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Public Bill Committees

Debated on Thursday 15 September 2016

Higher Education and Research Bill (Eighth sitting)

The Committee consisted of the following Members:

Chairs: † Sir Edward Leigh, Mr David Hanson

† Argar, Edward (Charnwood) (Con)

† Blackman-Woods, Dr Roberta (City of Durham) (Lab)

† Blomfield, Paul (Sheffield Central) (Lab)

Chalk, Alex (Cheltenham) (Con)

† Churchill, Jo (Bury St Edmunds) (Con)

† Evennett, David (Lord Commissioner of Her Majesty's Treasury)

† Howlett, Ben (Bath) (Con)

† Johnson, Joseph (Minister for Universities, Science, Research and Innovation)

† Kennedy, Seema (South Ribble) (Con)

† Marsden, Gordon (Blackpool South) (Lab)

† Milling, Amanda (Cannock Chase) (Con)

† Monaghan, Carol (Glasgow North West) (SNP)

† Morton, Wendy (Aldridge-Brownhills) (Con)

Mullin, Roger (Kirkcaldy and Cowdenbeath) (SNP)

† Pawsey, Mark (Rugby) (Con)

† Rayner, Angela (Ashton-under-Lyne) (Lab)

† Smith, Jeff (Manchester, Withington) (Lab)

† Streeting, Wes (Ilford North) (Lab)

Vaz, Valerie (Walsall South) (Lab)

† Warman, Matt (Boston and Skegness) (Con)

Katy Stout, Glenn McKee, Committee Clerks

† attended the Committee

Public Bill Committee

Thursday 15 September 2016


[Sir Edward Leigh in the Chair]

Higher Education and Research Bill

I must interrupt the negotiations between the Whip and the Opposition spokesman. I can see that they are proceeding in an extremely amicable way, as always. I am sure we can look forward to some expeditious business, because colleagues will be anxious to leave for their constituencies. Meanwhile, we are going to enjoy ourselves.

Clause 13

Other initial and ongoing registration conditions

I beg to move amendment 178, in clause 13, page 8, line 17, at end insert—

“(f) a condition relating to the provision of access to a range of cultural activities including, but not restricted to, the opportunity to undertake sport and recreation and access to a range of student societies and organisations;

(g) a condition relating to the provision of student support and wellbeing services including specialist learning support;

(h) a condition relating to the provision of volunteering and exchange opportunities;

(i) a condition relating to the opportunity to join a students’ union.”

This amendment ensures that all aspects of a positive student experience are considered relevant to the inclusion of a Higher Education institution on the register.

It is a pleasure to serve under your chairmanship, Sir Edward. This amendment takes us back to the thorny issue of what a university is and how we ensure that the measures in the Bill do not allow for or enable the dumbing down of the sector as a whole. I want to pose a series of questions to the Minister about why clause 13 does not provide a list of the sorts of service and the range of amenities that the Minister might expect a university to have in order to be deemed a university. The amendment sets out a whole range of conditions that should be included in the clause, so that something called a university actually is a university. I will be interested to hear why the Minister thinks that is not important.

As we all know, students do not only go to university to get a degree. Of course they go to university to get a degree, but along the way, they join lots of clubs and societies. They take part in cultural events. They might have a drama club. They often, as in the case of Durham University, have a theatre and put on performances—really good ones—that local people go along to. That is an incredibly important aspect of the cultural activities at Durham. At the weekend, we often go along to watch the university teams compete against other universities or in local leagues. It is incredibly important that students, particularly those who have done so at school, can take up sport at university.

Students join a whole range of clubs and societies that enhance not only their wellbeing but that of the wider community. In that respect, I point out the particular importance of providing volunteering opportunities for students, which can often help them with future employment and give back massively to the local community through community service. Indeed, I was at a luncheon club in my constituency just a couple of weeks ago that had been started up by students in a disadvantaged area of Durham. They have a volunteering rota to keep the club up and running.

We would normally equate those sorts of activity with the university experience, along with being able to join the students union, which I will not mention again because we discussed it a couple of days ago, but that is clearly a very important aspect of what students can do when they go to university.

Does my hon. Friend agree that the thrust of the Government’s policy here is enhancing the learning experience, and that the sorts of activities that she describes are not simply important in giving students the widest opportunities in their lives, but provide them with opportunities to learn team and leadership skills, and are very much part of that broader learning experience?

Absolutely. My hon. Friend makes an excellent point about the way in which the wider experience of university contributes to the overall student experience. Indeed, a necessary part of that student experience is universities ensuring that there is adequate student support and a range of wellbeing services, and that specialist learning or special needs are met through the university learning support system. It seems a little odd, to put it mildly, that in the list of “other initial and ongoing registration conditions” in clause 13, there is absolutely nothing about the range of services that an institution should provide; it is all about regulation. It is important that the sector is properly regulated, but that is not sufficient.

A few months ago, I was standing where my hon. Friend the Member for Blackpool South is sitting now, questioning the Housing Minister about starter homes. I made the point to him—this is directly relevant—that a starter home was not affordable housing just because the Government legislated for it to be affordable housing or thought that it was affordable housing. Clearly, a £450,000 house in London, or a £250,000 house outside London, is simply not affordable. Alas, that Minister did not take my advice and went ahead with legislation that said that such houses were affordable, when clearly they are not. Now, of course, the Government are having to revisit that legislation and what they are doing on starter homes, because it was absolutely obvious that they could not simply legislate for something to be what it is not. I fear that the same will happen with the Bill, and the Government will say about a college or specialist provider, “It is a university if it meets these regulation conditions,” when in any other context it would be considered not a university but a specialist provider.

I am trying to help the Minister to avoid falling into the same trap of legislating for something that clearly is not what the Government try to make it out to be by suggesting that it would help us all in our deliberations—indeed, it would help some of us to negotiate our way through the clauses dealing with registration conditions—if the Minister clarified what he thought a university should be and the range of services that an institution should provide before it is able to use “university” in its title. We really do not want students to think that an institution provides a certain range of services when it clearly does not and has no intention of ever providing the range of services or opportunities that one would normally associate with a university.

It would be helpful to hear what the Minister thinks a university is and what range of services he would like to see universities normally provide. Can he reassure us that no institution will be able to call itself a university when it clearly is not one?

It is a pleasure to be back under your chairmanship, Sir Edward. I do not want to delay the Committee for long with what might risk turning into an abstract and philosophical conversation about what a university is. After all, that question has occupied theoreticians of education through many books and learned articles. At its most literal, a university can be described as a provider of predominantly higher education that has got degree-awarding powers and has been given the right to use the university title. That is the most limited and literal sense. If we want a broader definition, we can say that a university is also expected to be an institution that brings together a body of scholars to form a cohesive and self-critical academic community that provides excellent learning opportunities for people, the majority of whom are studying to degree level or above. We expect teaching at such an institution to be informed by a combination of research, scholarship and professional practice. To distinguish it from what we conventionally understand the school’s role to be, we can say that a university is a place where students are developing higher analytical capacities—critical thinking, curiosity about the world and higher levels of abstract capacity in their thinking. In brief, that is my answer to what a university is.

Let me turn to the nitty-gritty of the hon. Lady’s amendment and her suggestions for how we can improve the registration conditions. Her amendment highlights the breadth of opportunities offered by participation in an HE course, and it is welcome in doing so. However, I do not believe that putting that into legislation would be desirable. There are many excellent examples of extracurricular activities and experiences offered by higher education institutions—sporting groups, arts groups, associations of all kinds and exchange opportunities. I agree that, in many cases, those activities contribute greatly to a student’s learning and personal and professional development. As the hon. Lady said, they can be as much a part of a student’s education as traditional lectures.

When a student is deciding which institution to study at, their decision is based on many factors, including the qualification they will receive, the cultural and social opportunities presented to them, the student organisations they can join and the support available. Higher education institutions think very carefully about the range of extracurricular activities they offer and the additional opportunities for students on or around campus. They are tailored to the specific characteristics and needs of their particular student bodies. One size does not necessarily fit all, and student populations vary hugely in their requirements. As independent and autonomous organisations, higher education institutions are best placed to decide what experiences to offer without prescription from the Government.

In our deliberations, we have heard, particularly from the possible new entrants into the sector, that they wish to have a level playing field. Part of the point of this amendment is to genuinely make it a level playing field. We do not want to take diversity out of the sector; we just want to ensure that all institutions that could become a university provide a basic level of services.

There may be high-quality institutions based in, for example, urban locations that cannot offer the broad range of services that campus-based, big institutions can. That does not mean they are lesser institutions; it just means that their student populations have their own purposes in coming to that particular institution and want their needs to be met in a way that is relevant to their institution. For those reasons, I do not believe that a one-size-fits-all, prescriptive approach is the best way to achieve the hon. Lady’s goals.

I am sure we are all grateful for the Minister’s definition of a university. He said it is about high levels of abstract thinking—I learned a lot about that in the union bar.

The Minister is being characteristically generous about what universities do. I am bitterly disappointed by his response because this is a really serious point. The higher education sector in the UK has an excellent national and international reputation and we meddle with it at our peril. It is incumbent on the Government to uphold and promote the quality and excellence of the sector, which means ensuring that, if something is to call itself a university, or to have “university” somewhere in its title, the common understanding is that it provides a range of opportunities for students. Otherwise, it can stay as it is at the moment as simply a specialist provider.

If institutions want to join a specific club, they should take on all the obligations and responsibilities that go with that membership. Simply allowing specialist institutions with a very narrow range of courses and opportunities for students to be considered in the same way as other institutions does not seem to be very helpful, either to the institutions themselves, quite frankly, or to potential or current students. I urge the Minister to take the amendment away, look at it and then see if he can include something in the Bill to reassure both prospective students and the sector at large that the Bill will not dumb down what a university might be and what our excellent higher education experience is. I am sure that that is not his intention at all. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 190, in clause 13, page 8, line 17, at end insert—

“( ) The OfS may strengthen the registration conditions for new providers depending on the assessment of that new provider’s previous track record and future sustainability.”.

This amendment would enable the OfS to set stricter entry requirements for new providers by considering previous history and future forecasts.

It remains a pleasure to serve under your chairmanship, Sir Edward, even under these heated circumstances. There appears to be a little more of a draft coming through; if we dissipate some of our hot air it may become even greater.

I thank my hon. Friend the Member for City of Durham for what she said because it is germane to this amendment, which is in the name of my hon. Friend the Member for Ashton-under-Lyne and myself. The amendment tries to define what new providers that might wish to become a university have to do, and I think it is incumbent on us to think a little harder than is perhaps sometimes the case about a new provider’s

“previous track record and future sustainability.”

The Minister was quite right not to engage in a “philosophical discussion”— I suspect if he had not said that, the Lord Commissioner of Her Majesty’s Treasury, the right hon. Member for Bexleyheath and Crayford, would have perfectly reasonably bashed him on the head—but there is a balance between that and simply saying, “This is what a university does.” That is particularly true when talking about new providers. In earlier exchanges, the Minister referred to Lord Mandelson, whose grandfather, Herbert Morrison, when asked what the definition of socialism was, famously replied:

“Socialism is what a Labour Government does.”

That is a reductionist argument with which I am sure the Minister would not agree, but we need to ask some serious questions about what guarantees and provisions we would require from new providers.

As I said on Second Reading, the Bill

“places immense faith in the magic of the market”—[Official Report, 19 July 2016; Vol. 613, c. 720.]

to produce new providers and to take them on board. It is philosophically consistent, if I may be so grand, with the paean to competition and the markets in the White Paper, which says:

“With greater diversity in the sector…our primary goal is to raise the overall level of quality. But we must accept that there may be some providers who do not rise to the challenge, and who therefore…choose to close some or all of their courses, or to exit the market completely. The possibility of exit is a natural part of a healthy, competitive, well-functioning market and the Government will not, as a matter of policy, seek to prevent this from happening. The Government should not be in the business of rescuing failing institutions—decisions about restructuring, sustainability, and possible closure are for those institutions’ leaders and governing bodies.”

That is all very well as a paean to free-market Friedmanism, and perhaps those who had drafted it had had a good lunch at the time, but the truth of the matter is that it is not the people who draft such things who have to deal with the consequences, but the people on the receiving end, who are not just students—although students are a key part of that process—but everyone who works with, is sponsored by or supplies those new providers. Therefore, it is important that we talk about that—we will do so in more detail when we reach clause 40, which deals with some of the issues to do with awarding powers, so I will be careful not to step into that territory.

Cutting corners in the process of becoming a higher education provider can pose a serious risk to staff and students, and it can increase the risk of public money being misused. If we are in any doubt about that, I would refer to the Public Accounts Committee report on alternative providers published in February 2015. The Committee was fair about the potential benefits of alternative providers, but hard on some of the things that had happened in the preceding period. It stated:

“The Department pressed ahead with the expansion of the alternative provider sector without a robust legislative framework to protect public money…and…failed to identify and act quickly on known risks associated with the rapid introduction of schemes to widen access to learning…The Department does not know how much public money may have been wasted…and…should report back to us urgently with an assessment of how much public money is at risk of being wasted”,

and so on. I appreciate that the Minister was not in place at the time, but the report was a fairly comprehensive slap on the wrist for the Department for Education about how the matter had been treated.

No doubt the Minister will come back and say, “Ah, but that was then, and this is now. We have done lots of other new things”, but the trouble is that that argument does not solve the problem. As a result the University and College Union, among other organisations, submitted a detailed paper to Committee members, including a number of specific examples of where things had gone wrong. It argued that to allow commercial providers a quick, low-quality route into establishing universities and awarding degrees would mean that those studying and working in the sector were seriously vulnerable to the threat of for-profit organisations moving into the market for financial gain, rather than from any desire to provide students with a high-quality education or teaching experience.

The University and College Union also quoted figures from the Department for Business, Innovation and Skills: between 2010 and 2014-15 the number of alternative providers rose from 94 to 122. Furthermore, the matter is one that concerns the public purse, as well as the protection of students, because student support for those alternative providers rose from £43 million to more than £600 million. Also, in 2014 the National Audit Office reported concerns about abuses of the student loan system by for-profit providers. It mentioned that drop-out rates at nine of them had been higher than 20% in 2012-13, compared with 4% across the sector in general.

As I have mentioned, the Public Accounts Committee published its report in February 2015. If the Minister therefore says, “Ah, well, we don’t want to put more obstacles in the way of potential new providers. We don’t want to make it overly onerous for them”, all I can say is that we have to look at the track record up until now. That is not to disparage any of the new providers who might come forward or the evidence that was given in our sessions. It is merely to say that the precautionary principle is often a wise one to proceed on. It is not often I quote President Reagan with approval. He was famously asked, during SALT negotiations with the Soviets, whether he trusted them. He said he worked on the principle of “trust but verify”. Trusting but verifying is the thrust of the amendments.

In case the Minister is tempted to say that we are digging up old history, it is not that old. Since he referred to something I said in 2002, I think I am being generous in only digging up recent history. Only this year the West London Vocational Training College had its designation for student support funding revoked following a Quality Assurance Agency for Higher Education report that said that it had failed to establish the authenticity of applicants’ academic qualifications, admitted some students who were demonstrably not qualified to enter their course, included some students who had not met the English language proficiency requirement and admitted some students after qualifications awarding body Pearson—which is for profit and has been there for a long time—had blocked it from registering new entrants.

Before the Minister either personally or corporately allows some of his officials to write more paeans to the benefits of the market and competition, perhaps he would indulge us by considering the amendment. It is important that the registration conditions for new providers consider previous track record and future sustainability. Of course, not all new providers will have a track record and I think one of the witnesses mentioned that at the evidence session. If that is the case, the presumption should be to look more stringently at their future sustainability.

The proposal is not that they must have both but they certainly must have one. It is on that basis that I put the amendment forward for consideration.

I start by reassuring the hon. Gentleman that there will be no cutting of corners to allow an easy route into the sector for providers who would not pass our exceptionally robust thresholds in terms of financial sustainability, management, governance and quality. The single gateway into the sector that we are putting into place through the Bill and the robustness of its processes are of key importance to the success of our reforms. The hon. Gentleman and the Government are at one on that question.

I explained when debating earlier clauses and amendments that risk-based and proportionate regulation is the basis on which the office for students will operate. “Trust but verify”, as the hon. Gentleman put it, might be a good way to describe it. It will protect the interests of students and the taxpayer while providing a regulatory system appropriate for all providers.

Clause 5 requires the OFS to consult on and publish initial and ongoing registration conditions. Different conditions will be applied to different categories of providers. Although it is for the OFS to determine those conditions, we expect that they will reflect those first set out in the Green Paper and subsequently confirmed in the White Paper. We expect they will include academic track record, as demonstrated by meeting stringent quality standards, checks on financial sustainability, including requiring financial forecasts from providers, and other important issues, such as the provider’s management and governance arrangements.

