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Higher Education (Fee Limits and Student Support) (England) (Coronavirus) (Revocation) Regulations 2020

Volume 807: debated on Thursday 29 October 2020

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Higher Education (Fee Limits and Student Support) (England) (Coronavirus) (Revocation) Regulations 2020.

Relevant document: 30th Report from the Secondary Legislation Scrutiny Committee

My Lords, I will remind us of the background to these regulations and the circumstances leading to the introduction of student number controls. On 4 May 2020, my right honourable friend the Secretary of State for Education announced a package of stabilisation measures for the higher education sector in response to the Covid-19 pandemic. One such measure was the introduction of temporary student number controls.

As noble Lords may recall, following the onset of the pandemic, it was expected that fewer international students would travel to start their first year of study in England in the academic year 2020-21. This was in addition to an already known demographic low of 18 year-olds, and the risk of a high number of deferrals from domestic students. The real risk at the time was that our world-renowned higher education sector would have suffered a drop in fee income, which would have had significant financial implications for many providers.

Further, in the early part of this year, we became aware of aggressive recruitment practices being employed by some higher education providers, as they sought to make up the potential shortfall in student numbers and income by offering places to students to whom they would ordinarily not have made offers, for example, by making wholesale unconditional offers in March. While it is understandable that individual higher education providers would seek to ensure their own financial stability, this strategy could have had serious and detrimental consequences for the sector. It would have caused an uneven distribution of students, leaving some providers with even fewer students and income than they would have planned for, putting their financial sustainability at risk.

To counter this, higher education providers in England were allocated an individual student number control—a set number of students we believed constituted a fair maximum share of student recruitment for this academic year. To accompany this, we also made the Higher Education (Fee Limits and Student Support) (England) (Coronavirus) Regulations 2020. These regulations, which were the subject of rigorous debate in the House, provided that if providers exceeded their individual number, they would face a reduction in the maximum tuition fees they could charge for the academic year 2021-22. The purpose of this was to address the consequences of providers exceeding their allocated numbers, and thereby reducing the tuition fee income available to the sector as a whole, by reducing the sums available to the offending provider through the student finance system in the subsequent academic year.

Additionally, providers in the devolved Administrations which provided courses to English-domiciled loan-funded students were also allocated an individual student number control applicable to those students in the academic year 2020-21. In this case, the regulations provided that recruitment beyond this would result in a reduction in the maximum tuition fee loan available in the academic year 2021-22. The regulations—which we seek to revoke by the instrument we are debating today—set out in law what those reductions in the maximum tuition fee and tuition fee loan amounts would have been. These were short-term measures, to be in place for one academic year only, and were a necessary targeted response to the unprecedented circumstances caused by the Covid-19 pandemic.

However, as noble Lords will be aware, there were unexpected issues with the A-level grading, resulting in the decision to use centre assessment grades, where those were higher than the calculated grades that were initially awarded, so as to avoid some students receiving grades that did not accurately reflect their performance. It then became clear that an unexpectedly high number of students had met the grades required to meet the conditions of the offer for their first choice place at university. This was in large part an issue of timing, with the move to centre assessment grades coming shortly after higher education providers had allocated the majority of their places. As a result, many providers were oversubscribed and would have been at risk of exceeding their student number control if they honoured these offers, through no fault of their own. We therefore announced our intention to remove the temporary student number controls for the coming academic year, a decision that was widely welcomed by the sector and Members across both Houses.

The introduction of these regulations, revoking the original regulations, means that the temporary number controls that were previously notified to providers will no longer apply, nor will the financial consequences of exceeding their student number controls, which would be unfair in these unique and unprecedented circumstances. I beg to move.

My Lords, I thank the Minister for introducing these regulations. Our A-level students this year were so messed about with changes to their teaching and examinations that we must be as indulgent as possible over their university opportunities. When state and disadvantaged pupils missed out on their universities through government incompetence over a flawed algorithm, it was right for universities to try to put it right. Of course, collegiate universities such as Oxford and Cambridge did not have the flexibility to admit more students once they had admitted their first tranche, in spite of some bitter disappointments from bright, disadvantaged students who missed out through no fault of their own but the system.

