Authorisation to grant degrees etc

Higher Education and Research Bill – in a Public Bill Committee at 3:15 pm on 11th October 2016.

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Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education) 3:15 pm, 11th October 2016

I beg to move amendment 213, in clause 40, page 22, line 4, leave out “or research awards or both”

See amendment 214.

With this it will be convenient to discuss the following:

Amendment 214, in clause 40, page 22, line 6, at end insert—

‘(1A) The OfS may by order in conjunction with UKRI authorise a registered higher education provider to grant research awards.”

Amendments 213 and 214 would give the OfS the power to authorise higher education providers to grant both taught and research degrees but the OfS should be required to do this in conjunction with UK Research and Innovation (UKRI).

Amendment 235, in clause 40, page 23, line 21, at end insert—

‘(13) The OfS must consult with UKRI, including Research England, and the appropriate National Academies and learned societies before authorising any provider to grant research awards.”

This amendment ensures that OfS consults UKRI, including Research England, before issuing authorisation to grant research awards.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

I am pleased to move this amendment and to support the similar amendment tabled by my hon. Friend the Member for City of Durham. The amendments reflect not only our concern but that of a large number of organisations and HE providers about what the relationship will be between the OFS and the new UK Research and Innovation body. Obviously, we will have far more discussion about that in the context of part 3 of the Bill. At this stage, we want to flag up the strong concerns that there should be right from the beginning, not exactly a symbiotic relationship, but a very close relationship between the OFS and UKRI. These probing amendments intend to tease out some of that discussion.

Amendments 213 and 214 would give the OFS the power to authorise higher education providers to grant both taught and research degrees, but require them to do that in conjunction with UKRI. We are not being prescriptive or suggesting what that requirement on working in conjunction has to be. Rather, we are signalling very strongly that, right from the beginning, the OFS and UKRI and their personnel should understand that in the critical areas of authorising providers to grant both taught and research degrees, it is important that they have not only close formal but close informal relationships, so that we do not get into the situation that sometimes occurs when a new institution is set up—or two, as in this case—where they spend a lot of time marking out their own territories. Territories are important, especially for good governance, but so are co-operation and collaboration. That is what the amendments are intended to do.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing) 3:30 pm, 11th October 2016

I shall continue in the same vein as my hon. Friend. Amendment 235 queries whether the OFS should have the sole power and control over who can grant research awards. Giving the OFS the sole power would mean that it would not have to work with any research funding bodies, or indeed any other relevant agencies, in coming to a decision about whether to grant an institution research degree-awarding powers. There are two significant problems with that. First, the OFS granting research degree-awarding powers without reference to other bodies diminishes the level of expertise going into the decision-making process about whether a specific institution should have those degree-awarding powers. In addition, given that UKRI, Research England and the national academies and learned societies also have responsibilities for providing research funding, it seems to be a major error not to consider what role they would have in the granting of research degree awarding powers. Apart from anything else, it could affect funding decisions that those bodies make.

Consulting UKRI and Research England, among others, on whether to grant research degree-awarding powers would allow for a variety of opinions to be aired and would ensure that the OFS is not acting in isolation. It is really important that the Minister looks at that. He helpfully produced a paper, which we got a couple of days ago—I am not sure when it was produced—which talks about how UKRI should work in partnership with other bodies. Unless I have missed it, though, we do not seem to have had a similar exercise on who the OFS needs to work with.

Particularly with regard to research degree-awarding powers, it would be helpful if the Minister gave some thought to the full range of institutions that need to be involved, not least because this is the second really important point. As the system stands and is described in the Bill, it lacks oversight and checks and balances from the research sector. There is nothing to be gained from the OFS working alone, but a lot to be gained from it working in collaboration. I look forward to the Minister’s response.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

I am grateful that hon. Members have raised the role of UKRI in the authorisation of the granting of degrees. Our reforms are designed as a single, integrated system that reduces complexity, eliminates barriers to close working and delivers clear responsibilities, especially for the protection of the interests of students. To deliver that integration and close co-operation, it is vital that the OFS and UKRI are empowered to work together. For that reason, clause 103 makes provision to ensure that they do that in a way that enables them to carry out their functions effectively and efficiently.

One key area in which the OFS and UKRI should work in close co-operation is the assessment of applications for research degree-awarding powers, and the provisions in clause 103 will facilitate that. I am satisfied that the provision for co-operation between the OFS and UKRI will address the concern that the hon. Gentleman rightly touches on in his amendment.

The Secretary of State will have powers to require that co-operation to take place if it does not do so of its own accord. We intend to make it explicit in the Government guidance on degree-awarding powers, which we plan to publish, that we expect the OFS to work with UKRI in that way. On that basis, it is not necessary to capture that point in clause 40 as well, so I ask the hon. Gentleman to withdraw the amendment.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

The Minister will understand that I can speak only to the Labour Front Benchers’ two amendments. It is encouraging to hear that he has made provision for co-operation between UKRI and the OFS. He mentioned clause 103, so no doubt we will have another opportunity to discuss the issue when we examine that part of the Bill. On that basis, I will be content to withdraw the amendment.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing)

I am afraid that I am not quite so easily repleted—[Laughter.] Clause 103 states:

“The OfS and UKRI may cooperate with one another”.

I accept that subsection (2) gives the Secretary of State an ability to make them co-operate, but the clause does not really capture what we are trying to achieve with our amendments, which is to ensure that the research community is included when research degree-awarding powers are given. The provision might include UKRI, but it does not include the national academies and other learned societies.

I am sure that, having heard my point again, the Minister will want to go away and look into it. Perhaps he will give us an indication of what might be in the guidance or regulations that would assist the OFS in coming to its decisions on research degree awarding powers.

Amendment, by leave, withdrawn.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

I beg to move amendment 219, in clause 40, page 22, line 6, after “grant” insert “taught awards and”.

This amendment would make clear that qualifying further education providers will have access to taught awards and foundation degrees and also be able to provide degrees, diplomas, certificates or other appropriate courses of study, as defined by the bill.

The amendment is designed to deal with a particular situation in respect of further education colleges that offer higher education courses. Hon. Members will be aware that at a number of points during the passage of the Bill—on Second Reading and in Committee—I have commented on the importance of higher education delivered by the further education sector, and on the need for the Government to focus significantly on that. The amendment deals with some practical problems that do occur. Without mentioning individuals, I can say that at least a couple of cases have been brought to my constituency advice surgery, and other hon. Members may have faced similar issues.

About 250 colleges offer higher education. Twenty of them, including my local college, Blackpool and the Fylde College, have more than 1,000 HE students, and 186 have fewer than 500. The vast majority of college HE courses have been priced at under £6,000, although there has been an increase in those charging above the threshold since the trebling of the tuition fee ceiling in 2012.

The purpose of the amendment is to change the situation whereby colleges that offer foundation degrees are unable also to provide a certificate of higher education, to provide a flexible qualification option for students. Colleges with foundation degree-awarding powers can issue only one award and can consequently issue only a 240-credit foundation degree. A certificate of higher education is 120 credits; the AOC believes, and we agree, that colleges should be able to deliver that as well. Employers often want only a 120-credit certificate of higher education, rather than the full 240-credit foundation degree, because many roles require only level 4. For example, many technician jobs in manufacturing, engineering, construction and accountancy do not require degree-level entry. In addition, many higher apprenticeships include the higher national certificate, which, again, is below degree level.

If I can say so without going outwith clause 40, this issue is highly relevant to what we have said more broadly about the Government’s skills plan. The Sainsbury review particularly singled out the importance of boosting our technical skills, and the Minister and other Ministers concurred with its conclusions. The amendment offers a practical way of assisting that process.

In some cases, a one-year course is an exit destination in its own right. The Bill provides a timely opportunity to address that. The recent OECD report “Skills beyond School”, which echoes the Sainsbury review, states:

“Nearly two-thirds of overall employment growth in the European Union…is forecast to be in the ‘technicians and associate professionals’ category”.

In a 2014 report, the UK Commission for Employment and Skills—which, sadly, the Government have now withdrawn support from, but which has nevertheless produced valuable reports for the Government—found that

“questions remain about the UK’s intermediate skills base. This remains smaller than in many other advanced economies.”

