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Higher Education and Research Act 2017 (Consequential, Transitional, Transitory and Saving Provisions) Regulations 2018

Volume 791: debated on Wednesday 9 May 2018

Motion to Regret

Moved by

That this House regrets that the Higher Education and Research Act 2017 (Consequential, Transitional, Transitory and Saving Provisions) Regulations 2018 do not provide sufficient independence for the Office for Students (OfS) from Ministers; do not enable the OfS to engage effectively with students, student unions and the National Union of Students; do not enable the OfS to protect the institutional autonomy of universities, or the autonomy of the OfS board; and overemphasise the marketisation of higher education (SI 2018/245).

My Lords, these regulations relate to the establishment and operation of the Office for Students, the new regulator of higher education institutions. The OfS has replaced both HEFCE and the Office for Fair Access, which as a result of the regulations ceased to exist on 1 April this year, with the OfS taking on their statutory functions. I do not seek to challenge the passage of these regulations, but I welcome the opportunity to debate the establishment and future of the OfS at a time of major turbulence in our higher education system. We have seen the tripling of fees, the introduction of loans and the ending of maintenance grants promoted by a Government driven by a neoliberal ideology which places such faith in markets to the detriment of everything else.

What has been the outcome in practice? There is no competition in fees; students are leaving university with debts of around £50,000, a large majority of whom will not pay them in full; we have the most expensive undergraduate courses in the world; there has been a complete collapse in part-time provision; and a reduction in home-based postgraduate students. There is a huge uncovered gap in the public finances. The Education Policy Institute calculates that the contribution of student loans to net government debt is forecast to rise from around 4% of GDP today to over 11% in the 2040s.

Nor is it clear in what direction the OfS is going to take higher education. It is ironic that alongside the Government’s genuflection to free market ideology with the creation of the OfS, it brings with it the tools of what could be a heavy-handed regulator. It is an intention we have seen all too clearly in the character of the last Education Minister. One moment he was extolling the virtues of the market and new private providers; the next, threatening the same institutions with draconian punishments if they did not do what he, as the Minister, wanted. I fully accept that intervention in the pay of vice-chancellors might be justified in the public sector, but it sits rather uneasily in the competitive market that Mr Johnson was so keen on.

My key concern is whether Ministers, instead of promoting scholarships, encouraging research or a concern for truth, have as their goal turning the UK’s higher education system into a market-driven one at the expense of both quality and the public interest. This is not a broken system that needs shoring up and intervention; it is the second most successful higher education system in the world with four universities ranked in the top 10.

I imagine the Minister will refer to the regulatory framework for the OfS published in February this year. It certainly makes interesting reading and there are some positives. First, I am glad that it starts with an affirmation that our universities provide a world-class higher education sector. I am also glad that at page 15 it states that the regulatory approach is designed to be principles-based and that the imposition of a narrow, rules-based approach, with numerical performance targets or lists of detailed requirements, would risk leading to a compliance culture that would stifle innovation and prevent the sector flourishing. Spot on.

If the Minister wants to see a regulatory system that has all the wrong characteristics, look no further than the NHS, which seeks to combine the legal framework of a competitive market with intense micromanagement by Ministers and a plethora of regulatory bodies all pulling in different directions.

I welcome the statement, again on page 15, that once the regulatory framework is established its implementation will reduce bureaucracy and unnecessary regulation. My reservation is that in that framework I did not see what contribution the OfS would make to enhance the world-class status of our universities. Indeed, I could not see what the added value of the OfS was meant to be. I hope the Minister is able to explain that. The framework document seems to have an excessive belief in creating a market to drive competition, but nowhere have I seen evidence to suggest that this will enhance the sector overall.

The most depressing characteristic of the framework is that the language of the market is used so much. The use of the word “provider” is objectionable. No longer are Oxford, Cambridge, Imperial, Sheffield or whatever to be regarded as universities or higher education institutes—they are to be called providers. Why on earth are we not using “university” or “higher education institute”? If it is because the Government’s legal framework is designed to allow tin-pot little institutions to be suddenly called universities, I cannot think of a worse reason for introducing market ideology into a sector which has shown itself to outshine country after country. The one thing I would ask the Minister to do is expel the use of the word “provider”. It is a typical government approach to markets they do not understand, and which threatens to reduce the integrity of our university sector.

I come now to the OfS and its independence. It has to be seen as an independent institution if it is to have credibility and inspire confidence among the public, students and universities. It has had a poor start. It was clearly complicit in the shambolic and over-political approach taken by Ministers to the board appointment process. It was not a good start by its chairman. The appointment of Mr Toby Young and his subsequent resignation was followed by an investigation by the Public Appointments Commissioner. He identified a number of problems, including all-male appointment panels, failure to provide information to the commissioner in good time and—this is the key point—risking the independence of the board by a too partisan approach to appointments. He found that the governance code was not followed, itself a breach of the ministerial code.

