Higher Education and Research Act 2017 (Further Implementation etc.) Regulations 2019

Viscount Younger of Leckie Excerpts

Wednesday 5th June 2019 Lords Chamber

Moved by

[Viscount Younger of Leckie]

That the draft Regulations laid before the House on 29 April be approved.

Relevant document: 49th Report from the Secondary Legislation Scrutiny Committee

[Viscount Younger of Leckie (Con)]

My Lords, it is a pleasure to speak to these regulations. I welcome the opportunity to debate them; they are the final major set related to the implementation of the higher education elements of the Higher Education and Research Act 2017, otherwise known as HERA.

The main purpose of the regulations is to make consequential amendments to existing legislation, a standard procedure after any primary legislation has passed. The majority of these amendments replace references to now defunct bodies or repealed legislation. They also reflect the diversification of higher education providers and the wide range of providers registered with and regulated by the OfS.

Further, they reflect the movement from a funding-based system with quasi-regulatory elements to a formal regulatory system based on registration. Some of the cross-references in other enactments relate to the quasi-regulation of higher education institutions by HEFCE, and others to the receipt of or eligibility for funding; the amendments reflect this nuance to preserve the original intention of such provisions.

Let me take a step back. As I mentioned during the debate on 20 May on the Higher Education (Monetary Penalties and Refusal to Renew an Access and Participation Plan) (England) Regulations 2019, we have made great progress since HERA came into law. Noble Lords may recall that HERA abolished the Higher Education Funding Council for England, otherwise known as HEFCE, and the director of the Office for Fair Access, more commonly known as OFFA. As mentioned earlier, a new regulator—the Office for Students, or the OfS—was created to oversee and monitor activities, including in relation to fair access and the participation of English HE providers registered with it.

The OfS currently regulates registered higher education providers under transitional arrangements; the new regulatory regime will be fully operational from August this year. In addition to retaining existing HEFCE and OFFA functions for the transitional period, the OfS has gradually begun to exercise its functions under HERA, and so has greater responsibility for a wide scope of higher education providers—not just universities, but some further education colleges, sixth-form colleges and alternative providers.

HERA gave the Office for Students the power to create a new single register of higher education providers. Registration with the OfS is the only route for providers to be eligible for teaching and research grant funding or to access student support funding, through charging fees for courses that attract student loans. Registration is now a requirement for an institution to obtain degree -awarding powers or the right to call itself a university. Since its formation on January 1 2018, and as of 23 May this year, the OfS has registered 357 higher education providers to exacting standards, including all English universities.

The HERA reforms to the system of regulating higher education were wide-ranging. This means that a number of changes to the statute book are needed to reflect the reforms introduced and to ensure the smooth running of existing legislation. That brings us to why we are here today.

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The quality of courses is of course imperative, not just for individual students but for the UK as a whole, which benefits from economic growth, a skilled workforce, productivity and social mobility. If the funding is not made up, in our view, universities will doubtless cut their widening participation budgets and drop subjects that are too expensive to teach. Given that a key aim of the Higher Education and Research Act is to improve student choice and access, do the Government consider that such a policy would undermine this principle? These questions are additional to those asked yesterday. The House deserves some reassurance on these points, and it will not do for the Government simply to say that all will become clear in the future and it is all subject to a spending review. We need some of those answers now, and so do the universities.

[Viscount Younger of Leckie]

I thank the noble Lord, Lord Bassam, and the noble Baroness, Lady Garden, for acknowledging that these regulations are mainly technical. I am pleased that these are the final regulations that have come out of the Higher Education and Research Act. It was a major Bill to go through this House and I thank all noble Lords who were involved.

A good number of questions arose. Before I get into answering them, I would like to pick up on what the noble Lord, Lord Bassam, said. He is quite right: the whole House acknowledges—and we would like to confirm—that what is important is to uphold and improve the quality of our first-class universities and, in so doing, to ensure we give the best choice to students, including international students, and that they get best value for money. That is behind everything we are doing in relation to the regulations and the Act itself, and—I will touch on this in a moment—is the basis for the Augar review, the independent review that has just reported. As I said yesterday and will say again in a moment, we will look very carefully at all 53 recommendations and will report back at the spending review, but not before. I say this not, perhaps, to reassure but to reiterate the point I made yesterday.