It stated that

“skills shortages are acute, and persistent, in middle-skill skilled trades—declining in number, but demanding to recruit”.

Allowing colleges to offer certificates of higher education would mean that they could meet local labour market needs better, because nationally developed qualifications are often too generic. It would allow colleges to develop learning modules locally to meet specific industry and business needs. It would also prevent time loss, because the college would not have to go to a university to develop such a qualification; it would be able to work immediately with an employer to deliver the necessary training. I say to the Minister in passing that moving in that direction seems entirely appropriate and in accordance with what the Government have already done in the Bill to simplify and improve further education colleges’ ability to award their own separate degrees. Giving colleges the ability to accredit individuals with a certificate of higher education would also be a big step in the right direction towards the much-needed national higher education system that we have been discussing.

The amendment also underlines the point that, in this area at least, further education and higher education are facing and addressing the same sorts of issues. It would promote part-time learning and could allow students to reduce debt more sensibly. Given the recommendations in the skills plan, a certificate of higher education issued by colleges could help to bridge credit-bearing programmes introduced to facilitate transfer or progression between academic and technical routes.

I appreciate that there is a lot of what I might describe as “techie business” in what I have just said, and I do not necessarily expect the Minister to sign up to the amendment, but I ask him and his officials to go away and look carefully at the points I have made. They are not partisan points; the amendment would actually facilitate some of the work the Government are doing in the Bill. Also, in the context of devolution, which we have not talked about much in relation to the Bill, it would make it much easier for some of the new combined authorities, and indeed some of the mayors taking on skills powers, to deliver flexibly some of the improvements that are not just desirable but necessary if we are to boost our productivity and achieve the targets that we will need to achieve in the 2020s.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education) 3:45 pm, 11th October 2016

I am glad to have the opportunity to discuss FE institutions, many of which are colleges, and degree-awarding powers. Institutions in the FE sector can currently apply for and obtain taught degree-awarding powers so long as they provide higher education and meet the relevant criteria. Indeed, in June of this year, Newcastle College Group became the first FE college to be granted taught degree-awarding powers, and other colleges are in the process of applying.

Any institutions that obtain taught degree-awarding powers, including FE Colleges, are already authorised to grant certificates and other awards as well as degrees. Institutions in the FE sector will continue to be able to apply for and obtain taught degree-awarding powers under the reforms in the Bill. The proviso is that they must be a registered higher education provider and, like other registered higher education providers, meet the relevant criteria. We intend to consult on the detailed criteria following Royal Assent and before the new regulatory framework takes effect. There is therefore no intention to prevent FE colleges from accessing taught degree-awarding powers through the Bill.

As happens now, institutions in the FE sector will also be able to apply for foundation degree-awarding powers only—with the proviso that, in addition to being registered and meeting other criteria, they provide a satisfactory statement of progression setting out what the provider intends to do to enable students to progress on to courses of more advanced study. Again, that is in line with the current arrangements for FE colleges that wish to apply for foundation degree-awarding powers. I therefore believe that the amendment is unnecessary.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

Whether the amendment is unnecessary or not—obviously guidance has been given that means we might want to discuss the matter further—does the Minister agree that the ability for colleges to accredit individuals with a certificate for higher education would be a big step in the right direction? That is essentially what the Association of Colleges is asking for.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

We will obviously look very carefully at the submission from the Association of Colleges, and officials have heard the hon. Gentleman’s comments. We will go away, have a further look at the issue and reassure ourselves that the approach that we are taking is the correct one, but for the time being, we believe that the Bill covers his intentions, and I ask him to withdraw the amendment.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

I thank the Minister for that reply. We look forward to the further rumination, if I can put it that way, on the particulars of the issue, and on that basis I am content to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

I beg to move amendment 216, in clause 40, page 22, line 28, at end insert

“(c) the provider operates in the interest of students and the public.”

This amendment would ensure any new provider must be operating with the public and student interests as a priority.

With this it will be convenient to discuss the following:

Amendment 217, in clause 40, page 22, line 28, at end insert

“(d) the provider shows evidence of satisfactory and consistent higher education delivery for a minimum of three years, which period may be extended, as part of a partnership with a validating provider.”

This amendment would ensure a further education provider can demonstrate that it can meet the requirements to exercise degree-awarding powers.

Amendment 218, in clause 40, page 22, line 28, at end insert

“(e) there is reasonable assurance that a provider is able to maintain the required standards for the duration of whatever authorisation period is set by the OfS.”

This amendment would ensure that any provider authorised to grant degrees must be able meet the required standards set for the full period of time they are authorised for.

Amendment 234, in clause 40, page 22, line 28, at end insert—

“(c) the OfS is assured that the provider is able to maintain the required standards of a UK degree for the duration of the authorisation; and

(d) the OfS is assured that the provider operates in students’ and the public interests.”

This amendment requires the OfS to be assured about the maintenance of standards and about students’ and the public interest before issuing authorisation to grant degrees.

Amendment 220, in clause 40, page 23, line 9, at end insert

“(9A) In making any orders under this section, and sections 41, 42 and 43, the OfS must have due regard to the need to maintain confidence in the higher education sector, and in the awards which they collectively grant, among students, employers, and the wider public.”

This amendment would ensure that the granting and removal of degree awarding powers would be linked to a need to maintain confidence in the sector, and with a view to preserving its excellent reputation.

New clause 9—Automatic review of authorisation—

“(1) The OfS must review an authorisation given by a previous order under section 40(1) if—

(a) the ownership of the registered provider is transferred to another legal person; or

(b) the owner of the registered provider has had restrictions placed on its degree-awarding powers in another jurisdiction, or

(c) for any other reason it would be in the student or public interest to do so.

(2) In this section “review” means consider whether to vary or revoke authorisation within the meaning of section 42.”

This new Clause would ensure that a review of a provider’s degree awarding power would be triggered if the ownership of a provider changes, if the owner of the registered provider faces restrictions to its degree awarding powers in another jurisdiction or if the OfS deems a review necessary to protect students or the wider public interest.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

We come to one of the most significant and contentious elements of the Bill—the Government’s proposals to enable new providers. Clearly, the amendments cover a wide area of subjects. Often on these occasions it is difficult to know whether one is delivering a clause stand part speech as opposed to a speech on each amendment or group of amendments, but I will do my best to do the latter.

If the hon. Gentleman wishes to refer to any or all of the amendments in the context of the clause, I will be happy to accept that. We can determine later whether we have a clause stand part debate, depending on the level of discussion at this time.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

That is very helpful, Mr Hanson. I am grateful for your guidance.

For the convenience of the Committee, I will make clear the context in which we tabled the amendments. Amendment 216 would ensure that providers operate in the interest of students and the public, which we believe is very important. It is not simply a question of competitiveness. Amendment 217 is about providers showing evidence of satisfactory and consistent higher education delivery. I will talk more specifically about the rationale for that timeframe. Amendment 218 states that any provider authorised to grant degrees should be able to meet the required standards set for the full period of time they are authorised for. Amendment 220 states that the OFS must have due regard to the need to maintain confidence in the higher education sector and the awards they collectively grant among students, employers and the wider public.

The amendments deal with specific parts of the process of authorising the granting of degrees proposed by the Government. However, they appear in the context of our grave concerns about the mechanisms and the process that the Government are preparing to take forward. It is not only our grave concerns; most, if not all of the large university and HE provider organisations, including Universities UK and the University and College Union, have the same concerns.

We said on Second Reading that we were concerned about where the rapid expansion of what the Government call challenger institutions is taking us. I said I was concerned that giving providers the option from day one to build up that process would potentially be very dangerous, with students in effect taking a gamble on probationary degrees from probationary providers. I asked, rhetorically, who would pick up all the pieces if those things went wrong.

The amendments are designed to mitigate—I am afraid they would not entirely obliterate—the problems that might arise from the way the framework has been put forward. I want to repeat, to avoid any doubt, that we do not in principle oppose the expansion of the sector, competition in the sector or new providers. However, we believe strongly that without a strong regulatory framework that makes viable easier access for new providers to the higher education sector, we could have major crises, difficulties and scandals that would affect not only the institutions and the students—who are crucial—but this country’s whole reputation for delivering higher education provision.

