Baroness Thornton:

Moved by Baroness Thornton

26: Clause 9, page 12, line 41, after “provider” insert “or the governing body of a constituent institution”Member’s explanatory statementThis amendment would make provision for collegiate universities, making clear that a governing body of a college – rather than their overarching provider – should report information under Clause 9.

My Lords, we have three amendments in this group, which have been proposed by my noble friend Lord Collins, with the support of my noble friends Baroness Royall and Lord Blunkett. They pick up some of the questions that were raised in Committee about transparency and proportionality with regards to overseas funding.

Amendment 26 would make provision for collegiate universities, making it clear that it is the governing body of a college, rather than its overarching provider, that should report information to the Office for Students under Clause 9.

Amendment 27 is intended to make the OfS power to gather information more proportionate, and to prevent commercially sensitive information being subject to a freedom of information request through the regulator having requested it. Several colleges and universities have contacted us about this matter, as I am sure is true for other noble Lords, so it is important that this be clarified at this stage.

Amendment 28 would prevent universities having to disclose sensitive commercial information to the OfS, and prevent independent trading entities—for example, the university press—being forced to violate commercial contracts not governed by UK law, because, of course, many of them have contracts with overseas organisations and institutions.

That is a summary of the amendments, and as my noble friend Lord Collins said at Second Reading or in Committee, the key to addressing these issues is transparency and ensuring that that transparency is proportionate. I could quote to the House many of the problems that have been outlined to us by others who are concerned about this, but because Clause 9 explicitly includes commercial partnerships, it is vital that the Government take on board these concerns and explain, on the record, how they will be dealt with, or provide clarification at the next stage of the Bill. I beg to move.

My Lords, I support these Amendments. Amendment 26 is self-explanatory, and it would be great if the Government could clarify that the governing body of a college, rather than the overarching university, will be responsible for reporting information to the OfS. It would be very good if the Minister could put that on the record today in Hansard.

With regard to proportionality and the fact that there should be reasonable grounds for suspecting a breach, it is important to have some articulation from the Front Bench that there will always be a sense of proportionality. However, the amendment that I will focus on, because I think it is extremely important, is Amendment 28, which would prevent universities having to disclose sensitive commercial information to the OfS. This is utterly critical, because it cannot be right that income generated by commercial partnerships and contracts for the receipt and delivery of goods and services, such as university presses, as mentioned by my noble friend, should be in scope of reporting to the OfS.

As noble Lords will be aware, reporting the details of such contracts to a regulator would mean that they were subject to FoI. That would be completely out of kilter and would compromise commercially sensitive information. As my noble friend said, it could also violate overseas data protection law and the confidentiality terms of contracts that are not governed by UK law.

It would be very interesting to know why the Government think it might be appropriate to require the disclosure of sensitive and confidential commercial information. We will listen to what the Front Bench says, but I would be very grateful if the Government could reflect further on that and, as my noble friend said, perhaps come back at Third Reading, because this is of extreme importance to some of our universities and presses.

My Lords, I will speak in support of those observations. I speak at a university that is in receipt of an extraordinary stream of revenue from its academic press. I think it is true to say that it has the largest academic press in the world, which is hugely successful and is a very large international business. I am puzzled at the suggestion that the contracts it negotiates elsewhere are likely to have an effect on freedom of speech and the associated freedom of inquiry at the university itself.

One reason why the university press is covered is that it is part of the university—and it is part of the university precisely to stop that sort of thing happening. So I very much hope that we can have some clarity on this and get an assurance that there will not be any question of commercial fishing trips with university presses. It is incredibly important that they are allowed to go on firing on all cylinders and doing as well as they do at present. The Oxford University Press, for example, sells 2 million copies of the Oxford English/Chinese dictionary every year in China and has huge sales of academic books in Shanghai. Our China Centre has not been prevented from teaching people about what is happening in Xinjiang, Tibet or elsewhere. So I do think we need to be careful about how we address this issue and, at the very least, as the noble Baroness has just said, make it absolutely clear that fishing trips through FoI requests are out and that the Government would not seek to get involved in what could happen commercially unless there were some evidence that freedom of inquiry or speech had been compromised.

