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Higher Education: Universities

Volume 710: debated on Thursday 14 May 2009

Question

Asked By

To ask Her Majesty’s Government what plans they have to reform the governance of universities by revising Schedule 7A to the Education Reform Act 1988.

My Lords, we have for some time been looking at how we can create a level playing field between the universities incorporated by the Education Reform Act 1988 and other universities which have more control over their governance arrangements. Specifically, we are proposing to amend Schedule 7A to the 1988 Act to allow these universities to determine the size and membership of their governing bodies, as other universities are able to do. We see this as a step forward.

My Lords, I am grateful to the Minister for his reply. Will he tell us how far his department is influenced by what is known as the Carver model of governance, which looks to a slimline board of non-executives with probably no representation from staff or students? Will he further tell us how far the Labour Government, which in their past espoused the stakeholder model of governance, are supporting the new concept of governance? If they are, why do they need to revise the schedule, which gives universities considerable flexibility over their size and membership, in terms of a membership of between 12 and 24 members, and states that they may, not must, have staff and student representation?

My Lords, I can reassure the noble Baroness, Lady Sharp, that we are not influenced by the Carver style: it would be more of a carve up if we were to utilise that. We are about giving flexibility, not reducing stakeholder involvement. We remain committed to that. As the noble Baroness rightly said, in the current regulation it is not mandatory; it is “may” rather than “must”. The new proposals are to have a new category of internal members. The corporations will consist of two or more persons who are members of staff or students at the institutions. I reiterate our commitment to stakeholder involvement.

My Lords, can the Minister confirm that the 1998 Act, which allowed the whole university community—students, lecturers, staff as well as the management and, crucially, brought in the expertise of outside business people and so on—was a powerful model and one that has enabled universities in the past 20 years to develop a strong management and governance structure?

My Lords, we agree with the noble Baroness. We want to continue the involvement of independent lay members; that will be a key feature of the revised schedule. We have had quite a bit of consultation; we have been working with HEC governing bodies and the AHUA. We take the point about the importance of independent members.

My Lords, is the Minister aware that it has often been members of staff or students who have brought to light serious difficulties with governance so that their role on the boards is extremely valuable? Do the Government really want to encourage universities to have small boards composed entirely of lay people? Surely the current banking crisis should warn them off such a model.

No, my Lords, we do not want boards entirely composed of lay people. I reiterate the assurance that there will be members of staff and students on them. We will look closely at the question of numbers. We have not absolutely made up our mind. We were trying not to be unnecessarily prescriptive, but we understand the importance of the point made by the noble Baroness.

My Lords, has the Minister noticed recent expressions of concern that major funders—persons or organisations endowing universities with very large sums of money—may be having an unacceptable influence on what is taught in those institutions?

My Lords, I cannot say that I have. Provided that there is a balanced board, provided that there are independent members and provided that stakeholders are represented, there should not be undue influence; but I understand the importance of the point made by the noble Lord.

My Lords, taking my noble friend’s point one stage further, what reports have the Government received on the financial problems that universities are facing and expect to face in future?

My Lords, I think that that strays outside the bounds of the Question. I am quite happy to respond to that point in writing.

My Lords, to come back to the centre of the Question, given the reassurances that the noble Lord has just given, why have the Government brought forward what seems to be an unnecessary new proposal?

My Lords, we believe that it is an improvement in flexibility. We are making it mandatory that there should be what we define as the independent members on the board, rather than that there may be. We are trying to extend the flexibility enjoyed by some institutions—chartered universities, for example—to all higher education institutions. We think that there is value in that. We are not being prescriptive on size; we have deleted the minimum and maximum. We think that there is a real benefit in that approach.

My Lords, I point out to the Minister that there is already a mandatory requirement in Schedule 7A to have lay members on the board. I cannot see that that is a good reason to revise the schedule which, as I pointed out at the beginning, is already extremely flexible in the numbers that it allows. The only effect of this is to reduce the representation.

My Lords, I think that I have already dealt with the points that the noble Baroness raised. I take her back to my point about the importance of independent members being mandatory rather than the current schedule’s provision of “may”.