Committee stage (Lords) of the Lifelong Learning (Higher Education Fee Limits) Bill - Jul 10

Clause 1: New method for determining fee limit

Amendment 1

Moved by

Baroness Twycross

1: Clause 1, page 2, line 5, at end insert “in consultation with relevant higher education sector stakeholders.”

Member’s explanatory statement

This amendment ensures that, before determining which method is used, the Secretary of State will consult relevant higher education sector stakeholders.

Baroness Twycross (Lab)

My Lords, I shall speak to Amendment 1 in my name and the names of my noble friends Lady Thornton and Lady Wilcox and the noble Baroness, Lady Garden of Frognal, and to Amendment 4 in my name and those of my noble friends Lady Thornton and Lady Wilcox.

As Labour made clear at Second Reading, we support the intention of the Bill. It is no longer the case that someone’s career can be predictable from the time they leave school, college or university. It is unlikely that someone starting their career will not have further educational needs during their lifetime and it is right that that is reflected in the funding available. However, it is Labour’s view that this is a good Bill that could be even better. As I said at Second Reading, it is a short Bill, and arguably too short. On the surface it does what it says on the tin, but with a bit more detail it would be more likely to succeed in the lifetime guarantee offers and a lifetime entitlement that it would bring about.

The further and higher education sectors also support the Bill. However, having such a limited Bill with little concrete information in it is of concern to those in higher education. We think that further consultation should therefore be built in to safeguard the success of the legislation. As the Open University said in its commentary, the Bill could be transformative, but the OU makes clear that its detailed design will be key to determining how it works in practice and whether it will be able to achieve the Government’s ambitions to deliver a fundamental and seismic shift towards flexible lifelong learning.

Amendment 1 would insert sectoral consultation into the decision about whether the fee limit for a course should be fixed or module based. Currently the Secretary of State has huge scope to decide that. It is likely that not all courses would lend themselves to being module based. We think that the extent to which a course is suited to being module based is likely to be something that the sector would be well-placed to have a view on.

Amendment 4 would include a similar requirement with credit-differentiated activity—for example, in relation to placements. The current wording gives the Secretary of State huge scope to decide the worth of placements in terms of credits. The amendment would insert a requirement for the Secretary of State to consult higher education and placement providers.

Without wanting to put words in the Minister’s mouth, I am confident that she may say that it is self-evident that the Secretary of State would consult on these matters. However, if that is the case, why not simply put the requirement to consult into legislation? I hope that the Minister will see the common sense in doing so and I look forward to her response on this matter.

Baroness Garden of Frognal (LD)

My Lords, I thank the Minister for her willingness to discuss issues in the Bill with all interested noble Lords. I have added my name to Amendment 1, for all the reasons set out by the noble Baroness, Lady Twycross. For these provisions to succeed, close co-operation and consultation with higher education and indeed other awarding organisations are crucial.

This is a small Bill with considerable limits. We had hoped to table amendments to ensure that careers information, advice and guidance were available to any of those wishing to take advantage of the provisions of the Bill, but we were told that that was out of scope. I fear that other of our concerns may also turn out to be categorised in that way.

There are a great many unknowns in the Bill. It is a matter of great concern that the number of adults over 21 accessing higher-level skills has fallen dramatically over a number of years. One reason is the lack of maintenance support—also, I fear, out of scope. The majority of part-time students do not have access to maintenance support and that can be a serious disincentive for them, so can the Minister say whether any thought has been given to maintenance loans—or, better still, grants—to enable the provisions of the Bill to succeed? I guess that this, again, will be out of scope.

As the Minister is aware, the Liberal Democrats are not convinced that large cohorts of adult learners will be keen to take on debt, and the lifelong learning entitlement is indeed a debt. We propose a skills wallet, putting money into learners’ pockets to enhance their skills learning and competence at three stages of their careers. We argue that that money would be rapidly recouped by the enhanced earning capacity of those who took advantage of it. We know that many adults are loath to take on additional debt, particularly in these times of economic difficulties. We will support any amendments calling for reviews to see how successful the offer of loans and debt is to adults.

I am not sure whether the Minister answered those concerns at Second Reading but obviously now we have to concentrate on the amendments tabled, which largely centre on clarification of what is or is not included in the Bill. We can only hope that the Bill has the desired effect. The country is woefully short of people with the skills that the economy needs and, if more adults can be encouraged to acquire those skills, we shall all benefit. However, it is a very little Bill.

The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)

My Lords, I shall speak to Amendment 1, tabled by the noble Baroness, Lady Twycross, also in the names of the noble Baronesses, Lady Garden of Frognal, Lady Wilcox of Newport and Lady Thornton, and Amendment 4, tabled by the noble Baroness, Lady Twycross, and in the names of the noble Baronesses, Lady Wilcox of Newport and Lady Thornton, which would require the Government to consult relevant stakeholders and others before, first, setting out which method should be used to calculate fee limits and, secondly, determining the nature and extent of credit-differentiated activity and the number of credits associated with it.

The Government intend for all courses offered under the lifelong loan entitlement, the LLE, to use the new credit-based method for calculating fee limits in order to create a consistent and unified fee limit system. That policy has been designed in consultation with relevant higher education sector stakeholders. I agree with the noble Baroness opposite that it is extremely important to take account of their views. That is exactly what the Government have done in designing this policy.

The Government intend to retain the ability to set fee limits using the current yearly system, as well as the new credit-based system, but would use this ability only by exception. The Government do not currently anticipate any courses to use the fixed method from 2025 and are confident that all courses can use the credit-based method. The Government concluded their consultation on the LLE on 6 May last year. The consultation included a question on whether any courses should continue to be funded per academic year under the LLE rather than according to the number of credits.

Through the consultation, the Government understand that some courses, such as postgraduate certificates in education or nursing degrees, may not be suited to having fee limits set using provider-assigned credit values. This is due to variations in how different providers assign credits to these courses, which could lead to variable fee limit outcomes. For those courses, the intention is to set fee limits using a consistent rate of 120 credits per year for full-time courses, with other values for other intensities. That will enable those courses to use the new credit-based method while retaining parity with the current per-year system.

In relation to credit-differentiated activity, the Government want to ensure that periods of sandwich placement and study abroad continue to be subject to lower fee limits. In the current system, these lower limits are applied to full academic years, which makes them incompatible with the per-credit system. To enable those lower limits within the credit-based method, the Bill introduces the term “credit-differentiated activity”. This will mean that substantial periods of sandwich placement and study abroad can have their lower fee limits applied accurately even when they do not conform to full academic years. Regulations will set out details on how this system will work, including a mechanism to enable credit-differentiated activities to work for non-credit-bearing placements.

I can also announce that, in the autumn of this year, the Government will publish further detail of the fee limits regulations. This will give the sector and the public an opportunity to scrutinise the detail and plan accordingly for the introduction of the LLE in 2025, as well as ensuring that the Government can receive feedback on their proposals prior to the laying of regulations. This will include detail on the maximum and default credit values for different course types.

In conclusion, given that consultation has already taken place and that further engagements with the sector will take place as part of the pathway to the LLE’s delivery, the Government cannot support these amendments.

Baroness Twycross (Lab)

My Lords, I thank the Minister for her response. I also thank the noble Baroness, Lady Garden of Frognal, for adding her name to Amendment 1 and for her contribution to this discussion; as she said, we desperately need more skills, so we need this Bill to succeed.

We welcome the Minister’s announcement that further detail and consultation will come in the autumn. The Labour Party is keen to work with the Government to make sure that this Bill is the game-changer that it could be. I hope that, once we get the detail of the consultation, we will look at whether additional consultation will need to be built into the Bill. At the moment, we think that there is merit in building something into the legislation. I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Amendment 2

Moved by

Baroness Garden of Frognal

2: Clause 1, page 2, line 10, at end insert—

“(1A) For the purposes of this Schedule, one credit corresponds to 10 notional learning hours.”Member's explanatory statement

This amendment puts the number of hours that constitute a credit on the face of the Bill.

Baroness Garden of Frognal (LD)

My Lords, I have also added my name to Amendment 5 in this group.

Currently, the definition of a credit is outlined in Ofqual’s conditions of registration, the Office for Students’ sector-recognised standards and the QAA’s higher education credit framework. It is outlined in the Bill’s Explanatory Notes but not on the face of the Bill. It is important to put it in the Bill to ensure that the Government do not amend the value of a credit without any proper scrutiny. Even though the current Minister committed to the affirmative resolution procedure, there is no ongoing commitment for future Governments. Evidence given to the Bill Committee also set out reasons why a definition should be in the Bill.

It is really important to communicate to a student what a credit means. In essence, a student wants to know a number of things: how much this is going to cost them; what they will have to expend in effort and energy to complete the module; and what they will get for that module and those credits from the institution that they choose to go to. Transparency around the relationship between credits and fees and between credits and module content, including what is expected within that, is very important. Would it not also help anyone whom we want to use the lifelong learning entitlement to understand what their fees translate to in practice?

