Student Loan Book: Sale

Debate between Paul Blomfield and Sam Gyimah

Thursday 11th October 2018 Commons Chamber

[Mr Gyimah]

I caught just the tail end of that question. If I understood it correctly, my hon. Friend was asking about the process and the decision making in the past. We have been dealing with this for two decades in this place; under the last Labour Government there were mortgage-style loans, where loans were sold to private investors, who could contact students directly and chase them for the money. That has now changed under this system.

[Paul Blomfield (Sheffield Central) (Lab)]

Will the Minister tell the House at what level the Department is currently assessing the resource accounting and budgeting charge? Will he share his consideration of the Office for National Statistics review of the treatment of unrepayable debt on the Government books?

[Mr Gyimah]

The RAB charge was at about 35%, but as a result of raising the repayment threshold from £21,000 to £25,000, which in essence makes the loan system more generous, it now stands at 45%. The hon. Gentleman is right to ask about the ONS reclassification of the student loan book, but that is an exercise the ONS is going through and we have yet to hear what its recommendations are. When we find out what those recommendations are, both the Department and the post-18 review will look at them and take the appropriate action.

Higher Education

Debate between Paul Blomfield and Sam Gyimah

Monday 23rd April 2018 Commons Chamber

[The Minister for Universities, Science, Research and Innovation (Mr Sam Gyimah)]

When I walked into the Chamber and listened to the shadow Secretary of State, the hon. Member for Ashton-under-Lyne (Angela Rayner), I thought for a moment that I had walked into the wrong debate. Although the Opposition prayed against the Government’s legislation, meaning that we had to have this debate on the Floor of the House, it took quite a long time for me to realise that she was actually speaking to her motion, because nothing that she said was relevant or bore any resemblance to its content. The motion is actually a very serious one that calls for the set of regulations before the House to be annulled, although she said that that was not the case at all.

This legislation should be a piece of good news for the House. For the first time in the age of the student—when students should no longer be grateful for the experience that universities dish out to them, but should have a champion for them—this Government have set up a new regulator to perform that role. But of course the Opposition chose not to recognise that, saying instead that we should annul the legislation.

The first point—I will speak specifically to the SI—is that annulling this legislation is unviable. It is unviable to continue with the existing legislation. That is because the Higher Education and Research Act—HERA—replaces the previous legislative framework for higher education that was established in 1992, when the sector was smaller and competition was limited. The majority of funding came from direct grants, to which HEFCE attached conditions. The situation now is fundamentally different. Of 131 higher education institutions funded by HEFCE until April this year, 90 receive less than 15% of their income directly from Government. Attaching conditions to grant funding is simply no longer a viable mechanism to deliver regulatory oversight and to protect students’ interests in the long term.

The Office for Students is an independent regulator that puts the interests of students and value for money at its heart. It stands for a new, outcome-driven approach to regulation that seeks to open up university opportunities to all, to enhance the student experience, to improve the accountability and transparency of providers, to promote the quality and flexibility of higher education choices, and, crucially, to protect students’ interests. The old system, to which the Opposition would like to return, is a recipe for state control of universities, and it would see a return to top-down planning of higher education and student number controls. This would be a fundamental undoing.

[Paul Blomfield (Sheffield Central) (Lab)]

As the Minister will know, I wrote to him on the point raised by the hon. Member for Faversham and Mid Kent (Helen Whately) about the remit of the OfS. Does he recognise that if it is to be a champion for students, its remit needs to be more widely drawn? Does he recognise the point made by the all-party parliamentary group on students that adding a responsibility for wellbeing, with special regard to students’ mental health, would balance out the current remit and demonstrate that the OfS was more interested in putting students first? I regret, as he might perhaps recognise, that he did not respond directly to that point but simply passed it on to the OfS for comment. Will he take this opportunity to agree with the hon. Lady, with me and with many Members on both sides of the House that the remit needs to be broadened in this respect?

[Mr Gyimah]

The remit of the OfS is already very broad. I passed the letter on to it for comment, as an independent regulator, and it is right for it to respond to the hon. Gentleman. I agree, however, that there is an issue around student wellbeing that needs tackling, whether via the OfS or via another route. It is something that we should be alive to. The Chairman of the Education Committee and the right hon. Member for Tottenham (Mr Lammy) mentioned the role of further education, in particular. I assure them that the Secretary of State’s first set of strategic guidance to the OfS set a very clear expectation that apprenticeships must be taken into account whenever the OfS exercises its functions, and that apprentices must be represented within its widening access and participation activity. I note the points that have been made about the composition of the board.

However, the key point is that there is no going back. HERA has established the new Office for Students, which regulates in a very different way by imposing terms and conditions on providers that want to be on its register, and only registered providers can benefit from their students having access to student support. The OfS is already operational, and there is no going back. HEFCE has already been abolished, as has the Office for Fair Access. Both ceased to exist on 1 April, and annulling these regulations does not change that. That ship has already sailed, and neither of these bodies can be resurrected without primary legislation. The OfS now has important responsibilities for access and participation and is already pushing higher education providers to make greater progress through their access and participation plans for 2019-20.

