One of those principles relates specifically to academic freedom and the issues to which the noble Lord was referring with respect to Israel. All academic staff at an English higher education provider have freedom within the law to question and test received wisdom, and to put forward new ideas and controversial or unpopular opinions, without placing themselves in jeopardy of losing the jobs or privileges they may have at that provider. I think that essentially covers the points he was making in respect of academics being prevented from pursuing partnerships or research with universities in Israel or with Israeli academics. We have these provisions in law and the Office for Students has all the powers at its disposal to enforce them. So I am not sure that Amendment 8 is entirely necessary, although I understand why he tabled it.
]]>Universities are often very decentralised in their structures, and power can be distributed quite far and wide. It is not always concentrated in the vice-chancellor’s office; nor is the governance of universities often as clear- cut as it might be. I would appreciate some clarity as the Bill proceeds on who exactly is going to be identified as the decision-maker in particular situations. Do we mean specifically decisions taken by the executive management team of an institution, principally the vice-chancellor? Do we mean, for example, student unions?
I noted that in my noble friend the Minister’s response to the noble Lord, Lord Mann, that student unions were—if I heard her correctly—out of scope, because they are private bodies. This confuses me a little, because I thought the whole purpose of the Bill, from a political point of view, was to address precisely this issue: student unions getting on their soapboxes and making statements about BDS, and all the rest of it. If they are out of scope of the Bill, I really wonder why universities as a whole are still in scope. It is not the vice-chancellors, academics or heads of department who are making these kinds of noises; it is the student unions. If I understood my noble friend the Minister correctly, they are not even covered. I really question why universities are still in scope at all, but that is a question we will come to later in Committee.
The final point on which I would like some clarity from my noble friend the Minister is whether a decision-maker will also be deemed to be an individual academic, who may manage a research budget. Will the use of that research budget by the individual academic be part of the decision-making process captured by the Bill? If so, how will that be squared with the legal duties on the OfS, among others, to promote academic freedom and freedom of speech in our higher education institutions?
]]>There is of course nothing new in the criticism that too many go to university—we have heard it again today—or that too much public money is wasted on low-value courses. Such attacks have been a constant in the history of the expansion of higher education and everybody is well used to it. I do not want to fall into the trap of complacency, and I certainly agree with the noble Lord, Lord Londesborough, that there is a case for cracking down hard on pockets of poor provision in the sector, which affect a minority of students on a minority of courses. We want to ensure that value for money is produced by this system.
However, I do not think that we should succumb to a general cynicism about higher education; nor do I think that we should return to a system of rationing higher education and limiting access to the number of students who progress from level 3 to levels 4, 5 and, particularly, degree level 6. Why do I say this? I say it because there is a very well-established skills bias in knowledge economies. Job creation takes place overwhelmingly in roles requiring graduate skills and, in the UK, this is happening at a time when we are already suffering from marked skills shortage, where we do not have enough highly skilled individuals to fill many vacancies. Our real problem as an economy is skills shortages. This really matters if we care about levelling up. Unless we continue to develop the pipeline of highly skilled human capital, we will see increasing inequality as wages rise more rapidly for those whose skills will be in stronger demand. We must not lose sight of how imbalanced our economy is. The FT recently calculated that, if you strip London out of our GDP per capita figures, the average Briton is worse off than the average resident of Mississippi, the poorest state in the United States.
The second reason is that we are living in an era of unprecedented technological disruption. As the noble Lord, Lord Blunkett, said, there are massive changes ripping through our economy due to two big waves of innovation; the first is a digital innovation wave, built on AI, supercomputing and automation; the second is a deep-science innovation wave based on biotechnologies and nanotechnologies. Our ability to surf those waves depends on the absorptive capacity of our firms and the adaptability of our people.
We are already seeing massive labour market disruption. As the noble Lord, Lord Blunkett, said, these powerful technologies, a number of which are converging at the same time—not just AI, but big data, cloud computing, the internet of things, virtual reality and blockchain—are driving change in all aspects of our lives. As the World Economic Forum’s Future of Jobs report found in its survey of employers, 44% of workers’ skills are likely to be disrupted over the course of the next five years. It is only the quality of our education system that will determine whether the UK will benefit from these innovations and whether it will be able to join the ranks of countries developing the next technologies. The most highly innovative knowledge economies around the world—look at South Korea, Israel, Japan and Canada—have boosted tertiary participation rates to well above ours, to the order of 60%, 70% or even more. Our ambition should be to join this vanguard of knowledge economies, not to give in to the dismal voices calling for student number controls that will hold back our productivity, widen inequality and throw sand into the engines of social mobility.
