The next item of business is a debate on motion S4M-14596, in the name of Elizabeth Smith, on Scotland’s universities. I invite members who wish to speak in the debate to press their request-to-speak buttons now or as soon as possible. I call Liz Smith to speak to and move the motion.
14:41
The motion in my name makes a very specific demand of the Scottish Government to remove those sections of the Higher Education Governance (Scotland) Bill that would increase the risk of our universities being reclassified as public sector bodies and, by definition, make them more open to the direction of Scottish Government ministers.
Those are ambitions that the Cabinet Secretary for Education and Lifelong Learning claims do not exist but which, because ministers and officials have been unable to produce convincing evidence to the contrary, remain a very serious concern for the entire university sector. Indeed, it is abundantly clear from the evidence sessions that were held by both the Education and Culture Committee and the Finance Committee of this Parliament that the Scottish Government has been unable to produce the necessary paperwork to defend its cause. That is why the assumption remains, and it is the reason for this debate this afternoon.
We take the Scottish Government at its word. The Higher Education Governance (Scotland) Bill is designed to expand academic freedom—it would be very good to know exactly how the cabinet secretary sees that taking place—and to increase democracy, transparency and accountability within university governance.
The Scottish Government claims that the bill is essential to ensure that university governors fully account for the public money that universities receive, and it tells us that no one has anything to worry about because the bill is merely building on best practice that is already there. Why then has there been such wide-ranging and fierce criticism, not just from within the universities sector but from business and civic Scotland? The names that my colleague Annabel Goldie listed in this chamber just before the recess are significant in their number and in their opposition. Partly, it is because they remain totally unpersuaded that there is a fundamental failure within the current system of university governance that is somehow acting to the detriment of higher education. “Why”, they ask, “when there are so many seriously pressing issues in education, such as closing the attainment gap, improving literacy and numeracy and cuts to colleges—to name but three—is the Government so focused on a problem for which there appears to be so little evidence?”
The greatest anger—and I mean anger—is reserved for two key aspects of the bill, most of which relate to sections 8, 13 and 20, which would change the very nature of our higher education institutions, specifically by increasing ministerial powers and by making universities into public sector bodies. Through recent exchanges at the Finance Committee and the Education and Culture Committee, the Parliament knows that Universities Scotland has substantive reasons for being concerned about the prospect of reclassification of universities by the Office for National Statistics. Those concerns have come about after careful consideration of the relevant guidance on reclassification issued by the ONS; of the bill, alongside existing controls on universities; and of Treasury guidance on the application of the European system of accounts 2010.
Presiding Officer, that might sound very technical, but it matters—it matters a lot. Universities Scotland rightly makes the point that Government powers over an institution’s constitution are seen within the “European system of accounts: ESA 2010” as the important indicator of whether an institution should be classified as being within the public sector.
However much the Scottish Government protests, the bill as it stands expressly gives ministers the power to amend universities’ constitutions by altering the composition of their governing bodies—a point that was confirmed by Scottish Government officials at the Education and Culture Committee on 6 October. It changes universities’ constitutions by giving ministers the powers to determine the selection method and term of office of the chair and the governing body. It also expressly gives ministers the power to change universities’ constitutions by changing the membership of their internal academic regulatory body.
Treasury guidance on sector classification makes it clear that there is a risk, even if ministers do not themselves appoint the members of the governing body. The Scottish Government tells us repeatedly that that is not its intention. It says that it has no desire to expand ministerial control or insist that universities become public sector bodies.
Listening to what the member has said, might it not reasonably be argued that legislation in 1966 and many other acts affecting the constitution of universities in Scotland have changed universities’ constitutions without the least suggestion that that implies ministerial control of them?
That is completely separate from what is proposed in the bill. With regard to the key issues about the bill and the issues in the evidence that I have referred to, it is clear that the Scottish Government’s reasons for the proposals do not stand the test of the evidence that has been presented. That is the issue.
Those concerns were raised by Universities Scotland in June, when the bill was published. They were also raised in a letter that was sent to the Scottish Government on 13 August. No reply to that letter was provided until 16 October. The only excuse that was offered for the delay appeared to be that Universities Scotland had asked some very difficult questions. It had—of course it had. The only answer that we can get from the officials at the moment is:
“we are more than half way through working on it.”
That hardly inspires confidence.
Given that this is becoming the most threatening aspect of the bill, little comfort can be taken from the Scottish Government’s response. The Scottish Government was criticised on that point by the Finance Committee. When everyone else is arguing that there is a high risk of reclassification, the Scottish Government persists in its claim that it deems reclassification to be zero additional risk. However, when it is asked for the evidence for that, it cannot find it—especially, it transpires, as it has not gone to the bother of taking detailed independent advice, as others have done.
Where in the Anderson Strathern report for Universities Scotland is there evidence that there will be reclassification of the universities?
It is pretty well all through it. I heard Mr Brodie’s questions in the Education and Culture Committee, and I think that he has serious concerns about the issue as well, so it is a bit rich of him to ask that question.
Will the member give way?
I have given way enough at the moment.
If Mr Brodie is prepared to give me evidence that proves that ministers are not intent on taking control of universities and do not want to reclassify public bodies, I would be delighted to see it because, as yet, we have not had it.
The blunt reality of the concerns was put to the Finance Committee by Alastair Sim, Professor Anton Muscatelli and Garry Coutts. They set out the general and specific risks of ONS reclassification. On a general level, it would mean that the scope for universities to borrow money would be seriously limited; universities could not hold over reserves from one year to the next; and there would be a detrimental impact on entrepreneurial activities, business relationships and community engagement. Those are exactly the reasons why senior businessmen such as Sir Tom Farmer and Sir Moir Lockhead have spoken out so strongly against the bill. There could well be further difficulties in attracting philanthropic funding, which was worth £53 million last year.
On a specific level, Anton Muscatelli set out what the numbers would mean for the University of Glasgow. He told us that his governing body has just approved a plan that will involve an investment of £775 million over the next 10 years, which, he argues, is of significant positive impact for Glasgow and Scotland. It includes £29 million for what would be one of four United Kingdom quantum technology hubs and a £16 million project that is aimed at reducing the university’s energy running costs by about £2.2 million and its carbon footprint by 20 per cent. However, the programme has to be financed from operating surpluses in the cash reserves, which will be in the order of £145 million by the end of this financial year. He points out that those projects, which clearly cannot be completed in the short term, could not happen in the same way if reclassification occurred.
Garry Coutts, giving evidence at the same committee, told us that the issues would be just the same for the University of the Highlands and Islands, a unique and diverse institution that has done so much in recent years to provide many new and exciting opportunities for Scotland. It is an institution that has direct experience of what reclassification has meant for colleges in not being able to retain reserves from one year to the next.
Mr Coutts made the point that the UHI’s efforts to develop new student premises, new courses and new community partnerships might all be seriously undermined if universities became public sector bodies. If we multiply the financial effects on Glasgow university and the UHI for the whole sector, the total is close to £1 billion. Surely the Scottish National Party could not possibly want to have that on its political conscience. That is why I repeat the call for the Scottish Government to commit today to removing those sections of the bill that have so clearly alarmed many in the sector and which, if they were allowed to proceed, would do untold damage to the sector’s viability.
Just a few weeks ago, the higher education international rankings revealed that five Scottish universities are currently in the top 200—three of them are in the top 100—in the world. As the cabinet secretary herself said shortly before recess, that is a remarkable achievement by any standard. Indeed, it does not really matter which academic, economic, social or cultural measurement is chosen—Scottish universities are held in the highest esteem throughout the world. That is precisely because they have a long-standing and proud tradition of attracting the very best students and staff and of maintaining their international competitiveness.
The member mentioned students, but the National Union of Students Scotland says that there is
“a lack of a genuine democratic culture in governing bodies; a lack of transparency and accountability over how decisions are made, and who makes them”.
Is that not a problem that needs to be addressed?
I have some comments here from students who take the completely opposite view on that. The president of the Educational Institute of Scotland and the Royal Conservatoire of Scotland argue—[Laughter.]
Members may laugh, but that is one of our best institutions. It is one of our most diverse institutions and it is has the highest international reputation, yet members laugh it off as though it does not matter. That is pathetic.
Let us get back to the basics. The reputation that our universities have, including the reputation that is held by the Royal Conservatoire, is about their diversity, their precious autonomy and the flexibility with which they are able to take part in a highly competitive education market.
If there is one thing about this bill that is a really significant problem, it is the lack of evidence that has been put forward by the Scottish Government to go with it. It does not matter how many times we ask the Scottish Government for back-up evidence to support what it has said—the evidence is simply not there. That is the crucial problem. If the cabinet secretary is willing to provide some of that reassurance, perhaps we will be able to take a different view. However, that lack of evidence has been a constant since the bill was published in June and to date we simply do not have the answers.
It is absolutely incumbent upon the Scottish Government to make a move on that. Scottish universities are the jewel in the crown of many aspects of Scottish life. Are we really saying that we want to undo that by a piece of unnecessary, unevidenced and completely unacceptable legislation that will do nothing to enhance the universities’ reputation and everything to damage it?
The cabinet secretary has some serious answers to give about the bill. I invite her not only to remove the very dangerous parts of the bill, but to provide us with the evidence that to date has been so sadly missing.
I move,
That the Parliament believes that, as well as their long-standing reputation for academic excellence, the recent international success of Scotland’s universities has been a result of their ability, as autonomous and diverse institutions, to react, in both an effective and flexible manner, to the increasing challenges in global education, Scotland’s economic priorities and the need to develop their research and capital assets in a way that allows them to make maximum use of opportunities in knowledge exchange and articulation with other educational institutions; is alarmed by the evidence placed on record by Universities Scotland and individual academic institutions, which suggests that sections of the Higher Education Governance (Scotland) Bill could increase significantly the risks of Office for National Statistics (ONS) reclassification; is concerned that, if ONS reclassification was to occur, the higher education sector would lose significant sums of money; believes that any such moves would seriously undermine the strength of the university system in Scotland and therefore threaten the international standing of its higher education institutions; calls on the Scottish Government to seek urgent external legal and technical advice on the matter and to publish, in full, all the analysis conducted to date on the matter, and further calls on the Scottish Government to make a formal commitment to remove all clauses from the Bill that could increase the risk of ONS reclassification.
14:54
I am pleased that the Conservatives have again chosen to discuss Scotland’s universities, as it gives us all another opportunity to celebrate our higher education sector and its success. Today’s debate also provides an opportunity to promote the Higher Education Governance (Scotland) Bill and, in doing so, to describe in clear and rational terms how it will help to enhance the reputation of our excellent institutions.
The bill will ensure that every member of the campus community, including students, staff and unions, will have an equal say in how our institutions are led towards future success. Our institutions are a success. Under this Government, Scottish higher education continues to thrive, and Scotland’s students and researchers continue to benefit. This year, the Scottish Government is investing more than £1 billion in our higher education institutions and, in a period of UK Government-imposed austerity, we have invested at that level every year since 2012-13.
As Liz Smith rightly mentioned—it is worth repeating—the Times Higher Education world university rankings for 2015-16 that were published on 30 September show that Scotland has five universities in the top 200, which is one more than last year. Our universities have a world-class reputation for research, and 77 per cent of their research was assessed as world leading or internationally excellent in the 2014 research excellence framework.
The Higher Education Governance (Scotland) Bill aims essentially to strengthen governance in our institutions, thereby making them more modern, transparent and inclusive. The bill’s content has been informed by the evidence gathered and the recommendations set out in the report on the review of higher education governance led by Professor von Prondzynski that was published in 2012.
The Government has listened carefully to the views that have been expressed by all stakeholders and partners on the provisions in the bill, and it is familiar with and respectful of the arguments that have been advanced.
