Higher Education and Research Bill - Committee (1st Day) (Continued)

– in the House of Lords at 6:52 pm on 9th January 2017.

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Amendment 2

Moved by Lord Stevenson of Balmacara

2: Before Clause 1, insert the following new Clause—“UK universities: establishment(1) UK universities must be bodies corporate, primarily located in the United Kingdom, and established on a not-for-profit basis. (2) UK universities are public bodies, contributing to society through the pursuit of education, learning, and research at high levels of excellence.(3) UK universities (whether established by Act of Parliament, Royal Charter or by the Privy Council) may be awarded degree awarding powers in accordance with sections 40 to 50. (4) Private universities, colleges of further education and other higher education providers established by Act of Parliament may be awarded degree awarding powers in accordance with sections 40 to 50.(5) Only bodies under subsection (3) or (4) which have met the criteria relevant to the granting of degree awarding powers under section 40(1B) for at least four years may be registered as higher education providers, in accordance with section 3.”

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

My Lords, the amendment we discussed prior to the Statement was originally part of a combination of amendments, of which this is the second. It might be helpful, for the convenience of the House, if I explain a little more about that, as some of the questions that were raised during the earlier debate also have resonance here.

The issue that we faced in drafting these early amendments was that to promote a debate and discussion—eventually, that was successful—around the role that universities should play in the United Kingdom, we had first of all to assess what that role should be. It also raised questions about establishment and the position of universities with regard to the way in which previous regimes have created them and continue to do so. In Amendment 2, which I stress is a probing amendment, to which I hope that Minister will be able to give answers that will help to formulate our thinking as we go forward, we had to think first about whether universities were essentially put in a position where they had to be based or primarily located in the United Kingdom, which is the first point in the amendment, and what their constitutional or legal formulation was. Most of them—not all—are bodies corporate, and all of them are primarily located in the United Kingdom but have establishments overseas. So this is not just an idle question; these things are happening today and we need to make arrangements.

The third limb of proposed subsection (1) of the new clause in Amendment 2—the establishment on a not-for-profit basis—is, as we will have picked up from the earlier discussion, controversial. In all the analysis I have seen—I look forward to hearing from the noble Viscount when he comes to respond, as well as other contributions—as education is a charitable object, it would be odd if bodies established for educational purposes were also to be profit-seeking. However, I fully admit and accept—we were reminded of this in the earlier debate—that when in government my party previously accepted that it would be possible for some institutions to be established on a profit-seeking basis. However, the quantum of the profit to be distributed from the profits made is capped and specified, so there is an assessment of the issue but it is not a completely binary not-for-profit/for-profit operation. The noble Viscount mentioned this in his response to Amendment 1, and my noble friend Lady Cohen has views on this, which I hope she will share with us.

It is true, and it is important to bear in mind, that no institution will survive if it cannot make an excess of income over its outgoings. In a sense, therefore, all universities, whether they are for profit or not for profit, are in the business of ensuring that their income is greater or at least equal to their expenditure. Therefore, the issue that needs to be addressed is whether we are talking about profit distributed to the owners of the company or profit reinvested in an institution’s activities. That might include teaching, research and other things that we are in favour of with regard to what universities should be.

I raise this as a genuine issue, because in promoting this amendment, I suggested in proposed subsection (3) of the new clause that whether universities are established by Act of Parliament, charter or Privy Council, it will be a restriction on the universities that may be called UK universities that they are not for profit. I am not sure, having made that statement, that my argument will sustain itself through this debate; I look forward to that debate and to the Minister’s response. I have difficulties with it myself, and if I have difficulties, as a promoter of the amendment, clearly others will do too, and I am quite ready to be knocked down on this point. It is important that we understand better what we are trying to say about institutions.

It is, perversely, the area of the Bill where I agree with the original drafting. The Minister has now left us—maybe it was something we said; he is no longer in sight, although he may be around. It is easier to talk about “higher education providers” in this context, although it shames me slightly to say that, given that “university” is an important term and we should hold on to it. Presumably, we are trying to ensure that for bodies providing higher education of the type specified earlier in the Bill—it is extensively discussed later on—which are doing it either for profit or not for profit, to a sufficiently high standard and in a way that meets the criteria of the regulator, which we will establish later, it is sufficient that the question of whether these have to be for profit or not for profit is left open. Therefore, if you follow that logic, it is important to have definitions for both. I will pause at that point, because that is as far as my thinking has got. However, we should address this issue and bottom it out, because it will be important later on in the Bill.

I will make three other points. In proposed subsection (4) of the new clause, private universities are specified, but it also includes, importantly,

“colleges of further education and other higher education providers”,

which I have specified should be established by Act of Parliament. However, I also have a greenish edge about that proposal, because it may be cumbersome and practically not possible to require Parliament itself to review the body that sponsors the institution that we will allow to become degree-awarding and autonomous. But if we are not to require Privy Council or royal charter issuing to take place, which is what is in the Bill, we need some other mechanism, which needs to be robust and at an arm’s length from Ministers. Whether it is through secondary legislation or primary legislation, there has to be a check on Ministers’ ability, not just to create universities but to close them down, because these will be important decisions.

The second point in the list—we will go on to discuss it later but it is raised here because it is important—is that there has to be a provision relating to the length of time that challenger institutions need to exist before they are given the responsibilities of a university. At the moment, the Bill provides for that to happen immediately on a provisional basis, but this amendment and others in the group would hold that back, requiring four years to have elapsed.

Finally, the question which I thought might come up during debate on the first amendment but did not but which will definitely come up in this debate is that the Bill is primarily an English-only Bill, although it deals with the UK primarily in relation to research because research is a reserved function. Part of the argument made in Amendment 1 and again in Amendment 2 is that universities as a sector would be better considered as part of an overall and overarching provision within the United Kingdom. Therefore, use of the term “UK” needs to be present and understood but it also needs to be referred to in the Bill. Therefore, in this opening speech I am addressing Amendment 514, which appears towards the very end of the Marshalled List.

I should have said at the beginning—I will say it now—that this grouping is not conducive to a very helpful discussion. I want to explain to the Committee that I will therefore pause at this point, even though I have amendments further on in the group which conventionally I would have addressed now. My Amendment 2 and the interesting Amendment 514, which I am sure nobody has yet looked at, although I recommend that they do, stand together, and it would be interesting to hear comments and responses to that later amendment if possible.

Later we will come to other amendments which were included in this group because it was felt appropriate to have a discussion about institutional autonomy. I am not the main proposer of those amendments, and indeed I would like to wait to speak to them until the noble Lord, Lord Kerslake, has spoken because I wish to follow his amendment. I beg to move.

Photo of Baroness O'Neill of Bengarve Baroness O'Neill of Bengarve Crossbench 7:00 pm, 9th January 2017

My Lords, I should like to ask the noble Lord, Lord Stevenson, what meaning is intended by,

“primarily located in the United Kingdom”.

There is a large number of examples across the globe of franchised campuses, sometimes franchised by extremely reputable universities in this country and in the United States but operating in other countries. Is it a matter of where the majority of their students are in the world, where the governing body is or where the financial control is? I feel that some clarification may be needed.