]]>I would be grateful if the Minister could provide some clarification on three issues. Two of them have been touched on so I will briefly skate over them. The first is the question of the ONS review of the status of universities in the public accounts. This is really not a trivial matter should they be reclassified as part of the public sector. It is important for us to understand, as the Bill makes its way through the House, what assessment the Government have made of the impact on universities’ financial freedoms, including over borrowing and investment, should such a reclassification take place.
The second area on which I would be grateful if the Minister could provide some clarity is the scope of the Bill in relation to how it is going to define a higher education provider. At several points, reference has been made to universities. Universities are of course relatively few in number; there are about 124 of them on the OfS register, along with a further 360-odd higher education institutions that do not have a university title, but beyond that there is a much larger universe of higher education institutions that are not on the register. I wonder what the Government’s intentions are in respect of students studying at those institutions and whether they will be in scope of this legislation.
The third point about which it would be helpful to understand a bit more has been touched on by several noble Lords: the freedom of speech duties that have been strengthened in various bits of legislation over recent years and how those duties will be exercised. In particular, what role will there be for the director for free speech within the Office for Students?
I opened by saying that I did not think this was perhaps the best way of realising the Government’s good intentions. There is possibly a better way, specifically with regard to universities, and that is to focus on developing the positive announcement that the Government made in the Autumn Statement that they would fund training and education relating to anti-Semitism in schools and universities, and to address the problem of anti-Semitism up stream. There are excellent organisations that provide training, including the Holocaust Educational Trust, which could much better be deployed in the cause of addressing the root cause of anti-Semitism in our universities than this legislation. I therefore ask the Government to reflect carefully on whether universities, which by and large are autonomous private organisations, really need to be in the Bill at all.
]]>I sincerely welcome this Bill as it addresses a very important problem with our current funding system for higher education. Our system, modified by my noble friend Lord Willetts, is one of an income-contingent, time-limited graduate contribution towards the repayment of heavily subsidised loans for tuition and maintenance. In my mind it is the least bad of all available systems, but it does have three flaws.
The Bill is important in that it address one major flaw: the impact that our current system has had—as we have heard from many Members this afternoon—on lifelong and adult learning, which has been in crisis in this country for a decade. On its own, however, it is not enough, because it does not address two prior problems with our student funding system: the fact that our system has not allowed for tuition fees to rise with inflation, which has led to the progressive defunding of our universities, and the increasingly precarious dependence of our universities on international student tuition income, cross-subsidising domestic tuition and the important research that goes on in our system.
Sadly, this Bill does not address that problem. Nor does it address a related issue: we have a system that has no link at all between the quality of provision and the fees that institutions can charge for that provision. It is very important to have alignment between quality and funding; it seems to me essential that we put such a system in place. The coalition Government did attempt that under David Cameron’s Administration when they instituted a link via the teaching excellence framework, which resulted in the only year of inflationary uplift to tuition funding over the last decade. Institutions that participated in the teaching excellence framework were allowed to raise their fees from £9,000 to £9,250. Sadly, however, that sensible innovation lasted only one year, because a snap election resulted in the Government losing the majority on which the policy depended.
Since that time we have seen, effectively, a crisis whereby our institutions, so important to our future as a knowledge economy, are becoming increasingly financially vulnerable. Had we stuck with the mechanism that the Cameron Government instituted, we would not have a situation where, for example, UEA had a £40 million deficit this financial year; tuition fees would have been allowed to rise to around £11,700 for those institutions that acquitted themselves well in the teaching excellence framework; and we would have a link between teaching quality and funding, which any sensible system should have.
