Instruments reported
At its meeting on 18 July 2018 the Committee scrutinised a number of Instruments in accordance with Standing Orders. It was agreed that the special attention of both Houses should be drawn to three of those considered. The Instruments and the grounds for reporting them are given below. The relevant Departmental memoranda are published as appendices to this report.
1S.I. 2018/719: Reported for requiring elucidation and for defective drafting
Housing Administration (England and Wales) Rules 2018
1.1The Committee draws the special attention of both Houses to these Rules on the grounds that they require elucidation in one respect and are defectively drafted in one respect.
1.2These Rules set out the detailed procedures for the conduct of housing administration, a special administration regime which applies to private registered providers of social housing.
1.3Paragraph 4.3 of the Explanatory Memorandum states that that these Rules mirror as far as possible the Insolvency (England and Wales) Rules 2016 and paragraph 10.3 states that it is expected that these provisions will be used very infrequently. The Committee asked the Ministry of Housing, Communities and Local Government to explain why it was decided to produce lengthy stand-alone Rules instead of using the application and modification technique.
1.4In a memorandum printed at Appendix 1, the Department explains that, while it would have been possible to use the application and modification technique, it considered that it would be of greater assistance to and clearer for users (registered providers in housing administration, their creditors and insolvency practitioners) to produce a stand-alone housing administration regime, particularly given that these Rules would be used infrequently. The Department also assert that stand-alone rules reduce the risk that unknowingly a practitioner might not be alerted to diverging from the usual Rules. The Department point out that this approach is frequently used for special administration regimes (such as the Postal Administration Rules 2013 (S.I. 2013/3208) and the Energy Administration Rules 2015 (S.I. 2015/2483)). The Committee accordingly reports these Regulations for requiring the elucidation provided by the Department.
1.5The Committee also asked the Department to explain why Rule 2.11 does not make provision to reflect the possibility of the appointment of more than two housing administrators in accordance with section 101(4) of the Housing and Planning Act 2016 and Rule 2.3(5)(e). The Department’s memorandum does not answer the question. The Committee accordingly reports Rule 2.11 for defective drafting.
1.6(The Committee also asked a question in relation to Rule 4.41(2)(a) which the Department’s memorandum helpfully answers).
2S.I. 2018/731: Reported for defective drafting
Transmissible Spongiform Encephalopathies (England) Regulations 2018
2.1The Committee draws the special attention of both Houses to these Regulations on the ground that they are defectively drafted in one respect.
2.2These Regulations amend arrangements for administering and enforcing Council Regulation (EC) No. 999/2001 of the European Parliament and the Council, as amended (the EU TSE Regulation) which lays down rules for the prevention, control and eradication of certain transmissible spongiform encephalopathies.
2.3Paragraph 9(1) of Schedule 2 states “The Secretary of State must approve laboratories to test samples taken under if satisfied that the laboratory…” The Committee asked the Department of Environment, Food and Rural Affairs to explain what wording is intended to follow “under” in the introductory sentence to paragraph 9(1).
2.4In a memorandum printed at Appendix 2, the Department explains that the words “these Regulations” should follow the word “under” and undertakes to make the amendment at the earliest opportunity. The Committee accordingly reports paragraph 9(1) of Schedule 2 for defective drafting, acknowledged by the Department.
3Draft S.I. 2018: Reported for doubt as to whether they are intra vires
Higher Education (Transparency Condition and Financial Support) (England) Regulations 2018
3.1The Committee draws the special attention of both Houses to these Regulations on the ground that there is doubt as to whether they are intra vires in one respect.
3.2These Regulations are made under the Higher Education and Research Act 2017 (“the 2017 Act”). Part 1 of that Act establishes the Office for Students (“the OfS”) as the independent regulator of higher education in England and requires the OfS to establish and maintain a register of English higher education providers.
3.3Under section 9 of the 2017 Act, the OfS must ensure that the ongoing registration conditions of each registered higher education provider of a prescribed description include a “transparency condition”. “Prescribed” means prescribed by regulations made by the Secretary of State. The purpose of regulation 4 of the draft Regulations is to prescribe, for the purposes of section 9, those providers whose ongoing registration conditions must include a “transparency condition”.
3.4A “transparency condition” requires a provider to provide to the OfS, and publish, such information about the following matters as the OfS requests:
- the number of applications for admission to higher education courses that the provider has received,
- the number of offers made by the provider in relation to those applications,
- the number of those offers that were accepted,
- the number of students who accepted those offers that completed their course,
- the number of students who attained a particular degree or other award on completion of their course, and
- a breakdown of the numbers referred to above by gender, ethnicity and socio-economic background of applicants and students.