This is important because the composition of the board remains highly controversial even now. There is no active further education sector representative on the board, there is no one from the NUS and there is no voice for staff. The appointments process has been symptomatic of a Government who are clearly trying to use the OfS to pursue a deeply ideological agenda. At the moment the chairman seems to show no signs of resisting the Government’s intervention in the activities of this body.

On access and participation, which is the subject of this statutory instrument because of the changes it makes, the recent end-of-cycle report from UCAS offered concerning statistics, stating that young people from the most advantaged backgrounds are still 5.5 times more likely to enter a university with the highest entrance requirement than their disadvantaged peers. Les Ebdon, the outgoing director of Fair Access, said in response last month that,

“people with the potential to excel are missing out on opportunities”.

This is an unforgiveable waste of talent.

Within the new OfS structure we are to have a Director for Fair Access and Participation, but will that person have enough clout within the OfS to make a real impact on this problem? Will that person have a direct line to Ministers, and not simply report to members of the OfS board and the chief executive? Importantly, can I take it that that person will be directly available to parliamentarians?

The term Office for Students—which is slightly Orwellian—suggests that it is focused on outcomes for students. That we will see. However, a recent Treasury Select Committee report noted that without adequate information, an efficiently functioning market will struggle to develop. Prospective students face the unenviable task of determining whether to participate in higher education based on increasing quantities of university marketing material coupled with a lack of proven, reliable metrics for judging the quality of courses. Can the Minister say what the intentions of the regulator are in this regard?

I refer the Minister to Universities UK’s submission to the current review of post-18 funding, which made some very good points. First, it says that while students understand the general long-term benefit of entering higher education, they are much less certain of how that translates into benefits that relate to them personally and how benefits vary according to the choices they make; secondly, that government, in partnership with universities, should provide more targeted information to prospective students on the cost and benefits of higher education; and thirdly, that universities could develop their value-for-money statements to better explain how pricing decisions for undergraduate courses are arrived at. Those should explain how the university uses income from tuition fees and other sources of income to fund the student experience and other activities, such as research.

Finally, I come to private providers. In the Government’s desperation to promote new private providers, they are already playing fast and loose with the term “university”, handing it over without proper scrutiny or oversight. Every time the title “university” is given to a new provider, without ensuring that it provides a good education, that not only risks students and taxpayers being ripped off, but potentially damages the integrity and reputation of the whole system. The initial conditions of registration are designed so that providers do not need a track record in delivering higher education; nor do they need evidence of financial performance.

Those of us with some experience in the education sector know what happens when you do not have sufficiently strong entrance qualifications. I fear that we are going to see a train crash here. I come back to my original question about why the Government are putting the international reputation of our universities at risk. The health of those institutions is of crucial importance to the UK. Clearly, we need to do nothing that would put that position at risk. The OfS has a clear role in mitigating that risk, but it must respect the institutional autonomy of universities and resist the temptation to micromanage every corner of university life. Obviously, I wish it well, but I believe that its performance needs to be kept under close scrutiny. This debate is a good start. I beg to move.

My Lords, statutory instruments are never the most exciting things to debate because there is very little we can do to them. However, I thank the noble Lord, Lord Hunt, for raising this, because it gives us an opportunity to raise concerns about the benighted Higher Education and Research Act and to ask the Government to clarify their position.

The noble Lord has expressed concern about many of the issues, which I share. The report of the Commissioner for Public Appointments into the OfS revealed a blatant cronyism in the appointments process, which was influenced heavily by the Prime Minister’s own special advisers. Apparently, special advisers at No. 10 blocked several nominees for the “student experience” role on the OfS board because they had been previously involved with student unions or had expressed opposition to the Prevent strategy. The report concludes that,

“the decision on whether or not to appoint one candidate in particular was heavily influenced, not by the panel but by special advisers”.

It concluded that there was a “clear disparity” in the treatment of different candidates, and parts of the process,

“had serious shortcomings in terms of the fairness and transparency aspects”,

of the code governing public appointments. That was a complete failure of process that ignored due diligence procedures.

We know that Toby Young was, until March, CEO of the New Schools Network, which received several sizeable grants to provide advice to sponsors setting up a free school. Ministers say that that support is now under review, and the Liberal Democrats have been calling for a reassessment of whether the award of those contracts followed due process. His appointment to the board was rescinded, but it should never have been allowed to get that far, both on his credentials and on the offensive views he had expressed.

I absolutely concur with the noble Lord that, given the large number of HE students who take their courses in FE colleges, it is really disappointing that the board did not appoint anyone from the FE sector. It is a highly valuable and important part of our education system, which is all too frequently overlooked and underfunded. Having a representative on the board we see as not only desirable but essential.