So, all that aside, it would be better if this Bill reinstated a link between quality and funding and made automatic an inflationary uplift in the upper limit of our tuition fee system, to put our universities on a stable footing. But that is by the by. The important thing is what this Bill does try to do; that is what is important today. The Bill creates a framework for us to move to a much more flexible system whereby we fund credits rather than years of study and enable people to dip in and out of learning throughout their lives. That is really welcome. I thoroughly support the objectives of the Bill and the framework that it creates for a much more detailed policy that is, hopefully, to come.
My concern, though, is about a policy that is in development at the moment in the department. There are lessons that we need to learn from the short-courses trial, which a number of Members have already referred to today. The trial is clearly struggling, with only 37 participants to date. That really is a paltry number, and I do not think it is sensible for us just to plough on and not try to learn some lessons from what is going on right now with the pilot and from the rather lacklustre response from providers—universities—in coming forward with suitable content for LLE funding.
There are potentially three lessons that we might preliminarily try to draw from what is going on with this pilot, and they are as follows. First, it is a mistake for us to focus so narrowly on level 4 to 5 courses at the expense of level 6 and level 7—that is, master’s—courses. Obviously, levels 4 and 5 are important, and I am not trying to say we should not have people doing level 4 and 5 study, but it is disappointing that modular degrees are not going to be available until the academic year 2027-28, almost a decade after the Augar report was commissioned and eight years or so after it landed. That is an inordinately long time for us to be getting off the policy drawing board into delivery mode for modular degrees, and I think the department could actively look at ways of accelerating that.
In respect of level 7, as the noble Lord. Lord Rees, said, it is important that we make modular funding available for level 7. Of course, master’s loans are available in non-modular form outside the LLE, but many people in work who already have level 6 qualifications will want to continue to progress to higher levels of educational attainment and will want to access level 7 courses. So I strongly urge the Government to remove their mental block on making LLE funding available for levels of study above level 7.
The second lesson that I suggest can be drawn from the pilot is about the minimum size of funding for which LLE funding will be made available. As the noble Lord, Lord Stevens, said in his excellent speech, 30 credits is too large a block of funding both in terms of learning commitment and time and with regard to the amount of loan funding—probably over £2,000—that the learner will have to commit to taking out. Other countries’ experience is that blocks of study of 10 or 15 credits are a much more flexible way of getting this thing off the ground, and I urge the Government to be a bit more flexible regarding the minimum size of funding that LLE will make available.
My third lesson, and this is probably the most important one, is about the kind of provision that will be eligible for LLE funding. At the moment the Government are determined, as far as I understand, to replicate provision that already exists; it has to derive from an existing HE qualification. In effect, we are saying that we want more of the same but in smaller pieces. This is a big missed opportunity. We want to enable learners to access different kinds of provision from different kinds of providers in different shapes and forms. We do not want to create a policy framework that completely chokes off innovation at this stage. Learners, as Andreas Schleicher from the OECD put it in his recent HEPI lecture, will want to access many different types of provision from many different types of provider in lots of different ways, so I urge the Government to be a bit more flexible in the range of providers and the types of courses that they allow into the LLE funding regime.
Those are three early lessons that I would draw from the pilot. I do not think it is irremediable at this point. We are not going to launch the LLE until 2025-26, so there is plenty of time to get the policy right, but we need to crack on with it. In the meantime, I strongly support the Bill for providing the legislative framework for what I hope will be the skills revolution that Ministers want.
]]>Amendment 63 withdrawn.
Amendments 64 to 66 not moved.
Clause 9 agreed.
Clause 10: Director for Freedom of Speech and Academic Freedom
]]>I am not sure we are capturing exactly what we need to in this section of the Bill on overseas funding. If we are to legislate afresh, as we seem to be doing, on freedom of speech in higher education, the chilling effects arising from the excessive concentration of international research and tuition income surely need to be part of the discussion. The four categories of relevant overseas funding in Clause 9 are all good as far as they go, but they manage to exclude altogether the largest single source of such income. That is, of course, the income that universities receive from the uncapped and unregulated tuition fees charged to international students.
Like so many in this place, I strongly support the contribution that international students make to the success of our higher education system, and I am very pleased indeed that we met the Government’s target of 600,000 international students in this country by 2021, 10 years ahead of the 2030 target. There are many critics of international students in the country today. I note only that the proportion international students represent in the overall student population has not changed markedly since 2014. While the actual number has increased by 28% since that time, that has been matched by a similar growth in the UK student population, meaning that their proportion of the mix has stayed broadly the same.