3.5Under section 39 of the 2017 Act, the OfS may make grants, loans or other payments to a registered higher education provider of a description prescribed by regulations made by the Secretary of State. The purpose of regulation 5 of the draft Regulations is to prescribe, for the purposes of section 39, those providers to which the OfS may make grants, loans or other payments.
3.6In regulations 4 and 5, the relevant providers are prescribed solely by reference to the proposed names for parts of the (as yet, unwritten) register of English higher education providers which the OfS is required by section 3 of the 2017 Act to establish and maintain.
3.7Under regulation 4, the providers which are to be subject to a transparency condition are those registered in the ‘Approved’ and ‘Approved (fee cap)’ parts of the register.
3.8Under regulation 5, the providers which may receive financial support from the OfS are those registered in the ‘Approved (fee cap)’ part of the register.
3.9Significantly, the OfS has wide discretion under section 3 as to (a) how it divides the register into parts, (b) the names it gives to those parts and (c) the part in which a provider is registered. Although it is expected that the OfS will divide the register into different parts representing different categories of registration – including parts called ‘Approved’ and ‘Approved (fee cap)’ - there is nothing in the 2017 Act which requires them to do this nor is there anything in that Act which sets out what those terms mean.
3.10Consequently, the effect of regulations 4 and 5 depends on how the OfS chooses to divide and name parts of the register, and what the OfS decides qualifies providers to be registered in the different parts.
3.11Regulations 4 and 5 appear to confer legislative functions on the OfS in a way that amounts to sub-delegation of a kind that requires express enabling power. The Committee therefore asked the Department for Education to identify the vires for these provisions.
3.12The Department has produced a Memorandum in response, printed at Appendix 3. Paragraph 10 of that Memorandum states-
“The Department recognises that prescribing, via these regulations, a description of provider that rests on an underlying determination made by the OfS regarding its registration category is capable of amounting to sub-delegation”.
3.13The Department argues that this is permitted by section 119(5)(d) of the 2017 Act which provides that regulations under the Act may-
“include provision framed by reference to matters determined or published by the OfS (whether before or after the regulations are made)”.
3.14The Committee considers that there is doubt as to whether section 119(5)(d) authorises the sub-delegation inherent in regulations 4 and 5. The presumption against sub-delegation is a strong one, for obvious rule of law reasons, and does not appear to be rebutted clearly in this case.
3.15As explained in Craies on Legislation (10th Edition), paragraph 3.5.1-
“As a general rule the person on whom a power to legislate is conferred cannot use that power to confer a further power to legislate. But Parliament can, of course, provide for departures from this rule by express power to sub-delegate.”
3.16Although section 119(5)(d) allows regulations to include provision framed by reference to matters determined by the OfS, that is not the same as allowing the Secretary of State to delegate to the OfS any element of the powers conferred on him by sections 9 and 39 of the 2017 Act, let alone to confer a very broad discretion on the OfS. The Department’s interpretation of section 119(5)(d) would allow the nature of the powers conferred by sections 9 and 39 to be fundamentally altered.
3.17If Parliament had intended this, the Committee would have expected the 2017 Act to contain far more explicit authorisation.1 Section 119(5)(d) may instead be seen as granting powers which are ancillary to the principal powers granted by provisions such as those in sections 9 and 39, not as permitting an alteration in the nature, or a substantive extension, of those powers. In its judgment in R (on the application of The Public Law Project) v Lord Chancellor ([2016] UKSC 39), the Supreme Court referred (in paragraph 36) to comparable powers in section 41 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 in the following terms-
“Section 41 is clearly intended to grant ancillary powers to those powers which are, as it were, primarily granted by provisions such as section 9: it is not intended to permit an alteration in the nature, or a substantive extension, of those powers”.
3.18Further, the Committee considers that section 119(5)(d) should be read as being subject to the implied restriction that any provision in regulations that is framed by reference to matters determined by the OfS must sufficiently describe the matters determined to make the nature and effect of the determination made by the OfS clear on the face of the regulations.
