Review of the non-HE regulatory landscape and its impact on HEIs · 2016. 5. 20. · Review of the...

© Capita Business Services Limited 2011

Higher Education Better

Regulation Group:

Review of the non-HE regulatory landscape and its impact on HEIs

Final Report

November 2011


Page 2 of 39 November 2011

Contents

1 EXECUTIVE SUMMARY .................................................................................................3

1.1 Introduction ............................................................................................................3

1.2 Context ....................................................................................................................3

1.3 Main findings ..........................................................................................................4

1.4 Key issues ..............................................................................................................4

1.5 Recommendations .................................................................................................5

2 INTRODUCTION .............................................................................................................6

2.1 Remit of the review ................................................................................................6

2.2 Methodology ...........................................................................................................6

2.3 About this report and next steps ..........................................................................7

3 CONTEXT FOR INSTITUTIONAL REGULATION ..........................................................8

3.1 Beneficial v problematic regulation ......................................................................8

3.2 Changing context for HE regulation .....................................................................8

3.3 Non-HE regulatory context ....................................................................................9

4 THE NON-HE REGULATORY LANDSCAPE ............................................................... 10

4.1 Introduction .......................................................................................................... 10

4.2 Corporation tax returns ....................................................................................... 10

4.3 Freedom of Information ....................................................................................... 11

4.4 Procurement ......................................................................................................... 12

4.5 Employment law ................................................................................................... 14

4.6 Equality & diversity .............................................................................................. 14

4.7 Health and safety ................................................................................................. 15

4.8 Estates & infrastructure ....................................................................................... 16

4.9 Additional areas ................................................................................................... 16

5 CONCLUSIONS AND RECOMMENDATIONS ............................................................. 18

5.1 Cross-cutting themes and issues ....................................................................... 18

5.2 Barriers and risks of change ............................................................................... 20

5.3 Recommended changes to the non-HE regulatory landscape .......................... 21

APPENDIX ONE KEY SOURCES........................................................................................ 22

APPENDIX TWO CONSULTEES ........................................................................................ 24

APPENDIX THREE LEGISLATION AND REGULATIONS AFFECTING HEIS.................... 27

APPENDIX FOUR CASE STUDY: REGULATORY IMPACT ON A SMALL HEI ................. 32

APPENDIX FIVE CASE STUDY: REGULATORY IMPACT ON A POST-1992 HEI ............. 35

APPENDIX SIX CASE STUDY: IMPACT ON A RESEARCH INTENSIVE HEI .................... 37



1 EXECUTIVE SUMMARY

1.1 Introduction

Current and forthcoming changes to the English higher education (HE) funding and policy environment have prompted questions on the continuing relevance and appropriateness of existing higher education institutions (HEIs) being subject to the same generic regulatory requirements and conditions as other public sector bodies or authorities, but which are different to those which apply to alternative HE providers.

In this context, the Higher Education Better Regulation Group (HEBRG) was tasked by the recent HE White Paper with conducting a review of some of the more generic, non-HE specific, areas of the regulatory landscape which impact on HEIs. Specifically, the review was asked to consider the following regulatory areas:

Corporation tax returns

Equality and diversity

Employment law

Freedom of information

Health and safety

Estates and infrastructure

Procurement.

HEBRG commissioned Capita Consulting to conduct a research project during August-October 2011 to support the review. This project involved extensive desk research and targeted consultation with members of HEBRG, HE and further education (FE) sector representative and professional bodies and individual institutional representatives. This report from the review is for consideration by the Department of Business, Universities and Skills (BIS).

1.2 Context

As in other sectors, HE benefits from regulation that is transparent, accountable, proportionate, consistent, and targeted only at cases where action is needed. Effective regulation can be beneficial when it is used to demonstrate rigour and provide assurance to stakeholders. However, there are a number of ways in which problems with regulation can arise, with the result that it becomes a burden rather than a benefit. Regulation that results in duplication of requirements, that does not build on existing practice, or is introduced too quickly, can quickly become burdensome in its implementation.

The Government wants to simplify the HE sector‟s regulatory framework and apply a risk-based approach while protecting student and public interests and promoting a well-functioning market. This includes measures to increase competition and „level the playing field‟ for different types of HE providers. These changes are intended to make it easier for alternative HE providers, including overseas and private providers, to enter the market.