Can the cabinet secretary confirm that the sections of the bill that cause the most concern—namely, sections 8, 13 and 20—were not part of that review nor part of the Government’s consultation on the bill?
I am certainly aware that there are four sections in the bill about which some stakeholders have expressed genuinely held beliefs. Those are section 1 and, as Mr Brown mentioned, sections 8, 13 and 20. [Interruption.] I will get to the answer if Mr Brown will do me the courtesy of listening.
Section 1 is purely about creating a space to allow for further dialogue and creating an opportunity for co-design across the sector of the process for how chairs are nominated and elected. The Government intends to lodge amendments at stage 2 to replace section 1.
Sections 8, 13 and 20 are quite simply about future proofing a bill that has very discrete purposes. I can assure Mr Brown, given that we view all commentators as critical friends, that where there is scope to refine and improve the drafting of those aspects of the bill in order to alleviate concerns, we will—although I do not accept those concerns—take the opportunity to do so.
Will the cabinet secretary give way?
I will make some progress, but I may come back to Ms Smith.
I want to make four clear statements to address the points that have been made by some stakeholders and by the Conservatives in their opening speech. First, the Scottish Government does not seek to advance ministerial control of our higher education institutions by either this Government or any future Government. The Scottish universities are autonomous bodies and will remain so. We are crystal clear on that point.
Further, we are not of the view that the content of the bill adds to any risk of reclassification of Scottish higher education institutions as public sector bodies by the Office for National Statistics. I have written to the Finance Committee to that effect and I note that committee’s recommendation that all analysis that the Scottish Government conducts on the matter be shared prior to the stage 1 debate, which is to be held in early 2016. The next point, which I stress, is that reclassification is an outcome that the Scottish Government would never want to realise.
Finally, I welcome the Finance Committee’s comments in its recent report on the financial memorandum for the bill that the written evidence that the Office of the Scottish Charity Regulator submitted to the Education and Culture Committee addresses satisfactorily the points that some stakeholders made that the bill might jeopardise the charitable status of our higher education institutions.
I thank the cabinet secretary for what she has just said, but I am afraid that I do not accept that there is any clarity there whatsoever. On 6 October, I asked one of the cabinet secretary’s Scottish Government officials whether there would be any alteration to the constitutions of universities. After a long wrangle, it transpired that, actually, there would be some changes. By definition, that means that the Government is taking some ministerial control, which has an implication for reclassification. That is the concern. The cabinet secretary’s officials are not in tune with what she has said.
The bottom line is that the bill does not give me any more powers as a minister. If we need to refine aspects of the bill to clarify that, we will do so. We have not yet even reached stage 2, which is an important part of the parliamentary process. We gave a commitment to hold serious discussion with our stakeholders. On the specific point about altering the constitutions of higher education institutions and the issue with the ONS, in evidence to the Education and Culture Committee OSCR examined in detail whether the bill’s impact on the constitutions of the ancient universities would jeopardise their charitable status and it concluded that that is not the case. Prior to the October recess, during First Minister’s question time, Ruth Davidson said that the bill could jeopardise charitable status. I hope that all members, including the Conservatives, will accept that that is not the case.
I want to focus on the bill’s overarching aim. The Government is committed to creating a fairer and more inclusive Scotland that better reflects our nation’s diversity and in which everyone gets to have their say. By enabling more transparent and open governance in our universities, we can ensure that every voice in the campus community is heard and involved in taking decisions. That is why we have made sure that the bill contains provisions to allow students and staff, including trade unions, a guaranteed seat at the table on university governing bodies.
Labour might wish to note that the bill has significant support from students, NUS Scotland, many individual academics, the University and College Union and the Educational Institute of Scotland Further Education Lecturers Association. My office is full of hundreds of postcards on the issue from academics the length and breadth of Scotland. As I said, as we begin to plan for stage 2 of the parliamentary process, we will continue to examine all the constructive ideas and suggestions that have been put to us and the contributions of the relevant committees.
I referred to section 1, which deals with elected chairs of governing bodies. As introduced, it will give ministers a power to make regulations, which is in order to provide time for substantive dialogue to be conducted with all stakeholders, including rectors, on the model for the appointment of elected chairs in Scottish higher education institutions. That dialogue has begun and it will continue in advance of stage 2. I am aware that that outcome is favoured by Professor von Prondzynski, as recorded in his written evidence to the Education and Culture Committee.
I make it clear that the bill will not abolish or diminish the role of rectors in our ancient universities. The role of rector is part of a democratic tradition in five of our universities that is also in keeping with the spirit of democratic renewal informing the bill. In talking to all stakeholders about how a model for elected chairs in our institutions might work, we are committed to ensuring that the role of rector continues.
We are looking closely at all parts of the bill that provide ministers with the ability to frame secondary legislation. Those elements of the bill are, as I said earlier, largely intended to future proof the legislation. I reiterate that the bill is intended to be a discrete, targeted and focused piece of legislation; as such, the views and suggestions made by stakeholders on the necessity of including all relevant sections in their current form are being examined thoroughly.
I move amendment S4M-14596.2, to leave out from “the recent international success” to end and insert:
“the autonomy of Scotland’s higher education institutions is a fundamental part of what makes them successful on the world stage, helps them to attract students and staff of the highest quality and enhances their international competitiveness and reputation for exemplary teaching and research; further believes that the provisions to enable more modern and inclusive governance in the Higher Education Governance (Scotland) Bill will enhance the reputation of the country’s institutions, present no threat to their financial wellbeing and ensure that all parts of the campus community, including students, staff and trade unions, are better included in the strategic decisions that guide the future path of Scotland’s excellent and highly-valued higher education institutions; recognises the commitment that the Scottish Government has made to higher education by investing over £4 billion in the sector in the last four years to enable universities to lever in money from other sources and help Scotland maintain its reputation as a leading nation in higher education; notes that the Scottish Government has no intention of advancing ministerial control over the higher education sector and would always seek to avoid any risk of the reclassification of higher education institutions as public sector bodies by the Office for National Statistics, and further notes that the Bill’s provisions do not increase that risk and that the Scottish Government continues to listen carefully to the views and constructive suggestions made by all higher education stakeholders on the provisions in the Bill, including ideas for potential amendments that can enhance the positive and beneficial impact of this legislation.”
15:05
There is no doubt that the cabinet secretary is right about the importance of the university sector to Scotland. We have more world-class universities per head than any other country in the world. They deliver an economic impact of over £11 billion to the economy and support 144,000 jobs. Their history is long and proud, and to be cherished—from the old chestnut of Scottish exceptionalism that, in the 16th century, we had as many universities in Aberdeen alone as there were in the whole of England to the current day, when our universities win much more than their fair share of UK research funding and we publish more peer-reviewed research papers per head of population than any other country, bar two.
However, for eight years, this Government's vision of universities has never really stretched much beyond the issue of free tuition. Way back in 2002 when I was the minister responsible for the university sector, tuition fees had already been abolished in Scotland and the debate was about the role of the universities in creating the jobs and industries of the future. There were debates about how better to support that astonishing research base and how to commercialise new intellectual property into businesses and jobs. There were new initiatives, such as the small firms merit award for research and technology, or SMART; support for products under research, or SPUR; and proof-of-concept funding. There were new models like the co-investment funds and the intermediary technology institutes. Every week saw us debate groundbreaking and imaginative ideas to build on the university sector of which we are so proud.
That is not so much the case now. This Government has decreed that we will debate and redebate tuition fees until the rocks melt in the sun, even though that debate was already won 14 years ago. It should therefore be welcome when, finally, after eight years, the Government turns its mind to something else about universities, but what a mess it is making of it.
Let me be clear: we support the idea of chairs of court elected by the whole university community. We support trade union representation on those courts. We support transparency of governance and, indeed, remuneration. There is work still to be done on the format of elections. There is work to be done on finding a way to avoid losing the historic post or title of rector for those institutions for which it is part of their tradition. We believe that there are compromises and even a consensus to be reached on those issues among stakeholders, but that is all being undermined by the drafting of the bill, which would allow ministers to exercise undefined powers for an unknown purpose through regulation.
It is those powers and that lack of definition that have raised concerns about the degree of control that ministers seek and the consequent heightened risk of ONS reclassification, which would jeopardise the finances of the universities. Frankly, the Scottish Government needs to fix that, and soon. It is not fixed through bland assertions from the minister that ministers will not overreach their powers of control. It is not enough for ministers not to have the intent not to interfere; the legislation needs to be clear that they do not have the power to interfere.
Would Mr Gray accept that there is a variety of voices in the debate? Would he accept the views of Unison Scotland, which in written evidence to the Education and Culture Committee concluded that
“There seems therefore no risk of reclassification following the implementation of the Bill”?
Is Mr Gray not concerned that, by voting with the Tories today, he is participating in a smokescreen for those who just do not want trade unionists or, indeed, elected chairs on university boards?
I will take no lectures from Ms Constance on supporting trade unions; I have been a trade unionist all my adult life and I will continue to do exactly that.
The smokescreen here is why ministers feel that it is necessary to give themselves regulatory powers that they do not need in order to meet those ends on which I agree with her. We have been here before. Colleges were promised that the Government would find a solution to their reclassification. No solution has ever emerged and colleges are paying the price in fiscal problems right now.
We have been here with police reorganisation. The Government was warned again and again that its model would make Police Scotland vulnerable to VAT. Solutions were suggested; they were ignored. Now the Government is running around Westminster crying foul grievance as if that is what it was looking for all along.
The truth is that the Finance Committee has already examined the assurances of Government officials and others on the ONS point and has not found their performance reassuring in any way. What the cabinet secretary should think about is how she has managed to get herself into the completely unnecessary position of uniting those of us who support much of the bill and those who, I suspect, oppose all of the bill in our condemnation not of those purposes but of her handling of the legislation.
If the cabinet secretary is wrong about the financial consequences for a sector that is so critical to our future, the results will be disastrous. She must produce incontrovertible evidence or tell us exactly how she intends to amend the bill to remove the risk. When it comes to universities, the cabinet secretary has had one job to do; it is time she got a grip of it.
I move amendment S4M-14596.1, to leave out from “is alarmed” to end and insert:
“recognises the longstanding tradition of university rectors and the contribution that these representatives of students and staff make to some of Scotland’s higher education establishments; is alarmed by the evidence placed on record by Universities Scotland and individual academic institutions, which suggests that sections of the Higher Education Governance (Scotland) Bill could increase significantly the risks of Office for National Statistics (ONS) reclassification; is concerned that, if ONS reclassification was to occur, the higher education sector would lose significant sums of money; believes that any such moves would seriously undermine the strength of the university system in Scotland and therefore threaten the international standing of its higher education institutions; calls on the Scottish Government to seek urgent external legal and technical advice on the matter and to publish, in full, all the analysis conducted to date on the matter, and further calls on the Scottish Government to make a formal commitment to remove all clauses from the Bill that could increase the risk of ONS reclassification and to protect the role of rector at those universities with such a tradition.”
15:12
I always welcome a debate on Scottish education, and I enjoy hearing members’ views on the challenges that we face. However, the Education and Culture Committee has not completed stage 1 consideration of the Higher Education Governance (Scotland) Bill. I will thoroughly examine all the written evidence and listen to constructive suggestions, so this debate seems a bit premature. With that caveat, I will comment.
Will the member take an intervention?
No, I have far too much to get through.
The Scottish Government has made it clear that the universities are and will remain autonomous bodies. Why would anyone want to take away something that is regarded as fundamental to our universities’ worldwide success?
The aim of the bill is to modernise and strengthen governance, ensuring that the principles of democracy and accountability are an integral part of the higher education sector. Earlier this year, Ferdinand von Prondzynski, principal and vice-chancellor of Robert Gordon University and chair of the Scottish Government’s review of higher education governance in Scotland, said:
“Universities are autonomous bodies, and should be. But their autonomy should not shield them from legitimate expectations that they engage with staff, students and external partners, or from the need to behave in an accountable manner.”