My Lords, I hope that the Government will take this away, consider whether there is a way of adapting to some of the valid points made on these amendments and, if necessary, come back at Third Reading—when, I suspect, any further government amendments would be welcome.

I will briefly raise a question that I have already raised with the noble Baroness’s private office, which is how Clause 9 on overseas funding relates to a substantial clause of the National Security Bill, which had its Second Reading yesterday. It seems in some respects to overlap or possibly duplicate it. We have to be very careful about the potential to ask universities to supply further information, answer reports and weigh down their central administration. We already have the National Security and Investment Act, which lays down a number of obligations on universities, which they are fulfilling—justified but additional burdens. This Bill and the National Security Bill will potentially add a further layer of detailed reporting by universities to government, which I am not sure government will be entirely capable of handling. I wish to mark that before those two Bills pass: we should be very clear that they are compatible with and complement, rather than contradict, each other.

Having said that, the question of funding and student unions wants looking at. I was not aware that there is significant overseas funding for student unions. I suppose it is possible that the Chinese, Saudi or even Russian Governments could decide that covert funding of student unions would be a way to influence the British debate, so perhaps there is a half-justification for this. But these Benches, having talked to a number of student unions, are concerned about these small, underfunded bodies, which have a very rapid turnover of officers—as is their nature—having burdens placed on them that are heavier than they can cope with and are not justified by the situation. I mark that as a caveat and hope that the Government take it back for further consideration.

My Lords, I will address this group of amendments relating to overseas funding and the application of the reporting requirements to the regulator. Amendment 26, tabled in the name of the noble Lord, Lord Collins of Highbury, seeks to ensure that it is the governing body of a constituent institution rather than their registered provider that must report information required under Clause 9 to the Office for Students. This is rather complex, in that the duty of the OfS in Clause 9 is to be exercised via the existing regulatory regime for registered higher education providers. The OfS already has the power to obtain information from providers.

New subsection (4), which is the subject of this amendment, refers to Section 8(1)(b) of the Higher Education and Research Act 2017. This requires that there is a condition of registration under which the governing body of a provider must supply the OfS with information for the purposes of the performance of the OfS’s functions as the OfS may require. This is achieved by registration condition F3, as described in the OfS’s regulatory framework, which applies to providers and not to constituent institutions.

The approach in proposed new Section 69D of the 2017 Act is that the OfS may require the governing body of a provider to supply information about relevant funding received by the provider or “a connected person”. A connected person is defined in subsection (6) as including

“a constituent institution of the provider”.

The noble Baroness, Lady Royall, asked for clarification and I hope that that is clear. If it is not now, it may appear clearer in Hansard.

I think what the Minister said was quite clear, but the concern is whether that is a satisfactory way to proceed for collegiate universities.

As I said, it builds on the existing approach to regulation of constituent colleges.

Amendments 27 and 28, also tabled by the noble Lord, Lord Collins of Highbury, seek to reduce the scope of Clause 9. Amendment 27 would allow the Office for Students to seek information only where the OfS considered that there were reasonable grounds to suspect a breach of the freedom of speech duties. Amendment 28 would remove overseas commercial partnerships from the definition of “relevant funding”, meaning they would not be within scope of the clause.

New Section 69D(1) will require the OfS to monitor the overseas funding of registered higher education providers and their constituent institutions so that it can assess the risk which the funding may pose to freedom of speech and academic freedom in the provision of higher education. The only way that the OfS can monitor the funding is if it has the necessary information. The power to require such information is linked to the registration condition that already exists under Section 8(1)(b) of the Higher Education and Research Act 2017; that is, condition F3 as described in the regulatory framework that I have already mentioned. Clause 9 is not about the speculative investigation of individual contractual arrangements; it is about routine monitoring of relevant information, at a sufficient level of detail, but no more than that, to allow the OfS to monitor the risk to freedom of speech.

