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Higher Education (Transparency Condition and Financial Support) (England) Regulations 2018

Volume 792: debated on Tuesday 24 July 2018

Motion to Approve

Moved by

That the draft Regulations laid before the House on 18 June be approved.

Special attention drawn to the instrument by the Joint Committee on Statutory Instruments, 30th Report.

My Lords, my purpose here today is to speak to draft regulations that encompass two keys elements of the Higher Education and Research Act, or HERA, as I shall refer to it, which require approval. I turn first to Section 9, the transparency condition.

There has been considerable progress in widening the access and success of students from disadvantaged and underrepresented groups into higher education. University application rates for 18 year-olds to full-time study remain at record levels, according to data published by UCAS earlier this month, and the proportion of disadvantaged 18 year-olds entering full-time higher education has increased from 13.6% in 2009 to 20.4% in 2017. However, there is more that could and should be done to fulfil our aim that anyone with the talent and potential to benefit from higher education will be able to do so, particularly on the progress of students from disadvantaged backgrounds to the most selective institutions, and the outcomes, including the retention and attainment of some groups of students. We want to see progress made and have charged the new regulator, the Office for Students, to lead that.

The introduction of the transparency duty through Section 9 of the Higher Education and Research Act is a key measure that will support the OfS in making the further progress we wish to see. This duty requires certain higher education providers to publish information on application, offer, acceptance, completion and attainment rates of students, which can be broken down by ethnicity, gender and socioeconomic background. The duty will apply to all providers registered with the OfS, including both those in the approved and approved fee cap parts of the register. It will ensure that data, similar to that released by the universities of Oxford and Cambridge on admissions recently in anticipation of this duty, is available from August 2019. That greater transparency will shine a spotlight on where higher education providers need to do more to widen the access and success of students from disadvantaged and underrepresented groups.

The duty also requires that the information is provided to the OfS. That will help the OfS to assess the performance of providers in terms of access, student success and progression. To ensure that we see progress, the OfS will be able to take action if a provider does not comply with its obligations, including on the access and participation of students from disadvantaged and underrepresented groups. The OfS has access to a range of interventions and sanctions which incentivise improvements. This can include placing additional registration conditions on providers, suspending providers from the OfS register, and, if necessary, imposing monetary penalties on a provider.

I recall that the duty was broadly welcomed by noble Lords during the passage of HERA. At that time the Government gave a commitment that the OfS would be asked to undertake a consultation in respect of additional data it might request on applicants and students with additional protected characteristics, such as disability and age. I am pleased to be able to report to the House that we have asked the OfS to undertake that consultation, and it has announced that it will do so through publishing a formal consultation and holding consultation events later this year.

I understand that there is great concern in the student world about the sharing of this data with third parties. Can the Minister tell us which third parties this information will be shared with?

If the noble Lord will allow me to finish the speech, we can have the debate then, and I will certainly bear in mind the point that he made.

The consultation, which is part of a wider consultation on the OfS work on access and participation, is intended to be published at the end of August, and consultation events will be held during September, with findings available early in 2019. The implementation of the duty through these regulations will help ensure that we can make further progress on the access and success of disadvantaged students, as well as supporting informed choice for all.

On the second part of these regulations, Section 39 of HERA, these powers allow the OfS to provide financial support for higher education. These funding powers broadly replicate the funding powers conferred by Section 65 of the Further and Higher Education Act 1992 on HEFCE, but have been expanded so that the OfS can fund any eligible higher education provider. Eligible providers in this new system are those subject to a cap on the fees they can charge, and thus are in the approved fee cap part of the OfS register. Such financial support is important because it gives the OfS the ability to provide financial support to providers to support a range of different delivery models, such as part-time, and to promote student choice, competition and value for money. It also permits the OfS indirectly to fund qualified schools, colleges or other institutions that are connected to an eligible higher education provider.

Furthermore, these powers ensure that the OfS can continue to provide funding for subjects which cost more to teach than can be met solely from tuition fees, such as those science and medicine courses that are so crucial to the economic and social future of the country. These powers also make it possible for the OfS to provide funding to incentivise and support providers’ work on widening participation or to meet the unavoidable costs of small and specialist provision, such as performing arts courses.

I turn to an issue involving the Joint Committee on Statutory Instruments, which has drawn the special attention of both Houses to this statutory instrument in its 30th report. It has stated that there is doubt that there are adequate vires for the regulations. I appreciate that some of what follows may seem rather technical. However, it is important that I put the Government’s interpretation of the relevant provisions on the record, given the strength of the committee’s views.