If the Minister is in any doubt about that, he need only look at the some of the questions raised in the United States about the activities of private providers; at some of the criticisms that Baroness Wolf has levelled at a similar process in Australia; or, as I said on Second Reading, at the issues involving BPP and the Apollo Group some three to four years ago, which caused his predecessor to take a deep breath and pause on these areas. I am not suggesting to him that these things should be set in stone just because the Government got it wrong four years ago and were forced to retreat; I am suggesting that, as I have said previously, the rather gung-ho and raw free-market rhetoric of the White Paper should be tested against some very specific issues and safeguards, which is what we are trying to do with these amendments.

I repeat what has been said by the UCU, which

“acknowledges that private colleges and universities have been a feature of our HE system for a long time. However we are strongly of the opinion that higher education providers should be not-for-profit bodies because these pose a far lower risk to the sector. Accelerating the rate at which for-profit organisations can award degrees or become universities exposes the sector to greater risk from those motivated to move into the market predominantly for financial gain.”

The UCU also expressed concern about the issues surrounding university title, which we will address in due course.

When we consider new clause 6—this will also come up when we consider amendment 221 to clause 43—it might be worth noting that existing universities have grave concerns about the right to revoke degree-awarding powers by order. All the people who would be affected by the failure of a new provider, such as the people who clean, who maintain the buildings or who cook the food—all the people who keep higher education providers going—deserve a say and protection in this area, as well as the students and the academics who will teach at these new institutions, which is why Unison has expressed its strong concerns about the proposal.

The risks of market exit were discussed in the detailed impact assessment produced by the Department for Business, Innovation and Skills, which assumed that volatility and the risk to students of course or institution closure could be managed with protection plans. Those assumptions, which I have looked at two or three times, still seem to be extremely cavalier. The impact assessment states that there is a

“risk to students attending HEPs that fall outside the scope... Internal BIS forecasts estimate that the number of providers operating outside of the system…will decrease from 655 to 460 by 2027/28.”

There will still be people outside the system.

MillionPlus has expressed similar concerns, and I will put this squarely in the Brexit context. As I said earlier, the eyes of the world will be focused on us, for good or ill, over the next two to three years. I would be surprised if anyone who has been abroad anywhere in the past couple of months has not been asked, “What do you think about Brexit?” For good or ill, that is what loads of people now think about the UK, and it shines a light on the importance of ensuring that the obvious ups and downs of the Brexit process do not cause irrevocable damage to one of this country’s most precious worldwide brands, the UK higher education brand. If we enter a process that does not have sufficient guarantees and protections, apart from the things that we should be doing on a social and a citizen basis to protect the people who work in such areas—this is a pragmatic point—we will commit an act of great folly from which, as I said this morning, we will find it difficult to recover.

Our proposals are designed to mitigate that process. Research Fortnight argued in May that

“the title of university needs to be seen as a privilege…not an automatic entitlement”.

I agree with that. One of my concerns about the Government’s approach—I said this right at the beginning, and others have said the same—is the way in which they have not rowed back on the proposal that, from almost the first day of operation, these applicant providers will have the ability to operate and recruit people for degree processes.

My hon. Friend the Member for City of Durham referred to papers coming out from the Government and this was one of the subjects we discussed shortly before the recess, so I have taken the opportunity of the recess to look in some detail at the technical note that the Government produced on market entry and quality assurance. I want to pose a number of specific questions related to that paper to the Minister.

Page 5 of the technical note talks about the importance of facilitating new entrants into the system. It says:

“One example will be the introduction of single-subject DAPs”—

degree-awarding powers—

“facilitating new entrants to the system, but only allowing them to award degrees in their specialisms.”

I assume that whoever wrote that thought it was a plus point for those of us who worry that new entrants might spread their net too widely and therefore be at risk of market failure, but it does not reassure me. What it says to me is that it is likely to attract institutions, or potential institutions, that are not interested in offering the broad range of courses that higher education has traditionally wanted to do or in the traditional practices of a university, but that are—although this may be a minority—simply interested in making a quick buck from whatever is the flavour of the month. Even if they are not interested in that, the fact that they are so narrowly based, with rapid expansion, would make them more at risk of early market exit. The Minister might like to tell me what analysis he has made of the success or failure of single-subject DAPs elsewhere.

In the seventh paragraph on page 5—this is something we welcome—the new proposals suggest annual reviews, as opposed to the six-yearly reviews that were originally suggested. Frankly, that was one of the most ludicrous aspects of the original proposals, so it is welcome that the Government have realised they need to do that.

Under the heading “Maintaining a co-regulatory approach”, the Minister—and the paper—has placed great faith in the ability of the OFS to monitor this process. It says:

“The OfS and designated quality body will maintain the existing co-regulatory approach to determining the baseline requirements for quality and standards,”

but we have to ask where the scrutiny will come from. We know that

“Current HEFCE powers will transfer to the OfS and will be strengthened to ensure that OfS has the necessary powers to intervene quickly…For example OfS will be given new powers and could: require an action plan to address areas of weakness; impose student number controls; charge fines; not-renew…or, as a last resort, remove DAPs and remove university title”.

That sounds like an impressive collection of powers for the new office for students, but where will the scrutiny of what they do come from? Where will the resources for what they do come from? What will the implication of those increased resources be for mainstream existing HE providers that may have to bear the brunt of those costs? There is nothing about that in this technical paper.

Paragraph 3 talks about the OFS’s judgment on a provider’s readiness, but there seems to be no outside judgment on a provider’s readiness to meet registration conditions. On financial projections, a provider will be asked for just a minimum of three years of financial projections; that is just enough for one degree cycle. If a provider wants to access student loans or public funding, it has to meet baseline quality requirements. These include

“sufficiently experienced teaching staff and faculty… appropriate curriculum and course materials”

and

“appropriate teaching and learning facilities”.

We know sadly that in a minority—it is a small minority—of existing HE providers, experienced teaching staff and appropriate curriculum and course materials are, from time to time, found wanting. We know that some institutions go down the route of offering low or zero hours, and we need robust mechanisms to assess that. How can those things be accurately assessed if, for the sake of argument—this goes back to what we discussed earlier—no student or faculty members are required on the office for students board?

On page 11 of the technical paper, the requirement for a track record in delivering HE has changed from four years to three. We could argue whether the status quo should remain. UCU has suggested it would be content with three years. The crucial thing is that the track record should be looked at with very great care. There is no evidence in the rest of the suggestions in the technical paper that there will be an increase in robustness; rather, the opposite. That is shown on page 12 and it is probably worth me reading a small section from that page:

“The probationary DAPs test would test a self-evaluation from the provider setting out the proposed…management of academic standards and the plans, preparations and procedures in place to enable expectations to be met. This would be based broadly on the current DAPs criteria…This test would assess the provider’s understanding of what holding DAPs entails.”

The fact is that a key component of the probationary DAPs test is a self-evaluation of readiness by a provider. I do not think most people in the outside world, let alone in the university and higher education area, would feel entirely comfortable or happy with that. It is not surprising therefore that severe criticisms of the Government’s process have come from all quarters. I have mentioned the range of university organisations and those who represent people employed in the sector that are concerned. The effect on students is potentially multifarious. We have examples. I will not repeat the ones I mentioned when we touched on issues with private providers in the first half of the Bill, but I noted on that occasion that the Minister had no answer, or chose not to give any answer, to whether the case studies of recent criticisms of private providers—by recent, I mean within the past 12 months—had any bearing whatever on the White Paper or the proposals in the Bill. My reading is that those criticisms and those of the NAO and the Public Accounts Committee might as well not have existed according to the paean to competition and expansion in the White Paper.

These are important issues. If we get this wrong, loads of people will suffer. We discussed the risks of market exit. Let us take one example of a provider. Let us not even say that the provider went in with the intention, to use a colloquialism, of making a fast buck and getting out. Let us say that after two years, the financiers of the provider were overstretched. They might have filed for bankruptcy or simply gone bust. How will the students who enrolled in that institution be protected? The Minister put a lot of emphasis on financial compensation, but as we have heard, that is only part of it. What do we do with an adult, in their 30s or 40s, who has done 18 months on a degree? We know that a significant number of new providers—this is a point in their favour—cater for mature and part-time students. But people who enrolled with those new providers would need to be even more assured that their degrees would not turn belly up, that they would not be left with useless qualifications and that they would be able to continue their studies in some other shape or form. The Government have given no satisfactory responses or explanations about how that process, beyond financial compensation, would work. Those are the things we are rightly concerned about.