Will the member take an intervention?
I still have quite a lot to get through.
Ferdinand von Prondzynski went on to say:
“None of this is about government control. None of our recommendations, and indeed none of the proposed elements of the government’s planned legislation, would give any power to ministers to interfere in the running of institutions.”
The 2012 review is the foundation of the bill.
On the potential for ONS reclassification of universities, the issue has been central to the Scottish Government’s consideration throughout the bill’s development. A Scottish Government official said in evidence to the Parliament’s Finance Committee:
“we deem reclassification to be a low risk. However, if, as a result of a wider ONS review of universities, there were any risk of reclassification—ministers have made it clear that that is not a policy goal—we would take what measures were required to ensure that universities were not reclassified.”—[Official Report, Finance Committee, 16 September 2015; c 46.]
The Government has said that there is no intention that the bill will lead to reclassification.
In its written evidence to the Education and Culture Committee, Unison Scotland helpfully pointed out:
“Universities have a range of income sources and the proposed Bill will not impact on the balance of funding. The difference in borrowing powers was also said to be significant: colleges unlike universities require government permission to borrow. ... There seems therefore no risk of reclassification following the implementation of the Bill.”
It is therefore my belief that the talk of ONS reclassification is taking us away from the more fundamental point of the debate, which is the need to ensure that our higher education institutions have open, transparent and modern governance. Surely, that would be a good thing.
I argue—this was also the view of the von Prondzynski review—that involving staff and students in the governance of their institutions would create an extremely positive and dynamic culture of governance. Mary Senior of UCU Scotland said in a round-table discussion at the Education and Culture Committee on 6 October:
“No one is questioning that Scottish universities are good—they are good. What we are saying is that they could be so much better if staff, students and trade unions were fully involved in how they operate.”—[Official Report, Education and Culture Committee, 6 October 2015; c 11.]
It is my opinion that that would create a form of collective responsibility, with decisions being made by representatives of all sectors of the university community. I cannot see any negatives in that, which is why I support having an elected chair of court or senate as a way forward. That would also create an openness that does not currently exist.
NUS Scotland mentions the same thing in its briefing for today’s debate. It is concerned that there is a need for a greater democratic culture within governing bodies. It states that, while many student associations are able to take part in university court meetings, many student representatives feel that those meetings act merely as a rubber-stamp exercise to validate decisions that have already been made by the principal or at committee level. NUS Scotland believes that there is a need for greater transparency in the making of decisions, stating that, in addition to a lack of participation and democratic culture on governing bodies, there is a distinct lack of transparency over governance decisions. It provides the examples of universities’ investment decisions and institutions increasing principals’ pay packages.
Let us look at the matter further, taking as an example salaries at the University of Edinburgh, although it is not alone in paying such salaries. In 2005, 190 people at the university had a salary of between £70,000 and £189,000. In 2014, 440 people at the university had a salary of between £70,000 and £319,000, with the top salary being anywhere between £340,000 and £349,000. I do not know how much the top salary is now because it is not clearly stated in the information that we can get, although that does not mean that there is no answer to the question. Surely, if we had democracy within the universities, the information on salaries would be available.
The Scottish Government provides £1 billion of public money in our higher education institutions because the educational future of our young people is important to us all and because our world-leading universities give so much back to our nation. We cannot stand by and admire that great work without moving our universities on. It is time for us to equip them for the 21st century.
15:18
I am pleased to have the chance to speak in today’s debate on Scotland’s universities and to support Scottish Labour’s amendment.
Scottish Labour recognises the outstanding contribution that Scotland’s universities make to the academic, economic, social and cultural life of Scotland. We welcome their continued success in attracting high-quality students and staff from around the world and in producing ground-breaking research, and we value the vital role that our universities play in Scotland’s economy by employing more than 42,000 and supporting more than 144,000 jobs.
However, there is no doubt that higher education institutions could benefit from being more open and accountable. The Higher Education Governance (Scotland) Bill provides real scope for change, which is why Scottish Labour supports the principles of the bill. It is absolutely crucial that, in looking at reform and how our universities are run, we ensure that there is careful and thorough scrutiny.
The bill presents real opportunities to address current shortfalls in university governance, as was highlighted by the member. In particular, we support the measures to ensure that staff, students and trade unions are represented in the decision-making structures so that they have a real voice and a real say in the future of the universities that they learn, teach and work in.
It is only right that public institutions that receive many millions of pounds from the taxpayer are run openly, democratically and transparently. Right now, that does not always happen. The feedback that I have received from students associations is that they often feel that they do not have a real say—the sense is that the decisions that they are involved in are simply a rubber-stamp exercise, rather than an open debate with genuine scrutiny.
The NUS points out in its briefing for this debate that the lack of transparency has affected the recent handling of two key issues: universities’ investment decisions and increases in principals’ pay package in our higher education institutions. I know that the issue is not strictly covered in the motion, but it is an important point that should be highlighted: I have no doubt that governing boards would make better decisions if they better reflected the student and staff body and if trade unions were involved in the process.
Research by NUS Scotland found that there are 88 individuals at Scottish universities who earn more than the First Minister, which is £140,000 a year. I do not think that it can be right that university principals on three-figure salaries take large pay increases while their staff are told to accept a 1 per cent increase, which is effectively a pay cut. I therefore support the NUS’s call to extend the transparency and accountability aimed for in the Government’s bill to governing body sub-committees, particularly those dealing with senior staff pay.
Given that hundreds of millions of pounds of public money goes—quite rightly—to support our universities, it is only right that we see more public scrutiny over the excessive wages that many at the top in our universities receive while staff at the lower end of the scale struggle to get by. I would welcome Government action on that issue.
I turn now to our amendment. Although Scottish Labour is generally supportive of the Higher Education Governance (Scotland) Bill, we are also very conscious of the need to ensure that reform does not undermine the academic autonomy of the university sector or its financial position. I am sure that I am not the only member who has received many emails on the issue from concerned constituents, raising in particular worries about the implications for academic freedom and university finances.
Last month, the University of Glasgow rector, Edward Snowden, described the bill as
“a real threat to the financial and academic independence of the university system in Scotland.”
There are real concerns about how the plans might dilute the voice of students in our ancient universities. Perhaps a one-size-fits-all approach strategy is not quite right.
There has been concern, too, about the future role of the rector in our ancient universities. Labour’s amendment calls for the protection of that position. I know that Angela Constance has offered reassurance on the issue, which is welcome.
Our amendment also highlights the very real risk that the Higher Education Governance (Scotland) Bill could lead to a change in the ONS classification of universities, and lain Gray has outlined our serious concerns in that regard. There are also concerns in the university sector that the proposals could lead to unintended consequences that will ultimately undermine the sector and cause difficulties in ensuring its charitable status. In that respect, the Royal Society of Edinburgh has warned that the bill represents a
“level of governmental intervention that is entirely inappropriate for an autonomous sector”,
potentially damaging the university sector in terms of its global academic standing, its entrepreneurial activity and its contribution to the Scottish economy.
In its briefing for the debate, Universities Scotland highlights serious concerns that sections 8, 13 and 20 of the bill would take an unprecedented step over the line of university autonomy. Universities Scotland and others believe that the increased potential for ministerial control puts the Scottish higher education sector at heightened and significant risk of reclassification as public bodies by the Office for National Statistics. Obviously, that could have potentially devastating effects. I appreciate that the cabinet secretary has said that that would not be the case, but those concerns cannot be swept under the carpet.
Iain Gray highlighted how VAT affects the Scottish Fire and Rescue Service. That is a prime example of the unintended consequences that can come back to bite later on. Consequently, Scottish Labour’s amendment calls on the Scottish Government to seek urgent legal and technical advice on the matter and to publish the analysis in full. We also want to see a commitment to remove all provisions from the bill that could increase the risk of ONS reclassification. That is vital to protect the independence and strength of our universities and their financial position.
I hope that the Scottish Government will listen to the concerns being expressed about the bill. I hope, too, that we will see progress on the issues not in the bill, such as principals’ pay. The future of the Scottish economy depends on a vibrant, independent and world-leading university sector. I hope that we can all work together to ensure the best possible outcome for staff, students and universities.
15:24
I thank Liz Smith for enabling the debate to take place.
Of course, the Education and Culture Committee is currently undertaking its stage 1 scrutiny of the Higher Education Governance (Scotland) Bill, and we will return to the subject on a number of occasions in the coming months. However, given the level of concern that exists about the potential effect that this “thin bill”, as the committee’s convener accurately described it, could have on our world-class university sector, the more times we get to kick the tyres, the better.
The fact that the committee has received more than 300 submissions tells its own story and highlights the strength of feeling that exists and what is at stake. At our recent round-table session, there was vigorous debate and often profound disagreement. Everyone agreed on the quality of our universities. Given that five of our institutions are in the top 200 worldwide and three are in the top 100, no one disputes that this is an area in which Scotland excels and punches well above its weight.
Although that state of affairs is a source of pride, it is certainly not one that can or should be taken for granted. We heard unanimity on the need for continued improvement, innovation and the constancy of change, but we must be clear about what any change will achieve and how it will deliver improvement—something better than what we already have—and we need to know how it will avoid diminishing the value of our universities to students, staff and the wider community that derives so much from their success.
In that respect, as I have said previously, I cannot help arriving at the conclusion that in much of what it is seeking to do the Government appears to be casting around desperately for a problem to solve. I recognise that Angela Constance is dealing with an inheritance from her predecessor, who pursued this agenda with some zeal. I acknowledge, too, that she has hinted—she did so again today—at a willingness to ditch some of the most damaging elements of what is proposed, and I hope that she will have the courage to do that.
Fundamentally, the regulatory powers that ministers seek to take through the Higher Education Governance (Scotland) Bill present a real and present threat to our universities. The fact that many of the proposed powers remain unclear and subject to secondary legislation only makes matters worse. For all that the cabinet secretary offers reassurance about how she would use the powers, the fact remains that, as Iain Gray said, it is the scope of the bill that matters, not the intentions of any one minister.
Universities Scotland has been unambiguous on the threat posed. Its legal advice shows that, cumulatively, the bill’s provisions—notably, sections 8, 13 and 20—heighten the risk of ONS reclassification of higher education institutions. Anderson Strathern states:
“If ONS carried out an assessment in the near future ... the challenges posed to HEls by such an ... exercise should appear at the level of ‘significant risk’ on their risk registers”.
It could not be clearer. For the minister to assert in her amendment that
“the Bill’s provisions do not increase that risk”
is, frankly, not credible, nor is it right for this Parliament to be asked to support such a baseless assertion. Mr Swinney may have his own reservations, given the threat of an additional £530 million being added to Government borrowing.
I do not know what evidence or base Mr McArthur would like. He said that the claim that is made in the Government’s amendment is baseless. Is there somebody that he would like to comment on that? The ONS will not comment.
Perhaps in his speech John Mason will explain his view on the legal advice from Anderson Strathern that the committee and the Parliament have been privy to. We have not had any equivalent advice from the Scottish Government on its assertions.
The consequences of reclassification, which have been laid out in stark terms to the Education and Culture Committee and the Finance Committee, are serious and include a loss of incentive to earn around £1 billion of entrepreneurial income; restrictions on borrowing worth around £370 million; and the inability to create surpluses and to invest in improved facilities, which will put capital programmes at risk. I would argue that that is hardly a price worth risking; far less is it one worth paying.