Before turning to the detail—which is important—I want to be absolutely clear that I greatly appreciate the invaluable work the Joint Committee does in holding the Government to account for the secondary legislation that they produce. I am especially grateful for the clear way the committee has expressed its views in its recent report and, indeed, for the extensive engagement between its officials and my own during the drafting of these regulations.

The committee’s conclusion, as I understand it, is on the basis that the regulations involve subdelegation to the Office for Students and that this is not adequately authorised by the parent Act. Having carefully considered the concerns raised by the committee, and having again consulted those who drafted the provisions, the department respectfully disagrees. The Government’s view has always been that the Act was deliberately designed to enable regulations to refer specifically to named categories of registered provider, as created by the OfS.

In technical terms, that was achieved by the inclusion of a specific provision—Section 119(5)(d), which states that regulations made under HERA may,

“include provision framed by reference to matters determined or published by the OfS (whether before or after the regulations are made)”.

The division of the register into different categories is then expressed by the Act to be precisely such a matter that the OfS “determines”. That is clear if one reads the words of Section 3(2), which uses the word “determines” when it gives the OfS the power to divide the register into categories.

The net result is that regulations made under HERA, including these regulations, may lawfully include descriptions framed by reference to the registration category of a provider. There may be reservations, perhaps strongly held, about whether this was the right approach as a matter of principle, but I believe that Parliament expressly authorised it when passing HERA, as we specifically referred to an intended use of the power in the very way proposed in this instrument. This is reflected in Hansard, where I gave an example of the use of the power under Section 119(5)(d) as one that refers to part of the OfS register. I hope that that reassures the House that what we propose in these regulations is both a legitimate use of the powers given by HERA and consistent with the statutory scheme as the Government described it when we sought Parliament’s approval to enact it.

In summary, the transparency condition and financial support regulations work together to enable the Office for Students to promote access, participation and student choice across all higher education. Together, they are part of the vital foundations for the new regulatory framework that will give the Office for Students the tools to deliver sector-wide reform and ensure that higher education delivers for every student. I beg to move that these regulations are approved.

My Lords, I very much welcome these regulations. For a long time since the introduction of the higher-level fees, there has been a large expenditure by universities on trying to widen access, but to my mind it has been carried out in a most disappointing manner. Universities are mostly research institutions that understand how research works, but a lot of these expenditures have not been accompanied by evaluation, by publication of what does and does not work or by any sharing of expertise between institutions so that this common enterprise can work better.

I hope that there are some but I have not seen any examples of universities working with other elements of government or the third sector to try to tackle the underlying problems. A lot of these problems are deep, as your Lordships’ committee on seaside communities is finding out. The principal reason that some of these communities do not send many people to university is not down to what the universities do or do not do; it is down to the problems inherent in those communities. The best way for universities to tackle this problem is by working with other agencies active in those communities to try to achieve something wider and more co-ordinated. I would love to see more examples of that.

I really hope that my noble friend can assure me that this decade of bad practice is coming to an end, that we will be able to see exactly how universities are spending this money, that the Government, through the OfS, will expect publication of evaluation, that they will expect collaboration, and that they will expect a sector-wide drive towards better performance with a lot of the collaboration that that requires. I think that everybody is aiming in the same direction in terms of what we want to achieve, and it is very unsatisfactory that such huge expenditures are not being used efficiently and effectively.

My Lords, I see that my noble friend Lord Watson has a Motion on the Order Paper. Does he intend to move it?

My Lords, I want to comment very briefly as a member of the Joint Committee on Statutory Instruments. I would like to thank my noble friend for the detailed way in which he has responded to and commented on the committee’s 30th report. His remarks will be studied with great interest by members of the committee. I have one question to put to him. When producing its report, the Joint Committee on Statutory Instruments understood that the register may not be finalised or published by the time that Parliament is expected to approve the draft regulations. Will my noble friend tell us the current position?

My Lords, I want to focus on what the Minister told us about attempts to widen access and increase transparency, particularly through a better set of data. The noble Lord will know, because I have had this conversation with him in the past, that it is profoundly important not only to increase access for disadvantaged students and students from diverse backgrounds across the sector but to have people at the top among the academic staff and university leadership, particularly in the elite universities, who represent diversity. The figures we have seen from the regulators—there is precious little data in this regard—indicate either that data is not being compiled or that the universities are not prepared to share it with us. Will the noble Lord reassure me that there are genuine attempts on the part of our elite institutions to prepare the ground for diverse minority leadership within institutions—certainly more diverse than currently exists? I have shared with him the figures for, for example, Oxford, where women hold nine of the 44 leadership positions, and not a single ethnic minority.