I have two questions for the Minister. Where universities recruit above their original target, what assurances are there that sufficient teaching facilities will be available? Classes and classrooms have finite capacity, although with so many now resorting to online teaching only, this is not such an issue for many subjects. However, for practical, technical, scientific and artistic subjects, there is a need for laboratory, workshop and studio capacity and in-person teaching. What assurances are there that universities have enough equipment and laboratory space for all the additional students they may have enrolled?

We know from our Chamber that personal presence is far more effective than looming on Zoom. Yet very many students will not have any personal teaching this academic year. Tutorials, seminars and lectures seem destined to be virtual. My grandson, who is in his third year at Glasgow, has been told to expect virtual teaching for all this academic year. This is a far cry from students’ expectations and will inevitably be an inferior form of university experience. So my second question is: what plans do the Government have to reduce tuition fees to reflect such different teaching and learning? To pay £9,000 for a year of Zoom seems very poor value for money.

My Lords, it is right that the Government alter course where necessary, especially where original regulations, introduced in haste, are no longer fit for purpose. With universities initially offering more student places to offset an anticipated reduction in numbers due to the pandemic, those regulations sought to control the amount of money that universities would receive in the next academic year from English-domiciled students to ensure fairness. What do the Government propose to do to ensure that this type of situation does not occur in future if we are still in the same position next year or something else causes a similar situation to arise?

This issue needs also to be addressed across the devolved nations. The original legislation permitted the English student loans finance system to curtail the amount of funding available for English-domiciled students proposing to study in the devolved nations if universities there exceeded their student control number quotas. What discussions have been had with the devolved nations to ensure that in future, if English universities offer more places to students from the devolved nations to gain a financial benefit, they will not be prevented from doing so?

My Lords, I am most grateful to the Minister for explaining the regulations, which are clearly required, but I found myself very much in agreement with the noble Baroness, Lady Garden: students are being given a rough deal. I am disappointed that the Government are not using their regulatory powers to reduce the amount of fees that students are expected to pay. Many of them are having lectures online, and many are required to stay in accommodation because of Covid and are not able to go home, while those who can go home find that they are still required to pay the rent. Although some institutions have offered relief to take account of that, that is no good to the half a million or so students who are in private accommodation.

I suggest to my noble friend the Minister that she consider the recommendations included in the report of the Economic Affairs Committee—which I chair—entitled, Treating Students Fairly, which highlighted that all students from the moment they start their courses are expected to pay interest on the loans they take out to cover their fees. The interest rate charged is the rate of inflation plus 3%, yet the Government are currently borrowing money on a 10-year basis at 0.1%. This is an absolute rip-off. Cannot the Government at the very least cut the rate of interest on student loans to that at which they borrow money or, even better, go back to the previous situation in which students were not required to pay interest at all until they had graduated from their courses?

I also ask my noble friend to consider allowing students to repeat a year at no cost. Many students, particularly those who have no access to practical university experience, might prefer to take a year out and come back. Many of them, of course, are no longer able to find jobs in bars and restaurants to supplement their income. They are having a very bad time, and I do not see anything coming from the Government that recognises it. After all, they are not able to claim universal credit or housing benefit. It is true that some universities have hardship funds, but they are completely inadequate to the scale of the problem being faced.

My noble friend has obviously been thinking hard about protecting the universities as institutions. Could we think a little harder about protecting the students, who are having a terrible time? It is a terrible time induced by a policy which is about protecting the elderly. Young people are seen to be less at risk from the consequences of Covid, but they are taking the brunt of the consequences of the measures being used to combat it.

I thank the Deputy Chairman for the advance notice of the schedule change.

