§ 1.50 p.m.
§ The Parliamentary Under-Secretary of State, Department for Education and Skills (Lord Filkin) rose to move, That the draft regulations laid before the House on 7 September be approved [27th Report from the Joint Committee].
§ The noble Lord said: My Lords, the regulations concern the role of the Director of Fair Access to Higher Education and access plans. Perhaps I may say a few words about how the director's role fits into the overall package of reforms contained in the Higher Education Act 2004. As the House knows, the Act introduced variable tuition fees from 2006 and will provide significant additional funding to institutions.
§ However, higher education institutions can charge higher fees only if they have first agreed an access plan with the Director of Fair Access. The Government are also providing significant resources to improve access to higher education. We are abolishing up-front fees and the deferred fees will be payable only when graduates are earning £15,000, with any outstanding loan being written off after 25 years. Institutions no longer need to collect money directly from students. The Government pay the charge up front and graduates pay over time to the Government. We are greatly improving the student support package through new higher education grants of up to £2,700 from 2006.
§ The freedom for universities to charge higher fees was a something-for-something arrangement; in other words, universities are to take responsibility for managing the potential consequences. Universities can charge higher fees only if they have considered and set out in an access plan the measures that they will be taking to safeguard access. Those plans will show how institutions will recycle some of their additional resources so that the needs of the poorest and most under-represented groups of potential students are not forgotten if fees increase. In practice, we expect that that will mean that universities promise more bursaries for the poorest students and more outreach work, both of which should bring greater benefits.
§ The Director of Fair Access will safeguard access to higher education when higher fees are introduced in 2006 through the approval and enforcement of the institution's access plans. OFFA will be a small organisation that is initially based within the Higher Education Funding Council for England (HEFCE) in Bristol, drawing on HEFCE's staff, expertise and resources. The director will be independent of government and free to do as he sees fit, subject to the Higher Education Act 2004 and the regulations. The Secretary of State's draft guidance states that the director should be well focused and non-bureaucratic in his approach.
§ I shall briefly mention changes that were agreed in the Lords. In doing so, I pay tribute to my noble friend Lady Ashton of Upholland, whom I follow and who steered the Bill so ably through this House. I also acknowledge the significant contribution made by this 1357 House in shaping the policy, especially the role of the Director of Fair Access. The Higher Education Act is better due to this House's scrutiny. I shall give noble Lords the rubric of that. For example, the director cannot interfere with institutions' admissions criteria or academic freedom, for which I acknowledge my noble friend Lady Warwick and the noble Lord, Lord Dearing. The director has a power to identify and disseminate good practice on access—the noble Baroness, Lady Perry. The director's remit may extend to part-time students—the noble Baroness, Lady Sharp. An institution cannot be sanctioned if it has taken all reasonable steps to comply with its plans—the noble Lord, Lord Butler.
§ The Government accepted the amendment of the noble Lord, Lord Forsyth, on gap years, which provided that students who defer entry from 2005–06 to 2006–07 will not be charged fees above the standard fixed fee. The affirmative procedure for content, approval and financial penalties came from my noble friend Lady Warwick, although the Government are going further than that and the regulations before us today are being discussed as a single set. The contributions of those noble Lords show that the House of Lords is not merely a process that we have to get through, but that it adds value to our legislation and policy. I will probably be sacked for saying that, but never mind.
§ The regulations set out the content of plans; the procedure for approval, variation and publication; and how the director may enforce the plans. They also outline a review procedure which can be followed if an institution disagrees with a provisional decision by the director.
§ On the content of plans, the regulations largely reflect the wording of examples in the Act. The purpose of access plans is to ensure that access is safeguarded, so it is only right that they should include the measures that the institution plans to take to attract more applicants from under-represented groups; the bursaries and other financial assistance that the institution will offer to students; and the financial information for them. There is a new addition to the regulations that will not be so familiar to the House. It will ensure that institutions inform prospective students of the aggregate fees that it will charge before they commit to a course.
§ On the approval of plans, the key to the approval process is, hopefully, a grown-up dialogue between the director and an institution. Once approved, plans must be published and a plan can last for up to five years. Plans can be varied once approved with the approval of the director.
§ On enforcement, I would not expect there to be a major need for enforcement action because we are talking about grown-up organisations, but the sanctions decrease the likelihood that one will need to take enforcement actions in any event. We expect institutions to uphold their access plans and dialogue will be an important feature. The director must consider representations from the institution before imposing a sanction. The sanctions are to direct HEFCE or the TTA 1358 to impose financial requirements or to refuse to approve a new plan when the current plan expires. Where they need to be imposed, the financial penalties fall into two categories: the first can be restored to the institution once it has made good any breach and is equivalent to 110 per cent of the breach; the other is not restored, but has a ceiling of £500,000.
§ The regulations put flesh on the hones of the review procedure, including the grounds for a review, if there is new evidence or evidence which the director wrongly disregarded or if he had acted disproportionately.
§ These are important regulations which will give certainty to institutions as they begin to prepare their access plans. I beg to move.
