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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 274-i

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Business, Innovation and Skills Committee

Government reform of Higher Education: Follow‑up

Tuesday 12 June 2012

Rt Hon David Willetts MP

Evidence heard in Public Questions 1 64

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Oral Evidence

Taken before the Business, Innovation and Skills Committee

on Tuesday 12 June 2012

Members present:

Mr Adrian Bailey (Chair)

Mr Brian Binley

Paul Blomfield

Katy Clark

Rebecca Harris

Ann McKechin

Mr David Ward

Nadhim Zahawi

________________

Examination of Witness

Witness: Rt Hon David Willetts MP, Minister for Universities and Science, Department for Business, Innovation and Skills, gave evidence.

Q1 Chair: Good morning, Minister, and thank you for agreeing to come before the Committee. Just for voice transcription purposes, could you introduce yourself?

Mr Willetts: David Willetts, Minister for Universities and Science.

Q2 Chair: Thank you very much. Earlier in the year you wrote to me saying that the response to the November Committee report would be provided "immediately after the Queen’s Speech". What stopped you giving the report then?

Mr Willetts: I should apologise to the Committee for the series of delays in responding to this Committee’s report, which, of course, was published last year and which we have been considering very carefully. We had, first of all, of course, the need to wait to see what the collective decision would be on whether there would be legislation in the Queen’s Speech. After the Queen’s Speech we needed to finalise our response to the Committee’s report, and then our advice was also that it would have been bad practice to have produced the report during the recess. So there have been a series of reasons for the delay, but I do unreservedly apologise to the Committee because I know it has meant that it has been both a long time since this Committee’s report and it has also meant that, sadly, this Committee has had not enough time to consider our response, which we produced the day the Commons was back after the recess.

Q3 Chair: I find your response amazing: that you consider it would be bad practice to publish the response during recess. If that is bad practice, I cannot think what practice would be any better. You published the report the afternoon prior to this Session with you, when there is a key piece of BIS legislation going through the Commons and inevitably members would be involved in that. Why did you not send it through during the recess?

Mr Willetts: Our advice was that in the past we had been criticised and advised not to publish material for the Commons during the recess, but I fully realise it has meant this Committee is now facing this inquiry with limited time to have seen our response.

Q4 Chair: The fact is that we received it at a time when it was too late for us to adequately consider that response in the questions that we put to you today. I find that quite astonishing. It does convey the impression-and I think this is how members of the Committee have perceived it-of playing games with the Committee.

Mr Willetts: I have accepted the responsibility for the delays, and I have tried to explain to the Committee the reasons for the delays, but I do not accept that charge because we in BIS greatly respect the views of this Committee and we consider them very carefully. I suppose the question is the timing-and I do not claim any expertise on the parliamentary proprieties-but our advice was that publishing during the recess would not be the correct way to proceed.

Of course, as soon as this Committee summoned me, I was very happy to come along, but once there was the recess and then this session on Tuesday, inevitably there was going to be a squeeze. I have tried to explain to the Committee the reasons for these continued delays, but I do not accept that we would play games with this Committee.

Q5 Chair: You wrote to me on 22 May, saying-and I quote-that, "I look forward to explaining how we intend to move forward on the vision for the sector when I appear before the Select Committee in June." What was to stop you in that letter saying exactly when it would be published?

Mr Willetts: I am not sure that at that point we had an agreed publication date. The process was that there was a set of decisions about the contents of the Queen’s Speech. The Queen’s Speech was then published, and in the light of the decisions on the Queen’s Speech we then took the decision-which I am sure some of the Committee will wish to question me on-that now our aim is to move steadily forward with our reforms, working without new primary legislation. That approach I then, obviously, needed to clear collectively with colleagues in Government, which takes time. Then, at the end of that clearance procedure, there was a recess, and our understanding was that releasing documents to Commons Select Committees during the recess was frowned upon. I am not sure if I could find a text of "Erskine May", but that was our understanding. Then we released it on the first day back.

You are quite correct-that, sadly, also overlapped with the Second Reading of a BIS Bill, but that is the chronology of events that has brought us here. The one thing I would absolutely assure the Committee of-and I understand the Committee’s frustration-is that at no point have I or any of my colleagues in any way wished to play games with this Committee. That is the narrative of what happened, when and why.

Chair: You have explained the chronology of it, but what I do not think you have given is an adequate reason why the difficulties the Department was in and the potential ways of addressing them could not have been communicated to me and this Committee beforehand.

Now, I am going to deal with some of the details of your response in a moment, but I do feel it appropriate at this point to bring in the lead Conservative member, Brian Binley, on this, because I know that he shares my strong feelings and I think they are reflected in all members of the Committee.

Q6 Mr Binley: Thank you very much, Chairman. Good morning, Minister. You will know there has been a history between your Department and this Committee with regard to what might be considered an undervaluation of the role of Select Committees, and it is in that light-rather than just in one incident of a report being much too late for consideration-that this Committee has viewed this matter. Can I ask why you did not understand that this Committee could not possibly do its job of holding the Government to account, bearing in mind the late arrival of this report?

Mr Willetts: There are clearly lessons from this episode that we need to reflect on. First of all, I would like to assure you that BIS-and all of the Ministers in BIS-do take this Committee’s deliberations seriously, and that is reflected in the substance of the response that we are making to the Committee’s report. If I were taking steps back, and I am very happy to reflect further on this and discuss it with the Committee, we either had a mistaken understanding about the recess-and, as I said, our advice was that publishing in recess was not something that Parliamentary Committees particularly welcome-or, in coming here on the Tuesday, the day after the end of the recess, we could have perhaps given the Committee more time to consider. I am sure there are lessons here for improving communications between BIS and the secretariat of this Committee to ensure that misunderstandings like this do not happen again. I will take delivery of ensuring we try to avoid such misunderstandings in future.