In addition, clause 6 provides the OFS with the power to apply specific ongoing registration conditions based on the OFS’s assessment of the degree of regulatory risk that each provider represents.

I appreciate that there is a delicate balance to be struck in trying to set up all the details of the OFS in Committee. I welcome the Minister’s view on the importance of track records. Obviously, that will be weighed up by everybody else in considering the Bill. Does the Minister have any indication at the moment for how long a new provider should have been involved in an area of activity before making these applications?

As set out in our technical note on market entry and quality assurance, which was sent to the Committee, although not necessarily successfully received by some Members, we have given a clear indication that OFS will be consulting representative bodies in the sector to establish answers to that sort of question. I encourage the hon. Gentleman to feed into that consultation when it is under way.

Clause 6 provides the OFS with the power to apply specific ongoing registration conditions, based on the OFS’s assessment of the regulatory risk that each provider represents. Where the OFS determines that a new provider represents a higher level risk it may, under the powers already included in the Bill, apply more stringent conditions. Moreover, the OFS may also adjust the level of regulation at any time, should there be a change in a provider’s circumstances or performance. That may be appropriate if a provider’s financial forecasts, as supplied when the provider first applied to join the register, eventually prove perhaps to be have been over-optimistic.

While I understand fully the reasons for the amendments and agree with the need for the OFS to take such matters into account, I believe that the Bill already provides the OFS with the powers necessary to take a wide range of issues into account.

Before the Minister sits down, I would say that all of that is welcome. The paper to which he refers and the student protection plan, which I have now looked at, are welcome. The student protection plan is strong in direction of travel but weak on detail and we can come to that on another occasion. The Minister is perfectly reasonably laying a number of onerous requirements on the OFS, particularly as regards the forecasts that his Department has produced on the potential for new providers to want to take on charges, university title and licence. Is the Minister at all concerned about what resources the OFS will have to carry out this process? If there is going to be a rush of new providers there will be substantial requirements of it, given what the Minister has just said.

The hon. Gentleman will have read the impact assessment, which goes into some detail about the future cost projections for the OFS. That will give him and the Committee a sense of the OFS’s resources to deal with the anticipated new providers in the sector. In addition, the Higher Education Funding Council for England is a very competent funding council and we want to maintain all the excellent capabilities that it has, including the people who undertake the important roles relating to quality in the system.

As I was saying, although I agree with the reasons for the amendments, I believe they are unnecessary, given the provisions we are making in the Bill in respect of safeguards for quality in the system and, therefore, I ask the hon. Gentleman to consider withdrawing his amendment.

I have heard what the Minister has to say and am reassured by his commitments. As always, the devil will be in the detail and we will want to probe further but at this point I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 13 ordered to stand part of the Bill.

Clause 14

Public interest governance condition

I beg to move amendment 25, in clause 14, page 8, line 27, after “documents” insert “and practices”.

This amendment is consequential to amendment 26.

With this it will be convenient to discuss the following:

Amendment 27, in clause 14, page 9, line 2, at end insert—

“( ) The list (as originally determined and as revised) must include the principle that the governing body of a higher education provider publish the ratio of pay of the highest paid employee at the institution to the pay of—

(a) the average, and

(b) the lowest

paid employee at that institution.”

This amendment would require, as a public interest governance condition, the governing body of a higher education provider to publish the ratio of pay between the highest, average and lowest paid employees at the institution.

Amendment 26, in clause 14, page 9, line 2, at end insert—

“( ) The list (as originally determined and as revised) must include the principle that the governing body of a higher education provider appoint as members of any committee established to consider remuneration of the institution’s employees representatives of—

(a) persons employed at the institution, and

(b) persons enrolled at the institution.”

This amendment would require, as a public interest governance condition, the governing body of a registered higher education provider to include staff and student representatives on any remuneration committee.

It is a pleasure to serve again under your chairmanship, Sir Edward. I hope we will have the opportunity to hear more about your mind-expanding experiences at university. That was highly enlightening.

Britain has one of the best higher education systems in the world, educating millions of students from this country and around the world. Behind that success are hundreds of thousands of dedicated staff, ranging from university leaders and those who educate students on a daily basis to the many staff who perform essential support functions, from processing admissions to keeping our campuses clean.

Like any good employer, universities should invest in their staff and ensure that they are paid fairly. My motivation for tabling these amendments is to tackle two things. One is excessive high pay at the top of our universities, and the other is some of the remaining poverty rates that continue to be paid to staff working in and around higher education, particularly those working for university contractors.

I will begin with high pay. It is important to say that as leaders of universities, vice-chancellors carry serious responsibilities for a large number of staff, manage huge budgets and have to consider a wide range of activities, from research and innovation to educating students. It is right that we pay vice-chancellors at a rate that enables us to recruit and retain the very best leadership from this country and around the world. I certainly do not begrudge vice-chancellors appropriate payment for the work they do or, indeed, use the ludicrous benchmark that appears from time to time of comparing vice-chancellors’ salaries with the Prime Minister’s.

I have been concerned, however, about excessive rates of pay rises in recent years, particularly at a time of restraint in public spending and with students paying more than ever for their higher education. I do not use terms such as fat cat lightly, but vice-chancellors who have decent and appropriate salaries have been receiving fat-cat pay rises with little justification and certainly inappropriate scrutiny from institutional remuneration bodies.

I know that the Minister is concerned about that. In the HEFCE grant letter for this year, the Minister and the former Secretary of State for Business, Innovation and Skills, the right hon. Member for Bromsgrove (Sajid Javid), included a specific reference to excessive high pay at the top and urged universities to show greater restraint— incidentally, not only in terms of pay and pay rises, but in awards made to vice-chancellors on exit. I hope that the Minister will see the amendments as friendly ones that would help to pursue the issue that he and the former Secretary of State raised in the grant letter and could really make a difference.

The hon. Gentleman makes a very good case for open and transparent processes in relation to vice-chancellors’ pay. I have a lot of sympathy with him about that. However, is he aware that this Government have already introduced gender pay gap reporting? For the institutions he mentions, the amendment would simply mean a duplication of legislation. We should look at enhancing the current legislation.

The hon. Gentleman is right to refer to the gender pay gap in higher education. There is something like an £8,000 difference in the pay awarded to male and female academic staff. My amendments do not deal specifically with the gender pay gap, but instead address the inequality between pay at the top and at the bottom.

The amendments would address those issues in two ways. The first is to require universities to publish the pay ratio between the highest-paid staff and the lowest-paid staff and the median rate of pay. That would get remuneration committees to think hard, when telling front-line staff that they cannot afford pay rises, about whether they are applying the same principle to staff at the top. According to the Times higher education survey, one in 10 universities paid their leaders 10% more in 2014-15 than the previous year, while average staff pay rose by just 2%. It is incredibly demoralising for university staff, academic staff and support staff when they feel they are exercising pay restraint but see university leaders not leading by example.

Publishing the pay ratio would bring about greater equity and a greater focus on low pay. I do not see any good reason why any university in this country should not be an accredited living wage employer. I hope that one outcome of the amendments would be to reinforce many of the campaigns led by students unions and trade unions to persuade universities to become accredited living wage employers.

As well as proposing publishing information to push for transparency, the amendments would strengthen accountability by including staff and student representatives on remuneration committees. That is important for two reasons. One is that staff representatives, through the University and College Union and other trade unions, and student representatives, through their students unions, bring a degree of independence from the process. They have a legitimate interest in ensuring fair pay from a staff perspective and also from a student perspective, in terms of ensuring that their fees are well spent.

There is also a broader point, which ties into the interesting exchange earlier about the idea of a university being, as well as all the things that the Minister set out in his response to my hon. Friend the Member for City of Durham, a community. An important part of a university is the academic community in the university. It is not made up just of university leaders and staff; students are also part of it, and I think that it is important to include them in the decision-making process.

I therefore hope that the Minister looks favourably on the amendments. They would reinforce the signal that he has already sent through the HEFCE grant letter. They would help to concentrate more effectively the minds of remuneration committees, as well as bringing about a wider range of perspectives to ensure that they are reaching the right conclusion, to the benefit of students, staff and the taxpayer. I hope that the Minister supports the amendments.

I thank the hon. Member for Ilford North for his amendments, to which we are giving some thought. However, I emphasise that the public interest governance condition that the clause contains is a vital component of the new regulatory framework and is designed to ensure that providers are governed appropriately, as he wants them to be. That is in recognition that some providers’ governing documents—in particular, those of providers accessing Government grant funding—are of public interest.

Let me first explain how we envisage the public interest governance condition working. Clause 14 explains what the condition allowed for by clause 13 is. It will be a condition requiring certain providers’ governing documents to be consistent with a set of principles relating to governance. The principles will be those that the OFS thinks will help ensure that the relevant higher education provider has suitable governance arrangements in place. That is not new. Legislation currently requires the governing documents of certain providers—broadly, those that have been in receipt of HEFCE funding—to be subject to Privy Council oversight. That is the backdrop.

Let me deal with the amendments. I do not believe that amendment 25 is necessary, and it could be confusing. The arrangements are already set out and designed for the primary purpose of ensuring that appropriate governance arrangements are in place and that best practice is observed. The introduction of the term “practices” through the amendment would risk changing the scope of the public interest governance condition to give it a much wider and more subjective application and imposing a significant and ambiguous regulatory burden on the OFS. That would stray outside our stated policy objective and beyond the OFS’s regulatory remit.

The suggestion in amendments 26 and 27 is to include principles relating to transparency of remuneration as being helpful for potential inclusion within the consultation process. We resist those also. We do not think that it would be helpful at this stage to make them mandatory components in clause 14. That is because, as I am sure the hon. Gentleman will appreciate, higher education institutions are autonomous institutions and the Government cannot lightly dictate what autonomous institutions pay their staff. As the hon. Gentleman said, we have already as a Government recently expressed concern about what appears to be an upward drift in senior salaries. The previous Secretary of State in the Department for Business, Innovation and Skills and I put this explicitly, as the hon. Gentleman said, in our most recent HEFCE grant letter. We clearly stated that we want to see sector leaders show greater restraint. The hon. Gentleman will also know, as a seasoned veteran of the HE sector, that higher education institutions are now obliged to publish the salaries of their vice-chancellors anyway, but as I said, we are watching this issue very closely and doing everything we can to urge the sector to exercise restraint, without crossing the line and interfering in the practices of autonomous institutions.

Will my hon. Friend give assurances, however—I agree this should not be put in the Bill—that he will work with the new OFS to ask them to look at remuneration, and also make sure that transparency is at the very heart of the OFS in relation to remuneration?

Yes, I can certainly give my hon. Friend that assurance. Transparency is a big feature of the reforms in other respects and it is important we continue to ensure that the OFS is attentive to the issues around remuneration in the future, as we have asked HEFCE to be in our last grant letter.

To make sure we get this list of principles absolutely right, clause 14 requires the OFS to consult on its contents. This is because we wish to ensure a transparent and full re-evaluation of the current and any subsequent lists, and to provide all interested parties with a full opportunity to make their own representations and help shape the terms of the list in a positive way. For those reasons, I respectfully ask the hon. Member for Ilford North to consider withdrawing his amendment.

I am grateful to the Minister for his reply, particularly his initial remark that these amendments are on issues that the Government are carefully considering. I hope that the Minister will take the exchange we have had this afternoon on board and think about more precise amendments. I note that he made a technical objection to amendment 25, and hope that he will therefore reflect on whether a better form of wording would achieve the objectives.

There are a couple of issues I want to pick up, in terms of the Minister’s principal objections. He talked about university autonomy and of course that is an important principle, but he has also conceded that universities are already required to publish the pay of the highest paid members of staff in an institution. The amendments propose a very simple and relatively minor extension to make sure there is transparency about the lowest paid. There are issues within institutions where some staff, particularly support staff, are paid at frankly unacceptable levels—in particular if they are contractor staff. I do not think it would be a gross intrusion into university autonomy to proceed with the principles outlined in the amendments. There is certainly not the threat to university autonomy that universities have been audibly whingeing about in the last few days. I hope the Minister will go away and think carefully about that.

Having said that, the Minister has raised a particular technical concern and I am mindful of the crack hand of the Whip—even when he is not in his place he is very effective at marshalling the troops—so conscious of the numbers, and the practical issues the Minister has put forward, I am content and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 169, in clause 14, page 8, line 34, leave out “English higher education providers” and insert “Higher education providers in England”.

This amendment would ensure higher education providers which operate in other UK nations are not excluded.

The Whip returns just as I am moving an amendment that, if he did not look at it carefully, he might think was a piece of pure pedantry—

But it is not, and I will explain why. Clause 14 deals with a public interest governance condition. The need, or concern, for the amendment has been brought to my attention, and possibly to the attention of other members of the Committee, by the Open University because it is alert—as the Minister and I always are— to the unintended consequences of legislation. I am also alert to the fact—as I hope the Minister will be, because he will want the successful completion of the Bill, if not on his tombstone, on his CV—that Bills like this one do not come along that often. Therefore, we need to try, without having a crystal ball, to look at where higher education is going in the next 20 years. The Open University, of course, is particularly concerned because it also operates, as the explanatory notes say, in other UK nations. It is therefore important that the Open University is not unintentionally removed from those provisions.

The Open University has been going for more than 40 years, but other potential providers, groups and conglomerates will increasingly want to operate across other UK nations through different mechanisms and in different media. We therefore have to try to future-proof the Bill for the development of online and other sorts of learning, as well as for the traditional campus-based learning that we all know and love—that is true in your case, Sir Edward, and possibly in other people’s cases, too.

I do not want to labour the point, but new forms of teaching are rapidly developing, such as massive open online courses. The Open University has come together with a number of other organisations on the FutureLearn programme. Groups of organisations that have not historically put their material out for formal or informal learning, particularly in the arts and cultural sector, might see the potential to do so and to produce largely online degrees that are quite specific to the stuff they put out, which is welcome. I do not know whether we will quite reach the nirvana on which the Minister mused. If he has been misquoted, I will let him correct me, but I think at one stage he speculated as to whether Google or Facebook might want to enter from the wings.

As for today, this is principally and specifically something about which the Open University is concerned. I am sure that the devolved Administrations will also be concerned, because they do not want to have different levels of regulation for institutions that operate across the United Kingdom, let alone across other jurisdictions outside the United Kingdom.

This is a probing amendment in the sense that I am presenting the Minister with a difficulty. If, by any chance, what I have suggested is technically inadequate, I would be more than happy for him to propose an alternative.

I thank the hon. Gentleman for tabling the amendment, which we have carefully examined. The amendment would change a reference in clause 14 from “English higher education providers” to “Higher education providers in England”. The term “English higher education provider” is defined in clause 75 as one

“whose activities are carried on, or principally carried on, in England”.

In practice, that means any higher education provider that carries out the majority of its activities in England. In that sense it replicates the definition in the Further and Higher Education Act 1992. It is important to note that that wording is capable of including a provider that carries out activities outside England. The only proviso is that the provider must carry out most of its activities in England.

Clause 14 relates to the public interest governance condition that can be set as an initial or an ongoing condition of registration of any registered higher education provider. A provider that has such a condition will be required to ensure that its governing documents are consistent with a set of principles relating to governance. We intend that the OFS will monitor compliance with those principles upon a provider’s registration and as part of its annual monitoring of a provider’s governing documents.

The public interest governance condition is an essential aspect of the new regulatory framework. It is right that the condition should be applied to all registered higher education providers but that it should not apply more widely. To apply the public interest governance condition to any institution that happens to provide some HE in England would extend the OFS’s regulatory reach beyond that which is appropriate and would expose some HE institutions to double regulation.

I will press on because this is a complicated set of arguments.

Such double regulation does not seem right, and it would not respect existing devolution arrangements in cases where an institution is already providing higher education across the nations of the UK. To make it a bit less abstract, let me give an example of HEFCE and the Higher Education Funding Council for Wales. At present HEFCE regulates all HEFCE funded providers who carry on activities wholly or principally in England. Likewise, HEFCW regulates providers whose activities are wholly or principally in Wales. HEFCE regulates activities outside English borders—for example, the Welsh activities of a provider that principally operates in England—and HEFCW regulates the English activities of a provider that principally operates in Wales. Those arrangements ensure that there is neither a regulatory gap, nor double regulation, across the UK.

