. We have had some serious and constructive debate, and I really appreciate the way they have taken it forward from their side. Of course, I also thank my own side for all their support for the Bill. We have been discussing credits and transfers, and my firm view is that the Bill will be transformative once it comes into play in 2025. It will potentially make a huge difference to many future learners.

I also thank officials at DFE, who have done an extraordinary job in preparing for everything; my Whip; and you, Mrs Cummins, for chairing today’s session. I recommend that the clause stand part of the Bill.

[Matt Western]

We do not wish to oppose clause 3, but I will add my remarks to those of the Minister. I thank you, Mrs Cummins, and Sir Robert for chairing us through the last couple of days. I thank the Clerks and Department for Education officials for the work that they have put into the Bill. Most importantly, I thank Members and the Minister for the spirit in which the Committee has been conducted. I thank my colleagues for their forbearance, and I particularly thank my Whip as well.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Bill to be reported, without amendment.

Lifelong Learning (Higher Education Fee Limits) Bill

Matt Western Excerpts

Report stage
Wednesday 3rd May 2023 Commons Chamber

[Matt Western (Warwick and Leamington) (Lab)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Dame Eleanor Laing)]

With this it will be convenient to discuss the following:

New clause 2—Requirement to publish a revised impact assessment—

“(1) Before laying the first regulations under this Act, the Secretary of State must prepare and publish a revised impact assessment.

(2) The impact assessment must take account of, in particular—

(a) the Lifelong Loan Entitlement Consultation and the Government’s response,

(b) any spending review decisions announced after the date on which the Act received Royal Assent, and

(c) any announced changes to Government skills and education policy.”

This new clause would require the Secretary of State to publish a revised impact assessment of the Bill with regard to recently announced and future changes related to the Lifelong Loan Entitlement policy.

Amendment 2 to clause 1, page 2, line 10, at end insert—

“(1A) One credit means 10 notional learning hours.”

This amendment puts the number of hours that constitute a credit on the face of the Bill.

Amendment 1 to clause 2, page 6, leave out lines 17 to 20 and insert—

“(7A) Nothing in subsection (7) requires the Secretary of State to make regulations under subsection (6) to set fee limits for courses which have not been designated by or under regulations made by the Secretary of State in accordance with section 22 of the Teaching and Higher Education Act 1998.”

This amendment safeguards against charging variable fees based on course or subject.

Amendment 4, page 8, line 36, after “may” insert “until 30 September 2024”.

This amendment is a probing amendment that would limit the use of saving and transitional measures to 30 September 2024.

Amendment 3, page 8, line 38, at end insert—

“(6A) A statutory instrument containing (whether alone or with other provisions) regulations under this Act shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

This amendment would require that regulations made under this Act are subject to the affirmative procedure.

Amendment 5, page 8, line 38, at end insert—

“(6A) Before laying the first regulations under the 2017 Act, the Secretary of State must make a written ministerial statement updating the House of Commons on the progress made in the Lifelong Loan Entitlement roll out and outlining how the regulations will support further policy development.”

This amendment would require the Secretary of State to publish a written ministerial statement ahead of laying any regulations under this Act, updating the House on the progress of the Lifelong Loan Entitlement policy and how the regulations aim to support the policy.

[Matt Western]

I rise to speak to new clauses 1 and 2 and amendments 3 to 5, which appear in my name and that of my hon. Friend the Member for Chesterfield (Mr Perkins), who is unfortunately unable to be here today. Our amendments at their core seek to do three important things and are designed to ensure that the Bill is successful: to introduce parliamentary oversight; to provide the sector with as much clarity as possible ahead of the implementation of the lifelong loan entitlement; and to allow for an assessment of the interaction between the Bill and the policy underpinning the lifelong loan entitlement. They seek to achieve those aims at various key points in the Minister’s decision-making process, covering the period prior to laying the regulations, the process of laying the regulations and the post-enactment effect of the regulations. With your permission, Madam Deputy Speaker, I will speak to our amendments with that logical structure in mind.

New clause 2 would require the Minister to publish a revised impact assessment before laying any regulations under the Act. Such an impact assessment must consider the Government’s response to the lifelong loan entitlement, any subsequent spending reviews, and the Government’s broader education and skills policy. I note that the Minister has committed himself and the Government at various times to such an impact assessment. In the impact assessment attached to the Bill, a post-enactment impact assessment is promised. In Committee, the Minister also promised that

“the Government will publish a full and detailed impact assessment, including the qualification of expected costs and the benefits of LLE in its entirety, when we lay the necessary secondary legislation to fully implement the LLE.”––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 23 March 2023; c. 98.]

Therefore, the need for a revised impact assessment does not seem to be in dispute.