For a similar reason, I have added my name to Amendment 5, which the noble Baroness, Lady Twycross, will address more fully. It is a probing amendment on credit structure. Other institutions have told us that they are on a 20-credit system and so increasing the structure to 30 credits would cause significant disruption, inhibit a quick rollout and be a great disincentive to many learners. There is the argument that short courses are valuable to employers and that putting in a higher credit minimum limits the potential for students’ choice in short courses.

This group has also acquired Amendment 6A in the name of the noble Lord, Lord Johnson. We certainly support it. Higher education institutions should be allowed to uprate in line with inflation and this measure should be in the Bill; there would be little incentive for them otherwise.

These are three useful amendments. I beg to move Amendment 2.

Baroness Thornton (Lab)

My Lords, I will speak to Amendment 5 in the name of my noble friend Lady Twycross, to which my noble friend Lady Wilcox and I, and the noble Baroness, Lady Garden, have added our names. It is a probing amendment intended to ensure that modules worth 20 credits or more are included within the lifelong learning entitlement.

We are concerned that there is a series of questions on this that need clarification. The briefing that we have all received from the Association of Colleges also expresses concern about how the credits system will work. It says in its briefing that this is a significant reform and that we need to ensure that credit requirements do not limit access to modular learning, as many providers teach 20-credit modules and a minimum requirement of 30 credits would require learners to bundle together at least two modules to meet the funding requirement.

This issue was discussed in Committee in the Commons, where a similar amendment was tabled to the one that I have put down here to probe this issue further. Since we put our amendment down the noble Lord, Lord Johnson of Marylebone, has tabled his Amendment 6A, which is of great interest. I want to see what the noble Lord has to say about it but, on the face of it, it is the kind of amendment that we would be interested in discussing as we move forward with the Bill.

4.00pm
Lord Johnson of Marylebone (Con)

My Lords, I will speak to Amendment 6A in my name. I declare my interests in the register as a visiting professor at King’s College London and as chairman of FutureLearn. As other noble Lords have indicated, this amendment attempts to address what is an elephant in the room in our debates. This is obviously a controversial issue, which is very much present but has largely been avoided as a subject for discussion: the absolute level of fees and tuition fees.

While it is very welcome that we are introducing a more flexible system of student finance, that is not much good on its own unless we address the relentless erosion in the value of tuition fees themselves. I have always found it a little unreal that we have a Bill that refers in its title to “Higher Education Fee Limits” but we have not actually had any discussion whatever of those fee limits.

The legal cap on tuition fees for full-time undergraduate study at most universities is now £9,250—that is barely changed from the £9,000 that it was when the system was introduced a decade ago. By May this year, inflation had eroded the value of these fees to £6,020 in 2012 money. If inflation remains elevated, it will be materially below £6,000 in 2012 money by September and teaching UK students at this level will be loss-making for many, if not most, institutions. Carry on like this and we will have stretched the unit of resource to such a point that a crisis is inevitable. The LLE certainly will not be offered, nor will much else. My view is that we are really not doing our job unless we do something in this Committee, and during the passage of the Bill, about the fact that the system as a whole is becoming unsustainable.

The current impasse is creating a situation in which we are systematically defunding our universities, depriving the engines of our knowledge economy of the fuel they need to offer great teaching and world-class research. If we want to retain our position as one of the world’s most highly regarded higher education systems, and to have a fighting chance of attracting researchers to support our goal of becoming a science superpower, this clearly cannot go on. We all know that this needs to be fixed, yet we seem to lack the political courage to do what needs to be done.

As far as I can tell, a lot of effort is going on across all parties to work out how to say as little as possible about higher education funding ahead of the next general election. I am very grateful for the support from my colleagues opposite and hope that, were this amendment to find favour, they would continue to support it as we make progress with the Bill. The amendment seeks to force the debate into the open and to flush out the extent to which the Government—and Opposition parties—are seriously engaging with this issue before the crisis in funding takes a further turn for the worse.

The amendment itself is very simple. It would automatically allow higher education institutions that deliver great teaching and student outcomes, as assessed by the teaching excellence framework, to raise fees in line with inflation. There is nothing novel about this. A mechanism to link funding to quality in exactly this way exists already in law in the Higher Education and Research Act 2017. Schedule 2 to that Act allows fee caps to be set at differing levels based on a provider’s teaching excellence framework award, subject to overall limits prescribed by regulations that are scrutinised by Parliament. This amendment would ensure that the mechanism is used automatically each year, ensuring that high-quality providers can continue to deliver great teaching and student outcomes without their tuition income being relentlessly eroded by inflation. There is nothing new in it.

As noble Lords may recall, the Cameron Government used this exact method to enable fees to rise with inflation from £9,000 to £9,250, some five years ago. In my view, we should have continued with that approach, as it would have maintained university funding on a more sustainable footing than it is at present and entirely avoided the current crisis. Gold-rated and silver-rated providers would today have been able to charge fees of approaching £12,000. The University of East Anglia, for example, would have had an extra £38 million, which would wipe out the black hole in its finances. Such a system, linking funding to quality, aligns the interests of students, taxpayers and providers, and is an immediately deliverable solution which can be implemented as soon as the next TEF results come out this September.

We do not need a big review. We should not wait for our universities to start falling over one by one. We need to get on and use the mechanism that already exists.

Baroness Barran (Con)

My Lords, I will respond to Amendment 2, tabled by the noble Baroness, Lady Garden of Frognal, and Amendment 5, tabled by the noble Baroness, Lady Twycross, and also in the names of the noble Baronesses, Lady Garden, Lady Wilcox of Newport and Lady Thornton. I will speak also to Amendment 6A, tabled by my noble friend Lord Johnson of Marylebone. These amendments seek to put the number of notional learning hours that constitute one credit in the Bill, to limit the default credit value to a maximum of 20 credits, and to allow certain higher education providers to increase their tuition fees automatically each year in line with inflation if they have a teaching excellence framework rating.

Amendment 2 would define in the Bill a credit as equivalent to 10 notional learning hours. As has been set out in the other place, while it is crucial that the definition of credits in the fee limit calculation aligns to standard practice in the sector, the Government plan to set this out in detail in secondary regulations, rather than in primary legislation. The power to do so is provided for in new paragraph 1B of Schedule 2 to the Higher Education and Research Act 2017, introduced through Clause 1 of this Bill.

Specifying the learning hours in secondary legislation, rather than primary, means that providers which might choose to use a different number of learning hours per credit will simply have those courses treated as non-credit-bearing for fee limit purposes. If we took the approach of this amendment, those same providers could instead be considered in breach of the fee limit rules as a whole, with all the regulatory consequences that that might bring. The Government do not intend to change the number of learning hours in a credit unless standards in the sector change: learning hours are, and should continue to be, based on sector-led standards. Regulations on learning hours will follow the affirmative resolution procedure, so Parliament will always get the opportunity to debate and formally approve any changes to those regulations.

Amendment 5 queries the extent to which the Government are prepared to fund modules of fewer than 30 credits through the LLE. As I referred to in my response made at Second Reading, and as set out in the Government’s consultation response, modules must have a minimum size of 30 credits for funding purposes. This is in line with the recommendation in the Augar review. None the less, as the noble Baroness, Lady Thornton, pointed out, it will be possible to bundle two or more modules from the same parent course to meet the 30-credit funding requirement.

This amendment also refers to the default credit value. If your Lordships will permit, it may be helpful to provide the Committee with some further detail on the purpose of this value. The default credit value is intended to allow fee limits to be set on full courses that do not bear credits or on full courses that are more suited to annual fee limits than credit-based fee limits. For example, this could include some degree programmes at Oxford and Cambridge or sandwich years where the provider has not assigned credits. It could also include courses such as postgraduate certificates in education or first degrees in nursing. For these types of study, a default number of credits will be used in the fee-limit calculation, instead of any provider-assigned number of credits. These default values will be set at 120 credits per year for full-time courses, with other amounts for other intensities, all of which will align with sector-recognised standards. The default credit values will not apply to modules undertaken separately from their full course. As all modules funded through the LLE will be required to bear credit, they will always have the fee limit calculated using the provider-assigned number of credits, not a default number of credits.

To be clear, the default credit value applies only to full courses, not to modules. If default values are all set at 20 credits, that would mean that, for example, Oxford and Cambridge would be allowed to charge for only 20 credits a year for their degrees, instead of 120 credits, which I am sure is not the noble Baroness’s intention. We would not want providers to be limited to being able to charge for this number of credits per year.

I now turn to speak to Amendment 6A, tabled by my noble friend Lord Johnson of Marylebone. It is clearly vital that our higher education sector remains on a sustainable financial footing. It is an important contributor to our national economy, and it is something that we excel at as a nation. That is why the Government keep all elements of student finance and higher education funding, including fee limits, under constant review. We have said that fees will remain frozen until the start of the 2025 academic year. This ensures that students and taxpayers continue to receive value for money. However, we are also investing an extra £750 million in higher education teaching and students over three years to 2024-25 through the strategic priorities grant. This will help providers to fund their provision of high-cost subjects, such as medicine, science and engineering, and help students to succeed.