Giving the OFS the ability to regulate providers involved in providing any HE in England at all, no matter how limited, would upset the current balanced devolution arrangements. Even if the amendment of the hon. Member for Blackpool South were applied only to the public interest governance condition, it would expose Welsh, Scottish and Northern Irish providers, which might have only a minimal presence in England, to additional regulation from the OFS for their activities in England.

I appreciate that it is a complicated situation—I often use the example of a Rubik’s cube—and this is obviously part and parcel of that process. The Minister prayed in aid the arrangements made in the 1992 Act. There is a world of difference between the way people operate in higher education in 2016 and how they operated in 1992, hence the various references I made to online providers and all the rest of it. I am concerned to capture in the legislation what the situation would be for people who operate as an online provider, as the Open University increasingly does. How can the structure the Minister describes, which was principally set up for an analogue world, cope with a digital one?

The Bill is designed to cope with the growth of online HE providers. Providers of distance learning or online HE courses will be covered by the definition in clause 75 if the majority of their activities take place in England. If that is not the case, they can bring themselves into scope by setting up their presence in England as a separate institution and meeting the OFS’s registration conditions. Considerable thought has been given to the future-proofing of the legislation to take into account the growth of online and distance provision.

The hon. Gentleman asked about foreign institutions wanting to set up in England. Providers of HE courses will be covered by the definition in clause 75 if the majority of their activities take place in England. If a foreign university wished to set up base here, to appear on the register, and to hold English degree-awarding powers and a university title, it would need to set up its presence in England as a separate institution and meet the OFS’s registration conditions.

The hon. Gentleman specifically mentioned the Open University. I reassure him that we believe that the Open University will count as an English HE provider. According to published data from July 2015, the majority of its students are in England, and most of its income is from English sources. Like the hon. Gentleman, I recognise that the Open University plays a valuable role in HE provision right across the four nations of the UK and it is rightly proud of its status as a four-nation university. Its status as an English HE provider under the Bill should not be seen to detract from that in any sense. I hope that I have reassured the hon. Gentleman and I ask him to withdraw his amendment.

I am reassured by the Minister’s explanation. It was important to have that exchange, because what he said and the implications of it for future-proofing are important. It is important to get it on the record at this stage. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 170, in clause 14, page 8, line 40, after “law”, insert

“, including from Government and other stakeholders”.

This amendment would ensure that academic staff are not constrained on academic freedom by Government or other relevant stakeholders.

With this it will be convenient to discuss amendment 171, in clause 14, page 9, line 5, at end insert—

“( ) relevant student bodies and/or their representatives,

( ) academic workforce and/or their representatives,”.

This amendment would ensure the OfS must consult with students/academic staff before revision of the list.

I always bow to the Clerks’ superior knowledge, but I confess I was slightly mystified about why amendments 170 and 171 are yoked because they cover different issues. I will have to keep them within the scope of the one clause.

My hon. Friend the Member for Ilford North asked the Minister about definitions of “university” and wisely constrained himself to talking in fairly straightforward terms and did not become too philosophical. I will try to do the same in the context of this amendment.

We had a debate about what should and should not be in the Bill. Clause 14, to my surprise when I first saw the Bill, refers to

“the principle that academic staff at an English higher education provider have freedom within the law”.

In my judgment, it is unusual to see that in a Bill and I was so bold as to table the amendment because the one group of people the academic staff did not seem to be protected from were Government or other relevant stakeholders. It talks about ways in which they might be protected against, presumably—perhaps the Minister will amplify this—being affected by their provider. One can think of all sorts of situations without naming individual universities. Hypothetically, for example, a university might depend heavily on funding or support from companies promoting genetically modified foods and so on.

I will not mention a particular university although I will mention a particular controversy. In future, a university might, for example, receive funding from the proponents of fracking and find that a member of its staff who was not keen on fracking had all sorts of legitimate academic arguments against it. Such examples, which I believe will be covered by the clause, are well understood. The amendment is about how the Government or other relevant stakeholders might also constrain that because that will arise in any Government. I think back to when Baroness Thatcher was deprived of an honorary degree from Oxford because of the views of the congregation at that time—not that she was moved to be punitive or, as far as I am aware, to be terribly concerned about the matter. Nevertheless, circumstances may arise in which a university might put itself against the view of a Government Department, Minister or something else.

If we are going to have all these others things in the Bill, the amendment would not be a bad idea, although it is a probing amendment, obviously. I tabled it partly from curiosity because I want to tease out why these specific things have been put in the Bill when in other circumstances I would expect them to be in guidance or whatever.

My only other point relates more to the whole of clause 14 and putting forward new ideas and controversial and unpopular opinions. I do not want to set a hare running, but there is a fine line between controversial or unpopular opinions, or sometimes perceived opinions, and things we now take for granted should not come under the purview of the academics promoting them. Some may remember the furore around Professor Eysenck and his supposed research about the abilities of certain races to perform better at sports, for example. Some will remember a time when university academics pontificated about the origins of homosexuality and so on. These are not hypothetical issues. Getting the balance right between being allowed to put forward

“ideas and controversial or unpopular opinions”

and those things that we in an evolving society now regard as unacceptable is always difficult. That is why I was curious to see this proposal in the Bill. I urge the Minister to think about the issues in terms of the Government and other stakeholders and to respond.

I will turn to the entirely separate matter of amendment 171, which is more straightforward and far less philosophical. In line with everything the Opposition have said and will continue to say—and on which my hon. Friend the Member for Ilford North sallied forth today—this concerns the position of students. Surely it makes sense to require the OFS to consult students, the academic workforce or their representatives before revision of the list.

Again, that would need to be proportionate. We had this argument on an earlier clause but I am not suggesting that every small item of detail that requires a revision of the list should be consulted on. Fundamentals that perhaps change the pattern of work in a university or the closing of a campus should surely require students and academic staff to be consulted and to put forward their opinions to the OFS. That is the basis of amendment 171.

The governance condition is a vital component of the new regulatory framework. It is designed to ensure providers are governed appropriately. Taking amendment 170 first, academic freedom is one of the fundamental strengths of our system and I want to reassure the Committee that the Government are fully committed to protecting it. We absolutely agree that academic staff must be able to teach and research without interference.

The OFS is obliged to consult on a list of principles that can make up this governance condition. The Bill, therefore, rightly does not prescribe what should be included in that list, with the one notable exception that the hon. Gentleman has identified, which is the principle of freedom for academic staff

“(a) to question and test received wisdom, and

(b) to put forward new ideas and controversial…opinions”

without losing their jobs or privileges. The amendment relates directly to that wording, which has been highlighted in consultation with the sector as being of great importance. That is why clause 14 ensures that that important principle remains included in legislation for the future.

The hon. Gentleman asked where the exact wording comes from. It is from the Education Reform Act 1988, which now cross-references to freedom of speech and academic freedom provisions in the Counter-Terrorism and Security Act 2015, in relation to actions of governing bodies in preventing people being drawn into terrorism. The wording is also the same as specified in the Committee of University Chairs’ higher education code of governance. This is a tried and tested definition of academic freedom, widely valued and understood by the sector.

The Bill includes a comprehensive range of protections for academic freedom, of which this is just one. It defines for the first time all the ways in which the Secretary of State may influence the OFS by issuing guidance, in terms of setting conditions of grant and giving specific directions to the OFS. In each case, the Bill places an explicit and specific statutory duty on the Secretary of State to have regard to the need to protect academic freedom, and it lists the areas in which the Secretary of State may not interfere.

While I can reassure hon. Members of our commitment to academic freedom, I do not believe that the amendment adds anything to what are already extensive protections from Government interference in academic freedom, specified in multiple places in the Bill. As I mentioned earlier, the OFS will need to consult prior to determining and publishing a new list of these public interest conditions.

I turn to amendment 171 and the issue of who the OFS needs to consult, on which I am glad to be able to provide some reassurance. I fully believe that the list of principles on which the governance condition will be based should be as proportionate as possible and consulted on widely. I therefore welcome and sympathise with the suggestion that student bodies and academic staff should be included. In fact, I firmly expect those groups to be covered under subsection (8)(c), which states:

“such other persons as the OfS considers appropriate”.

It would be inappropriate, however, to attempt to list all parties the OFS needs to consult on the face of the Bill. That approach would risk drawing up what could be seen as an exhaustive list, thus excluding anyone else from such an important consultation.

I assure hon. Members that I firmly expect the OFS to conduct a fully open consultation, inviting the views of anyone with an interest, including students and staff. The Bill as drafted fully allows for that to happen. In the light of all those assurances, I ask the hon. Gentleman to withdraw his amendment.

Taking amendment 171 first, I entirely accept and am reassured by what the Minister said, which will be welcomed. There is always an argument about not wanting to list everything under the sun because we might miss something, and that is fair.

I will not press the amendment to a vote, which the Minister will be pleased to hear. Without us spending half an hour going through the various bits and pieces of statute— we are obviously not going to resolve it this afternoon—if we stopped people in the street and asked, “What is one of the most important things that a new office for students, preserving academic freedom, would want to do?” I would not be surprised if they said something like, “Well, Government shouldn’t be allowed to interfere.”

These are not hypothetical issues; they are real ones—for example, universities or colleges that get support in the area of fracking. Those are real issues, but we are saying, “Oh, well, it’s all covered somewhere else.” I am not knocking the specific examples on the face of the Bill, but I do not understand why things like questioning and testing received wisdom and new ideas need to go on the face of the Bill but something as fundamental as saying, “You can’t be done for challenging Government policy or Government Ministers” is not.

I will continue to reflect on the points raised by the hon. Gentleman. He makes some interesting suggestions, and we will take them away and have a think.

On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 14 ordered to stand part of the Bill.

Clause 15

Power to impose monetary penalties

I am delighted to call the Member who represents Durham University, which is where I went to university and learned everything I know—when I was concentrating, which I shall now do for the hon. Lady’s speech.

I beg to move amendment 194, in clause 15, page 9, line 11, leave out “if it appears” and insert

“where evidence has been provided”.

This amendment would require the OfS to have evidence about the behaviour of a higher education provider before taking action against them.

With this it will be convenient to discuss the following:

Amendment 195, in clause 16, page 9, line 24, leave out “if it appears” and insert

“where evidence has been provided”.

See explanatory statement for amendment 194.

Amendment 196, in clause 18, page 11, line 17, leave out “it appears” and insert “evidence has been provided”.

See explanatory statement for amendment 194.

Amendment 197, in clause 21, page 13, line 1, leave out “it appears” and insert “evidence has been provided”.

See explanatory statement for amendment 194.

Given the breadth and depth of your knowledge, Sir Edward, Durham University obviously did a simply brilliant job.

Amendments 194 to 197 all deal with the same issue. The OFS has a wide range of powers outlined in the Bill, including the ability to impose sanctions on institutions. Clause 15, to which amendment 194 relates, gives the OFS the power to impose a monetary penalty on a higher education provider. Clause 16, to which amendment 195 relates, gives it the power to suspend a registered provider. Clause 18, to which amendment 196 relates, allows it to deregister a higher education provider completely, and clause 21, to which amendment 197 relates, gives it the power to refuse to renew an institution’s access and participation plan.

Each of those sanctions could have a significant impact, both for the university in question and its reputation and, perhaps more important, for the students studying at that institution and the staff who work there. It could also ultimately lead to students not being able to graduate from their degree. However, I do not have a particular issue with the range of sanctions that the OFS will have in its arsenal. Members of the Committee know I have grave concerns about the laxity of the system that will allow new entrants into the sector, so I am actually very pleased that there are some sanctions for new entrants that breach the registration conditions. My question is: how will the OFS know those new entrants are in breach of the registration conditions?

Each of those clauses use the words “it appears”. For example, in clause 15:

“The OfS may impose a monetary penalty on a registered higher education provider if it appears to the OfS that there is or has been a breach of one of its ongoing…conditions.”

Clauses 16, 18 and 21 use similar forms of words to determine whether a sanction should be applied. What does “it appears” mean, and what evidence will be needed to demonstrate the appearance of breaching a registration condition? Schedule 3 sets out in more detail how the OFS will go about imposing penalties on higher education institutions but it does not set out what evidence will be sufficient for the OFS to take action and enforce sanctions. Schedule 3 says only that in the notice to providers the OFS must specify its

“reasons for proposing…the penalty”.

Again, the language is rather inadequate, but I will leave that point until we scrutinise schedule 3. What does “it appears” mean? What evidence base is going to be applied by the OFS and where do we learn what that evidence base is? Is it going to be set out in regulations or is it going to be up to whoever happens to presiding over that section of OFS?

It is a serious point because, for example, a disgruntled student could take to the airwaves and criticise an institution and say it is in breach of a registration condition, when in fact that might not be the case. Is that sufficient evidence? Is that, as “it appears”, a breach of a condition? The lack of clarity is my concern and I look forward to the Minister’s response.

I thank the hon. Lady for tabling her amendments. They would require that evidence must first be provided to the OFS that a provider has breached its registration conditions before a sanction may be imposed, such as a monetary penalty or removal from the register, or a suspension placed on the provider’s registration.

The Bill as drafted states that the OFS may take such actions if it appears to the OFS that a breach of conditions has occurred. The test of “it appears” needs to be read alongside the rest of the clause and schedule 3. Regulations will set out the factors to which the OFS must or must not have regard when deciding whether to impose a monetary penalty. They will be subject to consultation and targeted at ensuring that the OFS can impose a monetary penalty only when there is good reason to do so. In addition, the hon. Lady will be aware that the OFS, as a public body, must act reasonably and proportionately in accordance with general public law principles.

I recognise the spirit in which the amendments were tabled. Although I understand and respect the intentions behind them, the OFS will be a public body acting in accordance with public law. It is clearly the case that

“if it appears to the OFS”

requires the OFS to make a judgment and take responsibility for its decisions, which seems to me to be the right approach. If we accepted the amendment, the changed wording

“where evidence is provided”

would be more passive, almost implying that, provided the OFS has received some evidence, it could trigger the sanction without applying a rigorous approach. We surely want a more engaged OFS than that, applying its judgment flexibly, sensibly and proportionately.

Clause 2 is clear on that point, too, making it clear that the OFS must follow the principles of best regulatory practice, including that its regulatory activities should be transparent, accountable, proportionate and consistent, and targeted only at cases in which action is needed. The hon. Lady might take further assurance from the fact that any intention to impose a suspension or monetary penalty or to remove a provider from the register must have clear processes, described in the Bill, that allow for a minimum period of 28 days for providers to make representations to the OFS. The only exception to that rule is where the OFS considers that a suspension should take effect immediately because of an urgent need to protect public money. Those provisions create important safeguards for providers. I am clear that any compliance action proposed by the OFS must be based on well founded concerns, and I am confident that the Bill as drafted makes the necessary provisions.

I add that clause 2 requires that the OFS, when performing its functions and duties, must have regard to guidance given to it by the Secretary of State. I assure Members that if the OFS is not acting in a reasonable and proportionate manner in respect of the issues raised by the amendments, such guidance will be given. On that basis, I ask that the hon. Lady withdraw the amendment.

I have listened carefully to the Minister’s response. If I have got it right, although “appears to” might be rather loose language, subsection (3) means that regulations will set out the types of evidence that the OFS might consider. In addition, if the regulations are not considered to be sufficient or have not been adopted properly by the OFS, additional guidance will be given by the Secretary of State to assist the OFS in its decision making. With that in mind, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 32, in clause 15, page 9, line 22, after “interest” insert

“, and

(d) the retention of sums received”.

This amendment is consequential on amendment 33.

With this it will be convenient to discuss Government amendments 33, 102 and 103.

The Bill grants the office for students the necessary powers to impose penalties on higher education providers and recover costs and interest related to unpaid penalties and costs. As drafted, the Bill provides only that those sums will be paid into the consolidated fund. On reflection, that is too blunt an approach and is not in line with best practice elsewhere. We think it should be possible for the OFS to retain some of these costs, but only in certain cases in which the Secretary of State agrees to it with the explicit consent of the Treasury. We are clear that the OFS should be allowed to retain income only when it relates to its costs, not when it is imposed as a penalty or deterrent.

For the avoidance of doubt, Government amendments 32, 33, 102 and 103 align the legislation with standard Treasury guidance. They make it clear that OFS income is to be remitted to the Secretary of State unless the Secretary of State, with the consent of the Treasury, directs otherwise.

I have no wish to detain the Committee over Government amendments that seem to me entirely sensible and proportionate. However, I have a question for the Minister that is not merely hypothetical, because significant sums of money that were extracted under the previous Government, for example in LIBOR fines, found their way into curious parts of the Consolidated Fund, enabling the Chancellor to stand up and produce rabbits out of hats in the various Budgets. That is another matter and we will not go into it, but it leads me to my point, which is that I am entirely happy and relaxed for the money to go to the OFS or even to the Secretary of State, but I would be rather less relaxed if I thought it would disappear into the Treasury without trace. Will the Minister give me an assurance that this money will be ring-fenced for the Department and will not simply go back into the Treasury?

