Fun with Statutory Instruments: the process of inflationary fee rises

Jo Johnson succeeded in getting the Higher Education and Research Act (HERA) passed in the final days of the last parliament, but in doing so he had to offer concessions to those who had raised issues with the legislation.

As Wonkhe reported at the time, one little-noticed change was the requirement that any decision to raise the fee cap has to be placed before and voted on by both houses of Parliament.

Although the Act has passed into law this change in process has not yet happened. The existing process, as set out in the 2004 Higher Education Act still stands – and inflationary fee rises just have to be placed before parliament, not voted upon.

Although this is a very topical matter, you’ve probably read very little about it. This is primarily because the legislative nuts and bolts of what is going on are so fiendishly complex it is very difficult to take it all in. For those of you yet to experience the sheer joy of affirmative statutory instruments, hang onto your hats!

I’m hugely indebted to alert Wonkhe reader Brian Harrison for making a series of very astute FOI requests to the Department of Education back in May, which have greatly aided general understanding of this issue.

Negative and affirmative

To understand what is going on we need to be clear on a couple of aspects of the way governments make regulations.

Not every decision made by the Government requires a new Act – for certain kinds of change a statutory instrument can be used to amend regulations. Acts set out circumstances where this can be done, and the mechanisms for doing so. This process is sometimes referred to as Delegated Legislation and is sensible because if we needed a new Act for every small regulatory change we would never be able to get anything done.

The most common mechanism is the Negative Statutory Instrument. This simply requires that a decision is published in a prescribed way (“laid before both Houses of Parliament”). Either house can “pray” against the instrument, which would potentially spark a debate if the issue was controversial – and this usually happens in the Commons by way of an Early Day Motion (EDM). In legislation the phrase “subject to annulment in pursuance of a resolution” is used to signify a Negative Statutory Instrument.

In some cases an Affirmative Statutory Instrument is required, signified by the phrase “a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament”. This means that there must be a vote in both Houses before a Statutory Instrument becomes law. This vote is simply on the instrument itself – there is no debate on the wider issues of the Act.

In both cases, it should be noted, it is vanishingly rare that the government does not get their way regarding a statutory instrument. The last Negative Statutory Instrument successfully annulled in the Commons was the Paraffin (Maximum Retail Prices) (Revocation) Order in 1979 – the last Affirmative Statutory Instrument voted against in the Commons was the 1978 Dock Labour Scheme. The Lords are very slightly more likely to act – the Greater London Authority Elections Rules were annulled in 2000, and famously the Lords’ decision to “decline to consider” the Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015 led to a blockbuster report by Lord Strathclyde into the whole area of delegated legislation.

If you want to learn more about this fascinating subject, I can recommend both the House of Commons Library Background Paper on the issue and chapter 6 of Rogers and Walters’ magisterial “How Parliament Works”.

Drafting HERA

One could be forgiven for missing the change to fee regulation processes on the face of HERA. Section 5(2)(a) and (b) of Schedule 2 of HERA replicate the requirements of Section 26(2)(a) of the 2004 Higher Education Act (HEA): increases in fees up to the cost of living require a Negative Statutory Instrument [5(2)(a)]. Beyond that, an Affirmative Statutory Instrument [5(2)(b)] is required – described in some places as a “special resolution procedure” which just means that the contents of the instrument are prescribed by the Act.

However, section 119(2)(i) of HERA requires that paragraph 5(2)(a) of Schedule 2 (on inflationary fee rises) requires an Affirmative Statutory Instrument – “a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament”. Even though 5(2)(a) itself suggests a Negative Statutory Instrument, the wording in section 119 of HERA trumps it.

This is not a particularly clear way of writing this requirement into law, to say the least.

This wording was added to the Bill during the Commons consideration of Lords Amendments – the “ping-pong” section of the Bill’s passage. As Jo Johnson said in the Commons:

I am also pleased to propose amendments […] which amend the parliamentary procedure required to alter fee limit amounts, to ensure that any regulations that would raise fees would be subject, as a minimum, to the affirmative procedure. That provides a greater level of parliamentary oversight on fees than the measures originally put in place under the Labour Government in 2004.