It is not simply the Labour party or universities that are making those criticisms; it is aspiring Conservative members. I draw attention to the Financial Times article of 2 September, written by Martin Wolf, which said that—[Interruption]. As far as I am aware he has not crossed the Floor to us.

Order.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

No I will not. I am just about to finish the quote. Then the Minister can intervene.

“The reform of Britain’s universities is a betrayal of Conservative principles”.

So there we have concerns across the sector, even in the Minister’s own party.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

No. I said that Martin Wolf was not about to cross the Floor to join the Labour party and that is exactly the case. [Interruption.] If Mr Wolf wanted to put things on record I am sure he could do so, but that is the point I am making. The Bill is causing concern among the Conservative party’s own traditional supporters and representatives, and elsewhere. That is the important issue to be addressed here.

The Bill, as the Council for the Defence of British Universities has said,

“is designed to give encouragement to ‘new providers’ but has few safeguards to protect students from for-profit organisations… Experience in this country, and particularly in the US, suggests extreme caution is needed to protect the reputation of British universities”.

Those are some of the issues that we have tried to mitigate in our amendments. I have asked the Minister a range of specific questions regarding the TEF paper, and I invite him to respond to them.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing)

Given the gung-ho attitude that the Minister has displayed in wanting to open up the sector to alternative providers, I am not sure I will get anywhere with amendment 234, but I will try, because as my hon. Friend the Member for Blackpool South has outlined, there is considerable concern across the higher education sector that not enough regulation and requirement is being put on to new institutions before they are allowed to have degree-awarding powers.

The amendment would put a few additional requirements into clause 40(4). The OFS would have to assure itself that the provider was able to maintain the required standards of a UK degree for a period of perhaps three to five years—the length of time we would expect a degree to last—to ensure that it was properly bedded in. The reason for that, as my hon. Friend outlined clearly, is to prevent students from undertaking courses and degrees with new providers that have not been adequately tested and where there are not enough safeguards in place. If a course falls, students have to transfer or be compensated in some way, so the amendment is an attempt to put a few more safeguards in the system.

The amendment asks that

“the provider operates in the interest of students and the public.”

That is important because, as my hon. Friend said, we are all genuinely worried that some providers could operate simply in the interests of their shareholders, without sufficient regard to the needs of students.

We have rehearsed a whole set of arguments, which I will not go through again, about the way in which institutions should demonstrate a public interest. They should have a civic role and be judged in exactly the same way as all other universities. The Minister has not really given us an adequate explanation as to why he has adopted a gung-ho approach with so little regulation and requirements being placed on alternative providers, and he has not mentioned what he will do if students end up losing out. The Committee has not sufficiently added requirements to the Bill to ensure that students’ interests, and indeed the public interest, are safeguarded.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union) 4:15 pm, 11th October 2016

I rise to speak to new clause 9, fairly briefly. I do not want to repeat the concerns that have been ably outlined by my hon. Friends, but I want discuss one particular problem. The Minister is deeply conscious of the risks presented by some potential new providers. We have discussed those risks outside of the Committee, and he recognises the importance of having a robust regulatory framework.

New clause 9 would deal with a specific problem of which the Minister will be aware in relation to some private providers in this country and, in particular, in the United States, where the terrain is similar to the one that he is, arguably, trying to create through the Bill. One problem in the United States—this is also true in Australia to a significant degree, as the Minister knows, because he has looked at the system there—is that a business model has developed for some avaricious companies that see the opportunity to milk the public funds that are available to support students through loans.

Those companies are less concerned than others with the quality of the offer they make, and they have no long-term commitment to students. Theirs is a model in which companies offer a product, and students are then attracted by aggressive marketing, draw down a loan, are let down by the quality of provision, end up with a degree with questionable value, and face enormous debts to repay. It is a model that neither I nor the Minister want, but it has been encouraged, in some cases, by the transfer of ownership once degree-awarding powers have been given. My hon. Friend the Member for Blackpool South mentioned BPP and Apollo, but the Minister is also aware of the problem in the United States.

The new clause would ensure that the regulatory portal for entry to degree-awarding powers will be triggered if an institution changes ownership, because the culture, commitment and quality of provision can change substantially when that happens. Likewise, if restrictions have been imposed in another jurisdiction on the owner of an institution with degree-awarding powers—we know that many companies in the sector operate across countries—that should be a sufficient signal to us to be worried and to review any decision on degree-awarding powers for that owner in our jurisdiction. In those two respects, the new clause would simply provide a trigger to re-open the decision to give degree-awarding powers, which I would have thought the Minister would agree with. I hope he will either support the amendment or reassure me about how he intends to address the issue.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

I am still reeling from the hilarious image that the hon. Member for Blackpool South conjured up of Martin Wolf as an aspiring Conservative Member of Parliament. I worked with Martin for 13 years at the Financial Times and I have no doubt that that characterisation of his career plans is very wide of the mark. Judging by some of his contributions to the debate over the future of HE in this country, he might be more likely to seek to become master of an Oxford college. But a Conservative MP? I think not.

Order. He is also not on the face of the Bill, so stick to the argument—or lack of it.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

We are justifiably proud of our HE sector, and our country is renowned as the home of many world-class institutions, but that does not mean that we should be satisfied with the status quo. As I have said before, the current system is too heavily weighted in favour of existing incumbents, which is stifling innovation in the sector. As Emran Mian, director of the Social Market Foundation, has said:

“Higher education is too much like a club where the rules are made for the benefit of universities. These reforms will begin to change that.

Students will have access to more information when they’re making application choices; and universities will be under more pressure to improve the quality of teaching.”

Under the current regime, new and innovative providers have to wait until they have developed a track record that lasts several years before they can operate as degree-awarding bodies in their own right, no matter how good their offer or how much academic expertise they bring to bear. To develop that track record, they typically have to rely on other institutions to validate their provision in some way, which can be a huge obstacle. The onus is on the new entrant to find a willing incumbent and to negotiate a validation agreement. Such agreements can be one-sided and in some cases prohibitively expensive, as we heard in evidence given to the Committee.

Our reforms will ensure that students can choose from a wider range of high-quality institutions and will remove any impression that, as John Gill, the esteemed editor of Times Higher Education, put it, existing universities can

“act like bouncers, deciding who should and should not be let in.”

If a higher education institute can demonstrate its ability to deliver high-quality provision, we want to make it easier for it to start awarding its own degrees—not harder, as the hon. Member for Blackpool South would like—rather than needing to have its courses awarded by a competing incumbent. Earlier in this sitting, the hon. Gentleman said that the whole point was that it should be difficult. We fundamentally disagree. If there are high-quality providers out there that want to come in and provide high-quality education, we want to make that easier for them, not more difficult.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

Again, the Minister is trying to set up a straw man. “Difficult” does not mean “impossible”. It means that, because literally hundreds and in the future possibly thousands of people will be relying on the decision that is made, there should be due process—a significant process. The trouble with what the Minister suggests is that he is not just making it easier, he is making it far too easy.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

I ask the hon. Gentleman to look back at the transcript of our earlier discussions and reread his comments. He said that the whole point was that it should be difficult. That is a fundamental point of difference between us. We believe it should be easy for high-quality providers to get into the system and offer high-value-for-money higher education.