I thank the hon. Gentleman for that further line of questioning, which I will reflect on. I cannot give him that assurance now, but I will reflect and hopefully provide some further assurance in due course. In the meantime, I reiterate that the amendments are to bring the treatment of OFS income in line with best practice by allowing the OFS to retain some of its income, but only where the Secretary of State so directs, with the explicit consent of the Treasury.

Amendment 32 agreed to.

Clause 15, as amended, ordered to stand part of the Bill.

Schedule 3

Monetary penalties: procedure, appeals and recovery

Amendment made: 33, page 72, line 34, leave out sub-paragraph (5) and insert—

“Retention of sums received

5 The OfS must pay the sums received by it by way of a penalty under section 15 or interest under paragraph 4 to the Secretary of State.”.—(Joseph Johnson.)

Schedule 3, as amended, agreed to.

Clause 16

Suspension of registration

I beg to move amendment 34, in clause 16, page 10, line 11, after “ends” insert

“otherwise than when the provider is removed from the register”.

This amendment provides that the OfS’s duty to enter the date on which a provider’s suspension ends in the register does not apply where it ends with the provider’s removal from the register.

The amendment removes the requirement for the OFS to enter the date of the end of the suspension of a provider in instances when the provider has been removed from the register. Given that, in the event of deregistration, there will no longer be any entry in the register to enter a date against, it is a sensible clarification of the OFS’s duties in such cases.

Amendment 34 agreed to.

I beg to move amendment 172, in clause 16, page 10, line 12, at end insert—

“(10) A suspension must not exceed 365 days.”.

This amendment would ensure suspension of a provider’s registration cannot exceed more than one year.

With this it will be convenient to discuss amendment 174, in clause 17, page 10, line 36, at end insert—

“(e) specify what happens to existing students during the suspension period as documented in an institution’s student protection plan.”.

This amendment would ensure clarity as to the safeguards for students at a suspended institution.

We return to a subject that we have already begun to touch on and will touch on further: the issue of what happens when things go wrong for whatever reason. I will deal with amendment 172 first, which is a probing amendment. As in the discussion that we had earlier on the issue of 28 days and 40 days, the figure is not entirely arbitrary, but it is a figure that could be played with.

The amendment concerns suspension and would create a sunset clause. Our concern is about natural justice for the provider that has been suspended, but equally we want to make sure that all the people affected by the suspension—we come back to our familiar mantra of workforce, students and so on—are not left in some infernal limbo for an unreasonable period of time. I will not refer to specific examples, but will draw on my own experience of having been on the Select Committee before 2010 when two or three major cases came up, which the Select Committee looked at and which the QAA was involved in. There were lengthy proceedings, which in some cases took two to three years to resolve. That was detrimental not only to the provider under investigation, but to all those associated and, by extension, caused problems for the reputation of the sector as a whole. I bear that in mind with this amendment.

After all, if a provider is suspended, there are presumably two outcomes. They are either told, “Go away and put your house in order and we will lift the suspension”, or the provider withdraws from the market or possibly goes and does things and they are then told, “Sorry, this is not going to work”, and then there is a market exit of some sort. But suspension needs to be done in a reasonable and timely fashion. The Minister has the advantage of the rest of us because he has a phalanx of civil servants who can go back and look at previous examples of how long some of these things have taken, and who can consider whether it is not unreasonable to put some form of sunset clause in the Bill. That is the reason for amendment 172.

On the broader and more substantial issues, which again we have touched on to some degree and which I am sure we will touch on again when we come to clauses 40 to 48—I will not engage with the issue of the relevance or otherwise of probationary powers—amendment 174 is about what safeguards there are for students at a suspended institution. We want more meat and potatoes in the Bill to say what is actually going to happen. That is why the amendment would specify what happens to existing students during the suspension period—leave aside the issues for future or indeed past students who might study their degree certificates more nervously than previously, considering the amount of money they have spent to get them—as documented in an institution’s student protection plan.

At this point I want to refer to the paper that the Minister has given us. It is the paper on student protection plans that we discussed this morning. I have speed-read it. I might have said earlier that I think the broad range of intentions are good and perhaps one should not expect to see more than the broad range of intentions, but there are lots of specific points. Before I press the Minister a little further on a couple of points about market exit, it is important to lay out the context, which we touched on to some degree this morning when I talked about the evidence produced in the Government’s White Paper on the expansion of alternative providers up to, I think, 2014 and on the number of institutions that have closed. I will not go over that ground again, but I will say something that I did not have the opportunity to say this morning on the nature of students at alternative providers.

I alluded this morning to the other part of the IFF Research report—commissioned by the Department for Business, Innovation and Skills, which was then in charge of higher education—which emphasises the proportionally large number of people from ethnic minorities or from disadvantaged circumstances who study at alternative providers. The Minister will remember our evidence session with a couple of the alternative providers and the discussion that followed with Mr Proudfoot, who represents a range of such providers. Mr Proudfoot specifically emphasised, and wanted us to support, the proportionally large number of people from disadvantaged backgrounds who study at alternative providers. From what the Minister and others have said, we can assume that the Government wish to see an expansion of alternative provision precisely to address some, although we believe by no means all, of the access and participation issues.

Alternative providers are, as it were, the other side of the coin, which is why we feel it is important to press this point. The figures from the survey suggest that 46% of learners at alternative providers are significantly more likely to be from an ethnic minority—46% of respondents were non-white, compared with 10% in the publicly funded sector. There is also some indication that those studying at alternative providers tend to be older, with only 23% aged under 20 at the time of entry, compared with 37% aged over 20 at the time of entry in the publicly funded sector.

I come back to what I said this morning, and have said on other occasions, about the importance of all forms of providers addressing the need for lifelong learning, because people want to come back to reskill and retrain. All of that is good. Concomitantly, when and if alternative providers stumble or fall, there are greater consequences for people who either would have felt wary of coming into higher education—perhaps because no one in their family had been there before or because higher education is not seen as a great strength by their particular ethnic grouping, or for whatever reason—and for people who went into higher education at a later stage. Again, I draw on my experience as an Open University tutor. People who enter higher education at a later stage are often in their middle years and are predominantly women. Often they go to alternative providers because they do shorter-term courses or ones that can be fitted in with a complicated work-life balance. People who were chary about going into the system in the first place, or people who went into the system knowing that they would have to juggle things quite a lot to do so, will be far more dramatically affected than others, it might be argued, by a collapse in the alternative sector. For all those reasons, we believe it is important to get this right as soon as possible.

I am sorry to have to come back to this, but this is not a question of something that cannot happen, has not happened or, indeed, is not happening. I referred previously to the issues in 2011, when concerns around BPP and the Apollo group caused the previous Secretary of State to pause a major extension in this area. Research Fortnight argued in May—I am sure the Minister will not agree—that

“The government’s proposed reforms are being billed as bold and innovative but in fact they are no such thing.”

It said that the wording

“proportionate for the Bill’s regulatory aspects”

is “code for light touch” and that

“the UK government has instead decided to emulate a model from which many in the rest of the world want to escape.”

We may not share all the conclusions that might come from that, but we are well aware that those other problems exist elsewhere and have affected students. Indeed, a six-country study that was requested by BIS and published by the Centre for Global Higher Education at University College London’s Institute of Education warned of some of these risks. It said that

“relative to the public sector, the quality of provision…is often found wanting, while tuition fees are usually higher.”

The six countries concerned were the US, Australia, Germany, Poland, Japan and Chile. The study went on to say:

“This suggests the need for much tighter regulations in the UK for all private providers, and not just those receiving government funding”—

I appreciate that today we are dealing specifically with the ones in that category.

I want to press the Minister on these points. When it comes down to the practical, a student at a university that is suspended and has problems will ask, “Who is going to pick up the pieces if it all goes wrong?” We are talking about several different sorts of pieces—how do I continue my degree? What happens about the money I have spent already? What happens if the problems are not picked up until halfway through my course? Apart from financial compensation, the other issue is: if I want to continue with this course, where do I go? That is a huge issue for the Government and the OFS to address.

We are not going to solve this today, but to put the amendment on the face of the Bill would at least suggest that there needs to be a direction of travel. At the moment, the way the Government have set out the provisions is too laissez-faire and assumes that everything will be fine. I will go back to the example I quoted this morning of a question raised in the House of Lords about the West London Vocational Training College. I think that the question was posed—Hansard will or will not bear this out—by the noble Baroness Wolf, and the report in the Times Higher Education tells me that it was the noble Baroness Evans of Bowes Park who responded for the Government. In her answer, published on 1 July, she said:

“The Government has revoked West London Vocational Training College’s designation…Affected students will be supported so they can continue their studies with as limited disruption as possible.”

May I ask the Minister how—this is germane to illustrating the need for amendment 174—those students are being supported? That answer was on 1 July; it is now 15 September. If the Minister cannot respond today, perhaps he will be good enough to update us on precisely how they have been supported. Have they been supported financially? Have they gone to other institutions? I use that example to demonstrate that just saying, “Well, they will be supported,” begs a range of other questions.

I have a whole list of other colleges that have been in similar circumstances recently. I would be interested to know about those, too, although I will not trouble Committee. Perhaps those colleges will be a subject for written questions that might pop on to the Minister’s desk at some point.

These are not hypothetical issues. In its evidence to the Committee, the National Union of Students—having said what it said about the changes to degree-awarding powers—said that there should be a requirement, under clause 13, for all student protection plans to specify

“how students will be protected from any reasonable financial loss”.

It also says, “Should a student’s institution collapse or close their course while they are still studying, through no fault of their own, the student may be at risk of losing course costs, accommodation costs, moving costs and other costs that they would not have incurred had they not gone to that university, and it would be grossly unfair to put a student in a position where they stood to suffer financially for reasons totally beyond their control.”

I think that submission from the National Union of Students is particularly valuable because it lays out the range of issues to be dealt with. It is a question not simply of tuition fees but of all the knock-on effects on people’s accommodation commitments. The cost of accommodation for students, particularly in London, has become a key issue, as I was told when I visited the new University of the Arts London campus in January. If there are failures of that sort—I am not suggesting that in respect of UAL but I am using UAL as an example of how important accommodation costs are in places such as London—there needs to be a clear set of plans for dealing with it.

It is interesting that Carl Lygo, the vice-chancellor of the for-profit BPP University said that the report showed that, while the alternative sector was

“doing a great job at attracting students that would not otherwise go into higher education”,

there was

“quite a lot of instability in the sector”.

He said:

“It is a sector that really does need a track record before progressing on to full degree-awarding powers”.

That is the thrust of much of what the amendment is trying to get at. We do not expect to get much more detail today, although we may press for it in due course. However, we expect to get some sense from the Minister as to how it will be taken forward.

This morning, the Minister prayed in aid, as a good—an unalloyed good—the power to take the cap off the number of students who could go into the sector. He slightly had a go at us for somehow being dog in the manger about it, but it is not just the Opposition who are questioning the rush for alternative providers. The noble Baroness Wolf, to whom I already referred, has drawn sharply to the Government’s attentions some circumstances that have taken place in Australia as a result of the expansion of private providers, possibly without the necessary precautions.

I am sure that it is no part of the Minister’s wish that if we do not get the regulation and protections right, two or three years after his Bill appears on the statute book, there will be a series of scandals that cause real problems for the reputation of the whole alternative provider sector. I strongly urge him not simply to say, “Oh, well, we have adequate protections already”, or, “Putting this on the face of the Bill is otiose.” The tens of thousands of students who are at alternative providers or, indeed, at existing providers—we are talking not just about alternative providers, but about protecting people at existing longstanding institutions or new people who might be tempted into the market—would not regard these matters as unsuitable for the Bill. If we make this amendment to the Bill, it would give a great deal more reassurance—and direction, which is also important—to the OFS to ensure that this information is available.

I thank the hon. Gentleman for raising these issues, which I agree are important, and that is why we have given them very careful thought at every stage in the development of our reform proposals.

The Bill provides important enforcement tools for the OFS, including a power to suspend a provider’s registration if it appears to the OFS that there has been a breach of the provider’s registration conditions. This imposes a powerful incentive for providers to adhere to the OFS’s conditions, and is therefore critical to safeguarding the quality and reputation of our HE sector, and to protecting students.

Amendment 172 seeks to ensure that any suspension imposed on a provider’s registration cannot exceed a period of more than 365 days. Imposing a limit of that nature to a provider’s suspension seems arbitrary and may be unhelpful, for example, when a suspension has been imposed in cases where a provider is “teaching out” students during a period that could exceed 365 days. I hope that gives the hon. Gentleman just one very quick example of why we would not want to have a limit of that kind.

Clause 17 puts in place a clear process for dealing with suspension, including setting out to providers the reasons for imposing a suspension and any remedial actions that may be required of them. We envisage that such remedial action requirements will not only state clearly what needs to be done but set out clearly the date by which such actions need to be taken.

The OFS will treat any breach of conditions as a serious matter and will require providers to put matters right promptly. Indeed, clause 18 allows the OFS to deregister a provider if its powers to suspend are insufficient to deal with a breach of a provider’s conditions. That will provide a clear safeguard for students, as it will avoid unnecessarily lengthy—even unduly protracted—periods of suspension.

I turn to amendment 174. The Committee has already discussed student protection plans, which the OFS can impose under clause 13. As the Committee has heard, we want the basic principles for having a student protection plan to be applied to any and every situation where a material change may potentially affect students’ continued participation on a course or at an institution. Such situations could include an event where a provider’s registration has been suspended.

We would expect providers to set out to students clear arrangements as to how student protection plans would handle material changes that might occur, including suspension. Information to students should include a clear process and provide clarity about options and mitigating actions, and the objective is to minimise any potential negative impact on students. The Bill also gives the OFS the ability to specify what transitional financial support students may receive if they are at a provider that has been deregistered by the OFS, resulting in designation for student support being removed.

On that basis, therefore, although I fully agree with the hon. Gentleman’s concern about the importance of having a robust regulatory framework and tough threshold conditions for entry for high-quality providers, I do not believe that the amendment is necessary as I strongly believe that the Bill already contains the necessary provisions to safeguard students’ interests.

The Minister has quoted chapter and verse as to what the OFS might or might not be able to do, but what he has not been able to do is address the specific circumstances that I have listed, and I press him on this point about the differences between accommodation and all the rest of it. If he does not want to make this particular change to the Bill, how does he intend to ensure that the OFS considers all of those matters?

We published an explanatory guide to the student protection plans, which was made available to the Committee yesterday, and that was an early provision of information to assist the Committee. Of course, the OFS will properly consult relevant bodies when it comes to drawing up the finer detail of how student protection plans should work.

Members of the Committee will have seen the kinds of measures that we expect student protection plans to include to assist students in those circumstances, such as suspension. We have listed four examples. The plans should include:

“provision to teach out a course for existing students; offering students an alternative course at the same institution”—

if it is just a programme or a department that is closing—

“making arrangements for affected students to switch to a different provider without having to start their course from scratch; measures to compensate affected students financially”.

Those are the kinds of things that we expect the consultation to flush out.

I know the Minister is trying to be helpful. As I have said before, I am not dissing, to use a colloquialism, the student protection plans paper that has come forward, but it is very much a first stab at this. In particular, I want to ask him about the section on market exit at the end. Paragraph 35 states:

“Instances of a provider suddenly and without warning exiting the market completely are likely to remain extremely rare.”

I am sorry, but that is not historically accurate. We have had examples where providers have collapsed. The paragraph also states that

“the OfS will be able to work with students who want to transfer to alternative institutions”.

Say an institution was teaching law in a confined area and it was suddenly suspended for whatever reason and it had 1,000 students. Can the Minister tell me what alternative institutions would be available to pick up that tab and that group of students at that point? Just as importantly, what support—

Mr Marsden, I can allow you to intervene as many times as you like—I am very easy-going on that—but we have to keep interventions brief, otherwise it is not fair on other people.

Again, Sir Edward, I respond to the hon. Gentleman by reminding him that student protection plans are an existing feature of our higher education system, but the problem is that they are patchy and not systematic. The Bill will ensure that the OFS has the power to request student information plans systematically from categories of provider so that more students can benefit from the kinds of protections that are currently available only on a piecemeal basis. Those protections have helped institutions cope with the closure of courses or programmes, and we want to make systematic the existing best practice framework in the sector. That is our objective.