3.19This test is not met by the draft Regulations:
- simply setting out the names of the parts of the register in which the relevant providers are entered gives no indication of the matters which have been determined by the OfS as qualifying a particular provider to be entered into the particular part of the register. The names are capable of relating to an almost limitless range of scenarios, and therefore indicate nothing about the nature or effect of the determination made by the OfS;
- this problem is exacerbated by the fact that there is nothing in section 3 of the 2017 Act to require the OfS to establish the register with parts having these names. Therefore, it is possible, if the OfS decides not to use the names referred to in the draft Regulations for parts of the register, that the regulations would fail to provide any description of providers to whom a transparency condition would apply or to whom financial support may be provided; and
- a further problem is the fact that the OfS could decide to change over time the matters which qualify a provider for entry into a particular named part of the register. Therefore, not only is it unclear what the nature and effect of the determination made by the OfS is, but also the nature and effect of the determination could change over time without any change being made to the regulations themselves.
3.20The Committee would contrast the provision made in the draft Regulations with the following example of provision which section 119(5)(d) could reasonably be considered to have been intended by Parliament to allow. The OfS is responsible under section 25 of the 2017 Act for devising a ratings scheme for providers with different levels of ratings. The Secretary of State has power under Schedule 2 to decide which level of the ratings scheme devised by the OfS constitutes a “high level quality rating”. This sets the level which must be reached by a provider for the fee limit to be set at its highest amount. In the Committee’s view, this arrangement clearly contemplates that regulations made by the Secretary of State under Schedule 2, read with section 119(5)(d), may include provision framed by reference to matters determined by the OfS.
3.21Sections 9 and 39 of the 2017 Act confer distinct functions on the OfS and on the Secretary of State respectively. The functions conferred on the OfS under section 9 include:
- a duty to ensure that the ongoing registration conditions of prescribed providers include a transparency condition; and
- a discretion to request from providers which are subject to a transparency condition, and to publish, information about numbers of applications for admission to courses, offers made and accepted, etc.
3.22The function under section 9 of prescribing in regulations providers to whom a transparency condition must apply is conferred on the Secretary of State, not the OfS. Parliament has, moreover, required that the exercise of this function is subject to affirmative procedure scrutiny.
3.23In its 10th Report of Session 2016–17,2 the House of Lords Delegated Powers and Regulatory Reform Committee (“the DPRRC”) noted the significance of this regulation-making power and recommended that the affirmative procedure should apply to it-
“Regulations under [section 9] are fundamental to the scope of [section 9] because they define the registered higher education providers to whom the transparency condition applies”.
3.24The functions conferred on the OfS under section 39 include:
- making grants, loans or other payments to “eligible providers”; and
- making grants, loans or other payments to any person in respect of expenditure incurred by them for the purposes of the provision of services in connection with the provision of education by “eligible providers” receiving grants, loans or other payments from the OfS.
3.25Section 39 also specifies that it is a matter for the Secretary of State, not the OfS, to determine by regulations which providers are “eligible providers” and thus which providers may receive financial support - and the 2017 Act requires that this determination is subject to the affirmative procedure.
3.26In its 10th Report of Session 2016–17, the DPRRC noted the significance of this regulation-making power too, and recommended that the affirmative procedure should apply-
“We consider the power conferred by [section 39(1)] to be significant because it will have the effect of determining the kinds of registered higher education providers who are to be entitled to public funding”.
3.27The Department argues that, read with section 119(5)(d), there is clear authorisation for the Secretary of State to delegate the powers in sections 9 and 39 to the OfS. The Committee disagrees and, as indicated above, considers that there is doubt as to whether Parliament envisaged that powers conferred on the Secretary of State by those sections would in fact by exercised by the OfS. The Committee has not seen anything in the Delegated Powers Memoranda or in the debates on the Bill which makes it clear that this was contemplated.
3.28The Committee is unclear how Parliament can be expected to scrutinise and approve regulations made by the Secretary of State under the affirmative procedure where the real decision-making contemplated by the enabling powers is to be done by the OfS when it comes to prepare the register under section 3, instead of by the Secretary of State in regulations, and could in any event be changed by the OfS at any time without scrutiny by Parliament. The Committee understands, moreover, that the register may not be finalised or published by the time that Parliament is expected to approve the draft Regulations.
3.29Accordingly, the Committee reports regulations 4 and 5 for doubt as to whether they are intra vires because the sub-delegations of legislative power to the OfS are not clearly authorised by the 2017 Act.
1 For an example of explicit authorisation of sub-delegation, see paragraph 3 of Schedule 3 of the Health Act 1999, which provides that the power to make an Order under section 60 of that Act, “may be exercised so as to make provision for the delegation of functions, including provision conferring power to make, confirm or approve subordinate legislation.”
2 HL Paper 86.
Published: 20 July 2018