I beg to move,
That this House
has considered the Office for Students.
It is a pleasure to serve under your chairmanship, Dame Maria. Higher education is unanimous in recognising the need for effective regulation. The UK has an international reputation for the quality and strength of our higher education sector. Everyone involved in the sector I have spoken to or corresponded with understands the role that effective and proportionate regulation has to play in improving standards and maintaining that reputation. I thank everyone who has been in contact since they saw this debate timetabled.
The Office for Students was created in 2018 with the aim of ensuring that higher education in England delivers positive outcomes for students. Its mission statement is:
“to ensure that every student, whatever their background, has a fulfilling experience of higher education that enriches their lives and careers.”
However, there are increasingly concerns that it has become overly bureaucratic, imposes increasingly high costs on providers, takes an inconsistent view on what does and does not affect the quality of student education, and has become more concerned with extending its areas of oversight to meet the desires of the Government of the day than the needs, experiences and views of the students for whom it is supposed to exist.
Regulation is vital for any sector, but it comes with financial and resource costs that must be proportional to the risk, and must represent value for money. The cost of regulation for providers should be an important concern for the OfS, as ultimately that cost is felt by the students. The HE sector has to contend with regulatory overlap; there are multiple regulators in the HE, further education and technical education sectors, as well as multiple subject-level, professional, statutory and regulatory bodies.
The Government’s own regulatory code outlines the principle that regulators
“should collectively follow the principle of ‘collect once, use many times’ when requesting information from those they regulate.”
It also says that regulators should
“share information with each other…to help target resources and activities and minimise duplication.”
“Regulators should avoid imposing unnecessary regulatory burdens through their regulatory activities”, and
“should choose proportionate approaches to those they regulate, based on relevant factors including, for example, business size and capacity.”
Is the OfS adopting that approach? In the past few years, it has spent a great deal of time continually revising its regulatory frameworks and processes, including the B conditions of registration on quality and standards, the access and participation regime and the Teaching Excellence Framework.
In 2022, there were a number of significant consultations running simultaneously, and major consultations were run with very short response periods. For example, the consultations on quality and standards, B3, TEF and underpinning data all ran at the same time. The supporting documents for those consultations ran to a total of more than 700 pages, and the sector had just eight weeks to respond to all of them. That approach results in a very high cost to institutions, and risks undermining the quality of data submitted due to the compressed timetable. For example, one Universities UK member had 10 full-time equivalent staff supporting regulatory compliance at an approximate staff cost of £444,000. Another institution estimated the cost of regulatory activities to be £1.1 million in 2022-23.
Such demands place a higher relative cost on smaller providers, which not only lack the resource of the larger providers but tend to offer a wider range of education, including higher education, degree apprenticeships—the Minister’s favourite—further education and other industry-specific continuous professional development. That means that they must deal with a large number of regulators in addition to the OfS, including the Institute for Apprentices and Technical Education, the Education and Skills Funding Agency and Ofsted. Unfortunately, that does not just mean reporting for some students to one regulator and for others to another. Degree apprenticeship students have to be reported to both the OfS and IFATE in significantly different ways. GuildHE reported that one provider needed separate data teams for the two bodies.
On average, the cost of regulation for a student studying HE in a FE college that has only a small HE provision is £289, compared with £14 for a student studying at a large HE institute. That cost is even more pronounced in the light of the lower tuition fees charged by many colleges—£6,165, in contrast with the higher education fees of £9,250.
In the same report on regulation in smaller universities and specialist colleges, GuildHE said:
“Overly-legalistic language in communications, delays in meeting their own deadlines, short consultation periods, consultations’ outcomes that rarely listen to the views of those consulted and political capture” were regular complaints from their members. Those complaints are repeated in the results of the OfS’s own survey, “Report for the Office of Students: Provider engagement”. Its executive summary said:
“Providers are confused by the complexity of some OfS processes, communications and consultations, and related tasks require high levels of resource by providers.”
It went on:
“Providers would like a more transparent, collaborative, and consultative relationship with the OfS with a shared focus on student outcomes, including opportunities to contribute and share good practice.”
Specifically on smaller providers, it concluded:
“Small providers felt that the OfS was geared towards large established universities and didn’t acknowledge their different levels of resourcing and experience.”
Furthermore, the report read:
“Smaller and further education providers feel that their different circumstances and student audiences are not recognised by the OfS and that the regulator failed to adapt their approach accordingly.”
Those complaints go to the heart of the student experience. HE students are not a homogeneous group and a diverse HE ecosystem is required to meet their needs, but the OfS seems to be operating an overbearing, one-size-fits-all approach. It appears that that approach suits no one, as the report also said:
“Established providers felt they should be treated differently from newer providers and that communications they received didn’t reflect their low-risk track record.”
In the guidance for condition B4, all registered providers are now expected to retain—this is ridiculous—five years of all student assessment. Conservative estimates from Universities UK of what digitalising and storing work on such a scale might cost an institution resulted in figures of between £270,000 and more than £1 million a year. That does not include the environmental cost.
The requirement also poses difficulties for subjects such as art, design, performing arts, and medical and veterinary subjects. Such subjects use a range of approaches to assessment, including continuous assessment based on a series of exchanges. To digitally record all those exchanges would be inappropriate and would entail GDPR issues. The retention of students’ work in the arts presents difficulties over intellectual property rights, which return to students on graduation.
