Post-school reform in Scotland continues to chug along, following last month’s announcement of the preferred future shape of the funding body landscape.
Today sees the legislation that will enact the changes introduced in Holyrood: the Tertiary Education and Training (Funding and Governance) (Scotland) Bill.
We’ve been over how responsibilities for further education student support and apprenticeships and skills funding will shift around, and the bill also contains expected changes to the governance arrangements of the Scottish Funding Council (SFC), as well as some technical changes relating to fees and private provision.
But what’s emerged as perhaps the more pressing question for the higher education sector is how the legislation will change SFC responsibilities and powers, as these apply to its work with universities. The legislation sets out the route the Scottish government will take here, and it’s a fairly balanced one – we are still a long way from an England-style “boots on the ground” regulatory environment, likely to the relief of many.
Tell us about your finances
Much of what the bill will do legislatively is through modifications to the Further and Higher Education (Scotland) Act 2005. Section 22(4) of this gives the SFC various powers to “pull” information from universities – or strictly, from their governing bodies – but only where the funder knows that the information exists, or may exist.
The new legislation aims to create a landscape in which post-16 education bodies must “proactively notify SFC of certain developments of which the SFC might otherwise be unaware” in what the bill’s policy memorandum characterises as a “push” of information – a responsibility to notify the funding council of things it would not have known otherwise. Those who are more used to other UK systems will probably be thinking of “reportable events”.
It’s suggested that notifications would likely be sought in the following kinds of situation:
- Where a university is planning voluntary or compulsory severance (so no daily refreshing of the QMUL UCU cuts tracker for the SFC)
- Where a university has reached a certain threshold in a rapidly worsening financial viability situation
- A major data breach, such as resulting from a cyberattack.
But exactly how this will work is not specified on the face of the legislation – it would be determined by ministers via the laying of regulations, with consultation and an affirmative procedure in the Scottish Parliament, “given that they could potentially place significant obligations on post-16 education bodies.” But this does mean that there is a lack of clarity on exactly what the bill is going to mandate.
Part of the rationale for beefing up the legislation from what was previously anticipated (and let’s be honest, what was in the consultation) seems to be that ministers have not received enough clarity about the financial challenges being faced by certain universities and colleges. When the policy memorandum notes that “there can be challenges for SFC in getting information from post-16 education bodies about their financial sustainability,” you feel that really the issue is about ministerial oversight and the sense of having active levers to pull. This is given an explicit tweak elsewhere in the bill (again, quoting the policy memorandum):
New section 15A(2) allows the Scottish Ministers to seek information and advice from the SFC relating to post-16 education bodies, this could be an individual body or the bodies as a whole. Section 15A(3) requires the SFC to respond to any such request from the Scottish Ministers and the SFC may also offer information proactively when it considers it appropriate to do so. This is necessary because unforeseen circumstances may arise of which the Scottish Ministers might otherwise be unaware (and so would not know to enquire).
So what are you going to do about it?
Also in the 2005 Act is provision for the SFC to “secure the promotion or carrying out of studies designed to improve economy, efficiency and effectiveness in the management or operations of any fundable body” – but no such power exists where the matters are not related to financial support.
The new legislation would amend this, with the intention of making the SFC able to “address a broader range of matters to assist with performance improvement.” So in scope for an efficiency study would now be the needs and interests of learners:
The policy intention is that the SFC could, particularly where notified of certain adverse circumstances (such as course closures), instigate studies or reviews of the impact on students and learners so that assistance could be provided to ensure they are not negatively impacted. For example, if a college was heading towards needing to close courses before students could complete them, the SFC could help to make arrangements for the students to continue their education at different colleges.
Bringing the student interest in scope sounds sensible in theory, but there remains the question of what changes on the ground, beyond the production of a study. The 2005 Act allows the SFC to attend and speak to an institution’s governing body – the new section 15(4) of this bill will extend this to the issuing of a set of written recommendations.
So the SFC will be able to recommend setting specific improvement targets, or requiring the development of an improvement plan. And it will now even be able to publish these, “where there is wider interest amongst institutions, or the public, in the recommendations and they are not sensitive.” But it won’t be obliged to.
And what if its recommendations are ignored?
As with the SFC’s right to address meetings, already provided for in section 16 of the 2005 Act, there is no corresponding duty on the fundable body to do anything in response to the recommendations. However, as a matter of good governance and practice, the Scottish Government would expect the fundable body to consider them appropriately.
But beyond these recommendations, in the legislation as it stands there would be proper statutory powers for the SFC to influence educational institutions’ behaviour, through the issuing of guidance, which currently is “purely administrative” (though presumably always very welcome). The Tertiary Education and Training Bill will change this, so that institutions must have regard to the guidance, in the carrying out of their funded activities (note that “have regard to” is quite woolly language – something that the Office for Students has exploited frequently within the way HERA was drafted). But the SFC will have to consult both ministers and institutions in issuing guidance.
It could have been otherwise
Various alternative approaches were considered and rejected. The use of codes of conduct (“for example to address concerns around breaches of fair work conditions”) was felt to potentially lead to complex interactions with other requirements, and diminish autonomy. Plus there would have been a need for “appropriate enforcement mechanisms,” which is a whole other question.
More powers of audit and investigation were also considered and not taken forward, which would have been a move towards a “more interventionist SFC.” Likewise for stronger enforcement and intervention action, including serving enforcement notices or the removing, suspending, or appointing of officers or governing body members.
But this would have been “a fundamental change to SFC’s role which requires more careful consideration” – and would have gone way beyond what was originally consulted on.
There’s still a long way to go here – Universities Scotland is already noting the “new, very broadly defined provisions regarding the monitoring of the financial sustainability of institutions,” and raising concerns that too much change in the relationship between the SFC and universities (or universities and the Scottish government) could jeopardise the classification of universities in the Office for National Statistics classification.
The Scottish government seems to be aware of this particular risk – but there are certainly MSPs keen for the SFC to become more “interventionist”, and the legislation now faces a complicated passage through a Parliament in which the SNP does not hold a majority. The ministerial statement to Holyrood launching the bill saw Ross Greer of the Scottish Greens concerned about whether the SFC would have the ability to intervene in matters relating to fair work – higher education minister Graeme Dey said he would be happy to discuss the issue further.
For now the legislation aims at a delicate balancing act between juicing up the SFC’s role and preserving universities’ autonomy. The next question is whether this persists in the face of deeper scrutiny and parliamentary compromises.