As we heard at the round-table session that I mentioned, it is a risk that is already being felt in the reputational damage that is being done by the perception of increased ministerial interference in our universities. All the evidence shows that the best-performing universities worldwide are those that exercise the highest level of responsible autonomy. They should be accountable and transparent and should reflect the diversity of the communities that they serve, but how that is best achieved should not be second-guessed by ministers using the blunt instrument of legislation, particularly given the highly diverse nature of the sector.
At no stage have ministers or their officials been able to point to the international comparators to which we should be aspiring. I have no difficulty accepting that our universities, excellent though they are, could be better, but I would like some reassurance that, when it comes to governance, the standard to which they are being asked to adhere has been demonstrated somewhere—anywhere—else to deliver better results and wider benefits.
On union and student representation on governing bodies, I am not convinced that that needs to be written into law. Staff and student representation is an essential but existing feature of university governance. That said, I can live with the relevant provisions if gaps need to be filled.
On elected chairs, I agree with Stewart Maxwell that it is hard to see how these proposals can be squared with the minister’s commitment not to diminish the role of rectors.
Will the member give way?
The member will be able to deal with the matter in his own speech.
As for academic freedom, there is no evidence that that is currently curtailed. Ministers insist that the change is minor, but they offer no explanation of the problem that it aims to address.
Although this is a “thin bill”, its potential to do damage should not be underestimated. Legislation is not always the answer; some might argue that it is rarely the answer. Certainly the perils of using such a blunt instrument to manage such a diverse sector are obvious.
The SNP must accept that ministers do not always know best, that one size does not fit all and that the temptation always to control should be resisted. In that context, Scottish Liberal Democrats will support the motion and Iain Gray’s amendment later this afternoon.
15:30
On 16 September, the Finance Committee spent a fair bit of time considering the financial memorandum of the Higher Education Governance (Scotland) Bill; my comments stem largely from the evidence that we heard then.
On the day of the meeting, there had been a letter in The Herald from Dr Iain Banks, who is president of the University and College Union in Glasgow, referring to
“the difficulty faced by staff and students wishing to influence a governance structure that is too often focused on business rather than education or research”.
When I asked the witnesses whether the ONS, OSCR and “financial concerns” are really just a smokescreen that the universities are using to avoid democracy and transparency, Professor Anton Muscatelli assured us that that is not the case, but I remain uncertain as to the universities’ real agenda. The unions are strongly supportive of the proposed governance changes. Given that they are intelligent people who want the universities to thrive, there is at least something of a disconnect between management and staff.
Clearly, ONS reclassification would be a major concern to us all. As George Adam has pointed out, the Finance Committee spent a considerable amount of time on that matter.
Mr Mason’s point has some merit, but surely the biggest disconnect is that which exists between the cabinet secretary’s assertion that Government ministers have no desire to take more control and the sections in the bill that would allow them to do just that. If they do not want to take control, is not the easiest way of dealing with that simply to remove those powers from the bill?
I am not on the Education and Culture Committee—I am looking at the matter mainly from a financial point of view—but from that angle there is a big difference between changing how a board comes about and putting people on that board. Perhaps some tweaking can be done as the bill works its way through Parliament. I merely note that we could get involved in how companies choose their boards, that we get involved with loads of charities by making them conform to lots of rules and that we get involved with the public sector. It is not unusual for the Government to get involved in outside organisations.
With regard to ONS reclassification, the bill team made it clear to the Finance Committee that
“If reclassification is triggered it does not come into immediate effect. The colleges in England and Wales were given a period”
of time
“in which to review their control mechanisms and make changes that would keep them outside the boundary.”—[Official Report, Finance Committee, 16 September 2015; c 54-5.]
I found that comment interesting, because it shows that we are not faced with a huge gamble in which if we lose, we lose everything. Instead, there is an issue that might or might not occur and which we will, if it is going to occur, have the chance to fix before it becomes a reality.
On the gamble that Mr Mason mentioned, I note that when he questioned Mr Sim at the Finance Committee, he asked about the degree of risk. Mr Sim said:
“I find it easier to put the risk in terms of red, amber and green.”—[Official Report, Finance Committee, 16 September 2015; c 25.]
When questioned further, he added that he put the risk “at the top” of the red.
Mr Sim also said that the current risk is at least amber. What he was saying—[Interruption.]
Order. Can we hear the member, please?
Mr Sim was saying that the current risk is considerable—but the debate is about whether the bill will affect that risk and move it up the scale. The universities are saying clearly that it will and the bill team and the Government are saying clearly that it will not. That can be looked at in more detail, but it is certainly not a given that the risk will be increased by the provisions of bill.
The motion suggests that the Scottish Government should
“seek urgent external legal and technical advice”
on reclassification. That is another topic that we considered at the Finance Committee. The answers to our questions were, first, that the bill team is not aware of experts in that field who are likely to know more than the Scottish Government. In fact, it was suggested that even the ONS
“considers the Scottish Government to be a leading expert on reclassification”—[Official Report, Finance Committee, 16 September 2015; c 56.]
I do not know whether Liz Smith had a particular expert in mind when she wrote the motion, but I am sure that we would like to know who it is. Neither Labour nor the Lib Dems have been able to suggest who that expert might be, either.
Secondly, it was suggested that we ask the ONS itself about the risk, but we understand that it does not give advice in advance. In addition, it strikes me that writing to the ONS highlighting the risk might damage our case rather than help it.
Another topic that we considered at the Finance Committee was charitable status and what OSCR’s opinion on that might be. I will not quote from what was said about that, because we have heard it already, but OSCR says basically that there is no risk as far as it is concerned. Universities Scotland confirmed that it would take OSCR’s view at face value, but that point does not appear in the Conservative motion at all. I assume, therefore, that there is fairly widespread agreement that charitable status is not likely to be at risk.
However, the question remains whether the universities have been crying wolf on charitable status, which has now been dismissed. If they were crying wolf on that issue, are they also crying wolf on a number of other issues? Liz Smith says that she wants written evidence against something that we do not even know exists. If somebody asked me whether I robbed a bank last night, I would say, “No.” Do I have written evidence to prove it? No, I do not. We are all agreed that we have a university sector to be very proud of, but the question is this: can it be improved? In particular, can its governance be improved, or is it like some highly delicate flower that would collapse and die if we even touched it?
The NUS Scotland briefing for the debate is particularly helpful in giving a reason for the need for more transparency and accountability—namely, that we might all know
“how decisions are made, and who makes them”.
Many of us had thought that that was a given in 2015 for almost all parts of the third and public sectors, yet the universities stick out as something of a sore thumb in resisting movement in that direction.
I believe that our universities are robust. They are living organisms that can and should adapt to the 21st century. We may have been timid in the past for fear of upsetting organisations that have a lot of money and a lot of friends in high places, but governance in private business, in the public sector and in the third sector has moved on over the years, so I believe that our universities need to remember that they are servants of the public and that the public expects them to be open and transparent in their governance arrangements.
I allowed Mr Mason some time back for the interventions that he took, but we are now running out of time, so I ask members to keep to their six minutes.
15:37
I declare relevant interests, in that I am a graduate and honorary fellow of the University of Strathclyde and served on the court of the university for a number of years.
The debate sees Parliament being used for a proper purpose. If Government cannot be called to account and challenged by an Opposition party, Parliament is found wanting. I am pleased that my party has secured a debate on the highly controversial proposals to change university governance. What no one can level against my party, in citing our objection to the proposals, is a charge of political opportunism, political dogma, obsession with ideology, or just being difficult with the SNP for the sake of it. That is because the level of opposition to the Higher Education Governance (Scotland) Bill is massive and most of it is outwith the realm of political parties.
I see that I have affected the cabinet secretary deeply, as she is walking out of the chamber, but I hope that she will return.
My party is the conduit for conveying that huge anxiety and unease to Parliament, so I wish to examine the Scottish Government’s premise for change. The first test to be applied is this: what is wrong that the Scottish Government thinks needs fixing? The evidence is sparse. There is general assent, as other members have said, that our universities are doing a very good job—some are excelling, by international standards. That points to good, not bad, governance, so where is the problem?
That is the irony. I think that the problem is not with our universities at all. Rather, it is with the Scottish Government, because the genesis of the proposals seems to be that, when universities rightly took responsibility for their futures, requiring them to focus on their strengths—
Will Annabel Goldie take an intervention?
I would like to continue, for the moment. When universities wanted to focus on their core fields of excellence and to plan accordingly, some members of staff and some trade unions were hostile to that, and they took that view because there were redundancies.
Let me be clear: it is right that staff members and their unions should examine any proposals that would involve loss of jobs, it is right that unions should ensure that their members’ interests are represented and that they should assist in discussions with universities to scrutinise such proposals, and it is right that their concerns should be within the knowledge of the court. What is not right—indeed, what is patently wrong—is to attempt to argue that universities are public bodies and that as such they should not be permitted to take such governance decisions but should have their governance regulated. Let me deal with that misconception and articulate some general principles.
The fact that a body receives part of its funding from the public purse does not make it a public body. If that were the case, private healthcare providers, most Scottish pharmacies, security companies that deliver services for the Scottish Government justice system and other contractors that derive significant revenues from the Scottish Government would all be public bodies. The suggestion is ridiculous. They are not public bodies, and nor are the autonomous institutions that are our universities.
Indeed, if the Scottish Government’s argument were correct, hundreds of thousands of organisations the length and breadth of Scotland that receive regular sums of public money should now, by the Scottish Government’s logic, be the subject of governance intervention because they are public bodies. Even by the Scottish Government’s standards, that would be a ludicrous proposition. Universities are, of course, autonomous and are independently constituted. They are not public bodies, and the Scottish Government should not try to make them so.
For the sake of hypothesis, let us assume that the Scottish Government’s analysis is correct and examine what the sparsely supported proposals would mean in practice. They would mean a shift in focus from having university boards of governance whose primary collective responsibility is for the whole institutions, to boards having elected chairmen who would be accountable to an electorate and who would have to reconcile that obligation with a parallel duty to other court members and the institution as a whole. That would create divided loyalties and an irreconcilable conflict of interests. It would also create weak leadership and governance confusion.
For the older institutions that have elected rectors—which situation I understand the Scottish Government has confirmed will remain—there would be the added conflict of who is accountable to whom and whose view would prevail were there to be a difference of opinion between the rector and the elected chairman. It is not surprising that one cannot find such another such model of governance anywhere; it is so inherently flawed that it is unworkable.
Let me seek to educate the cabinet secretary. In 2000, the Scottish Qualifications Authority, which is a public body, ran up against problems with delayed exam results. Its governance was investigated by the Enterprise and Lifelong Learning Committee of this Parliament. The convener was Alex Neil, and his SNP colleague on the committee was Fergus Ewing. When talking about weaknesses in governance and a board member’s role, the committee’s report said:
“there does appear from their evidence to be confusion in the minds of some Board members, about their role on the Board of Management. It is clear from the Government guidance that Board members are appointed as individuals to bring their personal expertise and experience to the boardroom table. They are not appointed as representatives of other organisations. At least one Board member appeared to take the latter view. This is not a position which the Committee finds tenable.”
The bill proceeds on one misconception about university governance after another. Yes—develop with the universities a code of good practice for governance and, yes, encourage universities to engage in good practice, but I say this to the Scottish Government: do not get mixed up in telling universities what to do. They are already running themselves more successfully than any Government could ever achieve. I say this to the cabinet secretary: stop digging. She should heed what this Parliament’s committee found out 15 years ago and what most of Scotland is now telling her, and she should review what is a misconceived, flawed and inept proposal.
15:43
I am fortunate that not only do I have in my constituency of Edinburgh Pentlands two excellent universities, in Heriot-Watt University and Edinburgh Napier University, but my two sons are graduates of those institutions.
The two universities in my constituency and the other 17 institutions across Scotland employ more than 42,000 staff and educate more than 215,000 students. It is therefore important that the voice of those people be heard in this debate, because they overwhelmingly are the university community.