The appointments process has undermined confidence in the board of the OfS. Universities no longer see it as independent of Ministers and its fitness to regulate the sector must be called into question. The OfS must operate in a way that is proportionate, risk- based and truly independent of government. It must also have regard to its statutory duty to uphold institutional autonomy. The Minister will well remember the concerns voiced in this House over universities’ autonomy.

The regret Motion reiterates the lack of confidence in the OfS, but also reflects wider concerns raised by Labour, Liberal Democrats, Cross-Benchers and, indeed, by Conservatives during the passage of the then Higher Education and Research Bill. For example, the Government may still use the teaching excellence framework to vary fees from 2020. That may promote a multi-tier university system where poorer students are deterred from going to higher-rated universities. New providers will be able provisionally to award degrees from day one and have full degree-awarding powers after three years. Without proper scrutiny, that could erode academic standards and threaten the reputation of UK universities. The OfS must have a constructive relationship with the QAA as the designated quality body to ensure that the integrity of the use of university title is maintained. On the TEF, it is important that the independent reviewer is appointed soon, with enough influence that the Government will listen and enough time to incorporate findings into the TEF as it progresses. On subject-level TEF, there are considerable concerns about the time that will take and the quality of the information. Will all the academic time it will take make a real difference to institutional practices or to student decision-making?

The OfS has a “deeply ideological agenda”, which is reflected both in its appointments and its duty to promote competition between providers. I entirely agree that the term “provider” is not one that sits comfortably in the world of universities. Indeed, many universities thrive because of collaboration rather than competition. It may take a narrow perspective on value for money, based on employability, ignoring many other factors important to students, such as quality of provision and individual aspirations. There are issues with how the student panel will contribute to the regulator’s strategy in practice—and, indeed, where has the term “scholarship” gone in all this debate?

Under the new framework, the OfS loses two key powers that HEFCE and OFFA possessed, namely to intervene when providers are in financial difficulty, and to negotiate directly with universities when approving or rejecting access and participation plans. What will happen to those powers? The new OfS regulatory framework does not come into effect until the beginning of the 2019-20 academic year. However, because HEFCE and OFFA ceased to exist in April 2018, the Government have transferred the powers of HEFCE and OFFA to the OfS and UKRI for the remainder of the 2017-18 academic year and the entire 2018-19 year. The Government said that that will offer HE providers a transitional period where they continue to be regulated under the old framework but can prepare their registration with the OfS ahead of the 2019-20 academic year.

In that transition period, the OfS will regulate HEFCE-funded providers—sorry, I cannot help using the word “providers”; it crops up so often, but does not sit comfortably—with the department continuing to regulate alternate providers until 2019-20, at which point power transfers to OfS. The OfS will prepare HEFCE and OFFA’s accounts for their last financial year of operation; enable the Parliamentary Commissioner for Administration to continue to investigate complaints made against HEFCE and OFFA before they were closed; and amend charity law so that the OfS, rather than HEFCE, regulates the charitable status of HE providers.

That is all happening in a short timescale for decisions which will radically affect our higher education sector—a sector held in worldwide esteem, which we can ill afford to undermine. I ask the Minister: does the OfS have the staffing and the skills to carry out all these tasks? We hear the advice of Universities UK that an independent review of the OfS should be undertaken in September 2022. It may be necessary to bring that forward if there turn out to be more challenges for this highly influential body that need sorting out. Our universities are already deeply concerned about the damage that Brexit might inflict—the potential loss of EU staff and students, which is already happening, and access to Erasmus, Horizon 2020 and the world-renowned research that we have achieved in collaboration with our European neighbours. To inflict further damage through any ill-thought-through proposals in this legislation would be unforgivable. I hope the Minister can reassure us that no hasty measures will be taken before all the implications have been assessed and that the Government will consult at every stage with universities and will always have the best interests of our great universities at the heart of their decisions.

My Lords, the scrutiny of these regulations, which are consequential on the Higher Education and Research Act 2017, provides an opportunity to take another look at the developments in the governance of UK universities and to consider where they are taking us. The education Act of 2017 encapsulated a modern view of the purpose of universities that is greatly at variance with a conception that prevailed for most of the 20th century. In the traditional view, which accompanied the expansion of universities that began in the 1960s, universities’ purpose was to create an educated population and to give it full access to our cultural and intellectual heritage, with no limit initially on the number of participants. Anyone who was capable of profiting from a university education should have been able to do so.

Nowadays, it is generally agreed among members of the Government and senior management of universities that universities should be regarded as institutions for training the workforce and for making discoveries for pursuing developments that might stimulate economic growth. The universities Act of 2017 attempted to direct the activities of universities to these ends via a plethora of regulations and initiatives that fall under three headings: the research excellence framework, the REF; the teaching excellence framework, the TEF; and latterly the knowledge exchange framework, the KEF. Work is under way to develop metrics to enable the Government to judge the successes and failures of institutions in each of these three areas and to award the available funds to support their activities accordingly. There has been a hypertrophy of university administration, which has arisen largely to service the demands of Governments. In most institutions, administrators now outnumber the academic staff.

