Parliament has passed the Higher Education and Research Bill, clearing the way for the most significant sector legislation in 25 years to further a market approach in England.

However, the government accepted changes to its plans to open the sector to new providers, which it says are needed to offer more competition for universities and more choice for students.

Ministers also agreed to delay the introduction of measures that would link the new teaching excellence framework to differentiated tuition fees until an independent review of the exercise’s metrics is complete.

Labour won concessions from the government as ministers raced against time to push through the bill in the pre-election “wash-up” for outstanding bills, prior to Parliament being dissolved on 3 May ahead of the general election on 8 June.

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The legislation, which met significant opposition in the House of Lords, will create a powerful new Office for Students as a market-style regulator for English higher education. It also contains major changes to the structure of the UK-wide research system.

But the government rejected a Lords amendment calling for students to be removed from the target to reduce net migration. Theresa May has come under intense pressure to change her stance and agree to the change, but refused to budge.

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Lord Hannay, who proposed the amendment, told the Lords on 27 April that the government had threatened to “kill the whole bill” if the amendment remained in place, which “shines a pretty odd light on their priorities”.

“The problem will not go away,” he added.

On private providers, peers were concerned by plans to allow the OfS to grant new institutions the right to award degrees from the outset of their operation, instead of the current arrangement of having to undergo four years of validation by a university.

The government’s amendment on private providers means that the OfS “must request advice from the relevant body regarding the quality of, and the standards applied to, higher education provided by a provider” before granting degree-awarding powers.

Jo Johnson, the universities and science minister, told the House of Commons on 26 April that the “role of the relevant body will be similar to that of the Quality Assurance Agency for Higher Education’s advisory committee on degree-awarding powers, and the system we are putting in place will build on the QAA’s valuable work over the years”.

Baroness Wolf of Dulwich, a cross-bench peer who is Sir Roy Griffiths professor of public sector management at King’s College London, tabled the amendment to the original plans. Of the government’s amendment, which adopts some of her proposals, she said that she was “very happy to see it move towards the statute book”.

But Baroness Wolf warned that it was “only too easy” to grant access to public funds to for-profit providers whose “existence is hard to justify” and who can do “enormous harm”.

The government has also made changes in response to another Lords amendment about the use of the title “university” by new providers, by agreeing that before allowing use of that title the OfS must have regard to guidance issued by the secretary of state, which will be developed after consultation.

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The government rejected a Lords amendment that would have prevented the TEF being used to set universities’ fees.

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“For the TEF to work properly…there must be reputational and financial incentives behind it,” Mr Johnson said. But he said that the new government amendments “demonstrate our commitment to a considered roll-out of differentiated fees”.

The link between differentiated TEF ratings and tuition fee caps “will not come in for more than three years, with the first year of differentiated fees as a result of TEF ratings being no earlier than the academic year beginning autumn 2020”, Mr Johnson added.

Reflecting concerns raised in the Lords about TEF metrics, the government has amended the bill to ensure an independent review of the framework’s use of statistics takes place before the link to differentiated fees is introduced.

Critics see the TEF as a potential route to the introduction of a system of truly variable tuition fees.

Gordon Marsden, Labour’s shadow higher education minister, told the Commons that the independent review was an important concession and that “we will do everything in our power to resist the TEF being used as a Trojan horse for the escalation of fees”. 

Mr Johnson described the bill as “the most significant legislative reforms of the sector for 25 years”, since the passage of the 1992 Further and Higher Education Act.

Dame Julia Goodfellow, the president of Universities UK, said that the passing of the bill would provide “stability during a time of uncertainty” for higher education.

“We agreed that there was a need for new legislation, but we had concerns about the original draft bill,” Dame Julia said. “Thanks to MPs and peers, and the willingness of ministers and officials to engage and listen, the final bill has been significantly improved.”

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Dame Julia added that UUK would continue its efforts “to secure a more progressive immigration regime for staff and students”.

john.morgan@timeshighereducation.com