We provide support for the sector through subsidised fee loans. This is our investment in the skills, people and economy of this country, and one that is even more important in current circumstances. A continuous automatic increase in fees in line with inflation would undermine the incentive for providers to find efficiencies in their business models or to develop other sources of revenue to diversify their income and achieve sustainability in ways that benefit British students and British taxpayers. Despite current pressures, the Office for Students found in its latest report that the overall aggregate financial position of the sector remains sound, though there is variation between individual providers.

I remind the Committee that overall tuition fee income in English higher education providers has increased in cash terms from £13.7 billion in 2014-15 to £21.6 billion in 2021-22, an increase of around 58%, but there are significant differences in income and student number growth between providers. Some providers have increased their student numbers significantly in recent years, in particular in business and management courses, which have grown rapidly. With the public outlay to support students to go to university having increased so much in recent years in cash terms, the rapid, localised growth that we have seen in some courses and at some providers emphasises the need for us to ensure that the quality of provision remains high, so that students can achieve the employment outcomes that they are looking for and the economy benefits from our considerable investment in higher education.

As my noble friend understands very well indeed, fee income from domestic students is just one element of the income mix of higher education institutions. Obviously, there is income from international students, research fees and funding institutes, as well as commercial income. There are questions that the Government would be keen to work with universities on, and, if helpful, I would be happy to meet my noble friend or providers to think about the scale and breadth of courses offered by individual institutions and groups of institutions within an area, as well as about how the cost base of institutions will develop in future.

4.15pm

I thank my noble friend for raising a valuable discussion on this topic. The Government absolutely agree with him that a sustainably funded higher education sector is vital to our national economy and to the prospects of the many thousands of people it educates every year. However, the Government do not believe that it is fair to students to increase tuition fees at this time. Therefore, I ask him not to press his amendment. For the reasons set out earlier, the Government cannot support the other amendments in this group.

Baroness Garden of Frognal (LD)

My Lords, I thank the Minister for her response. I am sorry that my arguments for putting the 10 notional hours in the Bill did not meet with her approval. Of course, secondary legislation can be amended much more readily than things that are in the Bill. I will have to read her answer on the credit structure as I was getting slightly confused about that—if Oxford would get only 20 credits, oh dear, what has happened to my old university? I will have to read that carefully and see where the argument was going.

On Amendment 6A in the name of the noble Lord, Lord Johnson, again, I am not quite sure why fees should not increase with inflation. I realise that, at the moment, nobody wants anything to increase at all because we are in a difficult time when money is scarce for a lot of people, but the noble Lord gave figures about how the disparity has grown. I speak from a party that did not want university fees at all—by golly, were we punished for that—but we costed it and worked out that an awful lot of students would not pay fees anyway. The cost of setting up the Student Loans Company and chasing down students all had to be put in the negative. It was a fully costed programme, but obviously it did not serve us well at all.

I hope the Minister will look again at the noble Lord’s amendment. One reads about the UEA getting into all these troubles and probably having to forego its creative writing course, which would be a lamentable outcome, given the incredible people who have come out of that course over the years. Anyway, I thank her for the reply. We shall consider everything she said, but I beg leave to withdraw my amendment.

Amendment 2 withdrawn.

Amendment 3

Moved by

Lord Watson of Invergowrie

3: Clause 1, page 2, line 34, at end insert—

“(3A) Regulations may not provide for credits to be differentiated according solely to whether the learning time is spent on in-person learning or on distance learning for the purposes of this Schedule.”

Lord Watson of Invergowrie (Lab)

My Lords, I shall speak briefly to Amendments 3 and 6 in my name and those of my noble friend Lady Twycross and the noble Lords, Lord Addington and Lord Storey, whom I thank for adding their names. I shall then speak a little more widely on a closely related matter, after I have given some attention to the per-credit limits issue in the amendments.

On the wording of these amendments, I do not doubt that either part-time or distance learners—in some cases they will be the same person—will be treated less favourably in terms of credits than those engaged in full-time face-to-face teaching. It would be helpful to have from the Minister confirmation that there will be a single per-credit fee limit that applies to the whole system and will not vary depending on the mode, subject or method of study.

The main reason for submitting these amendments, apart from that issue, was to facilitate a debate on maintenance support for distance learners. Given the narrow nature of the Bill, an amendment referring directly to maintenance support was ruled out of scope by the Public Bill Office; none the less, its staff then assisted me in putting this wording together. Currently, part-time students studying face to face are entitled to receive maintenance support. However, with the exception of those with a disability, the vast majority of part-time distance learning students are not entitled to maintenance support. The introduction of the lifelong learning entitlement offers an opportunity to make this important change—one that would facilitate greater access to and flexibility around lifelong learning, which is surely something that the Government want.

However, the Government’s response to the lifelong learning entitlement consultation made it clear that, while maintenance support will be extended to all designated courses and modules that are studied face to face, distance learning courses will continue to be denied maintenance support. There is no further detail to explain the reasoning for such a decision. I very much hope that the Minister will provide that information to noble Lords today. As I said at Second Reading, this decision flies in the face of the DfE’s own policy impact assessment for the Bill showing the extent to which financial concerns are a key reason for part-time learners—in particular mature learners, who are naturally more debt-averse—not accessing higher education study. When I asked the Minister at Second Reading why that assessment appears to have been ignored, she declined to provide an answer; I hope that she will do so today, because it is essential that the lifelong learning entitlement extends maintenance support to all learners.

Together with my noble friends Lady Thornton and Lady Wilcox, I raised this issue at Second Reading. Unfortunately, in her reply, the Minister danced around the question, linking it with the status of online learning, which is of course part of distance learning, and making sure that these courses work for those leaving school or those who are already in employment and have this flexibility. Yes, the fact that the maintenance offer will now be available for face-to-face part-time study below level 6 is a welcome step forward for many learners at levels 4 and 5 but it still stops short of including distance part-time learners. My question for the Minister is this: why should distance learners be discriminated against in this way?

The Tory Government have previously signified their support for the introduction of maintenance loans for part-time distance learners. That was in 2017, but, unfortunately, the measure has never been introduced. At that time, it was stated that, subject to satisfactory controls, part-time maintenance loans would be extended to distance learners with effect from the 2019-20 academic year. However, this commitment was abandoned in March 2019 on the basis that demand would not be high enough to make the distance learning loans viable. No evidence was offered to support that claim; again, I hope that the Minister will be able to fill that information void today.

The question needs to be asked: how could it have been known that there would be insufficient demand if that demand had never been tested? Ah, but it has been tested—just not in England. There is solid evidence that introducing maintenance support for part-time and distance learning students makes a difference; its introduction in Wales in 2018-19 illustrates the significant impact on demand for part-time learning. Surely the time has come to learn from Wales—not something that comes easily to DfE Ministers or officials, I suspect. At the very least, this Government owe it to distance learners in England to offer them the opportunity and then assess the results. Extending maintenance loans to distance learning students would help mitigate the current cost of living pressures facing distance learners, which, as I said, are beginning also to have an impact on mature students and discourage them from entering study.

I believe that it is vital to promote lifelong learning by providing greater access to financial support to meet existing financial commitments for distance learners, such as caring responsibilities. I know that the Minister genuinely wants to see the reach of the lifelong loan entitlement extend as far as possible and to secure the best learner outcomes. Extending maintenance loans to distance learners would enhance those aims. I look forward to hearing assurances from the Minister as regards the per-credit fee limit being applied equitably, irrespective of the mode of study. I beg to move.

Lord Addington (LD)

My Lords, I do not think I have to add much to what the noble Lord, Lord Watson, said as he is a man who never leaves you in any doubt that he has done his research. However, distance learning should be part of the network and structure of how you acquire qualifications and carry on doing so, updating them as you go through your working life. There cannot be much doubt that it is a good idea, so making sure that alternative forms of study, including distance learning, are covered in the Bill is—well, blindingly obvious comes to mind. We need to have this structure to make sure we are reaching the people we need to get at to improve their lives and, indeed, GDP—that wonderful thing—and productivity. You name it, training is a key component. Making sure it is more easily accessible in a way that is convenient to people, even if it messes up the paperwork a little, has got to be an advantage. I hope that the Minister will say “Yes, we are going to deal with this in another way”, but unless we have something that gives us some assurance here, the Government are missing an obvious trick. I hope that I and the noble Lord, Lord Watson, will go away suitably chastised that of course the Government are going to do this; they just have not told us how yet.

Baroness Wilcox of Newport (Lab)

My Lords, I declare my interests as noted in the register. As my noble friend Lady Twycross has already stated, the Labour Party supports the financial funding for students as evidenced in this legislation. However, as we have already seen in this debate, we have grounds for exploring further clarity and to probe the details so that we can put the best possible version on the statute book. That is what is behind these amendments from my noble friend Lord Watson and other noble Lords.

It is essential that the decline in higher education is reversed. It requires a funding and regulatory system that supports and encourages lifelong learning. The LLE could be transformative in revitalising flexible higher education and reversing the sharp decline in adult learners. It could also incentivise alternative, flexible pathways that support people to access learning throughout life. However, its detailed design will be key in determining how it will work in practice.