We know how important universities can be to their local economies. Recent research by the London School of Economics has demonstrated the strong link between universities opening and significantly increased economic growth. Doubling the number of universities per capita is associated with more than 4% higher GDP per capita. However, the sector has built up over time to be serving only parts of the country. It is not providing employers with enough of the right graduates, especially STEM graduates. It can do more, as we discussed earlier, to offer flexible study options to meet students’ diverse needs, and it can do far more to support social mobility. Most OECD competitor countries have a higher proportion of the population entering higher education than the UK. We have about a 51% first-time entry rate, compared with an OECD average of about 60%.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing)

Would the Minister accept that, if the Government are serious about wanting more people to have an experience of higher education, that can be done through expanding the current institutions or in a more measured way of bringing alternative providers into the system? My anxiety has grown over the afternoon, because making it easy for alternative providers will not necessarily guarantee sufficient safeguards for students or the public.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

Of course we want high-quality provision to expand, whether through the entry of new institutions or the expansion of existing institutions that do well in the quality assurance frameworks that we have in our system—the research excellence framework and the TEF that we are introducing for teaching. They will get more resources and will be able to expand high-quality research and teaching activities. That is how we see the market developing in this country.

The system needs to have informed student choice and competition among high-quality institutions at its heart. Competition between providers in higher education—indeed, in any market—incentivises them to raise their game, offering consumers a greater choice of more innovative and better-quality products and services. The Competition and Markets Authority concluded in its recent report on competition in the HE sector that aspects of the current system could be holding back competition among providers, which needed to be addressed. That is what we are doing with the provisions in this and later clauses, including those covering validation.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union)

I would be grateful if the Minister could share with us the work that the Department has done on comparing the impact of private providers in other countries with developed higher education systems. My understanding is that there is very limited evidence to suggest that increased competition has contributed to innovation, higher quality or lower prices within the countries that the Department has looked at. Could he share the evidence?

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

First, I would encourage the hon. Gentleman not to try to compare apples and pears by talking about the US experience. Many of the parallels that he is attempting to draw with the so-called private sector in the US are not really relevant to our environment here in the UK. US private providers are subject to little state control. We have a strong, and increasingly strong, regulatory framework in place to ensure appropriate oversight. I again encourage Opposition Members not to disparage institutions that they describe as for-profit or private providers. Let us remember first that all higher education institutions are private to begin with—every single one of them. Let us try to get that straight in our minds right away.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

No, I am going to make this point, because the hon. Gentleman has already intervened. Let us also remember that there are exceptionally good providers in the sector delivering high-quality education sector, for example Norland College, the University of Law or BPP University. For-profit providers have among the highest levels of student satisfaction in the system, demonstrated for example by the University of Law coming joint first in overall satisfaction in the most recent national students’ survey. I find it sad and disappointing that the hon. Member for Blackpool South wants to disparage such institutions and those who choose to study at them.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

I am not disparaging those institutions. They have reached that position precisely through the rigorous system that we currently have, which the Minister is proposing to dismantle. He has failed to address some of the questions I put to him. For example, does he seriously believe that the introduction of single-subject DAPs is a good thing for students?

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education) 4:30 pm, 11th October 2016

I will shortly come on to the single-subject degree-awarding powers measures that we are proposing, and yes, I obviously believe that specialist provision is to the advantage of the higher-education system, because it will help us address many of the skills shortages that the country faces. We can point, for example, to the New Model in Technology and Engineering institution in Hereford, which will be a specialist STEM provider in an HE cold spot. That is precisely the kind of new entry that we want to encourage into the system.

Competition expands the market and widens choice to the benefit of students. That is generally, although not universally, accepted. It is certainly accepted by the sector itself.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

I am going to make some progress, because I have got a fair amount to get through.

Universities UK, the representative body, has said it welcomes the Government’s intention to allow new providers in the system to secure greater choice for students and to ensure appropriate competition in the higher education sector. Paul Kirkham pointed out in a speech earlier this year that

“there are many reputable APs out there, providing specialist, bespoke education and training to students who, lest we forget, consciously choose such an alternative.”

The story of those new entrants and of diversity and provision has been one of widening participation. We want them to be able to compete on a level playing field.

As we discussed earlier, the world is changing fast, and the higher education sector needs to change too if it is to meet the needs of 21st-century learners, yet in a 2015 survey of vice-chancellors and university leavers 70% of respondents said that they expected higher education to look the same in 2030 as it does now—largely focused around the full-time three-year degree. The risk is that, given their position, that will become a self-fulfilling prophecy. We know, for example, that the share of undergraduate students in English higher education institutions studying full-time first-year degrees—the traditional model—has increased from 65% in 2010-11 to 78% in 2014-15. Allowing the vested interests of incumbents to continue to protect what is effectively a one-product system that promotes only the three-year, full-time, on-campus undergraduate university course as the gold standard comes with considerable risk. It is a high-cost and inflexible approach, and given that in excess of 50% of the population wish to engage in higher education, it cannot be the only solution. That system of validation is curbing innovation and entrenching the same model of higher education.

As Paul Kirkham said in evidence to the Committee:

“There are significant risks to student and taxpayer of a very static, non-changing universe of providers and way too much emphasis on the three-year, on-campus degree.”––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 13, Q15.]

As Roxanne Stockwell, the principal of Pearson College, said in her submission:

“It is clear that the dominance of the one-size-fits-all model of university education is over. Fee rises have transformed students into more critical consumers and the government is right to recognise this in their reform package. Students are calling out for pioneering institutions offering alternative education models and an increased focus on skills that will prepare them for the careers of the future—with the mind-set and agility to fulfil roles that may not even exist yet.”

We must not be constrained by our historical successes.

Photo of Carol Monaghan Carol Monaghan Shadow SNP Westminster Group Leader (Public Services and Education)

I do not recognise the picture of higher education that the Minister is painting. It has changed greatly, even in the past 10 to 20 years. There is a massive focus on skills, and students are now leaving university with much greater abilities, and the problem-solving, business and employability skills that are required. I simply do not recognise the picture of traditional HE that the Minister paints.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

I urge the hon. Lady to recognise that huge value has been added to the sector by the arrival of new entrants. New providers have tapped into unmet demand, and that is why they are springing up. They are surviving the test of the marketplace and meeting a need that is not presently being met. That is why they are coming into existence; they are providing value and succeeding and thriving in the marketplace. We should welcome what they bring rather than denigrate it.

As a report on international experience by the Centre for Global Higher Education found, private providers can

“swiftly provide courses to meet unmet demand, and deliver them in convenient ways, such as online or in the evening and over the weekend.”

We also know that they offer greater flexibility to potential students by having different course start dates throughout the year. Alternative providers are already supporting greater diversity in the sector, which we should all welcome. Some 56% of students at alternative providers are aged 25-plus—I know that the hon. Member for Blackpool South cares greatly about mature students—compared with only 23% of students at publicly funded institutions. They have higher numbers of black and minority ethnic students, with 59% of undergraduate students at alternative providers coming from BME ethnic groups compared with 21% at higher education institutions overall.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

All the statistics that the Minister has just reeled off, which we recognise, underline precisely why we need rigorous—not blocking—regulation. The sorts of people who are going to the providers he talks about are those who will suffer most greatly if those providers go belly up. That is why we need rigour in that area, and that is why the best alternative providers have succeeded and are coming through at the moment. He is constantly setting up straw men.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

They are as robust as they need to be, and they will ensure that only high-quality, well managed, stable institutions that deliver high-quality higher education enter our system.

As I have set out, current would-be new entrants typically rely on competitors for a foothold in the sector. It is hard to think of another sector—including those involving major once-in-a-lifetime decisions, such as mortgage or pension providers—where one provider is beholden to another for market entry in that manner.

Inevitably, the nature of our validation requirements has a moulding effect on entry into the system. New providers may feel forced to adopt practices, habits and mentalities of incumbents in a way that can stifle innovation or even cede some of the new entrants’ competitive advantage. For example, we can read in the evidence provided by Le Cordon Bleu how that can happen. It chose not to offer a UK degree via the validation process, as it felt it would be required to hand over its recipes, techniques and individual culinary style to another institution in order to have its courses validated.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

I will make some progress, if the hon. Lady will let me.

In the case of Le Cordon Bleu, the intellectual property of its course would be free for the validating institution to redistribute as it saw fit. We have heard a fair amount from Opposition Members about for-profit providers, and the idea that for-profit institutions would not act in the interests of students. That is simply not true.