I am not alone in being particularly concerned about the recent announcement that the Quality Assurance Agency for Higher Education will no longer be the Secretary of State for Education’s designated quality body. That means that it will no longer be responsible for assessing quality and standards in English higher education to inform the OfS’s regulatory decision making. The QAA has relinquished its role because the work it was being asked to undertake in England on behalf of the OfS was no longer compliant with recognised quality standards, namely the European standards and guidance that are monitored by the European Quality Assurance Register for Higher Education.
As the Minister will be aware, the QAA has been in existence for over 25 years. The system it has established is regarded by many countries as the gold standard in quality enhancement and benchmarking and it is still in operation in Wales. Its withdrawal in England is entirely due to the conditions that the OfS has insisted on how their reviews are undertaken.
Among the issues that led to non-compliance were the OfS’s refusal to publish reports on providers, ending the cyclical review of all providers and the insistence that student representatives—remember that this is the OfS—should no longer be part of review teams. The sector is still waiting for clarification on how the OfS would replace the QAA’s role in terms of breadth and activity beyond investigations. Will the OfS now become the regulator, the enforcer and the assessor of quality? If that is the case, how can there not be a conflict of interest?
My hon. Friend is making a fine speech. I apologise for missing the beginning, because the debate started surprisingly early. She made a really important point about the QAA. Does she not agree that it is rather extraordinary that the QAA is no longer providing that role on the basis that it wanted to provide student voice, significantly? The gold standard she described requires the presence of student voice within the regulatory framework. Does that not go to the heart of the problem with the OfS at the moment? I recall, in a Public Bill Committee, discussing with the Minister at the time the fact that the OfS was set up with too small a student voice. That voice has become consistently more marginalised through its life.
My hon. Friend is absolutely right, and I shall speak in more detail about how the voice of students has been marginalised. It seems fairly ridiculous that the Office for Students wants to exclude students when its whole core purpose and mission statement is to represent and promote the needs of students. There is a serious disconnect. I think we should be slightly ashamed of the fact that the QAA is moving out of that role within English institutions.
Although only 6% to 7% of higher education is taught in English FE colleges, they make up around 37% of providers registered with the OfS, and there are more FE colleges on the OfS register than universities. The Education and Skills Funding Agency and the Department for Education are the chief regulators for FE colleges, and several agencies have funding, regulatory and inspectorial roles in the FE. OfS requirements on quality and standard of teaching, student support and wellbeing and financial sustainability overlap with those in many instances.
Large institutions are not unaffected. Universities UK provided an example of one member reporting a total of 99 data returns being required for the 2022-23 academic year across not only the OfS, which represents only a small proportion of this number, but also professional, statutory and regulatory bodies, the Student Loans Company and the Office for National Statistics. That is being supported by a team of seven full-time staff members. Indeed, concerns about multiple and potentially duplicate data collections were recognised by the DfE in the creation of the higher education data reduction taskforce in 2022. I am hoping the Minister will be able to feed back with progress on that.
It has been argued by some that the focused remit for the OfS, as set out in the Higher Education and Research Act 2017, was already quite wide-ranging and too broad, with 25 conditions of registration. Over the past five years, the OfS has expanded its responsibilities to include as priorities unexplained grade inflation, harassment and sexual misconduct, mental health and wellbeing, freedom of speech, diversity or provision, modular provision, transnational education, partnership and franchise provision and non-OfS-funded provision such as additional teacher training and degree apprenticeships. With the withdrawal of the QAA, we must now assume quality assurance is a priority. Where is the compelling evidence for this expansion of OfS priorities beyond its original remit in HERA?
In 2022, the Higher Education Policy Institute’s student academic experience survey showed that the majority of students were comfortable about freedom of speech and showed a recovery in several aspects of students’ wellbeing, with the life satisfaction, life feeling worthwhile and happiness categories all increasing. Tackling harassment and sexual misconduct is of course crucial, but is that really the role of the OfS regulator? It is already covered by legislation. The Government’s summary of HERA suggests that the OfS’s primary aim was to make it easier for new higher education providers to enter the market and raise teaching and quality standards. What has driven the OfS to move so quickly into these other areas, bringing increased financial and resource costs for both regulator and regulated?
It seems that the OfS is disproportionately influenced by ministerial pressure. We have just heard of how the increased OfS burden increased regulatory scope, but providers are paying for that twice—once through the extra costs of data collection and administration, and again through a 13% increase in OfS fees to cover its own costs of moving into these extra areas, as announced in December last year. It is worth noting that the OfS was due a review of its fee model two years after its establishment, but that is yet to happen.
However, this is not an increase the OfS wanted in September 2020 when it committed to a 10% real-terms reduction in registration fees over two years. Then came guidance from the Secretary of State for Education and the Minister for Further and Higher Education in March 2022 advising that the fee reduction was not necessary in view of the priorities the OfS was being asked to pursue. This is neither the first nor the last incident of the priorities of the OfS not being set by the sector or, crucially, by the students, who it was set up for, but by the Government.
In November 2021, the Secretary of State and the Universities Minister write to the OfS requesting that it start requiring universities to work with schools to drive up academic standards. Three months later, the OfS puts out a press release saying that it will work with universities to
“put their shoulder to the wheel” to increase attainment in schools. In March 2022, the Universities Minister writes to the OfS asking it to conduct on-site inspections. Two months later, the OfS puts out a press release saying—guess what?—that it will conduct on-site inspections. In March 2022, the Secretary of State and Universities Minister write to the OfS asking it to set conditions of registrations in relation to sexual harassment as soon as possible—and it goes on to do just that.