My noble friend Lord Watson’s amendment recognises that the regulations do not currently provide for credits to be differentiated according to whether the learning time is in person or distance learning, and Amendment 6 highlights that different per credit limits may not be prescribed according solely to whether the learning time is spent on in-person learning or distance learning. Flexible and distance learning is the key to lifelong learning and to making courses accessible to people who may not otherwise be able to take them.

As my noble friend Lord Watson has already noted, the current progressive system of student finance we have in Wales means that Welsh undergraduate students have on average less to repay than their English peers, as we continue to provide non-repayable grants and students receive a guaranteed level of maintenance support. In England, currently, part-time students studying face-to-face are entitled to receive maintenance support, but the vast majority of part-time distance learning students are not entitled to maintenance support.

The introduction of the LLE could be a real opportunity to make this important change. It would bring greater access and flexibility to lifelong learning. It is a worthwhile goal that would make all the difference. Maintenance support is crucial to learners from disadvantaged backgrounds to prevent further hurdles to them taking up study. Many adults will otherwise be unable to take up these opportunities. These people would be prevented from transforming their life chances and being part of the skilled workforce that employers, the economy and the GDP need. Many people have existing debts, financial commitments or caring needs. If lifelong learning is to succeed, the system must recognise these differences. Furthermore, an extension to distance learning students would help mitigate the current cost of living pressures facing them, which are beginning to impact on mature students, discouraging them from entering study and threatening continuation rates. This would help to widen participation and support by allowing students to take unpaid study leave or to reduce their hours of work to focus on studying.

4.30pm

I therefore pose the following questions to the Government. Why have distance learners been excluded from receiving maintenance support? What would need to happen to persuade the Government to extend maintenance support to distance learners? Will excluding distance learners from maintenance support distort student choice and force students who want to study via distance learning and require maintenance support to either choose less suitable modes of study or not to study at all? By not allowing maintenance support for distance learning, a significant barrier will be created for participation in lifelong learning. I urge the Government to look again and support these amendments from my noble friend Lord Watson and other noble Lords.

Lord Storey (LD)

My Lords, I added my name to this amendment. I apologise for not being present at Second Reading. I echo the comments made by the noble Baroness, Lady Wilcox, that it is really important that everybody is able to take up these opportunities. The Minister should think carefully about those people who live in rural areas. Last year, I went to Northumberland where I met a group of students who have to travel scores of miles to get to the local college. There is no financial support for their travel, but one way round that would be distance learning. By not providing that opportunity, the Government are denying the opportunities they want to achieve in this very welcome and important Bill.

Baroness Barran (Con)

I will speak to Amendments 3 and 6, tabled by the noble Lord, Lord Watson of Invergowrie, and also in the names of the noble Lords, Lord Addington and Lord Storey, and the noble Baroness, Lady Twycross. These amendments would require that per-credit limits and credit-differentiated activity may not be prescribed solely according to whether the learning is in person or distanced.

Fee limits are not different for distance learning currently, and there is nothing in this Bill that would change this. I hope that reassures the noble Lord, Lord Watson, on one of his questions. I can assure your Lordships that the Government have no intention of differentiating fee limits between distance and in-person learning under the LLE. The per-credit fee limits will be the same for full-time, part-time, face-to-face and distance learning.

Distance learning courses will remain in scope for tuition fee loan support under the LLE. As your Lordships have pointed out, these courses will also continue to be out of scope of maintenance support, which is in line with the current system. However, the Government are committed to encouraging flexibility, and I was grateful to the Committee for acknowledging the important expansion in the use of maintenance loans for living costs and targeted grants. This will make maintenance support available for all designated courses and modules under the LLE, including those currently funded by advanced learner loans and those studied part time. It will also include—a point raised by the noble Baroness, Lady Wilcox—targeted support grants such as the disabled students’ allowance and the childcare grant.

Your Lordships expressed real concern that the absence of maintenance loans might impact on demand for distance learning. The noble Lord, Lord Watson, referred to the impact assessment. I will need to check, but my understanding is that distance learning was not specifically covered in the Bill’s impact assessment. Rather, as the noble Lord knows, the impact assessment was very positive overall, particularly when referring to learners who might be debt averse.

The ratio of distance learners to campus learners has been constant, at around 10%, despite the rapid growth in campus learners over that period, so I do not think there is compelling evidence that the absence of maintenance loans is impacting on demand for distance learning, relative to campus learning.

The noble Baroness, Lady Wilcox, stressed that distance learning was the key to unlocking lifelong learning. I only partly agree with her: I think the key is choice. We need to offer learners choice, whether that be campus learning for those who would benefit from and prefer that approach, and distance learning for those for whom campus learning is not their ideal situation.

On the maintenance loan and distance learners, the Government will roll over the existing exemption that enables distance learners with a disability to qualify for maintenance loans and disabled students’ allowance. The disabled students’ allowance will be extended to all designated courses and modules. The Government intend to review attendance validation more widely, and we will consider any necessary policy changes following the outcome of that review. We believe this amendment to be unnecessary, and therefore the Government will not support it.

Lord Watson of Invergowrie (Lab)

My Lords, I thank the Minister for her response, and I also thank those who spoke on this group of amendments. I am happy to welcome what the Minister said about fee limits not being different and the Government having no intention to change that, and that per-credit fee limits will be the same for all modes of study. It is useful to have that on the record. I know that the Open University was concerned about the lack of specificity on that, and that has been laid to rest this afternoon.

Some issues remain on the question of distance learners’ maintenance. If I understood the Minister correctly, she said that distance learners account for about 10% of all learners taking undergraduate courses and that that figure has remained stable while the overall number has increased. I am not sure that suggests that there is not an issue. How many more would have come forward and participated had they had the support needed—the sort of support to which the noble Lord, Lord Addington, and my noble friend Lady Wilcox referred? These needs will still be there.

It is slightly disingenuous to suggest that the disabled students’ allowance is available. That is basically saying that, if you want to study and are disabled, you can do so from home, but if you choose not to study, you need to make bit more of an effort and could get to classes if you really wanted to. As we have said, this impacts often older learners—those with family or caring responsibilities or a full-time job that stops them doing that. It is in no way a defence of the current situation.

I do not have the figures to cite to the Minister on the impact assessment, but, as I said earlier, when the plan to provide this support to distance learners was abandoned four years ago, it was on the basis that the demand would not be high enough to make it viable. I do not quite know what “viable” is—has it got something to do with repayments? I do not know. We need some more information on this, and it may be possible to get it at Report.

The Government cannot use this Bill to change that because it is so narrow, but this issue will not go away and it will impact on the Bill’s effect, which we very much support, of getting more people to make use of lifelong learning. With those remarks, I again thank everyone who has contributed on this group of amendments and I beg leave to withdraw the amendment.

Amendment 3 withdrawn.

Amendments 4 to 6A not moved.

Clause 1 agreed.

Clause 2 agreed.

Amendment 7

Moved by

Baroness Twycross

7: After Clause 2, insert the following Clause—

“Review(1) The Secretary of State must conduct an annual review of the operation of the provisions of this Act.(2) These reviews must consider the impact of the provisions of this Act on—(a) learner uptake of modular study,(b) learner uptake of non-modular part-time study,(c) uptake of modular study amongst learners aged 30-60 years old,(d) employer spending on lifelong learning, re-training and upskilling opportunities for their employees,(e) the provision of courses offered by higher education and further education providers,(f) the financial sustainability of the tertiary education sector,(g) the Student Loans Company, and(h) the Office for Students.(3) The Secretary of State must lay the report on the findings of the first review before Parliament before the end of 2026.”Member's explanatory statement

This new Clause would require the Secretary of State to annually review the impact of the Act on various aspects of higher education, starting in 2026.

Baroness Twycross (Lab)

My Lords, in moving Amendment 7, in my name and those of my noble friends Lady Thornton and Lady Wilcox, I also lend my support to the other amendments in this group: Amendment 8 in the name of the noble Lord, Lord Addington, and Amendment 11 in the name of my noble friend Lord Watson. I declare an interest as a former student of Birkbeck College, to which I will refer during my remarks.

I will speak primarily to Amendment 7, under which the Government would have to publish regular updates on the important potential impacts of the Bill. The Second Reading debate raised a lot of questions, not least the almost total lack of detail in what is—as has already been highlighted—a very short Bill. This amendment would ensure that those questions do not remain unanswered or unconsidered in future. The timing of the proposed first review, by the end of 2026, would also identify any issues with how the rollout is affecting particular groups for whom the lifelong loan entitlement must work in order for it to fulfil its promised transformation.

Labour will be particularly interested in the extent to which the Bill helps to get people back into education. The amendment would allow us to establish whether this is working in practice for those who have already undertaken an undergraduate degree, for example. We are not at day zero, and this is intended to cover a wide range of people, many of whom may view their involvement in formal education as a distant memory.