What has changed, particularly since our departure from the EU, is the composition of this international student body. Concentrations of international students from particular countries are intensifying quite rapidly. Efforts to diversify are generally making feeble progress. Recent research by Janet Ilieva of Education Insight for Universities UK International highlighted this clearly. Her research pointed to an increase in the number of UK higher education institutions recruiting more than half of their undergraduate students from just one country, and at postgraduate level the number of higher education institutions recruiting more than half of their PG students from one country has increased over the past three years from 42% to 50%.
A full quarter of international students in the UK are from China. It is reasonable for policymakers to ask whether this is perhaps too much of a good thing, at least for some institutions. Dependency on China for international students varies markedly across the UK system, driven by the strong preference of Chinese students for prestigious and highly ranked institutions. China accounts for 51% of all non-EU students at the 24 universities of the Russell group—10 times more than the next country, India, which accounts for just 5% of such students. The Russell group has made a clear business decision to focus its international student recruitment on a group that yields the most revenue per place. That is because average tuition spend is almost £20,000 for a Chinese student, whereas it is £11,000 for a student from Nigeria and an average of £10,800 for a student from India. Six of our Russell group universities—a quarter of them—had more than 5,000 students from China in the last academic year, and one big institution currently has more than 11,000 Chinese students, roughly a quarter of its total student body of 44,000.
The problem is that excessive concentrations of students from particular countries within certain institutions can create financial dependencies that may limit freedom of speech and result in academic self-censorship. This issue pertains to China now, especially within the Russell group, but it could easily be about other countries exercising inappropriate influence and instrumentalised student flows in the future. We are living through torrid geopolitical times, and views may vary as to how likely some form of disorderly disengagement in our relations with China is and over what timeframe, but we should assign some probability to a severe disruption to student flows and research partnerships.
To my mind, the Office for Students is late on to this from the perspective of institutional and systemic financial sustainability, and I also believe that UKRI is late on to it in terms of assessing the impact on our capabilities in key fields, including telecommunications and applied materials, where a significant portion of our most impactful research is undertaken in collaboration with Chinese partners. That is why I would welcome a broader definition of overseas funding than is currently in the Bill and why I believe it would be sensible to add a duty on the Office for Students to consider whether a registered higher education provider is overly reliant on income from a single country of origin. I beg to move.
]]>My objection to Clause 4 is that I think it will undermine the regulator, the Office for Students. I speak not as a lawyer or an expert jurist, so I enter into this terrain with great trepidation. From a very practical point of view, my concern is for the work of the director for free speech and the authority of the Office for Students if we put this new statutory tort into law.
Having been involved in helping to set up the Office for Students through the Higher Education and Research Act with my noble friend Lord Younger, I am acutely aware that we have already created a very powerful regulator. The reporting structure that this Bill creates around the director for freedom of speech is none the less extremely useful. That is why I support this aspect of the Bill, which creates this new position in the leadership team of the Office for Students.
However, once the director for freedom of speech’s position is created, his or her position will be very strong and he or she will have sufficient powers to do the job that we expect him or her to do in promoting freedom of speech in our system. That is because the director for freedom of speech will be able to impose conditions of registration on any provider that falls short of the enhanced duties created by this Bill.
These conditions of registration are an extremely powerful regulatory tool, because they consist of far more than just the nuclear option that HEFCE used to have, which was just to withhold funding from a provider. The Office for Students has a very subtle suite of regulatory tools at its disposal. They run a full range from simply seeking an action plan from a university all the way through to imposing fines on an institution if it does not deliver on the action plan it has agreed with the director for freedom of speech. They do not need to consist simply of suspending a provider from the register and therefore effectively dooming it to failure, or taking away its university title. Those are nuclear options that no regulator really has any credibility in threatening, but the director for freedom of speech will have many other more useful tools at his or her disposal.
A statutory tort on the statute book will not help the regulator in any way at all; it already has the tools it needs. I strongly support my noble friend Lord Willetts. I hope the Government will listen to the debate and the excellent interventions that we have heard this afternoon and accept Clause 4’s removal from the Bill.
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