The OfS does not appear to be an independent regulator, driven by the needs of the student; it appears to be a regulator driven by the desires of the Government of the day. But it is not even when the OfS is directly required to do something, which I can understand. If the Minister just happens to mention that something is important, the OfS jumps to. In April 2018, Universities Minister Sam Gyimah is in the news announcing that he will keep a “laser-like” focus on vice-chancellors’ salaries. Guess what the OfS does two months later, without even being asked to? Two months later, it publishes a new requirement forcing universities leaders to justify their salaries.
In April 2021, the then Universities Minister, Michelle Donelan, is in the news for announcing that she is “appalled” by inclusive assessment practices that do not mark down students with incorrect grammar. Again, there was no direct request of the OfS, but guess what? Two months later, the OfS launches a review of inclusive assessment practices. In February 2022, the same Universities Minister is in the news, calling for universities to end all online learning. The next month, the OfS launches a review of blended learning.
Where is the regulatory independence that holds students at its very core? The Government do not even need to write to the OfS to get it to do what they want. They just need to issue a press release, and now they have a member of the Conservative party, who chooses to retain the party Whip, sitting in the House of Lords who is the chair of the OfS. As the Minister is aware, Lord Wharton had no previous experience in higher education. He did, however, run the leadership campaign for the man who appointed him.
Last year, while chair of the OfS, Lord Wharton spoke at the Conservative Political Action Conference in Budapest, Hungary. He endorsed the recent victory of the Hungarian Prime Minister, Viktor Orbán, a man who had been widely criticised for a host of restrictions on human rights and democratic practices—specifically, for attacks on academic freedom including, infamously, shutting down the independent Central European University. Lord Wharton said that CPAC was a
“great chance to pick up new ideas…reconnect with friends across the world” and
“fight for the values that we all hold dear”.
I am not even going to quote the remarks of another speaker who attended the conference—Zsolt Bayer, a television talk show host in Hungary—because the language he used is not something I wish to repeat. Lord Wharton wrote an apology to staff, saying that he did not know who else was speaking and had never heard of Bayer, but that is hardly reassuring. The rest of the world can see and hear this. What conclusion does the Minister imagine it is drawing about our supposedly independent OfS?
So the OfS listens and responds to Government, but does it listen and respond to students? We have already heard that HEPI’s most recent student survey suggests a different set of priorities for students from those pursued on their behalf by OfS. The OfS will no doubt say that it has its own avenues to hear from students, but we only get answers to the questions we ask. In the most recent consultation on the national student survey, 90% of respondents told the OfS that they wanted to retain the summative question, “Overall, are you satisfied with your experience?” But out it went anyway. The majority told the OfS that they did not see the value of a question about freedom of expression, but in it went anyway.
With or without those alterations, the NSS only captures the views of final-year students—something that has contributed to both the Public Accounts Committee and the National Audit Office concluding that the OfS has an “incomplete picture” of student satisfaction. That dovetails with the evidence given in a hearing for the ongoing Lords Industry and Regulators Committee inquiry, when members of the OfS student panel said that the panel was threatened with a reassessment of its future if they continued to express views on inclusive curricula that did not conform to those of the OfS staff. Former panel member Francesco Masala said:
“we felt quite often that we were there potentially more as a tick-box exercise rather than genuinely providing active challenge”, and that if
“you are…a representative of students, there will still be someone in a boardroom who is going to tell you what you really think and what you really want.”
Their opinion was that the OfS made decisions that were opposite to the advice and views gathered through student surveys and consultations and that it then buried the outcomes of those consultations by rolling student feedback in with feedback from all other stakeholders. That was particularly the case on freedom of speech, which they felt was a Government priority and not a student priority. Add to that the OfS’s insistence that the QAA removed students from advisory teams and we might be forgiven for asking, “What does the s in the OfS stand for?” It is unclear to many in the sector whether the OfS has sufficient expertise or capacity to meet its ever-expanding duties and operations. To make matters worse, while expanding its reach into areas where it is not needed, it appears to be falling at monitoring areas that are core to its mission.
Both the Public Accounts Committee and the National Audit Office have found that the OfS lacks an integrated system for assessing financial risk. These risks come from a multitude of external pressures on universities’ financial sustainability, such as rising pension costs, inflation in the face of frozen tuition fees, the impact of the covid-19 pandemic and the risk of Government policy or geopolitical events affecting international student recruitment. The OfS does not focus on assessing the level of risk that these systematic risks pose to the sector or our students, despite the fact that the proportion of providers with an in-year deficit, even after adjusting for the impact of pension deficits, increased from 5% in 2015 to 32% in 2019-20. Some 26% of universities forecasted at the end of 2020-21 that their cash balance would fall below 30 days’ net liquidity at some point in the next two years. Financial stress is not confined to one part of the sector: the 20 providers that have had an in-year deficit for at least three years range in size from 200 students to 30,000 students.