It is very comforting that he said this in the house, as this clarifies a slightly ambiguous situation – it is possible to read this whole mess as a drafting error, but a Ministerial statement means we can be much more confident in how we read it.

And he was correct on both counts – the wording of the Act as passed does require that any regulations that raise fees are subject to the Affirmative procedure, and this does offer a greater level of oversight than the Higher Education Act 2004.

This interpretation is again backed up by the latest version of the Explanatory Notes: “Any other regulations which prescribe the higher amount, the basic amount or the floor amount will be subject to the affirmative procedure” (para 461)

Repealing the HEA

The story doesn’t end here.

Legislation has to be specifically repealed before it can be replaced by new processes. Even though section 119 (which Jo Johnson proudly flagged as providing a greater level of oversight) came into force on the day the 2017 Act (HERA) became law, we still have the old requirements in force from the 2004 Act (HEA). The 2004 fee regulation mechanisms – which can be found in section 26(2)(a)(i) and (ii) of HEA – are still law, until repealed. HERA contains the apparatus required to repeal them, if triggered.

Schedule 11 section 30(2) of HERA describes the repeal of section 26 of HEA – this sits within two whole schedules devoted to what are called “consequential amendments”, changes to existing laws required by the passage of new ones. But these schedules require section 122 of HERA to commence in order to come into force, an event we are still waiting for.

So why didn’t section 122 of HERA come into force on the day the Act became law? The answer lies in section 124 of HERA – which sets out when different parts of the Act come into force. You’ll note that section 122 is not mentioned in section 124 – which means that it commences “on such day as the Secretary of State may by regulations made by statutory instrument appoint”. Yes, that’s another statutory instrument to keep track of – this one is a “commencement order”. It is neither Negative nor Affirmative – it’s just a decision that needs to be announced in order to bring section 122 into force.

What about the Emergency Debate on Student Fees on 19th July?

The 19th July debate on tuition fees  was a linked but separate issue. Labour had tabled Early Day Motions to attempt to annul the Higher Education (Higher Amount) (England) Regulations 2016 (S.I., 2016, No. 1206) and the corresponding Basic Amount Regulations (S.I., 2016, No. 1205) back at the start of 2017. This Negative Statutory Instrument had been laid before the house in December 2016.

A corresponding debate had been granted by the government on the 19th April, but this was abandoned after the general election was called on 18th April. Labour expected this debate to occur in the new parliament, but after asking several times had learned that the debate would no longer be drafted. This ties into more general concerns about granting debates, opposition days, and backbench time that were raised in yet another debate on Tuesday 17th July. Sadly, the debate on the 19th itself wasn’t a great moment for Parliament; it was simply a way of using up parliamentary time and failed to resolve this – or indeed any other – issue.

Too long; didn’t read

I’ve tried to make this as clear as I possibly can, but I am sorry this is difficult to follow. We have a diagram which may help:

Suffice it to say that the promise that all fee rises would need a vote in Parliament doesn’t start until Jo Johnson says it does.  This is a fairly big deal – for students already concerned about rising levels of debt, for vice chancellors hoping that fees will rise along with the cost of living, and for those with an interest in the politics of higher education policy.

We may have hoped to have seen the commencement order required to move across to the new regulatory mechanism as soon as possible after HERA became law. There is some uncertainty regarding whether the appropriate parts of the new Act (and the repeal of the old) can be enacted without the Office for Students being ready to take on the new responsibilities granted to it by HERA. Likewise the fact that the Joint Committee on Statutory Instruments has not yet been convened in the new parliament may be holding things up. But the optics of the first “new” fee rises after the Act being done under the “old” rules are far from ideal.

So HEA 2004 is not dead yet. The sector was counting on notice being given of an inflationary fee increase under HEA for 2018-19 before the summer recess – as happened for 2017-18 last year, before the required SI was laid in December. DfE have indicated to Wonkhe that this announcement is now planned for September, but at this stage it would be brave indeed to see it as a done deal.