As I said before, Amendment 27 would limit the power to require information from providers to where the OfS considered that there were reasonable grounds to suspect a breach of the freedom of speech duties. That test sets a very high bar which could arguably never be met. The OfS would not be in a position where it could suspect a breach because it would not have evidence to support that. However, at the same time, the amendment would mean that it would not be able to require information that may provide such evidence, so this would be circular, resulting in the inability of the OfS to obtain information on overseas funding. That in turn would mean that the OfS would not be able to carry out its duty to monitor the risk to freedom of speech that overseas funding may pose. This would mean that new Section 69A would be ineffective and would subvert the whole point of the overseas funding clause.

I should add that the effect of the drafting of this amendment would not be to prevent commercially sensitive information becoming subject to freedom of information requests through the regulator having requested it, which I understand the intention of the amendment to be, noting that the amendment does not refer to that and focuses simply on suspicion of breach. In any event, approved fee cap providers are themselves subject to freedom of information requests, so disclosure of information to the regulator would not result in new exposure to that legislation, and, of course, the OfS already holds sensitive information about providers as part of its overall regulatory role—for example, financial information—so this will not be new.

As for Amendment 28 and the removal of commercial partnerships from the scope of new Section 69A, the Government are of the view that the funding received from such partnerships could pose a risk to freedom of speech and academic freedom. Accordingly, if we do not include commercial partnerships in new Section 69A, we would be leaving a large gap.

The OfS will decide on the level of detail that it will need as regards the information that it will require from providers, liaising with the sector as need be in order to determine that. The OfS will of course consider how to handle any sensitive commercial information that it requires to be provided, but, as I have said, it already holds sensitive information, so this would not be new.

I note that the noble Lord references in his explanatory statement that the clause may force a violation of commercial contracts not governed by UK law. My understanding is that commercial contracts are likely to contain a standard clause dealing with disclosure to regulators, so disclosure under the Bill would be covered by that.

As for the particular situation of a university press, which my noble friend Lord Patten of Barnes referred to, such a body will be in scope only if it is legally part of the provider. In that case, it would not be an independent trading entity. If it chooses to have as its legal status to be a department of a provider, as I am aware is the case for Cambridge University Press and Oxford University Press, it inevitably brings itself within scope of regulation as a part of that provider. I would be more than happy to follow up with my noble friend if he would like to progress that conversation or requires any further clarification on that point.

With regard to the point by the noble Lord, Lord Wallace, about the National Security Bill, as we have heard from earlier amendments, the Government are keen that there is consistency across legislation. That applies in this case also. The noble Lord also hinted at the regulatory burden. He will be aware that the Office for Students is required, when performing its functions, to have regard to the need to protect the institutional autonomy of providers and to the principles of best regulatory practice, including that it should be transparent, accountable, proportionate and consistent.

I am still not clear how the fishing expedition that the noble Lord, Lord Patten, mentioned would be avoided. That is the point here, is it not? There is a vulnerability and a risk. The Minister needs to explain that to the House—if not now, certainly before the next stage of the Bill—otherwise we will need to return to this. It is not at all clear to me how that risk is averted through the regulation that the Minister has explained.

Given the hour, I am more than happy to set that out in detail in a letter to the noble Baroness. I hope that will allow us to explain to the satisfaction of the House how this provision will operate and that the amendments—

My Lords, I am terribly sorry to interrupt the Minister’s flow again. I am very grateful to her for suggesting that she should continue the conversation with the noble Lord, Lord Patten, and for saying that she will write to my noble friend. However, if we still have deep concerns about this—I think we are right to be deeply concerned—I suggest that we come back to it at Third Reading, notwithstanding what the letter may explain.

I hear the noble Baroness’s request. I hope my letter will be able to reassure your Lordships that these amendments are not necessary.

My Lords, I think the Minister will understand that the House is still not satisfied that we are in a safe place with Clause 9. I hope we can achieve that before we get to the next stage of the Bill, but we may need to return to this at that stage. I beg leave to withdraw the amendment.

Amendment 26 withdrawn.

Amendments 27 and 28 not moved.

Clause 10: Director for Freedom of Speech and Academic Freedom