Yesterday, in the internal market Bill debate, the noble Lord, Lord Callanan, found it objectionable that my noble friend Lady Jones of Moulsecoomb used the term hypercapitalism. I refer to this now because this statutory instrument is a second attempt to manage extreme competition between universities. What were once communities of scholars working for the advancement of knowledge are now pushed to operate like cut-throat businesses. The “aggressive recruitment practices” to which the Minister referred are a perfect illustration that the Government might like to study to further their understanding of the term. I draw on the Wiley Online Library discussion of hypercapitalism, which states that

“critical scholars believe that once separate spheres of culture and commerce now overlap … culture and the way of life in a hypercapitalist society becomes subsumed by the commercial sphere”.

Our universities are a case study for that subsuming. They have been pushed to become businesses by the policies of successive Governments over decades.

The original statutory instrument was a small concession from the Government, who were forced by the reality of our current circumstances to move away from their ideology of allowing market forces to run wild. They now acknowledge that there is a deep state of chaos. I am pleased to follow the noble Lord, Lord Forsyth of Drumlean, and others in asking for cuts to student fees—a cut , or perhaps the dropping of all fees this year, given the kind of suffering to which the noble Lord referred. On another occasion, I shall talk about why they should be dropped altogether.

While competition between factories to produce the best tools, or between market gardens for the tastiest produce, might not be a bad thing, competition in the educational sphere, as I noted in our earlier debate on Ofsted inspections, is innately damaging, particularly in the state of confusion we now find ourselves. I can only hope that such confusion helps the Government to see the problems that we are in now and understand the swingeing damage being done by hypercapitalism, which I note the Wiley reference says is also called “zombie capitalism”. I would be interested in the Minister’s thoughts.

My Lords, I am very interested in this debate because student numbers being larger than ever may sound a doubtful proposition, but when I went to Sydney University, that was exactly the situation there. Those who had fought in the Second World War were all allowed to come in in unlimited numbers, and they provided a huge surplus of dentists in Australia. Everything had to be taught on a shift mechanism. Eventually—there were no jobs; they were out building roads and things—they discovered that the National Health Service in London was desperately short of dentists. Hundreds came over and did wonders with the national health treatment, particularly of children.

It is children who I think would benefit from these extra numbers in the schools. It is essential that they be maintained and encouraged to go on. It does not matter what the financial difficulties are. We have to think of the future of these people who have now been offered a place at university. We cannot afford to fail to honour that. It is good that we have these numbers. I support the measures.

My Lords, UCU, the UK’s largest academic union, had to cancel its online congress because it ran into technical problems. Could anything be more ironic, especially when one of the key matters for debate was the union’s opposition to the Government opening universities and the demand that all teaching be online? One does not need a PhD to know that Zoom and Teams are not fool-proof, or lecturer-proof, and are no substitute for face-to-face gatherings. I mention this because the greatest tragedy for students is not fees per se, or numbers, or algorithms, or even being locked up in their halls like prisoners or being accused of killing grannie by a government Minister. The real let-down is being abandoned by the official lecturers’ body and far too many politicians, who have sacrificed quality and personal engagement on the altar of safetyism.

I declare an interest as a visiting professor at the University of Buckingham, and I commend the vice-chancellor and staff of that university, who have worked with the student union to maximise as much face-to-face teaching as possible within the restrictions and delivered that blended learning model. The students have loved it, and so have the staff. Indeed, rank-and-file staff and many of my colleagues around the country from my previous life love teaching face to face but are being stopped from doing so by management and, indeed, their union. It is the cut and thrust of intellectual life, and far better than the stilted, awkward Zoom experience —such as here and now, indeed, in this Room.

Will the Minister commit to championing this higher education model, based on live human interaction, and challenge managements and the UCU which say that non-essential teaching should be done online? I want the Minister to ask what is “non-essential teaching”. It is perhaps a bit like the Welsh Assembly’s non-essential shopping. Any institution that believes it delivers non-essential teaching does not deserve fees or students. I would like to see the Minister and the Government championing face to face far more than they are doing, instead of getting caught up in the technicalities.

