Higher Education and Research Act 2017

Policy background

2. The policy underlying many of the provisions in this Act was consulted on in the Green Paper "Higher education: teaching excellence, social mobility and student choice", published in November 2015. The Government’s response to the consultation was published as a White Paper, "Success as a Knowledge Economy: Teaching Excellence, Social Mobility and Student Choice" on 16 May 2016.
3. The Conservative Manifesto of 2015 stated:
   1. we will ensure that universities deliver the best possible value for money to students: we will introduce a framework to recognise universities offering the highest teaching quality; encourage universities to offer more two-year courses and degree apprenticeships and require more data to be openly available to potential students so that they can make decisions informed by the career paths of past graduates;
   2. through Paul Nurse's independent review of research councils, we will seek to ensure that the United Kingdom continues to support world-leading science, and invests public money in the best possible way;
   3. we will ensure the continuing success and stability of our higher education reforms, so that the interests of both students and taxpayers are fairly represented.
4. In the policy paper "Fixing the foundations: creating a more prosperous nation" published in July 2015 the Government committed that:
   1. it would introduce a new Teaching Excellence Framework to sharpen incentives for institutions to provide excellent teaching, as currently exist for research;
   2. it would work to enable the best new providers to compete on a level playing field with established universities. As part of the review of validation arrangements, the Government would explore options to allow the best providers to offer degrees independently of existing institutions before they obtain degree awarding powers;
   3. providers with good quality teaching would be able to raise their fees by the rate of inflation from 2017/18.
5. At the Spending Review and autumn statement in November 2015 the Government stated:
   1. that is was taking forward the recommendations of the Nurse Review and, subject to legislation, would introduce a new body - Research UK - which would work across the seven research councils;
   2. that it would also look to integrate Innovate UK into Research UK in order to strengthen collaboration between the research base and the commercialisation of discoveries in the business community. Innovate UK would retain its clear business focus and separate funding stream.
6. This Act enables the Government to meet these commitments.

Part 1: The Office for Students

Establishment of the Office for Students

7. The Higher Education Funding Council for England (HEFCE), was set up as a Government funding body in the Further and Higher Education Act 1992. At the time it was designed, university competition was limited, student numbers were controlled, and the majority of university teaching was funded by public grant. Reports by the Higher Education Commission in 2013 and Universities UK in 2015 (the Gaskell Report) suggested that with the introduction of student tuition fees and a diminished reliance on public grant funding, HEFCE’s role, purpose and powers had become outdated.
8. The Higher Education Act 2004 created a new office-holder, the Director of Fair Access to Higher Education, whose role was to approve and monitor plans made by institutions in England that wish to set fees higher than the basic amount. His or her office was informally known as the Office for Fair Access (or OFFA).
9. This Act creates a new non-departmental public body, the Office for Students (OfS), as the main regulatory body, operating at arm’s length from Government, and with statutory powers to regulate providers of higher education in England. In performing its functions, the OfS must have regard to the need to protect the institutional autonomy of English higher education providers. It must also consider quality, greater choice and opportunities for students, competition, value for money in the provision of higher education and the need to promote equality of opportunity in access to and participation in higher education. These duties will ensure the OfS will focus on fostering a more competitive system with the aim of driving up quality and outcomes for students and taxpayers, while maintaining protections for academic freedom and institutional autonomy.
10. This Act abolishes HEFCE and the office of Director of Fair Access to Higher Education, and transfers with appropriate modifications the regulatory functions of the HEFCE and the statutory powers of the Director of Fair Access to Higher Education to the OfS.
11. To regulate the sector and provide assurance for students, this Act requires the OfS to establish and maintain a register of higher education providers in England. The register will include, among others, all providers whose students can receive student support.
12. Other providers offering accredited higher education courses can apply to join the register on a voluntary basis in return for compliance with the student complaints scheme of the Office of the Independent Adjudicator for Higher Education (OIA) but will not receive access to OfS funding and/or student support.

Powers to grant degrees or convey "university" status

13. This Act introduces a range of reforms to the way in which providers obtain authorisations to grant taught awards or research awards. In these Explanatory Notes, these authorisations are referred to as "degree awarding powers".
14. The provisions enable providers to make a case for obtaining degree awarding powers from the OfS. They enable eligible providers to secure degree awarding powers in a number of different ways and at different levels. The provisions do not require a track record evidenced by validation (or other arrangements) before degree awarding powers can be granted, and enable degree awarding powers to be granted on a time-limited or indefinite basis. The OfS also has the power to make any granting of degree awarding powers subject to extensive monitoring and to impose appropriate restrictions on scope. The provisions also enable more flexible degree awarding powers: i.e. up to bachelor-level only or in a limited range of subjects. For the first time, a role for an advisory body on degree awarding powers is enshrined in statute. The provisions also make changes to the process for conveying degree awarding powers and university status by transferring responsibility for granting them from the Privy Council to the OfS.
15. This Act contains express powers to vary and revoke degree awarding powers and to revoke university title. Any variation or revocation must follow the procedures set out in this Act. Revocations must be on one of the grounds specified in this Act. Providers can appeal against a variation or revocation to the First-tier Tribunal.

