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Higher Education and Research Bill - Committee (6th Day)

Part of the debate – in the House of Lords at 5:30 pm on 25th January 2017.

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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) 5:30 pm, 25th January 2017

My Lords, I apologise to the Minister. I was watching a figure behind who seemed to be moving towards an upright position and therefore might speak. If he is not I will carry on.

This is an interesting amendment and I am glad that it has been raised in the form that it has. We cover a number of points every time we debate this, but here is a question that cannot be ducked. The reality is that universities have to face a number of different regulators already. Those that are charities obviously have the Charity Commission as their regulator. Then there are those that are established as companies. As we have heard, many higher education providers have the permission of the Secretary of State to use “university” in their title or, even if they do not, are subject to anything that may be required under the Companies Acts. Many will have a variety of regulators; it is not unknown to have companies that are also charities. There are also bodies that are not for profit—corporations that are subject to the Companies Acts, but in a different way from those that are set up for profit.

However, I think the main purpose was to try to untangle the relationship between the CMA—a recent entry to this area—and the universities. It is a little surprising that the CMA has entered this area rather late given that it stated recently that providers of higher education that now come within its scope are subject to the Consumer Protection from Unfair Trading Regulations 2008; the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013; the Unfair Terms in Consumer Contracts Regulations 1999, for contracts concluded prior to 1 October 2015; and Part 2 of the Consumer Rights Act 2015. That Act went through your Lordships’ House just over a year ago and included the application of consumer rights to public bodies such as institutions of higher education. It was amended during its passage through the House.

As I think is well known, the CMA has carried out a preliminary investigation into the new responsibilities that it has taken on in the last 18 months, and has obtained undertakings from more than a few universities to secure improvements to their terms and/or practices. It has written to all higher education providers, drawing the findings of the compliance review to their attention, and asking them to review and revise their practices and terms, as necessary, to ensure compliance with consumer protection law.

Where will this wave of regulatory practice, which is sweeping in with unforeseen and possibly unpleasant purposes, stop? I do not object to the CMA’s engagement or to anything that raises standards and keeps public bodies moving forward. However, there will be regulatory overload, as has been mentioned. We must be very careful to guard against that. The way most sectors operate in the event of overlapping regulators is to obtain a memorandum of understanding between the principal regulator—or in this case regulators—and the one closest to the bodies concerned. If the OfS is to be a regulator, we will need to know how this will operate in practice. It is welcome news that the Bill team is considering whether to engage more directly with the Regulators’ Code, as that would solve a lot of problems.

Before we proceed further with the Bill, we should be told exactly what the boundary between the CMA and the OfS, as envisaged, is. Indeed, it would be helpful to be informed of the boundary between the Charity Commission and the Registrar of Companies, if that is relevant. We should also probe a little further whether it is envisaged that a memorandum of understanding between these regulators will be drawn up to protect the provision we are discussing. If so, what timescale applies to that? Could that be provided by Report, at least in draft form, so that we can discuss it further?