It is important, however, that the impact assessment is as thorough as possible. At the moment, we have impact assessments split across a variety of strands: attached to the Bill, the Government consultation response, and future announcements. There are some glaring gaps, noticeably on the impact on providers. The Bill’s current impact assessment stresses that the

“overall impact is likely to be ambiguous because of various opposing effects.”

It is important that those effects are considered in the round in any future impact assessment.

Even if the Minister does not accept the new clause, I would welcome his commitment to producing a post-enactment impact assessment, pulling together the variety of loose strands across different announcements. I would also welcome his commitment to publishing a revised impact assessment before he lays any regulations under the Bill, and a commitment on when he intends to do that.

Amendment 5 is linked to the aim of new clause 2. It would require the Minister to publish a written ministerial statement before tabling any regulations under the Bill. The amendment would require any written statement to take into account the interaction between the regulation and the policy proposal. On Second Reading, I described the Bill as an “exoskeleton without a body”—that is to say, a framework without much policy substance. After detailed debate in Committee, I understand some of the reasons why the Bill is technical in design and therefore somewhat policy-light. What amendment 5 seeks to do, however, is to link the policy objectives of lifelong learning to the secondary legislation tabled under the Bill. It would close the gap between the Bill’s skeletal framework and the policy announced by the Government.

Amendments 5 and 3, the second of which would subject all regulations made under the Bill to the affirmative procedure, are guided by one simple aim: parliamentary oversight. In Committee, the Minister confirmed that regulations determining the fee method, the number of credits attached to credit-differential activity, the number of learning hours attached to credit, the maximum number of credits and the uprating of the lifelong learning entitlement would all be subject to the affirmative process. I welcome that commitment and have no reason to doubt the sincerity of the Minister’s promise. However, given that we have had, I think, three Ministers in the last 10 months, there is uncertainty about the commitment —or lack of it—to that on the part of others. Given that the Minister supports the central thrust of amendment 3 and is a keen supporter of parliamentary oversight and a pragmatist, I hope that he will be prepared to assert Parliament’s right to scrutiny in the Bill.

Amendment 4 would limit the use of the saving and transitional provisions in the Bill to the end of September 2024. I tabled a similar amendment in Committee that would have limited their usage to the end of January 2024. The Minister confirmed that the Government

“are not intending to lay the broader suite of regulations to enable the LLE until after January 2024.”—[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 23 March 2023; c. 111.]

I understand the reasons behind the need for flexibility—after all, lifelong learning is a fundamental change in the structure of the student loans system—but the Minister will no doubt be aware of the need for providers, students and the Student Loans Company to have adequate time to prepare.

On the Minister’s own timeline, continuing to table saving and transitional provisions after September 2024 would leave less than one complete academic year before the expansion of LLE to level 4 courses in September 2025. What assurances can he give the sector that the vast majority—if not all—of the regulations will be laid by or before September 2024? Can he be a little more specific than any time after January 2024?

Finally, I turn to new clause 1, which would require the Secretary of State to conduct a review of the Bill’s impact on a variety of factors after the launch of lifelong learning for level 4 in the 2025 academic year. It would need to be published before the expansion in the 2027-28 academic year to levels 4, 5 and 6. The Secretary of State would then have to conduct an annual review every subsequent year taking into account learner uptake, employer spending, the provision of courses on offer, the financial sustainability of the sector, the Student Loans Company and the Office for Students. I will touch on a few of those points to illustrate why such a review is so crucial.

On the Bill’s impact on learner uptake, we know that there is a huge job to be done. As Sir David Bell, vice-chancellor of the University of Sunderland, reminded us in Committee, accelerated courses were once poised to be the next big thing but never really materialised. The same can honestly be said of T-levels. The Education Committee’s report into post-16 education, which was published last week—the Minister will be more than familiar with it—revealed that 63% of young people had not even heard of T-levels. As Rachel Sandby-Thomas, the registrar at the University of Warwick, put it:

“The take-up has been disappointing”––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 33, Q75.]

The National Careers Service—incidentally, this was introduced by my friend Gordon Marsden, the former Member of Parliament for Blackpool South—would be the most obvious choice for helping to deliver information, advice and guidance. I am reliably informed that the NCS is now poorly resourced and unable to meet the demand for face-to-face appointments, and has been described by the Local Government Association as in need of a “radical shake up”. How on earth, therefore, does the Minister expect adequate information, advice and guidance to be provided to prospective learners when the most obvious mechanism available to deliver it has been so stretched and under-resourced these past few years?

Of course, none of that is to say that LLE will not propel an enormous wave of adult learners and upskillers, but recent policy announcements suggest the need for an enormous communications campaign, a large investment of resources and a clear understanding of the barriers to uptake. A review, as proposed in new clause 1, would achieve that aim. Linked to that, the impact of the Bill on the courses on offer and the financial sustainability of the sector will be one of the main factors in determining whether the policy is a success.

