Dennis Farrington is a Visiting Fellow of OxCHEPS, New College, University of Oxford and co-author of The Law of Higher Education.
The purpose of this piece is to identify changes in legislation necessary to give effect to the proposals in the Green Paper, taking the opportunity to suggest other improvements in the legislative background.
The main elements of the Green Paper with a legislative impact are:
(i) The adoption of a Teaching Excellence Framework leading to the establishment in due course of differential tuition fees;
(ii) The creation of an Office for Students (OfS) incorporating the existing Higher Education Funding Council for England (HEFCE) and the Office for Fair Access (OFFA): the sector-owned UCAS and Office of the Independent Adjudicator (OIA), and the Student Loans Company (SLC) are unaffected;
(iii) Two alternative routes for funding of teaching, either through OfS or through the Department of Business, Innovation and Skills (BIS) with allocations effected by SLC;
(iv) A revised system of granting Degree Awarding Powers (DAP), university title and designation, with a market approach recognising that some existing providers may close.
In relation to (iv), there is no proposal in the Green Paper to examine either the number or the location of higher education institutions, the majority of which (excluding the new universities of the 1960’s) have come into existence in an unplanned way. Instead the Green Paper discusses the ‘architecture of higher education’ not in terms of the number of institutions but in terms of the regulatory framework, simply as building on existing provision and existing providers. Although there have been voluntary mergers (such as the Victoria University of Manchester and UMIST) or incorporation of colleges into universities (such as that undertaken by the University of Hull), it is suggested that the power to force closure or merger on economic grounds is taken in a new Higher Education Act. As it is, there will inevitably be an increase in the number of universities in England.
The terminology used follows the Council of Europe Framework noted in Chapter 2 of The Law of Higher Education: the Framework was originally drafted in 1998, published in 2000 and used, in amended form, in advice on higher education legislation internationally. Generally speaking, and as appropriate in a common law country, the current English legislation from 1988-2004 is compliant with the Framework and it is suggested that this would also be true of the proposed legislation. The Framework allocates subject matter to three Tiers: Tier 1 which is primary legislation, Tier 2 which is secondary legislation (including in England Royal Charters and equivalent), and Tier 3 which includes the internal legislation of institutions within their own authority (although, as in England, many of the Tier 3 provisions are subject to external approval, in this case by the Privy Council.)
The new reference to students’ rights as consumers, broadly advocated by the present author in terms of some form of ‘student contract’ since 1992, and also by his co-author David Palfreyman since at least 2006, has been given impetus by the work of the Competition and Markets Authority, referred to in the Green Paper. Thus any new legislation should take full account of this separate development.
Currently, the primary legislation which governs the subject matter addressed in the Green Paper is a complex jigsaw of public general statutes and is far from being codified:
In principle all of these provisions can be repealed, and such content as is necessary for the new ‘level playing field’ can be re-enacted with amendments in a new Higher Education Act.
In addition there are over 40 public and private Acts dealing with the powers of individual institutions from 1571 to 2004, most of which are outdated, and company law dealing with institutions run by companies, or those attempting to register ‘sensitive’ names including the word ‘university.’ All of these should be examined, and out of date/inconsistent legislation should be repealed.
As the Green Paper is clear that ‘academic freedom’ must be protected, there are potentially also (i) s.43 Education (No 2) Act 1986 (E2A86) (as amended in 1988 and 1992) dealing with free speech: note s.31 Counter-Terrorism and Security Act 2015 (CTSA) in this respect; (ii) the provisions of Part II Education Act 1994 (EA94) dealing with student unions. These provisions can (and should) be incorporated into a new Higher Education Act.
Tier 1, as adjusted to the English system, should include the following (in bold, with a note of current legislation and how it might be changed in accordance with the Green Paper, in italics):
Define higher education: S. 120(1) ERA in a rather roundabout way defines ‘higher education’ by reference to Schedule 6 which defines courses of higher education, to distinguish it from further education. This is the only extant definition in law: the Higher Education Statistics Agency (HESA) UKPI definition is that ‘[higher education] students are those students on courses for which the level of instruction is above that of GCE/VCE A levels or SCE Highers/Advanced Highers.’ S.579 (1) Education Act 1996 (EA96) uses the same definition as ERA; S.1 (4) EA96 (as in its predecessor, the Education Act 1944) excludes higher education from the statutory system of education.