My Lords, as ever with such regulations, our task is not to oppose but to seek clarification from the Government over rationale, detail or implementation. I thank my noble friend for her intervention because, although these regulations are to do with students, the point she makes is extremely valid about having diversity elsewhere in universities.

The regulations are largely uncontroversial, but I have some queries. How much resource will it take for universities to supply this information? We note that there is no impact assessment for this. Obviously, the numerical statistics received—of applications received, offers made and accepted, completions and awards made—are fairly straightforward. Gender will probably be straightforward too, although it can be more complex than the male/female of yesteryear, but ethnicity and socioeconomic background might not be straightforward. Will the Government make use of UCAS’s multiple equality measure, which records the multifaceted nature of educational disadvantage? This measure groups the UK’s 18 year-old population into five groups according to their levels of disadvantage. It incorporates sex, ethnicity, the POLAR3 quintile, school type and eligibility for free school meals.

Disadvantaged students will normally be a matter of family income. However, if students are over 18, they are officially adults and, in theory, should have responsibility for their own income rather than be dependent on parents. We can assume, however, that the socioeconomics of this depends on the family rather than on the independent student. There are many families with very limited money but who are very strong on aspiration and work ethic. Young people from these backgrounds may be less disadvantaged than those from backgrounds that a teacher friend of mine once described as, “Three Mercedes, but no books” families: money but no cultural depth nor work ethic. I doubt the statistics will take account of them, although their achievement may be harder won than some of their poorer colleagues.

I note that a review has been ruled out but the OfS will monitor the effectiveness in relation to widening participation. We welcome the advances that the Minister has already mentioned. UCAS has concluded that in universities with the highest entry requirements the entry gap is widest but has narrowed most quickly. It quotes that the most disadvantaged 18 year-olds are 65% more likely to attend an elite university in 2017 than they were in 2011. However, that was starting from a low base rate and, obviously, considerable disparities remain.

We shall be interested to hear in due course how straightforward it is for universities to comply with this data and its impact on widening participation, which I know we all support.

My Lords, I thank the Minister for introducing the first of three statutory instruments relating to the Higher Education and Research Act that we will be debating today—ending the term with a flourish in the twilight zone, which I suspect few of our respective colleagues will envy.

Notwithstanding the technical objections of the JCSI, we will not oppose these regulations. It is clearly important that higher education providers receive the necessary funding to enable them to carry out their teaching functions, and Regulation 5 does this. Provided it is delivered efficiently and fairly then we have no other comment to make in respect of this part of the regulations, although I will have more to say on fees in the debate that will follow this one.

Although higher education providers will regard that part of these regulations as being the most relevant, I have no doubt that the transparency provisions of Regulation 4 will have more long-reaching consequences. This is because the information that providers are obliged to provide under these regulations, as set out in detail in the Explanatory Note, will have a significant impact on the choices made by students—not all of whom by any means are 18 year-olds—when they decide which university and what course to apply for. I endorse paragraph 7.2 of the Explanatory Memorandum, which says that,

“greater transparency is one of the best tools available to drive social mobility”.

We know that many institutions do well in having an inclusive and diverse student population broadly reflective of the population as a whole. Equally, a considerable number do not. The Minister mentioned Oxford and Cambridge universities. A recent survey revealed that several of the most prestigious Oxford colleges each admitted only two black British students as undergraduates in the past three years. Six of Cambridge’s colleges each admitted fewer than 10 black and minority ethnic students between 2010 and 2016. Oxford’s Wadham College is an excellent example, admitting 68% state school students and sitting in the top five college rankings, while making considerable efforts to widen its participation programme with visits to schools. If it can be done at Wadham, I do not see why it cannot be done at other colleges and universities. It is perhaps, a question of priorities. I endorse the view expressed eloquently by the noble Baroness, Lady Falkner, that the need to develop diversity should be extended to management and leadership levels.

The Government regularly declare that widening participation is a key part of their agenda, and the Office for Students states that its aim is to make higher education more representative of wider society. We certainly wish them well with that. However, in nine of the Russel Group’s 24 universities, the proportion of state school students fell over the past year, so it seems that efforts to widen student participation at universities have stalled. It is to be hoped that the transparency provisions of these regulations will help to refocus the recruitment policies of the under-achievers.