How would a residual entitlement be worked out? I declare an interest as a former languages student. Would someone who, 10 or 20 years ago, had chosen a four-year course, including a year abroad or work placement, be entirely excluded from future educational opportunities with funding? Will these definitely be subject to a lower fee limit, as suggested by the Minister in her earlier remarks? I am concerned that an unintended consequence would be lower take-up of longer undergraduate courses. The Minister will be aware that there is also concern from stakeholders that, if the structure around fee limits is not right or it has unintended consequences, this could limit the amount and type of courses offered, which would also limit student choice. Although we support the Bill, we want to ensure that any issues are dealt with swiftly, which a review would allow.

During the Second Reading debate, a number of noble Lords raised concerns about the potential impact of this legislation on the take-up and provision of part-time study. Indeed, this was discussed previously today. Birkbeck College has raised concerns about whether the Government appreciate the risk to part-time study inherent in the Bill. I ask the Minister whether the Government intend to see the end of part-time study in favour of modular study and, if not, will she commit to the Government accepting the need to review the implementation of the Bill to provide a safeguard against this happening?

During the Second Reading debate, it was highlighted that, despite the fact that the UK needs the most adaptable and flexible approach to learning and skills, employers are failing to invest in the skills system. There has been a 28% drop in spending by employers in real terms since 2005. We know that employer investment in skills is less than half the average in EU countries. We on the Labour Benches think that the Government need to ensure that this does not fall further.

We already know that the apprenticeship levy is used poorly by employers. We do not want—and I do not believe that the Minister wants—the lifelong loan entitlement to put the onus for paying for learning to develop skills within roles on to employees without employers having to pay their fair share. This amendment would allow the Government to review whether this pretty dire situation is getting worse. The Labour Party thinks that it would help to guard against a situation in which employers use the system to push their employees and potential hires into further debt to fulfil internal skills gaps. We need both this lifelong loan entitlement and more investment from employers.

Finally, the biggest unintended consequence that this Bill might have would be in effect to undermine the financial viability of institutions that are in some cases already struggling financially. I spent Saturday afternoon playing Jenga with two of my nieces. It strikes me that an unintended consequence of not building in a review of the operation of the legislation while changing the fundamental approach to funding through fees is a bit like playing Jenga blindfolded. Including the financial sustainability of the sector, the Student Loans Company and the Office for Students would allow the Secretary of State to consider this issue formally as part of the overall assessment of how the approach is working. I think that it makes total common sense to build in a review.

I look forward to hearing from the Minister both responses to my questions and whether the Government will incorporate a review into the Bill going forward. I beg to move.

4.45pm
Lord Addington (LD)

My Lords, I have added my name to the noble Baroness’s amendment. I have my own amendment in a similar vein in this group. It is probably about time that I reminded the Committee of my declared interests. I am chairman of Microlink PC Ltd, which supports those with disabilities, and president of the British Dyslexia Association.

The idea of reviewing legislation is sound, particularly so with this Bill because we all basically agree that it is the basis of a good idea; it is useful. It is fundamentally the fact that we are going to address skills in a more flexible manner. More importantly, the real revolution here is going down to level 4. This means that we are looking at a new structure for supporting people to get skills and make themselves more productive, blah blah blah. We have a structure going forward.

My amendment would add two big changes. One is on sharia law. We have spent a great deal of time talking about getting loans that conform to sharia law. We have a spent a great deal of time talking about it in Committee. A great many ideas have come up. There are people who have invested far more in it than me. I do not think that any of them are in the Room now; they are possibly sitting in a corner, quietly crying when it is brought up again. The fact of the matter is that we should have done something by now. It is not beyond the wit of man to do it, apparently, so why has it not happened?

On the second change, I have to apologise to the Committee because it has become one of the little bees in my bonnet: special educational needs. The Minister may have sneakily put in her previous response an answer to some of my concerns around whether the disabled students’ allowance will cover everything in the Bill. I take it that this Bill will expand the DSA down to cover all level 4 courses; if so, we will need a review to look at how it is helping and what it is covering. However, there are odd things about the DSA. A few years back, higher education institutions took over what had been the first tranche of it; that was providing information capture within all the institutions in which there was teaching.

I raised this issue at Second Reading. I understand that I did not get a response due to the scope of the Bill and the limits of time, but we will need to look at how that whole picture of support is worked in or, indeed, whether it does not need to go in. That would come as a surprise. Is it better to have individual support packages for those who have disabilities, for example, to capture what is said in lectures and transfer it to something that can be either read later on or played back? That is a pretty basic function of assistive tech. You get the information presented to you in a form in which you can absorb it.

I hope that the Minister will be able to confirm the comments that she made in her earlier answer and build on them here, as well as confirm that the structure—the institution itself—will bring this in. We are talking about a few microphones, digital recording and going back to platforms that are readily available now. They already exist. Half of these institutions, if they provide higher education, should be doing this anyway. The big difference is in whether they switch the machine on or off, depending on the course level. I cannot see why they would ever switch it off but, hey, I am here and they are there.

Could we have a few clarifications from the Minister about what we are doing and how we are going to observe information, store it and act upon it in the future? We need to do that in order to be sure of the areas that we are talking about. I do not think it would do any harm at all to take both lists and put them together. Please could we have answers?

With regard to both the amendments, mine and that of the noble Baroness, Lady Twycross, I would particularly like to know what we are going to do about sharia law, something to which we should have had an answer a long time ago. The cock-up school of history has probably been active here, but we can do something about it. Making sure that all the provisions of the DSA get in would put my mind at rest on this.

Having a very good system only for those at the top of the education tree by definition excludes quite a few. By bringing it slightly further down, you will expand the number of people who acquire qualifications, which means they will be financially independent and have a good standard of living. Surely that is not too much to ask of a piece of government legislation.

Lord Aberdare (CB)

My Lords, I support Amendment 7, looking to review how the Act is working. I regret that I was not able to speak at Second Reading.

I shall mention some specific issues that I hope such a review would include, reflecting some of the briefings that I and, no doubt, other noble Lords have received. The list of items to be covered mentions the provision of courses offered by higher education and further education providers, but nowhere in the amendment or indeed in the Bill is there any reference to independent training providers, one of my hot buttons. Yet ITPs are likely to play an important part in delivering LLE-funded courses and indeed modules.

There are two specific issues relating to ITPs. The first is that the process for applying for and gaining recognition as a provider in this field needs to be straightforward and efficient. It is good to see the idea of the third recognition route for providers via the Office for Students.

The second, which I suspect the Minister will have less flexibility in responding to, is that, for many of the courses they offer, independent providers have to charge VAT, even though FE colleges providing very similar courses do not, so there is a fundamental issue of fairness there. I know that VAT is largely untouchable, but the advantage of a review such as this is that it might highlight some of the impact of that competitive disadvantage.

The second concern that has been raised is the possible impact on creative subjects. They can be expensive to deliver, requiring extra resources and facilities, and are often seen as less valuable in the world of employment and work, although that is something I would strongly dispute. It would be welcome if the Minister could reassure us, or if the review could help to demonstrate, whether creative subjects are playing their fair part in terms of the courses being offered and taken up.

The third issue is a robust system of information, advice and guidance to support the LLE in general, both to ensure that young people—indeed, all people—considering taking up courses by using the LLE should be clear about what the opportunities, impact, risks and costs are, and to provide good information to potential providers. I am thinking specifically of SMEs, which, again, have an important role to play but may need lots of support and information in order to know how to play it.

That would all feed into the various uptake headings—the first three all relate to uptake by learners—so a review as proposed by the amendment would be really helpful in making sure that the aims of the Bill, and indeed of the lifelong learning entitlement as a whole, are being met. I hope the Minister will be able to tell us something about how the Government are planning to review these issues anyway with or without the amendment, but the amendment is a jolly good idea.

Lord Willetts (Con)

My Lords, I shall indeed ask some further questions of the Minister arising from the proposal in this amendment, because I think that it is aimed at learning as much as possible about this very bold initiative. First, following on from some of the points made by the noble Baroness, Lady Twycross, how will this scheme interact with employer spending? Clearly there are upsides and downsides. It is possible that the ability to spend some money from this loan alongside spending from an employer will make vocational courses and provision viable when they otherwise would not have been, and that is a good thing. On the other hand, there is the risk of some employers shedding their responsibilities and expecting an employee to use this loan scheme to finance training that they would otherwise have funded. It would help a lot of us if in her answers—they are always very helpful and informative—the Minister could explain exactly how the Government envisage they are going to monitor and manage that process so we know how we get the best possible outcome of the extra total spend on training and not the worst outcome, which would be the taxpayer simply picking up more of the bill with no increase in the total. Any indications on how employer spending might react would be very helpful.

Secondly, on the provision of courses offered by higher and further education providers, the Minister will know that I am interested in one possible use of this scheme being that at last we have a clear indication of public finance through loans for four years of higher education. Of course, that could be taken at different points over someone’s life in lots of different engagements with higher education, but equally, it could be four years in one go. If she could offer an indication of the Government’s support for that way in which students could benefit, it would be helpful.

I hesitate to add any suggestions of uncertainty when there is quite a lot of cross-party consensus on this issue, but it would be understandable if some people young thought “I don’t know how long this lifelong loan scheme is going to be around; if I’m currently eligible for it, I am going to take my chance now and get on with it rather than necessarily being confident it’s going to be around in 20 years’ time when I’m at a different stage of my career”. Being clear on the opportunity for people to take a four-year loan now would be helpful, and I hope the Minister can inform the Committee further on that.

