My Lords, I will speak to Amendment 138, to which I am a signatory.
I made the point at Second Reading that a shell provision for student protection plans is not sufficient to reassure students that, in the event of institutional failure, they will be able to continue their education. I chair the Higher Education Commission and in our report, Regulating Higher Education, we stressed the need to have a strategy in place that allowed for an institution to exit the market in an orderly manner with the right level of protection in place for students.
Institutional failure would create obvious problems for students, not least in terms of disrupting their education and potentially leaving them adrift, at significant financial cost. As we argued, good governance and proper scrutiny should reduce the chances of failure, but there needs to be greater attention given to what happens when an institution does fail.
On the recommendation of HEFCE, we looked at the travel insurance industry, which participates in a sector-wide scheme to protect air passengers. We argued that this model could be applied to the HE sector, with a requirement for institutions to sign up and pay a sum per student into a fund which would cover costs in the event of failure. Our recommendation was:
“Institutions need to be better prepared for the possibility of a failure in the sector. Given the potential damage this could inflict on students and the sector as a whole, a ‘protection’ or ‘insurance’ scheme coordinated by the lead regulator should be put in place”.
I welcome the fact that the Bill recognises the need to have some student protection plan in place, but merely placing a duty on the OfS to ensure that such plans are in place is inadequate, in my view, for the purpose of providing the reassurance to students before they embark on a course of higher education that they will be able to complete it. The more new entrants come in to HE and the more a market exists, the greater the risk becomes. However, it is not the new entrants causing the potential problem; that already exists. It just exacerbates the potential.
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It would therefore be desirable, at the very least, to ensure that student protection plans make provision to avoid or minimise the disruption to students in the event of institutional failure. Without such provision, students will be uncertain whether they have a right to continue their education at another institution and whether they will be able to reclaim their fees. For international students, it will be unclear as to their right to continue their education in the UK if their visa is connected to the particular institution.
The amendment would impose a duty on the OfS to make provision to avoid or minimise disruption to the studies of existing students of an institution. It would empower the OfS to include provision for transferring some or all of an institution’s undertakings to another appropriate body; to include provisions that would
enable existing students to complete their studies; and to identify arrangements that would be established for existing students to complete their studies at another institution.
As the noble Lord, Lord Stevenson, indicated, the wording of the amendment should be familiar to the Minister. It is drawn from a provision in the Technical and Further Education Bill. If such provision can be provided in that Bill, I see no reason why it should not, and every reason why it should, be included in this Bill. I regard it as the minimum necessary. We need to address more substantially the implications of possible market failure.