Universities UK has raised a number of issues with the way investigations are being undertaken, including a lack of clarity on the basis for the investigation, limited information on what a provider needs to do to comply with the investigation, the scope changing during the investigation, inconsistent methodologies when investigating similar issues within different providers, and the absence of an expected timescale with short deadlines for providers to supply large amounts of information, with delays in response to that information from the OfS. I was given one example where a single query requesting a range of data and information required 8,070 hours of staff time at a cost of £48,000, including external legal advice and a number of examples of requests for large volumes of information followed by changes in the focus of the OfS inquiry. This is undermining trust in the regulator when these requests have been felt to be fishing exercises and, of course, that adds to the time cost and burden of the work.
To conclude, we have heard from all areas of higher education, large and small, that the regulatory burden is too large and expensive. What steps will be taken to reduce it? For example, will the higher education data reduction taskforce be reconvened to assess and address data burdens across OfS and other relevant regulators, including the OfS counterparts in the rest of the UK? Fees are increasing by 13% with disproportionately higher costs for smaller institutions. Does the Minister believe the OfS provides value for money? Will the DFE consider working with the OfS to make specific provisions for smaller institutions by being less rigid in its data requirements, reforming its fee structure to reflect the number of students at an institution and improving two-way communication with the sector. As I know the Minister cares deeply about degree apprenticeships, will he look specifically at the amount of regulatory overlap required for that?
We have a political placeman as chair, constant ministerial direction of the OfS and an OfS no longer compliant with recognised international standards. How will the international standing of the UK HE sector, as one of the high academic standards of excellence free from political interference, be maintained? This country has a higher education sector that is internationally regarded as maintaining the highest academic standards and being free from politically motivated Government interference. It needs and deserves a regulator to match. I do not believe we have it yet.
It is a real pleasure to speak in this debate. I thank Emma Hardy for leading it. She gave a credible, comprehensible introduction—no one could doubt the knowledge she put forward today, and I congratulate her on that.
Higher education is so important for England, and indeed for all of us in the devolved Assemblies, where we have the ability to direct our different ways of doing things. Although the Office for Students does not apply to Northern Ireland—we have a different system back home—the Department for the Economy at the Northern Ireland Assembly has fantastic guidelines and direction in ensuring equality and diversity for every student. As I always do, I will give a Northern Ireland perspective to this debate—not because the Minister has responsibility for Northern Ireland, but to add another perspective, which will complicate what the hon. Member for Kingston upon Hull West and Hessle has put forward.
I want to honestly say what a joy it is to see the excellent and knowledgeable Minister in his place, and I very much look forward to his contribution. When we go to vote, I hear people from all parties saying that he is a really good Minister. There is consensus of support across the Chamber, which comes from the way he deals with the questions put to him. It is quite an achievement, and I congratulate him on that.
In Northern Ireland, the higher education division formulates policy and administers funding to support education, research and related activities in the Northern Ireland higher education sector. Unlike other parts of the United Kingdom, Northern Ireland has no higher education funding council; the Department for the Economy fulfils the roles of both a Government Department and a funding council. In Northern Ireland, 77.8% of school pupils will go on to study in some form of higher education setting, whether that be through a regional college, university or education-based apprenticeships.
I have a very good working relationship with my local technical college and Ken Webb, its chief executive; we talk regularly about these matters. I understand that the students the college produces are excellent, and their potential to gain jobs is also there, so there is good continuity from education to employment. Within the higher education division in Northern Ireland, there are many sectors that fall into this category, including the student support branch, student finance branch, research and knowledge branch, and many more.
I am minded, as I often am when I talk about education—the hon. Member for Kingston upon Hull West and Hessle referred to this, and I am sure others will as well—that the students of today, after all, are the leaders of tomorrow, whether they be politicians, teachers, business leaders or, as in my constituency, farmers. The opportunities are there. We need to encourage and assist the next generation and give them help along the way. That is important.
The Office for Students and other bodies aim to do their best to represent the individual student on many issues: student finance, employability opportunities—I am glad to say that I see evidence of just how good those are—careers advice, which is also excellent, partnerships, collaboration, and much more. Support for higher education is crucial, as it encourages pupils to stay in university and complete their course. According to the Education Data Initiative, around 40% of undergraduate students each academic year leave or drop out of their chosen university course. Those figures are crazy. It is so important that these opportunities are not wasted for others who have been dying—a word I often use—to go to university to gain the opportunity to do better educationally.
I am here to support the hon. Member for Kingston upon Hull West and Hessle. I want to conclude by saying that this subject is so important and this debate has been vital. The hon. Lady has illustrated its importance in all aspects of higher education, and I am pleased to add my contribution. I thank the Department for Economy back home for all the work it does in this sector. I know that the Minister always responds to these things, so I have only one question for him, which hopefully he can respond to here. Will he ensure that discussions are undertaken regularly with all the devolved Administrations, in particular the Northern Ireland Assembly, so that we can keep our support for him and the hon. Member for Kingston upon Hull West and Hessle at what is already an all-time high?
It is an absolute pleasure to serve under your chairmanship, Dame Maria. As has been mentioned, the Office for Students, which is the independent regulator for higher education providers, is a relatively new addition to the regulatory landscape in the UK and was formed back in January 2018. I think I am right in saying that this is the first opportunity that MPs have had to debate the regulator since the passage of the Higher Education and Research Act 2017. Here we are five years on, with this well-timed and possibly well overdue debate about what is happening in the landscape.
