Office for Students

Matt Western Excerpts

Wednesday 26th April 2023 Westminster Hall

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

It is an absolute pleasure to serve under your chairmanship, Dame Maria. As has been mentioned, the Office for Students, which is the independent regulator for higher education providers, is a relatively new addition to the regulatory landscape in the UK and was formed back in January 2018. I think I am right in saying that this is the first opportunity that MPs have had to debate the regulator since the passage of the Higher Education and Research Act 2017. Here we are five years on, with this well-timed and possibly well overdue debate about what is happening in the landscape.

I congratulate my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) not just on securing the debate, but on her absolutely comprehensive and thorough dissection of the issues, which ranged from the burden of bureaucracy, the concerns about consultation and how it is handled, the questions about the future measurement of quality across the sector, and many points in between, which I will elaborate on. I thank my friend, the hon. Member for Strangford (Jim Shannon), for his contribution and for reminding us of some of the distinct characteristics of higher education provision in Northern Ireland.

Before I build on some of the points raised by my hon. Friend the Member for Kingston upon Hull West and Hessle, I want to stress the importance of good, fair-minded, proportional regulation, which is needed in any sector, especially the higher education sector. For a sector that benefits from £30 billion in income from public money, educates over 2 million students and contributes £52 billion to our GDP, supporting more than 800,000 jobs, the need for regulation is clearly self-evident. To that end, the Higher Education and Research Act lays important foundations for the inception of the Office for Students. It is important to stress that almost no one I have met working in the sector has ever questioned the need for regulation. Indeed, as Universities UK says:

“we support the objectives of the OfS and believe its statutory duties are clear and appropriate”.

However, five years on from HERA, four of the main representative groups—MillionPlus, GuildHE, University Alliance and the Russell Group—have felt compelled to write to the Chair of the Education Committee, the hon. Member for Worcester (Mr Walker), expressing

“growing concerns that the OfS is not implementing a fully risk-based approach, that it is not genuinely independent and that it is failing to meet standards we would expect from the Regulators’ Code.”

The establishment of any regulator, especially one that so markedly departs from the role of the previous funding agency, is bound to have some teething problems. But when we have reached the point at which stakeholders are joining forces to raise concerns that the House of Lords Industry and Regulators Committee has launched an inquiry into, and when MPs feel compelled to raise the issue in Westminster Hall, then something has clearly gone awry. The question is: what?

Regulators are most successful when they are able to exercise a proportionate degree of authority over the sector they regulate. Authority stems from trust, which in turn reinforces the authority of the regulator. The two go hand in hand; they are mutually reinforcing. In part, this issue stems from the structure of the OfS—for example, in not having adequate avenues to allow stakeholders to offer feedback on its own performance as a regulator. The OfS’s provider refresh strategy is therefore broadly welcome, but part of the mistrust stems from a perception—and I think it is a perception—that the regulator is too easily at the beck and call of Ministers, stretching the epithet “independent regulator of higher education” to its very limit.

Most obviously, as we have heard, the chair of the Office for Students, Lord Wharton, is seen as a plainly political appointment, having little experience in the sector while maintaining the Conservative Whip in the Lords. The potential conflict of interest is plain. That he has visited only five universities since his appointment may suggest that his interest lies less in the promotion of the sector and more in occupying a public office to shape the sector to his party’s wishes. Certainly, his failure to declare an interest as a significant donor to Ben Houchen’s campaign to be the Tees Valley Mayor when interviewing and appointing Rachel Houchen as a non-executive director supports that hypothesis.

They say that a fish rots from the head down—incidentally, the last time that I used that expression in this House was in relation to the Government of the right hon. Member for Uxbridge and South Ruislip (Boris Johnson). There is a perception that the OfS is straying too far into the political fray at several levels. Take the student panel, for example, which was mentioned earlier. Last week, the former student panel members gave evidence to the Lords Committee. They claimed that

“an acute focus on free speech in regulatory activities was politically motivated rather than being based on the concerns of the student body”,

and strongly indicated that the student voice, as expressed by panel members, was “actively suppressed” when trying to counter aims and policies that appeared to be political in nature.

My hon. Friend the Member for Sheffield Central (Paul Blomfield) talked about the student voice being marginalised. I have frequently thought that the Office for Students is a misnomer. Surely, if it was truly a regulator for students, they would be given greater priority in decision making and greater oversight, and they would turn to it more often and would feel that their priorities—such as the cost of living, student mental health, and sexual harassment and violence on campus—were being given the utmost priority. Given the seriousness of the accusations that have been made, I would welcome the Minister’s personal commitment that he will ensure that the student panel and voice are fully respected within the OfS structure and the regulations that it makes, as schedule 1 to HERA demands.

Another common theme emerging from my conversations around the sector concerns the regulatory burden. Under HERA, the OfS is required to ensure that ongoing registration conditions are proportionate to the OfS’s assessment of the regulatory risk posed by the institution. The OfS has termed this “risk-based regulation”. That is an eminently sensible approach to take, but unfortunately it is one that belies reality.