Universities have raised concerns about ONS reclassification due to the Higher Education Governance (Scotland) Bill and the effect that that could have on their autonomy and their revenue. However, what are the views of staff and students? After all, they would be affected were there to be any changes to universities’ revenue, which Universities Scotland has suggested there will be.
In Scotland, we have some of the oldest universities in the world, in St Andrews, Glasgow, Aberdeen and Edinburgh. We also have the world’s oldest education trade union in the Educational Institute of Scotland. In its written evidence on the Higher Education Governance (Scotland) Bill, the EIS stated:
“The Bill would lead to HEIs remaining as autonomous bodies that are only accountable to themselves. Universities Scotland has claimed that the Bill could lead to the reclassification of HEIs as public bodies leading to the potential loss of charitable status and fewer philanthropic bequests. The EIS does not believe that the Bill brings increased control to the government that would lead to reclassification.”
The EIS also took the view that
“Universities Scotland’s claims are simply supporting the personal interests of principals, some of whom may not welcome the additional scrutiny brought about by the Bill.”
NUS Scotland stated in its evidence to the committee:
“While we fully recognize the need of any further regulation to fully respect the autonomy of Scotland’s HEIs, we do not believe the proposals set forward in the current bill alter that autonomy in a notable way. The proposed changes would not require institutions to implement any substantive policy changes; rather, they address the processes through which decisions on substantive issues are taken. We fully endorse the notion of ‘responsible autonomy’ for our institutions. Where we have concerns is around the weight lent to both aspects of that, and are of the view that there has not been enough responsibility in return for the significant sums of public funding our institutions rightly receive.”
The Scottish Parliament information centre briefing on the main sources of the funding that was provided to Scottish higher education institutions in 2013-14 identified total income in the sector to be £3.2 billion, with £2 billion coming from public sector grants and fees from across the European Union, including £1 billion from the Scottish Further and Higher Education Funding Council. On ONS reclassification, NUS Scotland concluded:
“We would reject the assertion made by some in the sector that the Bill poses such a threat to institutional autonomy that it places the charitable status of institutions at risk, and raises the concern of ONS reclassification”.
Will Gordon MacDonald take an intervention?
No, thank you.
The Office of the Scottish Charity Regulator raised no concerns about the bill’s provisions, as set out in the original consultation. It said that, in its view, the changes
“would not affect the constitutions of higher education institutions in ways that would give Ministers the power to direct or control these institutions’ activities”.
OSCR also raised no concerns in its response to the call for evidence on the bill’s provisions that the Education and Culture Committee issued.
The Scottish Trades Union Congress evidence was clear on why the bill was introduced. It said:
“This Bill is not about Government controlling Universities, it is about good governance. Good governance procedures mean that the sector will function better and as a result spend public money better. In this way the autonomy of the sector would be secured in the longer term by ensuring that institutions are better able to govern themselves and can show transparent and well evidenced decisions around how they spend public funds. Better governance structures will also help the University meet the educational needs of students and better support the economic development of Scotland.”
As I said in my opening remarks, the quarter of a million staff and students are the university sector, and their views are at least of equal importance to those of the university courts. The University and College Union Scotland is the largest trade union in the post-16 education sector: it represents 120,000 academic and related staff across the UK, and is the largest union in the higher education sector in Scotland. It said:
“We do not wish to see any increased influence by Ministers in the running of universities and do not believe that the proposals outlined in the bill would do so. The proposals do allow Ministers to ensure that the sector has improved and provides for more robust governance procedures. Given that the sector currently receives over one billion pounds annually we believe that politicians and parliament are entitled to be assured that the sector is robustly governed. The proposals do not give powers to Ministers to involve themselves in the day to day running of institutions, or in setting targets beyond the current ministerial letter of guidance to the funding council.”
The Finance Committee’s report on the bill contained a suggestion that the issue of ONS reclassification and charitable status is a “smokescreen” to avoid greater accountability in the sector. Having listened to the evidence of staff and students, I tend to agree.
15:50
The consequences of the ONS reclassification would be serious. Although I support making universities more democratic, I do not want that to jeopardise their finances. I also do not want the democratic structures that already exist in some institutions to be diminished in any way by a one-size-fits-all approach.
The proposed changes have managed to line up an impressive array of opponents, not least rectors past and present. Rectors are already elected by students—or, in the case of the University of Edinburgh, by staff and students—as their representative and as the chair of the university court. The rectors who have reservations include a former Prime Minister, a former Presiding Officer, a current MEP, the author of the West Lothian question, the author of “Munro-bagging without a Beard”, the legendary Archie Macpherson and several others. Even Edward Snowden has been tweeting from Russia about the dangers to the autonomy of universities—although it must be admitted that he is not a great advert for the importance of rectors as active participants in university governance.
The question is: are those fears well founded? In response to the rectors, a Scottish Government spokesperson said:
“universities are autonomous bodies ... Ministers seek no control”.
Apparently, ministers just want
“more transparent and inclusive governance”.
The same spokesperson assured us that
“The Scottish Government has analysed risk associated with potential re-classification of Scottish higher education institutions by ONS. We are confident that the provisions in this Bill do not advance risk and are compliant with the indicators of government control ONS use”.
I am pleased to hear that—I think—Labour members share our concern to make university governance more representative of the communities that it seeks to govern. Will the member clarify for me what Labour wants to put into the bill to achieve that end? What does Labour want to put in that it feels would not fall foul of the objections that the Conservatives are making on the ONS and other matters? Labour has not yet given us any indication of what it would prefer to see in the bill other than what is there.
Some reassurance could have been given if the Government had replied more timeously to the serious questions that Universities Scotland raised. We need the Government to produce the advice and evidence that are required to take away all the concerns.
The references to risk do not sound reassuring to me, not least because the Scottish Government does not have a particularly good record of being right on such matters, even when—perhaps especially when—it is supremely confident of being correct. As we have heard before, we should just ask the police and fire services about their VAT bills. It is sometimes even unclear whether the Government has proper legal advice.
Although we might accept that the Scottish Government does not intend to inflict a huge financial penalty on higher education, and we might even accept that the Scottish Government genuinely believes that the bill will not compromise autonomy, would we be wise to take its word for that, particularly without external legal and technical advice and the full publication of all the analysis that has been conducted to date? Of course not—particularly when others have sought and published legal advice, including Universities Scotland. It was told by Anderson Strathern that, taken together
“with other existing government controls ... the provisions in the Bill would take HEIs into ‘borderline’ territory in terms of their current ONS classification”.
I do not necessarily think that that is the final word in legal terms—partly because there rarely is a final word in legal terms—but at least Anderson Strathern set out its reasons and published them.
The Scottish Government should stop saying that it knows best when we know that, too often, it does not. We need a proper analysis of the risks so that we can decide whether they are acceptable, rather than simply be told that they are. The Scottish Government should make a formal commitment to remove from the bill all sections that could increase the risk of ONS reclassification and to protect the role of the rector at the universities that have such a tradition.
Things are hard enough for higher education institutions and students without inflicting further financial disaster on them. For students there would be added pressure. Information that the Student Awards Agency for Scotland released this week shows that grant and bursary levels for Scotland’s students are down again—they are down by £40 million since the SNP took office in 2007. Fewer students are getting support from bursaries and, when they do, they get less support. Those from poorer households, who already struggle the most, will inevitably find it harder to undertake higher education courses. Meanwhile, student debt has soared as thousands who have the qualifications and the ability, but not the finance, are forced to borrow more to fund their studies.
The Scottish Government says, “Trust us.” Well, I am quite sure that everybody will remember the manifesto pledge to write off student debt.
15:56
I declare an interest in that I used to be a lay member of the university court of the University of St Andrews.
Many things that border on the unbelievable occur from time to time in the chamber, but the motion stretches credulity a bit too far. The Education and Culture Committee is still considering inputs on the bill, yet today we have a Conservative motion on it. I do not lay that at the door of Mrs Scanlon or Liz Smith, both of whom have behaved impeccably in their understandably robust questioning of witnesses in committee; rather, it should lie at the door of the opportunistic Conservative central office. Well, have I got news for you—we will complete the report on the bill and discuss it meaningfully, and then perhaps, with that evidence, we can have a substantive discussion. We have a motion with alleged evidence that is riddled with ifs, mights and coulds, which shows a propensity to rush to judgment that I thought was below even the capabilities by which that office might be characterised.
We accept that Scotland’s universities have a long-standing reputation for academic excellence and international success—at least for some—that is a result of ability. However, as the famous engineer and inventor Charles Kettering once said,
“If you have always done it that way, it is probably wrong.”
Like other institutions, universities have to stay ahead of the game. Change is a constant, and in our universities, as elsewhere, there are limitless opportunities. Where there are open minds, there is always a frontier to aim for.
The motion refers to
“Scotland’s economic priorities and the need”
for universities
“to develop their research and capital assets in a way that allows them to make maximum use of opportunities in knowledge exchange”.
After detailed questioning of university representatives about their international involvement and equity participation in the many great products and services that they produce, their eventual answer was that they had not developed that line of thinking and would take it away for review—no change there, then. Representatives of one of the great engines of our future economy—our universities and their research and development capabilities, some of which are publicly funded—are going away to think about that process and how more funding might be generated via that route for the universities. Having that and the further democratisation of the university courts is how we will strengthen—not undermine—the university system in Scotland.
Not everything in the bill is perfect. I turn to the contentious issue of possible reclassification of universities from charitable to public sector organisations. The motion says that “if”—there is the magic word again—
“the ONS reclassification was to occur, the higher education system would lose significant sums of money”.
It bases that premise on evidence, but on what evidence? On evidence that was placed on record by Universities Scotland, on the basis of a report that it produced.
Will the member give way?
I am sorry; I do not have much time.
In her questioning of witnesses on 6 October, Liz Smith referred to the proposed, not the evidenced, ONS reclassification and accepted the OSCR
“ruling that the public bodies proposal would probably have no effect on universities’ charitable status.”—[Official Report, Education and Culture Committee, 6 October 2015; c 19.]
That was confirmed in an answer by Stephen White of the Scottish Government, who said that the Government’s internal analysis concluded that the bill’s provisions comply with the indicators of control in the European system of accounts.
On that subject, advice that I received from the Scottish Parliament information centre on 17 September said that the new European accounting guidance means that some projects that were formerly classified as private sector would now be classified as public sector. That is not a revenue issue, but it potentially affects capital projects that are financed through the non-profit-distribution model. Three of the four projects have not even been looked at yet and another eight are coming along.
However, the ONS’s work plans in relation to higher education institutions are being looked at. The Anderson Strathern report said that the basis of the ONS’s assessment is a change of policy in relation to tuition fee maxima that universities in England and Wales can charge. There is no specific reference in the work plans to assessing Scottish HEIs. I therefore ask Liz Smith to erase the ifs, mights and coulds from her motion, much of which is unhappily reflected in the Anderson Strathern report. Let the committee and the Parliament pursue and finalise the questions that have been raised on all sides, so that the committee’s report can be published.
In general, the world hates change, yet it is the only signpost to progress. Let us agree on that. Let us discuss the matter on production of the report and let us implement that change once we have followed the process and discussed what is presented to us in detail.
16:02
I welcome the principles of the Higher Education Governance (Scotland) Bill, which aims to make the higher education system more modern, inclusive and accountable. It is right to rebalance the power of university governing bodies to increase transparency and accountability and to have more involvement of staff and students. To that extent, I agree with the Scottish Government and, if it can preserve the position of rector, I—as a graduate of the University of Edinburgh—will be even more pleased.
However, I agree with the Conservative motion to the extent that I have grave concerns about the financial implications of sections 8, 13 and 20 in particular. We know that a vast range of external bodies have expressed similar concerns, including the Royal Society of Edinburgh, which I always respect.