I congratulate my hon. Friend Emma Hardy not just on securing the debate, but on her absolutely comprehensive and thorough dissection of the issues, which ranged from the burden of bureaucracy, the concerns about consultation and how it is handled, the questions about the future measurement of quality across the sector, and many points in between, which I will elaborate on. I thank my friend, Jim Shannon, for his contribution and for reminding us of some of the distinct characteristics of higher education provision in Northern Ireland.
Before I build on some of the points raised by my hon. Friend the Member for Kingston upon Hull West and Hessle, I want to stress the importance of good, fair-minded, proportional regulation, which is needed in any sector, especially the higher education sector. For a sector that benefits from £30 billion in income from public money, educates over 2 million students and contributes £52 billion to our GDP, supporting more than 800,000 jobs, the need for regulation is clearly self-evident. To that end, the Higher Education and Research Act lays important foundations for the inception of the Office for Students. It is important to stress that almost no one I have met working in the sector has ever questioned the need for regulation. Indeed, as Universities UK says:
“we support the objectives of the OfS and believe its statutory duties are clear and appropriate”.
However, five years on from HERA, four of the main representative groups—MillionPlus, GuildHE, University Alliance and the Russell Group—have felt compelled to write to the Chair of the Education Committee, Mr Walker, expressing
“growing concerns that the OfS is not implementing a fully risk-based approach, that it is not genuinely independent and that it is failing to meet standards we would expect from the Regulators’ Code.”
The establishment of any regulator, especially one that so markedly departs from the role of the previous funding agency, is bound to have some teething problems. But when we have reached the point at which stakeholders are joining forces to raise concerns that the House of Lords Industry and Regulators Committee has launched an inquiry into, and when MPs feel compelled to raise the issue in Westminster Hall, then something has clearly gone awry. The question is: what?
Regulators are most successful when they are able to exercise a proportionate degree of authority over the sector they regulate. Authority stems from trust, which in turn reinforces the authority of the regulator. The two go hand in hand; they are mutually reinforcing. In part, this issue stems from the structure of the OfS—for example, in not having adequate avenues to allow stakeholders to offer feedback on its own performance as a regulator. The OfS’s provider refresh strategy is therefore broadly welcome, but part of the mistrust stems from a perception—and I think it is a perception—that the regulator is too easily at the beck and call of Ministers, stretching the epithet “independent regulator of higher education” to its very limit.
Most obviously, as we have heard, the chair of the Office for Students, Lord Wharton, is seen as a plainly political appointment, having little experience in the sector while maintaining the Conservative Whip in the Lords. The potential conflict of interest is plain. That he has visited only five universities since his appointment may suggest that his interest lies less in the promotion of the sector and more in occupying a public office to shape the sector to his party’s wishes. Certainly, his failure to declare an interest as a significant donor to Ben Houchen’s campaign to be the Tees Valley Mayor when interviewing and appointing Rachel Houchen as a non-executive director supports that hypothesis.
They say that a fish rots from the head down—incidentally, the last time that I used that expression in this House was in relation to the Government of Boris Johnson. There is a perception that the OfS is straying too far into the political fray at several levels. Take the student panel, for example, which was mentioned earlier. Last week, the former student panel members gave evidence to the Lords Committee. They claimed that
“an acute focus on free speech in regulatory activities was politically motivated rather than being based on the concerns of the student body”, and strongly indicated that the student voice, as expressed by panel members, was “actively suppressed” when trying to counter aims and policies that appeared to be political in nature.
My hon. Friend Paul Blomfield talked about the student voice being marginalised. I have frequently thought that the Office for Students is a misnomer. Surely, if it was truly a regulator for students, they would be given greater priority in decision making and greater oversight, and they would turn to it more often and would feel that their priorities—such as the cost of living, student mental health, and sexual harassment and violence on campus—were being given the utmost priority. Given the seriousness of the accusations that have been made, I would welcome the Minister’s personal commitment that he will ensure that the student panel and voice are fully respected within the OfS structure and the regulations that it makes, as schedule 1 to HERA demands.
Another common theme emerging from my conversations around the sector concerns the regulatory burden. Under HERA, the OfS is required to ensure that ongoing registration conditions are proportionate to the OfS’s assessment of the regulatory risk posed by the institution. The OfS has termed this “risk-based regulation”. That is an eminently sensible approach to take, but unfortunately it is one that belies reality.
As we heard from my hon. Friend the Member for Kingston upon Hull West and Hessle, data gathering is being massively duplicated. To give some anonymous examples, as we have heard earlier, I am informed that, for the 2022 Higher Education Statistics Agency data return, one member reported having to provide 59,000 student records, which equates to 7.2 million individual data fields—an increase from 4.5 million in 2019. We have heard that another provider has 10 full-time equivalent staff supporting regulatory compliance, at a cost of £440,000. Another has estimated that the total cost in regulatory activities equates to £1.1 million in the year 2022-23. So the burden is both concentrated and widespread, particularly when taking into account the reporting requirements of other regulatory bodies.
When it comes to degree apprentices, as we have heard, apprenticeship providers are often subject to four, or possibly five, separate regulatory bodies and demands: the OfS, the Institute for Apprenticeships and Technical Education or IFATE, the Education and Skills Funding Agency, and Ofsted. The effects on smaller institutions are clearly greater, as these absorb more and more resources to the detriment of the student experience. Over a year ago, the Minister’s predecessor, Michelle Donelan, launched the HE data reduction taskforce, which of course is very welcome, to tackle this very issue. I would be grateful if the Minister updated us on when the taskforce last met, when it next plans to meet and what steps he is taking to ensure that new initiatives, most importantly lifelong learning, do not bog down providers in an even greater regulatory quagmire.