The declared objectives of Governments have been mutually antagonistic and largely counterproductive. To recruit sufficient numbers of students in the increasingly competitive open market environment created by the present Government, UK universities are indulging in what has been described as an amenities arms race. They have been spending exorbitantly on student union buildings, swimming pools, sports centres and student accommodation. Things have had to give way to enable these developments. The university to which I am affiliated as an emeritus professor has declared the objective of reducing its salary bill by 20% to provide the funds for capital investments.

It is clear that there has been a conflict of objectives in the context of the teaching excellence framework. The assessments are based largely on measures of customer satisfaction. The provision of student amenities is liable to enhance this satisfaction. The reduction in the numbers of permanent teaching staff and their replacement by casualised teachers has provided some of the necessary funds. The casual workers are mainly drawn from among the postgraduate students but they include a growing number of post-doctoral teaching fellows on temporary contracts. This is bound to affect the quality of the teaching.

The research excellence framework involves a quinquennial competition among university departments to determine where they should be ranked in terms of their research output. Once more, the effect has been dysfunctional. These assessments are based on a so-called peer review by senior academics. Departments can guess what sort of research will be most favoured by closely examining the adjudicators’ research output. Innovative research and interdisciplinary research in particular tend to be discouraged.

The principal effect of the research excellence framework has been to compel academics to maximise their published output. They have learned to write several papers for the price of one good idea by contriving never completely to finish a research paper. In this way, there will be something left over on which to base a subsequent paper. A small voice used to remind me, whenever I became enthused by the prospect of a new research avenue of enquiry, that I could not afford to indulge in speculative research. My mission instead was to write papers. Only when I had produced a sufficient number of papers was I free to pursue the research.

The research excellence framework has also militated against the objective of doing applied research of a sort that might lead to industrial innovation. Such research is liable to be sponsored, in part, by an industrial enterprise. For that reason, it is often subject to industrial secrecy. An academic who seeks promotion through the excellence of their publications would be advised to steer away from such applied research, which might not see the light of day for many years. This is one way in which the research excellence framework comes into direct conflict with the objectives of the knowledge exchange framework, which aims to encourage the practical application of academic research. One cannot impose these contradictory requirements upon academics without driving them to despair. Nor can academics evade these demands, which are being placed upon them at the behest of the Government by university administrators. Vast amounts of time are liable to be spent in meeting the demands of the various assessment exercises, to the detriment of teaching, research and the transfer of knowledge.

The mantra of the present Government is to induce market competition into the university environment. University life is already very competitive. Hitherto the competition has been largely academic. Now there is intense competition to win research grants, since their acquisition is liable to be an important factor in achieving promotion. A young statistician in my department was able to make rapid headway on the basis of a grant from the Medical Research Council to pursue a very ordinary epidemiological investigation, which would not have incited any interest among his more cerebral colleagues. His preferment created intense jealously. Maybe that is too personal a story to dwell upon, but there is a point to be made. Applied research of this nature is best conduced in research establishments that are devoted to the relevant lines of inquiry, be they in medicine, pharmacology, telecommunications, aviation or whatever.

Britain was once endowed with many splendid research establishments within the public sector. These had strong relationships with universities, as well as with industry. Many of them were abolished in the 1970s and 1980s. It is wrong to expect universities to fill the gap that has been left, which is what the knowledge exchange framework is intended to force them to do.

I believe that the Government’s policies towards our universities are self-defeating. They are liable greatly to diminish the quality of our universities and their status in the world of learning.

My Lords, I am very glad that I gave way to my noble friend because that was a very important speech. By the same token, I applaud my noble friend Lord Hunt’s speech. He reflected my own misgivings very powerfully. I should declare an interest because I have been, over many years, involved, and still remain involved, in the governance, in the widest sense, of some of our university institutions.

We applaud the standing of British universities. We cannot reflect enough on how that standing and admiration across the world has been achieved. It has certainly not been achieved with the language of “providers”, or of “customers” instead of “students”. In other words, it has not been involved in the context of an overriding commitment to market ideology. It has been achieved because of a long-standing and continuing commitment to scholarship, to learning and to the concept of the value of education as an end in itself, not as a means to an immediate end.

In the long run, the well-being of humanity, not to mention that of the individual student, and incidentally the well-being and success of our economy depend upon originality. In that context, original, pure research is crucial. It depends upon the scholarship of those who are teaching and leading the universities, but it has always also depended upon the concept of the ideal, to which I hope we can return—I do not give up on this because I think if we do we are in trouble—of the university as a community of scholars in which students and scholars are together in the exciting enterprise and challenge of this learning and scholarship experience.