My Lords, I welcome this statutory instrument as drawing a line under a particular chapter of confusion in government policy. The real question I want to put to the Minister is: what is going to happen next? What is the government’s future policy on fees and student numbers? At the moment, we have a higher education sector that has no certainty about the financial perspective in which it operates, and there is a duty on the Government to show greater clarity.

I have some sympathy with what the noble Lord, Lord Forsyth of Drumlean, said about whether students should pay the full fee in the present difficult circumstances. However, just to cut the fee alone and do nothing else would gravely damage the financial position of one of the most successful sectors in Britain: the university sector. What we need is comprehensive reform. We need more teaching grant, because that is the only way to compensate for a reduction in fee. As the noble Lord, Lord Forsyth, mentioned, because of the difficulty students have in getting jobs, we need the reintroduction of maintenance loans.

I am an enthusiast for universities. I was, until recently, the chair of Lancaster University. I agree totally with the noble Baroness, Lady Gardner of Parkes, that we need to get more people into university, but we will not do that successfully unless we have a long-term, sustainable funding model, and that is just totally unclear at present.

My Lords, I agree with what most noble Lords have said. Students get a raw deal. I only have to look at my city of Liverpool, which is in tier 3. Students arrive expecting to get the student experience. Polling suggests that 73% of students who decide to go to university away from home to live in halls of residence or rented accommodation do so because they want that student experience. What we are seeing is students trapped in their halls of residence or rented accommodation, in a local community, and having to do nearly all their lectures virtually. Imagine having to do that day in, day out. I suspect when they go home at Christmas quite a large number will choose not to return to university. That is not how we should be treating our students. I realise there are issues and problems, but we need to have a conversation with students. I do not have some sympathy—I have complete sympathy with students in the situation in which they find themselves.

Obviously, if one higher education provider overrecruits domestic students, it affects other HE institutions and, as the report states, disproportionately increases the public funding flowing to it through the student loan system. In so doing, it reduces the available students for other providers and increases the risk of insolvency of some HE providers, which puts further strain on public finances. There is some irony in a party that believes in letting the market decide bringing in these controls, but I will not go there.

This is the first cap on student places since 2012. All English providers get their student number cap. There are few exceptions: brand new providers do not get a cap, and nor do those in the approved registration category. If providers want to recruit more than the student number control, there are two ways they can do so. The first way allows them to bid for up to 250 extra places in a list of subjects. What are the criteria for the list? Why, for example, is architecture on it? Are we short of architects in the UK? The second way allows providers to bid for any number of courses in a selection of healthcare disciplines—very good. But have we given any thought to using, or would it be possible to use, that sort of top-up to recruit students from disadvantaged backgrounds or from black, Asian and other ethnic backgrounds?

What are these caps, and how are they calculated? We do not know how many students each provider can take this year. The Office of Students and the Department for Education have deemed it inappropriate. Can the Minister tell us why? There should be transparency. After all, it is a basic component of a trustworthy system of student number allocation. HEFCE used to do this rather well, after all. How will students retaking A-levels not be disadvantaged? Is there any mechanism for students who might chose to apply for a January start? Otherwise the cap will apply and they may not get a place.

Of course, there are wider considerations which Covid has accelerated. We could see a record number of students dropping out. In the case of first-year students, universities will be losing up to three years’ tuition fee income. Universities are likely to start experiencing more serious falls in income with financially poorer and less prestigious universities being hit first, but richer institutions are not far behind. Instead of waiting for that process of attrition to happen, universities should look at their practices and rather than entrenching old models should look at pioneering new funding structures, increasing access to higher education and, of course, ensuring that students get a proper experience of university.

Finally, can the Minister tell us whether private universities and colleges which offer degree courses included in the cap number?