Q7 Mr Binley: Can you understand, Minister, that when you say that all Ministers in your Department do take the Select Committee seriously, this episode, when conjoined with what appeared to be a decision having been made over an appointment-and I do not want to go into the Les Ebdon matter again; that is dealt with and done; the man is there; he has an important job to do; and we will scrutinise him in that role. You will know that there were very serious concerns that a decision had been made before a matter was put to this Committee. Do you understand, in the light of those serious concerns, that this adds to the view that there is a feeling amongst the BIS Ministry that this particular scrutiny role does not matter anywhere near as much as it should and is nowhere near as important as it should be considered-and, indeed, it might even be considered, when collectively put together, to be a contempt of Parliament in that respect?

Mr Willetts: There are two very different issues there. First of all, of course, when it came to the OFFA appointment process, we did explain in our response to the Committee that it has not been the position of this Government-or the previous Government-that the process in which appointments like the OFFA appointment are brought to the Committee was intended to be binding. What we did do was pause and reflect on this Committee’s advice. I have to say that one of the advances the coalition has made is that this Government brings more appointments before Select Committees for them to give their views on than has ever happened in the past.

Today we are dealing with something very different, which is an unfortunate series of accidents of timing that I have tried to explain to the Committee. I think we do need to reflect on how we can improve the liaison between the secretariat and my Department to ensure we avoid this happening ever again, but I hope when it comes to the substance the Committee will see we have reflected and tried to address very thoroughly the points of substance in the Committee’s report of last autumn.

Q8 Mr Binley: Then can I suggest one final point? There is a view in this Committee that this Committee’s work is not taken anywhere near seriously enough by Ministers. From the findings I can conclude from this Committee, that is the case, and we need good relationships together, which means more discipline from your Department. Would you take that message back?

Mr Willetts: I certainly understand. We do absolutely need to show and behave in such a way as to ensure the Committee understands that the views of this Committee are always taken into account and are taken very seriously by BIS. We are very happy to work with this Committee to remove any misunderstandings.

Q9 Mr Binley: My question was a little more than that: will you take it back to the team of Ministers in BIS and make the point forcefully on our behalf?

Mr Willetts: I will certainly report this and discuss this with my ministerial colleagues.

Mr Binley: I am grateful, Minister.

Q10 Chair: There are two further issues that I want to tease out to establish clarity on. First of all, regarding the documents published yesterday, there are basically two: there was the Government Response to the White Paper consultation; and, secondly, the Government response to us. The response to this Committee was not being published by the Department. That is, if you like, our responsibility-indeed, we have done that-and I think it is perfectly reasonable to argue that the response to the Committee as a private response, which we could then decide to publish or not, could have come to us during the recess, separate from any issues about the Government response to the White Paper. Had you sent that response to the Committee, it would have enabled us to research and further our preSelect Committee deliberations today. I can see no reason at all why it is bad practice to send a Government response to a Committee for members to consider during the recess, prior to a questioning session on their return.

Mr Willetts: Mr Chairman-and this could be in whatever form the Committee wishes; perhaps you and I can have a separate direct discussion-what I take away from this is that I am committed, as are all my colleagues in BIS, to making sure that our relationship with this Committee works properly. There are lessons we need to learn from this incident about what is explained when, what documents are sent over when and how timings of hearings are set in relation to timetables for the publication of documents. I am very happy to do everything I can to ensure that we work together in future in a way that enables this Committee to carry out properly its scrutiny role, because we do respect and value the work this Committee does.

Q11 Chair: Affirmations about your good faith do not actually answer the question. Why was the Government response not sent to the Committee beforehand for our consideration?

Mr Willetts: We saw the set of documents as a single package, but, as I say, we are getting into deep waters here about what exactly is to be sent to Committees when, and I think the best thing is for us to take delivery of the challenge set by this Committee-that we should try to ensure that incidents like this do not happen again. I absolutely undertake to do that.

Q12 Chair: The other issue is, quite honestly, of the 46 recommendations and conclusions we set out in our report, which were you unable to respond to before yesterday?

Mr Willetts: One of the questions that we had to address was the implementation of our reforms with or without a Bill in this Session, so there are questions-and I do not want to preempt lines of inquiry the Committee might have-on how, for example, one approaches the regulation of alternative providers. You need to wait for the collective decision about whether or not there is going to be a place in the parliamentary timetable for legislation. In the light of the decision of colleagues-and I fully understand that-about how we proceed, what we then needed to do was respond to the Committee’s challenge and set out, as I personally think we can, a way forward that achieves many of the objectives that the Committee set out in their report last autumn without primary legislation. That, in turn, then requires collective clearance and that, then, in turn, can be published for the Committee.

That, as I say, was the timetable, and that is a very good example of how we have absolutely shown a commitment to achieve some of the objectives the Committee has laid out without requiring primary legislation. If there had been a slot in the parliamentary programme, it would have been a rather different approach, but I think we can achieve the same objectives without primary legislation.

Q13 Chair: In your response I still have not been able to identify any concrete reasons or any concrete conclusions that could not have been put to us before yesterday.

Mr Willetts: As I say, I tried to offer the Committee one example of an area where the way forward could only be finally set out in the light of the Queen’s Speech, so I am not sure I can add much to that. That was the constraint that we faced. There were several issues-and I am very happy to go through them-where we thought that how we proceed without legislation is something we should explain to the Committee fully, and we could only finalise our response in that way and clear it with colleagues post the Queen’s Speech.

Q14 Chair: Yes, post the Queen’s Speech is one thing; the day before we have this session-three weeks, maybe four weeks after the Queen’s Speech-is another. The substantive point about why your response did not come prior to yesterday has not been addressed.

Mr Willetts: As I say, I thought I had tried to address that to the Committee, because we first of all needed collective clearance within Government after the decision was taken to make as much progress as possible without legislation and then-and perhaps there was a misunderstanding here, and I apologise if there was-the view within the Department was that the document should then be provided after the recess was over.

Again, as I said earlier, Mr Chairman, it seems to me that there is a case for both our officials in BIS and your secretariat-and perhaps you, me and the Secretary of State-getting together just to try to iron out any misunderstandings so as to avoid anything like this happening in future.

Q15 Chair: Given the fact that there are a number of policies that have not been determined anyway, I really cannot see any reason why your response to our Committee report could not have been sent at least during the recess at the latest and, quite frankly, the impression that is given is that the Department at best has been shambolic in its approach and, quite frankly, at worst is playing games with the Committee. You have denied it, and I accept your responses in good faith.