§ Moved, That the draft regulations laid before the House on 7 September be approved [27th Report from the Joint Committee].—(Lord Filkin.)
§ Baroness Seccombe
My Lords, I thank the Minister for outlining the details of the regulations. With the summer Recess behind us, it seems a while since we gathered to debate higher education issues. However, the concerns and objections that we expressed at the time of the Bill have not diminished. With your Lordships' forbearance, I shall briefly highlight them again.
I echo the Minister in commending the Members of your Lordships' House who worked so hard to improve the Bill. As a result, we were especially pleased with the inclusion of the all-important stronger protection for academic freedom; provisions for gap year students; and the improvement to the appeals system against OFFA decisions.
As many of your Lordships know, we on these Benches believe that there is a much better way to raise funds for universities without forcing them to do a deal. Under the Government's scheme, universities would benefit financially only if they let the Director of Fair Access have what has been described as "unwarranted interference" in bodies that should be independent institutions.
That is another sorry example of an attempt by the Government to interfere in a way that they should not. One can only believe that there is a form of social engineering behind the lack of independence of the regulator from the Government. Why do our universities need to be burdened with the added expense of time and money in order to adhere to a Director of Fair Access, with all the paraphernalia of regulation and bureaucracy of the office, only to try to achieve something that is already happening?
Our universities are already doing good work to widen participation. Outreach programmes and summer schools are but two of the common tools already in use to achieve that end. The point that regularly reared its head during the debates on the Bill was that the root of the problem of encouraging wider participation lies in schools and not in the universities, despite it being the universities which will be penalised if they do not carry out government wishes.
1359 I turn briefly to the detail of the regulations. We have always been concerned about the fines that the Director of Fair Access will have the power to impose under Regulation 10. We were informed during the passage of the Bill that if universities did not comply with the regulator they would be liable to fines of £500,000, so we knew what was coming. However, earlier this week, my right honourable friend in another place highlighted the point that although we were forewarned about the £500,000 fines, we were not warned about the provisions under paragraphs (a) and (b) of Regulation 10, thus losing the opportunity to discuss them during the passage of the Bill.
Those bombshell paragraphs allow for an additional 10 per cent on top of the fees charged when a university does not meet the Government's requirements. This additional 10 per cent could be a substantial amount of money. This is an extension of the financial penalties available to the director that we consider to be unwarranted. Surely, in this case the fees alone should be penalty enough on institutions that are struggling financially to be able to carry out their work. Can the Minister explain this significant addition to the House and can he also explain why it was not brought up whilst the Bill was in Committee?
§ 2 p.m.
§ Bursaries are mentioned in Regulation 3. On Monday there was debate in the other place about the compulsion implied by the use of the word "must" in relation to the provision of bursaries by institutions that decide not to charge the full £3,000 fees and thus do not have to provide £300 bursaries. Taking it as it reads, Regulation 3 suggests that every institution has an obligation to provide a bursary, even if it is not charging a fee above the current level and even if it is not charging a fee at all. The Minister in the other place said in response to that debate that he would seek further clarification. I hope that the Minister can provide that here today.
§ What will happen to those universities that charge only a couple of hundred pounds over the minimum fee? Will there be an obligation to provide a bursary from this amount? If so, could there not be a cut in the revenue from fees, again removing money from the pot? We must not forget that during the passage of the Bill it was highlighted that it would cost £1.1 billion to implement, while raising only £900 million. Looking at the details of these regulations and, I expect, others in relation to this Act, it looks as though what money is raised will be spread more and more thinly.
§ Although improved by your Lordships, there was only so much that could be done to the Bill. These regulations are part and parcel of an unwelcome change that undermines the independence of our universities, while imposing extra costs in time, as well as a bureaucracy, on the very people who are trying against all the odds to educate our young people. It is a sad day for students and parents but as a general 1360 election approaches voters will become more aware of the issues and will then have their say on the funding of higher education.
§ Lord Shutt of Greetland
My Lords, I rise to thank the noble Lord for presenting these regulations and to congratulate him on mastering so quickly the brief that has fallen to him.
I too was musing that it does not seem long since we were discussing this and I too have abiding memories of our discussions. One is the incredible unity of the university glitterati. A second memory—and it was mentioned in the thanks that the noble Lord, Lord Filkin, gave those who had contributed to the Bill—is the concern of my noble friend Lady Sharp and throughout the House about people undertaking degrees on a part-time basis. That is the point to which I refer.
We are very much in favour of widening access for all the reasons that I spoke about at the time when we were debating the Bill. I believe that there will be an incredible potential growth in part-time work. Therefore, it is surprising that there is no reference to part-time education in the regulations. It is in the Higher Education Act, at Section 32(1):The Director must perform his functions under this Part in such a way as to promote and safeguard fair access to higher education, (including part-time higher education in so far as his functions are exercisable in relation to it)".But I see no reference in these regulations to part-time education. It would be useful if, in promoting their plans and their response to it, proper accord is given to the business of part-time work. It will be increasingly important.
As the Minister will be aware, this is an Act over which we did not always see eye to eye. But all that is under the bridge. This is what we have and we have to work with it. Therefore, although we did not think that OFFA was needed and that HEFCE could cope with it, we have OFFA and it is very important that there are regulations for setting it up. Therefore, we support that.
