My Lords, I thank the noble Baroness, Lady Wilcox of Newport, for reminding us of the tragedy of Aberfan and the terrible loss of life on that day. I will speak first to the amendments in my name on the lifelong loan entitlement and then respond to your Lordships’ amendments.
The amendments being laid today primarily address the technical underpinnings of the LLE and make other minor corrections to enable a strong legislative framework. We are laying them now to introduce the enabling powers for the Secretary of State that are necessary to the delivery of the LLE from 2025. The Government previously set out that we would table additional amendments, as your Lordships have noted, outlining further detail on the modular fee limit policy of the LLE. Following further policy development and engagement with stakeholders, including debate in Committee in this House, the Government have decided not to lay these before we consult. As noble Lords have noted, these are complex issues and it is essential that our final policy approach is informed by the needs of students, providers and all key stakeholders. This complexity was demonstrated in Committee by some of the questions on the detail and implementation of the lifelong loan entitlement. Given the intricate nature of such legislation, we must not pre-empt further policy design or decisions based on the consultation.
The noble Baroness, Lady Sherlock, asked what the consultation will contain. We intend to seek views on our ambition, objectives and coverage. This will include aspects such as but not limited to: the level of modularity —this will cover the minimum number of credits a course will need to bear to be eligible for funding; maintenance support; how to support quality provision and flexible learning; how to incentivise and enable effective credit transfer; and whether restrictions on previous study should be amended to facilitate retraining and stimulate high-quality provision. We intend to bring further primary legislation following consultation. This will allow us to meet the rollout timetable of the LLE from 2025, as originally planned.
The noble Baroness, Lady Sherlock, describes herself as nerdy; in my world, that is a great compliment. I thank her for her kind remarks about my getting to grips with the role, but I also commend my noble friend Lady Chisholm, who has found herself on an equally steep learning curve. To be clear on the timing of the LLE consultation, we commit to delivering the LLE from 2025. We cannot give the noble Baroness a
firm date today, but it will be lined up so that we can deliver on that commitment. She also asked whether fee limits would require primary legislation; I can confirm that they would.
The noble Baroness also asked why the Government are laying amendments on the LLE now rather than waiting for future primary legislation—I have an instinctive feeling that, if we had not laid these amendments, she might have challenged the Government on our commitment to really delivering on this. Part of the reason is to be absolutely clear that there should be no doubt about that level of commitment.
In terms of the definitions of a module in the Bill, from both a funding and a regulatory perspective, I know that the noble Baroness has been in correspondence with colleagues in the department and I am happy to put a full, detailed response in a letter in the interests of time. The THEA and HERA legislation have two very different purposes. The former makes provision for loan funding via a broad set of regulation-making powers for the Secretary of State; the latter is principally about the regulatory regime—the powers of the Office for Students—and specifically enables the setting of fee limits for higher education courses by the Secretary of State. In Clause 14, new Section 28A(1)(e) modifies Section 22 of THEA by inserting new subsection (2ZA). That enables the Secretary of State to define what “module” means in relation to a higher or further education course for the purposes of making loan regulations.
Clause 15, which is to be amended by the government amendments, takes a slightly different approach due to the different regime that it covers. It clarifies that a module of a “full course”—an HE course, for example, mentioned in Schedule 6 to the Education Reform Act 1988—is itself a category of higher education course for the purposes of Part 1 of HERA 2017 when it is taken separately from the course from which it is derived.
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Finally, the noble Baroness asked whether it was the intention that a module can be funded via the loan book only if it is part of a full course. The funding of modular loans will be delivered via regulations, using the modified powers to THEA under Clause 14 of the Bill, as noted earlier. The policy intention is for the lifelong loan entitlement to fund whole courses—or their component modules, if taken separately—that meet the necessary regulatory requirements and are provided by or on behalf of a registered provider. All registered providers currently offering loan-funded provision should be able to offer modular learning through the LLE. It is not the policy intention to fund modules that are not component parts of whole courses. The Bill would allow for regulations that could include or exclude from funding modules that are not part of a qualification. We will consult on the scope and policy of the lifelong loan entitlement, including seeking views on objectives and coverage, together with aspects such as the level of modularity.
The noble Baroness also asked about the regulations on fee limits and whether these would be introduced ahead of debate on the primary legislation. Any fee regulations would have to follow an affirmative resolution procedure, so there would be a debate in both Houses
if and when the primary legislation has been introduced. I hope that that answers the noble Baroness’s questions, and I thank her for giving me warning of them.