While the Green Paper does not directly address this issue, it is suggested that there should be a clear definition of higher education (and/or tertiary education) in the main text of a new Higher Education Act in relation to the Regulated Qualifications Framework (RQF) rather than by reference to a Schedule.
Define types of institution delivering higher education and define and regulate the use of the word ‘university’: s.77 FHEA provides for the grant of the title of university by the Privy Council and s.39 THEA prohibits unauthorised use of the word ‘university’ except where granted under legislation (i.e. ERA/FHEA, Companies Acts and some private Acts) or by Royal Charter under the prerogative. Nothing in the existing legislation sets out to define a higher education sector (a term appearing in s.122A ERA without further definition) and then to determine how it should be organised. The result is that the sector consists primarily of universities which have developed over time in an uncoordinated way, and setting aside the Universities of Oxford and Cambridge which as civil corporations are extensively regulated by legislation from 1571 onwards, about a third are founded by Royal Charter or equivalent , the rest being either run by higher education corporations or companies under the provisions of ERA/FHEA, taken over from institutions run by local authorities pre-ERA, and converted from polytechnics and colleges of higher education following the enactment of FHEA. Some universities are specialised (e.g. the University of Law, the Royal Agricultural University), and the category includes institutions with ‘university college’ in their titles, (e.g. University College Birmingham, University College London) but which are not ‘university colleges’ as defined by legislation. There is also a number of colleges of higher education and further education with degree courses validated by universities and one remaining local authority institution (the Guildhall School of Music and Drama, owned, funded and managed by the City of London Corporation). To address a long-standing confusion, s.40 THEA provides that university colleges [as such] are not to be treated as universities. These are the only ‘definitions’ in the legislation.
The Green Paper proposes access to university title should be available to a wider range of providers and that universities should not be limited by the size or location of the student body. It proposes reducing the number of students or potentially even removing the student numbers criterion for university title. The consequence is that there would no longer be a need to distinguish between a university and a university college (except in the specific case of constituent colleges of universities). The Green Paper envisages creating a ‘level playing field’ for all providers, which it is suggested requires a clear definition both of higher education (as above) and of the different types of providers: universities, university colleges (while they exist), colleges of higher education, colleges of further education, including private providers as in the next paragraph. It is suggested that there should now be a clear definition of types of institution. As in the case of DAP below, any proposal to remove the Privy Council from the process of grant of university title would be a change of historic significance.
Permit creation of private institutions: There is no restriction on any individual or organisation creating a private higher education institution and calling it ‘XYZ Higher Education College’ run by ‘ABC Ltd’, but the prohibitions mentioned in s.39 THEA, coupled with the earlier ss. 214-216 ERA relating to unrecognised degrees and the provisions of The Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations 2014, SI 2014/3140 effectively control this sector as far as universities and degrees are concerned.
The Green Paper encourages the entry into the market of more ‘alternative providers’ created in the private sector but to protect students from market failures envisages a scheme for financial protection of students enabling continuity of courses where institutions fail. This would require a provision which is common in other European countries requiring a legal charge over assets, a bank or similar guarantee, and overrides any provisions of bankruptcy/insolvency laws. The Green Paper envisages this would apply to all providers. Going further, it is suggested that all possible words (e.g. College, Academy, Institute, School) identifying an institution as being in the higher education sector should be regulated by amendment of the 2014 Regulations.
Delimit circumstances under which institutions may be accredited: While there is no direct equivalent of ‘accreditation’ in England, degree-awarding powers other than those granted by Royal Charter or equivalent or by other primary legislation are vested in the Privy Council by s.76 FHEA which also (in s.76(4)) protects institutional autonomy . It should be noted that the power to award degrees derives originally from the Holy See, and is an exercise of the royal prerogative, not subject to parliamentary scrutiny (unlike the grant of a charter, which is ‘laid before Parliament’ under the College Charter Act 1871).