Lord Storey (LD)

I rise to support my noble friend Lord Addington’s amendment. I want to tease out of the Minister some answers on sharia law and its effect on accessing education opportunities for all. I was with a group of about a dozen Somali women on Sunday. They have that conflict between faith and education. The Minister will remember that in 2014—nine years ago—the Government published a report on Islamic finance in the UK that acknowledged the lack of an alternative financial product to conventional student loans. It was a matter of concern. The report also identified a solution: a frequently used non-interest-bearing Muslim financial product. The Government explicitly supported the introduction of such a product. However, since then no sharia law-compliant student finance scheme has been made available. Why not, Minister, and what we are going to do about it?

Lord Watson of Invergowrie (Lab)

My Lords, I will speak to Amendment 11. Before doing so, however, I want to touch on a point that the noble Lords, Lord Addington and Lord Storey, made about sharia-compliant loans. I can remember a time so far back it was before the Minister was even in your Lordships’ House, during the debate on the Higher Education and Research Act. The noble Lord, Lord Willetts, will remember, because he was very active in that. At that time, the issue of sharia loans came up. That finished immediately prior to the 2017 general election, six years ago. Why on earth has it taken so long? I suspect the Minister will not have the answers now, but someone in the Department for Education—or maybe the Treasury—should have. The answers must be found, it cannot be that difficult. Basically, I echo what other noble Lords have said: get a move on because it is a problem that surely cannot be insuperable.

5.00pm

I shall say a bit about my amendment now. Amendment 11 would mandate the Secretary of State to undertake a review on the impact of defunding level 3 courses. The need for this relates to the Government’s defunding of many of them, changes which many people believe will result in a drastic reduction in 16 to 18 year-old students being able to learn and achieve at level 3, because many will see no option that is attractive to them in the sector, trade or profession they want to pursue.

I mentioned the Higher Education and Research Act, and I now invoke the Skills and Post-16 Education Act. Just over a year ago, many noble Lords will recall a series of amendments to that then Bill on the question of defunding BTECs and AGQs. They were successful in your Lordships’ House, but ultimately overturned in another place. This led to the then Secretary of State for Education issuing a series of commitments to ensure that the Bill was passed, the most important of which was that only

“a small proportion of the total level 3 BTEC and other applied general style qualification offer—significantly less than half”

would be removed. These commitments were echoed by the Minister in your Lordships’ House.

In January this year, however, the Government finally published a guide to their qualification approval process, which included a much more limited than anticipated list of subjects that they will fund from 2025. When that list is mapped against 134 applied general qualifications that are currently available to young people, 74 will not be funded in the future. However you characterise that, it is not a small proportion. This change of approach is described in the DfE’s own guide—also published in January—as

“a conscious choice by Ministers to further streamline the qualifications landscape and to ensure that wherever A levels and T Levels exist, students are channelled to these highest quality options”.

This “conscious choice” will have a hugely damaging effect on student choice, because 69% of students currently enrolled in an AGQ—about 350,000—are studying qualifications that will be scrapped before the approval process begins. This figure is certain to rise even higher by the time this process concludes. While the Government would like T-levels to replace BTECs, just 15,000 students are enrolled on T-levels, despite more than £1 billion of public investment in them since 2017.

I stress that this amendment is not anti T-levels. I am not anti T-levels; I genuinely want them to succeed. However, colleges across the country are extremely concerned about the impact of the Government’s plans to defund these qualifications, both for the effect on reduced opportunities for young people to which I referred, and even for the future financial viability of some colleges. Additionally, if fewer learners achieve level 3 qualifications, this could lead to decreasing participation at levels 4 and 5. This would negatively impact the number of people able to take advantage of the lifelong loan entitlement, which would surely frustrate the Government’s intention in its introduction.

Noble Lords may be aware that the shadow Secretary of State, Bridget Phillipson, has said that a future Labour Government would pause the cull of BTECs and review the process. Unfortunately, we are not quite there yet, but that point should be noted.

If the Minister and her officials are so confident—as they have been in our previous discussions on this matter—that the damage the sector warns of will not happen, then she should not have any hesitation in accepting this amendment, because a review would surely vindicate her optimism.

To finish—it has become a cliché but like many clichés, there is an element of truth in it—I believe we should be defending BTECs, not defunding them.

Baroness Barran (Con)

My Lords, Amendment 7, tabled by the noble Baroness, Lady Twycross, and in the names of the noble Lord, Lord Addington, and the noble Baronesses, Lady Wilcox of Newport and Lady Thornton, Amendment 8, tabled by the noble Lord, Lord Addington, and Amendment 11, tabled by the noble Lord, Lord Watson of Invergowrie, would place requirements on the Government to review the impact of the Act. I take this opportunity to confirm that the Government agree with the sentiment behind these amendments and are fully committed to monitoring the impacts of this transformation of student finance.

As your Lordships will be aware, the Government have published an impact assessment for the Bill which includes a consideration of impacts on learners, providers and employers. A full impact assessment and an equality assessment were also published alongside the Government’s response to the LLE consultation. In addition, parliamentary accountability mechanisms are already in place to review Acts of Parliament, including post-legislative scrutiny reviews, and I take this opportunity to acknowledge the Education Select Committee in scrutinising the work of the department.

Amendments 7 and 8 would require the Government to review the impact of the Act in relation to multiple different areas. However, vehicles through which these areas can be monitored already exist. For example, I take this opportunity to refer your Lordships to the publications produced by the Higher Education Statistics Agency, which will continue to publish data on learner uptake, personal characteristics of learners, including disabilities, and student course enrolments. Similarly, data on the take-up of level 3 courses, as referenced in Amendment 11, is available on the government web pages. I also refer your Lordships to publications from the Office for Students, including its annual report and accounts, as well as publications on the financial sustainability of the sector. Furthermore, information on student loan borrowers is publicly available from the Student Loans Company.

The Government are working jointly with the Student Loans Company and the Office for Students throughout the development and implementation of the LLE. I refer your Lordships to the framework document between the DfE and the OfS, which was updated in January 2023. It sets out the governance framework within which the OfS and the DfE operate, including in relation to financial matters. The department and the OfS will continue to work together to monitor expenses, funding, resources and efficiency via business planning.

I note that Amendment 8 references the impact of the credit-based method on students with disabilities and those with a need for a sharia-compliant loan system, among other criteria. I clarify that the fee limits are set on courses, not students. Therefore, the credit-based method, like the current fee-limit system, will not depend on any characteristics of individual students. All students on a course will have their fees determined in line with the same fee-limit rules, regardless of whether they have a disability, self-fund or use alternative loan arrangements.

I take this opportunity to assure your Lordships that the Government remain committed to delivering an alternative student finance product compatible with Islamic finance principles alongside the LLE. We were grateful for the support and contributions of noble Lords on this issue during the passage of the Financial Services and Markets Act. I can confirm that, in April, I met the noble Lord, Lord Sharkey, and representatives from the Islamic community, including the Islamic Finance Council UK, to discuss the steps the Government are taking to deliver alternative student finance as swiftly as possible. I look forward to meeting them again—later this week, I believe.

Lord Watson of Invergowrie (Lab)

They may have been confidential discussions, but is the Minister able to tell the Committee what the stumbling block is to introducing suitable loans?

Baroness Barran (Con)

I am familiar with what the current issue is and, if I express myself in any way inaccurately, I know that my colleagues will help me to write to the noble Lord and all your Lordships. The issue is that there are obviously very significant changes to the Student Loans Company systems with the establishment of the LLE, and sharia compliance should not be an add-on on the end. It needs to be woven through every single one of them and we are committed to doing that really important job. It is very significant in its complexity, but I am happy to set out more detail in a letter to the noble Lord, if that is helpful. I can stress, knowing what I think is behind his question, that there is no lack of motivation and commitment to doing this. It is a practical barrier rather than any other.

Returning to my recent meeting with representatives on this issue, we will continue to engage with your Lordships, Members of the other place and representatives from the Islamic community. I will be able to provide a further update on alternative student finance later this year.

Delivering the Government’s vision for the LLE will require, as I just said in response to the noble Lord’s question, extensive changes to the student finance system and the types of course available. Introducing ongoing reviews into primary legislation before policies have been fully implemented or had sufficient time to bed in would, we believe, be of limited value, if any, particularly when the Government want to focus on working with the sector and learners—and indeed with employers, as your Lordships raised—during implementation.

As your Lordships know, we often see initiatives in post-16 education needing time to scale up to reach their full potential. The noble Lord, Lord Watson, referred to the development of T-levels, which have been deliberately phased to ensure high-quality provision. There are now 16 T-levels available, with 164 providers. Over 10,000 new students were recruited to T-levels in 2022; that is more than double the 2021 figure, but there is obviously also tremendous growth potential there.