There is no doubting the good intentions of both the OfS and the universities, but good intentions are without merit unless they are acted upon. One clear failing concerns the issue of unconscious bias. I repeat a point I made in an earlier debate about the most egregious example of that, which was the admissions process highlighted by UCAS’s own researchers last month when they reported that more than half of all applications flagged for possible fraud were from black applicants, even though these applicants constitute only 9% of the total. That is surely wholly unjustifiable and clearly the result of bias. Whether it is entirely unconscious bias is perhaps a moot point.

As I said, greater transparency in the process is clearly necessary, and we have reason to hope that these regulations can help to provide it. While more free school meals students are going to university than 10 years ago, the increase has not been at the same pace as the number of non-free school meals students going to university. Since 2010, the gap between students from independent schools going to the most selective universities and students from state schools going to those universities has grown substantially. To put it another way, disadvantaged pupils’ progression to university is as far behind that of their more affluent peers as it was seven years ago, which is simply unacceptable.

Of course it is no coincidence that analysis from the Institute for Fiscal Studies has shown that the ending of maintenance grants finds students from low-income families graduating with the highest debt levels, sometimes in excess of £57,000. Labour believes in the reinstatement of maintenance grants because, no matter how much effort universities put into improving their admissions policies and being transparent about the outcomes, much more remains to be done to reduce the barriers that prevent those from underrepresented groups fulfilling their potential. It will be instructive to return to this subject in three years’ time and to assess how effective these regulations have proved to be in widening access to our higher education institutions.

My Lords, I hope that the Minister will forgive me, but I am somewhat confused by the procedure. My noble friend has tabled a Motion to Regret on one of the sets of regulations even though the Minister introduced all of the regulations in his opening remarks. Perhaps I may make a few remarks now on the first of these sets of regulations concerned with transparency before we come on to the data sharing issues in a moment.

No one could have anything against these regulations. It is vital that there is transparency and the Office for Students, which got off to a terrible start in terms of its reputation, the appointments to the board and so on, is at long last starting to concentrate on some of the issues for which it was set up. One of those is to ensure fair access and to encourage universities to publish appropriate data on this. It is an important point, and the Minister’s remarks on that at the outset were well made and I support them entirely.

The essential thing to understand is that the publication of data itself will not improve access. It is a tool to that end, but the critical development is what happens university by university and community by community. My concern with the OfS is that, in setting up this new body and getting into a big exercise in establishing systems, protocols and data arrangements, it will concentrate too much in its first year or two on getting the systems in place and not on actually changing the behaviour of universities. There is some evidence for that already.

The first big announcement the OfS has made is to parade, as if it was some enormous achievement in the history of higher education, a register of providers. A register of providers in itself is an entirely neutral thing. No additional provider has been made available simply by the publication of a register. The fact that this may be the first such register is an interesting proposition but it is not a great development in the history of higher education in this country.

As a former Minister in this area, everywhere I go around the country I can see the enormous challenges involved in widening access. I want to bring the Minister’s attention to one area which I hope he might be able to write to me about after the debate. I do not expect him to be able to respond to my remarks now, but it is an issue of immense concern which does not come to the attention of this House because of devolution. I spent most of last week in Northern Ireland, where the shortage of higher education places is a very big issue. Northern Ireland exports a very large number of students to universities in the UK because there has been proportionately a much lower cap on places in Northern Ireland than has applied in Britain.

I turn to a subject that was raised with me almost everywhere I went, particularly at Queen’s University Belfast. Students and academic leaders told me in graphic detail about the brain drain from which Northern Ireland is suffering as a result of the shortage of higher education places. That in itself is a matter of concern. A large number of students in Northern Ireland are studying in Britain and then not returning home, which is very damaging to the economy and probably also to the wider society of Northern Ireland. However, there is an additional dimension that was forcefully made clear to me: this is a particular issue in the nationalist Catholic community in Northern Ireland because of a decision taken by the Stormont Parliament a generation ago not to establish a university in Londonderry. I looked into the history of the decisions that were taken in the 1960s and 1970s. It was decided to set up a new higher education institution in Coleraine rather than Londonderry which, amazingly, still does not have a proper higher education institution. That is greatly resented by the community in Londonderry and acts specifically against the interests of the Catholic community.

Normally this would be a matter for the Northern Ireland Assembly to concern itself with, and indeed part of the reason the Assembly exists is to address issues like this. However, it has now been more than a year since the Northern Ireland Assembly met. The two leading parties in Northern Ireland have conspired to keep the Assembly from sitting. There is no Government in Northern Ireland. Therefore, in this as in other areas such as equal marriage and abortion, this Parliament must surely start addressing these issues if there is no other democratic outlet for Northern Ireland to make its views heard, and for them to be addressed as they should be by Parliament.