Photo of Lord Willetts Lord Willetts Conservative

My Lords, perhaps I may put three questions to the noble Lord, Lord Stevenson, about this proposed new clause. First, there is a classic model of a university—a kind of trusteeship model—in which the university has no interest in profit, it is located in a particular place, and its academic staff and the people running it at any one time wish to enhance it and pass it on to the next generation in roughly the same form. That is a completely noble and understandable model of a university and it is what most British universities are like. However, it is not the only form of universities. There are enterprise universities, global chains of universities and for-profit chains of universities.

Personally, I rather regret the fact that there is not a single British-based global chain of universities, as that is probably the only way in which we will meet the surge in demand for higher education around the world. Organisations such as Amity and Laureate meet this demand but no British organisation does so. Pearson College perhaps comes closest to the model but it is not the same. The amendment seems to propose a kind of anti-globalisation measure. If MIT or an American chain wanted to set up a university in Britain, we would not allow that. If an organisation is not located primarily in the United Kingdom, it does not count.

My second point concerns the not-for-profit stipulation in the proposed new clause. It is very important that a higher education institution and a university have very high academic principles. Personally, I do not think that we should require that they should not be for-profit organisations, given that we know that if you really want to provide higher education on a large scale and grow rapidly, some combination of commercial management and access to commercial capital markets is probably the way to do it. Again, the amendment takes a view about what a university is and eliminates a model. It is a model that barely exists in the UK, although we now have some examples of it, and it is a pity that the amendment tries to stop the process of creating enterprising universities alongside trusteeship universities.

My third point concerns the assertion:

“UK universities are public bodies”.

There is a very attractive rhetoric about the public value of universities, and they do indeed contribute to society in the way that is described here. If, through legislation, we define them as public bodies, we are no longer simply making an attractive rhetorical point about their public purpose; I presume that we are saying something real about their status. We went through this very issue only in the past few years with FE colleges, which were defined as part of the public sector. When people realised what that meant—the colleges being subject to public expenditure controls and borrowing counting as part of the PSBR—even some of the people who rather liked the idea that these were public bodies ran away from the implications. Are we really saying that we think that universities are part of the public sector and subject to the rules and constraints of being in the public sector? You could argue that one reason why our universities have done rather well is that they are not part of the public sector. If this is to be anything other than rhetoric, I assume it means that we think that in future universities should be part of the public sector. Therefore, we are invited to consider a future where universities are not part of global chains and not allowed to make a profit, and, instead, we are going to define them as part of the public sector. Sadly, I do not think that that is the future of higher education in this country.

Photo of Baroness Cohen of Pimlico Baroness Cohen of Pimlico Labour

Perhaps I may add to my earlier remarks. This proposed new clause is absolute anathema to those of us who are chancellors of substantial private universities set up under the 2004 legislation and regulated to the hilt. My organisation, BPP, has 20,000 students, we have 5,000 to 6,000 undergraduates and we make a profit. We charge £5,000 a year, which is very much less than £9,000 a year, for a three-year degree, and £6,000 a year for a two-year degree. We have part-time degrees all over the place and we offer degree-awarding apprenticeships. We are fairly specialised. We stick within the general field of law and business, although we have just branched out into nursing and medicine—so tomorrow the world.

However, none of that is envisaged in the clause produced by my noble friend Lord Stevenson. I cannot believe that this House intends to outlaw this kind of university. Indeed, you can hardly do so because BPP was granted university status in 2013 after four heavy-duty years of regulation—and we are still heavily regulated, which we do not mind at all.

We would all be perfectly happy with the autonomy clause. For BPP, autonomy is guaranteed by a very tough academic council. You try telling the academic council what to do. That is just impossible—and occasionally it frustrates things that the management would like to do.

Therefore, we really do have to rethink this and, as my noble friend said, bottom out what we mean by “for-profit universities”. I cannot believe that BPP is the only organisation that would be affected by this proposal, yet it is the only one of any size that I can describe. Further on in the debate I will want to emphasise that we went through four years of heavy-duty regulation to get there. To be honest, that is about what it took to convert us from a first-class, long-established training establishment to something that had proper academic qualifications and worked as a university. Therefore, I suggest that we look very carefully at probationary degree-awarding powers. I feel equally strongly about the idea of outlawing private sector universities. There would be one set of things called UK universities, which would be the gold standard, and then there would be the rest of us. What would that say about the 2004 legislation—or indeed about the future of universities in this country? We will have to think about this rather carefully.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Deputy Chairman of Committees

My Lords, I added my name to this amendment on the basis that it seemed to contain some things that were very worthy of discussion. As we have heard, this is obviously a rather controversial area, but it gives us another chance to look closely at what we understand by universities and at what characteristics in them we value.

There is much to support the ongoing role of the Privy Council in the establishment of universities, providing as it does impartiality, expertise and universal standing in the awarding of royal charters. This clause would also allow for Acts of Parliament—but, again, it is open to debate as to whether there should be other sources of authority. There is a general anxiety that there should be authoritative powers to set up new universities because there is a concern that the Bill as it stands seems to give a fairly free hand for new universities to be set up without necessarily the standards that we have all grown accustomed to.

The other amendments in this group to which I have added my name are all to do with autonomy, which we discussed at great length in the debate on Amendment 1. The success of universities depends on their ability to take their own decisions, so that they can be flexible and responsible to the environment in which they are working and decide for themselves on courses, staffing and admissions. The Bill as drafted includes a number of areas where a future regime could seek to intervene in matters that are for individual institutions. Autonomy has been recognised as providing a key competitive advantage and, indeed, has been identified as a critical factor in making the UK the top performer in the efficiency and effectiveness of public spending in tertiary education. These amendments would enshrine university autonomy in the Bill.

We welcome the Government’s amendment that states:

“Guidance framed by reference to a particular course of study must not guide the OfS to perform a function in a way which prohibits or requires the provision of a particular course of study”.

This addresses concerns about the Government directing individual institutions on which courses they can open or close. However, autonomy is such a fundamental principle of the UK higher education system that we would want the Bill to go further. The amendments in this group enshrine that.

Photo of Lord Kerslake Lord Kerslake Crossbench

My Lords, I will speak in support of Amendment 65 and give my general support to the other amendments in the group. I first declare my interest as chair of Sheffield Hallam University’s board of governors.

Free institutions are a fundamental part of a truly democratic society. We sadly know that simply having the power to vote is not in itself a guarantee of a democratic and free society—you need only to look at Russia to see an example of that. For me, the issue of free institutions is not simply about the benefit to the institution itself but is fundamental to an open society. That is true of a free press but, in my view, it is equally true of free universities. This has been a fundamental tenet of thinking for a long time. Indeed, there is unanimous agreement across all parties about the issue of institutional autonomy.

The question therefore is: why does the issue arise now? I am afraid that it arises precisely because of the Bill. The noble Lord, Lord Storey, put it well when he said that the Bill itself has raised concerns and questions about institutional autonomy. Yet we would all sign up to the freedom of universities to decide which courses they run, which staff they employ and which students they choose to admit or not admit.