Given the declining unit of resource, the urgent need for a review in post-16 education funding, as the Education Committee has called for, and the additional costs incurred by modular study, there is a risk, albeit small, that the policy might stretch providers too far and too thinly. I note the Minister indicated that the wider LLE impact assessment, which is being updated as the policy develops, expects increased uptake of technical provision, modular study and part-time study to expand opportunities for providers to generate revenue. That is good news. However, circumstances change, populations grow and shrink, and universities are under greater pressure to deliver. The assessment therefore needs to be continual.

On a final point—one that was raised in Committee—the reform will inevitably help those currently in the workforce to reskill and retrain. Given that the apprenticeship levy has been so poorly used, with just 31% of levy-paying employers in a recent Chartered Institute of Personnel and Development poll claiming that it had encouraged them to spend on training, down from 46% five years ago, there is clearly a pressing need for reskilling and workplace training. However, there is obviously a balance to be struck between meeting the needs of employers and those needs being imposed on workers, and meeting the expectations of citizens to have access to further educational experiences for their own fulfilment. There is a real risk that employers will use the system to burden their employees and potential hires with debt to fulfil their own internal skills gaps. I know that the Minister would not want the system to be used purely for that purpose and new clause 1 would keep an ongoing eye on that practice. I would be interested to hear any further thoughts the Minister has had since Committee on what steps he might be inclined to take to prevent the misapplication of the LLE by employers.

I will draw my remarks to a close. I reiterate my support, and the Labour party’s support, for the Bill and the policy it underpins. The amendments we have tabled reflect that support, while seeking to futureproof the policy to ensure it has a long-lasting impact over successive election cycles and decades. We want it to be successful. By far the most important of the amendments we have tabled today is on the need for review to guard against any unintended effects of the policy, engage parliamentary oversight and provide an avenue for all stakeholders to continue to feed into the policy outcome. It is for that reason that we will be pressing new clause 1 to a Division.

[The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)]

Ahead of speaking to the amendments tabled by the hon. Member for Warwick and Leamington (Matt Western), I would like to thank Members from across the Chamber for their contributions and the spirit of the amendments tabled, as well as the spirit in which they invested in the Bill and its transformational programme.

I will start with new clause 1, which seeks to require the Secretary of State to publish an ongoing annual review on the impact of the Act from academic year 2025-26. I understand the new clause intends to require the Secretary of State to conduct and publish a review on the impact of the Act, in particular covering the phased introduction of modular provision from 2025. As hon. Members will be aware, the Government published an impact assessment for the Bill, which includes a consideration of the impact of modularisation, including on providers.

If I may, I will recount to Members how the Government intend to introduce the LLE. The LLE will provide individuals with loan entitlements to the equivalent of four years of post-18 education to use over their working lives, for example £37,000 in today’s fees. The LLE will be available from 2025 for full courses at levels 4 to 6, such as degrees and higher technical qualifications. In addition, the LLE will begin a phased introduction of modular funding, starting in 2025, with modules of high-value technical courses at level 4 and 5. The Government are particularly keen to ensure a wide range of high quality level 4 and 5 modules are in scope from 2025-26. That will pave the way for expanding out new modular funding to broader level 4, 5 and 6 provision in 2027, where we can be confident of positive student outcomes.

There will be an opportunity to contribute to the approach of the expansion of modular funding. As set out in the Government’s response, we intend to launch a technical consultation next year to specify how we will determine funding for wider modules. I agree with the sentiment behind new clause 1 on the importance of monitoring the function of the LLE in line with policy intention. However, introducing an ongoing review into primary legislation before the policy has been fully implemented or had sufficient time to bed in would not be appropriate. Additionally, the Government believe a yearly report without an end date could be an undue and disproportionate burden at this stage. For that reason, the Government believe it neither necessary nor appropriate to introduce an ongoing review requirement on the face of primary legislation and that is why we cannot support new clause 1.

New clause 2 introduces a requirement to publish a revised impact assessment. It would have the effect of requiring the Secretary of State, before the laying of secondary legislation, to publish a revised impact assessment, taking into account any development of policy on the LLE. I am in full agreement with the intent behind new clause 2, which is to ensure there is adequate and ongoing analysis of the impacts of policy to inform decision making and scrutiny of legislation. As Members are aware, the Government published an impact assessment for the Bill on its introduction, on 1 February. The Government subsequently published an updated impact assessment for the LLE as a whole, alongside the publication of the consultation response, on 7 March. The impact assessment published in March contained the following commitment, on page 18:

“In accordance with the Better Regulation Framework, more detailed assessments of impacts, including quantification of expected costs and benefits of the different aspects of LLE policy, will be published in due course at the point when the government lays the necessary secondary legislation to fully implement LLE.”

