A duty to disclose a decade of inward investment? An ill-considered amendment

That overseas funding amendment to the Free Speech bill, what does it do?

Well, according to the chaps who wrote it (including Robert Halfon, who should really be above this kind of thing):

This new clause seeks to introduce transparency and public reporting of foreign donations to universities, in order to promote freedom of speech and academic freedom, and increase public confidence in universities.

That was enough to get them a mention in the Spectator and a vague nod from Nadhim Zahawi, which may well have been the point of the exercise, but the actual text of the amendment is a little more nuanced. So I thought we’d have a little look.

One bill to the tune of another

The first thing to note is that the amendment amends the Freedom of Speech Bill in order to amend (as the whole FoS Bill does) the Higher Education and Research Act (HERA) 2017. Specifically, it amends new clause A3 of HERA that would be added by the Freedom of Speech act and deals with the duty to promote the importance of freedom of speech and academic freedom.

The body of the proposed amendment adds a reporting duty to subsection 1 of A3 – a curious choice as the other reporting requirements placed on providers in the Bill are left to the OfS ongoing registration process. It’s not clear to me why OfS could not also add this reporting requirement to the ongoing registration conditions – indeed, OfS could arguably roll this into condition F3 (on information provision to the OfS).

Quite why we need to start building registration conditions into primary legislation is not clear – especially when these conditions arguably already exist. Mind you, the general aim of the Freedom of Speech Bill could be achieved via the public interest principles built in to condition E2 (management and governance arrangements) so maybe I am missing a trick here.

Reporting requirements

While OfS works – at the urging of DfE – to reduce the burden of data collection on the sector, this proposed new clause would add a new and exciting data collection to the sector’s arsenal. If a provider (or anything connected to a provider) enters into a disclosable arrangement with an overseas counterparty, the new clause would place a duty on the governing body of the provider to report required information about this to OfS. In turn, OfS is required to publish a searchable report containing all such disclosures from the preceding year.

Apart from the first year, which would involve a mega-report covering the years between 2014 and 2024.

What’s a disclosable arrangement? It’s any formal or informal contract, gift, or other arrangement of financial advantage to the provider, which conditionally or unconditionally exceeds £50,000. If there are multiple instances from the same (or a connected) counterparty that are equal to or greater than £50,000 in the same financial year, this also needs to be reported – though it is not clear if this is a single report or multiple reports.

What’s an overseas counterparty? Any person domiciled outside the United Kingdom. Any government, organisation, institution, company, foundation, trust, or similar body that is (deep breath) registered, incorporated, headquartered outside the United Kingdom. And any person acting in any capacity for or on behalf of any person mentioned above.

What’s the required information?

• The exact value of the funds involved.
• The identity of the counterparty.
• The overseas territory involved.
• The date on which an arrangement was entered into.
• The purpose of the arrangement.
• Any specific stipulations or obligation placed on a registered provider or any of its members, employees, departments, or associated bodies. For some reason this is “including, but not limited to, any changes of curricula, governance, or control.”

That data in full

You’re no doubt ahead of me here, but quite a few international students (undergraduate medical students and PhD students in particular) will be paying more than £50,000 in course fees and accommodation costs. OfS will therefore have a list of the names of all of these students that it needs to publish once a year. This feels like a data protection problem – and the only remedy that providers are allowed (ss4-5) is to plead with OfS to investigate a specific situation, which needs to happen before any information is redacted. There doesn’t appear to be any measure that allows for a general redaction policy for student fees.

Other highlights to look forward to in the OfS report would be Horizon Europe (and its successor programme, in the hope that we actually manage to affiliate) research funding, conference bookings made by scholarly societies headquartered overseas, private placements involving overseas funds (for example the various overseas pension funds that like to invest in UK higher education), and even loans from banks headquartered (or controlled) from outside the UK.

Quite what it is expected anyone will do with the information that the Ontario Teachers Pension Plan has a finance placement in an English university, that a university got a Horizon 2020 research grant, or that an Australian student studied medicine at an English provider is not made clear. This is an amendment dealing only with data collection and publication.

It all smells a little bit off

Now, I approach all this as a person who is on public record as being something of a fan of data. I like that we collect data on universities in the UK, and I like that a great deal of it is available to the public to scrutinise, examine, and make amusing league tables out of. I like that universities are required to publish audited accounts, and that any member of the public can spend an enjoyable evening reading through them to learn about provider income and expenditure.

But here we are talking about gathering a great deal of data without any sense of what is going to be done with it. My suspicion is that the hope among those who drafted the amendment is that people can search through this new register of disclosable arrangements with overseas counterparties, find something they personally dislike, and then make a lot of noise about it in the usual places (the Spectator, the Telegraph, 55 Tufton Street). It is truly startling to find that the regulator is charged with gathering and presenting data, but not with any form of actual regulation relating to it. It’s all left to the court of public and press opinion – a curious case of MPs supporting cancel culture.

If there are organisations, or even nations, where we need to have a concern over their influence on universities we should identify them, list them, and carry out some kind of risk-based monitoring led by an independent regulator. If we are not able to do that, collecting this data just adds fuel to a general attack on universities and creates an enormous amount of burden in the hope that Robert Halfon and his pals find a smoking gun.

How to do it right

For me, if I was concerned about the success of English universities in driving foreign investment, I’d look to add a column 15 (or further additional columns) to Table 4 of the HESA Finance Return for providers in England. This could separate out from columns 8 to 14 any provider income that is from countries (or even individual funders) “of concern” – based on a separately published and regularly updated list. This would add a bit of burden (I’m sorry), but it would let us take a view across the sector regarding the influence of a particular funder or nation state, and help OfS identify areas where it may wish to make a fuller investigation as to the compliance of the provider with conditions D and E2.

Alternatively, you could ask the ONS to disaggregate these tables a bit. Or if it is just the influence of foreign investment on university research you are interested in, you could look at funder disclosures in research papers. If you are concerned about student recruitment, there’s reams of HESA and UCAS data to look at. And on it goes.

I guess it should make for a lively debate should the Freedom of Speech Bill (which, as we’ve been over many times before, is also deeply flawed, expensive, and will not do what it was designed to do) ever gets to a Commons report stage.