The very particular concern goes to the powers given to the Secretary of State and to the new Office for Students. Others have spoken on this at length and I will not repeat that. However, I will cite three examples that concern me. First, the threshold for the OfS to undertake action against a university is if it appears to the OfS—I emphasise “appears”—that it has breached the conditions of its registration. Surely that is too broad a basis on which to intervene. Secondly, the Bill gives the OfS the power to search and enter the premises of an HE provider registered with it, subject to a court order. Surely that should be limited to situations where there is a concern about fraud or severe financial mismanagement. It is too open at the moment.

Thirdly, the Bill allows the Secretary of State to frame the guidance given to the OfS by reference to particular courses. As this House will know, that contrasts sharply with the current legislation—the 1992 Act—in which the Secretary of State is specifically forbidden from setting guidance to HEFCE in this way. Those are three very specific examples of why this Bill causes concern.

I should say straightaway that I have no sense that Ministers are seeking to undermine institutional autonomy. I absolutely accept their assurances that that is not their intent. However, the problem is that that is the effect of the Bill, even if it is not their intent—so we have to address this issue. We cannot give powers to a Government or a government body on the basis that future Ministers will always use those powers well and wisely. We have to be more circumspect than that.

In many ways, my amendment is a simple one, which I really hope Ministers do not object to. It sets out a duty on the Secretary of State and the OfS, when issuing guidance and directions, to uphold the principle of institutional autonomy in the exercise of their powers—very simple. In the amendment, I have defined “institutional autonomy”, but I am perfectly open to alternative wording that might do the same thing. The noble Lord, Lord Willetts, put the point very well that this is an obligation on the Secretary of State and the OfS, not on universities themselves. This is about how the duties of government, if you like, are exercised—and limiting those duties in a way that can be tested in the courts if needed.

We will come later in the Bill to amendments that are specifically about the powers that the Secretary of State and the OfS will be given. I am not suggesting that this amendment alone is enough to address the issue of institutional autonomy. However, in the meantime, it will provide a simple but important safeguard for the way that those duties are exercised. I sincerely hope that the Minister will accept the amendment—or, alternatively, undertake to come back with a very similar amendment when we get to Report. If that is not forthcoming, I think we will return to this issue. It is crucial for this House. Fundamentally, we are at risk of carelessly undermining a vital freedom in this country. We must guard against that very carefully.

Photo of Baroness Deech Baroness Deech Crossbench 7:15 pm, 9th January 2017

My Lords, I will speak in support of Amendment 65 in the name of my noble friend Lord Kerslake. The most relevant interest I have to declare is that I was the first Independent Adjudicator for Higher Education. I dealt with student complaints, which gave me a great deal of insight into what was going on.

Twenty-nine years have passed since the late Lord JenkinsRoy Jenkins, the chancellors’ chancellor—secured an amendment to the Education Reform Act 1988. That Act ended the tenure that had been enjoyed by British academics. His amendment protected in law the freedom of academics to question and test received wisdom and to put forward new ideas and controversial or unpopular opinions without placing themselves in jeopardy of losing their jobs or the privileges they may have at their institution. That is repeated in the second half of the amendment being moved this evening, which is directed towards the OfS and the Secretary of State.

Why is it necessary to draw attention to that principle again and to re-enact it? The answer lies in the width of the risk presented in the Bill to the independence of UK higher education and in the amount of power granted to the Secretary of State and the OfS—so much more extensive than in the 1988 Act. Staff have to be free to criticise without fear the opinions of their colleagues and government policy and to publish without fear of reprisal through the closing of departments at the behest of the OfS. In later amendments to be debated in a few days’ time, we will return to the freedom of speech that universities should be securing. However, this amendment is directed, in an overarching way, to the structure that will govern our universities in future.

The Bill would allow untrammelled direction from the Secretary of State for research themes and the appointment of individual council chairs. That could, for short-term gains, limit the scope of the UK’s research functions and its innovation. When my husband was a young scientist in the 1960s, he worked for years on a strange, new and apparently useless but fascinating invention: the laser. We know now how that turned out and how it might have been nipped in the bud had there been in place an OfS regime at the time. The proposed UKRI—the new all in one—will reduce funding routes and may impact on the variety of research that is funded. If plurality of funding is diminished, the risk of taking the wrong decision is magnified, the decision process will be narrower and the diversity of perspective reduced.

We have proof of how things can go wrong: the binary line between universities under the UGC and polytechnics under local authority control and the placing of them in one funding pot; the introduction of central regulation and the auditing of teaching and research; the subordination of academic planning to deep financial controls and the increases in staff workloads despite what has been said earlier this evening—because one hour of teaching may well represent days of research, days of marking, days of seeing students, and days of working in the library and on committees. Indeed, the pressure to research that has been dominant up to now and that was brought in by the Government is responsible for the fact that people now think that teaching is not getting all the attention that it should. What the Bill is trying to do—but should not do in too rigid a way—is swing that pendulum back towards good teaching for the students.

Now we have a sad situation. In the guise of efficiency gains, so much has been lost and cut—and now the miserable replacement of grants with loans to cover living costs will knock all hopes of social mobility on the head. The amendment does no more than keep UK university regulation in line with domestic and international human rights law. The amendment is embedding freedom of thought, conscience, opinion, expression, association and assembly—familiar terms from our European and national human rights legislation. Academic freedom requires freedom from discrimination and harassment and prejudice. It is inextricably bound up with freedom of speech. It also means proper whistleblowing procedures and collegial decision-making, with academic excellence at its heart.

It also involves adherence to the principle of the universality of science—the freedom to share and carry out research without illegitimate hindrance based on irrelevant discrimination. No group of people should be excluded from scientific enterprise under this principle for reasons extraneous to the science itself—so the European Union would be in breach of that principle of the universality of science were it to place barriers in the way of contributions of UK scientists to global research, and vice versa. Of course, no university should discriminate against or boycott the scientists of any one nation. There is everything to be gained from this amendment and nothing to lose. I urge the Government to accept it.

Photo of Lord Hope of Craighead Lord Hope of Craighead Convenor of the Crossbench Peers

My Lords, I just add a few brief words in support of the amendment of the noble Lord, Lord Kerslake. I declare an interest as a former chancellor of the University of Strathclyde, although I do not think that his amendment would extend to Scotland for the reason that the noble Lord, Lord Stevenson of Balmacara, mentioned. In that connection, I should point out that since Clause 117 makes it clear that the Bill extends to Wales as well as England, it may be that the noble Lord, Lord Kerslake, should extend his amendment to cover Wales as well, because I am not sure that there is any difference between Welsh institutions and English institutions for this purpose.

That aside, I commend the way in which the amendment is crafted, particularly the first paragraph because, as it was pointed out, it is directed to the duties to be performed by the Secretary of State. One of the problems revealed by the earlier debate is that of universities being required to do certain things that might attract all sorts of extremely unwelcome litigation. However, this amendment is directed where it should be directed and for that reason, as well as all the other points made by the noble Lord and by the noble Baroness, Lady Deech, I hope the Minister will take it very seriously.

