asked Her Majesty’s Government:

What is their assessment of the extent to which foreign funding of academic institutions in the United Kingdom may compromise the academic integrity of courses or influence the appointment of academic staff.

My Lords, UK further and higher education institutions are autonomous. They guard their academic reputations jealously and enjoy a global reputation for high quality. The integrity of their courses and their processes for appointing academic staff is, therefore, of the utmost importance to them. They are free to seek funding from a variety of sources and to determine their own staff recruitment and curriculum policies.

My Lords, I thank the Minister for her reply. Is she aware that since 1995 Islamic and Arab funders have donated more than £235 million to British universities—more than any other source of external funding—and 50 per cent of that money has been invested in teaching Islamic studies? That underpinned a report in the Guardian on 17 April, which highlighted serious concerns regarding the danger that such massive funding had serious implications for academic freedom by inhibiting balanced critical analysis of Islam and Islamic-related political issues. What unequivocal assurances can the Minister give that there is no compromise whatever associated with such massive funding from potentially partisan sources?

My Lords, I am delighted to offer the noble Baroness full and unequivocal reassurance on this question. I have read the article to which she refers and, just to be clear, the level of funding that it highlighted represents around 0.2 per cent of university funding in this country. I do not believe that universities would compromise their academic independence and reputations because of it.

My Lords, nevertheless, this is a question of principle. Would my noble friend ensure that all academic institutions publish their sources of finance from overseas donors?

My Lords, my noble friend makes a very important point on financial accountability in higher education. Each higher education institution has a financial memorandum agreed with the Higher Education Funding Council for England. This sets out the terms and conditions to be met if they are to receive public funding. These agreements include governance and accounting arrangements. The annual accounts of higher education institutions have to show all income and expenditure from public and private sources. They also report expenditure, under a number of headings, to the Higher Education Statistics Agency, which identifies overseas funding.

My Lords, can the Minister assure us that, when an academic institution is funded by a faith organisation from overseas, provision is made in terms of governance for students to engage with other faiths and with wider society generally?

My Lords, I can reassure the right reverend Prelate. In January of this year, my honourable friend the Minister for Lifelong Learning, Further and Higher Education reissued guidance to vice-chancellors on promoting good campus relationships, including advice to higher education institutions, to ensure that they engage with faith organisations of all faiths within campus.

My Lords, I declare an interest as someone who has been involved in raising funds for the LSE from orthodox Greece and arranging partnerships with what is still officially communist China. Does the Minister not agree that variety of funding is most important in defending academic integrity? Does she recall that during their early years, the Thatcher Government interfered in the academic integrity of some universities? I was one of those who defended the academic integrity of the peace studies department in Bradford from a rather sharp Conservative attack.

My Lords, I thank the noble Lord for that question. I agree that diversity of funding is healthy for any institution, including higher education institutions, and that it is essential that higher education is adequately funded. I am therefore delighted that this Government have increased funding by 30 per cent for higher education and by 52 per cent for further education. So there is adequate and diverse funding to create a strong sector.

My Lords, I have no doubt that there are dangers, as pointed out by the noble Baroness, Lady Cox, but I was astonished to find University College London commented on by the rather alarmist Centre for Social Cohesion. University College, London, as with many other universities—doubtless most—has robust procedures in place to check on precisely this kind of influence. The vice-provost for academic and international affairs has written to me this week pointing out that UCL fiercely protects its reputation and would never accept any endowment that might impugn its academic autonomy.

My Lords, academic freedom and financial independence will foster a continually successful higher education sector in this country, and I am delighted that this House continues to support that.

My Lords, if one can include as foreign funding overseas fees, which, as we all know, are an indispensable source of academic funding in various universities, can the Minister give an estimate of the ratio of overseas funding—overseas fees, for example—to domestic funding through HEFCE to academic institutions?

My Lords, the funding that higher education institutions receive from overseas students is very important. The number of overseas students has increased significantly, but so, too, has the number of UK and EU students. However, vitally, the funding that we receive from overseas provides an enormous boost to the economy in this country. Overseas students are essential in promoting the future prosperity and diversity of the education system in this country, and I think it is right that we should continue to promote their further development.