My Lords, we on the Labour Benches welcome the revocation of the original statutory instrument. We were initially supportive of the principle of the cap, as we could see scope for emerging aggressive recruitment by a small number of institutions. The decision to use a flawed algorithm to determine A-level results led to a great deal of distress and upheaval for schools, students and universities, which we thought was entirely predictable from early on. The belated but entirely sensible decision to use teacher assessments naturally led to an increase in the number of students seeking a place at university this year. That meant that the numbers cap proposed by the original regulations became unworkable and unfair.

It is to the universities’ credit that they were able to respond quickly and flexibly to the disruption surrounding the admissions process and were able to honour their offers. They should be congratulated for the way in which they responded, given that they were simultaneously coping with the farce of the A-levels algorithm and putting in place measures to ensure that campuses were Covid-secure. We record our thanks to the universities that have done a lot in that regard.

We have to hope that chaos does not become an endemic feature of the Government’s crisis management. For example, I am advised that guidance is habitually late from the DfE. Universities complain that the guidance they were promised for 11 October about managing the Christmas end-of-term departure of students has yet to appear. Perhaps when the Minister replies, she can advise the Committee on when that might be published. Can she also confirm that the Government have a special Christmas sub-committee, which, apparently, is reviewing all these issues?

I hope that lessons have been learned; it is right that the Government have listened to teachers, the Labour Party, schools, students and others and pushed back the timing of exams in this academic year to give pupils more time to catch up on the learning that they have lost. Frankly, the decision need not have waited weeks to be delivered, after it was called to be made—principally by the Labour Party but by others, the unions in particular. Although it is a necessary intervention, there are concerns that it will not be sufficient to prevent a repeat of the situation that led to the need to revoke the original order.

All the expert advice suggests that the virus will not disappear by next summer, so I have a few questions for the Minister. The HE sector, parents, students and schools are keen to learn how stability will be guaranteed next year. Nobody benefits from the chaos we had this summer, so will the Government be reintroducing a temporary numbers cap? Can we have early decisions on this issue? Have the Government undertaken an analysis of the impact of the removal of the cap on university finances, and on the current distribution of student numbers across the United Kingdom? What other measures have the Government considered to prevent aggressive recruitment practices in the following academic year? Will Ministers look at the impact of variations in overseas student numbers? Can we be reassured that there will be extensive dialogue with the devolved nations before any changes to the caps are considered? Given the additional number of students now attending university, how will the Minister monitor the student drop-out rate in real time while those students are still at university? Finally, have Ministers given any further thought to the mental health needs of students coping with the stress that they are enduring, cooped up in halls of residence, at a time when they do not have the necessary finances and resources to aid themselves?

Those are a lot of questions. While we are happy to support the order, the Government have a lot to answer for in the way in which they are conducting themselves towards universities, students, parents and the governing bodies.

I am grateful to noble Lords for their contributions this afternoon. In the time available, I shall seek to deal with the many issues that have been outlined.

I say to the noble Baroness, Lady Garden, in relation to capacity for teaching, a £10 million capital fund was made available, recognising the issues that she outlined with physical capacity. The Office for Students oversees that funding, and universities are allowed to ask for additional funding. A number of noble Lords referred to the costs of teaching. Additional teaching grants have been given to subjects that are high cost, such as medicine, nursing and STEM subjects. However, it is important to note that a record number of disadvantaged 18 year-olds, at 23.1%, have gone to university this year. We pay tribute to their hard work.

In answer to the noble Lord, Lord Loomba, we are regularly in touch with the devolved Administrations. As the matters are devolved, there are still some funding arrangements and number controls separate to the student number caps in these regulations which are relevant in that regard. In relation to exams next year, on 12 October we announced that there would be a three-week delay. Next month, we anticipate further guidance and information on contingency plans in relation to next year’s exams, should there be a wave of the virus. We regularly discuss matters with the devolved Administrations.

