Higher Education and Research Bill enters another uncertain week in the Lords

Today the Higher Education and Research Bill enters the third day of its Report stage in the House of Lords, and it’s in very different shape to this time last week. Cross-party opposition peers, with a little help from a couple of Conservatives, have taken a legislative sledgehammer to some of Jo Johnson’s central policy initiatives, defeating the government on a number of key points, at least for now.

As we stand, against the government’s wishes, the amended version of the Bill now allows for the following:

  • Any government ‘rating’ of universities (i.e. TEF) may not be used to set variable rates of tuition fees or to restrict recruitment of students, including international students. Peers argued that the exercise was not yet ready to be tied to universities’ income.
  • Any such government rating may not be a “single composite ranking” of higher education providers, and instead “must evaluate and report on whether an institution meets expectations or fails to meet expectations on quality measures”. This was an explicit vote of dissatisfaction by peers against the TEF’s three-medal rating system, effectively giving OfS powers for a pass/fail threshold for institutions.
  • The methodology of teaching evaluation must be evaluated by the Office for National Statistics, and approved by a resolution of both Houses of Parliament. Peers argued that the TEF’s current methodology is not sufficiently robust and has not been sufficiently scrutinised.
  • A higher bar has been set for new providers to receive degree-awarding powers. A new clause requires either a track-record of four years operating under a validation agreements with an existing provider or satisfying the needs of the OfS’s Quality Assessment Committee. And, in addition to either of those, OfS must be satisfied that the provider operates “in the public interest and in the interest of students.” Peers argued that a four-year track record is essential to protect the quality and reputation of the sector. With the Quality Assessment
  • Committee constituted of HE practitioners, this is a protectionist move designed to make it more difficult for new entrants to award degrees.
  • Students should be automatically placed on the electoral register, reversing the effects of Individual Electoral Registration introduced in 2014, which saw huge numbers of students drop off the register.
  • Appeals against a variation or revocation of a higher education providers’ authorisation by the OfS to grant degrees have been altered to replace a narrow list of options with, “the grounds that the decision was wrong”. This was a more technical point, aiming to increase providers’ scope for appeal if they find themselves in conflict with the OfS.

TEF, in particular, has taken a bit of a hammering. Peers have criticised, amongst other things, the use of a medal rating system, the metrics including NSS and DLHE, the lack of parliamentary oversight of the methodology, and the benchmarking which means only a relatively small portion of institutions would obtain Gold (not everyone can be above average).

None of the noble Lords expressed opposition to increasing tuition fees annually by inflation; their objection to this policy is that the link with TEF means not all universities would be entitled to such an increase. The government could still award universities (perhaps all of those that meet the baseline quality threshold) the increase through a statutory instrument, as it has done for 2017 entry. But it is by no means certain to do so in the future without the quid pro quo of the TEF, and so when the dust settles on the Bill, the fee rises could be shelved altogether. Whether the government has the stomach for the ensuing fight with the sector (which had been expecting and planning for the rises) remains to be seen.

Flashpoints

As the Report stage continues this week, the following proposed amendments could be flashpoints for debate and possible government defeat:

  • Amendment 145 which would prevent retrospective changes to the terms and conditions of student loans.
  • Amendment 146 prevents students in unincorporated higher education providers from fully accessing publicly funded student support.
  • Amendment 150 which will stipulate that students not “be treated for public policy purposes as a long-term migrant to the UK”. The amendment also aims to secure employment and immigration rights for foreign nationals working at higher education providers. Universities UK is briefing peers in support of this amendment.

Passing these amendments would be a big problem for the government, and it’s probably at this point that the Bill and associated debate moves firmly up No.10’s risk register. The peers’ revolt was not widely reported in the mainstream press last week, which was more preoccupied with covering the Budget, Brexit Bill, and grammar schools.

Amendment 150 on international students could reverse this. It’s a bit of a wildcard – not related to the Bill text itself, but an issue on which the Prime Minister does not have a clear majority in the Lords, nor possibly in the Commons, and not even around the Cabinet table. Theresa May is unlikely to want to suffer an embarrassing and very public defeat on the issue in Parliament and so may have to offer some sort of compromise to stop both Houses defeating her government. Despite trying to call a truce last week over the Bill, Universities UK is now lobbying furiously to ensure that 150 gets a hearing and the vote goes its way.

What’s next?

There appear to be three main ‘endgame’ scenarios that could now play out when it comes to the future of the Bill, and particularly TEF which has had some of the roughest treatment in the debate.

Remember, anything changed in the Bill by Lords needs to be sent back for MPs to vote on, before being sent back again to the Lords for approval or rejection. Colloquially, it’s known as ‘ping pong’, and it’s notorious for its ability to ramp up the political drama and the pressure on proposed legislation. Jo Johnson and his team will probably want to avoid having to go through the process if possible as it can be bruising, torturous and raises the prospect of further defeats.

  • Scenario 1: Compromise before ping pong. This is probably the most likely outcome and would see a quiet resolution to the political standoff. Under this scenario, the government would propose some further compromise amendments that opposition peers would accept, and the House of Lords would remove the latest changes from the text before sending the Bill back to the House of Commons. For example, a further delay in the link between TEF and fees – to 2020, well after the ‘lessons learned’ exercise – may be enough for peers to back down on that point. Other similar compromises could satisfy peers on some of the other issues up for debate.
  • Scenario 2: No compromise and the government gets its way. If Lords decide that they don’t want to/can’t sustain a fight with the Commons during ping pong, the Bill would probably lose the wrecking amendments and the trajectory of policy would largely proceed as expected before the peers’ intervention. Let’s remember that differentiated fees aren’t anticipated until 2019 entry that is after TEF3; the results from May’s TEF2 exercise entitle all participating institutions to the full uplift.
  • Scenario 3: No compromise and the Lords win at least on some issues. It’s an unlikely scenario, given it would require a rebellion of Conservative MPs to agree to the Lords’ amendments. However, the government only has a very small majority in the Commons so it wouldn’t take many MPs to rebel. Opposition peers may sense an opportunity to keep pushing the amendments that could be won – Amendment 150 on counting international students as migrants could be a contender if there is no prior compromise. But if the TEF-related amendments were to pass, it would bring a whole new level of complication and it’s hard to see what a completely revised TEF – perhaps no longer linked to fees and no longer ranked Gold, Silver and Bronze (and so lacking any monetary or reputational incentive), and overseen by Parliament – could look like.

Additional reporting by Team Wonkhe.

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