Order. Will the hon. Gentleman refrain from heckling? He has the opportunity to speak, and he can respond in due course.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

The insinuation that followed the persistent tropes denigrating private providers, new providers or alternative providers was very clear: the hon. Gentleman sees for-profit providers as fly-by-night operators out to exploit naive students at the expense of taxpayers. The whole riff he has been developing over weeks before this Committee is unmistakeable, and it is simply not true.

We need a diverse, competitive higher education sector that can offer different types of higher education, giving students the ability to choose between a wide range of providers. We must not constrain entrepreneurial activity and stifle innovative provision at students’ expense. New ventures are driven by a range of motives, not just by wealth creation, such as the desire to innovate and create new products, the desire to prove themselves better and smarter and a desire to create a personal legacy. It also seems strange that on the one hand making a profit is deemed distasteful, whereas on the other hand to fail to make a profit would be judged as a sign of financial unsustainability. There is an inherent contradiction in the hon. Gentleman’s approach to this question.

Turning to the specifics of amendments 216, 217, 218, 220 and 234, I hope—although I may not be successful—that I can still assure hon. Members that the reforms we are proposing will ensure that both the interests of students and the wider public are well served. In recognising the need for the changes that I have just set out, we also recognise the great importance of sustaining and improving quality and standards. Our plans are designed to ensure that quality is maintained, and that only those providers that can prove they can meet the high standards associated with the values and reputation of the English HE system can obtain degree-awarding powers. We intend that the assessment of whether a provider meets the criteria to hold degree-awarding powers would rest with the designated quality body; this mirrors current arrangements.

In order to become eligible for degree-awarding powers, providers will have to register with the OFS. We expect them to register in either the approved or approved fee cap categories. This would ensure that applicants for degree-awarding powers meet high market entry and ongoing registration conditions, which we expect to include quality and financial sustainability, management and governance criteria. As now, degree-awarding powers will either be granted on a time-limited or an indefinite basis. Degree-awarding powers being awarded on a time-limited and renewable basis in this way is critically not new: alternative providers and further education providers are already granted these powers on a six-yearly renewable basis. We intend to level up the playing field and raise the quality threshold so degree-awarding powers are granted on a time-limited basis to all in the first instance, with the opportunity for all to progress to indefinite degree-awarding powers subject to satisfactory performance.

What we do intend to do is change the requirement that new high-quality providers have to build up a track record and be reliant on incumbent institutions to validate their provision. However, as we set out in the factsheet on market entry and quality assurance that we published and sent to the Committee, we plan that 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. Under this test, we expect applicants to be required to demonstrate that they have the potential to meet the full degree-awarding powers criteria by the end of the three-year probationary period and we fully expect probationary degree-awarding powers to be subject to appropriate restrictions and strict oversight by the OFS in order to safeguard quality. We expect this oversight to be similar to the support of a validating body, except that new providers will not need to ask a competitor to do this.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

The Minister is now beginning to address the specific points I made, although he has still not commented on the rationale for allowing single-subject DAPs. That is not the same as STEM ones, Minister, because those cover a much broader range of things. May I ask the Minister specifically whether he considers the inclusion of self-evaluation as a key element in deciding whether people should have these degree-awarding powers sufficient and adequate?

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

As he has pressed on this first, let me come to the hon. Gentleman’s point about single-subject degree-awarding powers. We want the scope of degree-awarding powers to be more flexible, so that both probationary and full degree-awarding power holders would be able to offer degrees in specific subjects or with greater choice of levels. This would enable them to start awarding degrees while developing their provision and capacity, to assume increased levels of powers and enable the removal of restrictions over time. Holders of single-subject DAPs will, if granted validation powers, be able to validate in that subject only, and we intend that they will be eligible for university title. There are many specialist providers that I believe would benefit from this. For example, Norland College has been delivering specialist education since the 1860s and could be one of the providers that seeks to benefit from these provisions. It has a solid reputation for the quality of its provision.

Turning to the hon. Gentleman’s more recent point about self-evaluation, we intend self-evaluation to be only one part of a thorough and robust process to assess readiness for probationary degree-awarding powers. Understanding what it means to uphold academic standards is essential for any provider and should be tested, and we intend to consult on detailed criteria that we plan to publish in guidance.

I conclude by bringing to the Committee’s attention some remarks from two bodies that have assessed our overall package and concluded that we have struck the right balance in our approach. Maddalaine Ansell, chief executive of the University Alliance, said:

“The right regime for higher education and research is essential for building the knowledge economy of the future. These plans strike a healthy balance between protecting the quality and global reputation of our country’s universities, whilst also encouraging innovation.”

We welcome the support of the Quality Assurance Agency for Higher Education, which said:

“The government has struck a balance between encouraging competition and rigorous protection of UK higher education’s world class reputation, including independent quality assurance and the requirement of new providers to meet the expectations of the UK Quality Code. QAA supports measures to protect student interests and the new flexible routes to achieve degree awarding powers at Bachelors and subject level, which will allow new providers to develop their capacity over time.”

We plan for the detailed criteria and processes, as under the current system, to be set out in Government guidance. My Department intends to consult on the detail of the guidance before publication, which will enable all stakeholders to have the opportunity to feed in their views.

On new clause 9, our current policy is that degree-awarding powers cannot be transferred and we do not see that changing. If a holder of degree-awarding powers were involved in a change of ownership, they would be expected to inform the OFS, and to demonstrate that they remained the same cohesive academic community and continued to meet the criteria. We need to maintain flexibility to adapt to changing circumstances. Therefore, it is appropriate that these matters are covered through guidance in the same way in which the process currently operates. We intend to consult on the guidance before the new regulatory regime is operational. I therefore ask the hon. Member for Blackpool South to withdraw the amendment.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education) 4:45 pm, 11th October 2016

I listened carefully to the Minister, as I have throughout our proceedings. At least he is now addressing some of the meat of the issues, rather than going off and misrepresenting Labour’s position, which I warned him not to do at the beginning because we have made our position clear.

The Minister attempts to smear the Opposition by saying that we are not in favour of for-profit institutions. We did not say that. We said that for for-profit institutions to be absorbing significant amounts of public money and support—the implication of his proposals—we need rigorous inspection and process. I do not believe that he has demonstrated that today by offering a system of, “We’ll do it this way and that way with guidance.”

Where is the evidence? The Minister has produced no evidence for the so-called stifling of all the private institutions that are just springing up. We heard evidence from private sector alternative providers, including Condé Nast. Those providers were not—dare I say—typical of the sort of providers that we will get during this great revolution that the Minister is talking about. If he looked beyond his obsession and besottedness with his competition gurus to the possible implications if his proposals went wrong, he will see that we are not crying about things that will not happen. These are real risks and it is incumbent on us as policy makers and Members of Parliament to look not just to the utopian view but to a realistic view. Public money going into this expansion needs guarantees for the students and for the people who work in the institutions. If they do not get those guarantees, not only will a great deal of public money be lost but the public reputation of our higher education system will be at risk.

It is clear that the Minister is not going to move on these amendments. We will not press the amendments to a vote at this point and will make a decision on clause 40 when we have completed the further deliberations on the clause.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing)

I want to say briefly to the Minister that I do not think that it should be easy to get degree-awarding powers in this country. If we are really serious about upholding the quality and excellence of higher education, there should be a rigorous system and, because of the Minister’s remarks and the lack of safeguards for students and the public, I wish to press amendment 234 to a vote.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union)

I am sorry that the Minister sought to characterise our concerns in the way that he did. There are good examples in many countries across a diverse range of higher education providers, but he will also recognise that there are examples of unscrupulous operators who have caused real problems, not just in the United States—also in Australia. In the US, it has led the federal authorities to take legal action on behalf of students against some of the providers. All we are seeking to do is to ensure that a robust framework is in place to protect us from that situation in this country.