The proposal now is that all new DAPs are granted on a renewable basis. This implies that all existing perpetual DAPs remain in place. The Green Paper states that it is ‘vital that we support the opening up of opportunities to enter the sector at the elite level of DAPs and university title with a framework which protects students and upholds standards.’ So the new system would refine and expressly provide for sanctions such as the suspension and removal of DAPs and university title from any provider in appropriate circumstances. ‘We would only use this power in the event of very serious concerns arising, and would underpin it with a transparent, evidence-based and rigorous process around its use.’ So it is suggested that an express power to withdraw both perpetual and renewable DAPs is vested by legislation either in the Privy Council, or to ensure ‘a transparent, evidence-based and rigorous process’ that the secretive Privy Council’s role is replaced by a statutory system of DAPs granted by the Secretary of State subject to affirmative resolution. The Green Paper acknowledges this: ‘One possibility would be to remove the role of the Privy Council in making decisions about DAPs, university title and university college title.’ This proposal of course completely destroys the mystique (glamour, romance…) surrounding the concept of ‘degree’ as part of the sovereign’s role as the ‘fountain of honour’ and should presumably only be effected after careful consideration. The quality assurance system is an important element influencing the grant, extension or withdrawal of degree awarding powers so the legislation must set out how this is to be regulated. The Green Paper also suggests that DAPs could be given to non-teaching bodies to increase the options for validation. This would require specific legislation. To avoid confusion, it is also suggested that the power of the Archbishop of Canterbury as a ‘Recognised Body’ (under s. 214 (2) ERA as amended by s. 8 (48) FHEA) to award degrees under the Ecclesiastical Licences Act 1533, other than purely honorific, is revoked.
Describe how public institutions are created, merged, or closed: In England, for the present purposes, the word ‘public’ is used in the sense of ‘publicly-funded.’ Ss. 121-128 ERA (and Schedules 7 and 7A – restated by FHEA) set out the mechanisms for creating and dissolving higher education corporations (established originally between the enactment of ERA and April 1989 from pre-existing local authority polytechnics and higher education colleges, accompanied by the demise of the National Advisory Board) and for approval of their governing instruments, and ss. 129-30 ERA deal with designated institutions run by companies (e.g. the former ILEA polytechnics). Otherwise most pre-1992 universities and their equivalent and colleges of some universities were created by Royal Charter or equivalent, or by Act of Parliament, or incorporated as companies under earlier names.
The Green Paper makes one proposal: to allow the higher education corporations to dissolve themselves (rather than require the Secretary of State to do so by Statutory Instrument), and transfer their property, rights and liabilities to another HEC (e.g. Wimbledon School of Art HEC to University of the Arts London HEC in 2006) or a different form of corporate body (e.g. Leeds College of Music HEC to Leeds College of Music Ltd, 2011). At present transfers can only take place to (i) any person appearing to the Secretary of State to be wholly or mainly engaged in the provision of educational facilities or services of any description; (ii) any body corporate established for purposes which include the provision of such facilities or services; (iii) a higher education funding council. The body to which property, etc. is transferred must be an educational charity, or the funds etc. must be transferred on trust to be used for charitable purposes. In principle an HEC would, subject to the replacement of s.128 ERA, be able to transfer its property, etc., to a for-profit company as well as to a company limited by guarantee. There is one university run by a company limited by shares with charitable status: the Royal Agricultural University. The other ‘company’ universities are limited by guarantee.
Provide for and delimit extent of autonomy of different types of institution: In general, this is regulated by limiting the powers of the Privy Council (s.76 (4) FHEA), the Secretary of State (s. 68(2) (b) FHEA), apart from cases of financial mismanagement (s.81 FHEA) and the Funding Councils (s.65 FHEA, relating to the Financial Memorandum, since 2014 the Memorandum of Assurance and Accountability) to interfere in academic autonomy.
The Green Paper states the government’s intention to ‘protect the institutional autonomy and academic freedom that has underpinned the success of English higher education.’
Delimit the legal personality of institutions: In English law, chartered corporations have all the legal capacity of natural persons; through successive amendments to s.124 (2) f ERA by Schedule 9 (15) Learning and Skills Act 2000 and s.26 Further Education and Training Act 2007 the higher education corporations are placed on a broadly similar legal basis in practice.
The ‘level playing field’ envisaged in the Green Paper, including the conversion of higher education corporations to limited companies regulated by company law should result in the removal of any remaining anomalies.
Define arrangements for certification, recognition of diplomas, etc.: In England, bodies with degree-awarding powers are not subject to external control of this process, and s.76 FHEA specifies that powers granted under the provisions of that Act include grant of degrees to staff, joint and honorary degrees and the power of revocation.