The fact is that those sections were not proposed in the original review of higher education governance and their removal would not modify the bill’s central intent, so why do we need these undefined powers for undefined purposes? Why is the Scottish Government determined to take this risk, when removing the sections would not take away from the central thrust of the bill?
Look at what is at risk. All members are united today in celebrating the fact that five Scottish universities were in the Times Higher Education ranking of the top 200 universities, with three of them in the top 100. Innovation and improvement are central to retaining those high standards, and they depend on financial security. Why, then, is the Government determined to take a risk with that? I think that the risk is serious. The potential for ONS reclassification puts that financial security at risk.
There is loads of evidence that we can summarise; a lot of it has been mentioned. The committee of Scottish chairs highlighted in its evidence to the Finance Committee various issues. Let us not have the red herring of an effect on charitable status; ONS reclassification is different. The committee of Scottish chairs said in its submission that reclassification would
“prevent universities from retaining annual operating surpluses; place a severe restriction on their ability to borrow funds; reduce their ability to enter into commercial partnerships;”
and threaten their philanthropic support.
Professor Muscatelli, whom we all respect, has had his evidence to the Finance Committee mentioned by more than one member. He described his university’s £775 million investment programme, which is financed from operating services, and its £145 million in cash reserves. He said that he could not use those reserves if reclassification took place. The Carnegie Trust made the same point about its grant giving to Scottish universities.
All those reputable individuals and bodies cannot just be discounted; they cannot just be accused of scaremongering or of having ulterior purposes. It is incumbent on the Scottish Government to take the issue seriously.
The situation is worse for universities that are less dependent on public funding. For example, Heriot-Watt University is only 49 per cent dependent on public funding. It is probably more at risk than the University of the Highlands and Islands, which is 90 per cent dependent on public funding. However, even Garry Coutts, who is the chair of UHI, gave clear examples to the Finance Committee of how his university’s finances would be affected by ONS reclassification.
The Government will say that reclassification is not going to happen, but we need to look at the Treasury guidance on the European system of accounts. The essence is—Treasury guidance says this—that all controls, major and minor, will be looked at. The key thing is the cumulative effect. There is already an element of public control of universities, but the bill will increase that significantly. That is where the risk comes from.
Treasury guidance also says that, on its interpretation of the ESA, the power to change a body’s constitution is an indicator of ministerial control. That is all there in black and white if the Government is willing to read it, so how can its amendment to the motion today say emphatically that there is no increased risk?
The Government cannot just sweep aside reputable law firms such as Anderson Strathern, which says in its report that the bill will heighten the risk of reclassification. The firm says that
“the provisions in the Bill would take HEIs into ‘borderline’ territory in terms of their current ONS classification”.
What legal advice did the Scottish Government take on the bill’s potential to impact on ONS classification? We have not heard.
I know that the Government will not reveal legal advice, but it could at least allude to it in some way and perhaps also tell us what discussions it has had with the ONS. The Government certainly has the right to enter into those discussions. Even if the ONS and the Treasury would not give a definitive view, they would be able at least to indicate what matters might be relevant.
This is a serious issue for universities in Scotland and the Government cannot just lodge an amendment to the motion that essentially says, “We say there is no risk—what are you all bleating about?” That is unacceptable, and the situation is going to get worse. We are at the early stages of the bill and all these problems and issues have been raised at stage 1. The Government has to respond in a more constructive fashion.
I agree with the Government’s wish to improve transparency and accountability in decision making, but we must balance that most fundamentally with the need to maintain funds and to respect autonomy, which I—and, I hope, the Government—fully support. The simple solution, which would not satisfy the Conservatives but would unite the Conservatives, the Liberal Democrats and Labour, is to remove sections 8, 13 and 20 from the bill.
16:08
I was very pleased when Angela Constance, the cabinet secretary, said that where there was scope to “alleviate concerns”, the Government would listen. I think that this has been a constructive debate. It has been an impressive debate on all sides, and I hope that the cabinet secretary will listen to what is being said today.
We should all rightly be proud of our universities and their performance in the recent Times Higher Education world university rankings. The cabinet secretary said that we really do punch above our weight and we agree that thanks are due to our hard-working staff and students who have made that possible.
However, in thanking the staff and students, it is now proposed to burden them with punitive, unnecessary and counterproductive legislation that they do not want. The Government cannot speak highly enough of the success of Scotland’s universities. Why, therefore, does it want to meddle in their autonomy and governance?
As a member of the Education and Culture Committee, I sat at the table with world-leading academics such as Jocelyn Bell Burnell of the Royal Society of Edinburgh and David Ross. I find quite incredible the implication that the best global academics have misunderstood the Government’s intentions in its bill. I am sure that those academics will all be very grateful for a tutorial in future proofing from the Government, because they are obviously not quite up to understanding the legislation that comes out of the Parliament.
Universities Scotland is so concerned about the risk of ONS reclassification that it commissioned its own legal advice from Anderson Strathern. Much has been said today, but I will give a few quotes from that advice. Anderson Strathern stated that the bill
“heightens the risk of HEIs being reclassified by the ONS as being within the General Government category”.
It continued:
“we consider that the Bill brings HEIs closer to a possible reclassification by ONS into the public sector”
and noted that
“this ‘borderline’ territory is an uncomfortable place for HEIs, because of the major ramifications that would follow any ONS reclassification of HEIs to the public sector.”
If there is any external legal advice to the contrary, let us hear about it from the Government. Perhaps Anderson Strathern has also misunderstood future proofing and needs a wee tutorial. We have one piece of legal advice; if there is other legal advice—any advice—I am up for listening to it.
The governing bodies of Scotland’s universities have very diverse histories, traditions and goals. The universities of St Andrews, Aberdeen and Glasgow were founded in the 15th century, and the universities of Edinburgh, Dundee, Stirling, Strathclyde and Heriot-Watt were all established under royal charter. Funnily enough, they have all managed to rub along pretty well. They are world leaders, they have succeeded and thrived for 600 years, and they have managed all that without the Government interfering. It is funny that, now they are global leaders, they need the Government to tell them how to run their business.
Dame Jocelyn Bell Burnell of the Royal Society of Edinburgh and Professor Tim O’Shea have also conveyed concerns from their peers abroad and elsewhere in the UK, who are already asking difficult questions about why the Scottish Government is interfering in the running of our world-leading universities. Dame Jocelyn said:
“when I am abroad I have found people saying to me, ‘What is happening to the Scottish university? What is the Government there doing?’ The implication is that there is interference. There is also a not-quite-articulated implication that there is suppression of critical thought. That is not the word that you want to get abroad. It will be devastating for the Scottish National Party and for Scottish universities, but it is out there already and ... growing.”—[Official Report, Education and Culture Committee, 6 October 2015; c 8.]
We simply will not be able to attract the brightest and best staff and students to Scottish universities if that is being whispered at home and overseas.
For universities—as for this chamber—their most valuable currency is their reputation, and I hold that those reputations will be irreparably damaged if the bill goes through. Whatever the final terms of the bill, the Government is already creating the perception that it is prepared to damage Scottish universities, and its relationship with them, for little or no gain.
I have two points to make before I finish—I am running out of time. We have not looked today at the code. A huge amount of the progress that we all want to see has been achieved by that, and it is up for review next year. There is already a commitment for governing bodies to have 40 per cent of both genders and, in the past year, 42 per cent of those who have been appointed have been women. I welcome that. There is more to do, but action is being taken through the voluntary code.
16:15
To an extent, it is strange that we are having this debate. I am not a member of the Education and Culture Committee or the Finance Committee, but my understanding is that the Education and Culture Committee has had one evidence session on the bill. We are far from having a report from the committee that we can discuss in a stage 1 debate. I listened to the cabinet secretary and I think that she gave members reassurance that, if we need to look at parts of the bill, she is listening. She gave assurances to try to allay the fears that seem to be coming through.
I am sometimes amused by Mary Scanlon’s remarks in the chamber but, for one minute there, I thought that I was listening to “Dad’s Army”, because it sounded as if we are doomed. We have been taken back to the 18th and 19th centuries, but we are in the 21st century and it is time to reform. Many members have quoted Universities Scotland, but I have not heard many quotes from the NUS. Ferdinand von Prondzynski’s report says that the universities are autonomous. That is quite right, but we are looking for a degree of reform.
I was delighted to hear Malcolm Chisholm’s opening remarks. I probably agreed with just about everything that he said, apart from maybe in the last couple of minutes, when he started questioning—although it is right to question. I heard what the cabinet secretary said in her opening remarks. If Labour members agree with the principles of the bill and their only concern is about reclassification by the ONS, they should listen to the cabinet secretary’s assurances. Let us have the stage 1 debate and consider amendments. The debate this afternoon is a bit premature.
Other members have mentioned that they are graduates of various universities. I am a graduate of none, but I can and do listen. We are in a situation where rectors, principals, students and staff are saying that it is time for change, that they will embrace it and that universities should be more democratic and transparent. What is wrong with that? I do not see anything wrong with it. Nevertheless, some establishments want a degree of elitism and to try to prevent certain people from being on the boards or courts or whatever. What is wrong with being transparent and democratic? I would have thought that most members would welcome that, but it appears that that is not the case.
The ONS may reclassify, but we do not know whether it will. However, I believe what the cabinet secretary has said, which is that the Government would not use the powers and has no intention of using them. Perhaps there is a way to find consensus in the debate and to ensure that the powers do not come forward. I do not know, and that is because the Education and Culture Committee has had only one evidence session on the bill.
Why are we debating something in the chamber when it has not gone through its committee stage and we do not have a report and cannot consider the evidence base? We have had submissions and briefings, which have enabled us to have the debate, but I look forward to the stage 1 debate, by which time the committee will have had more evidence sessions, we will have had greater scrutiny and the cabinet secretary and the Government will perhaps have gone back to the committee and given a degree of reassurance. I hope that the committee will listen to that reassurance and can accept it.
I have nothing else to say, Presiding Officer.
We have a little bit of time in hand now for interventions.
16:19
Thank you very much, Presiding Officer, and good afternoon to you.
First, I declare that, like Annabel Goldie, I have spent some time on the court of the University of Strathclyde.
I am pleased to speak today on the topic of Scottish universities. We can all agree that Scottish universities make a major contribution to our economy, our environment and our society. However, there are some issues regarding their governance that need to be clarified by legislation. I have been contacted on the issue by a significant number of constituents who either study or work in Glasgow’s thriving universities. One constituent expressed their view very well, stating:
“I have become increasingly concerned at the lack of independence of my University Senate and Court bodies, both of which appear to be very compliant in the face of questionable strategic decisions.”
I would agree with some of those sentiments, if not all.
I whole-heartedly support the National Union of Students Scotland and the University and College Union in their calls for elected chairs in a bid to increase the transparency and accountability of governing bodies’ decision making. However, there are sections of the Higher Education Governance (Scotland) Bill that cause me to question the motivation for the proposed reform, as I do not understand the problems that they seek to fix. Some people go as far as saying that the bill is perhaps trying to gag universities; there might be an element of truth in that, but time will tell.
The bill significantly raises the risk of reclassification of universities by the Office for National Statistics from non-profit institutions serving households to central Government bodies. Another issue that has come to light is that there are additional risks to HE institutions’ charitable status from the bill. If we get the legislation wrong, we could cause severe financial damage to higher education institutions, and our decisions must ensure that that does not happen.