Photo of Lord Winston Lord Winston Labour

My Lords, I am wedged between two lawyers. I absolutely support the amendment spoken to by the noble Lord, Lord Kerslake. One thing concerns me and it may concern the noble Baroness, Lady Deech, as well. The rise of racist, anti-Muslim and anti-Jewish behaviour in universities in recent years causes us great concern. I wonder whether the phrase,

“the freedom of academic staff within the law”,

will be adequate to control some of these outbursts, which are not necessarily exactly illegal but are certainly very discreditable and dangerous for universities. Would the noble Lord like to address that?

Photo of Baroness Deech Baroness Deech Crossbench

I take it upon myself to answer the noble Lord. Amendment 469, when we get to it, deals with precisely that point.

Photo of Baroness Kennedy of The Shaws Baroness Kennedy of The Shaws Chair, EU Justice Sub-Committee

My Lords, I, too, support the noble Lord, Lord Kerslake, in his Amendment 65. There should be such a duty on the Secretary of State, although it makes me think about the duty on the Lord Chancellor to protect the independence of the judiciary. We do not see that being lived up to in the way that we would like, so just placing duties on Secretaries of State does not always deliver the outcomes that we want. But I certainly support the noble Lord, Lord Kerslake.

I want to give some comfort to my noble friend Lord Stevenson because I share many of the concerns expressed in his amendment. I am not in favour of for-profit universities: I should make that very clear. The ideal of the university is so precious and important to our nation. We should ask ourselves this question: where is a world-class university that is for-profit? The answer is that there is not one—not Harvard, Yale, Oxford or Cambridge.

Photo of Baroness Kennedy of The Shaws Baroness Kennedy of The Shaws Chair, EU Justice Sub-Committee

MIT has some provisions in its statutes that ensure that the money is fed back into MIT for research at the highest level. If that were part of the standards that we expect of the new private universities, one might feel rather differently. But my concern is that, if you speak to Americans in the field of education and higher education in particular, they look with envious eyes. Yes, they have grand universities, wonderful new liberal arts colleges and some great state universities, but they feel that in Britain we have, across the board, a much higher standard of university than can be seen in parts of the United States.

One thing that concerns them is that they went down this road themselves some 10 years ago. They let the business world bring all its entrepreneurship into the university world and by God, they are regretting it now. They have started having scandals. It has even reached our ears about Trump University, but only because Mr Trump’s name has of course become rather more familiar for other reasons. He was sued by students on the basis that the university set itself up claiming that it would deliver education in the world of business, but in fact the students were absolutely short-changed and exploited. Many of them were ordinary working folk who had thought that it would advance their careers, and in fact they were taken to the cleaners.

A pay-off is now taking place, but there are other cases in the pipeline. We should be very wary about where this will take us. There is the idea that universities could set up without any probationary period to show that they are acting in a proper way. My noble friend Lord Stevenson suggests in Amendment 2 that there should be a period of four years. I certainly agree that there should be a serious period of time to see whether these new institutions will be up to the standard we want this country to be recognised for.

I rather like the idea that “UK universities” will become the kitemark for institutions that follow the traditional pattern, but I am afraid that I must say to the noble Lord, Lord Willetts, that the pursuit of modernity has to be approached with some caution. I say this particularly when remembering so well the New Labour years. I regret the mistake made by New Labour in its enthusiasm for markets. I have great enthusiasm for markets and I like all aspects of them in their right place, but I do not like their consolidating interests such as the utilities. I do not like markets where you do not get real competition, and I certainly do not like their entering areas of our public life like education and health, where the result is in fact a diminution of investment. So I am very concerned about what the Bill means.

I appreciate what the noble Lord, Lord Hodgson, said earlier about his children and their friends going to universities where they felt rather short-changed because they did not get the teaching they expected. I am happy that the Government are seeking to pursue good teaching by creating the right kind of framework, and I have no objection to some of the things proposed in the Bill. However, I am concerned about autonomy and the potential for interference by Government and bodies that are basically a part of Government. I am also really concerned about this business of introducing into the sector profit-making universities which basically will be a milch cow for hedge funders and the like. I have no hesitation in saying that I am concerned about us going down this road, and I support the attempt by my noble friend Lord Stevenson to find a way through that will reconcile the mistake that Labour made when it said that profit-making universities could be brought into the system. I do not think we will relish that in the years to come.

Photo of Lord Smith of Finsbury Lord Smith of Finsbury Non-affiliated 7:30 pm, 9th January 2017

My Lords, I rise very briefly to support the amendment tabled by my noble friend Lord Kerslake. The noble Baroness is right to say that placing a duty on Secretaries of State does not necessarily mean that you get the right outcome, but it helps, and this amendment would certainly help. It also sits rather well alongside the new clause we passed earlier today. That was a declaratory provision which affects the title of “university”, and if anything it places a duty on universities. However, this amendment elegantly places a duty on the Secretary of State and on the OfS in exercising the very considerable powers the Bill is likely to give them. It would be sensible to accept it because the autonomy of higher education institutions is so massively important that the more belts and braces we have in the Bill to ensure that that autonomy is safeguarded, the better.

Photo of Lord Bilimoria Lord Bilimoria Crossbench

My Lords, I rise to support the amendment tabled by my noble friend Lord Kerslake on institutional autonomy. In passing the new clause earlier today, we have reflected at the beginning of the Bill the spirit of what a university is all about. Although many of us might disagree with the wording of the new clause, its spirit and essence are in place and at its crux is the autonomy of universities. As Chancellor of the University of Birmingham, before Second Reading I consulted our Vice-Chancellor, Sir David Eastwood, who is one of the most respected figures in higher education in this country and probably in the world, frankly. He is also a former head of HEFCE. When I asked him about the Bill, he said, “The UK has a co-regulatory approach that has maintained the autonomy of universities and relies on their own governance arrangements where appropriate, allowing universities such as Birmingham to be flexible and responsive to the needs of their students and employers, including shaping the curriculum in the light of the latest research findings, to think long term about global challenges and remain free from direct political interference. It is vital that that cornerstone of UK higher education is preserved throughout the Bill”. That is absolutely crucial to the whole Bill, and this amendment puts autonomy at the heart of everything.

When Universities UK was consulted about this, it said that in order to be successful, universities need to take their own decisions and indeed it used David Eastwood’s words: “flexible”, “responsive” and “autonomy”. They provide the key competitive advantage of our universities. Who is the number one competitor in the world when it comes to universities? We have the top two institutions, along with the United States of America. Later this week I will be at Harvard Business School, which I have been attending for 15 years because I am an alumnus. Harvard is the wealthiest university in the world by miles. On Saturday I will see new facilities that did not exist a year ago which are the result of $1 billion of investment. The university is very wealthy and privately funded, but there is a huge distinction between state universities in the United States and institutions like Harvard. We have a wonderful mix that gives us the best of both worlds. We have universities that receive state funding but yet have always been autonomous and can do their own thing in their best interests. We must not jeopardise that, so we should support this amendment.