What we want to do with this particular session is ask a number of questions that we feel are appropriate to ask at this time. Obviously, embedded within your response to the Committee’s report are a whole range of issues that we will wish to explore in greater detail but have not had the time to do at this point, and we will therefore be inviting you back to discuss those in greater detail in the very near future.

Mr Willetts: I am sure it is something we can all look forward to, Mr Chairman, and I will be at the Committee’s disposal.

Mr Binley: Mr Chairman, may I just take up a point with you? That is the offer made by the Minister for you to meet with the Secretary of State and the Minister in order to create a more amicable interchange and relationship, because it is important to both our jobs. Can I ask that we might pursue that?

Chair: Yes. Certainly, from my perspective, I am very willing to do that, as indeed I have always been. It is just that, shall we say, the departmental response has not always been as helpful as both I-as Chair of the Committee-and the Committee would wish. Can we now move on to bring in Paul Blomfield.

Q16 Paul Blomfield: Thank you, Chair. If I could, I will move us on from the specifics of the timeline of your response to the Committee-but only a little-to talk about the timeline in terms of the Department’s response to the consultations. The consultation on the regulatory framework closed last October and the consultation on the White Paper a month earlier. Why did it take until yesterday to respond to those consultations?

Mr Willetts: The main reason is the one I gave earlier-that how we move forward depends crucially on the decision on whether or not there is legislation in this Session, which affects issues in the consultation document as well. We were only able to finalise our approach post the Queen’s Speech. Obviously, we had been doing contingency work, but we were only able to finalise our approach and go for collective clearance on that after the final outcome of the Queen’s Speech. As I said, I think what we have been trying to do-with all of the documents taken as a whole-is show how it really is possible to make progress in tackling a lot of the issues that this Committee has identified in its report without primary legislation in this Session.

Q17 Paul Blomfield: I am a little bit puzzled. The consultation that you had on early repayment penalties had a comparable number of responses and was similarly integral to your overall strategy, but you were able to respond to that consultation four months earlier. Why was that?

Mr Willetts: That was a specific decision.

Q18 Paul Blomfield: There were a number of other specific decisions you could have responded to earlier, weren’t there?

Mr Willetts: Yes, but it was one that was also particularly relevant for universities that wanted to finalise prospectuses, have all of the information and be available for prospective students as they started applying to universities.

Q19 Paul Blomfield: Minister, with respect, there were other issues on which universities were also seeking clarity earlier.

Mr Willetts: This was one that was specifically identified by several universities and others as an area where prospective students would like to know what the regime would be as they went round the application process.

Q20 Paul Blomfield: Were there no other issues that universities were seeking earlier clarification on?

Mr Willetts: I do recall that, in particular, being raised in several conversations as a particular area of concern.

Q21 Paul Blomfield: You mentioned in your response to us that, because you are not introducing changes to primary legislation at this stage, you will now be seeking to move your reform agenda, which is a very substantial agenda, forward through nonlegislative means. Are you not concerned that this raises questions in terms of transparency, accountability and the role of Parliament in overseeing what you yourself have described as a very significant change to our higher education system?

Mr Willetts: I accept that it is very important to have scrutiny, and that is why the one part of the discussion we just had that I objected to was the claim we were playing games with the Committee, because I actually think this Committee has a crucial role in scrutinising something of considerable public concern, but one cannot bring forward primary legislation in order to have scrutiny over policy. The fact is there are lots of other ways Parliament can scrutinise polices; detailed interrogations by Select Committees are a crucial part of that. We believe we can make a lot of progress in delivering our reforms without primary legislation.

Q22 Paul Blomfield: It was your original intention to introduce primary legislation. That was your ambition, wasn’t it?

Mr Willetts: I think that, in the long run, at some point we will need to embed these changes in primary legislation, yes, but in fact one of the points the Committee made in the report last autumn was the proposal of a more incremental approach. We think we can make a lot of progress with the legal framework we already have. We think there are powers left by previous Governments that have not been used the way they could: for example, the power to designate courses in alternative providers, where, when you look at the legal framework we have already got, I have to say that in the past that was always a very passive process. I think we could be much more activist in the designation of providers. You can use existing legislation; you do not always need new legislation.

Q23 Paul Blomfield: You are not necessarily intending to move more incrementally, are you? You are simply aiming to do what you were otherwise going to do through primary legislation without it.

Mr Willetts: Well, we have the challenges that we are rising to. We have got the regulatory framework of the QAA and HEFCE, and we think that can be used very effectively. We do not measure progress in this Government by the amount of laws that we pass. If there are existing laws that can deliver objectives-and indeed sometimes you find powers that have not been used as actively as they could have been-it is not of itself a good thing to create new laws.

As I said, I do accept that down the track, at the right point, when we have seen how this is playing out, there will be a need for primary legislation to embed some features of this new structure in law, but I do not think anything is being lost by not having a Bill this Session. It gives us time for further reflection and it also means, as I said, that we can use existing powers provided by existing legislation perhaps more effectively than they have been in the past.

Q24 Paul Blomfield: Thank you. You also said in your response to us that it would be inappropriate to legislate now because you do not know the full effect of the new funding arrangements. When do you anticipate that you will know the full effect of the new funding arrangements?

Mr Willetts: Obviously, 2012-13 will be the first year in which we see new students go through the system, so some of the particular challenges that this Committee has put to us at various points can then be answered. For example, the Committee has said in the past that you wanted to see a kind of modal distribution of fees faced by students. That was a perfectly understandable request, which, again, we in BIS have reflected on because we respect the views of this Committee. The fact is that for that, you need to know how many students are paying which fees. We will not know that until they have arrived at university; through the Student Loans Company and other data sets, we will actually know what has happened.

A second example would be the volume of student loans. I have shared our estimate with this Committee before. It is no more than an estimate. The way we have done the calculation is to assume that 90% of students will take out an average loan of £7,500. That is not a fee assumption; it is a loan assumption. It will be in the course of 2012-13 that we find out whether the kind of total for loans implied by that calculation is roughly there or a bit higher or a bit lower. That kind of information will become available and, going back to our previous discussion, I absolutely undertake to share that information with the Committee promptly and to be very willing to come back to this Committee and be rescrutinised about it when those points of information that the Committee have asked about become available.