The Conservative Party motion states that our universities are “autonomous and diverse institutions”, and that is a fact. There has been a lot of discussion about the autonomy of university governing bodies, but little has been said about their diversity. Research conducted by NUS Scotland in 2014 highlighted that, despite recommendations made in the Scottish code of good higher education governance, university courts are still dominated by men. Governing bodies also suffer from a lack of diversity in terms of wider protected characteristics. For example, they have low numbers of ethnic minority representatives, which I feel means that they are failing to properly reflect the diverse community in Scotland today—our population. Despite a recommendation in the code of good governance that institutions should monitor and report on the diversity of their governing bodies, no data on that is currently held. If it is not being produced voluntarily, perhaps the Parliament should consider making its production a statutory requirement to ensure that it happens.
It is vital that we protect our higher education institutions, which do so much for us in Scotland, in their contribution to not only the economy, the environment and society, but the future well-being of education. Historically, education institutions in Scotland have managed very well without the type of interference that the bill proposes. I genuinely do not understand why we need to risk fixing something that is not broken. I therefore suggest to the Government that it needs to think very seriously before tampering with that situation. It should also think seriously about the need for representation on university boards to reflect the community out there.
16:25
I am pleased to have the opportunity to discuss a number of important issues that have arisen concerning the Higher Education Governance (Scotland) Bill.
Before I get into that, I have to say that I thought that the speech by Dennis Robertson hit the nail on the head. Of course the Conservatives are entirely free to bring forward any subject they wish to debate in the chamber, but I think that this debate shows some disrespect to the parliamentary system and the Education and Culture Committee. [Interruption.]
Order.
The fact is that the committee has not taken all the evidence, discussed the matter or written a report, and we are not at the stage 1 debate yet. I think that this debate is a bit premature, as other members have said, and Dennis Robertson was correct in his remarks.
Scotland greatly values the role that education plays in our society, and we are all rightly proud of the success of our universities. I am certain that the whole chamber is united in wanting to see our higher education institutions rated among the world’s best. Having five universities in the world’s top 200 is a remarkable achievement, and it seems to me that taking steps to modernise our universities so that they continue to be world leading is a worthwhile ambition.
The Higher Education Governance (Scotland) Bill has certainly received a lot of attention. The Education and Culture Committee’s call for evidence generated a wide variety of comment and input from across the sector, with around 300 written submissions received from a diverse range of contributors. The committee undertook an oral evidence session earlier this month involving a number of expert stakeholders and Government officials. We also look forward to welcoming the Cabinet Secretary for Education and Lifelong Learning when she comes before committee in a couple of weeks’ time to give further evidence on the bill.
During the evidence session on 6 October, I asked Scottish Government officials about the concerns that the Scottish Council of Jewish Communities had expressed about the widening of the statutory definition of “academic freedom”. The response was that officials had not yet had a chance to review the evidence that SCJC had submitted, due to the number of submissions that had been received. I would be grateful if the minister addressed the issue in his summing up. I hope that, after a number of weeks, there will be a response to those concerns.
There has been a degree of scepticism about the bill in certain sections of the higher education sector, but I welcome assurances from the cabinet secretary that she is working hard to address concerns and is in regular dialogue with key stakeholders on the issues. The cabinet secretary has also offered the assurance that all evidence that is submitted will be looked at seriously and that constructive suggestions will be listened to.
It is worth remembering that the bill is still in its early stages. A number of details still need to be addressed, but the overall objectives of the bill are extremely commendable.
Like many members, I have been contacted by a number of constituents about the bill. I understand that some universities have urged their alumni to write to MSPs to express concern about the proposals. I have seen some of those letters. It appears that a considerable amount of misinformation has been disseminated in the press and elsewhere, which has resulted in misconceptions about aspects of the bill.
That is not to say that correspondence from constituents has been only negative. Just last night I received an email from one of my constituents, who is an academic at one of our universities. He wrote to urge me to strongly support the proposals in the bill. He said:
“I hope that you will be able to offer your support for this Bill which I believe offers a rare opportunity to make positive farsighted reforms, which will be of lasting benefit not only to Scottish universities and those who work and study in them but also to the nation itself.”
Across the sector, there are individuals, groups, organisations and representative bodies who are fully behind the Government’s efforts to modernise and bring transparency and openness to the governance of the sector.
At the most recent First Minister’s question time, the First Minister was clear that the Higher Education Governance (Scotland) Bill is not about the Government taking control of universities. If that was the case, I would be opposing the bill, as would other SNP members and members of the Education and Culture Committee, because that is not what this Government is about.
The bill is not about taking control of the university sector, and it is nonsensical to say so. Rather, it is about delivering a modern system of governance that meets the highest standards of transparency and inclusiveness. It is about placing the students and staff of higher education institutions at the heart of decision making in our universities.
Does Mr Maxwell seriously expect us to believe that SNP members would oppose a bill that the Government has introduced? That would be a first, wouldn’t it? [Interruption.]
Order.
Is Mr Findlay seriously suggesting that members of this chamber do not think for themselves? That is insulting. It may be how the Labour Party works—I have no idea, because we have no idea what the Labour Party does from one day to the next—but the fact remains that members from across the chamber would not accept any Government interfering to take control of our higher education institutions. That applies equally to members on the SNP benches and members on other benches. Frankly, it is insulting to suggest otherwise.
The First Minister made it clear that the bill does not represent a threat to the charitable status of universities. The Office of the Scottish Charity Regulator responded to the Education and Culture Committee’s call for evidence without raising any concerns about the bill’s provisions in that regard. It is just one example of an area of the proposed legislation that has been—to be kind about it—misinterpreted.
Concerns have also been voiced about the potential risk that the proposals pose to the role of rector in the ancient universities. However, as we have heard, the bill seeks not to abolish the position of rector but, on the contrary, to extend the elected chair model to the governing bodies of every university in the country. The Scottish Government has repeatedly said that the proposal for new elected chairs is not intended to lead to the abolition of rectors. Indeed, when the committee wrote to the cabinet secretary ahead of its stage 1 scrutiny of the bill, she confirmed that the Scottish Government would seek to minimise and even remove any features that could negatively affect the role of rector.
I had intended to discuss the issue of ONS reclassification, but other members have covered the issue in detail. Having listened carefully to the arguments, I am of the view that there is no serious risk to the financial position of Scotland’s HEIs and that the suggestion is a smokescreen or a scare story.
Undoubtedly, there has been a degree of scaremongering about the proposals, and it is unfortunate that that has distracted from what the bill sets out to achieve. Some people have even questioned why the Scottish Government is bothering to pursue such legislation. However, although I accept that there has been some progress since the introduction of the code of good HE governance following the von Prondzynski review, that does not mean that there is not still substantial room for improvement.
If you could draw to a close, I would be grateful.
Our universities are a real success story, and I do not accept that moves to improve their governance will put that success at risk. Although the bill is still at an early stage, it is important to remember that it is underpinned by the comprehensive research and recommendations of Professor von Prondzynski. If universities do not exist to serve their students, staff and communities, who do they exist to serve? I have yet to hear a convincing argument for what is wrong with giving staff and students a greater say in how their universities are governed. It is only right that every voice on campus be given the opportunity to be heard equally.
Thank you very much. We now come to the closing speeches.
16:33
At the Education and Culture Committee at the start of the month, I said that I support the general principles of the bill. I support the inclusion of trade union reps and student reps on governing bodies as a democratisation of higher education institutions’ governing bodies, and that support has been echoed by all my Labour colleagues in the debate today. It is unfair to question our support for those principles because of the concerns that we have raised around ONS reclassification.
In committee, I also said that the issue of ONS reclassification was quickly becoming a key issue for the Scottish Government—understandably, given its potential impact on the sector. Given the real fears in the university sector about the financial implications of reclassification, it is only right that we debate the issue in the chamber today. George Adam and others have talked about its detracting from the positive measures in the bill. I agree with Mr Adam, which is why I think that the Government should support both the motion and the amendment, giving a commitment to remove the sections that increase the threat of reclassification.
Jennifer Craw of Robert Gordon University said:
“ONS reclassification is a real risk to the sector when it comes to future investment and success. As governing bodies, we absolutely have to take financial accountability into account. Our principals are accounting officers in relation to the Scottish funding council, and as chairs and boards, we are accountable for the financial sustainability of the organisations as a whole. The ONS reclassification of colleges as public bodies has had a severe impact on the further education sector, and it is not a risk that we can afford to take with the HE sector. We are too successful, and we are too important to the Scottish economy, to put the sector at risk.”—[Official Report, Education and Culture Committee, 6 October 2015; c 31.]
All parties—in the motion, in the amendments and in members’ speeches in the chamber—have recognised the importance of the higher education sector to Scotland’s economy and our international standing, so we should be listening to the sector’s views and responding to its concerns.
The Government amendment states that it
“would always seek to avoid any risk of the reclassification of higher education institutions as public sector bodies by the Office for National Statistics, and further notes that the Bill’s provisions do not increase that risk”.
However, that directly contradicts the evidence given to the Finance Committee and Education and Culture Committee by Scottish Government officials. Scottish Government officials stated:
“we deem reclassification to be a low risk.”—[Official Report, Finance Committee, 16 September 2015; c 46.]
Granted that officials stated that they believed it to be a low risk, it is a risk all the same.
My view is similar to that of Liam McArthur and Malcolm Chisholm: I cannot understand how a Parliament could support an amendment, in the name of the cabinet secretary, that directly contradicts the evidence given to parliamentary committees by the cabinet secretary’s officials.
Is the member aware of the correspondence that I sent to the Finance Committee? That goes through in detail the European system of accounts 2010 guidance, which essentially looks at the indicators of Government control and how we assess the risk cumulatively, as Mr Chisholm mentioned, and how we look to each indicator separately. We have shared our assessment and why we have reached the conclusion that the bill does not increase the risk of ONS reclassification.
I put questions to officials at the Education and Culture Committee on the assessment, and I will come on to that in a minute.
As I said, Government officials believe there is risk of reclassification and have stated:
“It is an extremely serious issue”.
Universities Scotland also believes that there is a risk of reclassification but, in its assessment, has concluded that, far from being low risk, it is at an amber to red level of risk.
I questioned Scottish Government officials about the risk assessment process. They confirmed that the process that they have followed is, as the cabinet secretary has outlined, the same one that was followed by Universities Scotland:
“they have looked at exactly the same material”
and exactly
“the same indicators of control”.—[Official Report, Education and Culture Committee, 6 October 2015; c 43, 44.]
My concern is that we have a radically different outcome, with Government coming to the conclusion that there is a low risk and others coming to the conclusion that the risk is much, much higher. I am not taking sides in a debate; I am simply flagging up a gulf in the legal opinion. When the consequences are so far reaching, the Government must take that seriously.
Will the member give way?
Sorry—I am pressed for time.
It is of utmost importance that, given the significance of the sector, the Scottish Government seriously considers the course of action suggested in the motion and our amendment, seeks urgent external legal and technical advice on the matter, and publishes in full all the analysis. In the minister’s closing remarks, I would welcome a further commitment from him to remove all sections in the bill that could increase the risk of ONS reclassification. If the Government is serious about addressing the concerns, it will follow that sensible and pragmatic course of action.
There have been other issues and other pieces of legislation that we have debated in Parliament on which the Government has believed its position to be correct—in relation to legal advice on the European Union, college reorganisation and VAT exemption for the new national police and fire services, for example—but on which it has simply been wrong in its assertions and assumptions. The repercussions of the Government getting it wrong on higher education governance are so serious that I ask it to take another look at the issue and to consider the course of action that is set out in our amendment.
16:40
The Scottish Government certainly welcomes today’s debate, and I have noted carefully all the contributions to it, many of which were very considered indeed. I am thinking of the speeches of Liz Smith, Cara Hilton, Liam McArthur, John Mason, Malcolm Chisholm and many others. Some contributions were predictable. Some of my friends who are graduates will be surprised to learn from Iain Gray that tuition fees were abolished 14 years ago, but let us not rehash that debate.