On the points raised by about finance, particularly by my noble friend Lord Forsyth—I pay tribute to his work on the Economic Affairs Committee—we must remember that universities are autonomous institutions; they are not like schools. Fees are a contractual arrangement between an institution and students—but, of course, the Office for Students is there as a regulator. My noble friend will be aware that only high-earning borrowers repay all the interest on their loan. The majority of borrowers do not fully pay back their loans, with borrowing written off at the end of their loan term. That means that reducing the interest rates would in practice benefit only higher earners and reduce the progressive nature of the student loan system.

On the point raised by the noble Baroness, Lady Garden, we want to see an increasing number of students going to university and taking advantage of that offer when it is appropriate for them. I am pleased to say that we have the admissions data for this year and more than 371,000 English-domiciled students have taken up a place at university.

Once again, I am sad to say, I have to disagree with the noble Baroness, Lady Bennett. Universities have a variety of structures: many of them, as noble Lords will be aware, are charitable in their foundation and have great endowments, and they award degrees and have degree-making powers. Many universities do collaborate, and that is not just something we see with the Russell group. There are many regional collaborations between universities, and many of them are involved very closely with LEPs and institutes of technology and are playing their wider part in the system. Of course, at the moment—this perhaps goes without saying, but I do want to say it—they are at the front line of trying to find a Covid vaccine for us, and they deserve our support.

This is the first time that I have had the pleasure of hearing the noble Baroness, Lady Fox, address your Lordships’ House, to which I welcome her. As we know from schools, there is no replacement for the face-to-face nature of teaching, and I commend the work of the University of Buckingham, which is one of our private universities. In answer to the question raised by the noble Lord, Lord Storey, I say yes: any other institutions in the higher education sector that were regulated by the Office for Students, including private providers, were subject to the cap. The noble Baroness is right that the blended offer is the best offer, and we commend that best practice to other institutions.

On the question from the noble Lord, Lord Liddle, unfortunately we cannot provide guarantees and certainties in any area of life at the moment, but we did bring forward millions of pounds of tuition fees to help the cash-flow situation of universities. We do not know what position we are currently in formally. Obviously, we know the admissions data for English-domiciled students, but, as noble Lords will be aware, many international students start their courses in January, so we do not know the full position of universities’ finances. Along with the Office for Students, we are monitoring this, and there has been the offer of restructuring—thankfully, at the moment, no institution has come forward needing that support. As part of the wider post-18 education review, the Government are carefully examining the Augar report and its recommendations. We are considering our response to that along with the spending review, and the upcoming further education White Paper will be part of our response to that. Hopefully, this will give some certainty to providers and students.

Regarding the behaviour that we saw earlier in the year from some institutions, it is important to remember that one of the fundamental concerns of government was that this was not in the best interest of students, who, at that point in time, were put under pressure to accept an unconditional offer, which perhaps might not have been the one they wanted. We wanted to guard against that.

On the mental health and welfare of students, which many noble Lords have mentioned, the Minister for Universities in the other place, Michelle Donelan, has written to universities outlining their responsibilities in relation to the mental health and welfare of students, particularly those who are self-isolating. There has been £256 million of funding for this academic year in relation to students’ mental health.

Of course there are no maintenance grants anymore, but there is a comprehensive system of maintenance loans, and, as I say, the figures for disadvantaged students going to university mean that we have not seen a drop-off in the numbers of people going to university from those backgrounds, which is of course very important.

Finally, I turn to the comments of the noble Lord, Lord Bassam. Yes, there will have to be particular arrangements in relation to Christmas, but, as I say, we do not know the situation in relation to overseas students. We are in dialogue with the devolved Administrations on the various matters, and we commend all the work that universities have been doing in order to make the offer. Many universities and students have shown enormous resilience. Obviously, this current situation is not ideal for them to study in, but, unfortunately, every sector in our society has been drastically affected by the pandemic, and we are doing what we can to support the sector, offering advice, guidance and restructuring, should any institution need that, as I have said. Therefore, it is right that we take this action to revoke the fee limit regulations in relation to student numbers. I commend these regulations to your Lordships.

Motion agreed.

Sitting suspended.