§ Baroness Carnegy of Lour
My Lords, the Bill was enormously mangled in the House of Commons in order to get it through. The Government had great problems getting it through before it ever came to this House. We did our best and made some improvements but it was not easy to see that the Bill was going to be workable.
This regulation takes my breath away. It is completely extraordinary to think that we have reached the point—and we have apparently reached it, with the Liberal Democrat Front Bench happily accepting it—where universities are simply not autonomous any more. Our most distinguished universities are going to be subject to these regulations. Some of our universities, which used to work under the government of local authorities, find this kind of regulation very much easier but our old universities, long-standing and distinguished ones, are going to be subjected to detailed scrutiny by this regulator in certain respects that I find completely extraordinary. They will do it on penalty of this enormous fine of 1361 £500,000, as my noble friend said. I would like to read out one or two parts of the regulation because the way that universities are being treated would be laughable if it was not so tragic.
I have been on the governing bodies of three universities and I can imagine how they are going to have to react to this. It will be very time-consuming and they will have to bend their arrangements to the Government's will to an extent that I never thought would be possible. I am really surprised. I do not think that we should say that our universities are autonomous anymore. They simply are not. They are being pushed around by the Government in a very detailed way and will have a big fine if they do not do what the Government want. I am very disappointed to see this regulation. We have to pass it and we will see what happens. It is very disappointing indeed.
§ Lord Filkin
My Lords, in rising to respond to and thank noble Lords who have taken part in the discussion of these regulations, I should not be drawn back into a primary legislation debate by the noble Baroness, Lady Seccombe, which was almost her invitation. However, I shall say that we are serious about trying to ensure that all people of whatever background have the opportunity for their talents to be fully exercised. That is part of what a civilised society is concerned about. If one instances the fact that one in four working class students with eight good GCSEs does not go to university, there are still issues in our society for us to address. They are issues that the vast majority of universities are concerned about, irrespective of Government and other political parties.
I turn to the specific questions that the noble Baroness raised on the regulations, one of which was about why there were the two regulations. That is a question that I asked myself when I was preparing for the debate. First, the matter of 110 per cent is not new. The issue was in the draft regulations published in February 2004 and July 2004. In essence, it operates like this: if either intentionally or unintentionally a higher education institution charges and does not fulfil the obligations to which it has committed itself in its access plan and, as a consequence, benefits by an extra income of—for the sake of argument—£100,000, then there is the sanction of withdrawing £110,000 from the grant that will be paid to it in future. The 110 per cent is specified because, if only 100 per cent were withdrawn, things would simply be back where they started from, and there would be no incentive for the institution to restore the agreement that it had set out and proposed in its access plan. When institutions comply with the undertaking that they have offered in their access plan, as we expect that they shall, the 110 per cent is restored, so they end up not having lost a penny. That is essential, because I suspect that most of these issues will be ones of mistake rather than malice.
It is important that there be an effective, quick and proportionate incentive for institutions to comply. Because that sanction is there, I believe that it will be very rarely needed, because it is clear that there is no net gain or benefit from—how shall one put it?— mucking about".
1362 The second measure, relating to the sum of up to £500,000 is a further sanction that is even less likely to be needed. It is essentially saying that it is possible to envisage, for someone of a particularly suspicious mind, a set of circumstances in which an institution kept on trying it on and did not actually fulfil the undertaking. An institution might make a breach and be sanctioned 110 per cent, apply and get the 110 per cent back, and then constantly go round in that loop. That is extremely unlikely ever to occur, but there is a sanction of a permanent penalty rather than the temporary docking of grant that the 110 per cent achieves.
The noble Baroness, Lady Seccombe, asked whether institutions would have to provide bursaries if they charged only a few hundred pounds over the standard fee. The answer is no, unless they have set it out in their access plan that they put forward to the director that they would provide bursaries. If in their proposal they do not say that they will provide bursaries and the access plan is agreed, there is clearly no obligation on them to provide bursaries. If, however, they said that they would provide bursaries in X or Y circumstances, and that was the plan agreed, they would be obliged to do so.
I agree with the point made by the noble Lord, Lord Shutt, about part-time study. The relevance of part-time study to widening access has always, historically—going back 100 years or more—been massively important in our society. It will continue to be so. While the regulations do not need to use the words "part time", because they can encompass that idea, I agree with him that in putting forward access proposals, consideration of part-time opportunities is important.
I was saddened to hear that the noble Baroness, Lady Carnegy of Lour, was so unhappy about the primary legislation and also, by implication, the regulations. I do not believe that they will take away universities' autonomy. Universities have the freedom to charge higher fees if they want to, not the obligation to do so. The intention is that they are incentivised by the process to consider how they can continue their excellent efforts, in many cases, to widen access. If they want to charge fees, there is a light-touch process for ensuring that they have given thought to doing so, and it must be as non-bureaucratic as possible.
I hope that I have done as much as I can to answer to the questions raised.
§ On Question, Motion agreed to.