The hon. Gentleman is trying to conjure up this image of a sector that will suddenly be confronting the need to develop student protection plans, but they exist already. We are making them more widespread and on that basis, having given way a couple of times, I ask him to withdraw the amendment and agree that we are defending the student interest with this provision and putting in place something that the NUS has welcomed.

Right—okay. I hear what the Minister has said. It is not my interpretation of what the NUS has said, which is why I am quoting chapter and verse from it, but the NUS can speak for itself. The problem with what the Minister has said—I accept his bona fides, his intentions and the rest of it, and I can see his frustration that I am not prepared to accept the broad assurances, but that is what they are—is that they are broad assurances that do not address some practical issues.

I go back to this point: the Minister cannot put a paper out to the Committee and not expect to be questioned on it in the course of the consideration of an amendment. I take him back to paragraph 35, which says that

“the OfS will be able to work with students who want to transfer to alternative institutions, with the aim”—

this is the additional thing—

“of their having banked credit for study already completed.”

The Minister knows as well as me, because he has made a big thing of the fact that he wants to do more about it in the future, that that situation of being able to transfer banked credit for study already completed does not exist in many institutions. That is one of the things that needs to be changed, but he wants to introduce a system that will make market exit much easier.

The Minister is blithely saying in the paper, “Of course they will be able to transfer to an alternative institution”, but he cannot give me any idea of what would happen in the particular example I gave him, or where the inducements would be. The paper also talks about the aim of students transferring with banked credit for study already completed, but the Minister knows perfectly well that is very fragmentary and very uncertain in the process that we currently have. Particularly in a crisis, hundreds of students could be transferred from one institution to another. Who will fund them? Will the Government stump up money? Will the university that takes them on board automatically have all those courses?

I know that these are matters of detail and not in the Bill. I do not expect them to be, but I do expect us, when we table an amendment that says that the OFS needs to think about all these things in great detail, not simply to be palmed off with the idea that it is all in the paper and everything will be fine, because everything will not be fine. There are many recent history examples of that.

That is why I am profoundly unhappy and concerned at the Minister’s approach at this moment. I hope that he will reflect on this exchange and the issues that we are raising. When we come to consider some of the specific issues in clauses 40 to 48, we will want to see far more meat on the bone than we have been given here this afternoon. I am mindful of the time and the heat of the day and that it is Thursday afternoon and hon. Members want to get back to their constituencies. For those reasons, whereas on other occasions I would have pressed this amendment to a vote, I will not press it today, but I will expect to hear about more progress on this issue from the Minister in the future. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16, as amended, ordered to stand part of the Bill.

Clause 17

Suspension: procedure

I beg to move amendment 35, in clause 17, page 10, line 42, at end insert—

“( ) section 85 in the exercise of UKRI’s power under that section to give financial support, or”.

Clause 17(8) provides for an expedited suspension procedure where there is an urgent need to protect public money. This amendment adds financial support given by or on behalf of UKRI in the exercise of its power under clause 85 to the list of examples of public money for the purposes of that provision.

Subsection (8) provides the OFS with the power to suspend a provider with immediate effect where the OFS considers that there is an urgent need to protect public money. The clause lists particular examples of payments in the HE field that the OFS may want to protect and the amendment simply adds to that list payments made by UK Research and Innovation using the powers given to it by the Bill. The amendment provides a clear signal that the OFS will specifically take into account the need to protect UKRI funding when considering the suspension of a provider.

Amendment 35 agreed to.

Clause 17, as amended, ordered to stand part of the Bill.

Clause 18

De-registration by the OfS

I beg to move amendment 36, in clause 18, page 11, leave out line 26 and insert

“breach (whether or not they have been, are being or are to be, exercised in relation to it).”

This amendment clarifies that the requirement in one of the pre-conditions for de-registration of a provider that the OfS’s powers to impose monetary penalties or suspend registration are insufficient to deal with the breach does not prevent those powers being exercised in relation to the breach.

Clause 18 sets out two types of case in which the OFS must deregister a provider. The first is when a provider, having previously been suspended or fined for breach of an ongoing registration condition, breaches the same condition or another of its conditions. The second case is when the breach of an ongoing registration condition is so serious that neither the imposition of a monetary penalty nor a suspension will be sufficient to deal with it. The amendment simply makes it clear that the OFS can come to a view that a fine or suspension would be insufficient to deal with a breach and then move to deregistration without first having had to take any action to impose those sanctions. That allows for appropriately speedy action in particularly serious cases—for example, cases of large-scale fraud. Of course, it will always be the case that the OFS could take such an approach only if the facts of the case justified it.

Amendment 36 agreed to.

I beg to move amendment 175, in clause 18, page 11, line 37, at end insert—

“(8) The OfS must submit any list produced under subsection (7) to the Secretary of State who shall lay it before Parliament.”

This amendment would ensure the list of providers removed from the register is laid before Parliament.

With this it will be convenient to discuss new clause 5—De-registration: notification of students

“(1) The governing body of a higher education provider must inform all students enrolled on a course if it—

(a) is notified by the OfS of its intention to suspend the provider’s registration under section 17(1),

(b) is notified by the OfS of its intention to remove it from the register under section 19(1),

(c) is notified by the OfS that it will refuse to approve a new access and participation plan under section 21(2), or

(d) has applied to be removed from the register under section 22(1),

(2) The governing body of an institution must notify students under subsection (1) by the date on which—

(a) the suspension takes effect,

(b) the de-registration takes effect, whether enforced or voluntary, or

(c) the expiry date of any existing access and participation plan that will not be renewed and the period of time for which approval of a new plan will be refused,

whichever is applicable.”

This amendment would require that any students still undertaking courses at that provider are notified if the provider becomes deregistered.

This amendment, again, is in line with transparency before Parliament, particularly transparency in serious cases. That is what it would be, in our opinion, if a provider were removed from the register. We had a run-around on this subject in another context on Tuesday. The Minister said to me then, perfectly reasonably, that the register would be done in real time, that it was an ongoing process and so on. I observed that things done on a rolling basis day by day are often things that people do not pick up on.

After all, if a provider is to be removed from the register, there must be substantial reasons for doing so, and it is in the public interest, let alone the interests of students and other stakeholders, that that should be made clear. They should not be constrained to look on a website every day to see whether their institution has not made the grade in some way. As a de minimis process, it should be the case that the OFS must submit, according to the terms of the amendment,

“any list produced under subsection (7) to the Secretary of State who shall lay it before Parliament.”

That is not onerous—indeed, one might say that stronger things could have been put into the Bill. However, it is important for the sake of transparency and confidence in the sector, particularly if we are going to be dealing with a significant number of new and alternative providers over the next 10 years, that the public and students have confidence, and that the communities in which those new providers provide higher education have confidence. That is why we tabled amendment 175 as a probing amendment. I hope that the Minister will understand the difference between simply putting something on a register in real time and having a fixed period in which to lay it before Parliament.

I will speak to new clause 5. The clause continues the argument set out by my hon. Friend the Member for Blackpool South that in the event of deregistration, the interests of students must be paramount. In particular, students and their degrees must be protected, and they must be able to prepare and decide what to do if their institution is deregistered or their course is removed.

The purpose of new clause 5 is to ensure that something is put on the face of the Bill about how and when students will be informed that there is a problem with their institution. It will ensure that the governing body of a higher education provider informs students enrolled on one of its courses if it is notified by the OFS of its intention to suspend the registration of the institution or remove it from the register, or if it refuses to approve the new access and participation plan, which would have the effect of removing it from the register. It stresses that the governing body must notify students if a suspension or deregistration is to take place, when it will take effect, whether it is enforced or voluntary and, critically, whether there is an expiry date for any existing access and participation plan.

The new clause is straightforward: it simply seeks to set out in the Bill some basic protections for students to ensure that they are informed well in advance. Although the new clause does not say this, students should be notified before something inaccurate gets into the media that might alarm them. They should be informed well in advance of anything leaking out and be given clear information about whether there is going to be a suspension or deregulation, and when. Critically—this was the purpose of the amendment of my hon. Friend the Member for Blackpool South—students must be enabled to take relevant and appropriate action early enough to safeguard their current and future studies. I look forward to hearing what the Minister has to say.

I do not want expectations to rise too high.

I welcome this opportunity to discuss the deregistration of providers. The OFS list of deregistered providers will be a single, comprehensive record of English HE providers that have been removed from the register. As such, it will be updated in real time as and when additions are made to it. The list and the information in it will be publicly available and hosted on the OFS website. In that sense, there appears to be little value in placing a duty on the Secretary of State to make available information that the OFS will place in the public domain. The OFS will take steps to ensure that the register and the list of deregistered providers is well publicised.

On new clause 5, the powers that the OFS is given in the Bill to impose sanctions, suspend a provider’s registration and, ultimately, to deregister a provider are a powerful incentive for providers to adhere to their registration conditions. When the OFS proposes to suspend or deregister a provider, or to refuse to renew a provider’s access and participation plan, this is primarily a compliance measure to ensure that providers take necessary steps to comply with the conditions of registration that have been placed upon them. Providers are given time either to take corrective action or to make further representations to the OFS before any sanctions are imposed.

I understand the reasons for the new clause, but it would not be right for there to be widespread publicity when the OFS has yet to decide to take action, and when discussions, representations and evidence gathering may still be ongoing. Such publicity may cause reputational damage that would not easily be repaired, even if the provider addresses the OFS’s concerns and no action is ultimately taken. It may also dissuade those giving evidence from doing so and lead to the provider not being fully co-operative. That is not desirable, given that our aim is, whenever possible, to work with providers to improve their performance, and for them to continue to provide high-quality higher education.

Let me be clear: when a decision has been taken, if the OFS considers it appropriate that students should be informed of the actions taken, it already has the power when appropriate to compel a provider’s governing body to ensure that students are properly and promptly informed.

The Minister is being characteristically generous in giving way. We have already expressed our concern about the phrase “if the OFS considers it to be appropriate”. I am sure that my hon. Friend the Member for City of Durham does not want to place huge burdens on the OFS, but I do not think “if the OFS considers it to be appropriate” is the right phrase. If an institution is in that situation, it should not be a question of whether the OFS considers it appropriate to notify students; it must do so. If I were the new chief executive of the OFS, I would consider it a dereliction of my duty not to do so. I see no reason, therefore, why we are not talking about “must”, rather than whether it is appropriate.

I understand the hon. Gentleman’s point but, as I have said on previous occasions, the OFS will be a public body that has to respect general public law principles and will need to act reasonably and proportionately in everything it does. I assure him that it is certainly our expectation that the OFS will act in the interests of students and will consider making it a specific condition of registration that a provider’s governing body advises students promptly and accurately of OFS proposals to take action against it. Where a provider applies to the OFS to be voluntarily removed from the register and students are still on such a provider’s courses, they will be notified through actions set out in the provider’s student protection plan. On this basis, I ask the hon. Gentleman to consider withdrawing the amendment.

I thank the Minister for his response. It is clear that, if not a philosophical, there might be a slight ideological division for us on whether it should be “must”, or “considers it to be appropriate”. He will be relieved to know I will not go down that route again. I accept the thrust of his arguments and am glad that he has been induced, if I may put it that way, to speak as passionately on the subject as he has, because that will enable a much clearer steer to go to the OFS. I think that steer is important, as I have said before, with any new institution, notwithstanding the wisdom of the Secretary of State in appointing whoever she does to those particular posts. On that basis, for my own part—my hon. Friend the Member for City of Durham must speak for herself—I am prepared to withdraw amendment 175.

I listened carefully to what the Minister said. I think that he was assuring us that the protection plan will contain clear guidance about how students are to be informed in the event of an impending deregistration or suspension. If that was indeed what the Minister was saying, that suffices for the moment and I will not press new clause 5.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 18, as amended, ordered to stand part of the Bill.

Clauses 19 and 20 ordered to stand part of the Bill.

Clause 21

Refusal to renew an access and participation plan

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

I rise to put a couple of particular questions to the Minister about this process. Obviously the refusal to renew an access and participation plan would be of significant concern. The whole idea of access and participation plans is to take forward the process of widening participation that the Minister and all of us have committed to, so refusing to renew one is actually quite a significant step. In the text the Minister has provided, there is a lot of detail about the circumstances in which that might take place. The Bill talks about the OFS notifying

“the governing body of the provider”

about this. I was not quite clear about the implications of this particular phrase, so I would be grateful if the Minister were to expand on it, but subsection (3) says:

“The Secretary of State may by regulations make provision about… matters to which the OfS must, or must not, have regard in exercising its powers under subsection (2);”.

I would welcome some clarification, however brief, on that. That is the first point.

My second point touches on our earlier discussions. What would the position and the relationship of the director for fair access and participation be in this process? At what stage, for example, would his recommendations be reviewed? Would he have a veto—that is perhaps the wrong word—or the sole power to make that decision, which the OFS board would just rubber-stamp, or does the Minister envisage a conversation between the OFS board and the director before refusals were made clear? As I have said, this is not a power that should be used lightly. It is not a light issue for the students who will be affected by no longer having access to an access and participation plan nor for the provider who will have its plan removed and for whom it will potentially appear as a black mark on its corporate reputation.

I am grateful to the hon. Member for Blackpool South for giving me a chance to provide some clarification. The Government believe that anyone with the talent and potential to benefit from higher education should have an opportunity to go to one of our great institutions. In the new world, the OFS will take on responsibility for agreeing access and participation plans, so that even more people can have that chance. However, it is important that the OFS has a backstop power to refuse to agree a new plan where there have been concerns with previous performance, which would be used only in circumstances where it appears that a higher education provider has failed to deliver on commitments in its access and participation plan or has exceeded the specified limits for course fees.

The process that the OFS would follow in those circumstances will be set out in regulations. The regulations will cover the matters that the office for students should or should not take into account in deciding whether to refuse to renew an access and participation plan, the procedure it should follow when giving notice of the refusal to renew a plan, the impact of a notice of refusal and provisions enabling providers to apply for a review before a decision to refuse to renew a plan becomes final. Such detailed arrangements, covering the whole process of agreeing, renewing and enforcing plans, have been set out in regulations since 2004. The hon. Gentleman asked about clause 21(3). Those provisions replicate the provisions in the Higher Education Act 2004.

The director of fair access has not used his powers to enforce compliance with access agreements under the current system. However, we want to ensure that the office for students has the necessary teeth to act where there are concerns. Such a power underlines the priority that we place on widening participation and the key role the OFS will have in ensuring that continued progress is made in that area. I recommend that this clause stands part of the Bill.

It is extremely helpful of the Minister to lay that out. I asked a very specific question about at what point in the process the director for fair access and participation would be involved and whether he would have a full say. I accept that those are issues that can be dealt with when further guidance is put forward. They are important issues. As the Minister has just said, the current director has not yet had to use his powers in this area. If we are looking at a situation where there is going to be a significant expansion of providers over the next 10 years, which the Government’s own technical document makes very clear, we cannot assume that this process will not happen in the future. It would therefore be helpful for the Government and the OFS if some further thought were given to the relationship between the OFS and the director for fair access and participation on the important decision to refuse an access and participation plan as envisaged in clause 21.

Question put and agreed to.

Clause 21 accordingly ordered to stand part of the Bill.

Clause 22

Voluntary de-registration

I beg to move amendment 191, in clause 22, page 14, line 5, leave out “may” and insert “must”.

This amendment would ensure transitional measures were put in place by the OfS if a provider is removed from the register.

People might say that voluntary deregistration is not as important as a compulsory one. Nevertheless, even a voluntary deregistration has consequences. Therefore, with this probing amendment, we are asking the Minister to consider requiring the transitional measures to be put in place, rather being left as “may”. I leave that for the Minister to consider in context, but it is important for us not simply to have a situation of voluntary deregistration.

The amendment would require the OFS to put in place transitional measures when a provider has applied to be removed from the register, even if it were the case that all students had completed their studies. We expect that, in the overwhelming majority of cases, transitional measures will be appropriate and that they will be made by the OFS. It is important, however, for the OFS to retain discretion to act when necessary, rather than being forced to take action that, in some circumstances, may not be appropriate, in particular when a provider is making an orderly exit from the HE sector.

There is little value in the OFS being required to make transitional arrangements when a provider has acted reasonably, responsibly, and has remained on the register until such time as the students have completed their studies. I understand the hon. Gentleman’s intentions in moving the amendment and fully agree with the need to promote such important issues, but it is not necessary, because the Bill already makes appropriate provision. I ask him to withdraw the amendment.

I hear what the Minister has to say. I am grateful for his explanation and, on that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 ordered to stand part of the Bill.

Clause 23

Assessing the quality and standards of higher education

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

I do not wish to detain the Committee unduly, but the Minister will be well aware that Universities UK has, in its written evidence to the Committee and, I am sure, in person with him, expressed some real concerns about how the concepts of quality and standards are being applied in this legislation.