In raising these concerns, I do not intend to discredit the important work that the regulator has done in some areas. The recent work on access and participation plans, for example, and the launch of the equality of opportunity risk register could prove transformational in improving the experience of higher education for students from a widening range of backgrounds. Likewise, a good deal of work has to be done behind closed doors by necessity; managing the financial sustainability of providers is the clearest example. To that end, I was pleased to read the case study note provided by the OfS yesterday about how it is managing financially precarious institutions, which are increasing at an alarming rate under the current Government. I should not need to remind the Minister that the proportion of providers with an in-year deficit increased from 5% in 2015-16 to 32% in 2019-20.
In conclusion, the need for regulation is absolutely obvious; indeed, good regulation is needed to generate confidence, trust and investment in the sector from domestic students, international students, businesses, government and research bodies. However, the relationship between the OfS and the sector is at an all-time low. It did not start at a particularly high level. Trust and confidence is crucial in a regulator, and I am afraid that there are profound concerns across the piece. I have met with the OfS, and I appreciate that moves are afoot to try and reset the relationship and restore confidence. I very much welcome that. Trust and authority are hard-won and quickly lost. To that end, I would welcome the Minister’s response on the following points, as well as those I raised earlier.
What steps is the Minister taking to reassure the sector that the era of heavy-handed political involvement in the regulator is at an end? What plans does he have to raise the registration fees to accommodate additional duties on the OfS? What assessment has he made of any increase on institutional financial sustainability and the student experience? Finally, what assessment has he made of whether the OfS provides value for money, judged against the objectives that Parliament legislated for it, and by comparison with peers in the regulatory sector?
It is an honour to serve under your chairship, Dame Maria. I congratulate Emma Hardy on securing this debate. It feels a bit like groundhog day, because we served together on the Education Committee. I have the highest regard for her work, not just on higher education but on special educational needs and disabilities, mental health and post-16 education. I am very happy to be debating the important matter of the OfS with her. I have had the privilege of visiting Ron Dearing University Technical College in her constituency, which is doing an incredible job in transforming the lives of thousands of students.
Before following through on the OfS issues, I want to begin by setting out how I see higher education, because it very much forms the architecture of what we are talking about today. Higher education of course plays many important roles in our society—developing people’s education and academic talents, academic knowledge, and world-class research and innovation, which are absolutely important—but for me the three key things are meeting the skills needs of the economy, providing high-quality qualifications leading to excellent, well-paid jobs, and advancing social justice. What I mean by that is ensuring that everyone, regardless of their background, can not only access high-quality education, but complete their studies and get good skills and knowledge, and jobs at the end. The OfS is essential to upholding the quality and ensuring the success of the higher education system and the aims that I have suggested.
Before I turn to the OfS specifically, it is important to briefly highlight the fact that we have an ambitious skills agenda, as the hon. Member for Kingston upon Hull West and Hessle pointed out, with £3.8 billion of extra investment over the Parliament. We are using that to expand and strengthen both higher education and further education. We are investing an extra £750 million in the HE sector up to 2025, to support high-quality teaching and facilities, particularly in science and engineering subjects, and to support NHS and degree apprenticeships. The hon. Member’s university, the University of Hull, is receiving more than £10 million in the strategic priorities grant, so I hope that she is pleased about that.
There is also, of course, the money that goes to UK Research and Innovation, which is £25 billion over the spending review. That is £6.2 billion for Research England, which funds our higher education institutions. The latest estimate shows that the income of English higher education providers in 2021 from tuition fees in education was £21.6 billion, which was 55% of the total income of £39.77 billion.
I was going to talk about the Lifelong Learning (Higher Education Fee Limits) Bill, as I thought it would come up, but we have plenty of time next week when we discuss the Bill on Report and Third Reading. The Bill will be very important, because the lifelong loan entitlement will provide everyone with a loan of up to £37,000 to do flexible and modular learning. There will be level 4, level 5 and level 6 provision, and it will start with level 4 and level 5. The OfS and the new register of FE colleges will provide the LLE, and those owners will have an important role.
Let me turn to the OfS and its vital work to support the Government’s priorities. I commend the activity of the OfS, for the most part, over the last five years to put in place the regulatory framework and to register providers. The hon. Member for Kingston upon Hull West and Hessle talked about the cost, which boils down to just under £13 per student. She also talked about regulation, and I completely get that. I am not a believer in small or big Government; I believe in good Government. I am not a believer in loads of regulation or low regulation, but in good regulation. To be fair to the shadow Minister, Matt Western, he said that as well.
Of course, I recognise that regulation creates a burden for those being regulated, but it is important that the benefit of regulation outweighs the burden. Seeking to minimise the regulatory burden is a key focus. It is set out in the strategy to 2025. I wanted to go as far as possible in doing so. The OfS has already taken significant steps to reduce the data burden it places on providers. In 2022, it removed the need for all providers to send monitoring returns for access and participation plans. It significantly reduced its enhanced monitoring requirements, which are now less than a quarter of what they were in 2019. It has published its intention to become increasingly risk-based in the way it monitors compliance. It also plans to vary further the regulatory requirements placed on individual providers according to the risks they pose, which will affect the impact of its regulation on those that pose the highest risk.
