My Lords, let me start by acknowledging that this is the second day in a row that this Chamber is hosting a long debate, this time with 69 Peers down to speak. There are, I believe, three brave speakers who have signed up for this “second” marathon. I pay tribute to them all—they know who they are; we know who they are. If this House were ever to have degree-awarding powers, a degree in stamina would surely be in order for them all.
The number of Members present is testament to the interest that this Bill is engendering. It is important legislation. I am already struck by the phalanx of highly distinguished academics and those with extensive experience of the university and research sectors who have expressed a strong interest in engaging in debate.
The Higher Education and Research Bill has been carefully developed through extensive consultation and with input from experts, reviews and independent reports. I pay tribute to the important work of my noble friend Lord Willetts, who authored the 2011 higher education
White Paper, Students at the Heart of the System, and that of the Minister for Universities and Science, Jo Johnson, who oversaw last year’s Green Paper consultation and authored the White Paper, published in May, entitled, Success as a Knowledge Economy.
The Bill builds on expert independent recommendations, including from the Gaskell report, entitled Quality, Equity, Sustainability: the Future of Higher Education Regulation in 2015, and Sir Paul Nurse’s review of the research councils, published in autumn last year. Many noble Lords will know that the Minister for Universities and Science has already engaged extensively with your Lordships on a one-to-one basis and in group sessions.
The Bill received robust and constructive debate in the other place. I am pleased to report that the Government listened, reflected and have to date made some important changes as a result. We continue to listen. We welcome further scrutiny of the Bill in this Chamber. I, along with my noble friend Lady Neville-Rolfe, who will lead on the research and innovation aspects of the Bill, look forward to hearing views from all noble Lords. I and the House also much look forward to the maiden speech of my noble friend Lady Sugg, who I am sure will make a valuable contribution to this debate.
Let me first set out how important this legislation is and why we believe it is so firmly in the national interest. The UK’s higher education and research sector is one of our greatest national assets. We are home to some of the best universities in the world, with four institutions in the global top 10 and with 30 in the top 200. From the ancient universities of Oxford and Cambridge, through to the redbricks such as Birmingham and Liverpool, the “plateglass” institutions of the 1960s and other more modern institutions, our universities provide the knowledge, skills and expertise that fuel our economy and have been the foundation of our cultural and intellectual success. This Government recognise that this success is built on the important principles of institutional autonomy and academic freedom, principles that we are preserving in this legislation.
However, let me outline some of the challenges that we now face, which this Bill seeks to address. The world of higher education has changed fundamentally over the past 25 years since the previous major legislative reforms of 1992. The regulatory system is complex, fragmented and out of date. It is a framework that the sector has long acknowledged is simply not fit for purpose, as highlighted by the Gaskell report.
Access to higher education remains uneven. While the proportion of young people from disadvantaged backgrounds going into higher education has increased from 13.6% in 2009 to 18.5% in 2015, applicants from the most advantaged backgrounds are still around six times more likely to go to the most selective universities than those from disadvantaged backgrounds. While the UK has world-class capabilities in both research and innovation, we need to deliver a system that, as Sir Paul Nurse diagnosed, is more agile, flexible and able to respond strategically to future challenges.
Let me set out how this Bill will help us address these challenges and maintain our global standing. We are delivering a robust regulatory framework through the creation of the Office for Students as the principal regulator for higher education, with students at its heart. Operating at arm’s length from government, the OFS will deliver a “best in class” regulatory system. As Clause 2 of the Bill sets out, the OfS will be a champion of choice, opportunity, quality and value for money. The Government recognise that academic freedom and institutional autonomy are cornerstones of our higher education sector’s success. There are robust safeguards in the Bill to ensure the protection of these important principles.
The Bill also introduces a statutory duty on this body requiring it to consider equality of opportunity across the whole higher education sector. We will bring together the responsibilities of the Office for Fair Access and HEFCE for widening access into the OfS. The new Director for Fair Access and Participation within the OfS will be able to look beyond the point of access into higher education and across disadvantaged students’ entire time in higher education.
As I said, our higher education sector is truly world leading but, as the Competition and Markets Authority noted in a 2015 report on regulation of the higher education sector, aspects of the current system could be holding back competition. Competition can be a driver of diversity and innovation. Diversity and innovation within the sector are important because there is no longer a one-size-fits-all model for university education. Indeed, our manifesto committed to supporting such further innovation, including encouraging universities to offer more two-year courses. Students of all ages, part-time and full-time, are now increasingly discerning with regard to value for money and what they want from their degree. We want to see a system that can respond effectively to that demand; a system that takes into account the wide variety of modes of study and provides employers with enough of the right graduates.
Recent research from the LSE shows that doubling the number of universities per capita could mean a 4% rise in future GDP per capita. The first-time entry rate into tertiary education in the UK was 54% in 2014 compared to an average of 61% across other OECD countries. Furthermore, research from the UK Commission for Employment and Skills tells us that nearly half of job vacancies between now and 2024 are expected to be in occupations most likely to employ graduates.