I turn to some of the specific questions which your Lordships raised. The noble Lord, Lord Aberdare, hoped that there would be a straightforward registration process for independent training providers. Of course we need to make it as straightforward as humanly possible; equally, it needs to be appropriately rigorous so that we uphold quality because, as the noble Lord understands extremely well, there have been issues with the quality of provision and we really do not want to go there again with these reforms. We are very committed and keen to ensure that we uphold quality at all times, so simplicity of process should not trump the quality of delivery.

In relation to VAT, the noble Lord answered his own question; it is considerably above my pay grade. On creative subjects, I had breakfast last week with a group of tech companies to talk about STEM careers. A number of them really wanted to talk about only the importance of creative subjects within a STEM career, so I agree with much of the sentiment that the noble Lord expressed on that.

5.15pm

My noble friend Lord Willetts asked about the Government’s view on four-year degrees. As he knows, the Government rightly tread a delicate line when it comes to the relationship with providers; they should not, and do not, want to be seen to push providers one way or another. Where I hope we have been really clear is on the importance of flexibility, quality and value for money for students. I know my noble friend has also considered the value of two-year degrees as well as four-year ones. That is something for providers to reflect on seriously when it comes to perhaps using these changes to rethink some of the options that they offer to students.

The noble Baroness opposite raised many points relating to unintended consequences. I shall pick up two of them. First, I understand her concerns that there might be disincentives and that the emphasis on modular learning would be such that one would lose part-time learning. That is not something we expect to happen. If one considers those members of the workforce who are in work and considering upskilling or reskilling, as we heard in earlier debates, one sees that there is a huge value in part-time education. Like the noble Baroness, I spoke to Birkbeck and the OU in preparation for today’s debate along with another number of other providers, and they all talk about how a number of their mature students in particular really value part-time provision. That is something that we will track closely, but I think we will see different groups of students preferring different modes of delivery, whether that be distance learning—in relation to our earlier debate—part-time or shorter full-time courses.

On the issue of the risk of employers just using this as a way of—my words are stronger than hers—abdicating responsibility for training their workforce, I think the noble Baroness would agree that this country needs a big cultural shift in the way that employers regard their investment in their workforce. We have heard from employers two things that I think are mutually consistent. The first is a concern that when employees get additional qualifications, they become attractive to other employers too. I have spoken to employer representative organisations that have suggested that some employers are considering—again, these are my words, not theirs—golden handcuffs so that if a member of their staff goes on additional training and stays with the firm for a certain period then the employer might pay off either all or part of their loan. That could work in other ways, but a change in culture is important.

The noble Lord, Lord Aberdare, and other noble Lords talked about the importance of information, advice and guidance. In a way, that goes to the heart of the whole question of culture: how quickly will students and providers feel confident to shift from their current models? Information, advice and guidance is clearly critical to that, and it is important work that we need to put in ahead of the launch of the LLE.

I hope I have set out a number of reasons why the Government do not feel they can support these amendments.

Lord Addington (LD)

I think the Minister covered my questions, but just to make sure that bears of little brain have no confusion about this: all the provisions for anyone entitled to the DSA are now available at level 4, and the responsibilities of the colleges and universities providing this are the same as they would be for those on the traditional undergraduate course. So information capture and structuring are required to be there, and if they are not then there are consequences. Is that right?

Baroness Barran (Con)

That is the basic principle we are following but I will set it out absolutely accurately in a letter to the noble Lord.

Baroness Twycross (Lab)

I thank the Minister for her detailed reply to this debate. I particularly welcome her strong words on the need for employer investment, which is a shared concern. I also welcome others noble Lords’ contributions to this debate. In particular, I note the strength of feeling from the noble Lords, Lord Addington and Lord Storey, and my noble friend Lord Watson in relation to ensuring that sharia law-compliant funding is available. I welcome the commitment from the Government and the Minister to ensure that alternative finance is available. As the noble Lord, Lord Addington, said, this can and should happen; everybody on all these Benches agree that it is a priority.

The noble Lord, Lord Aberdare, mentioned the need for independent training providers to be included within the scope of any review and in the Bill, including, in his words, making the process straightforward. We agree with the Government on the need for rigour in this process in order to ensure quality without making it impossible for independent training providers to apply to be within the scope of this provision. I feel passionately about creative subjects, so I am pleased that the noble Lord raised them.

I do not think we heard the point made by the noble Lord, Lord Willetts, on scepticism from learners. It is a valid point and one that was worth raising in terms of the concern that some learners may have that this may be a scheme that is here today, gone tomorrow. One thing that we need to make sure we get clarity on is how learners will get some sort of model; I do not know how we can guarantee it but this debate has, I hope, demonstrated that there is cross-party agreement that this model would work.

I feel—I think that I speak for Labour colleagues, but I do not want to speak for other parties—that there is a view that periodic reviews of the legislation’s impact may help to ensure that students do not feel sceptical about this and that learners do not feel that they need to use all the money now or else risk not being able to access it in future. I appreciate that the Minister feels that some of the assurances that we would want from a review are already covered by other mechanisms and other forms of scrutiny, but Labour is not yet convinced that that is sufficient. We would welcome an opportunity to discuss further with the Minister how we can build additional reviews into the Bill and into future scrutiny of the legislation. We feel that periodic reviews of the impact of the legislation will ensure that it is delivering what it promised, including people feeling able to wait 10 or 20 years to take up some of the funding.

I appreciate that the Minister is unable to say today that the Government would support including this measure in the Bill. We would like to discuss it further, but I beg leave to withdraw Amendment 7.

Amendment 7 withdrawn.

Amendment 8 not moved.

Amendment 9

Moved by

Lord Addington

9: After Clause 2, insert the following new Clause—

“Guidance in relation to the provisions of this ActIn section 2 of the Higher Education and Research Act 2017 (general duties), after subsection (1)(e) insert—“(ea) the need to provide information to students about changes made by the Lifelong Learning (Higher Education Fee Limits) Act 2023.””Member’s explanatory statement

This amendment amends the Higher Education and Research Act 2017 to require the Office for Students to provide information to students about the changes made by the provisions of this Act.

Lord Addington (LD)

My Lords, this is a fairly straightforward issue. It is about making sure that people are adequately informed about the changes to the way courses are funded. There are two primary targets. One is the institutions themselves; the other is pupils and those providing educational support to get them ready. My primary aim is the school structure, which is dominated by A-levels. Let us face it: we are a group that is probably rather dominated by those who decided that level 6—degree-level traditional learning—was for us. We aspired to it. We all know that what we did was right so expecting teachers to do something other than that will require intervention and periodic reminders.

Let us face it: the figures I have in front of me show that, from 2008-09 to 2019-20, there was a 72% drop in people taking non-degree level courses. In that age group, it has become very unfashionable. We have a skills gap that is decades old. It used to be called technician level but it is where we have always had a skills gap. We know how to push people into degrees but there are dozens of stories—I have been provided with many from the creative industries—about people effectively having to retrain at a lower level of skill on an ad hoc basis to fulfil job roles. People take exams for degrees to get a job. It may well be that everybody would be a damn sight happier—and it would be quicker and cheaper—to make sure they can see levels 4 and 5. Possibly this Bill provides reskilling and skills updating; maybe it is not perfect but it should provide that model. I hope that we will all get behind making sure that we have enough knowledge to get the best out of this change because there is no point in doing it if people do not know it is there.

I have just had it confirmed that one of my little pet hates on this has been removed, which is great. So there is a chance for just about everybody to go through and—I am waving my dyslexia flag here—a lot of that group might be better off taking on something that is not so language-based or report-based. We need a further commitment to making sure that everybody knows about this new option because it addresses a historical problem—I say “well done” to the current Government for grabbing hold of that—and means that people will get what they want from it. If you want the level 6 experience, which we all know is wonderful because we did it, that is great. However, at the moment, people do not know about the other options, especially in terms of the level 3 T-levels and whether they work. I should have said something nice about the amendment tabled by the noble Lord, Lord Watson, in the last group, but I forgot; I apologise. We should make sure that something happens there and that we have reassurance that people are informed about their options because there is not much point in doing it if nobody knows about it. I beg to move.

Baroness Wilcox of Newport (Lab)

My Lords, Amendment 9 simply asks for more information and guidance. The Bill has been drafted incredibly narrowly in comparison to the full scope of the LLE. I often told my students when they were performing in their examination pieces that less is more when creating a character on stage but, in terms of the detailed guidance in the Bill, we are left with many questions about how it will work in practice. All we want to do is try to ensure that greater substance and practicality is put into the Bill, thus lessening the need for secondary legislation.

Stakeholders have brought up concerns about not yet knowing the details that, when taken together, will make or break whether the LLE will help more people to enter education for the first time later in life; help them to build on existing skills; or allow them to spread that learning over their lifetime. There are uncertainties around the range of courses, the LLE’s role within the wider funding context and its relationship with minimum entry requirements. More detail needs to be included to ensure that it will be effective in boosting lifelong learning. We need greater clarity on the concepts at the centre of the Bill.

There needs to be strong information, advice and guidance campaigns targeted towards both prospective students and employers, which are vital to the success of the LLE. Prospective students of all ages will need help to navigate the widening pool of options and opportunities available to them, and employers will need support to understand and recognise the various qualifications of potential employees.