Q25 Paul Blomfield: Just one final question from me: what other outstanding issues, variables or information stop you bringing forward legislation at this stage that you might not have mentioned so far?

Mr Willetts: It is the eternal debate about allocation of parliamentary time: we are always trying to squeeze a quart into a pint pot. There was also the very fair challenge, which is not just for BIS, that the Prime Minister has set for lots of Departments: before you rush to legislate, be clear whether you cannot achieve some of your objectives using the powers of existing legislation. He does not measure the success of this coalition by how many laws we pass. That was a challenge we were set and I think it is a challenge we have risen to.

Q26 Chair: Could I just, shall we say, record that you quoted our report as saying that reform should be introduced in an incremental way. Could I just read you the appropriate recommendation? It says, "Successful delivery of these reforms is a key component of providing a prosperous higher education sector. Therefore, we strongly believe that they should be implemented as a package and not in a piecemeal way as both students and universities need certainty in the new system if they are to make informed decisions. We therefore urge the Government to ensure that its delivery programme has sufficient flexibility to accommodate a later implementation to deliver its reforms. To do so would be seen as a strength both for Government and for the sector it seeks to reform." I would not necessarily interpret that conclusion as justifying an incremental approach.

Mr Willetts: That is a fair point, Chairman. Looking back to some of our previous exchanges, I guess my point was-as I think I have explained to this Committee before-that through the public expenditure decisions we took in the CSR in 2010 we had to move ahead rapidly with the decision on fees and grants and the implementation of that, which has meant, inevitably, the finance decision got detached from some of the other decisions that we are still working through.

Q27 Mr Ward: There has been a discussion about the inferences for the future regarding primary legislation or existing legislation. There have been a number of measures built in to ameliorate the effect of increased tuition fees, in terms of nothing up front, £21,000 and so on. If I sign up for a 25year mortgage, I know-even if it is variable rate, I know what the variable rate will be based upon-what I am signing up to for 25 years. We have a change in the system and there is some uncertainty in the system; on an individual graduate basis, does a student know what they are signing up for in 20 years’ time in terms of their commitments and responsibilities?

Mr Willetts: We have tried to set out clearly the coalition’s approach here and the framework of fees and loans. Of course, under successive Governments, in the letter that every student gets there are some words to the effect that Governments reserve the right to change the terms of the loans. That is a text that has always been there for students, but we have no plans to change the framework we have explained to the House of Commons and set before this Committee.

Q28 Mr Ward: Does that mean no?

Mr Willetts: I read lots of accounts of how, for example, the RAB charge, which we have estimated at 30%, is going to be very different, and therefore that is going to create a fiscal crisis that requires changes. Our view remains-although nobody can know-that the RAB charge is going to be at about 30% and, indeed, we have had those estimates checked by the OBR and the IFS have done their estimates. Some of the things I read suggest that we are going to have to make some sudden change of course because it is a problem; I do not think it is a problem. We have set out our plans, but there is always that health warning that successive Governments have put on the letter the prospective student gets, and I would be irresponsible if I did not say that statement is there and always has been there.

Q29 Ann McKechin: Mr Willetts, I wonder if you could clarify some further points regarding these issues around legislation. Are all of the regulatory changes dependent on the funding arrangements? For example, are the statutory changes to OFFA and HEFCE subject to these restraints, or are you able to continue with some regulatory changes that will not be?

Mr Willetts: I think that is another example of what we can do without legislation and what would require legislation. What we can do without legislation is increase the staffing of OFFA. We can shift from a model in which universities were sending in their access proposals on, I think, a fiveyear basis to annual scrutiny, because we realise there is public concern about whether students from poorer backgrounds might be put off from applying or whatever. They go together, so you have more frequent interaction of OFFA with universities, with an annual process of access proposals going forward and more staff in OFFA to assess those proposals because there is a greater volume of work. We can do all that.

There was a thought that the penalties available to OFFA should change and there could be other penalties, which at the moment are either to refuse universities permission to have fees higher than £6,000-described vividly to this Committee in a previous session with words I may or may to repeat-or a fining power. I think the current legislation has a fine of up to £500,000. In the White Paper we did discuss whether there should be other penalties. You could not add other penalties without primary legislation, so that part of it would require primary legislation and with no primary legislation we are not, therefore, envisaging any big change in the penalty regime for OFFA, but we can make the scrutiny more effective.

Q30 Ann McKechin: You are saying, in effect, that some of the regulatory changes are not dependent on funding arrangements.

Mr Willetts: Correct.

Q31 Ann McKechin: I think it would be helpful to the Committee if your Department clarified to us which of the regulatory changes are not dependent on the funding arrangements and which are, because obviously when we next meet with you it would be helpful if we could have that distinction. Is the regulatory framework to incorporate forprofit providers dependent on funding arrangements?

Mr Willetts: By the way, I prefer to call them alternative providers because they come in all sorts and sizes. There are charities and social enterprises and there are some that are commercial entities, but they are newcomers to the system. For them, when it comes to quality control, which is very important-and I understand the lively debate about that-the current structure, which we inherited from the previous Government, was that any organisation seeking to have courses designated for public support for students has to be validated by a university. You cannot just set up a course; it has to have a parent university that is validating it. Part of the role of the QAA is to make sure that those validation arrangements are effective.

I have read of, and there is a lot of debate about, the case of the University of Wales, and whether its validation arrangements were satisfactory. One thing that we can do is say, there is this framework in place-and to be fair to the previous Government, they left this framework behind-let’s be absolutely sure that the QAA is checking that the validation of courses by alternative providers is properly being done by HEIs.

Secondly, there is, as I said, this power to designate courses. Hitherto, the designation task, as we see it, was done pretty passively. We have, over time-and we are going to go further-become much more activist about whether or not courses should be designated. We can say, before we designate a course, "We need this information about the financial strength of your institution." We are proposing to say in future that as part of course designation you have to accept that you come within the framework of number controls. That goes back to a designation power that is already in the legislation, which we believe we can use more actively than has been done hitherto.