In the written evidence, Universities UK pointed out to the Committee that the way in which standards should be assessed is not being set out clearly enough, nor has enough clarity been given to the difference between what is meant by “quality” and “standards” throughout the Bill. Universities UK states:

“The quality of higher education provided is clearly a key consideration in the regulation of the sector, although at present the bill makes the relevant condition one which may be applied rather than one which is a mandatory condition of any institution seeking to be included on the register of higher education providers.”

It points out that all the clauses subsequent to clause 13 that deal with assessing quality and standards should make the distinction between “quality” and “standards” much clearer.

On that point, clause 23(3) as drafted states:

“‘Standards’ has the same meaning as in section 13(1)(a).”

Clause 13(1)(a) states that

“a condition relating to the quality of, or the standards applied to, the higher education provided by the provider (including requiring the quality to be of a particular level or particular standards to be applied);”.

That does not seem to be a particularly helpful or clear definition.

Will the Minister, from clause 13 onwards and in clauses 23, 25 and 27, assist the Committee in its deliberations by agreeing to put more clarity in the Bill or in regulations?

My hon. Friend makes an important point, which is shared by the Russell Group in its evidence. It is concerned that the definition as it stands would require the OFS to be involved in decisions about appropriate standards that are properly for universities themselves to make as autonomous institutions? There is widespread concern, which the Government need to address.

I thank my hon. Friend for making that important point. The Minister has had many representations on this issue. I have not yet heard from him how he will address those concerns, but I am sure I am about to.

Yes, indeed. There have been representations and plenty of discussion about why the Government felt it necessary to make explicit reference to standards here. The words “quality” and “standards” have distinct meanings within the higher education sector, even though both are encapsulated within what a layperson might consider to be the quality of a degree. While we consider that HEFCE currently has a role in assessing standards as part of its current quality duty, the lack of an explicit mention for standards has created some uncertainty and that requires correction.

Quality refers primarily to processes, such as whether a provider has suitable academic staff or is providing appropriate levels of assessment and feedback. Standards, on the other hand, refer to the level that a student is required to meet to attain a degree or other qualification. The common expectation of standards is set out in the “Frameworks for Higher Education Qualifications”, which has the support of the sector.

It is essential that the office for students is able to ensure that providers are genuinely offering qualifications that are of a suitable standard to be considered higher education. Otherwise, we could be powerless to prevent a provider offering a qualification in, for example, mathematics which might require students to achieve no higher standards than a C at GCSE, while potentially passing it off as a degree and collecting student support from the taxpayer. This would clearly be unacceptable.

Let me be absolutely clear for the hon. Member for City of Durham and others. This is not about undermining the prerogative of providers in determining standards. It is essential that the office for students is able to ensure that providers are genuinely offering qualifications that are of a suitable standard to be considered higher education, otherwise we might be powerless to prevent a provider offering a qualification in, say, mathematics, which might require students to achieve no higher standard than a C at GCSE, perhaps while passing it off as a degree and collecting student support from the taxpayer. That would clearly be unacceptable.

Let me be absolutely clear for the hon. Member for City of Durham and others: this is not about undermining the prerogative of providers in determining standards. This is about ensuring that all providers in the system are meeting the threshold standards set out in the “Frameworks for Higher Education Qualifications”, a document endorsed and agreed by the sector.

We are clear that the Government have no role in prescribing course content or structure and that institutional autonomy, as well as the consequential diversity of content and teaching styles across the sector, are crucial to the reputation and vibrancy of UK HE. However, it is important that we can ensure that the overall quality of HE in this country is not undermined by providers offering substandard qualifications, thus ensuring that students get what they pay for and that the taxpayer receives value for money.

As we heard from Pam Tatlow of MillionPlus during the evidence sessions,

“we have got to protect quality and standards for our students. We have also got to maintain a system in which we can maintain confidence.”––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 12, Q11.]

Together with our wider reforms set out in the Bill, clause 23 is a key element of our approach to maintaining a high and rigorous bar for entry into the system and providing effective oversight—goals that I know hon. Members share—while reducing the burden of inspection on those providers that are performing well.

Question put and agreed to.

Clause 23 accordingly ordered to stand part of the Bill.

Clause 24 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned.—(David Evennett.)

Adjourned till Tuesday 11 October at twenty-five minutes past Nine o’clock.

Written evidence reported to the House

HERB 41 Royal Academy of Engineering

HERB 42 Brunel University London

Higher Education and Research Bill (Seventh sitting)

The Committee consisted of the following Members:

Chairs: Sir Edward Leigh, † Mr David Hanson

† Argar, Edward (Charnwood) (Con)

† Blackman-Woods, Dr Roberta (City of Durham) (Lab)

† Blomfield, Paul (Sheffield Central) (Lab)

† Chalk, Alex (Cheltenham) (Con)

† Churchill, Jo (Bury St Edmunds) (Con)

† Evennett, David (Lord Commissioner of Her Majesty's Treasury)

† Howlett, Ben (Bath) (Con)

† Johnson, Joseph (Minister for Universities, Science, Research and Innovation)

† Kennedy, Seema (South Ribble) (Con)

† Marsden, Gordon (Blackpool South) (Lab)

† Milling, Amanda (Cannock Chase) (Con)

† Monaghan, Carol (Glasgow North West) (SNP)

† Morton, Wendy (Aldridge-Brownhills) (Con)

Mullin, Roger (Kirkcaldy and Cowdenbeath) (SNP)

† Pawsey, Mark (Rugby) (Con)

† Rayner, Angela (Ashton-under-Lyne) (Lab)

† Smith, Jeff (Manchester, Withington) (Lab)

† Streeting, Wes (Ilford North) (Lab)

† Vaz, Valerie (Walsall South) (Lab)

† Warman, Matt (Boston and Skegness) (Con)

Katy Stout, Glenn McKee, Committee Clerks

† attended the Committee

Public Bill Committee

Thursday 15 September 2016


[Mr David Hanson in the Chair]

Higher Education and Research Bill

Before we commence proceedings this morning, Let me say that I am aware that this room varies between warm and very warm. We are trying our best to find the most accommodating solution to make it cool and reasonable for all of us, but we may not succeed. In the meantime, please be aware that I am having discussions about how we can resolve that.

On a point of order, Mr Hanson. In previous sittings the Minister made reference to a document that he thought members of the Committee were aware of. In fact, the colleague in question was not aware of it and nor were most of the rest of us, because the document was not placed in evidence before the Committee. It is a convention—perhaps you will guide me on this—that when Public Bill Committees are sitting, any documents, new statements or important letters that the Minister or his officials may put out in matters to do with the Bill are made available to the members of the Committee as soon as they are ready. They should also be made available at the table for the relevant Committee sittings. I know the Minister is a naturally courteous man, so I am sure this is an oversight, but could this be made clear for future reference?

I thank the hon. Gentleman for his point of order. It is normal practice for Ministers to table documents in advance of their being spoken to in Committee. In normal circumstances, I would expect all documents to be circulated to Members prior to the sittings in which they may be referred to. I am not aware from memory whether the document that Mr Marsden refers to has been tabled. Perhaps the Minister will respond to that point.

I am happy to do so, Mr Hanson. I appreciate there is a lot of material that Committee members have been sent in preparation, so I understand why the document might have slipped the hon. Gentleman’s attention.

We did send the technical note to which I referred: “A technical note on market and quality assurance”. It was sent to the Committee on 5 September, along with my welcome letter. I recirculated it yesterday, along with a new information note that we are publishing to assist the Committee on a topic that we will be discussing shortly in relation to student protection plans. Both notes are available on the table in the corner of the room; they are also in the Library and online. As a matter of courtesy, should we publish further information notes in future, we will follow exactly the same practice and ensure the Committee has them in advance of debating them.

I am grateful to the Minister for his explanation. It appears that in this case, among the myriad information sent, this document was sent.

Further to that point of order, Mr Hanson. I found the document on the Department for Education’s website, but it was quite difficult to locate. I checked and rechecked and I certainly did not receive it via email. However, the clarification this morning has been incredibly helpful and I am sure we will be able to access documents more readily in future.

I am grateful to the hon. Lady. Whether Members received the document or not, the Minister’s intention was to send it. As explained, the normal practice is to give advance notice of any documents that are referred to in Committee. We can leave it at that if Members are content.

Clause 10

Mandatory fee limit condition for certain providers

I beg to move amendment 177, in clause 10, page 6, line 28, at end insert—

“(c) in respect of condensed courses or innovative methods of delivery, where the number of applicable years of a course is reduced from normal three year period.”

This amendment would allow fees for a 3 year degree to be charged over 2 years to allow for greater funding flexibility.

It is a pleasure to serve under your chairmanship again, Mr Hanson. We might be in for another hot day in more ways than one. I stress at the outset that this is very much a probing amendment. The Minister will be aware that we received some evidence, particularly from private providers but also from others, that universities have not been as innovative as they could be, particularly with regard to course structures and methods of delivery. One of the reasons MillionPlus and the University Alliance gave for the lack of innovation was that the fees and loans structure is too rigid and does not allow universities the flexibility they need to be able to offer, for example, a three-year course over two years. Does the Minister think that is an accurate assessment of the current fees and loans regime? If it is, what does he think can be done to make the regime much more flexible, to enable universities who want to encourage more part-time and mature students with different modes of delivery to provide that?

I thank the hon. Lady for tabling the amendment, because it gives me a chance to express our support for her underlying intention to encourage more innovation and a wider variety of provision in the sector. As I have indicated, the Government are wholly in agreement on the need for that and we are actively encouraging it in all our reforms of the higher education system. We do want to encourage more accelerated and flexible provision—in fact, that was a specific manifesto commitment at the 2015 election.

The Bill, as we have discussed before, will help us towards our goals by levelling the playing field for high-quality new entrants, making it easier for new specialist and innovative providers to enter the sector. Accelerated degrees are a particular strength of new and alternative providers, and they will help us to ensure that students can access learning in the form that suits them. I can give a few examples: Buckingham, BPP, Condé Nast College of Fashion & Design—it gave evidence before us—and Greenwich School of Management are all the kinds of newer institutions that offer students the opportunity to complete an honours degree over two years, meaning that the student incurs less debt and can enter the workforce more speedily having completed the same amount of study.

We are determined to do more to support flexible provision and that is exactly why we issued a call for evidence earlier in the summer, seeking views from providers, students and others. That resulted in more than 4,000 responses, the vast majority of which, as the hon. Lady may expect, came from individual students. We were delighted to see that level of engagement. Many of the students expressed an interest in exploring the idea of pursuing an accelerated degree, so, as she identified, this is clearly an important issue.

We certainly sympathise with the underlying intention of the amendment. We believe the Bill will help ensure more students are able to choose to apply for accelerated courses. We are currently analysing the full range of the many responses we received to our call for evidence. I assure the hon. Lady that we expect to come forward with further proposals to incentivise the take-up of accelerated provision by the end of the year. On that basis, I ask her to consider withdrawing her amendment.

That was a very positive response from the Minister, although he did not clarify whether we might get something at later stages of the Bill or whether it will come after the Bill has completed its passage through Parliament. I am reassured that the Government are looking to see what they can do to help not just new entrants, but all universities to deliver their courses more flexibly. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 29, in clause 10, page 6, line 36, after “means a” insert “higher education”.

This amendment and amendments 30 and 31 ensure that the courses which can be subject to the fee limit registration condition in clause 10 are confined to higher education courses - but excluding postgraduate courses which are not courses of initial teacher training. “Higher education course” is defined in clause 75(1) as a course of any description mentioned in Schedule 6 to the Education Reform Act 1988.

With this it will be convenient to discuss Government amendments 30 and 31.

These three small amendments clarify that only higher education courses can be subject to a fee limit registration condition under clause 10. The definition of a higher education course is in clause 75(1), which sets out various definitions for the purposes of part 1 of the Bill. Clause 10 already provides that, for the purposes of fee limits, a “course” and, as a result of these amendments, a “higher education course”, does not include any postgraduate course other than one of initial teacher training. The changes simply clarify that the scope of the clause is confined to higher education courses.

Amendment 29 agreed to.

Amendments made: 30, in clause 10, page 6, line 37, after “of” insert “higher education”.

See the explanatory statement for amendment 29.

Amendment 31, in clause 10, page 7, line 2, leave out “course” and insert “higher education course”.—(Joseph Johnson.)

See the explanatory statement for amendment 29.

Clause 10, as amended, ordered to stand part of the Bill.

Schedule 2

The Fee Limit

Question proposed, That the schedule be the Second schedule to the Bill.

I used the phrase “Hamlet without the prince” in an earlier session. I find it quite astonishing that the Minister is either so supremely confident in the clarity of schedule 2, or so contemptuous of the need for it to be debated, that he did not speak to it. This may not be Hamlet without the prince, but there is an issue that dare not speak its name, certainly in the context of the Bill: the relationship of fees to quality. It is not exactly the issue that dare not speak its name, because although clause 25, which we will debate later, does not in any shape or form contain the dread phrase “teaching excellence framework,” it contains a form of words that might, if one were lucky, lead one to the conclusion that it has some connection with that, in the same way as it might have enabled my hon. Friend the Member for City of Durham to find the thing that she was trying to find on the Department for Education website.

Unfortunately, the Minister and the Department have form here. The devil is always in the detail, but the devil is also always in procedure. By not putting the teaching excellence framework in the Bill in any shape or form other than the rather oblique way it is dealt with in clause 25, they have done their best to truncate any broad discussion of its merits or demerits or any attempt to address any of the significant concerns that have already been expressed.

It is all very well for the Minister to shake his head, but he had the opportunity to stand up and make some form of statement on schedule 2 and he did not. If he wishes to intervene and tell me why the schedule does not refer in any shape or form to the teaching excellence framework despite talking about high quality ratings, which is one of the elements of the teaching excellence framework and was one of the bases for putting that forward so strongly in the White Paper, I am more than happy to give way.

The hon. Gentleman is kind to invite an intervention. We are extremely committed to the teaching excellence framework, which was a manifesto commitment and the centrepiece of our Green Paper and White Paper, and which we discussed extensively in the evidence sessions. The framework is described clearly in clause 25 as a system for providing ratings to English higher education providers. I am looking forward to discussing it extensively whenever he wishes.

Well, I hope that the Minister might wish to discuss the framework in terms of schedule 2, because that certainly has implications for it. Schedule 2 introduces the whole area of the fee limit and fee regime and deals with high level quality ratings and circumstances in which the provider has no access and participation plan. There is a mass of stuff that we could talk about.

Tucked away right at the end of this rather dry schedule is a section on procedure, which of course deals with the procedures for increasing tuition fees. If hon. Members wish to turn their attention to the dry page in question, it is page 70, line 30 onwards. The schedule deals there with fee increases and the basis on which those will take place in relation to paragraph 2, which deals with ways in which fee limits can be set and all the rest of it. That is all the detail of the thing.

It is curious that the schedule goes into all that detail, because the Minister announced major increases in tuition fees for 2017-18 in a written statement that was published on the last day before the summer recess along with 29 other written statements, which in the view of the press—these are not my words—were “smuggled out”. That was a matter of some debate on the last day of term, and suggests that he is very tentative about discussing this issue.

I want to pick up on the hon. Gentleman’s use of the term “major increases”. Does he acknowledge that we are in fact simply allowing the real-terms value to be maintained? There is no real-terms increase. Does he understand that?

When I referred to a major increase, I was not commenting on the specifics of the percentage; I was talking about the fact that it will affect all students. Neither the Minister nor, as far as I am aware, anyone from his Department has seen fit to comment on the issue, but over the summer a number of universities have taken the confirmation in the written statement as a green light to put up fees not simply for those who enrol in 2017-18, but for those who already have a loan. There was some discussion in the media—again, I do not think the Minister took part in it—about whether, for example, a reference to the potential for fees to go up on the University of Exeter’s website constituted a good enough broadcasting of the issue. This will have a retrospective impact on students at a number of universities, and it has come about on the back of the way in which the Minister chose to announce the process.

If I remember correctly, when the Minister and his colleagues were pressed on the process, they said that they were doing it in accordance with the requirements of previous legislation. It is curious—I put it no more strongly than that—that when it suits him to smuggle a measure out in a statement on the last day of term, he prays in aid legislation that is more than a decade old, but when it comes to this thing, it is referenced in the context of the main Bill but without our being told anything more about the teaching excellence framework that will enable fees to go up.