Photo of Viscount Hanworth Viscount Hanworth Labour

My Lords, I wish to speak to my own Amendment, Amendment 66, and in doing so I declare my interests as I did at Second Reading. In common with many commentators, I fear that the Bill gives unprecedented powers to the Secretary of State to interfere directly in the academic business of universities and providers of higher education. As it stands, the Bill will allow the Minister to give direct instructions to the Office for Students and it will allow that office in turn to convey specific instructions to universities and other providers. A separation of powers is required to prevent any agency acting in a manner that exceeds its competence or expertise and infringes on other domains for which independence should be guaranteed.

The Office for Students should be an executive body and not be allowed in its own right to pass judgment on academic standards. An independent body of experts should be relied on to assess the quality of the provision of higher education and to judge the standards of accreditation. My proposed amendment would clearly limit the power of the Secretary of State to give specific instructions to universities. The Bill already proposes that any guidance given by the Minister must apply to the providers of higher education in general, but it would also allow the Minister to declare, for example, that, “the course in epidemiology at the University of Middleshire does not conform to the guidelines issued by the Secretary of State under Section 3 of the Higher Education and Research Act 2017”. In other words, the Minister could refer to a specific university relative to the general guidelines that have been enunciated. My amendment would preclude the Minister from making such statements in respect of a specific institution. It should be for the Office for Students to make observations about the conformity of courses with guidelines and standards, and it should be allowed to do so only on the advice of a designated body of experts. This point will be reinforced in later amendments that I intend to bring forward.

Photo of Baroness Wolf of Dulwich Baroness Wolf of Dulwich Crossbench

My Lords, I rise to speak to Amendments 55, 62, 72, 426 and 432, tabled in my name and those of the noble Baronesses, Lady Garden of Frognal and Lady Brown of Cambridge, and I will be very brief. I want to say how excellent is the amendment tabled by my noble friend Lord Kerslake because it encapsulates all our concerns about autonomy. I also agree with the eloquent speeches made by my noble friends Lord Kerslake and Lady Deech.

Importantly, these amendments deal with the whole of higher education, not just with universities. We will probably say this on a number of occasions in the weeks ahead, but we are in a new world in which higher and tertiary education is involving more and more of our citizens. Allowing institutions to decide which courses they teach and to be in control of how they deal with their academic staff and their students is absolutely critical to their ability to maintain standards and retain the autonomy that has served us very well.

Photo of Baroness Blackstone Baroness Blackstone Labour

My Lords, I, too, strongly support the amendment in the name of the noble Lord, Lord Kerslake, which is extremely well worded and very appropriate for the legislation in front of us. I am absolutely convinced that the current Minister responsible for higher education will respect the institutional autonomy of universities, but some future Minister may not. As a former Minister responsible for higher and further education, I was rightly constrained by the 1988 Act and what Lord Jenkins managed to do with his amendment. There were sometimes times when I did not agree with what was happening, but I was unable to interfere, which would have been wholly inappropriate. That is an extremely good thing.

There is a second reason why I support the noble Lord’s amendment. I, along with Jo Ritzen, a very distinguished former Dutch Minister of Higher Education, and two other former European Education Ministers—Eduardo Grilo from Portugal and the former Hungarian Education Minister—embarked on a project led by Jo Ritzen entitled Empower European Universities. It looked at the position of universities across Europe—north, south, east and west—in particular at some of the problems some universities in eastern Europe experience, as in southern Europe. There was an incredible amount of state control over what these institutions could do. One of the outcomes of that is you get no innovation. Therefore, one of the reasons why we should promote autonomy in our higher education institutions is that we should be concerned to make sure universities do not stand still, that they take into account a changed environment and that they are innovative. By being autonomous they are far more likely to be innovative than if they are controlled by Governments, as we saw from the project we did across Europe.

Photo of Lord Lucas Lord Lucas Conservative

My Lords, I join those who like Amendment 65, as my noble friend Lord Willetts predicted I would. I join him in saying that I do not share the fears expressed in Amendment 2. To take the example of BPP, which is the company that trained me as an accountant, it has been going a long time. It is the first among equals of a group of companies that have grown up providing professional training services to some very demanding customers. It has therefore developed an ethos of providing very good courses. It also sponsors women’s football, which I am grateful for. It has a broad and very encouraging ethos to it, which thoroughly justifies its status.

We have to be very careful about the quality of what is provided to students. Noble Lords will no doubt remember Ian Livingstone’s Next Gen report on training for the computer games industry. It found that 85% of courses provided by British universities were not up to scratch. We need to do a lot in the Bill and otherwise to provide students with better information about the quality of their courses, but the people who can demonstrate the best track record in this, who have the best sets of information and who have the most demanding customers are these commercial training companies and those who have come up by that route. We should not be frightened in any way by the fact that they are for profit. Despite that, they have proved that they can provide excellent education.

Photo of Lord Judd Lord Judd Labour

My Lords, it seems absolutely logical that if we believe that the considerations in the amendments before us are vital to the carat gold, the quality and the value of our higher education system, let alone its international standing and reputation, someone somewhere has to have specific responsibility for ensuring that everything done is to protect that role. We have seen in recent weeks a very interesting comparison. Our system of judges came under disgraceful and unprecedented attack in the media. Largely everybody in this House felt that it is a duty of Ministers to protect that system to the hilt. It is therefore absolutely self-evident that, to guarantee that what we want to happen will be protected, the responsibility of the Minister must be spelled out in the Bill.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench 7:45 pm, 9th January 2017

My Lords, when the noble Viscount winds up will he address a question I will put to him in supporting my noble friend Lord Kerslake’s Amendment 65 and Amendment 71 in the name of the noble Baroness, Lady Garden, which are about autonomy? The Government say very firmly, which I do not dispute, that they support the idea of institutional autonomy, but will the noble Viscount address how that squares with the consultation the Home Secretary is currently undertaking, which seems to me, on the face of it, to be designed possibly to interfere with the right of universities to decide what courses they will offer and what subjects they will teach? It would be a very serious intervention if the Government were, in granting visas to overseas students, to take account of restrictive views of their own about which courses universities ought to be teaching. Will he address that? It is germane to Amendments 65 and 71.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

My Lords, so far as the concepts which are in issue in these amendments are concerned, I am entirely in favour of the autonomy of our higher education institutions, but autonomy does not mean they can do what they like. There is a severe restriction on that autonomy in the provisions for academic freedom, because they prevent universities from trenching on the freedom of their academic staff in the way described.

This question of academic freedom is grounded on my heart. As a new Lord Chancellor I had been given the rather unpleasant responsibility of taking the universities section of the 1988 Bill through this House. There were about as many chancellors of universities then in the House as there are now. It was rather a difficult task. One of the things I was determined to have was protection for academic freedom in view of the provisions relating to university tenure. I therefore promoted in government an amendment to deal with academic freedom. When the Bill came to Committee, at a very early stage Lord Jenkins decided he had a good definition of academic freedom, which he put to the vote. From my point of view, it had the great effect of not requiring further consultation in the Government.

Academic freedom became a statutory provision then and remains, but it is an innovation on the complete idea of autonomy. One of the other things we have to remember relating to autonomy is a matter raised in the debate this afternoon on the governance of universities and higher education establishments. The form of the governance can be extremely important.