As I was saying, we intend to bring further primary legislation following consultation, and we are still committed to meeting the rollout timetable of the LLE from 2025. As a number of noble Lords have said, we share that vision for lifelong learning to make sure that everyone, no matter where they live or their background, can gain the skills that they need to progress in work at any stage of their life.
As part of the lifetime skills guarantee, the lifelong loan entitlement will be introduced from 2025, providing individuals with a loan entitlement to the equivalent of four years of post-18 education to use over their lifetime. The LLE will create a flexible skills system through which people can build up learning over their lifetime and have a real choice in how and when they study. It will make it easier for students to navigate the options available, and it will encourage provision to meet the needs of people, employers and the economy better. We will endeavour to keep the House updated on the progress of the development of the LLE.
I turn now to the government amendments in my name, which seek to do three things. First, they will clarify what is meant by “module”, in reference to a higher education course. Secondly, they will avoid introducing a potential bureaucratic burden on providers. Thirdly, they will correct a previous error in legislation surrounding the teaching excellence framework. Specifically, Amendment 39 will amend Clause 15, which itself amends the definition of “higher education course” in the Higher Education and Research Act 2017, to make express provision for the regulation of modules.
Currently, the post-18 education student finance systems do not provide for modules. The LLE will transform student finance by supporting more flexible and modular provision. These proposed changes will provide the explicit underpinning for the delivery of modular provision. On Amendments 37, 38 and 39, Clause 15, once amended, will make specific provisions for modules in Part 1 of HERA 2017, which relates to the regulatory regime under the Office for Students. These amendments also reduce the potential burden on providers to provide or publish information in relation to modules under Section 9 of that Act.
Amendment 59 relates to the high-level quality rating, which is currently an award under the teaching excellence and student outcomes framework—TEF—for providers without an approved access and participation plan. Higher education providers with a TEF award currently benefit from an uplift to their fee limit, which means that they are able to charge at a higher level than higher education providers without a TEF award.
There is currently an error in the legislation that could prevent a timely link between TEF awards and a provider’s fee limit. For example, let us consider a provider that does not have an approved access and participation plan. Whether that provider is entitled to the TEF fee uplift in any academic year is dependent on whether it had an award on 1 January in the calendar year before the relevant academic year. This means that a provider seeking to charge the TEF fee uplift in the academic year 2022-23 would be able to
do so based on an award in force in January 2021, rather than January 2022, which was the original intent. This amendment will correct this and ensure that there is a more timely link between fee limits and the TEF, helping to further incentivise excellence in higher education. Amendment 73 to Clause 27 is a related consequential amendment that sets out that the new clause in Amendment 59 will come into force two months after Royal Assent.
Finally, I turn to Amendments 68 and 69, which set out the territorial extent of the provisions contained within the Bill. The LLE provisions extend to England and Wales but apply in relation to England because we are making amendments to the English student finance system. The noble Baroness, Lady Wilcox, asked about our engagement with the devolved Administrations. We have engaged with them on the LLE and on other measures in the Bill, and contact and engagement continue as work on this area progresses.
Overall, we believe that these changes will help pave the way for more flexible study and for greater parity between further and higher education. As I said, we will consult on the detail and scope of the lifelong loan entitlement in due course.
I will now respond to your Lordships’ amendments and I thank all noble Lords for their contributions today. I turn first to Amendment 36, in the name of the noble Lord, Lord Storey. The Government warmly share the noble Lord’s desire to promote lifelong learning. However, this amendment would create significant fiscal and logistical challenges. It has the potential to disrupt our established loan support system in order to accommodate an additional system of grants. This would substantially increase costs to the taxpayer, both in the costs of such grants themselves and in their administration.
The amendment would mean that every individual in England would have a personal education and skills account. A report on this policy was published by the Independent Commission on Lifelong Learning in March 2019, setting out that the maximum total liability to government of PESAs would be £6.6 billion per year. It is worth noting briefly that this figure is likely to be an underestimate, because the PESA envisioned in that report was for a £9,000 sum, rather than the £10,000 suggested here.
The amendment also suggests that a new body would be created to administer these learning accounts for every adult resident in England. This process would have to happen seven years before an individual can first make use of any funds at age 25, and integration of these new accounts within the Student Loans Company’s existing operations would have significant cost and operational impacts. Moreover, there is an opportunity cost to the Government depositing thousands of pounds into these accounts, only to be left idle, waiting for an unknown point of use. This poses a strong contrast to our current loan support, made available at the point of study. Finally, these significant changes would risk delaying the rollout of the lifelong loan entitlement beyond 2025.