I will get straight into answering some of the questions raised: first, from the noble Baroness, Lady Garden, on pension schemes. The department ran a consultation, as she may know, on the impact of increased employer contributions on all TPS employers—including state schools, further and higher education providers and independent schools—for 2019-20. The department has decided to fund schools to the tune of £830 million and further education providers to the tune of £80 million—and not universities—in 2019-20, with costs beyond that year to be agreed at the spending review. This decision was based on the strongly positive response to our consultation proposal and the fact that schools and further education providers are most directly funded by government grants. I will read Hansard tomorrow to look again at the detailed remarks that the noble Baroness made. I will check her questions against my answer and, if I am not satisfied, I will write; I am sure that she will press me if she is not satisfied.

The point the noble Baroness raised on data is important and, again, she had some detailed questions. Although I would like to write to give her some information in answer to her question about our plans for changes, I emphasise that these regulations do not extend access to data; they simply update the bodies between which data may be shared, replacing HEFCE with the OfS and HEFCE-funded higher education providers with OfS-registered higher education providers.

I welcome the noble Baroness, Lady Wolf, to her place. I was sorry that she was not present yesterday. I thank her, particularly, for her role in the production of the Augar review. I am sure she has read Hansard in detail for yesterday’s exchanges. She asked how the OfS will demonstrate that it complies with the Regulators’ Code. The OfS, as she may know, is required to report annually on the performance of its functions. This report is sent to the Secretary of State and laid before Parliament.

The noble Baroness, Lady Garden, asked why the Charities Act amendments in Part 4 were drafted in this way; she had a number of detailed, interesting questions. I am sure that I will not be able to answer them all, particularly the points raised about the differences between Oxford, Cambridge or Durham. Again, I will need to read Hansard. What I can tell her is that the Charities Act amendments reflect the existing drafting in the Charities Act, which lists certain specific institutions. The term “relevant higher education provider” is used to ensure that a provider is registered with the OfS. If the provider is removed from the OfS register, it will no longer be a relevant higher education provider. But I want to go further and say that deregistration by the OfS can happen only under very narrow circumstances, including: serious breach of registration conditions by a provider; where the provider requests that it is deregistered; or where a provider stops providing higher education in England.

I shall say a bit more about the Augar review, which was mentioned by the noble Lord, Lord Bassam, and touched on by the noble Baroness, Lady Garden. As I said yesterday, I am not able to give an opinion on what, if any, recommendations we will take forward. I said yesterday, and repeat again, that we need to look at the 53 recommendations “in the round”—that was the expression that I used yesterday—since many of them are interactive. For example, the proposal to reduce tuition fees from £9,250 to £7,500 needs to be taken into account along with the proposal to extend the payback period from 30 years to 40 years and the further proposals for changes to the in-study interest rates and beyond. These are matters that I am simply not prepared to comment on or make a judgment on.

[Lord Bassam of Brighton]

Does the Minister accept—I think this is overwhelmingly the view of those who have looked at the Augar review—that the proposed financial changes are regressive rather than progressive? That is an important point, particularly in respect of the 40-year payback period it recommends.

[Viscount Younger of Leckie]

Again, I am not prepared to say whether they are progressive or regressive; we are looking at the 53 recommendations, and we will decide by the spending review what we want to do.

I shall go a little further. The noble Lord mentioned the teaching grant. As I said yesterday, the question of—to use his words—making up the teaching grant is again something that we need to look at in the round. It is all interrelated. If the proposed reduction to £7,500 leaves a make-up to be made, we will need to look at that with a great deal of care. As I said at the beginning, it is important to ensure the financial sustainability of our very best universities, making sure that the quality is there, the choice for students is there and that it is affordable—I think that that is incredibly important.

I think that I have covered all the questions. As I said earlier, I shall read Hansard in particular depth on this occasion because of the detail of the questions, and I shall certainly write a letter if I have not covered everything.

Motion agreed.