In addition to the HE regulatory framework, there are a range of professional, statutory and regulatory bodies (PSRBs) with which HE providers also have to engage, some with a 'prescribed statutory or regulatory responsibility to accredit HE programmes and determine standards‟. Further to this, there are many more bodies, some aligned with industrial sectors that do not relate directly to government departments, but operate in an accrediting relationship with HE programmes.



Existing HEIs are private and autonomous chartered or statutory bodies. Their legal status for the most part is that of exempt charities. Despite not being public bodies or authorities, HEIs have to ensure accountability for the substantial public funding they have received to date, by complying with a range of generic regulation outside of the HE regulatory framework. In some cases this is because they are classed as quasi public bodies or authorities, in others as organisations delivering public benefit. However, existing HEIs already compete with each other and globally with international institutions. Moreover, other types of alternative HE providers have fewer responsibilities under the same legislation.

1.3 Main findings

A majority of the consultees to this review indicated that their key areas of concern, and for which they believe it might be appropriate to consider some form of deregulation, are the requirements for HEIs to:

Complete corporation tax returns despite rarely reporting a corporation tax liability

Comply with the Freedom of Information Act, due to being classed as public bodies by the legislation, which is considered inappropriate, especially in light of the marketisation of HE

Comply with EU procurement regulations, due to the proportion of HEIs‟ income derived from public funding to date, but which may be subject to change due to the new funding environment for English HEIs

Be subject to aspects of employment legislation which affect post-1992 HEIs and FE Colleges, due to their origins within local authorities

Be considered as public authorities, and therefore have to comply with additional public sector duties for the purposes of equality legislation.

1.4 Key issues

The main cross-cutting themes and issues arising from the review relate to the following:

Issues with how existing HEIs are defined, and how this may be set to change within the currently changing policy and funding context. Current binary distinctions are likely to make less sense, and how HEIs are defined and categorised is set to change in future as different types of providers enter the market and it adapts to change. Clarity on how HEIs should be defined for legislative and regulatory purposes would therefore be helpful

The move to a more marketised environment and the ambition to provide a „level playing field‟ for all types of HE providers raises questions as to why legislation and regulation should apply differently

Variations in the HE landscape, policy context and in some cases legislative framework in Scotland, Wales and Northern Ireland. Therefore the implications and impact on the other home nations of making any changes to the non-HE regulatory environment in England will have to be considered carefully

The clear need to adhere to regulations designed to ensure a safe, fair and orderly society generally and HE sector specifically. Any major consideration of changing the regulatory environment has to focus on safeguarding students and their experience

Regulation is required to maintain a minimum standard, and avoid any reputational consequences from an insufficiently regulated sector. This is particularly so during an uncertain period in which the HE regulatory framework itself is changing and new measures to increase competition in the sector are being implemented.



1.5 Recommendations

Recommended changes to the non-HE regulatory environment as it impacts on HEIs arising from the review are set out in the table below.

Figure 1 Recommended amendments

No Regulatory area

Recommendation Priority Government ministry responsible

1 General Review the definition and categorisation of English HEIs in light of market changes and how they should be treated in future generally for non-HE legislation and regulation.

H BIS

2 Provide definitive guidance on what proportion of the graduate contribution (if any) will be classed as public funding.

H BIS / Treasury

3 Consider the potential impact of any non-HE regulatory changes on English HEIs in each of the home nations through active consultation with those nations.

H BIS

4 Corporation tax returns

Consider simplification of the calculations for corporation tax returns.

H HMRC

5 Improve the guidance available to HEIs as to when corporation tax may be payable and move to exception based reporting.

H HMRC

6 Examine the possibility of creating different types of charities, including a distinct category which HEIs would fit into such as large public charities, to enable a more targeted, risk-based approach to reporting.

M HMRC

7 Freedom of Information

Review whether existing HEIs should be removed from FOI altogether.

H Ministry of Justice

8 Consider the addition of an exemption for unpublished research results, similar to the exemption contained in the Scottish legislation.