It is against those considerations that we have to judge and assess how the new arrangements are working. I am sure we shall need to hear reports from the regulator soon, and we shall need to be confident that the regulator can speak to the wider public and also to government as well as the system itself. It is also why it is so important that the reviewer for TEF is soon appointed so that the reviewer can get on with the job of assessing how relevant the system is and how well it is working in the context of the objectives of education, about which I have just given my own views.

I think there is a confusion at the moment in talk about education and in writing about education. It is a confusion between training and education or scholarship. Training is not necessarily, in the widest, fullest sense, education. Training is preparation for a particular function. Of course we need training. We need training systems second to none and adequate to meet the challenges of our time, which are very great. Education remains about the wider context of scholarship, the widest concept of excellence, the wider concept of what society is about.

These are the considerations which are preoccupying me, and I will look very earnestly at how the new system is operating in order to judge whether it is up to the task. In the immediate situation, I simply cannot understand, whatever my misgivings, which should be self-evident, about the board and its role, how a board is expected to do a job adequately and properly if it has no representation from the academic community and no representation from the students. This is quite simply ridiculous.

My Lords, I am grateful to the noble Lord, Lord Hunt, for giving us this opportunity to consider progress made and to mull over some of the issues. Over the course of the past six months or so, I have put down several Questions to the Minister on higher education matters, and I want to come to some of those. I am grateful always for his detailed replies.

Of course, the Office for Students did not get off to a very good start with our Foreign Secretary’s confidant being appointed to that board. The board has the title of Office for Students but does not seem to have students at the heart of what it does. It should have included somebody from the NUS and someone from further education.

Fear not for vice-chancellors, because the former chief lobbyist for vice-chancellors was appointed to the board. As one vice-chancellor recently put it, no doubt with a smile on his or her face, “For us, this is far better than having a former vice-chancellor on the board. We now have 130 vice-chancellors as our regulator”.

Six months ago, “Panorama”, which we have heard mentioned in the previous Statement, reported on some of the problems of higher education, particularly those of private colleges. I was quite hopeful that the Office for Students would deal with some of these issues. I have not been reassured. As for the responsibilities, it talks about a “light touch” in monitoring and self-regulation. It says:

“Further changes will make it quicker and simpler for new providers to enter the market, with an expectation that greater competition may mean some providers will exit”.

I do not want a light touch on some of these issues.

I have had several emails from various individuals who have attended a college. I am not going to name the college, but I want to give a flavour of this, and I am quite happy to hand these over to the Minister. One student says that the college charges money from students to forge their attendance record and to make assignments for them; the college makes fake timetables and uses names of its full-time staff members on the timetables in their ignorance and uses fake assessment schedules where names of staff members are used as assessors without their knowledge. The college charges students a proportion of their total student loan grant available to students in one year as a token of the college’s services to students, fakes pages and records on student assessments and uses the name of the Ministry of Defence and the RAF et cetera on its website in order to facilitate its dirty business. And so it goes on.

That really is not good enough. We talk about having the finest higher education system in the world, but practices like that do not help our reputation, and we need to do something about that. It cannot be just a light touch here and a light touch there. Proper action has to be taken.

I will turn to a few issues that I have also raised, such as essay mills. I moved an amendment on that to the Higher Education and Research Act and was assured that, if we could not get this under control, we would look at legislation. I was grateful for the Minister’s reply. He said—and I think it is important to put it out there—that he expects the Office for Students to encourage and support the sector to implement strong policies and sanctions to address this important issue in the most robust way possible. That gives me hope. Now that we have said that, we can come back in 12 months or so and see whether that has happened.

One of the issues we talk about is degrees of private colleges particularly being validated by our universities. Again I put a Question down about how the Government ensure that a consistent and professional level of external examiners appointed for degrees are validated by universities but not delivered by those universities. The Minister’s replied that these institutions are subject to a rigorous, risk-based approach to quality assurance. That did not happen at Greenwich College. Its degrees were validated by Plymouth University, which allowed the practices to go on. When those degrees were validated, I did not see that institution being subject to a rigorous, risk-based approach. Again, I hope that the Office for Students will tackle this issue properly. My noble friend Lady Garden and I have met the new chief executive of the Greenwich School of Management, which was the subject of that programme and where some of the most appalling practices were highlighted, and we were reassured by the approach that it is putting in place. We have been invited to visit the college in the summer.

Responsibility for equal opportunities is also conferred on the Office for Students. It is equal opportunities in its widest sense: equal opportunity of access for students from disadvantaged backgrounds and equal opportunities for young people with special educational needs. Some fantastic work is going in terms of special educational needs. I came across a student who had completed her first degree at Leeds University and was going on to do a master’s degree. She had mild cerebral palsy and some other issues as well. That university has been stunning in the support that it has given her. Sometimes, when we moan about things, it is right and proper that we highlight good practice as well. Perhaps the Office for Students can take good practice and ensure that other universities highlight it as well.