My hon. Friend is making a very important and powerful point. Does he agree that the situation is becoming even more complicated because now, we understand, there will be a link between fee increases and the TEF results, but the Government are not being clear about what the uplift in fees can cover? One would assume, as there is a link between the TEF and the fee level, that it would be to support the quality of provision within institutions, but we understand that that uplift in fees might be used to fund secondary school education, requiring students to fund not only their own education but that of secondary school students.

My hon. Friend, indefatigable as ever, makes an excellent point. I will not dwell on the issue to which she refers. It was part of the substance of the Prime Minister’s speech, and a lot of it was in the statement made by the Secretary of State for Education the other day, so I will not go into any detail on it other than to observe that my hon. Friend is absolutely right: if universities are to take on a significant, major role—there can be lots of discussions about how that is done, the value of it and all the rest—inevitably that is another element that will call upon their resources.

I would like to try to understand where the Labour party is on this matter. If we are not allowed to build in for inflation, what do we do? For example, I believe fees have now dropped back to £8,500 in real terms. We are merely building in inflation proofing, so that universities can think about how they invest in relation to the teaching excellence framework and invest for students by delivering courses of quality. What do we hear from the Opposition? At the general election, the then Leader of the Opposition was talking about taking fees down to £6,000, and I think that the latest policy is for university education to be free. We have to pay for excellence and quality.

I thank the hon. Lady for her extremely eloquent intervention. Perhaps it will set a trend for Government Members to speak on some of these very important clauses. I am sure that their constituents would like to know that the hours that they spend in the Committee Room, which inevitably are taken from other things, are rewarded by their saying something about the Bill. So far, we have not heard much from them.

The hon. Lady’s intervention enables me to make two points. First, I remind her gently that she is a Member of the Government party, and it is the Government who are advancing these proposals. It is not a question of what the Labour party may or may not have promised.

I remind the Whip that, constitutionally, the point of an Opposition is to hold the Government to account for their legislation, not simply to engage in a running commentary. Government Members have been pricked by our pointing out that the Minister is trying to introduce these measures without proper discussion.

Of course it is the Opposition’s job to oppose, but the public want to know whether they are being hypocritical while they do it. The fact is that it was Labour that enshrined the power to uprate tuition fees. This measure is about ensuring that students get value for money.

Order. Before we continue, I remind colleagues, first, that Members are not hypocritical in any way, shape or form, and secondly that we are debating schedule 2. Within schedule 2, there are references to clause 25, but we will get to clause 25 in due course, so we should restrain our comments to the mechanisms in schedule 2. That is a gentle reminder to colleagues.

I am grateful to you, Mr Hanson. Although schedule 2 and clause 25 are closely enmeshed, I will do my best to observe your strictures.

Both the Conservative Members who intervened—maybe we can get everybody up before the end of the sitting—are missing the point. I am talking about the procedure—about the dichotomy between the procedure that the Minister is proposing today, but that he has not wanted to talk about, and the procedure that he and his colleagues employed before the summer recess to get the inflation-based element through.

Without straying into clause 25, I remind the Minister and his colleagues of what they said in the past and the basis on which the TEF was presented to this House. I am not saying the Minister did not have lots of discussions. He listened to the university sector, which was absolutely manic about the idea that it would have to produce lots of stuff for the first year of the TEF’s operation, and he said, “We’ll do it on the basis that you—the universities and higher education institutions—are essentially given a clean bill of health, which will enable you to implement an inflation-rated scheme”. That is what we are talking about: the dichotomy between those two things.

The hon. Gentleman seems a bit baffled by procedure. I remind him that we are using the same provision that the Labour Government introduced in 2004 so that universities do not suffer an annual erosion in real terms of their income.

The Minister is desperately trying to set up a whole series of straw people in order to get away from the essential elements of the arguments in the case. He is praying in aid what was set in legislation in 2004, when tuition fees were not £12,000; they are now set to increase from £9,000 to £12,000, possibly by the end of this Parliament. I am merely drawing attention to the dichotomy, which the Minister is clearly uncomfortable with, between the careful way in which he now wishes to place this proposal into legislation and the fact that he has had to rely on that mechanism.

My other point—I do not want to stray outside the schedule, but it is relevant—is that only two days before that statement, we had the Second Reading debate on the Bill. Even the most pedantic and pernickety of Ministers might have thought it was useful, in the context of the Bill, to talk about the teaching excellence framework, the impact it would have on fees and, in that process, to say, “Of course, I refer the House to the increase that I suggested might happen,” but at which point he had not moved.

I remind the hon. Gentleman, as the contents of the White Paper seem to have eluded him on other occasions, in particular in respect to the widening participation statement we discussed on Tuesday, that the White Paper clearly set out that our policy for maintaining fees would be that they could increase with inflation. This was not a secret. We had announced it prominently in our White Paper.

The question of what is or is not a secret is a matter for a lot of discussion, no doubt. What is not a matter for discussion is the fact the Government did not put the mechanism for this increase in the Bill until the last day before the summer recess started. In my view, they did that quite deliberately in the hope it would be smothered in public interest by the other 28 statements that went round. It is a common practice of Governments to do that, but it is reprehensible. It is particularly reprehensible when we now know that the consequences of it are that a number of universities have implemented it for existing students, and not simply for students enrolling from 2017-18.

As this subject is clearly irritating and frustrating the Minister quite a lot, I will move on to talk about the issues that affect the relationship between teaching quality and fees. We are going to talk about the detail of the TEF in regards to clause 25, so again I will comment in more general terms. The National Union of Students has made it clear that it firmly opposes statutory links between teaching quality and the level of fees being charged for that teaching. My hon. Friends and I made that clear on Second Reading. I remind colleagues of what I said in the summer Adjournment debate, when I came to inform the House that this had been done in what I regarded as an irregular manner. I said:

“I think that the way the Government have dealt with this matter is thoroughly reprehensible…We engaged in a vigorous discussion”

on the Bill, as to

“whether it was right to link fees to the Teaching Excellence Framework, but at no time during that process did Ministers take the opportunity to say anything about the issue.”—[Official Report, 21 July 2016; Vol. 613, c. 1056.]

I am saying that today because I want it to be put on record that we are talking about the discrepancy in procedures.

It is a question not just of increasing the fees, but of increasing the loans by 2.8% to match that increase in fees. That will have all the knock-on effects on students from disadvantaged backgrounds. Apart from the principled point that the NUS is making, as the Minister knows there is at least a degree of scepticism about the outcome for universities of linking the TEF with tuition fees, and scepticism on the part of one or two or them about linking it. Inevitably, however, students are on the hard end of this and they want to know what the evidence is for the measure.

The NUS rightly says:

“Since tuition fees were trebled in 2012, there is no evidence”

as a direct result of that process

“to suggest that there was a consequential improvement in teaching quality.”

It goes on to say that, broadly,

“There has been no change in student satisfaction with the teaching on their course, while institutions have instead been shown to spend”

in many cases

“additional income from the fees rise on increased marketing materials rather than on efforts to improve course quality.”

We will want to return the question of what this money will be used for when we talk about the obligations laid on new providers. Of course, if they sign up for the full-fat version of the fees, they will have to abide by the teaching excellence framework as well.

Does the hon. Gentleman accept that the ability to increase fees based on improving excellence is a massive incentive for institutions to do exactly that, by putting on better courses?

There we have it—the consumer-obsessed view of Government Members. That is not to say the consumer element is not an important part of the Bill—it is—but they are obsessed with the idea that consumerism and competition are the be-all and end-all of the way in which these fees will be raised and judged by university students. Actually, there is a very strong case for saying—a number of universities have already said it in their evidence—that linking the TEF with fee increases is pernicious because there is no evidence base that it will improve quality and because of its controversial nature. Certainly this year the Government have allowed an inflation-rated increase of 2.8% that is not linked in any meaningful form—this is no criticism of higher education institutions—with any major evidence of teaching quality improvement.

I think back to the general election of 1918, when Lloyd George famously issued a coupon to candidates to say that they were bona fide and to be voted for. The way in which the Government have tried to take this forward reminds me of that.

Order. May I remind the Committee gently that we are debating schedule 2? While a range of issues are linked to it, we are debating the words on pages 68, 69 and 70 of the Bill. I would be grateful if Members could focus on schedule 2, because other issues will arise in the course of the debate on later clauses.

Thank you, Mr Hanson. I merely remark that there are a whole range of other issues around what the teaching excellence framework needs to do for students and institutions, and no doubt we will have the ability to discuss those further when the Minister speaks eloquently on clause 25.

The hon. Gentleman seems to have forgotten that he was once fully committed to the principle of funding on the basis of quality. May I remind him of what he said in 2001, when he was younger and wiser?

The hon. Gentleman said very clearly:

“We must reassess the balance between teaching and research…The HEFC should seriously consider incorporating a teaching quality assessment exercise in the RAE”.—[Official Report, 8 November 2001; Vol. 374, c. 170WH.]

That implies we fund teaching on the basis of quality just as we fund research on the basis of quality, which is precisely what we are doing.

That is clutching at straws, but I stand by what I said in 2001. If the Minister will permit a mild compliment, I compliment the Government on grasping the nettle of increasing the way in which teaching, as a principle, is judged in relation to research. Many Labour Members have been banging on about that for years.

The Minister wants to go into history. When I was on the Education Committee in the 2000s, we questioned the then Labour Government vigorously about the research assessment exercise changes, and many of us on that Committee made the point that teaching excellence needs to be recognised and funded. There is no argument about us being in support of placing greater emphasis on teaching excellence. The argument is about whether we can save the Government from the consequences of their own folly. If the Government are not careful, they will taint the whole exercise through the cynical way in which they are using this simply as a coupon—I repeat the reference. That is precisely why a number of higher education institutions, including the University of Cambridge, have said that, and it is precisely why a number of Russell Group vice-chancellors—we will come on to this in clause 25—have shown themselves very lukewarm and sceptical about signing up to the TEF in the first place.

It sounds as though the hon. Gentleman is listening to other evidence than what we heard. He talks about evidence from the vice-chancellors, so let me quote one of the vice-chancellors who has given evidence. Ed Peck of Nottingham Trent University says:

“Linking increases in student fees to performance under the TEF is a further safeguard for students, one that has now been largely accepted by the sector.”

Is the hon. Gentleman calling the vice-chancellor of Nottingham Trent University cynical?

No, I am not calling any of the vice-chancellors cynical. Obviously they will welcome any mechanism that will bring forth additional fee funding. The people I am calling cynical—is cynical an appropriate parliamentary expression, Mr Hanson? I mean no disrespect.

The people I am calling misguided certainly, and possibly cynical, are the Minister and his—[Interruption.]

I am extremely concerned that the vice-chancellor of Cambridge has been misrepresented in the hon. Gentleman’s comments. We heard in the evidence session, and he said very clearly in his evidence, that the way the Government was recognising teaching through the TEF was, in his words, “really good”.

The Minister is being very selective, of course. It depends on how we interpret the phrase, “the way”. All I can tell the Minister—I will sift through the mountain of papers here—is that we have ample evidence in the written material given to the Committee and submitted before Second Reading from the University of Cambridge on that matter. [Interruption.] I will give way in a moment, but if I may just quote from what I said in the Second Reading debate, to refresh the Minister’s memory:

“Long-established institutions such as Cambridge University have said quite straightforwardly that they do not support the link between the TEF and fees. Cambridge University states: ‘it is bound to affect’”—[Official Report, 19 July 2016; Vol. 613, c. 718.]

[Interruption.] I am sorry the Minister does not like it. It was the university’s written evidence that was given to us all when we debated the Bill on 19 July—[Interruption.]

Order. I know these issues do raise strong passions, but we have to have a debate where only one person speaks at once and that goes for heckling on both sides. If anybody is going to heckle, it is me. In the meantime, I call the hon. Member for Blackpool South.

Right. I will continue. So that the Minister is in no doubt, Cambridge University stated in its written evidence to the Committee, in specific response to questioning on the link between the TEF and fees, that

“it is bound to affect student decision-making adversely, and in particular it may deter students from low income families from applying to the best universities”.

All the passion and enthusiasm that the Minister quite rightly generates for improving access for students from low-income families is in danger of being torpedoed, according to the vice-chancellor of the University of Cambridge, because of the pernicious link that the Government have chosen to introduce between the TEF and the fee increase. If there is an argument for fee increases, let that argument be made separately.

I will give way in a moment. Do not try and justify fee increases by referring to and using the teaching excellence framework in a way that, if we are not careful, will taint the whole process thereafter.

I rise to bring to the hon. Gentleman’s attention that there are many in the sector who can see that this will do exactly what he wants: it will enable universities to reinvest in teaching methods. I want to draw to his attention the words of Professor Steve Smith, the highly respected vice-chancellor of Exeter University, who said:

“At a time when our institutions face significant cost pressures the TEF presents us with an opportunity to invest in our students’ futures and the long-term economic success of our country, and to be recognised for outstanding teaching at the same time.”

Absolutely. Who is going to argue with that? No one is arguing against that. With all due respect to the Minister, I have known Steve Smith a great deal longer than he has. I have known Steve Smith for about 15 years and he has always been a doughty defender of all of these aspects. Yet again, the quote the Minister gives is simply about the principle of the teaching excellence framework. That I think is the point my hon. Friend wishes to intervene on.

I thank my hon. Friend for giving me the opportunity to intervene. My intervention is sharpened by the Minister’s comments. Does my hon. Friend recognise that Professor Smith was actually saying that this gives us an opportunity to draw additional income to invest in teaching, in effect because it is the only show in town? Does he also recognise that when the Select Committee on Business, Innovation and Skills took evidence from the university sector on the point of the TEF and the link, there was uniform opposition to the link at that stage?

My hon. Friend is absolutely right. I pay tribute to the work of the Select Committee in that respect. Of course university vice-chancellors are pragmatic people; they have to be. It is rather like when the late lamented Chancellor of the Exchequer said there could be any form of new structure for combined authorities as long as there were mayors.

I am extremely concerned at the misrepresentation. These examples I am giving of individual vice-chancellors supporting the TEF and the fee link are not unrepresentative of the sector. That is why I am going to read to the hon. Gentleman the submission from Universities UK.

Order. With respect, the Minister will have opportunities to make those points when he responds to the debate. Reading them into the record now would be quite a long intervention. I appreciate his points. If Gordon Marsden wishes to let the Minister intervene again, he can do so.

With reference to the Select Committee, I want to pick up one point from its conclusions. The Select Committee said:

“We agree with the Government that no university should be allowed to increase its tuition fees without being able to demonstrate that the quality of its teaching meets minimum standards.”

That is a perfectly reasonable and sagacious thing for the Select Committee to say, and it is to be expected. The Select Committee did not endorse this specific mechanism introduced in this specific way. [Interruption.] I am sorry, but we are going to have to disagree, though I am fairly sure that the record will bear me out on that. If the Minister wishes to demonstrate otherwise, he is able to do so.

I will move on as I am conscious of time, and we need to get some movement. I will talk about one or two other areas related to the linkage between TEF and fees. We will reserve the concerns of Cambridge and other universities about TEF for a later stage. We should also consider where this proposal will take a university’s position with regard to the students it wants to attract.

I want to quote Professor David Phoenix, chair of MillionPlus and the vice-chancellor—since we are quoting vice-chancellors this morning—of London South Bank University. When the Government’s Green Paper was produced, he rightly said:

“A focus on quality, continuous improvement and the incentivisation of excellent teaching is at the centre of every university’s ambitions for its students.”

He welcomed the Green Paper and, for the avoidance of doubt, the opportunity to highlight the many strengths and benefits of UK universities and their teaching, but he said this:

“Linking fee increases with a Teaching Excellence Framework…based on metrics that are proxies for teaching quality”—

that is the hub of the discussion, debate and aeration on the Minister’s part this morning: the automatic assumption that teaching quality equals his TEF—

“is unlikely to provide students or employers with an accurate picture of the rich and varied teaching and learning environments that universities provide. This risks damaging the reputation of the higher education sector in the UK and is why we recommend that the government defer the introduction of a multi-level TEF in 2018 until further work has been completed to determine the best way to promote teaching excellence.”

Since that Green Paper was published, there has been a lot of iteration and discussion, and I return to what I said at the beginning: I understand why the Minister has listened to the sector and not introduced the TEF in all its glory—if that is what it is to be—with the implications he wants for fees. Fees could go down, although I think it is unlikely. They are far more likely to go up, but that does not cancel out the points we have made all along.

We are not the only ones with concerns on these issues. We will talk about the cost of the teaching framework at another time, but the University and College Union, Unison and a range of other organisations oppose the Government’s plans to raise tuition fees and link variable rises to a rating system. That is precisely because they are concerned that those plans will further alienate young people, particularly those from disadvantaged backgrounds, and put them off going to those universities. In the process, that will affect those groups’ members. It will affect their members’ ability to have jobs, whether those are teaching jobs or all the other jobs done by the people needed to make universities work.