I was involved long ago in litigation about the governance of Scottish universities where they have a rector. For the first time in the history of Scottish universities, a certain student was nominated to be a rector of Edinburgh University—it does not take a lot of guessing to know who that was. He graduated to be the rector of Edinburgh University notwithstanding the judicial proceedings and later became the Prime Minister, so he had excellent preparation for that office. It has therefore to be borne in mind that autonomy does not necessarily mean that you can do exactly what you like, but it means that there is considerable freedom in how you do what you are there to do.

One issue raised by the first amendment in the name of the noble Lord, Lord Stevenson, was that of profit. As he said, every institution that wants to be ongoing has to ensure that its income is at least somewhat greater than its expenditure—as Mr Micawber pointed out to us long ago. Every institution that is a university or a higher education establishment has to have that. Why should it make all the difference that the people who set that establishment up want a return on the capital that they put into it? I agree with the noble Baroness who said that exploitation is quite wrong—nobody, I think, could dispute that—but it does not necessarily follow that because you run an establishment for profit you will exploit those who come to it. In a free-market situation, which is what we had until fees were controlled by the Government, universities were free to charge what they thought appropriate. I imagine that if a university is fee-paying, as is one of the institutions of which the noble Baroness, Lady Cohen, is chancellor, it must have some effect on the fees that are charged to the students.

I think that the law is that the purpose of education is a charitable one, but it does not follow that every institution set up as educational is itself a charity, because to be a charity you have to be established for charitable purposes only. One purpose that is not charitable is distributing profits to those who set the establishment up, so that university and any others that might follow in the same pattern would not be charities. I do not think that that matters too much; what matters is whether you can guarantee the quality of the teaching and research—if it does research—that such an establishment can bring forward. I do not feel that the provision that was made by a previous Government is necessarily incorrect. We have had a good example of what such an establishment can achieve. I think I am right in saying—I am depending very much on my recollection—that at least some of the examining boards are now set up by organisations that are for profit.

Protection from government of the autonomy of an institution strikes me as fundamental. I do not think that the Bill infringes on that directly, but I can see the advantage of making sure by way of negative provisions that it does not happen in the future, because we never know who may come along after the present Government. Proper protection for autonomy strikes me as highly appropriate, although there may be some dispute with my noble friend the Minister about the extent to which it is necessary. Such principles seem fundamental and I hope that they will be followed in consideration of these amendments and many later amendments.

Photo of Baroness Brinton Baroness Brinton Party Chair, Liberal Democrats

My Lords, the autonomy outlined in both this and the previous debate has been one of the guiding stars of our universities in this country for hundreds of years. The balance in their relationship with either the Government of the day or other local interests has been vital. That is why I support the amendment in the name of the noble Lord, Lord Kerslake.

The noble and learned Lord, Lord Mackay, spoke about profit and not-for-profit and why whether a university or institution might be a charity was irrelevant. I spent more than a decade as a Cambridge college bursar and I know many other finance directors of universities. Getting into a debate about charity and about trading arms ends up being a debate about VAT. That is not the business of this House today, but I could bore your Lordships in some detail on that. It is available to most large charities to find mechanisms that allow them to trade, but the big difference is that they then reinvest profits from any trading arm into the charity. That is why I prefer the word “surplus” to “profit”. That has been the guiding star of our university sector for some time.

I was rather taken with the idea put forward by the noble Baroness, Lady Cohen, of a probationary period. I hope your Lordships will forgive me for coming back to my own experience, but 20 years ago this year, Lucy Cavendish College achieved full college status with its own statutes—which went through the Privy Council—and part of my role in the preceding five years was to ready the college for that and to prove that the college would be here in a hundred years’ time. That included demonstrating the standards that everybody has talked about—making sure that the base finances were solid enough and that access to students and provision of courses met the demands of Cambridge University. The problem for Lucy Cavendish was that it was a 30-year probationary period, but we are talking about the University of Cambridge and perhaps time moves slightly more slowly there than for others. However, the key lesson that the college learned as we prepared for getting our own autonomy was that we had to be able to demonstrate a whole range of standards that would ensure that provision, and then we could accept the responsibilities that come with the autonomy that the noble and learned Lord, Lord Mackay, outlined.

I think that the reason that this debate and the debate on the previous amendment have gone on so long is that there is a great fear that in the Bill as outlined, such autonomy is undermined. That is the debate that we need during the passage of this Bill in order to negotiate our way through difficult words such as public and private. I have a slight concern—I would never have described myself at university as being part of the public, but I accept that there was a duty towards the public. It is that language that we need to look at.

Photo of Baroness Cohen of Pimlico Baroness Cohen of Pimlico Labour

My Lords, I would not have spoken again but for the fact that I should have known the noble Baroness, Lady Brinton, had been so heavily involved with Lucy Cavendish, of which I am an honorary fellow and, I hope, partly responsible for its financial stability. One thing is being missed out of this debate on autonomy—it is my fault because I have not mentioned it: we find ourselves heavily constrained by the role of the academic council. We also find the role of our owners and financiers considerably stood off by the role of the academic council. The academic council is a great defence against anybody trying to tell us do things—not that our owners do that. It stands firm. I am sure that this must be true for other universities. It is an important part of autonomy. We do not seem to have discussed academic councils. Perhaps they will be mentioned later in the Bill.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Department for Education) (Higher Education) 8:00 pm, 9th January 2017

My Lords, I am grateful for the opportunity to speak to this important group of amendments. Our universities are a key part of national life and contribute significantly to the public good and economic prosperity. I fully understand that protecting the sector’s reputation is at the heart of many of the amendments. I assure the House that the Government’s reforms are designed to ensure exactly that and that, like now, only high-quality providers will be able to enter the market, award their own degrees and obtain university title. Once again, I assure noble Lords that the Government are determined to protect institutional autonomy in the Bill every bit as much as the current legislative framework has protected it for the past quarter of a century or so, and I will say a little more about that later.

First, I will address the new clause in Amendment 2. The Government agree that our universities should be expected to have high standards and to do more than simply teach courses. They benefit the communities they are based in, and there is a strong correlation between opening universities and significantly increased economic growth. However, we believe that what matters is this contribution, not the form of the institution. Universities are private, autonomous bodies, not public bodies as such, although of course they contribute greatly to the public good. They therefore come in a variety of forms, as has been discussed, and we value this diversity immensely, as I mentioned in the first debate. We would not wish to exclude excellent institutions such as the University of Law from having full university status simply because it is for-profit. My noble and learned friend Lord Mackay asked why profit is so vilified; he makes a fair point.

Our reforms do not seek to overhaul the current framework for obtaining degree-awarding powers or university title in any major way. Currently any provider, regardless of its corporate form or background, can obtain degree-awarding powers if it passes rigorous scrutiny. Only providers with degree-awarding powers can apply for university title. Again, they need to meet specific criteria but these are not tied to corporate form. The proposed new clause would in effect introduce a two-tier system of universities or degree-awarding providers, when what we are trying to achieve is a more level playing field. It would be a step back in time, rather than further developing a well-functioning system.