To meet this need, the Bill speeds up and streamlines the processes for new providers to enter the market while maintaining the world-class reputation of our higher education institutions. Let me reassure the House that this does not—and must not—mean a lowering of standards. To enter the market, become eligible to award its own degrees and ultimately call itself a university, a provider must register, pass rigorous entry requirements and undergo tough scrutiny. Let me be clear that this Government believe in building an education system that delivers the skills that meet the needs of our economy. That is why we are simultaneously carrying
out reforms of both higher education and technical education, giving us the best opportunity to ensure that they are complementary.
No matter what or where a student chooses to study, they should be able to access clear information about what outcomes to expect from their course to help them make an informed choice. Through this Bill, we will make more information available to students than ever before. The consumer group Which? said:
“Our research has shown that students struggle to obtain the information they need to make informed decisions about university choices. We welcome measures to give students more insight into student experience, teaching standards and value for money”.
More needs to be done to drive teaching excellence. After consultation with the sector, we introduced the teaching excellence framework, promised in our manifesto and designed with maximum respect for the diversity and autonomy of the higher education sector. We continue to listen to views. The Bill will give the OfS the power to operate the TEF to continue to provide students with robust, comparable information on teaching quality. It will also allow fee caps to be linked with providers’ performance at different levels. The parliamentary scrutiny for setting the fee cap remains the same as it has been since 2004. This will ensure that high-quality providers are able to maintain their income in real terms and give the sector certainty over its long-term funding. It will also provide strong incentives to prioritise the quality of the teaching that students receive. We have seen plenty of backing for these proposals from the sector. Professor Sir Steve Smith, vice-chancellor of Exeter University and board member of Universities UK, said that,
“it is essential that we proceed with the teaching excellence framework (TEF) linked to tuition fee increases, a policy that offers significant benefits for the quality of higher education that are important to both students and universities”.
Noble Lords will not need reminding of the strength of our research base. The UK has a track record of consistently punching above its weight. This is why the Government committed to protect the science budget in real terms in last year’s spending review, introducing the £1.5 billion Global Challenges Research Fund; it is why in our manifesto we made a commitment to grow our investment in research infrastructure, with a science capital budget of £6.9 billion to 2021; and, as we saw in the Autumn Statement last month, it is why the Prime Minister has committed a further £2 billion per year by the end of this Parliament for research and development, including through a new Industrial Strategy Challenge Fund. UKRI’s ability to provide a joined-up, strategic voice is already bearing fruit.
We want the UK to be in as strong a position as possible to meet the challenges of the future, and we want to make it simple for researchers to collaborate on multi- and interdisciplinary research, and to boost support for business-led innovation. As we committed in our manifesto, we are therefore taking forward the recommendation of Sir Paul Nurse to bring together the seven research councils into a single organisation that can, in his own words,
“support the whole system to collectively become more than the sum of its parts”.
UKRI will also include Innovate UK, along with the research and knowledge exchange functions currently undertaken by HEFCE. As Venki Ramakrishnan, president of the Royal Society, recently commented,
“UK Research and Innovation (UKRI) will boost cooperation among the research councils; allow a more flexible, interdisciplinary approach to global challenges; and position research at the heart of a new industrial strategy”.
Innovate UK is named in legislation for the first time. It will retain its own individual funding stream, and grow its support for business-led technology and innovation as a key part of the industrial strategy. As the CBI said:
“Bringing Innovate UK’s business-facing perspective into UKRI can bring strategic advantages and should be used to build partnerships, creating the best conditions for fast growing, dynamic businesses to thrive”.
In the Bill we are also introducing, for the first time, protections for the dual support system, described by the noble Lord, Lord Stern, in his recent review of the research excellence framework as,
“essential, intertwined and mutually supportive”
drivers of the UK’s success in research. It ensures that any future Government should give careful consideration to and take advice on providing proportionate funding for competitive and block grant funding for our universities. The Bill also demonstrates our commitment to the Haldane principle, which was outlined with such clarity by my noble friend Lord Willetts in 2010. Our reforms recognise that teaching and research are intertwined and complementary, with the OfS and UKRI having been designed from the start to work closely together.
I recognise that many of your Lordships feel passionately about our higher education sector and I welcome the scrutiny under which the Bill will be placed. These reforms are overdue and are needed to update a regulatory framework which was fit for purpose two decades ago. The time is right for the Bill and this legislation is needed now more than ever. I know some have said that this is not the right time to bring forward these reforms, in the context of the decision to leave the European Union. I do not to seek to minimise these concerns, but rather to emphasise how important the reforms in the Bill are. We need to secure our knowledge economy so that it continues to be a driver of economic growth, creating jobs and boosting productivity to take the UK from strength to strength.
The Bill will streamline the system’s regulatory architecture, it will give students more choice and opportunity, it will strengthen our world-class research and innovation capabilities, and it will enhance the competitiveness and productivity of our economy. I beg to move.
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