One of the things that depresses me most about the Government’s approach to the Bill thus far, certainly in Committee, is that they seem to have a blind spot about anything other than the mechanics of producing the legislation to do these things. Every time we table an amendment that would include students and members of the workforce, they fight shy of putting it in the Bill. I will leave that point there.

I need to touch what the situation will be if leading universities opt out of the TEF, which was the subject of an article in Times Higher Education at the beginning of September. Reference was made to various issues, including Russell Group universities perhaps not wanting to take part because:

“They fear that taking part in the TEF will become such an administratively burdensome activity that the cost of participation will become so expensive that it will outweigh the value of an inflationary increase in tuition fees.”

We should be concerned about that not only because it is causing Russell Group vice-chancellors to agonise but because it threatens both the future of the TEF—I repeat, we want to see a proper TEF succeed—and future access for the sorts of students whom every member of the Committee, no matter whether they are Government or Opposition, wants to see at university. We all want to improve access to participation.

It is extremely important that the process in this matter is not a repetition of the precedent from before the summer recess. The issues are extremely important. People are so frustrated about the teaching excellence framework not being debated on the Floor of the House and in the context of the Bill, because that will enable the Government to evade detailed scrutiny of all the issues and of that process subsequently.

We have already seen how the Government did not choose to address the 2.8% increase in fees on Second Reading. We seek an assurance that if there are any major issues related to the TEF, including what the Government wish to do or not to do on fees, it will not simply be left to ministerial guidance or, with all due respect, shuffled down to a Delegated Legislation Committee, which will not allow all Members of this House to engage with the important and potentially very beneficial development of properly recognising teaching in our universities and higher education institutions.

As ever, it is a pleasure to serve under your chairmanship, Mr Hanson. I rise to make some relatively brief remarks on the principle of the fees link. The Minister is understandably but deliberately confusing the issues of teaching excellence and fee increases. The inquiry by the Select Committee on Business, Innovation and Skills received a considerable amount of evidence on this issue. When the Government were still thinking about the issue, the overwhelming bulk of evidence from universities was that, while they celebrated the Government’s intention to put teaching quality at the heart of the agenda—the Minister has quoted the evidence that they did so—and welcomed the opportunity provided by a teaching excellence framework, the measure would be wrong, could have perverse outcomes and certainly would not assist the Government’s objective of linking the teaching excellence framework to fee increases.

Many Opposition Members disagree with the current funding regime in our universities and want to see different approaches that adequately fund our universities so they can continue to be among the best in the world without some of the other consequences of the current regime.

As a fellow Select Committee member, the hon. Gentleman will recall that at the time there was a lot of discussion about the TEF and the metrics. A lot of progress has been made. The discussion about the metrics and the link with fees created some of that debate. Does he agree that the Government and the Minister have been listening and that a lot of progress has been made on developing the TEF and the metrics, both qualitative and quantitative, that will be included?

The hon. Lady and I have spent many happy hours debating these issues in the Select Committee. I agree that the Government have been listening on the metrics, and we will have an opportunity to debate those metrics more fully at a later stage. My point is simply that, even once the Government have got it right, and they are not quite there yet—we will debate that later—linking the measurement of teaching quality with fees is fundamentally wrong. That was the overwhelming evidence that our inquiry received from across the sector.

Why does my hon. Friend think the Government have chosen to serve provider interests through this mechanism, by allowing institutions to increase fees as part of quality enhancement, rather than serving the students’ interests? At every stage in Committee they have resisted any measure to improve student representation, the student voice and the consumer, user and student demand side of quality enhancement.

My hon. Friend highlights an interesting contradiction. The hon. Member for Cannock Chase has pointed out that the Government are in listening mode, and I had hoped that we might have some more positive statements during our proceedings on student representation—if not accepting the amendment, at least giving greater clarity on the role that the student voice will have in the system.

We are asked in schedule 2 to endorse the principle of linking fees to a quality system, which we have not yet debated. There are still major reservations about it, and there is scant information about it in the Bill. The Select Committee agreed that the Government’s proposed metrics are flawed. I appreciate that we are coming to that debate, but it is worth highlighting those concerns briefly.

I am not sure I entirely agree that we said the metrics were flawed. I recall that we could see a role for them and for other metrics, too. We said that there was a need to develop the metrics over time. The Government—again, in listening mode—talked about the phasing in of the TEF in recognition of that.

I thank the hon. Lady for her intervention, which helps us clarify what the Select Committee agreed. The report goes through the metrics, expressing reservations about employment. It is concerned that a narrow focus on employment will not demonstrate teaching quality. The truth is that if someone goes to the right public school and Oxbridge, however good the teaching quality at Oxbridge, they will get a good job because they know the right people and have got the right contacts. In itself, employment is no measure of teaching quality, and nor is retention.

I appreciate the Government’s initiative to improve retention as part of the widening participation agenda. It is positive, but the retention metric is open to university gaming: the best way of getting a good retention metric is by not taking students who are likely to struggle in university. It runs counter to the Government’s objectives, and there are similar concerns about the crudeness of the national student survey as a metric in itself.

The hon. Lady is right. We expressed those reservations and recognised that the Government were listening and were trying to move on them, but the Select Committee said very clearly that we wanted metrics with a proven link to teaching quality. The Government have not got those metrics yet. We will have that debate later.

The second point of concern in relation to the fees link is that the Government are rightly moving in the further stages of the TEF to subject-based assessment. Now, subject-based assessment is a good step because universities are large institutions within which there is a huge range of subjects and a great diversity of teaching quality, but to link a fee with an institutional assessment masks that range of teaching quality. People studying in a department where the teaching quality is not as good as in others will be paying higher fees. This flawed proposal does not enhance the Government’s objective and should be rejected.

This has been a more heated debate than those that preceded it. I anticipated that it would be, and I hope we can move on to more consensual areas of the Bill shortly so that we can recover our composure. I am glad we are having this crucial debate, because this issue is clearly of huge concern to many Members. It highlights the big differences between what the Government are trying to achieve and what the Opposition would have us do.

Schedule 2 is crucial, in that it provides the mechanism for the setting of fee caps, which are central to fair and sustainable higher education funding. It replicates the provisions put in place by the Labour Government more than a decade ago with one difference, which I will come to later. First, I want to set out why the current funding system not only works for the sector but is crucial to its continued competitiveness.

The system we have established and are updating through the Bill, building on the measures put in place by the previous Labour Government, will ensure the sustainability of the HE sector and drive up the value to students by linking quality with fees. Our approach has been recognised by the OECD, which praised England as one of the few countries to have figured out a sustainable approach to higher education finance.

The Minister will acknowledge that the quotes that he is giving—he may have reservations about them—are in relation to the fee system. The OECD has made no comment on the fees link.

The OECD has made its comments and it is of the view that we have the most sustainable funding system of any country in the world. We are developing it further with our teaching excellence framework.

Despite what the Labour party said at the time, students have not been deterred from going into higher education and young people from disadvantaged backgrounds have not been put off from going to university. We now have entry rates, as I have said, at record levels of 18.5% in 2015, up from 13.6% in 2009-10. In fact, individuals from disadvantaged backgrounds are now 36% more likely to go to university than they were when the Conservatives came into office in 2010. Our student funding system is fair and sustainable. It removes financial barriers to anyone hoping to study, and is backed by the taxpayer, with outstanding debt written off after 30 years. That is a deliberate, conscious decision by Government to invest in the skills base of the country.

The Minister repeats his and his colleagues’ familiar statement about fee movement and extra participation, and all the rest of it; but I will also repeat what I have said: there comes a sticking point, and just because some of the more pessimistic assumptions about fee rises that were made in the late 2000s have not come to pass, that does not mean to say that there have not been casualties along the way.

Our funding model, which we are continuing to develop and make more contingent on the delivery of quality, is a great strength of our system, and it is acknowledged as such by education experts such as the OECD. As a result of it, we have been able to lift the cap on student numbers. Labour was never able to do that with its model of funding. As a result, we have lifted the cap on aspiration and today we are enabling more people than ever before to benefit from higher education.

I do not believe that Labour’s proposals for funding higher education are remotely realistic, even if they were intelligible, and I am not the only person to think that. The hon. Member for Blackpool South mentioned Times Higher Education in his remarks. He might have read, in this week’s edition, an interesting interview with Lord Mandelson, former Secretary of State for Business, Enterprise and Regulatory Reform. On the question of how Labour will fund the removal of tuition fees he said:

“By spending less on health or housing? Or by raising general taxation, the burden of which would inevitably fall on middle-income families?”

He said that Labour was not being honest about its promises on tuition fees. Pledging to remove them was not

“an honest promise to make”.

Does the hon. Gentleman agree with Lord Mandelson?

At the risk of sounding like Old Father Time, I will say that I have known Peter Mandelson far longer than the Minister, and I know one of his traits over the years has been to challenge and prick, and all the rest. What the Minister has said is not good enough. We are here to examine the Government’s record with students. The truth is that, since fees trebled, the figures for part-time students have gone down. There is no guarantee that the figures for other students will not go down as well.

Order. On all those issues, it is helpful for the Chair if Members occasionally say the words “schedule 2”. If the Minister could focus our attention back on to the schedule that would be helpful.

Thank you, Mr Hanson. I shall come directly to schedule 2. I could have invoked a large number of other senior Labour party figures who agree with Lord Mandelson, such as Ed Balls, who said exactly the same thing. The hon. Gentleman may not agree with one wing of the Labour party; but he does not agree with the other, either.

I have been invited to carry on and speak about schedule 2, so I will press on for a minute. I will give way once I have made a bit more progress, if I can.

Tuition fees have been frozen since 2012 at £9,000 a year. That means that the fees have already fallen in real terms to £8,500 as things stand today. If we leave them unchanged they will be worth £8,000 in those terms by the end of the Parliament. It is not right or realistic to expect providers to continue to deliver high-quality teaching year in, year out with continually decreasing resources. The Committee heard that point made clearly by Chris Husbands, vice-chancellor of Sheffield Hallam University, which is close to the constituency of the hon. Member for Sheffield Central, when he gave evidence. He said clearly that it would be completely inappropriate for the university sector still to be stuck on £9,000 in 20 or 30 years’ time because no Government had the guts to allow fees to rise with inflation. That is precisely what we are doing.

I welcome the Minister’s coming to the core issue of schedule 2, but his quote from the vice-chancellor of Sheffield Hallam University referred to the case for a fees increase. Schedule 2 is about linking it to the teaching excellence framework. The Minister has yet to make the case, or even mention that link. Will he do so now?

Happily. The hon. Gentleman is deluding himself if he thinks that the chair of the teaching excellent framework does not understand the fee link that he himself is implementing. He does his fellow Sheffielder something of a disservice in casting that sort of aspersion on him.

What we are doing in schedule 2 for the first time is ensuring that only those providers who can demonstrate high-quality provision can maintain their fees in line with inflation. The ability to raise fees with inflation was provided for by the last Labour Government in 2004, but without any reference at all to quality or the student experience. Through schedule 2, we are doing better than that. The TEF fee link, in particular, as Government Members have already noted, was endorsed earlier this year by the Select Committee on Business, Innovation and Skills, which said that

“we support the principle of a more sophisticated link…between teaching quality and fee level”.

I do not want this to turn into an argument about semantics, but the reality is, as was mentioned earlier, in this schedule, we are being asked to buy a pig in a poke. We do not know what the shape of it is. When the Select Committee said that, it was about the principle and the concept, not about the detail, which the Minister is either not in a position or not willing to tell us about.

We can discuss the TEF in much greater detail at a later stage—I am looking forward to it—but we have consulted on it on several occasions now. The TEF is in shape. It is up and running, and it could not remotely be described in the way that the hon. Gentleman did.

No, I want to make progress. The sector is familiar with the principle of linking funding to quality, which was introduced by the Conservative Government in the 1980s, when they introduced the research assessment exercise. Over successive iterations, the research excellence framework has undoubtedly driven up the quality of our research endeavour as a country, keeping us at the forefront of global science.

No, I am going to make some progress. We are now extending this principle to teaching quality. Schedule 2 provides the mechanism for the setting of fee limits, allowing providers to charge fees up to an inflation-linked cap according to ratings of teaching quality established through the teaching excellence framework, which is mentioned under clause 25, as the hon. Gentleman said earlier.

I am grateful to the Minister for giving way, as I appreciate that he must get through his points. I will be brief. The teaching excellence framework, notwithstanding the fact that it is a one-size-fits-all judgment for the first year, is at the moment scheduled to come to fruition over only three or four years. The Minister knows very well that the conversion of the research assessment exercise into the research excellence framework took six years. Why, therefore, is he so confident that the Government will get it right in a short period of time?

The hon. Gentleman cannot have it both ways. He cannot criticise us for taking time to get it right and then wish it were in place sooner. We are developing the TEF in a phased, careful way. We are listening to the sector. That is why it is being piloted and trialled in its first two years.

The Government have a laudable target to double the percentage of students from low-participation areas by 2020. Can the Minister explain how linking the TEF to tuition fee rises will enable students from the most under-represented backgrounds to access the courses with the best quality teaching?

In order to participate in the TEF, all institutions will need to have an access and participation plan, and those access and participation plans and widening participation statements will be demanding. We have given strong guidance to Les Ebdon and, as the hon. Gentleman said, we have set the sector a demanding overall goal of doubling participation by 2020 of people from disadvantaged backgrounds from the levels we inherited back in 2009.

We are now extending the principle that we introduced for the funding of research to how we fund teaching, which is something the hon. Member for Blackpool South was himself suggesting that the Government should do back in 2002. Schedule 2 provides the mechanism for the setting of fee limits and allows providers to charge fees up to an inflation-linked fee cap according to its rating for teaching quality, which we will make possible through the TEF. The TEF, which was a manifesto commitment, will enable the impartial assessment of different aspects of teaching, including student experience and the job prospects of graduates. It will put teaching on a par with our country’s world-leading research so that we not only get more students into higher education, but ensure it is worthwhile when they get there.

Increasing fee limits in line with inflation is nothing new. It has been made possible since the Higher Education Act 2004 put in place by Labour, and it was routinely applied between 2007—by the last Labour Government—and 2012. Linking fee limits to teaching performance is new. It recognises and rewards excellence and will drive up quality in the system.

There is nothing in schedule 2 to suggest that as there is now a link between teaching quality and fees the additional fee income will be used to further enhance teaching quality. Will the Minister deal with that point?

Such incentives will play a powerful role in rebalancing universities so that they focus more on teaching than ever before. We do not have marginal funding allocated towards teaching in our funding system for universities at the moment and this will be a powerful driver of change in that respect.

It is right that only providers that demonstrate high-quality teaching will be able to access tuition fees up to an inflation-linked maximum fee cap. We expect the TEF to deliver additional income for the sector of £16 billion by 2025 and it will also allow providers to reinvest in teaching methods that work. As the Sutton Trust said,

“we need to shake the university sector out of its complacency and open it up to a transparency that has been alien to them for far too long. It is good that they are judged on impact in the research excellence framework, and that the teaching excellence framework will force them to think more about how they impart knowledge to those paying them £9000 a year in fees.”

The fee link has been welcomed not just by individual vice-chancellors but by the sector. The hon. Member for Sheffield Central challenged me to reference a body representative of the sector and I am very happy to do so. Universities UK said:

“Allowing universities to increase fees in line with inflation, on the condition of being able to demonstrate high-quality teaching through an effective TEF, is a balanced and sustainable response to these two objectives.”

Let me reassure the Committee that, as I set out in the White Paper, our proposed changes to the fee limits accessible to those participating in the TEF will at most be in line with inflation—fee caps will be kept flat in real terms. Let me also reassure the Committee that, should the upper or lower limits be increased by more than inflation, which is certainly not our intention, it will require regulations subject to the affirmative procedure, which require the approval of Parliament. That is in line with the current legislative approach to raising fee caps and we have no desire to depart from those important safeguards, so Parliament will therefore continue to retain strong controls over fees.

Order. It is for the Minister to determine whether he wishes to give way or not.

To summarise, the Government are committed to a progressive approach to higher education funding and to ensuring the financial sustainability of the sector. Schedule 2 establishes a direct link between fees and the quality of teaching—a principle supported by the Select Committee on Business, Innovation and Skills and the wider sector—along with a clear framework of control for Parliament. The provisions ensure that we can meet our manifesto commitment to deliver TEF under the Bill by ensuring that well-performing providers are rewarded so that they can continue to invest in excellent teaching.