I therefore reiterate and give assurance that the Government intend to publish an updated impact assessment for the LLE ahead of the laying of regulations. It is not necessary to codify that on the face of primary legislation and that is why the Government cannot support new clause 2.

On amendment 4 and the transitional measures referred to by the Opposition spokesman, the amendment requires any regulations on transitional arrangements to be made in connection with the coming into force of the Bill to be laid before the end of September 2024. Due to the complexity of the regulations required, and consistent with our plans to introduce the LLE from 2025, the Government intend to lay the broader suite of regulations to enable the LLE at the earliest in mid to late 2024. Those regulations are likely to include transitional and saving provisions needed in relation to the new powers in clauses 1 and 2. As hon. Members will be aware, the laying of regulations is subject to available parliamentary time. It would not be helpful at this point to prescribe a specific period. However, the Government agree that regulations need to be laid in a timely manner.

--- Later in debate ---

[Matt Western]

I extend my thanks to all those involved in the passage of this Bill on Second Reading, in Committee and this afternoon. I join the Minister in thanking Conservative Members as much as those on the Labour Benches. I particularly thank my hon. Friend the Member for Chesterfield (Mr Perkins), the shadow further education Minister, whose name appeared on the amendments we debated on Report. I also thank my hon. Friends the Members for Brighton, Kemptown (Lloyd Russell-Moyle), for Sheffield, Brightside and Hillsborough (Gill Furniss), for North Tyneside (Mary Glindon), for Barnsley Central (Dan Jarvis) and for Middlesbrough (Andy McDonald) for their work, constructive comments and contributions in Committee. Their thoughts provided the basis for subsequent amendments.

I also place on record my thanks to the Clerks, and particularly to Bethan Harding for all her work drafting the various amendments that allowed us to probe the Government’s rationale and that shaped the debate the ensuing debate.

Finally, I thank the Minister and his office for how they have guided the Bill through its Commons stages, offering numerous opportunities for Opposition engagement, following up with Members on specific points raised in Committee and generally respecting the right of Parliament to scrutinise the Bill. The seriousness and efficiency with which the Minister has approached the Bill encourages a certain trust both in him and in the purpose behind the Bill, both of which are essential if it is to form part of the cross-party commitment to lifelong learning.

This Bill is an important first legislative step on the road towards the full roll-out of lifelong learning provision in the UK, but the objective of lifelong learning has swirled around this place for far longer than I have been in this House. My friend and predecessor Mr Gordon Marsden, the former Member of Parliament for Blackpool South, was an assiduous campaigner for lifelong learning in this role, and I am pleased to see that work is now channelled through his Right2Learn campaign. It may be only a few short years since he stood in my shadow ministerial shoes, but the need for these reforms has never been so urgent. They simply cannot come quickly enough. The Minister will no doubt be aware of the severity of the problem from his time chairing the Education Committee.

With Government spending on adult education falling by 47% between 2009 and 2019 under the coalition and Conservative Governments, and with only one in three adults participating in some kind of learning, meeting the challenges thrown up by decarbonisation, growing a sustainable economy and the fourth industrial revolution will require a complete reversal of the last 13 years of decline, propelled by a much more expansive understanding of lifelong learning. So what concerns me is the uncertain direction of travel. The Minister published the consultation response before the Committee stage, and I thank him for that, but this Bill leaves an awful lot to be decided in due course by him.

The purpose of Third Reading is to give the Commons a final chance to debate the contents of a Bill; it is an opportunity to discuss what is actually in the Bill, rather than, as on Second Reading, what might have been included. The awkward predicament we are in here is that so much of this Bill is yet to be determined by the Minister, in regulations. Consequently, the Bill is somewhat divorced from the policy it seeks to implement. This is not a party political point; it is a call for certainty and predictability, and an expectation that transformational reforms in the tertiary education sector are clear, open to debate and transparent. I understand that most of the current student finance system is governed through regulations, but the point is, surely, that what we are trying to do with lifelong learning is break away from the current system. Does it not follow, therefore, that the limits of the old system—namely, government by regulation—should not necessarily impose a limit on the new system?

That was why we tabled our amendments on Report. They were all about ensuring parliamentary oversight, sector engagement and continuous monitoring of the impact of legislation on proposed policy. It is somewhat disappointing, therefore, there has been no movement from the Government on those issues, despite assurances. I strongly suspect, however, that the Minister will take a conscientious, diligent and measured approach to implementing lifelong learning. I urge him to engage frequently with the sector, with me, with employers and with non-governmental bodies, such as the Student Loans Company and the Office for Students, although the latter is perhaps increasingly less non-governmental and more governmental in practice. That being said, as the Bill progresses to the Lords, I look forward to listening to their considerations on the scope of delegated powers under this Bill, the feasibility of these reforms and the timescale suggested by the Minister.