I shall now give some examples of bad practice—again, I have put a Question to the Minister about this. Let us imagine that a student from a deprived community manages to get to a top London university. They get a first; their family is so proud of them and the ceremony to award their degree comes about. Suddenly, that young person from a deprived community is charged £45 for each ticket for their family—that is on top of having to pay for their gown and their photograph. That is absolutely disgraceful. We are talking about a top London university. It should not happen. When I wrote to the vice-chancellor, I was told that it did not even have a bursary award to support students in such a situation.

When we were talking about TEF, I remember being concerned that we might see universities going down the road of schools and hanging out banners equivalent to those saying, “Ofsted regard us as an outstanding school”. The prediction came true, because I was driving past Hope University in Liverpool and nearly crashed the car when I saw banners hanging outside the university—incidentally, Hope University is the only ecumenical university in Europe—declaring: “Hope has got a gold standard”, with leaflets given out here and there.

At Second Reading of the higher education Bill, the Benches opposite were packed out. I think that I was the only person who did not declare an interest—there were vice-chancellors, former vice-chancellors, chancellors and masters. They are not here now. I thought at the time, “It’s a pity we haven’t got a student standing up, because we need to listen to students”. For students, universities are about getting a job, getting an experience and getting a qualification. I hope that the Office for Students will be plugged into students and will hear what students want loud and clear, because that is what it must be about.

My Lords, I thank the noble Lord, Lord Hunt, for tabling this Motion. It is clear from it that the regulations are not in themselves at the heart of what troubles noble Lords and that, as the noble Lord said, this debate is intended instead to go somewhat broader on a number of issues, many of which have been raised previously in this House, not least during the passage of the Higher Education and Research Act, or HERA as it is known. Indeed, we spent about 110 hours debating the Act in both Houses, had more than 1,300 amendments and made at least 31 major concessions. Nevertheless, I welcome the opportunity again to touch on the issues raised in the Motion.

I want to put on record as a reminder what the regulations will enable. In particular, they enable the Office for Students and UK Research and Innovation to exercise the statutory functions previously exercised by the Higher Education Funding Council for England, which we know as HEFCE, and the Director of Fair Access to Higher Education. This will be for a transitional period between 1 April 2018, when HEFCE and DFA ceased to exist, and 31 July 2019, after which the new regulatory system under HERA will be fully functioning and the old system will in essence fall away for good. The transitional period allows for a smooth progression to the new system of regulation introduced by HERA, so minimising any disruption in the sector. The consultation on the OfS regulatory framework explained how this transition would work and the proposals were met with general approval by those responding.

Let me now address the four key issues that the noble Lord, Lord Hunt has raised. I want to spend some time on them, despite the Benches opposite being not exactly full for this debate as the noble Lord, Lord Storey, pointed out. On the first issue, the independence of the Office for Students from Ministers, I remind your Lordships that the House voted for the OfS to be an operationally independent statutory body, responsible and accountable for a much broader suite of functions than was its predecessor, HEFCE. Let me be quite clear: in regulating all registered higher education providers, it is the OfS, and not the Secretary of State, that determines and publishes the registration conditions applicable to providers, the registration categories and its own regulatory framework. The Secretary of State’s powers to attach terms and conditions to OfS grant funding and to give directions to the OfS are limited. The OfS is required only to have regard to guidance from the Secretary of State and not to follow it. However, I think that noble Lords will agree that it is important that the OfS has obligations to report to the Secretary of State, and these are set out in HERA. I reassure the noble Lord, Lord Judd, that the OfS also has obligations to produce annual reports and accounts, and these are publicly available.

A recent example will help me illustrate the reality of the OfS’s independence. While the department started off the consultation exercise on the conditions and regulatory framework, working with the then future OfS chair, CEO and Director for Fair Access and Participation, once the OfS was established in January 2018, it did not simply adopt the proposals outlined in the consultation document produced by the department. The published framework differed from the consultation draft in some significant respects. For example, taking into account responses to the consultation, the OfS decided to drop the registered basic category of the register which the department had proposed. I hope that this small example helps to reassure noble Lords that the OfS acts, and will continue to act, independently from Ministers.

On the second issue raised by the Motion, I might begin by laying out exactly how the OfS engages with students. The Office for Students’ approach to regulation and its statutory duties, as set out in the regulatory framework it published in February, is bold, student-focused and risk-based. It is consistent with its statutory duties, which, again, this House voted for.

We expect all members of the OfS board to engage with students to ensure they really understand the issues that they face and have these as considerations when making decisions and exercising their functions. HERA ensures that there is to be at least one OfS member with experience of representing or promoting higher education students’ interests, either individually or generally. However, I am pleased to say that the OfS went one step further: it should be a further reassurance to the noble Lord, Lord Judd, that it has set up a student panel where all 13 members are either students, prospective students or recent graduates. This membership includes current undergraduate and postgraduate students, part-time and international students, prospective students at GCSE and sixth-form ages, and a representative from the NUS. This provides a direct channel into the OfS itself, bringing a diverse range of views and perspectives. It is also worth noting that the current student representative on the board is also a full member of the student panel.