In terms of the regulation of small providers, of course the OfS does apply the same requirements for all types of providers. Whatever provider they go to, students should expect the same quality of education outcomes, protection and support to complete their courses. I accept that the regulatory burden should be minimised, including for small providers, and the OfS has a plan to minimise it. When it does so, it must have regard to the regulation code principles on determining general policy. The regulation code is less relevant to the work of the OfS when carrying out individual investigations and taking enforcement action, but it does take compliance very seriously.
OfS fees are tiered by student numbers, so providers with fewer numbers, such as FE colleges, will pay less in fees. In response to the question from the shadow Minister, the hon. Member for Warwick and Leamington, we are reviewing the high cost per student for smaller providers when we consider the fees for 2024-25. We are considering those general fees at this time.
On the important point about the QAA, it chose to withdraw consent for designation. If the English system is not in line with the European standard, it is because we do not have cyclical reviews, which we consider disproportionate in terms of regulation. As the hon. Member for Kingston upon Hull West and Hessle highlighted, the OfS will take on the quality assessment role in the interim, while consideration is given to a permanent arrangement. I have met university stakeholders to discuss those issues.
I will in a minute. I have a fair bit to add and want to make the following point, because Jim Shannon is so kind and comes to a lot of these debates on education and skills, as well as many other debates. I will have dialogue with the regulatory bodies. I was planning to visit them when visiting for the anniversary of the Northern Irish agreement, but unfortunately my slip was withdrawn because I had to vote in the House of Commons. Otherwise, I would have been there and visited universities and colleges in Northern Ireland. I very much hope that I will be able to make that visit. I note that at Queen’s University Belfast, 99% of the research environment is world leading and internationally excellent. I think it is No. 108 in the world, so congratulations to Queen’s University.
I thank the Minister for giving way. I agree with Jim Shannon that the Minister is widely respected for his work on education and his appointment to this job was welcomed. But I want to return to my earlier point about the OfS’s regulatory approach. When I debated the establishment of the OfS in Bill Committee with the Minister’s predecessor, I argued that we had a reasonable regulatory framework—the Higher Education Funding Council for England. The Minister at the time argued that it was important to put students at the heart of regulation. That is why it was called the Office for Students. Does the Minister agree that, if it is to live up to that name, it should do what it says and give a much stronger voice for students in the whole process of regulation? He does not agree with my concern that students have been marginalised, but will he set out how we could give students a stronger place in the OfS’s approach to regulating the sector?
That is an important question, and the hon. Gentleman is one of the key higher education spokesmen in the House of Commons. I am absolutely supportive of student representation. The student panel is incredibly important. I made a decision as a Minister to interview one of the members of the student panel. I did not have to do that—I could have just ticked the submission and said that Mr X or Ms X is fine—but I took proactive interest, because it is incredibly important to do so.
I met the student panel, and I want it to have a voice. I went to an OfS event in the House of Commons a couple of weeks ago. I spent time chatting to the student panel, which is essential in this. As long as it is used properly and listened to, it is the best conduit for ensuring that student voices are heard. The student panel has teeth. I will keep a watch over it, even though the OfS is independent and I do not have operational control. It is a bit like the police: the Mayor of London might have a say over the chief constable, but he does not necessarily tell them what to do day by day. Nevertheless, the student panel is incredibly important, so I accept what Paul Blomfield says.
The hon. Member for Stretford and Urmston asked me about the taskforce. It last met in full in June 2022, and there has been a subsequent meeting of arms-length bodies, separately, to discuss progress and to identify areas of work to take forward.
There is plenty of evidence to suggest that higher education is preparing students for high-quality employment: three quarters of graduates from full-time first degree courses progressed into high-skilled employment or further study 15 months after graduating in 2020. But more must be done to tackle the pockets of poor quality that persist, and the OfS is committed to doing that. The OfS has revised its registration conditions in relation to quality and standards to ensure that they are robust, and it is rightly now taking action to investigate and enforce those conditions.
We want to ensure that students see returns on their investment in higher education. The Institute for Fiscal Studies estimates that the net lifetime return from an undergraduate degree is £100,000 for women and £130,000 for men, but it should be noted that the IFS has also found that 25% of male graduates and 15% of female ones will take home less money over their careers than peers who do not get an undergraduate degree. I think that graduates should be achieving outcomes that are consistent with the qualifications that they have completed and paid for.
To give an opposing example, it is a testament to the genuinely excellent teaching and leadership at the University of Hull that nursing and midwifery students experience the highest progression rate—98%—compared to all other OfS-registered HE providers with available progression data, and that the university has performed above the OfS threshold for continuation, completion and progression. I say those things to highlight not just the brilliant work of the University of Hull but the important work that the OfS is doing. Without the work of the OfS, we would not have that kind of information.