On new clause 9, I was reassured to some degree by the Minister’s comments on change of ownership, but I would welcome clarification on whether the review process that he would expect would be as robust as the initial regulatory entry. He did not address my concerns on the restrictions being imposed on providers in other jurisdictions, which is the second part of new clause 9, and whether that would also trigger the sort of review I am seeking through the new clause.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

I thank the hon. Gentleman for his reasoned approach. The approach that the OFS would take would depend on the circumstances of any transfer of ownership. The whole philosophy of the OFS is that it is a risk-based regulator that seeks to act in a proportionate, reasonable way. Given that core approach to the way that it will regulate the sector, we would not expect it to have a one-size-fits-all policy response to every particular circumstance that might arise. I think the answer is that the OFS would evaluate the situation in light of all its duties and take a decision on how to proceed on that basis. That would include circumstances such as those covered by the other part of the new clause relating to other jurisdictions and legal environments outside this country. The OFS would evaluate it and take a view.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union)

I will not press the new clause to a vote at this stage but I will seek future assurances, particularly in relation to that second part about action in other jurisdictions. Does the Minister not agree that if we are considering circumstances in which providers are known to have transgressed in other countries we would expect a significant review of their operation in this country?

We must now reach a conclusion on amendment 216.

Amendment, by leave, withdrawn.

Amendment proposed: 234, in clause 40, page 22, line 28, at end insert—

“(c) the OfS is assured that the provider is able to maintain the required standards of a UK degree for the duration of the authorisation; and

(d) the OfS is assured that the provider operates in students’ and the public interests.”—

This amendment requires the OfS to be assured about the maintenance of standards and about students’ and the public interest before issuing authorisation to grant degrees.

Question put, That the amendment be made.

The Committee divided:

Ayes 7, Noes 11.

Division number 9 Christmas Tree Industry — Authorisation to grant degrees etc

Aye: 7 MPs

No: 11 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

I beg to move amendment 215, in clause 40, page 23, line 11, after “instrument” insert

“approved and made by the Privy Council as an Order in Council”.

This amendment would ensure scrutiny by the Privy Council of the power to grant awards.

With this it will be convenient to discuss the following:

Amendment 224, in clause 51, page 30, line 15, leave out “(instead of the Privy Council)” and insert “and the Privy Council”.

This amendment would ensure the Privy Council retained the right of oversight for the award and revocation of university title.

Amendment 225, in clause 52, page 31, line 7, leave out “Office for Students” and insert “Privy Council”.

This amendment would ensure the Privy Council retained the right of oversight for the award and revocation of university title.

Amendment 226, in clause 52, page 31, line 18, leave out lines 18 to 21.

This amendment would ensure the Privy Council retained the right of oversight for the award and revocation of university title.

Amendment 227, in clause 52, page 31, line 22, leave out lines 22 to 25.

This amendment would ensure the Privy Council retained the right of oversight for the award and revocation of university title.

Amendment 228, in clause 52, page 31, line 26, leave out “Office for Students” and insert

“the Office for Students and the Privy Council”.

This amendment would ensure the Privy Council retained the right of oversight for the award and revocation of university title.

Amendment 229, in clause 53, page 32, line 5, leave out “OfS” and insert

“the Office for Students and the Privy Council”.

This amendment would ensure the Privy Council retained the right of oversight for the award and revocation of university title.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

The group of amendments was tabled not in the expectation that there would be problems with the development of the office for students but in response to the concerns of a number of organisations, including universities, that there should be an existing backstop to the process. It is curious, perhaps, that we should propose to preserve an institution that the Government propose to destroy, but that is what the effect of the changes would be, with the Privy Council being removed from the entire process.

I do not want to speak in great depth or detail, except to repeat what I have said previously, which is that we are entering a period of great difficulty in how our higher education might be perceived overseas. I will not repeat the arguments I made this morning about UK plc and Brexit, but I think they are extremely valid. There is the old saying, of course: if it ain’t broke don’t fix it. The Minister, full of his competition zeal for all the poor providers that have been blocked out for years and years by the Privy Council and all the other archaic institutions, wants to remove them from the process. We do not suggest that the Privy Council remain the prime mover in the process. However, particularly in the first few years, when the office for students is setting itself up and finding its feet, there should be circumstances in which the powers that the Privy Council currently exercises in the oversight of the award and revocation of university title should be there as a backstop.

There are many parallels in government and, indeed, in this place. One that might seem slightly arcane but nevertheless is similar is the process that this House devised in the late 1920s, when the Church of England wanted autonomy and did not want Parliament to debate all matters of dogma; in this case, it was a prayer book. The Church of England was allowed by an Act of Parliament to establish itself as a synodical process with its own parliament in the Synod. There remains in this House the Ecclesiastical Committee, which is an interesting institution composed of Members of both Houses. It is the job of that Committee to act as a backstop—that is how it was once described to me by a senior Whip, using a cricketing metaphor—so that proposals have the potential to be vetted and scrutinised and we can say, “Go back and think again.”

I hesitate to mention Martin Wolf, since I have already mentioned him in his capacity as an eminence and a guru to the Minister, although his thoughts on what the sorcerer’s apprentice has done subsequently remain to be seen. However, there is a strong body of opinion that, at least for the time being, there would be merit in the Privy Council retaining the right of oversight for the award and revocation of university title. Revocation of university title could, after all, be applied in extremis not simply to new providers but to any provider at this moment. That is why we have tabled this series of amendments to various elements of the Bill where it is entirely the prerogative of the office for students.

The Minister talked about the colocation and co-working of various institutions. It would not be going too far to include the Privy Council in that process. I leave it for the Minister to explain why he or his officials wish completely to airbrush out of the picture an institution and university title conferred by the Crown that has not only served us reasonably well for a long period but also acts as a kitemark or a brand for the outside world, and why he thinks that simply launching the new shiny office for students will have the same beneficial effect.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education) 5:00 pm, 11th October 2016

In our reforms, we have deliberately taken out the function of the Privy Council in the granting of degree-awarding powers and university title in order to streamline the processes and transfer responsibility for those functions to the office for students. At the moment, as the hon. Gentleman knows, for degree-awarding powers the QAA advises HEFCE. HEFCE advises the Department, and the Department then advises the Privy Council. There is a similar process for university title. That is unduly complex and time-consuming to little or no additional advantage.

On the whole, there was no opposition to these changes in the responses we had to the Green Paper. This response to our Green Paper consultation from a provider that has only recently gone through this process illustrates the point:

“Removing the role of the Privy Council in making decisions about DAPs and University Title seems prudent. Our experience of the process suggests that this stage does not have added value and merely extends the time taken to complete the process.”

In fact, we checked back through recent history and there were no examples of the Privy Council not following the Department’s advice on granting degree-awarding powers and university title—not one.

Under our new system, the office for students, as the independent sector regulator, will be best placed to take decisions on degree-awarding powers and university title. That will cut out some of the process and lead to a more streamlined system. I know the hon. Member for Blackpool South wants to make things more difficult for providers, but we want to make things simpler. This is one of the ways in which we envisage reducing the bureaucracy and burdens that prevent high-quality new providers from entering the sector.

That is up to the Minister.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

I am going to make some progress.

In its evidence to the Committee, Independent Higher Education supported this view:

“The transfer of this authority to the OfS, a modern regulator, away from the outwardly archaic and opaque mechanism of approval by the Privy Council, will be more appropriate for a dynamic and diverse sector which includes industry-led provision and overseas providers bringing their extensive experience to the UK”.

However, I recognise that the amendments are probably born of a desire to ensure proper independent decision making, with a view to protecting the quality and prestige of these awards, as well as students in the system. Let me therefore be clear that I fully agree with that intention and have designed a system that will do just that.

Let me explain how the future processes will work. With regards to degree-awarding powers, we have every intention of keeping the processes, which have worked well to date, broadly as they are. We expect the process to remain broadly peer review-based and we envisage that the OFS will seek information from the quality body, with involvement from an appropriately independent committee. On university title, again, we are not planning to change the independent decision making and scrutiny. For both areas, we want decisions to continue to be made by an arm’s length body, based on departmental guidance that has been subject to consultation as and when appropriate. That also applies to variation and revocation of degree-awarding powers and revocation of university title. Additionally, those processes will be supported by a right of appeal, as set out in clauses 45 and 55.

Although I thank Opposition Members for giving me the opportunity to talk about these important matters, we have designed the new system with the right safeguards in place. Reinserting a role for the Privy Council would therefore add nothing except unnecessary process, so I ask the hon. Member for Blackpool South to withdraw his amendment.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

Well, I am reassured that the Minister thinks he has managed to produce a brand-new system that is going to work absolutely perfectly; that is what people always say when they produce brand-new systems. For the avoidance of doubt, we were not suggesting retaining the Privy Council in its existing position, and nor were the people who supported our proposal. It was a backstop, and I hope the Minister understands that—I have tried to make it as clear as possible.