There were also some speeches that, although thoughtful, I would have to disagree with. I feel that Baroness Goldie, in an otherwise carefully considered contribution, talked about the governance of our universities as if they were merely corporations. They are a great deal more than that, and I think that—perhaps unwittingly—she failed to fully realise that when she pursued the argument that university courts should be accountable primarily to themselves and not to a wider academic community.
I was at pains to refer to the SQA inquiry that was conducted by the Parliament, which concerned the governance of a public body, so I make it clear that I had no desire to conflate the governance of HEIs with corporate governance. I gave a public body example. The Enterprise and Lifelong Learning Committee refuted the very model that the cabinet secretary wants to introduce.
My point is about the wider responsibility to a community, and I stand by my remarks on that, notwithstanding what the member has said.
Important comments were made about academic freedom, which the bill seeks to enshrine, but I must differ with Hanzala Malik, who must have been talking about a different university system, because at no time is the system in this country subject to Government gag.
On the other side of that discussion, Mr Maxwell raised interesting questions. I would be happy to meet his constituents. I do not want to pre-empt what they have to say, but I suspect that some of their questions might be to do with the part of the bill that deals with academic freedoms. I make it clear that academic freedom is not an excuse to incite criminality or acts of racial or religious hatred, and the bill will make that very clear. I will be happy to meet Mr Maxwell’s constituents to discuss their concerns.
The Tories told us their view of the bill, to which I will seek to respond shortly. Before I do, I must admit that I am little nearer understanding Labour’s stance in principle on the bill. I welcome the fact that Labour has said throughout the debate that it is supportive of the idea that university governance should be reformed to allow staff, students and unions to play a greater role. The problem with the position of the Labour Party is that, in joining us on that, it simultaneously felt compelled to join the Tories in their argument that pretty much anything and everything that we have included in the bill is, at least in theory, a threat to the ONS classification of our universities. As I have already said, it is difficult for Labour to hold a credible position unless it can tell us what it would like to put in the bill. I look forward to hearing about that.
The minister’s position is patently absurd. We support elected chairs, we support greater transparency and we support trade union and student representation. The way in which that is to be achieved should appear in the bill. It will then be possible to remove from the bill those undefined powers for ministers that the minister and his colleague the cabinet secretary have spent the whole afternoon telling us they do not want to exercise anyway. I hope that that is straightforward enough for the minister to understand.
Perhaps Mr Gray can suspend his patronising tone for long enough to appreciate that those on this side of the chamber completely appreciate those points and that there is a certain onus on members to come forward with ideas for bills that they attack in the chamber.
As far as I can tell—and it will be interesting to see how its members vote on it—Labour agrees with my belief that the Higher Education Governance (Scotland) Bill will improve the modernity, transparency and inclusivity of governance in our higher education institutions. This year, the Scottish Government is investing more than £1 billion in our higher education institutions to advance learning and foster inclusive economic growth. The autonomy of higher education institutions helps them to be forward thinking and innovative; on that much I think we are all agreed, and I put on the record that, as the cabinet secretary has made clear, the Government is not interested in ministers having any role in the business of running universities or in interfering in what individuals universities appoint to any post.
However, the idea that the rules under which universities operate are incapable of improvement is a counsel of despair and one that I reject. I also reject the implication that nothing can be done to make the governing bodies of universities more reflective of the communities that they serve. The assertion that is implied in the motion that any attempt to make such an improvement is inimical to academic freedom has not been substantiated or borne out in the debate. The bill aims to strengthen governance in our institutions by empowering all staff and students to play a full part in guiding our academic institutions further into the 21st century.
I make it clear, again, that we are not of the view that the bill’s content adds to any risk of reclassification by the ONS of Scottish higher education institutions as public sector bodies.
Will the minister give way?
I have to come to a conclusion now, but I will add that reclassification is not an outcome that the Scottish Government would ever seek.
I reiterate that, as we begin to plan for stage 2 of the bill’s parliamentary consideration, we continue to examine all the constructive ideas and suggestions that stakeholders put to us and the relevant committees of the Parliament. The cabinet secretary has made very clear her willingness to do that. On section 20, which was mentioned at one point in the debate, it is worth pointing out that such a provision is pretty much standard to most, if not all, pieces of legislation. Nevertheless, the cabinet secretary has already indicated that she is open to thinking about section 1, and I am sure that we will have discussions at stage 2 about sections 8 and 13.
In conclusion, I emphasise the bill’s aim of helping to enhance the reputation of our institutions, which are world class and which I believe this legislation will help into the future.
I call Gavin Brown to wind up the debate. Mr Brown, you have until 4.59 pm, which is just over 10 minutes.
16:48
At the start of the summer, a rumour was circulating that the Scottish Government had been blindsided by the ONS reclassification issue. Of course, not all rumours prove to be true, so I was keen to hear the evidence to the Finance Committee and the Education and Culture Committee. Every day since the rumours first began to circulate, it has become more and more apparent that the Government has done nowhere near enough work on the ONS reclassification issue. Given what could be at stake, it is simply unacceptable for the Government to behave in that fashion.
Will the member give way?
In a moment.
ONS reclassification is not some kind of mythical beast; it is a real possibility, and this Government and this Parliament should be extremely cautious after what happened with the Aberdeen western peripheral route. In recent months, we have seen evidence of the implications of reclassification; indeed, we were told in advance of the AWPR situation that every precaution had been taken, that we were extremely safe and that it would not happen—and yet it did. There are schools and hospitals up and down the country that could be reclassified next month and in December, so the Scottish Government is taking an absurd position by saying that we need not worry about anything. We have seen it happen, we have been burned already, and we should take every single precaution to make sure that it does not happen again.
I said that I would give way to Mr Mason, so I do so now.
I thank Gavin Brown for giving way. Does he accept that the Scottish Government has developed considerable expertise and that it is quite hard to find other organisations out there with more expertise?
There has not been a huge amount of expertise evident in the chamber today from the SNP. However, Mr Mason asked a perfectly reasonable question. Who could possibly give the Scottish Government advice? That was the tone of his question. Well, Presiding Officer, there is any number of large law firms in Edinburgh and beyond in Scotland, and any number of financial institutions, that could give the Government advice. Mr Mason may be keen to know that, even when the AWPR issue came up, the Scottish Government did its best—at times, at least—to try to make that safe. John Swinney gave evidence in the chamber that the Government had taken five separate bits of legal and technical advice from external sources to try to ensure that it could give that project the best chance.
It is therefore inexplicable that the part of the Scottish Government with responsibility for higher education has not taken a single piece of external advice. Nobody outside the Scottish Government has given any technical, financial or legal advice on an issue that could cost our universities £1 billion a year if we get it wrong. I repeat that that could be the outcome if we get it wrong. It could be the case that the situation is reviewed and a decision is made that universities should remain as non-profit institutions serving households, but it is equally possible that it will be decided that universities must be public sector, with the result that they would lose £1 billion. That is why we need to be extremely cautious.
I want to pick up on some of the issues that have been raised. Chic Brodie mentioned that reclassifying universities is not specifically on the ONS’s published calendar for its work plan. That is true. The published work plan shows that it has agreed to look at higher education institutions south of the border but, as we know, there is every possibility that it could look at Scottish institutions, particularly as legislation is going through. There is a historical precedent for that. When colleges and sixth-form colleges were first looked at, Scotland was not on the map, but we all know what happened in 2010. Scottish colleges were brought into that inquiry and they were reclassified into a position that they have remained in ever since. Just because reclassifying Scottish universities is not specifically on the agenda today does not mean that it will not happen, and I think that there is every possibility that it would come up.
I would like to deal with the confusion that a number of members, primarily in the SNP, have come up with today. They have tried to use a letter from OSCR as a crumb of comfort. Anyone who is doing that is conflating two entirely separate issues. ONS reclassification is a separate issue from a decision on charitable status by OSCR. That OSCR letter is extremely helpful on the subject of charitable status, because it is OSCR that would ultimately decide that, so we can take some comfort from the letter, although I must point out that OSCR says that it would look at how the regulations were actually used and that it could reach a different view in future from the one that it has reached at this stage. However, that letter will be of no value whatsoever when the ONS takes its decision on reclassification, so I am afraid that any member who thinks that we can rely on that is severely misguided and has quite simply got it wrong.
We heard that the Scottish Government does not want any of the extra powers and does not want ministerial control, and we heard the suggestion that some of the powers that it is being given are just a simple tidying-up exercise; “future proofing” was the exact term that was used. For the record, I am going to read out section 8 of the bill, just so that we can be clear about the type of powers that are being given. Section 8 gives Scottish ministers the power to modify the governing body of all of our universities. It states:
“The Scottish Ministers may by regulations modify—
(a) the categories of membership”
of people who can be on governing bodies, and
“(b) the number of persons to be appointed under a particular category in that section.”
That is a pretty strong power. That is not just future proofing or a tidying-up exercise, and that is causing deep concern to universities across the land.
I will reiterate some of what has been said during the debate. For the record, I have already said that section 1 will be replaced when we insert the model of elected chairs. As Dr Alasdair Allan said, sections 8 and 13 can be looked at, as would be the norm under parliamentary process. Section 20 is a fairly standard clause that is in many pieces of legislation.
Why on earth did those powers go into the bill in the first place? The Government had a full report and held a full consultation on what ought to be in the bill, which asked 37 questions. Why on earth did the Government not mention that it intended to put those powers in the bill?
Iain Gray rose—
If the minister cannot answer that question, perhaps Iain Gray can.
Does Gavin Brown think it passing curious that, although the cabinet secretary is saying that she will make some of the changes to the bill that we have been asking for, the Government amendment tells us that the bill is in fact already perfect and has no problems?
The debate is becoming a bit circular. I cannot possibly say why the minister and the SNP have taken that view.
I will echo the comments of a couple of other members by saying that I am genuinely perplexed by the Government amendment. The Government claims to be open and listening, but it says in black and white—in clear terms—that it does not think that the totality of the terms of the bill will move by one iota the risk of ONS reclassification. I do not know how any Government could say that the bill is risk free and will not move the current risk at all, particularly when that Government has not taken any external legal, technical or financial advice.
There has been legal advice. The universities took legal advice and they took the particularly helpful and extraordinary step of putting it in the public domain. They gave their full legal advice to the Finance Committee and the Education and Culture Committee, after which it went online, where anybody could access it.
What I do not understand is why, despite the legal advice being out there for all to see and the Government having a fixed view of the situation, almost a month later there has been no formal rebuttal by the Scottish Government to the legal advice given by Anderson Strathern. I find it remarkable that it has not even attempted to rebut the legal advice that was given. Why has it not taken its own legal advice and why has it not attempted to address the issues that have been raised? Anderson Strathern concludes that the bill heightens the risk and takes us into borderline territory, which is an extremely uncomfortable place for our universities to be. It says that an ONS assessment exercise
“should appear at the level of ‘significant risk’ on their risk registers.”
Those are strong conclusions.
Anderson Strathern lays out clearly what documents ought to be looked at: “European system of accounts: ESA 2010”, the “Manual on Government Deficit and Debt: Implementation of ESA 2010”—MGDD 2014—and Treasury guidance from 2013. However, the Scottish Government’s letter to the Finance Committee made no mention of two of those documents and no mention of the indicator of control that looks at changes to university constitutions, and it gave scant regard to the indicators that it did mention. In particular, the indicator on Government control via regulation, which relates to one of the main complaints about the bill, is skimmed over in the Government’s letter.
We have been burned in the past by ONS reclassification, so we should be ultra-cautious as we proceed. We should take every bit of advice that we can and, if there is any doubt whatsoever, those sections must be removed from the bill. It is incumbent on the Scottish Government to take legal advice and publish it, and to remove any doubt. The consequences of not doing so could be dramatic for our universities, and they could take many years to fix.
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