To ensure that only high-quality providers can obtain degree-awarding powers, we are planning to keep a track record requirement of three years for all those that seek full degree-awarding powers. However, in parallel, we are also planning to introduce, as has been mentioned, a new route of obtaining degree-awarding powers on a probationary basis. This would mean that high-quality providers that have the potential to achieve full degree-awarding powers can be permitted to award degrees in their own name from the start—crucially, subject to close supervision. As the noble Baronesses, Lady Cohen and Lady Brinton, mentioned, under the current regime new and innovative providers have to wait until they have developed a track record lasting several years before operating as degree-awarding bodies in their own right, no matter how good their offer is or how much academic expertise they have. This stifles innovation, and the new clause would further entrench this system of new providers usually having to rely on incumbents.

However, I assure noble Lords that quality is still paramount. As we set out in one of the published factsheets to accompany the Bill on market entry and quality assurance, in order to be able to access time-limited probationary degree-awarding powers, providers will also need to pass a new and specific test for probationary degree-awarding powers. I realise from the tone of their remarks that this may not necessarily please the noble Baronesses, Lady Cohen and Lady Brinton, but we believe that this is important as a quality check. We absolutely do not intend a complete overhaul of the system of degree-awarding powers. We fully intend that the current criteria will continue to exist in a broadly similar form.

Returning to institutional autonomy, noble Lords will know that, while this concept has been central to our higher education system for many years, the Further and Higher Education Act 1992, which establishes the current legislative framework, does not explicitly mention institutional autonomy. The Bill goes considerably further by placing in legislation explicit new protections for the freedom of English higher education providers. Those protections apply to all the ways in which the Secretary of State may influence the Office for Students: guidance, conditions of grant, and directions. In each case, the Bill places a statutory duty on the Secretary of State to,

“have regard to the need to protect academic freedom … of English higher education providers”.

We strengthened this further on Report in the other place.

I assure noble Lords that there is no disagreement, as I see it, over the importance that we place on institutional autonomy and academic freedom. We have sought to protect these fundamental principles in the Bill. I agree that they are the cornerstone, as many noble Lords have said this afternoon, of our higher education system’s success. We have heard considered and well-informed debate—more so on this group of amendments—and I am grateful for the views that have been put forward, but we believe that the Bill enshrines and protects academic freedom. Having said that, I recognise the strength of feeling that has been expressed about institutional autonomy. I continue to listen and reflect on views from noble Lords and will reflect further on this issue. I hope that gives some reassurance to the concerns raised on this issue. These provisions represent the most comprehensive suite of explicit statutory protections for institutional autonomy ever contained in a single Bill.

Amendment 55, spoken to by the noble Lord, Lord Kerslake, places a duty on the OfS to have regard to,

“the need to act in a manner compatible with the principle of institutional autonomy”,

when it discharges its statutory functions. I understand and sympathise with the motivation of the amendment, but in the light of the new and additional protections I have just described, the Government do not feel that a statutory duty on the OfS is appropriate. I reassure noble Lords that the existing provisions in the Bill already require that academic freedom and institutional autonomy are taken into account by both the OfS and the Secretary of State. As such, the amendments are unnecessary.

The noble Lord, Lord Kerslake, asked whether it is right that the Office for Students can intervene “if it appears” that registration conditions have been breached. Intervention based on “if it appears” is standard legislative drafting and is underpinned by the usual public law considerations so that the OfS cannot act irrationally. As a public body, the OfS must at all times act reasonably and proportionately in accordance with public law when exercising its powers.

Similarly, I find myself in agreement with the main intention of the amendments relating to the Secretary of State’s powers to set conditions of grant and give directions to the OfS. But I assure noble Lords that the Bill as drafted does not leave any room for a future Secretary of State to be lackadaisical about this duty. The amendments, while well intentioned, do not add much by way of strength to the duty as it stands. As I have outlined, the Bill includes new and additional protections for institutional autonomy. I sympathise with the motivation for these amendments but I am not sure that adding a duty to have regard to institutional autonomy adds much in practice to the protections already in the Bill. I fear that the amendments may require future Secretaries of State to become rather more interventionist than they are now, guiding or directing the OfS to act in particular ways in particular cases to protect institutional autonomy.

Amendments 425 and 431 relate to the Secretary of State’s powers to set conditions of grant and give directions to the OfS. These amendments, while well intentioned, do not add much by way of strength to the duty as it stands and may risk inadvertently weakening other duties of the Secretary of State in the Bill which do not have this amended formulation.

I am entirely sympathetic to the intention behind Amendment 66, which seeks to build on existing protections within the Bill to ensure that when the Secretary of State gives guidance to the OfS, it is prevented from naming individual higher education providers. However, the restrictions on the Secretary of State already in the Bill will have the effect of preventing individual institutions being named in the Secretary of State’s guidance to OfS. Clause 2(6) requires that guidance,

“which relates to English higher education providers must apply to such providers generally or to a description of such providers”.

It is hard to conceive of a scenario where the Secretary of State could comply with these restrictions and yet name individual institutions. On that basis, I assure noble Lords that this amendment is not necessary to ensure the protections it seeks, and that we may rely on these being implicit in current drafting.

I am grateful for the thorough and thoughtful nature of Amendments 65, 71 and 165. The desire and determination of noble Lords to ensure that the Bill protects institutional autonomy is both evident and impressive—again, as we have discussed extensively today. However, I do not believe that these definitions of institutional autonomy and academic freedoms add anything substantive to the protections already enshrined within the Bill. Furthermore, as detailed in my letter to noble Lords following Second Reading, the Bill holds the Haldane principle at its core. The Government are fully committed to the fundamental tenet that funding decisions should be taken by experts in their relevant areas. The amendment risks compelling the Secretary of State to issue guidance to the OfS on issues beyond its remit, which I believe is unintended.

Amendment 165, tabled by the noble Lord, Lord Stevenson, seeks to include in the definition of institutional autonomy the right of providers,

“to constitute and govern themselves”,

as they consider appropriate. It is of course quite correct that providers have this right. However the powers of the OfS, or indeed any other body empowered by the Bill, to influence how providers constitute and govern themselves are already very limited. The public interest governance condition in Clause 14, for example, merely seeks to ensure that the governing documents of providers subject to this condition have best governance practice embedded within them. As now, the public interest principles are not intended to prescribe in any detail how providers are to be governed. We expect that they will continue to operate in tandem with sector-owned codes, such as that of the Committee of University Chairs.

Finally, Amendment 65, as put forward by the noble Lord, Lord Kerslake, would add specific protection for academic staff to speak and challenge freely. Again, there is no disagreement from the Government about the importance of this protection. However, institutions are autonomous and the Government cannot interfere in any decisions regarding academic staff, therefore only the institution itself can protect the freedom of its academics. The Bill already takes steps to ensure that this will continue to be the case by allowing the OfS to place a public interest governance condition on all registered providers, which will ensure that their internal governance must include the principle of freedom for academic staff. We therefore believe that the amendment is not needed.