Turning next to Amendment 41, from the noble Lord, Lord Watson, the Government’s vision for a four-year post-18 education loan entitlement mirrors the
four years’ full-time undergraduate training recommendation of the Independent Panel Report to the Review of Post-18 Education and Funding. As many noble Lords will be aware, the panel reported following extensive consultation and stakeholder engagement, and sought specifically to promote both uptake of higher technical qualifications and flexible study through this recommendation.
The recommendations made were intended to strike the right balance between taxpayers and students. This amendment would potentially enable much greater cost to be borne by taxpayers than has been proposed by the Government. It is also worth noting that the existing flexibilities for part-time students will remain under the LLE and that part-time study would be able to exceed four calendar years, as needed. This would mean that, as currently, a student could study a course of four academic years at a lower intensity, over, for example, six calendar years, if they desired.
I turn to Amendment 61, again from the noble Lord, Lord Watson. I warmly welcome the interest that he has placed on ensuring that the Government have the powers needed to deliver the LLE, and agree strongly with the underlying principle. The Government believe that at the heart of the LLE is enabling greater flexibility. Where appropriate, learners must be able to accumulate and transfer credit between providers, building up meaningful qualifications over time. The Bill, and the government amendments we have tabled on the lifelong loan entitlement, provide the building blocks of a modular system; we intend to come back with further legislation once we have consulted on how that system should be made to work best in the interests of students.
In developing the LLE, we are working closely with the sector to understand current incentives and obstacles to credit transfer and recognition. We will examine how to support easier and more frequent credit transfer between providers, working towards well-integrated and aligned higher and further education provision, with flexibility that enables students to move between settings to suit their needs. So while we welcome the push behind this amendment, it remains important that consultation informs our approach to credit transfer. We must not predetermine the outcome, nor pin the Government to a path of top-down regulation, without understanding fully the impact on providers and learners.
I will now address Amendments 40 and 45A, tabled by the noble Lord, Lord Watson, on retraining and ELQs. The Government agree that many learners need to access courses in a more flexible way to fit study around their work, families and personal commitments, and to retrain as both their circumstances and the economy change. Developing skills across the country is a key priority for the Government as we seek to build back better from the pandemic.
In April, we launched the “free courses for jobs” offer as part of the lifetime skills guarantee. This gives all adults in England the opportunity to take their first level 3 qualification for free, regardless of their age. The offer builds upon the pre-existing legal entitlement for 19 to 23 year-olds to access their first full level 2 and/or level 3 qualification, which the free courses for jobs offer complements. Through the adult education budget, full funding is also available through legal
entitlements for adults aged 19 and above to access English and maths, to improve their literacy and numeracy, and to access fully-funded digital skills qualifications for adults with no or low digital skills.
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However, I should also note that existing equivalent or lower qualification rules were designed to help maintain a sustainable system. As such, we are designing the lifelong loan entitlement to support students pursuing higher and further education flexibly, but also to share the costs fairly. We want the lifelong loan entitlement to provide value for money to students, the education sector and the taxpayer. The complexity of this balance and the transformative nature of the LLE are among many reasons why we intend to consult on the detail and scope of the LLE before legislating on eligibility. It is crucial that careful consideration of the needs of providers, learners and stakeholders informs our final policy design and that we do not pre-empt the findings of the consultation.
Regarding Amendment 45A, introducing an ongoing review on eligibility into primary legislation before the policy detail is yet finalised may also prejudice the outcome of the consultation. Additionally, the Government believe that a yearly report without an end date could be an undue and non-proportionate burden to be tied to at this stage.
I again note that Amendments 40 and 45A would be out of kilter with similar legislation passed previously in your Lordships’ House in relation to student finance. As outlined earlier, much of the detail of how the system works, such as exact eligibility criteria, has been set out in secondary legislation, and the necessary monitoring and review will be undertaken after changes have been implemented and had time to embed.
On Amendment 43, tabled by the noble Lord, Lord Storey, I can reassure him that the Bill already provides the necessary powers for maintenance support. Clause 14(1) modifies the powers in Section 22(1) of the Teaching and Higher Education Act 1998, so that regulations will be able to provide for maintenance and living cost loans for eligible students taking designated modules of higher or further education courses. The introduction of this would follow consultation, which, as I have mentioned, will cover maintenance support. This amendment is therefore not necessary but I warmly welcome—and the Government agree with—the underlying principle: a need for appropriate support for students while they undertake their studies.
The Bill makes explicit provision for supporting the introduction of the lifelong loan entitlement. The funding of modules of courses will help create a more flexible system of provision across higher and further education. As I have said, much of this work is subject to the consultation on the lifelong loan entitlement, which we will be launching in due course. As such, I would hope that noble Lords will feel able not to move their amendments when they are called.