5.30pm

Information, advice and guidance for adult learners is generally underresourced and of variable quality. Moving towards modular and less linear progression routes is welcome as it brings greater flexibility for the learner. However, it adds to the complexity of the learner journey and therefore advice is needed to navigate choices and make the next steps. Learners will need to have the financial implications of their loan fully explained and set out, striking a balance between ensuring that learners fully understand their obligations and making the options accessible, not onerous or off-putting. Marketing and targeted information through various national bodies, community organisations, councils, charities and faith groups will help to ensure that no individual or community is left behind. This information must be sustained over the longer term to ensure its success as it grows across our societies.

The amendment of the noble Lord, Lord Addington, simply asks for guidance in relation to the provisions of the Bill that are to be provided to students by the Office for Students. We on these Benches fully support the amendment and would support an even wider information campaign to make the LLE a success for all learners.

Baroness Barran (Con)

My Lords, Amendment 9, tabled by the noble Lord, Lord Addington, would require the Office for Students to have regard to the need to provide information to students about the changes made by the provisions of the Bill. The noble Lord set out clearly the skills gap that the Bill seeks to address and the flexibility it seeks to introduce as an Act, if passed. He is right that this is a significant change that we need to communicate effectively.

I can assure your Lordships that the Government understand the critical importance of ensuring that students are aware of the benefits of the lifelong loan entitlement, including the fee-limit system. Ongoing sector engagement has been, and will continue to be, an integral part of delivering the transformation of student finance that the Government aim to achieve. The Government will work with key organisations and delivery partners, including the Student Loans Company, to support providers in implementing the changes, learners in making informed decisions and employers in recognising the value of the LLE. This information, advice and guidance will be supported by stakeholder engagement, targeted communications and promotion to future learners and others, ensuring that the right information is communicated at the right points to aid delivery of the LLE.

The noble Baroness, Lady Wilcox, stressed the need for clarity. I remind the Committee that prospective learners will have access to an LLE personal account—I think they will be able to get it on their phone—which will support them to make choices on how they spend their entitlement. This will change the way in which they interact with the student finance system and make it simpler, easier and more accessible for those who, previously, never thought that higher education might be possible for them.

The Government will work closely with the regulators to ensure that providers understand how fee limits apply to their courses and modules. As is the case currently, providers will take responsibility for making clear to students what the cost of each course will be. I can assure your Lordships that the Government will keep the available information, advice and guidance under review to ensure that learners have what they need to make informed choices. I stress that, ahead of the introduction of the LLE in two years’ time, a great deal of work will go into ensuring that learners have the information they need.

I thank the noble Lord for his amendment and strongly agree with the spirit and intentions behind it, but as the Government are already focused on the range of information, advice and guidance that will contribute to the successful delivery of the LLE, the Government cannot support the amendment.

Lord Addington (LD)

A hint of agreement, my Lords, but the main thing here is finding out what so that we can figure out how it is being done. Can the Minister at some point give us some form of guidance about the level of preparation for what is to happen? When it is going to happen would seem to be the next question. If the Minister is in a position to answer now, I shall give way.

Baroness Barran (Con)

I shall be delighted to keep the House updated as we progress in whatever form is most useful.

Lord Addington

Mentally, I had about another five minutes on this, but as somebody who did not read the review, it would probably be churlish to say other than that I thank the Minister for her response and hope that everything she said would be provided by the department will come through regularly. I promise that if it does not, we will be back do it. Let us hope we do not have to do that. I beg leave to withdraw the amendment.

Amendment 9 withdrawn.

Amendment 10

Moved by

Baroness Twycross

10: After Clause 2, insert the following new Clause—

“Review of impact on Lifelong Loan Entitlement rolloutWithin six months of the day on which this Act is passed, the Secretary of State must make a written ministerial statement updating both Houses of Parliament on the impact of this Act on the rollout of the Lifelong Loan Entitlement.”Member's explanatory statement

This amendment would require the Secretary of State to publish a written ministerial statement updating Parliament on how this Act affects the progress of the Lifelong Loan Entitlement policy.

Baroness Twycross (Lab)

My Lords, I rise to move Amendment 10 in my name and those of my noble friends Lady Thornton and Lady Wilcox. The purpose of this amendment is somewhat different to the amendments in group 4. This amendment would introduce an early review of the rollout of the lifelong loan entitlement. We think this is necessary, given the extremely low—indeed, poor—take-up during the pilot stage. We have heard concerns from stakeholders that the pilots were primarily intended to test the IT system at the Office for Students. Although that is an important thing to test, it means that the impact on the wider sector and the level of interest among the general public remain untested.

Given that the intent behind this legislation has sector and cross-party support, I find it surprising that the Government are rolling it out without testing it fully. We do not understand why the Government have not had a wider, more thorough pilot stage of this approach. We are also concerned that, given that guidance on adult education has been severely fractured since the end of Connexions, the lifelong loan entitlement means that the Government may need to rethink the framework of adult careers advice completely.

How do the Government intend to ensure that learners and, more importantly, those who are not learners, will be aware of the changes to their entitlement? In my view, this is particularly important for those who do not have a history of further or higher education. What will the Government do to ensure that they know what options are available throughout their careers? How are the Government intending to ensure that individuals are supported in their current career or support them to make a career change?

As I said, the pilot appears to have been entirely about IT systems, not the interaction of people with the education system. This runs counter to what appears to be the intention of the Bill, and the rollout of the lifelong learning entitlement should move us to a situation in which we can treat further and higher education as something that can and should enrich the lives and careers of people throughout their lives. It is right to ensure that the IT system works; it is, however, wrong not to look at how this new funding system works in practice for those it is intended to help. It seems almost reckless not to build a review of the rollout into the legislation, and I hope, although I am not convinced she will, that the Minister agrees. I beg to move.

Baroness Barran (Con)

We are so speedy, my Lords. I will speak to Amendment 10, tabled by the noble Baroness, Lady Twycross, and also in the names of the noble Baronesses, Lady Wilcox of Newport and Lady Thornton. This amendment would require a review whereby the Secretary of State would publish a Written Ministerial Statement as to the impact of this Act six months after Royal Assent. As we mentioned in our debates on earlier groupings, the Government are fully committed to monitoring the impacts of this transformation of student finance.

In accordance with the better regulation framework, I can assure your Lordships that full and detailed impact assessments will be published when the Government lay the secondary legislation to implement the LLE fully. In addition, as is standard practice, Explanatory Memoranda will be laid alongside all regulations to detail the scope and purpose of them. The Government will publish them on the dedicated government legislation website to outline fully what the regulations do and why. I can also confirm that the Government will endeavour to publish a Written Ministerial Statement ahead of laying regulations under this Act.

Delivering the Government’s vision for the LLE will require extensive changes to the student finance system and the types of courses available. Introducing into primary legislation a requirement to publish a Written Ministerial Statement before policies have been fully implemented or had sufficient time to bed in would not, in our opinion, be appropriate. I also take this opportunity to refer once again to the parliamentary accountability mechanisms that already in place to review Acts of Parliament, including post-legislative scrutiny reviews.

Furthermore, the LLE as a policy is much wider in scope than this Bill. As such, the Written Ministerial Statement sought through this amendment would focus narrowly on fee limits and not on the impact of the LLE as a whole, which is, I think, behind the spirit of the noble Baroness’s amendment. The necessary suite of regulations needed to implement the LLE is expected to be laid more than six months after Royal Assent, given that the LLE will be implemented from the 2025-26academic year. Therefore, such a Written Ministerial Statement would neither cover as much detail as the existing plans for further scrutiny nor be able to consider the implementation of the LLE in its entirety.

The noble Baroness referred to the short course pilot. She is absolutely right that part of the point of it was to test the Student Loans Company’s systems. We are pleased to have been able to do this. During the trial’s launch, 22 providers developed more than 100 courses, which will be delivered at various points during the three-year trial period. We are a bit over a year into the trial; there are still two more years to go. The noble Baroness is right that this is a really important opportunity to test the shape and size of demand for these courses.

With those reservations, I have, I hope, explained why the Government do not support this amendment.

Baroness Twycross (Lab)

I thank the Minister for her reply. I am pleased that the Government intend to monitor the impact of the legislation and welcome the Minister’s commitment to the Government endeavouring to publish a Ministerial Statement before secondary legislation is laid. “Endeavour” is a slightly unfortunate word; we would welcome a stronger commitment than that.

We could probably do with a bit more detail about what the pilot involves. There is a slight difference in terms of whether it is intended to test computer systems and whether it will be ongoing as we develop the legislation. It feels a little ad hoc in that we are agreeing legislation while the pilot is ongoing; this strengthens the argument for building in a review at an early stage of the rollout of the policy. It does not speak to me against the need for a review that would bring up any adverse impacts of the approach so that they can be dealt with at an early stage. This is another thing on which we would welcome further discission with the Government.

I will not say any more as I do not want to risk us derailing what has been a really positive debate today. I beg leave to withdraw Amendment 10.

Amendment 10 withdrawn.

Amendment 11 not moved.

Clause 3 agreed.

Bill reported without amendment.