[Mr Gyimah]

The hon. Lady makes a perfect case for the OfS. The reason why the OfS could not have intervened in the recent strikes is that it did not exist statutorily at that point, but were the OfS to be in place, that is exactly the sort of issue it could take on and champion on behalf of students. That is why we have brought this legislation forward.

Let me absolutely clear about the effect on students and providers alike if this motion is carried. First, students’ fees will be uncapped. While the amount of fees that students can be charged is set out in separate legislation, these transitional regulations ensure that until the new regime goes fully live on 1 August 2019, a cap remains on student fees. Without these regulations, students’ fees would be completely uncapped. That would happen immediately, and it would be the Opposition’s fault.

Overnight, there would be no legal barrier to prevent students from being charged the same fees that providers charge to international students. What would that mean for students? In 2017, international students paid between £10,000 and £35,000 annually for lecture-based undergraduate degrees, and for undergraduate medical degrees some providers charge up to £38,000 per year. Simply put, a vote to annul these regulations is a vote to allow tuition fees to be increased without any upper limit.

Without fee caps, we lose access plans, because it is the incentive of being able to charge students up to the current higher fee cap that drives providers towards agreeing access plans. Without fee caps, that incentive is removed. Many Members in the debate have commented on the importance of access, especially to our elite universities, but a vote to annul these regulations is a vote to remove the key tools currently used to boost access and participation. We need an orderly transition to the new regulator.

[Paul Blomfield]

Will the Minister give way?

[Mr Gyimah]

The hon. Gentleman has already had his chance. Establishing a single regulator, which brings together the—[Interruption.]

Funding Higher Education

Debate between Paul Blomfield and Sam Gyimah

Wednesday 28th February 2018 Westminster Hall

[Paul Blomfield]

I have visited the university that my hon. Friend represents. It does particularly innovative and good work in supporting small businesses and is a leader in the sector. He makes an important point. At a time when one of the issues we face as a country is the imbalance in the economy between London and the south-east and the rest of the country, universities offer a unique asset in ensuring that economic growth is distributed across the country. They are the one asset that we have in every part of the UK, in its regions and nations. The role that they play in driving economic growth is hugely important. My hon. Friend makes that point very well.

I have three additional points. First, will the Minister answer the question—which the Education Secretary was unable to in the statement the other day—relating to widening participation and fair access funds? There is a concern that one of the ways in which the sector will be squeezed in order to hit ambitions on fees is by reducing the amount of money allocated to widening participation and fair access. Investment in that area was one of the few good things that came out of the 2012 reforms, so I would be grateful if he could give a reassurance on that.

[Mr Gyimah]

I would like to give the hon. Gentleman that reassurance now. He is absolutely right: the widening participation funds—£1,000 out of every £9,000 paid by students in fees—go towards access. We will not be doing anything to diminish that access project. Although many people talk about the fact that we have global, world-class institutions, one of the successes of our higher education system is actually the number of disadvantaged people who are going to university as a result of those funds being available. There is a challenge in making sure that they are successful at university and get well-paid jobs. We will not be doing anything to diminish that.[Official Report, 21 March 2018, Vol. 638, c. 2MC.]

Office for Students

Debate between Paul Blomfield and Sam Gyimah

Tuesday 27th February 2018 Commons Chamber

[Mr Gyimah]

Every decision that any Minister makes involves a judgment—it is not a scientific process. Clearly, all the issues had been gone through, with the input of the advisory panel and civil servants, and everyone involved then came to a judgment. Clearly, in retrospect, Toby Young should not have been appointed, which is why he is not on the board. In terms of making sure the process works better, the Department, which has ultimate responsibility here, will make sure that we have a much more robust and stringent process next time.

[Paul Blomfield (Sheffield Central) (Lab)]

As chair of the all-party group on students, may I express concern about how the credibility of the Office for Students has been damaged by the then Minister’s handling of these appointments? There is a legal requirement for one board member to have experience of representing students, yet it appears that Ministers have actually taken the best possible experience—involvement in a student union—as a reason to not make an appointment.

[Mr Gyimah]

indicated dissent.

[Paul Blomfield]

I am sorry that the Minister shakes his head, because that is what the commissioner says in the report. Will he assure me that under the new process that he has indicated the Government will follow, involvement in a student union will not be a barrier to consideration?

[Mr Gyimah]

The reputation of the Office for Students has not been damaged by this. It has a board with 15 members. It is led by Sir Michael Barber, who is very well respected across the House, and Nicola Dandridge, who has a long and proven track record in higher education. Toby Young was going to be one non-executive board member. Of course experience of being involved in a student union is particularly important, which is why there is a member of the NUS on the student panel. As a Minister, I value students’ views, which is why I have been on a tour to talk to students across the country. It is important that student unions have an input, but it is also important that so do all the other students who do not stand for election and are not politicians, but have views on public policy and how that has an impact on them. It is important to make sure that their voice is heard, too. That is what we are doing with the Office for Students and it is what I am doing as a Minister.