Q32 Ann McKechin: In effect, certain of the interactions between your Department and the nonuniversity sector-and we have described it as forprofit providers but, as you said, it may incorporate a wider range-will be subject to regulations, which you can go ahead with just now rather than relying on the funding. Is that what you are saying?

Mr Willetts: I am sure this is something the Committee will want to scrutinise further, but we actually think we have got a designation power that does not even, we believe, necessarily require more regulations that have to be brought before this House. The way the legislation is written is that the Secretary of State designates courses. We believe the Secretary of State can publicly say, as we come to take a decision on the designation of courses, "We need know from you the following information: x, y and z," which, I have to say, was not previously being requested or collected.

Q33 Ann McKechin: I understand, obviously, the change in attitude in your Department, but clearly, when the Committee prepared its report, it was on the basis that a substantial piece of primary legislation was coming before this House at some point this year. That is no longer going to be the case, so I think the Committee, in order for us to do our proper job of scrutiny, needs to know the areas in which you think you already have the legislative powers and you do not need to do anything further; the areas in which you think you need to amend the secondary legislation; and the areas covered simply by agreements between your Department and institutions, or in policy. Yes, you can do it by this alternative way but, as you will be aware, Mr Willetts, from your experience as a Minister-and as I recall from being a Minister as well-it is also much more complicated and more difficult for the public and for this Parliament to follow the train of thought and to make sure it is joined up.

Mr Willetts: I would, of course, be very happy to share that kind of assessment with this Committee. The only health warning I put in is-going back to the example I gave of quality and validating-that is an area where we have asked HEFCE and the QAA to make sure that this validation power is properly being used. They can come back to us. They may come back to us and the QAA simply say, "Yes, we have the legal powers we need; we do check that universities are properly validating alternative providers and we are going to be more energetic as whistleblowers if there is a concern about validation." They could come back and say that. They might come back and say, "We actually think that we need some further powers," in which case we would obviously consider it very carefully and that might be secondary legislation or something in a putative future Bill. As I say, these are matters where we are advancing forward incrementally and so some of this is still open for consultation.

Q34 Ann McKechin: It is still a work in progress. My final question is really on that point. What do you think the timescale is in terms of bringing forward legislation for the regulatory system? Clearly, your Department must have some idea, if you are out in consultation with these bodies such as HEFCE and OFFA, about what additional powers you might need. You are waiting for them to come back with evidence. I am sure that you have some sort of provisional timetable to which you are working to say, "Well, we are going to give them three months and then we will consider and make a decision." I think the Committee would appreciate some idea, given that we are no longer going to have primary legislation, of what sort of timetable your Department is now working to.

Mr Willetts: I am very wary of setting a timetable. I would not like to make a commitment to this Committee that I then fail to honour. I am going to be particularly cautious, therefore, but obviously we have got several areas out for consultation. There are not quite as many as I have read in some of the blogs over the past 24 hours, but we are asking HEFCE and the QAA, particularly, to advise us on various things, and I will, again, happily keep in touch with this Committee regarding our progress.

Chair: Could I make it clear, Minister, that the Committee is quite understanding when the Department can give us a good reason why a timetable has had to be extended or cannot give a response? It is when we do not get an explanation that it is not very tolerant.

Q35 Ann McKechin: I think an indicative timeline rather than-if I could put it this way-a binding timetable would be helpful in terms of transparency, because it is not just this Committee but, very importantly, the many students and higher education institutions that are dependent on the operation of your Government and the decisions your Department makes. I think we have a level of transparency on the public record, and an idea of the cohesive plan that your Department is working to would assist everyone.

Mr Willetts: We will try to provide the Committee with that sort of note.

Q36 Nadhim Zahawi: Minister, your response states, "We have asked OFFA and HEFCE to work together to develop a shared strategy on higher education access and student success and examine how total investment might be best targeted to deliver most effectively." It goes on to say that the Government is committed to reviewing the introduction of the National Scholarship Programme from 2012 to 2013 in advance of the full programme being in place for 2014. The White Paper was subject to a consultation exercise and the National Scholarship Programme will be reviewed over the next year. Why have OFFA and HEFCE only now been asked to develop a shared strategy on access? Should this not have been commissioned last year?

Mr Willetts: For the National Scholarship Programme there is a group in existence, which I chair, that has been involved in designing it, and we have said all along that we will want to consider how it works in the first year. On the access budget, the fact is that for the first year OFFA-very tightly staffed and very busy-was focusing on the immediate task in hand: it had over 100 detailed access proposals sent in from universities. OFFA went back and asked quite a few universities for further information. That process was simply working through the 100 individual proposals from universities; it absorbed all of the time and energy of OFFA. Now that first round is over. I understand your point very much; we simply did not have the capability. The access agreements all had to be agreed first.

Now I think it is the right moment to take a step back. We are talking about a significant amount of funding. We are talking about £150 million by the end of three years for the National Scholarship Programme. We are talking about access funding; HEIs have estimated that they will be spending £620 million on access by 2015-16. Then, of course, there is HEFCE’s own widening of participation-part of the teaching grant of £140 million. If you put all of that together, now is absolutely the right time and that is one of the reasons for the modest increase in staff at OFFA. Of course, overall, BIS is reducing staff.

We now think that if you add this up you are talking about £900 million, and now that we have got all of these initiatives in place, as the evidence comes in about what works and what does not, I think it will be very useful. We may find summer schools are incredibly effective; we may find summer schools are incredibly expensive and ineffective, but I hope, over time, OFFA will have more and more evidence about what works and what does not, and can draw on that evidence when advising universities about how they should use these very large sums of money.

Q37 Mr Ward: Have you identified any likely substantive differences between Aimhigher and what may result from these proposals coming forward?