It bears repeating that HERA sets out the requirements to be met in appointing OfS members, and the desirable criteria for the make-up of that membership that the Secretary of State must consider. These statutory requirements were all subject to a rigorous parliamentary debate in this House about whether particular representation was necessary to enable the board of OfS members to operate effectively. Parliament concluded that there should not be a requirement for specific representation from every single part of the sector. Instead, the criteria to which the Secretary of State must have regard include experience of providing higher education, and from a broad range of different types of English higher education providers. We consider that the current OfS membership meets these criteria.

I recognise that the appointments process for OfS members has not necessarily been as smooth as one would have hoped, a matter raised by the noble Lord, Lord Hunt, and the noble Baroness, Lady Garden, with some further criticisms. I reassure your Lordships that the department has looked carefully and seriously at all the recommendations of the Commissioner for Public Appointments, and we have already made improvements to the DfE diligence processes in line with the Commissioner’s advice. To further ensure the robustness of these processes, we have established a DfE nominations committee, to ensure adherence to the Government’s code on all future public appointments. I will also update noble Lords on the couple of appointments still to be made. The competition for the OfS member with student experience is to be launched shortly, as the current appointment is on a short-term basis only. We will run a separate competition for the vacancy left by the resignation of Toby Young later in the year.

The noble Baroness, Lady Garden, has raised on a few occasions, including today, her wish for a representative from the further education sector to be on the board: I know that the noble Lord, Lord Hunt, raised this as well. We encourage such representatives to apply when the competition is launched. We also, of course, continue to communicate with the Commissioner for Public Appointments on these appointments.

I move on to that old chestnut of institutional autonomy: the noble Baroness, Lady Garden, should be reassured that I remember it. It was debated at length during the progress of HERA through both Houses of Parliament, but it bears repeating: after amendments by your Lordships, HERA brought in the most robust statutory protection for institutional autonomy that has ever existed in our modern higher education system. It placed new and explicit protections for the freedom of English higher education providers. I do not think anyone disagrees about the importance we place on institutional autonomy and academic freedom, and this is reflected in the duty of the Office for Students, in carrying out all its functions, to have regard to the need to protect the institutional autonomy of English higher education providers. That duty also applies to the Secretary of State when issuing guidance, giving directions by regulations and determining terms and conditions of grants to the OfS. This means that the Secretary of State must have regard to the need to protect the institutional autonomy of English higher education providers when exercising any of these functions.

The final issue within the Motion refers to the overemphasis on making the higher education sector more of a market. I would like to put this in a slightly different way. Students are surely better protected when we make them aware of their rights in relation to their education, including their rights as consumers. I use this word with some caution because I know from previous debates that this is a term that does not best please a number of noble Lords, including the noble Lord, Lord Judd, but I use it nevertheless. I make no apology for what the noble Lord refers to as “marketisation”. Surely the House will agree that students should rightly expect the best quality and robust standards in their higher education study and experience, and equally be protected from concerns about governance and financial stability. The OfS sets clear expectations about how providers should go about this, through conditions of registration. For example, the OfS has now introduced a registration condition for student protection plans, to set out what students can expect to happen should a course, campus or institution close, to ensure that students can complete their courses or be compensated if this is not possible.

I turn to questions raised during this short debate, particularly from the noble Lord, Lord Hunt, and the noble Baroness, Lady Garden, who spoke about the word “provider”. Let me say that not all higher education providers are universities. “Provider” includes universities, but the terms are not interchangeable. There are special protections attached to the use of university title and providers have to meet tests in order to call themselves a university. The noble Baroness, Lady Garden, asked whether the OfS has the expertise necessary to undertake the vast number of tasks that it has been set or that we gave it. The OfS combines the expertise of its diverse board, its student panel and its staff with the experienced leadership of its chair, Sir Michael Barber, and its CEO, Nicola Dandridge. It is well placed to perform its functions, we believe, during the transition period and beyond.

The noble Baroness, Lady Garden, spoke about the TEF external review and the subject TEF. I reassure the House that the TEF review is going to take place and, of course, I have said from this Dispatch Box that we need to move to a subject-level TEF. By extending the test to the subject level, the Government aim to help prospective students compare the different courses on offer across institutions. This will shine a light on course quality, revealing which universities are providing excellent teaching and which are perhaps coasting or relying more on their research reputation.