No specific proposals are made in the Green Paper, although there is the question of potential revocation of DAPs.
Prescribe in general terms how public institutions are governed: The system of internal governance in England varies considerably, and is regulated in primary legislation only in the case of higher education corporations (s. 124 ERA as amended, Schedule 7A ERA, reformed in FHEA) and designated institutions (ss. 129-130 ERA as amended), although any new Charter (which includes Statutes as a Schedule) has to be laid before Parliament under the College Charter Act 1871. Apart from the cases of the Universities of Oxford and Cambridge, the standard model set out in Charters, Acts of Parliament and Articles of Association/Government is a split system of corporate/academic governance generally known by the names Council/Senate.
HEFCE has suggested that there may be a role in quality assurance for governing bodies: traditionally this has been the function of Senates or Academic Boards, although in some charters etc. there is provision of governing bodies to disallow any decision of the Senate or equivalent. Some consistency of approach would be welcome. The Green Paper also states that ‘providers would not be required to seek approval to individual changes to their governing documents and would be free to make changes as and when best suited them to meet their business needs.’ This switch from constitutional mystique to what is needed to run a business efficiently would be a complete break with the past since at present, any changes to Charters and Statutes, Articles of Government, etc. which have not been ‘de-regulated’ over the past decade have to be approved by the Privy Council in accordance with the terms of Charters or s.129A ERA. In the case of the Universities of Oxford and Cambridge, these changes are approved by the Universities Committee of the Privy Council – so adoption of the proposal would also require repeal of s.7 (1) Universities of Oxford and Cambridge Act 1923 (as amended by the Constitutional Reform Act 2005) and result in one less task for the Lord President and the Archbishop of Canterbury, inter alia. Perhaps one can deduce the train of thought from the learned judge’s finding in ‘University of Wales v London College of Business Ltd  EWHC 1280 (QB)’ that the University was a ‘commercial entity, carrying on business for profit.’ Not perhaps strictly accurate, but it illustrates the trend.
Prescribe in general terms how public institutions are funded: Funding from public sources is regulated by the provisions of Part II FHEA which includes the establishment of the Higher Education Funding Council for England (HEFCE) and its functions, which include responsibility for quality assessment in s.70. Funding from fees paid by UK/EEA undergraduate (first cycle) students through the Student Loans Company or privately is regulated by Part II THEA as amended by HEA, which introduced the concept of ‘Fair Access.’ Otherwise institutions are free to charge non-EEA first cycle, and all other categories of student, whatever fees they decide, and to raise funding from other sources. Universities generally are limited in the use of public funds, and in borrowing, by the terms of the HEFCE Memorandum of Assurance and Accountability. The issue was highlighted in 2012 when De Montfort University secured funding from private investors via a £110 million public bond, after securing an Aa1 credit rating from Moody’s – the second-highest possible from the agency. HEFCE gave formal consent.
The Green Paper envisages a new approach to funding for teaching, either via the OfS/SLC or via the BIS/SLC with the majority of HEFCE’s functions being transferred to OfS, with the possibility of it contracting some functions to other agencies (as HEFCE does with QAA).
Delimit the conditions that may be attached to funding: Funding of the HEFCE by the Secretary of State is subject to directions under s.81 FHEA, and funding of institutions by HEFCE is subject to conditions under s. 65(3) FHEA. S. 65(4) prevents HEFCE from interfering with the financial autonomy of institutions to seek funding from other sources.
There will be a need to replicate these provisions in new legislation when HEFCE’s functions are transferred.
Prescribe arrangements for financial audit: S.135 ERA and s. 53(2)(b) provide that the accounts of higher education institutions in receipt of funding under s.65 FHEA are subject to inspection of their accounts by the Comptroller and Auditor General under the National Audit Act 1983 as amended by the Budget Responsibility and National Audit Act 2011. HEFCE through its Memorandum of Assurance and Accountability and its Code of Audit Practice also prescribe requirements for external and internal audit: pre-1992 Royal Charters normally include provision for external audit.
No changes in the Green Paper apart from the transfer of functions from HEFCE.