Mr Willetts: I think it is a bit early to say. Another challenge, incidentally, where I think we do need to do more and to do better-although I think some of the Aimhigher work was not always effective-is this: if the University of Sheffield puts in an enormous effort to communicate with students and comprehensive schools in Yorkshire, as a result of which more people apply to the University of Birmingham, that is good work by the University of Sheffield. We are very keen for universities as a whole to see this as a shared enterprise, and there are some initiatives in which universities do come together on access agreements. There are different access agreements but they come together by spending some money on those types of transnational initiatives, and that is another area where I would hate to see fragmentation and where we may be able to learn some lessons and improve for the future, always respecting universities’ power ultimately to decide whom they admit to their university.

Q38 Mr Ward: First of all, can you give me a bit of information, please, on the Student Finance Tour? Who was responsible for delivering that? Maybe you could also give us some information or details on how the 2,000-odd schools and colleges were identified and selected.

Mr Willetts: I think we approached all schools and colleges with people who would be applying for university, and I think some of them, for whatever reason, did not want to participate but most did. I am trying to find the figures for the Committee, but I think we reached approximately 2,000 schools and colleges.

Q39 Mr Ward: Some 150,000 young people were identified. We have seen the survey data, which are impressive. The number of parents was actually averaging around about four per institution, which was really quite low, I would have thought.

Mr Willetts: Yes. One of the areas in which we want to do better next time is with parents. I think we focus so much on reaching 18-year-olds, and although I say it myself, I take some comfort from the UCAS figures. They were not perfect but, if you allow for the slight shrinkage in that cohort, we had a decline in applications of about one percentage point. I think that was quite encouraging. Yesterday, we started the Student Finance Tour for the new round. It started on 11 June over a sixweek period, finishing on 26 July. We aim to get to 12,000 parents this time around on the Student Finance Tour, which I think is a significant improvement on the number we managed to reach last year.

Q40 Mr Ward: Who delivered the programme?

Mr Willetts: Sorry, I have now got the exact figures. Last year we reached 1,956 schools and colleges, 152,000 students and 8,400 parents. What we aim to do this year is to get to 12,000 parents. We hope to get to significantly more students-they may not physically be in the session; but schools and colleges with 360,000 students-and for the first time we are going to try to reach students in Year 9, who are just taking the crucial decision about GSCEs, not just in Years 12 and 13. As to the exact name of the organisation that ran the Student Finance Tour, I am not sure I can recall it. I will happily write to the Committee. I have met the excellent group of recent graduates that were deployed last year and they were fantastic. They were recent graduates and were able, in a very straightforward way, to tell teenagers what it was like to go to university. They were also armed with factual information about how the Student Finance system would work. I have not yet met this year’s recruits.

Q41 Mr Ward: There is some evidence that if the information is provided by someone other than the Government it is more accepted or acceptable. Is it seen as being impartial and independent?

Mr Willetts: Yes. That, sadly, is something that all of us in politics have to be aware of, and it is better if it is independent; and, as I said, these are recent graduates who give an unvarnished, direct account. We have also had excellent advice and support from Martin Lewis and his group, who, again, have operated independently of Government. They have not cleared text with Government. They have been operating independently, and our view is that these initiatives-the Martin Lewis initiative and the Student Finance Tour-combined with a modest spend on advertising are part of the reason why we have ended up with a very modest fall in applications to university this autumn compared with the previous year. I think young people realised they do not have to pay up front to go to university.

Q42 Mr Ward: There is obviously a big effort that has gone into this in terms of the necessity of a new scheme and people understanding that. Is that to be sustained? I know there is a tour planned for this summer; is the intention that that will be an annual tour?

Mr Willetts: I think that is our hope. One would hope eventually that this would just become part of the normal functioning of a school or college, and the understanding of the system would be widespread. When we evaluated the last year’s tour, we received incredibly good feedback. That is why we are running it again, and I would envisage we should run it for a third year. Perhaps I can report some of the responses from the evaluation of the first year’s tour: 95% had a greater understanding of Student Finance after the presentation; a shift from 82% to 86% in the number of tour participants reporting they were intending to go to university. We fielded recent graduates who are local to the schools and colleges in which they presented, so they felt a connection with the presenter. We have tried to make this work; we have got a more ambitious one for year two, and I would expect we would have one in year three.

Q43 Mr Ward: You could say that is a sad reflection of the lack of information they had before this point.

Mr Willetts: I think it is frustrating for all of us-and I have to say that the previous, Labour Government must have gone through this-because no student has to pay up front and, in many ways, we have a graduate payment scheme that is quite close to a graduate tax. Obviously the payments are linked to the actual cost of higher education and the payments go to a director in the individual university. If there is one thing that I hope all of us from all the different political parties represented around this table agree on, it is that it would be a tragedy if any young person was put off from going to university by the belief they have to pay up front when they do not have to.

Q44 Mr Ward: Lastly, within that tour, is there any special effort made to make contact directly with those from socially deprived backgrounds?

Mr Willetts: I do not know about that. I am not aware of that as a feature. I think we did actually aim it at all schools and colleges, although some of those decided not to participate. We intended it as a general offer.

Q45 Mr Binley: Can I turn to financial statements on student loans, Minister? We acknowledged, as you know, in our report to you that some form of annual statement of student loans was essential for graduates, but we recommended that the government and the Student Loans Company give serious consideration to the form of the statement and the supporting information. In other words, we wanted that statement to be as clear and understandable as possible, bearing in mind some of the nonsense that comes from this place, Minister, that you will well know of. Given that particular fact, we are concerned that your response intimated that the Student Loans Company is currently working on the design of the statement of accompanying information. Why has it taken so long to design? It really is not the most difficult form of statement to decide upon, is it?

Mr Willetts: No. I think it is important that students have that kind of information. There are some issues about exactly how it should be presented, but yes, I rather agree with you.

Q46 Mr Binley: Can you kick them?

Mr Willetts: I have a good working relationship with the Student Loans Company.

Q47 Mr Binley: So you can kick them.

Mr Willetts: I do regularly hold them to account for their performance. I have to say that, compared with the situation three years ago, their performance has been transformed for the better, but I will certainly undertake to put that item on the agenda for my next review meeting with the SLC.

Q48 Mr Binley: I am very grateful. Could you, then, tell us when that statement might be finalised, having already had some communications and conversations with the Student Loans Company?