This issue of higher education places in Northern Ireland, which goes directly to the issue of access, looks to be of fundamental importance. Will the Minister undertake to do two specific things? First, will he let me know what the powers of the Office for Students are in Northern Ireland? Does it have powers in Northern Ireland equal to the rest of the United Kingdom? Can it get into these issues of access? Secondly, will he ask the Office for Students to look, if it can, at fair access not regarding the number of places, but between different parts of the community in Northern Ireland, because it is clearly an issue that is very strongly felt there?

My Lords, I thank all noble Lords for their broad acceptance and approval of these regulations. I thank my noble friends Lord Lucas and Lord Lexden, the noble Baroness, Lady Falkner, and the noble Lord, Lord Adonis. I will cover all their questions in turn.

On the big picture, these transparency regulations are very important as part of the setting up of the OfS and its very remit. The whole point is that there should be transparency and universities should be seen to provide value for money for all students. At the end of the day, outcomes are also important: students going in, what they do when they come out and where they go. Linked into the LEO figures we can then better know who is coming in, who is coming out and how they get on. Ultimately, that helps to market our universities at home and abroad, particularly, as I said at the beginning of my speech, looking at social mobility and disadvantaged students who—for first time in some cases—have the chance to go to university and a great opportunity for a career.

The noble Baroness, Lady Falkner, made an interesting point about elite universities and sharing data. That leads into something that the noble Lord, Lord Adonis, will feel strongly about, which is transparency at vice-chancellor and senior leadership level at university. He and I agree on this. He knows, as I do, that we are putting as much pressure as we can on all universities, including the elite ones, to act with restraint. They obviously have a duty to publish certain figures relating to their salaries. I will not go into the details of that; I think that the House knows about it. That will help to lead to that restraint, but it will also help to raise the profiles of the universities abroad. People will be able to look at the figures and at what the universities do, how they operate and how they manage themselves. I hope that it will be a good story and that more people will come to university. There is a linkage there.

My noble friend Lord Lexden asked about the current position of the OfS register. I reassure him that it now exists. The OfS recently confirmed that the first 42 providers have been officially registered. The OfS register is now available for anyone on the OfS website. The OfS will continue to populate the register over the forthcoming months.

The noble Lord, Lord Adonis, asked early on in the debate about the sharing of data. Maybe I can give him a little bit more information. The information-sharing regulations enable the OfS to share information with a range of bodies as set out in the regulations, where this is for the purpose of performing the other body’s functions. The OfS will also be able to share information with third parties where it is appropriate to do so and where this is part of an OfS function. There are specific regulations laid down with restrictions for that.

My noble friend Lord Lucas, in welcoming the regulations, asked about the research and evaluation by universities and their sharing of expertise in tackling underlying problems. We have asked the Office for Students to develop an evidence and impact exchange to identify and share good practice on what works and what has the greatest impact.

The noble Lord, Lord Watson, and the noble Baroness, Lady Falkner, spoke about Oxbridge and ethnicity. Wadham was mentioned. “If Wadham can, then why can’t the others?”, one noble Lord asked. I think I said at the beginning that 18 year-olds from disadvantaged backgrounds are entering full-time higher education at record rates, including the most selective universities, which is positive news, but we have asked the OfS to challenge for and encourage more progress, particularly at our most selective institutions. The publication of transparency data by ethnicity will shine a light on where they need to go further, so I hope that provides some reassurance.

The noble Lord, Lord Adonis, asked about the powers of the OfS in Northern Ireland. I listened carefully to his latter remarks and am grateful for his observations. The OfS is a regulator of higher education in England only but, having said that, let me write to the noble Lord, because his remarks were quite expansive and extended to the difficulties that Northern Ireland is facing at the moment. I will read his remarks in Hansard and write a letter to him to clarify that.

The noble Lord also asked about the OfS concentrating too much on setting up and systems, and not on changing behaviours. I do not agree with him. Yes, a key focus this year is for the OfS to register providers, but it has a wide range of other priorities as set out in the Government’s strategic guidance to the OfS published in February, and set out in the OfS’s strategy and business plan. On the back of the Higher Education and Research Act, the OfS is very much up and running. The noble Lord mentioned certain problems that arose, but I am glad that he acknowledged that it is moving forward and making progress on a range of matters.

I hope that I have covered the questions asked. Noble Lords have a keen and understandable interest in the implementation of HERA. There is no doubt that today’s scrutiny plays a vital role in ensuring that the reform promised by that Act is achieved.

Motion agreed.