Delimit the extent to which institutions are required to report to the state: S. 69(1) (a) FHEA requires institutions to provide HEFCE with such information as they may require for the purpose of the exercise of any of their functions, and such information is processed by HESA. The first regulations in 22 years made under s.79(c) FHEA: the Education (Prescribed Courses of Higher Education)(Information Requirements)(England) Regulations 2014, SI 2014/2179 bring any courses designated under the student support system under the definition of ‘prescribed’ courses in s.79. (‘Prescribed’ is defined in s.579 (1) Education Act 1996, replacing a similar definition in s.114 Education Act 1944). This then extends the information requirements to ‘alternative providers’ although these did not exist when FHEA was enacted, so the legal basis for the Regulations is at least arguably absent.
By adopting the ‘level playing field’ proposed in the Green Paper, the new legislation should apply the same information requirements to all providers.
Prescribe the extent of accountability of governing bodies for use of funds: S.65 (3) FHEA makes it clear that HEFCE funds are provided to the governing body, which then has the responsibility to ensure that they are used for the purpose for which they have been granted. Student tuition fee loans are taken out by the student, but paid to the university or college (up to £9000 in most cases, up to £6000 for private providers). Charters and Statutes and the equivalent place financial responsibilities on governing bodies.
Although the source of funds may change, there is no proposal to change the responsibility of the governing bodies.
Prescribe in general terms arrangements for quality assurance: S. 70 FHEA requires HEFCE to establish a Quality Assessment Committee, now known as the Sub Committee for Teaching, Quality and the Student Experience. The statutory function is discharged through an arrangement with the Quality Assurance Agency, which at present is not mentioned in any legislation. In 2009, the Sub-Committee reported that the then current audit method was not flexible or responsive enough to keep up with the pace of change in English higher education, and recommended that the method should be changed for the next round of audits. In 2015 HEFCE published a consultation on new proposals for quality assessment.
The Green Paper refers to the HEFCE consultation, and the ongoing process of determining the future of quality assurance.
Provide for academic freedom of staff and protection against arbitrary sanctions: It is commonly asserted that this protection is found in the provisions of s.202 (2) ERA relating to the duties of the former University Commissioners who, while bringing an end in the period after 1988 to ‘academic tenure’ by putting in place a ‘Model’ statute, were required to have regard to aspects of academic freedom as set out in that subsection. However, many universities have, with the consent of the Privy Council, repealed the relevant statute although some have adopted the s.202 (2) formula in their Charters, Statutes or Ordinances, and it also appears in the Articles of Government of higher education corporations, etc. It is also referred to in s.31 Counter-Terrorism and Security Act 2015, designed to address fears that the requirements placed on institutions by the Act would interfere with academic freedom.
The Green Paper asserts that the government wishes to protect academic freedom and institutional autonomy but it is not clear exactly what is meant by these expressions. In respect of academic autonomy of institutions, the law broadly correlates with the ‘Sweezy’ freedoms (named after a McCarthy era case in the US Supreme Court: ‘ the four essential freedoms of a university [are] . . . to determine for itself on academic grounds who may teach, what may be taught, how it should be taught, and who may be admitted to study.’ Otherwise the UK as a whole is rated very highly in the recent European Universities’ Association Autonomy Scorecard, as assuring the appropriate balance of institutional autonomy and accountability of publicly-funded higher education institutions, including the right to decide, within a basic framework of good governance, on a range of issues of governance and management, to ensure the most cost-effective use of public funds. There is no single ‘European model’ for this but a useful start is the Recommendation CM/Rec (2012)7 of the Committee of Ministers of the Council of Europe ‘On the responsibility of public authorities for academic freedom and institutional autonomy’.
There is an extensive set of statutory instruments made under the primary legislation in Tier 1, plus the Royal Charters granted under the royal prerogative over a long period to many universities and colleges.
Among the former are the Education (Universities Funding Council) Supplementary Functions Order 1992, the Education (Designated Institutions in Further and Higher Education) (Interpretation) Order 1993, which are important for the system as a whole, then the frequently amended Education (Listed Bodies) and (Recognised Bodies) Orders, and similarly the Education (Student Support) Regulations, the Higher Education (Basic Amount) and (Higher Amount) Regulations and the Student Fees (amounts) and (Approved Plans) Regulations. Certainly the first two of these can simply be incorporated into new primary legislation. It may be possible to make alternative provision for the Listed and Recognised Bodies Orders. The student support and fees regulations will in any event require to be replaced.
Already mentioned as possibly problematic are the Education (Prescribed Courses of Higher Education) (Information Requirements) (England) Regulations 2014.