Mr Willetts: I think I had better report back to the Committee after I have had my meeting with the Student Loans Company on that, but I very much take to heart the point and we will try to expedite that.

Mr Binley: I am most grateful, Minister.

Chair: I am sure the comments from my Committee colleague will, shall we say, help you accelerate that progress.

Q49 Mr Binley: I am not going to apologise for business language; it is the world I worked in for most of my time and I would never have been a diplomat, Minister. Can we now go on to the Government’s longterm aspiration for Student Finance? The Committee recommended that the Government set out its longterm aspiration, but the response we got was a bit weak, in truth, and I am sure not the response you would ideally want to give. It seemed to suggest that you were taking some cover behind the 2015 Spending Review. Can you provide us with any more detail than you have in your response with regard to your long-term aspirations for higher education funding in the context of improving public finances?

Mr Willetts: I see the White Paper that we produced last year as our strategy for higher education, and it is, I think, already achieving a lot. It has enabled us both to save public spending, which was necessary, but to do it in a way that is fair and progressive through graduates paying more. We have set out a financial framework within that White Paper. I do not believe we need a further White Paper; the White Paper is the vision. I sense I am not helping. Is there a specific set of questions you think we need to answer?

Q50 Mr Binley: I think one of the problems with higher and further education has been the lack of ability to consolidate, to settle down, to give people a real understanding on an ongoing basis of where they are going to be, so that parents, when they look at the child’s education when the child is eight, nine and 10, can have some understanding. That is the angle I am coming from. I wonder whether you can give more comfort to those parents.

Mr Willetts: I think that is fair. One of the things I slightly regret, looking back on the White Paper, is because we had to tackle a set of financing issues, wider reforms about information and empower the students, we probably did not do as much on the vision of what universities offer to the country, what universities offer the individuals who go there, why they are, as people quite rightly say, of public value, and why the experience of going to university is transformational for many individuals. We could rise to the challenge of setting out that vision more explicitly, perhaps in a speech or some other document, because I believe that and the coalition believes that. I hope that would also include some sense of what students can expect in the future. However, we think we have a financial framework, as set out in the White Paper, that will be sustainable for the long term and we think can deliver that.

Q51 Paul Blomfield: Very specifically, on that last point, thinking of businesses and other organisations, wouldn’t it have been more sensible to sort out the vision first?

Mr Willetts: I have always been clear in my own mind, as have my employees, that universities are of great value to the nation, but, as we have discussed in this Committee before, that value comes in many forms. When the coalition took office, the immediate issues we faced were about public spending and finance. We had to set out public expenditure plans in short order, and that in turn involved a set of financing decisions. Therefore, the White Paper focused on those financing decisions. Because we had to focus on those finances, it does not mean we are reductionist and think that a university is no more than a kind of elaborate finance mechanism with a graduate contribution at the end of it. A university is a much more worthwhile experience than that.

Q52 Paul Blomfield: I do seem to recall, in the debate we had in 2010, you were at pains to point out that your reforms were not simply driven by a response to the financial crisis but were an attempt to develop a new model for higher education. Wouldn’t it have been helpful, just thinking about how other organisations go about strategic planning, for Government to learn some fairly fundamental lessons: get your vision right first, get all the stakeholders to buy into it, and then put the strategy in place?

Mr Willetts: There were, indeed, other aspects to the reform. Using the change in finance to drive a set of reforms in higher education that essentially give far greater power and more information to students and prospective students, with more money going to the university the student chooses, is all right. I have tried in successive speeches and on other occasions to make it clear that this is part of a wider vision of university. The fact that so much of the White Paper was about the plumbing does not mean that we do not understand the architecture. But, inevitably, the White Paper was largely about the financial planning, because those were decisions we had to take that autumn.

Q53 Katy Clark: When was the Higher Education Public Information Steering Group tasked with looking at information on the relationship between fees and the cost of courses?

Mr Willetts: That was one of the decisions we took in the White Paper. This is the idea of a kind of council taxtype breakdown of where your money goes, which I think they are still working on. But that is something we put into the White Paper.

Q54 Katy Clark: I understand that organisation is due to report back by September of this year. What is the timetable for you to publish your response and act on any recommendations?

Mr Willetts: The sooner that information can be available to students, the better. I undertake to report promptly to this Committee after we have received their report.

Q55 Rebecca Harris: Last November, this Committee recommended the use of private sector organisations to provide comparison websites for key information sets. Your aim, I know, is to ensure that all information data are available for prospective students and private sector organisations from this September. The question really is, why is this taking so long?

Mr Willetts: I would rather that data had been available earlier. A lot of useful work has been done. The fact is, however, these key information sets and the information that is being requested is a radical transformation of the information available to students. Not all of it was already being collected. Universities had to agree a kind of harmonised standard for this information. It is a big change, is what I would say, but an excellent group has been working on it. I regularly press for progress. We are trying to get more information, for example for employability, on professional bodies that recognise courses. We are getting more information about different assessments used by year of study. So there is a lot of extra information. It would have been great had it been available a year ago, but I think we are on track for September this year.

Q56 Rebecca Harris: That was my follow-up: do you think we will make September?

Mr Willetts: I believe we are. Of course, as soon as it is out, we can have a range of alternatives. I want to see innovation in how the information is presented and analysed, and I believe there will be social enterprises and perhaps commercial groups that want to provide a mobile phone app to help analyse the data in a way that is userfriendly.

Q57 Rebecca Harris: Your response to the Committee also goes some way to accepting our recommendation on the introduction of kitemarking of courses. When do you expect the industry group on that to report?

Mr Willetts: I would have to confirm to the Committee. I believe that is also in the autumn, as part of this exercise, but perhaps I can send the Committee reliable advice on that.

Q58 Rebecca Harris: Depending on that forecast, what would be the likely timetable, do you think, on the introduction of kitemarking?