I talked about social justice, which is very important to the hon. Member for Kingston upon Hull West and Hessle and to me. I want to ensure that no student is excluded from higher education because of their background. A wider point has been made about us putting extra burdens on the OfS, but it has recently launched the equality of opportunity risk register to highlight key risks that can impact negatively on disadvantaged and under-represented student groups across the whole of the student lifecycle. That is an extra thing for the OfS to do, but I want it to happen. I am delighted with that. I do not like the name “risk register”, but nevertheless the principle is really important. It will empower higher education providers to develop effective interventions and support at-risk students, helping them not only get in but get on. I have a lot more to day about Hull University. It really is doing some remarkable things, and I hope to be able to go there one day and see it.
The hon. Member for Kingston upon Hull West and Hessle cares deeply about mental health. We have allocated £15 million from the strategic priorities grant to the OfS for mental health support. That is another OfS duty and its purpose is to support students’ wellbeing when they transition to university, and to create opportunities for partnerships between providers and the national health service. The OfS has a role to play in funding Student Space, an online platform for mental health and wellbeing resources. The OfS also runs a mental health challenge competition with Northumbria University. It has supported projects to ensure that mental health needs are identified by providers. That is another important role for the OFS. Yes, the OfS has increased its role, but it is doing really important things that will make a difference to many students’ lives.
I knew that the hon. Member for Kingston upon Hull West and Hessle would bring up degree apprenticeships. I have some sympathy with what she says; there is too much regulation, and all I can say to her is to please watch this space. I am looking at it very carefully to see what can be done. Of course, we also have to maintain quality, because if we do not have quality, I will have the shadow spokesman, the hon. Member for Warwick and Leamington, get up in Education questions and ask why apprenticeship provision is so poor. The hon. Lady will be pleased that over the next two years we will increase from £8 million to £40 million—£16 million in the first year, and £24 million in the second—the funding to promote degree apprenticeships among providers. I know she will support that extra funding.
A House of Lords inquiry has criticised the OfS registration fees for being too high. As I have mentioned, however, in the light of the Government’s commitment to funding skills over the Parliament, the OfS registration fees offer value for money. It is currently around £26 million a year, which is less than £13 per student. I do not think that feels like a high price to pay to ensure that we have a high-quality system working in the interests of students.
In conclusion, the work of the Government, which I have outlined, and of the OfS regulator will continue to deliver on skills, jobs and social justice. I accept that there is over-regulation—the hon. Member for Kingston upon Hull West and Hessle highlighted some unnecessary regulation that I will look at with officials at the Department for Education. However, we have a world-class higher education sector. I am not complacent about it. I acknowledge that there is not enough in some areas, and that some graduates are not getting good, skilled jobs, but many—in fact, most—higher education providers deliver a top-class education and equip students with the skills they need to get excellent jobs. I am clear that a robust and fair regulator—a good regulator—is vital to ensuring that our higher education sector remains world leading and protects students and the taxpayer.
I think that the OfS has achieved a fair bit in the first five years of its existence. It has registered 400 providers. It has also registered the new Dyson Institute, which is—
Very good. I have been to that university. I met James Dyson some years ago when I was the Chair of the Education Committee. It was extraordinary. I hope that there will be many more examples of universities like that one. The Department will work closely with the OfS to ensure that we continue supporting a world-class higher education system. As I said, I remain committed to delivering on skills, jobs and social justice. The OfS will be an absolutely crucial part of that.
There was one about political interference, which may be difficult for the Minister to answer. Could I go back to the second question? It was about whether he had any plans to raise registration fees. I also had a question about an assessment of the value for money that the OfS represents, particularly in the context of other regulators.
I am happy to answer. I think I said that we are considering OfS registration fees and that I will come back about that matter in due course. I do not recognise any political interference. Since becoming a Minister, I have had meetings with the OfS chief executive and chair, and we have literally just discussed what needs to be done to make sure that the organisation continues its work and that we continue to have a world-class university system.
I beg the hon. Gentleman’s pardon—what was the third point?
Ah, yes. I think the OfS is providing value for money. First, as I mentioned, the cost to students is just under £13, which represents value for money. More importantly, what are the outcomes? If we have great universities, as we do, and we are meeting the country’s skills needs, promoting degree apprenticeships and acting further on mental health and other areas, including social justice, to make sure that disadvantaged students have the right outcomes, as we are, then the OfS will absolutely be providing value for money.
I thank everyone who has taken part in the debate. The Minister knows how to charm me: he talked about how good Hull University is, and of course I agree. That brings me to my favourite fact about it: there are more graduates from Hull University in the Houses of Parliament than from any other university, partly because of its internship programme.
Nobody minds bureaucracy and paperwork if their purpose is seen as improving outcomes for students; as a teacher, I never minded that. The core of the issue is that although some OfS bureaucracy does make a difference—I share the Minister’s thoughts about the equality risk register—so much of it does not improve outcomes for students. In fact, it has a detrimental impact as it drives resources and energy away from the necessary focus on students. I welcome the fact that the Minister is going to look at some of my examples.
On the issue of the chair of the OfS, I should say that the Minister and I served together for a few years on the Education Committee—he cares about education, as does everyone in this room. I just believe that we deserve an OfS chair who genuinely cares about education as much as we all do.
Before I put the question, I offer a sincere apology to Paul Blomfield. I started the debate six minutes early because I knew that we would fill every moment, but I could see that he had made every effort to be here by 4.30 pm. I hope he will understand that, in starting early as we did, we gave the debate an extra few minutes—including an extra few minutes’ scrutiny of the Minister, which I am sure the Minister appreciated.
Question put and agreed to.
That this House
has considered the Office for Students.