Information and choice for students

16. This Act makes provision for a quality rating scheme. This will be delivered through the Teaching Excellence Framework (TEF), as promised in the Conservative Manifesto of 2015, to provide clear information to students about where the best higher education provision can be found with the intention of driving up the standard of teaching in all universities. The TEF is intended to provide clear, understandable information to students about where teaching quality is outstanding and to establish a robust framework for gathering information to measure teaching in its broadest sense.
17. This Act requires the Secretary of State, within one year of the commencement of section 25, to commission an independent review of the operation of the TEF. This Act also allows fee caps to be set at differing levels based on a provider’s TEF award, subject to overall limits which will be prescribed by regulations scrutinised by Parliament. However, differentiated fees based on providers’ TEF awards cannot be introduced until academic year 2020/21.
18. This Act enables the Secretary of State to make regulations to implement a higher fee cap for accelerated courses. It also gives the OfS a power to monitor the availability of student transfer schemes provided by registered higher education providers, and a power to facilitate, encourage or promote awareness of such schemes.

Access and participation

19. This Act introduces a transparency duty requiring higher education providers to publish data on the backgrounds of their applicants to make their admissions processes clearer. It also requires the OfS to consider access and success for students from disadvantaged backgrounds alongside choice and competition. It provides for a member of the OfS with responsibility for fair access and participation for students from disadvantaged backgrounds, whose role is enshrined in law.
20. This Act does not allow for the OfS to set targets for access and success. Instead, in a continuation of the way that the Director of Fair Access to Higher Education has operated, it will be able to work with institutions to ensure they are doing as much as they can to make real progress on these issues.
21. The OfS has a duty to protect academic freedom, including institutional autonomy over admissions, in the performance of its duties around access and participation.

Part 2: Other education measures

Financial support for students

22. The interest on student loans could deter some prospective students who feel unable to use interest-bearing loans for religious reasons. To address these concerns, the Government consulted on a non-interest bearing alternative model of student finance. The consultation was restricted to student finance in England.
23. The Government response to that consultation set out the intention to introduce primary legislation to allow for alternative student finance to be offered alongside current student loans. Payment and repayment levels for this alternative student finance would be equivalent to those set for users of student loans.
24. The 2015 White Paper re-affirmed the Government’s intention to introduce an alternative student finance product which would be equivalent to a student loan but avoid the use of interest.
25. Before this Act, legislation only allowed for regulations to offer loans and grants to support students of higher and further education. This Act extends that power so that regulations can provide an alternative model of student finance alongside current student loans.

Deregulation of higher education corporations

26. Higher education corporations originated in 1992 from local authority-funded higher education providers. Since then, additional higher education corporations have been created by further education corporations transferring into the higher education sector.
27. Once removed from local education authority control in 1992, the new higher education corporations had to take on responsibility for their own governance, management and staffing. As they were now entities with a new type of corporate status, it was considered necessary to set down a detailed legislative framework within which they would operate.
28. This Act deregulates the legislative arrangements governing higher education corporations, with the aim of placing them on a more equal footing with other providers of higher education incorporated under different constitutional arrangements.

Part 3: Research

29. This Act streamlines the current research and innovation landscape by bringing together the nine existing research and innovation funders, including the seven research councils, Innovate UK and the research and knowledge exchange functions currently performed by HEFCE, whilst preserving the strengths of individual disciplines and providing legislative protection for dual support funding of research.
30. In December 2014 the Government published "Our Plan for Growth: Science and Innovation", a joint HM Treasury and Department for Business, Innovation and Skills strategy to support United Kingdom research and innovation. Linked to the strategy was a commission to Sir Paul Nurse, then the President of the Royal Society, to undertake a review with the research councils to: "look at how [the] councils can evolve to support research in the most effective ways by drawing on a range of evidence, including international comparisons and the views of the scientific and business communities".
31. The 2015 Conservative Manifesto pledged to make use of Sir Paul’s findings which were published in November 2015. At the 2015 Spending Review Government reiterated its manifesto commitment to support the Nurse recommendations and indicated it would consider the inclusion of Innovate UK. A consultation on this was launched in February 2016.
32. These initiatives, complemented by the November 2015 Green Paper consultation form the basis of Part 3 of this Act, which is based on the following key principles:
    1. the aim of strengthening strategic thinking on cross cutting priorities and developing a more agile and responsive research and innovation funding system;
    2. the aim of retaining the world class strengths of the current system, including the Haldane principle, the dual support system and Innovate UK’s distinct business facing focus;
    3. the importance of subsidiarity, with decisions needing to be taken at the lowest effective level and leaders in particular fields of activity given full responsibility for decisions in their areas; and
    4. the aim of reducing bureaucracy, freeing up research and innovation leaders to focus on strategic decision-making.
33. This Act provides for the formation of a single executive non-departmental public body operating at arm’s length from Government. As outlined in the Government’s White Paper "Success as a Knowledge Economy: Teaching Excellence, Social Mobility & Student Choice", published on 16 May 2016, this new body, UKRI, brings together the seven research councils and integrate Innovate UK, while retaining Innovate UK’s distinctive business focus and separate funding stream. In addition, it integrates the research and knowledge exchange functions currently performed by HEFCE, maintaining its hypothecated funding streams and protections for the dual support system - in England.
34. This Act provides for nine "Councils" within UKRI – seven of which will represent the Research Councils - which will have autonomy on scientific, innovation and research decision making, with delegated budgets. This Act provides for UKRI to delegate functions to the Councils, with each Council responsible for the strategic leadership and research and scientific decisions in their area. Councils are led by Executive Chairs, appointed by Ministers on the advice of UKRI’s board and reporting to UKRI’s CEO. The Executive Chairs will each have significant expertise in their particular fields of activity (e.g. medical research, innovation). The Executive Chair will discharge the implementation of their Council’s decisions on a day-to-day basis. UKRI’s board will have responsibility for leading overall strategic direction and cross-cutting decision making, including managing funds with cross-disciplinary impact.