As we heard from my hon. Friend the Member for Kingston upon Hull West and Hessle, data gathering is being massively duplicated. To give some anonymous examples, as we have heard earlier, I am informed that, for the 2022 Higher Education Statistics Agency data return, one member reported having to provide 59,000 student records, which equates to 7.2 million individual data fields—an increase from 4.5 million in 2019. We have heard that another provider has 10 full-time equivalent staff supporting regulatory compliance, at a cost of £440,000. Another has estimated that the total cost in regulatory activities equates to £1.1 million in the year 2022-23. So the burden is both concentrated and widespread, particularly when taking into account the reporting requirements of other regulatory bodies.

When it comes to degree apprentices, as we have heard, apprenticeship providers are often subject to four, or possibly five, separate regulatory bodies and demands: the OfS, the Institute for Apprenticeships and Technical Education or IFATE, the Education and Skills Funding Agency, and Ofsted. The effects on smaller institutions are clearly greater, as these absorb more and more resources to the detriment of the student experience. Over a year ago, the Minister’s predecessor, the right hon. Member for Chippenham (Michelle Donelan), launched the HE data reduction taskforce, which of course is very welcome, to tackle this very issue. I would be grateful if the Minister updated us on when the taskforce last met, when it next plans to meet and what steps he is taking to ensure that new initiatives, most importantly lifelong learning, do not bog down providers in an even greater regulatory quagmire.

In raising these concerns, I do not intend to discredit the important work that the regulator has done in some areas. The recent work on access and participation plans, for example, and the launch of the equality of opportunity risk register could prove transformational in improving the experience of higher education for students from a widening range of backgrounds. Likewise, a good deal of work has to be done behind closed doors by necessity; managing the financial sustainability of providers is the clearest example. To that end, I was pleased to read the case study note provided by the OfS yesterday about how it is managing financially precarious institutions, which are increasing at an alarming rate under the current Government. I should not need to remind the Minister that the proportion of providers with an in-year deficit increased from 5% in 2015-16 to 32% in 2019-20.

In conclusion, the need for regulation is absolutely obvious; indeed, good regulation is needed to generate confidence, trust and investment in the sector from domestic students, international students, businesses, government and research bodies. However, the relationship between the OfS and the sector is at an all-time low. It did not start at a particularly high level. Trust and confidence is crucial in a regulator, and I am afraid that there are profound concerns across the piece. I have met with the OfS, and I appreciate that moves are afoot to try and reset the relationship and restore confidence. I very much welcome that. Trust and authority are hard-won and quickly lost. To that end, I would welcome the Minister’s response on the following points, as well as those I raised earlier.

What steps is the Minister taking to reassure the sector that the era of heavy-handed political involvement in the regulator is at an end? What plans does he have to raise the registration fees to accommodate additional duties on the OfS? What assessment has he made of any increase on institutional financial sustainability and the student experience? Finally, what assessment has he made of whether the OfS provides value for money, judged against the objectives that Parliament legislated for it, and by comparison with peers in the regulatory sector?

--- Later in debate ---

[Robert Halfon]

Very good. I have been to that university. I met James Dyson some years ago when I was the Chair of the Education Committee. It was extraordinary. I hope that there will be many more examples of universities like that one. The Department will work closely with the OfS to ensure that we continue supporting a world-class higher education system. As I said, I remain committed to delivering on skills, jobs and social justice. The OfS will be an absolutely crucial part of that.

[Matt Western]

Will the Minister give way?

[Robert Halfon]

How could I say no to the hon. Gentleman?

[Matt Western]

I was hoping that the Minister could cover the three questions I raised at the end.

[Robert Halfon]

I thought I had answered most of the questions.

[Matt Western]

There was one about political interference, which may be difficult for the Minister to answer. Could I go back to the second question? It was about whether he had any plans to raise registration fees. I also had a question about an assessment of the value for money that the OfS represents, particularly in the context of other regulators.

[Robert Halfon]

I am happy to answer. I think I said that we are considering OfS registration fees and that I will come back about that matter in due course. I do not recognise any political interference. Since becoming a Minister, I have had meetings with the OfS chief executive and chair, and we have literally just discussed what needs to be done to make sure that the organisation continues its work and that we continue to have a world-class university system.

I beg the hon. Gentleman’s pardon—what was the third point?

[Matt Western]

Assessment of value for money.

[Robert Halfon]

Ah, yes. I think the OfS is providing value for money. First, as I mentioned, the cost to students is just under £13, which represents value for money. More importantly, what are the outcomes? If we have great universities, as we do, and we are meeting the country’s skills needs, promoting degree apprenticeships and acting further on mental health and other areas, including social justice, to make sure that disadvantaged students have the right outcomes, as we are, then the OfS will absolutely be providing value for money.