Mr Willetts: That should be happening in the course of the academic year 2012-13. Some institutions are already doing it. There is a subtle distinction between accreditation and kitemarking, but we have already had events here, in the House of Commons. There was an excellent event when the Society of Biology accredited a first set of university courses, broadly in biological sciences. I have not completed the process of working through all of them, but what I particularly valued was that some of the universities that had applied to have the accreditation from the Society of Biology had not secured it. They had done the thing properly: they had gone round to individual courses to ask, "Is this biological science course one that will pass muster so you can get a job in a lab or a pharmaceutical company?" Not all of them had passed muster. As we want it to be a serious exercise where a group of genuine experts from a learned society or perhaps a company go round and look at what happens on the individual courses, it will take time, but I know there are already examples of it happening, and I believe there will be more in the course of the academic year 201213.

Q59 Rebecca Harris: Does that imply that you do not envisage that it will require legislation to enforce?

Mr Willetts: No, I do not believe that will require legislation.

Q60 Chair: Earlier on, in your response to Nadhim Zahawi, you said-and I think it is a fair summary-that in effect OFFA did not have the capacity to carry out the National Scholarship Programme consultation exercise until relatively recently. I think that raises the issue of capacity with OFFA. Are you actually proposing to strengthen it, both with additional resources and possibly complementary changes to its statutory responsibility?

Mr Willetts: I apologise if I have misled the Committee, but what I was particularly thinking of with OFFA was the access agreements-where they were so busy going through the individual access streams with individual universities and agreeing their particular programmes. The time has now come for them to step back.

Q61 Chair I understand that fully. The implication is that they did not have enough staff to do both.

Mr Willetts: It is true that organisation has been very busy. I cannot remember the exact timescale, but we envisage that the number of staff in OFFA should increase threefold or fourfold. I think some of this has already happened, but it has got a significant amount of extra work. It is looking, as I say, at these access agreements annually. We have asked OFFA and HEFCE together to assess overall what is most effective in the wide range of initiatives that are now happening. That does require extra staff. Within an overall reduction in staffing in BIS, we are shifting resources into OFFA.

Q62 Chair: Broadly I would welcome the comments you make, but would prefer a greater definition of them in future, and if you could enlighten the Committee, that would be helpful. With regard to consultation-or further consultation-we all accept that in principle it is a good thing; what is not so good is when you implement the policy before having done the consultation. In your response, you list a number of consultations and reviews. I will just go through them. HEFCE is supporting a review of voluntary giving; the Government has initiated a feasibility study to assess a potential monetisation of the olderstyle, mortgagestyle loan book; HEFCE has commissioned two research studies on postgraduate needs; there will be a review of the key information sets in late 2012; the Student Loans Company and UCAS will be establishing a working group on a single application portal and integrated application process; there is to be a reconvening of the Student Charter Group to review student charters; the review of the National Scholarship Programme and other forms of student support will be undertaken in relation to the strategy on social mobility; HEFCE is reviewing the transparent approach to costings; there is to be a review of the existing student support and a course designation scheme for alternative providers. The Department will be consulting, later this year, on the process of applying student number controls to alternative providers who have courses designated for student support purposes; it will also review, update and improve the full suite of application guidance for degreeawarding powers and university title; and it will be looking at options for giving HEFCE greater responsibility in some regulatory processes. That is a hell of a lot of reviews and consultations. When do you estimate that all this evidencegathering will be concluded?

Mr Willetts: If I may say so, that is a list of higher education policy issues. Higher education policy is not simply determined by me and a small group of civil servants in BIS. It is an area where there are important executive responsibilities with our education funding council, the Student Loans Company and others. Essentially, that is just a list of ongoing policy work. I started noting down key information sets, which I was just asked about by Rebecca Harris: we have the first 17 key information sets. I do not want that to be the last word. There may be other crucial bits of information that should be added and some things that prove to be more useful than others. What that says is the key information sets, as they appear in September of this year, will continue, we hope, to be improved.

Regarding SLC/UCAS, we are sharing publicly that one of the challenges we have laid down is: a lot of prospective students complain about the fact that they work all the way through UCAS in an application process, and then have to start over again with the finances with the Student Loans Company. The Student Loans Company is under the Government; UCAS is an independent body. We have asked the two organisations to work together to see if there cannot be a rather easier transition, so they share some of the data. The National Scholarship Programme has not yet been implemented; we have always said that it will come in in 2012, and then we have to look at what works and what does not. Regarding the information sets and tracking data, there is a feeling amongst universities that this is onerous data collection. So I have asked HEFCE to work with the universities to see if they can slim down the data they request.

So, I am unapologetic about that. That is a list of serious higher education policy work that carries on under this Department and is worth while, and we share it in public. It can be dressed up as a review or consultation, but essentially I think the more that people know these are the issues we are addressing, and this is what I have tasked the different external bodies to work with us on, the better for public policy.

Q63 Chair: Are you concerned that a lot of the issues you spoke about, particularly around the National Scholarship Programme and so on, are actually part of a package that should have been introduced when the changes in tuition fees were implemented, and in effect the core driver has been the tuition fees, and the packages that should be in place to mitigate any potential problems arising from them have not been put in place?

Mr Willetts: The National Scholarship Programme will be available from this autumn, at the same time as the new fee regime comes in.

Q64 Chair: There are whole issues-and this relates also to other means of support for students-that have not yet been decided on. Would it not have been sensible to do that consultation before you introduced that particular element of change?

Mr Willetts: I do not know quite where the Committee is coming from. We try to consult; we try to be explicit about that. I do not know whether we are being criticised for not consulting enough or for consulting too much, but we try to share publicly; we try not to be secretive. If there are areas I have asked the Student Loans Company or HEFCE-which have a direct relationship with Ministers-or outside bodies like UCAS to look at, we share that information with this Committee and more widely, and quite rightly so.

Chair: The key problem is that, of course, students have to make a decision well in anticipation of the introduction of them, and that information was not actually readily available. I suppose I welcome the review of that, because at least we will be able to measure some of the consequences of that particular policy.

On that note, Minister, I think we will conclude the current round of questioning. Obviously, there are more detailed areas of questioning we would wish to enter into after we have had a chance to examine the responses you have given to our report. We will take that up in the very near future, at a time to be agreed. I thank you for coming before us today. This is the end of the first half, if you like, and the second half will commence in due course. Thank you very much.

Prepared 15th June 2012