I would also like to raise myself the issue of essay mills, raised by the noble Lord, Lord Storey. I know he has raised it on other occasions in this Chamber. I start by saying, and I am sure the whole House will agree with me, that cheating of any kind at any level is completely unacceptable, particularly to the department and to the country. We have given the new regulator, the OfS, the power to take appropriate action where this is happening, including fines, suspension from the OfS register or, ultimately, deregistration of the provider—the highest possible punishment. We have given the OfS the power to impose fines when it is fully operational. The Government have already taken action to ensure that universities know their responsibilities and have instructed leaders across the sector, including the NUS, the QAA and UUK, to create new guidance, which was published last year, as the noble Lord may know, setting out their roles when it comes to cheating. However, we are reviewing its effectiveness, particularly because of the seriousness of this issue. The Department for Education has ensured that the parliamentary passage of the Bill did not rule out legislating in the future: that is a measure of the seriousness with which we take it.

I listened carefully to the speech of the noble Viscount, Lord Hanworth, who spoke about what he called an amenities arms race. We believe that investing in the student experience via new facilities and by other means is a good thing, but rest assured that the TEF and the regulation provided by the OfS still puts the greatest stock on teaching quality and provision.

Finally, I think it is worth reflecting on what has happened since the Higher Education and Research Act received Royal Assent. As planned, the OfS was up and running from 1 January 2018 and officially launched on 1 April 2018. In the meantime, the designated quality body and designated data body were announced after recommendations by the OfS. The OfS published its regulatory framework and registration conditions on 28 February and the Secretary of State’s guidance was issued shortly before that date. The OfS has established and convened the aforementioned student panel to advise on strategy and activity. The OfS is now registering providers with early student recruitment cycles, and on Monday 30 April published its strategy and business plan for 2018-19.

To conclude, clearly there are strong views still on all sides of the House. I am thinking particularly of the noble Lord, Lord Hunt. I will review Hansard to be sure that I have covered many of the points he made. Understandably perhaps, he used a broad brush to cover a range of issues, including tuition fees. He will know that the post-18 review is looking at the funding of tuition fees. I will look carefully at what noble Lords have said, and indeed what I have said, and if a letter is merited, I will certainly write to noble Lords and leave a copy in the Library. I hope that I have reassured noble Lords about the reasons for this order and on the questions they have raised. I hope that the noble Lord, Lord Hunt, will withdraw his Motion, but of course that is entirely his decision.

My Lords, I am grateful to the Minister for his full response, and to other noble Lords who have spoken. As the noble Baroness, Lady Garden, said, at the heart of this is our concern about the autonomy of our universities and the independence of the OfS. These become ever more important because marketisation increases the risk of perverse incentives being put in place, as well as the temptation to do so.

The Minister, commenting on what my noble friend Lord Hanworth said about the amenities arms race, said that you have to ensure that students have a good experience. I agree, but he said that when the reviews of students’ attitude to their university are done, which then feed into the teaching quality, often it will be the amenities that they judge. If those amenities are developed at the expense of investment in academics and the casualisation of those academics, with all the insecurities that that brings, it is a matter for some concern and at least debate.

My noble friend Lord Judd talked about the international standing of our universities, which he said depended on scholarship, learning and education as goods in themselves. I have seen nothing to suggest that the OfS has any understanding of those values, which is why we are so concerned.

The noble Lord, Lord Storey, raised the important question of these new private colleges—call them what you will—which are to be given university title and allowed into the sector without appropriate scrutiny of whether they are capable of taking on the awesome responsibility they have been given. So far, from what I have read of the OfS approach, the risk seems to be that colleges such as Greenwich will actually come under a lighter-touch regulation than institutions which have provided wonderful excellence over decades or hundreds of years. That is the charge that I put to the Government: why are these wretched private institutions to be given such an advantage when they come into a sector that is universally recognised as brilliant? The Minister has not answered that question. As for the gold star for Liverpool Hope University, the Minister forgets that it would have to be “Liverpool Hope Provider”.

I am grateful to the Minister for his very full response, which is always appreciated. He said that the OfS will be operationally independent and the Secretary of State’s powers of intervention are limited. The OfS has to show that it is independent. The chairman could have shown he was independent by resisting the intervention by special advisers in the appointment of Mr Toby Young. He did not. That is why his own position and judgment are in question and why he has an awful lot to do to show that he can carry out his job effectively. People are put to the test. He was put to the test. I do not think he succeeded.

Of course it is important to engage with students and the students’ panel is welcome, but it is no substitute for having somebody on the board of the OfS who can actually represent the views of the NUS. It remains a big issue for the credibility of that body.

On the core issue of marketisation, the Minister said that surely students have the right to good information. I totally agree and anything we can do to provide that information is to be welcomed; Universities UK’s evidence points to the direction. But students’ right to information does not equal a market or marketisation. That is why “provider” is such a pejorative term. For the sake of a few tin-pot organisations that are going to be allowed into the sector, we eradicate the concept of university and call them all providers. At the least that shows rather limited thinking.

At the end of the day the OfS has our good will. We hope it will do a good job. But we remain concerned that the Government’s intent is, in effect, to damage the university sector, with huge consequences for our country. I beg leave to withdraw the Motion.

Motion withdrawn.