The amendments that I have just spoken about—and there are quite a few—have understandable and laudable motivations, which the Government share. But on the whole they do not substantively add to the protections for institutional autonomy already contained in the Bill. In some cases, they may interfere with the OfS and UKRI’s distinct areas of responsibility, or create a risk of requiring more intervention from the Secretary of State rather than less. None the less, I will consider carefully the points that have been raised, as the Government agree that it is fundamentally important to ensure that the Bill protects institutional autonomy. The suggestions from noble Lords have been very helpful in understanding some of the concerns about this aspect of the Bill.

Amendment 73 would require providers to operate—

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench

My Lords, I think that the Minister is drawing to a close. He has not yet addressed the question I put to him about the compatibility with institutional autonomy of the consultation that is taking place about student visas for certain subjects. Will he please address that matter, because there is a genuine potential contradiction here? I am not suggesting a contradiction in his intention but it does not look to me as if the findings of that consultation, if they were turned into an attempt by the Government to tell universities which courses they could offer to overseas students, would be compatible with institutional autonomy. Can he please now respond to that?

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Department for Education) (Higher Education)

Yes, of course. I doubt that I will be able to give a response such that the noble Lord, Lord Hannay, will nod and agree that it is a full response. I will endeavour to write to him with a fuller response but the situation at the moment is that we have no plans to cap the number of genuine students who can come to the UK to study, nor to limit an institution’s ability to recruit genuine international students based on its TEF rating or any other basis. I know that the noble Lord’s question was much more detailed than that. The best thing I can do is to meet him offline and/or write a letter giving him a full answer. I am well aware that he is very exercised about this issue, as are a number of other noble Lords in this Chamber.

In future, being on the OfS register would mean that a provider is approved and recognised. Although registration is voluntary we would expect most providers, whether degree-awarding or validated, to register to have access to the various benefits that registration brings. If new providers had no choice but to operate outside the register, and thus outside effective regulatory oversight, they would be unable to access any student loans from the Student Loans Company. Students may see such providers as more risky and less attractive, thus preventing even high-quality new providers getting a foothold in the market. Let me reassure the Committee that only those which can demonstrate the potential to deliver high-quality provision will be able to register. All providers with access to student loan or public grant funding will need to continue to meet at least the current baseline financial, management, governance and quality requirements.

As the new system is firmly based on risk-based regulation, the OfS and the designated quality body will assess the risks attached to all providers that apply to be on the register, with the ability to attach specific conditions of registration to providers that are directly matched to the level of risk that a provider represents. This will allow the OfS to carefully manage the entry of new providers to the regulated sector, for example by using levers such as the imposition of student numbers. Being registered is therefore intended to be an important indication of recognition. The OfS will have the necessary tools to ensure that those registered maintain high-quality standards or face deregistration. We should expect excellence from all our universities and hold them to the same high standards, rather than focusing on their legal form or their profit or non-profit status. With that more detailed explanation, for which I do not know whether I should apologise, I ask the noble Lord, Lord Stevenson, to withdraw his amendment.

Photo of Baroness Deech Baroness Deech Crossbench 8:15 pm, 9th January 2017

Before the Minister sits down, may I take him back to his statement that there cannot be any interference by the OfS and the Government in the governance of universities because they are autonomous? However, as has often been mentioned this evening, under the 1988 Act university commissioners were sent to rip up the charters of Oxford and Cambridge colleges, and perhaps of other universities too, in the interests of ending academic tenure. Despite protests, they were rewritten. It was the Government’s will, and no amount of protestations at the time about academic freedom made any difference.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Department for Education) (Higher Education)

Let me give what I hope will be further reassurance that when the Office for Students is set up, as set out in the Bill in different clauses, academic autonomy will be exceptionally important. However, if there is a failing institution, the OfS will have the right to step in, but the steps it must take are long and quite onerous. I reassure the House that many steps have to be gone through before it goes down that route. I am sure we will have more debate about that.

Photo of Lord Kerslake Lord Kerslake Crossbench

My Lords, I express my thanks for the support that I received from all parts of the House for Amendment 65. I am very aware of the hour and will not rehearse every argument made, but I will pick up on one point, which is that this amendment is not in itself a guarantee that Ministers or the Office for Students would act properly, but it would help. This is the crucial point for me. I am disappointed with the Minister’s response. I see this as a practical, simple and necessary amendment to secure institutional autonomy. Just to be clear, the amendment states:

“The Secretary of State, in issuing guidance and directions, and the OfS, in performing its functions, have a duty to uphold the principle of institutional autonomy”.

It is hard to see any situation in which that would lead to greater intervention rather than less. In the circumstances we are in, I shall not press the amendment. I hope there will be an opportunity for further conversation, and I give notice that I will return to this issue at a later stage.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

I thank all noble Lords for their contribution to this rather extended debate. I prefaced my opening remarks by saying that this is a complicated group, and it certainly proved to be so. We have got there, but by a rather circuitous route, and I am a bit confused about some of the things that the Minister said when responding. I am sure a lot of us will want to read Hansard very carefully.

It is clear that the position that we are moving towards—it is clear to me and I am going to advance this as a thesis as I withdraw my amendment—is that we want a healthy system of higher education provision in this country. There is no doubt or dissent about that, but it is not clear who decides which institutions that are providing higher education are going to be universities and what the criteria are. The university title follows a particular process which we have discussed and we know about, but who does it? Is it Ministers or civil servants, or is there another body yet to be set up? I would like the Minister to write to us setting out very clearly the structure he has identified today. Who maintains the register? The Minister said that it will be not a statutory register but a voluntary register. I agree that the carrots and sticks are very substantial, but it is a bit of a strange decision to have a regulator—the Office for Students—that does not have a regulatory function because it is voluntary. That needs to be unpicked.

We need to know who assesses the criteria under which higher education providers get on to the register, who assesses the threshold standards for degree provision that they are obliged to have, and who assesses the quality of the degrees they subsequently grant. There are amendments about this later on, but we must also ask who regulates the body appointed as the regulator for the system. Is there another body that we do not know about? A lot of this will be answered by transparency, and I would be grateful if the Minister wrote to us about that.

I was asked three specific questions that I am not going to be able to answer, but I will record them so noble Lords know that I have them in mind. I do not understand the issue about where an institution needs to be located, but I think it is intimately connected with the points made by the noble Lord, Lord Willetts, about who gets the benefit of the subsidy and the tax provisions that are available. It would be quite inappropriate for a body to be registered as a university within the United Kingdom and to receive tax benefits if it is not also providing a public benefit. It is obviously a circular argument; we are making the same point, and we need to have that bottomed out. I do not have a solution, and my amendment would not have taken us to that point. The situation needs to be looked at again.

The trustee model has served us well. The noble Lord, Lord Willetts, was not knocking it and recognises its value, but he wanted there to be other bodies such as enterprise institutions. I would like to see the evidence for that. He has no responsibility in this respect, and it is about time he told us where he thinks all these brilliant institutions are. Comments were also made on this side about that issue. I am very sceptical about whether that would be worth while, but it is a fair point to question.

My noble friend Lady Cohen and others on our side need to resolve our differences about this issue. I am not against an institution making a profit, provided that the arrangements under which it is made are transparent. Transparency is the issue, and I am sure we will come back to it. I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

House resumed.