The Minister has given various assurances today; we will see how they pan out in practice. I maintain that it is a risk to create a new brand on the international HE stage without a backstop, when we are going to be in such difficult circumstances over the next two or three years. However, we are not going to agree, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss new clause 6—Committee on Degree Awarding Powers and University Title—

“(1) The OfS must establish a committee called the ‘Committee on Degree Awarding Powers and University Title’.

(2) The function of the Committee is to provide advice to the OfS on—

(a) the general exercise of its functions under sections 40, 42, 43 and 53 of this Act, and section 77 of the Further and Higher Education Act 1992;

(b) particular uses of its powers under section 40(1) of this Act; and

(c) particular uses of its powers under section 77 of the Further and Higher Education Act 1992.

(3) The OfS must seek the advice of the Committee before—

(a) authorising a registered higher education provider or qualifying further education provider to grant taught awards, research awards or foundation degrees under section 40(1) of this Act;

(b) varying any authorisation made under section 40(1) of this Act so as to authorise a registered higher education provider or qualifying further education provider to grant a category of award or degree that, prior to the variation of the authorisation, it was not authorised to grant; and

(c) providing consent under section 77 of the Further and Higher Education Act 1992 for an education institution or body corporate to change its names so as to include the word “university” in the name of the institution or body corporate.

(4) The OfS must also seek the advice of UKRI before authorising a registered higher education provider or qualifying further education provider to grant research awards under section 40(1) of this Act.

(5) The OfS does not need to seek the advice of the Committee before—

(a) revoking an authorisation to grant taught awards, research awards or foundation degrees; or

(b) varying any authorisation to grant taught awards, research awards, or foundation degrees so as to revoke the authorisation of a registered higher education provider or qualifying further education provider to grant a category of award that, prior to the variation of the authorisation, it was authorised to grant.

(6) Subsection (4) applies whether the authorisation being revoked or varied was given—

(a) by an order made under section 40(1) of this Act;

(b) by or under any Act of Parliament, other than under section 40(1) of this Act; or

(c) by Royal Charter.

(7) In providing its advice to the OfS, the Committee must in particular consider the need for students, employers and the public to have confidence in the higher education system and the awards which are granted by it.

(8) The OfS must have regard to the advice given to it by the Committee on both the general exercise of its functions referred to in subsection 2 and any particular uses of its powers referred to in subsection 3.

(9) The majority of the members of the Committee must be individuals who appear to the OfS to have experience of providing higher education on behalf of an English higher education provider or being responsible for the provision of higher education by such a provider.

(10) In appointing members of the Committee who meet these criteria, the OfS must have regard to the desirability of their being currently engaged at the time of their appointment in the provision of higher education or in being responsible for such provision.

(11) The majority of the members of the Committee must be individuals who are not members of the OfS.

(12) Schedule 1 applies to the Committee on Degree Awarding Powers and University Title as it applies to committees established under paragraph 8 of that Schedule.”

This new clause would create a committee of the OfS which fulfils much the same functions as the current Advisory Committee on Degree Awarding Powers.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

In the interest of time, I will try to be concise. Perhaps because we are coming to the end of the afternoon, the Minister was more constructive in his last comments than he had been previously. He talked about outside inspection and I hope that is a harbinger of his looking favourably on new clause 6.

New clause 6 attempts to answer the famous question posed by Cicero, which always bedevils any Government or organisation: “Who governs the governors?” I will not quote it in Latin; I will leave that to the Minister’s brother.

Photo of Alex Chalk Alex Chalk Conservative, Cheltenham

Quis custodiet ipsos custodes?

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education)

Indeed. Give that man a gold star.

Before we get into ridiculous territory, the serious point is that if we are to have confidence in the system that the Minister is proposing, it is important to have a body that can advise. That is the intention behind the new clause. The idea was put to us by MillionPlus but the view is shared by a large number of other organisations, including UUK, which the Minister quoted earlier.

MillionPlus believes that

“strong safeguards need to be put in place to ensure that any body that is awarded degree awarding powers or university title has met the criteria to do so, and will not put student interest at risk, or potentially damage the hard earned reputation of the entire higher education sector in the UK.”

Those are all things that we have been praying in aid this afternoon.

The new clause would go a long way to meeting that requirement. Subsection (2)(a) would provide for a committee to advise the OFS in general as to how it is fulfilling its functions. Subsections (2)(b) and (c) would allow for that committee to advise the OFS on the particular uses of its power to grant degree-awarding powers or university title.

The new clause allows the OFS to revoke degree-awarding powers or university title without consulting the committee, which means that any argument against it on the grounds that it might create problematic delays if urgent action were required would be mitigated. In fulfilling its role, we would expect the committee to seek advice from the designated quality body.

The current arrangements—and the Minister has made great play of praying in aid the current arrangements—for conferring degree-awarding powers and university title on an institution require, in England, the Higher Education Funding Council for England to seek the advice of the Quality Assurance Agency for Higher Education. That is not required in the Further and Higher Education Act 1992, but it clearly sets a precedent where appropriate expertise is sought prior to any decision making. It is therefore vital that the OFS continue to seek advice from the designated quality body prior to any conferring of degree-awarding powers and/or university title—[Interruption.] I hope the Minister is listening. There is, therefore, a strong argument for introducing the new clause further to reflect that obligation.

Photo of Jo Johnson Jo Johnson Minister of State (Department for Education) (Universities and Science) (Joint with the Department for Business, Energy and Industrial Strategy), Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

We have debated clause 40 extensively, so I will turn straight to new clause 6. I thank the hon. Gentleman for raising the important issue of safeguarding quality and ensuring that only high-quality providers can access degree-awarding powers and university title. We are taking that very seriously. I hope that that came through adequately in the technical note that we published a few weeks ago before the party conference recess.

I am interested that hon. Members have proposed the establishment of a committee with similar responsibilities to the current Advisory Committee on Degree Awarding Powers. I assure this Committee that we have every intention of keeping the processes around the scrutiny of applications for degree-awarding powers, which have worked well—including those around scrutiny of applications for university title—broadly as they are. That includes retaining an element of independent peer review, most likely in the form of a committee of independent members. As now, we would expect that committee to play a vital role in the scrutiny of applications, bringing to bear its unique and expert perspective on the process, and enabling the OFS to draw on its expertise in coming to a decision.

I note that hon. Members have also proposed in the new clause that the OFS must seek the advice of the UKRI before authorising the granting of research awards. We have discussed this point and I hope that I have reassured hon. Members that we absolutely expect the OFS and the UKRI to work in close co-operation in this respect. We envisage that the OFS will make its decisions on degree-awarding powers and university titles in much the same way as the Privy Council now, based on criteria set out in Government guidance, and after seeking relevant information and advice.

We intend that the precise details of the processes will be set out in Government guidance on which we intend to consult. We strongly believe that this process will ensure that robust judgments are made and that quality will be protected. Although I agree with the principle of involving a committee in decisions on degree-awarding powers, I am not convinced that exact relationship should be provided for in primary legislation. It is unnecessary and I therefore ask hon. Members to withdraw the new clause.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills), Shadow Minister (Education) 5:15 pm, 11th October 2016

I too will be brief on the substance of clause 40. I welcome what the Minister said about new clause 6. Again, the devil is in the detail and we wait to see that detail in due course, but he has outlined a reasonable process. Unfortunately, however, given the detail of the argument that has been put on clause 40, and in particular the response to our modest and reasonable amendments to mitigate the substantial dangers that we believe are posed by the way in which the Government are proceeding, we do not feel that the Minister has convinced us. We therefore wish to vote against clause 40.

Question put, That the clause stand part of the Bill.

The Committee divided:

Ayes 10, Noes 7.

Division number 10 Christmas Tree Industry — Authorisation to grant degrees etc

Aye: 10 MPs

No: 7 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly agreed to.

Clause 40 ordered to stand part of the Bill.

Clauses 41 and 42 ordered stand part of Bill.

Clause 43