| Higher Education Bill
|
|
Mr. Boswell: Is it in my hon. Friend's mind—it is certainly worrying me—that the Secretary of State could withdraw institutions' powers or override a decision to make a payment in connection with, for example, the research assessment exercise or, conceivably, from the research council? Chris Grayling: My hon. Friend anticipates me. I very much share that concern. Whatever the Secretary of State's intentions, the clause certainly appears to allow for that possibility. We must understand the nature of most higher education institutions in this country. One thing that surprised me when I took the shadow portfolio and started to talk to universities, in detail and at greater depth than I had talked to them before, was to discover just how small a proportion of their overall income is made up from the teaching grant that they receive from HEFCE or the Welsh equivalent. In most cases, it is substantially under 50 per cent. It is certainly under 50 per cent. among our more prominent universities. The real question is whether the Government, through the simple words of the clause, are taking a power to act far beyond the immediate scope of teaching students on undergraduate courses and beyond their determination to provide wider access to those courses, and are giving themselves powers over a much greater range of things that HE institutions do. One of the greatest absurdities in all this is the introduction of the ability to levy financial penalties. As NATFHE, in one of the documents that it sent to Column Number: 140 members of the Committee in the run-up to the debate, pointed out:
The Secretary of State is therefore taking powers to withhold loans and other payments when the basic process that the Government want to be implemented already exists. I have three concerns about loans and about other payments in particular. In recent years, the Government have taken it on themselves to ring-fence funding to a variety of organisations by offering initiatives and specific pots of money that have to be bid for and that are not simply part of the block funding that those organisations receive. Higher education is no exception. All universities have sought to raise some of the funding that they receive from the Government and the higher education funding councils by bidding for particular pots of money. Clearly, that has had a significant impact, albeit in a convoluted and bureaucratic way, on the running of those institutions. My first concern is about those ring-fenced funds. The Government currently provide additional funding through various different channels for the future and additional requirements on HE institutions to receive payments that are channelled on to third-party organisations. That is statutory. One example is the establishment of the Higher Education Academy. As the Committee knows, the Government's intention is that the academy will play a major part in enhancing the role of teaching and learning in universities and colleges. It is designed to support curriculum development and to facilitate the professional development of staff, and it will take on some of the functions performed by the Institute for Learning and Teaching in Higher Education and the Learning and Teaching Support Network. The academy is being set up by the Government, but participation by HE institutions in the form of a financial subscription to this new body is compulsory. The Government's response to concerns about the compulsory nature of the payment was revealing, because it throws up other issues relating to the funding that those HE institutions receive. The suggestion is that membership will be compulsory, and that that is a condition of the grant that HE institutions receive from Government. It is therefore clear that HE institutions are receiving money that they have to pass on to another body. What do the simple words ''other payments'' mean? Where an institution receives funding from a higher education funding council to support its compulsory membership of a third-party body, if that institution does not comply with the Government fund, does it lose the funding that enables it to be part of that body but still have a compulsory requirement to be part of that body? Does the money therefore have to come from another pot and from other resources available to that institution? Does that other payment give the Government the power to force that institution still to subscribe but not to receive the funding to do so? Column Number: 141 Mr. Clappison: I have listened very carefully to my hon. Friend's point about action against individual institutions. Under this clause the Government can set a condition telling the Higher Education Funding Council in effect what to do. The Government have made it evident they intend to use that power to set conditions relating to the access plans that are to be agreed. Has my hon. Friend considered that, in the same way that the Government stand behind the HEFC on the conditions of grants, the Secretary of State is also standing behind the director of fair access to higher education in drawing up the plans? The director has to act under the guidance of the Secretary of State, so the Government are at both ends of the chain.
3.30 pmChris Grayling: My hon. Friend is right—the Government are of course the puppet masters in all this. The access regulator is undoubtedly a creature of the Secretary of State, to whom all the powers enacted in this Bill ultimately go back. Ironically, this issue of ring-fenced funding may very well have a direct effect upon universities when it comes to the widening access payments. The payments made by the Government through the HEFC to universities in recent years could potentially come under the ''other payments'' category in this section of the Bill. The structure of these widening access payments has already caused enormous problems to many institutions. When they were introduced in medical schools a couple of years ago, those schools were informed in February or March that about 2 per cent. of their teaching budget was being top-sliced, and would be put into a ring-fenced fund for widening access payments. In order to gain access to any of that money they had to have a clear strategy in place for widening social participation. You will be aware, Mr. Hood, that, in the university calendar, by February or March plans for the following September and October's intake are already pretty well advanced and offers have already been made, so it is extremely difficult to change what one is doing within a single year. So setting up that ring-fenced fund in the first place caused financial problems to those institutions, and caused them some degree of administrative chaos. Now there is the possibility that funding through that such a channel might be withheld, as part of the Government's requirements to penalise them for not having an approved plan in place. Mr. Boswell: I am following my hon. Friend's argument and his concerns. Would he not agree that, as prospectuses are normally issued by this time of year, indeed slightly ahead of the occasion to which he referred, there is also the possibility of some legal challenge to the institution from the students? That might apply not only in the historic circumstances that he has already described, but also where an institution had made an offer in good faith but then found itself unable to discharge that offer, as the money had been taken away from it in circumstances that were themselves in dispute. Could we not in fact be moving towards—with great respect to my hon. Column Number: 142 Friend the Member for Hertsmere (Mr. Clappison)—a lawyers' paradise?Chris Grayling: My hon. Friend is right; that is always a danger. He makes a valid point: the removal of loan funding and other payments has the potential to force a university into breach of contract. It might be in default of an offer, as my hon. Friend mentions, but it might equally be in default of a construction contract or, as I mentioned, of a commitment to pay on a subscription to a third party body such as the Higher Education Academy. A partially established project could be left uncompleted, having reached a certain point before the funding disappears. The centres for excellence in learning and teaching set up by the HEFC and the Government would be a very good example of that up. Let me describe to the Committee the process that the Government has set out for the funding of those projects. The Minister said in a written answer:
They will have incurred bidding costs earlier and embarked on the establishment of centres, but at stage 2,
That additional funding clearly comes under the context of another payment. A higher education institution invited to establish a new centre will secure ring-fenced funding for the initial investment in a bidding process. It will also commit staff time to the process. However, if, when it reaches a later stage, a dispute breaks out, for entirely unrelated reasons, between the university and the access regulator over the nature of its plan, it seems that that ''other payment'' may be withheld. The money that was expected for the continuation of the project would disappear. Not only would that cause difficulties on the campus, but it would bring problems with external contractors, consultants and others brought in to help with the project.
|
| |
| ©Parliamentary copyright 2004 | Prepared 12 February 2004 |