9 Examine whether there should be an exemption for HEIs‟ outputs more broadly, including teaching materials, unpublished research results, and management or business information and intelligence (but not governance and accounts).


10 Review whether FOI should be extended to cover alternative HE providers.


11 Procurement If the decision is that the graduate contribution is mainly classed as private income, thereby taking most HEIs out of the threshold for EU procurement regulations, seek advice as to whether a ruling from the EU will be required to avoid future challenge.

H BIS

12 Monitor the European Commission‟s proposed reform of procurement legislation and any impact this could have on HEIs.

M BIS

13 Employment legislation

Review and establish changes which could increase flexibility for post-1992 institutions of the pension schemes they can offer to their employees.

H BIS

14 Consider removal of post-1992 HEIs from the Redundancy Modification Order.

M Department for Communities & Local Government

15 Review whether chartered institutions should be able to further restructure their statutes and move the additional area of employment into ordinances.

M BIS Privy Council

16 Equality and diversity

Consider in the light of the changing policy and funding environment, whether existing HEIs should continue to be considered as public authorities in respect of equality legislation, and therefore have to comply with additional public sector duties.

M Home Office



2 INTRODUCTION

2.1 Remit of the review

The Higher Education Better Regulation Group (HEBRG) was established in early 2010 as the successor to the Higher Education Regulation Review Group (HERRG). HEBRG‟s aims are to promote efficient and transparent approaches to the regulation of higher education (HE) and enhance communication and understanding between the sector and its regulators. Membership of the Group includes HE representative bodies, sector agencies, funders, regulators and government departments.

HEBRG was tasked by the recent HE White Paper1 with conducting a review of some of the more generic non-HE specific areas of the regulatory landscape and its impact on higher education institutions (HEIs). Capita Consulting was commissioned by HEBRG to conduct a research project during August-October 2011 to provide support in meeting the requirements set out in the White Paper.

The remit for the review was defined by Paragraph 6.19 of the White Paper as follows:

“...higher education institutions are subject to a wide range of regulatory requirements and conditions including health and safety, planning, equal opportunities, Freedom of Information, procurement, and employment law. They also enter into partnerships with many organisations in both the public and private sectors, each of which may have its own reporting and accountability requirements. We will ask the Higher Education Better Regulation Group to look across this complex landscape to identify areas for deregulation whilst still safeguarding students and taxpayers, and report back by November. BIS will work with other Government departments to reduce further the regulatory burden placed on higher education institutions, including whether it is possible to reduce the costs to institutions currently incurred in completing corporation tax returns.”

Current and forthcoming changes to the funding and policy environment have prompted questions on the continuing relevance and appropriateness of existing HEIs being subject to the same generic regulatory requirements and conditions as other public sector bodies or authorities, but which are different to those which apply to alternative HE providers. This includes the regulatory areas specified in Paragraph 6.19, some of which could potentially be subject to deregulation, and hence were the specific focus of this review. Although prompted by the England focussed White Paper, the review has also taken into account the UK-wide regulatory environment where relevant.

2.2 Methodology

The approach taken for the review involved the following strands:

A comprehensive desk-based review of relevant prior reports and evidential sources to assimilate findings and prior learning into the study and identify additional areas of enquiry

Targeted consultation via semi-structured interviews with members of HEBRG, HE and further education (FE) sector representative and professional bodies and individual institutional representatives

Testing of emerging findings part way through the review at a workshop with key consultees and by wider circulation of consultation papers

1 Department for Business, Universities and Skills, June 2011. Students at the Heart of the System.



More in-depth consultation with three very different institutions (one small and specialist, one post-1992 and one research intensive institution) to develop case studies to illustrate different regulatory scenarios, and the implications of changing existing arrangements for different types of institution and the variations among these

Engagement with leads on the Department for Business, Innovation and Skills (BIS) Technical Consultation on the future HE regulatory framework, and the HESA-led Higher Education Information Exchange Initiative

The main documentary sources reviewed are shown at Appendix One, and consultees who contributed their time, expertise and knowledge to the review are listed at Appendix Two. Individual case study reports are shown at Appendices Four to Six.

2.3 About this report and next steps

This is the final report from the HEBRG review completed in mid-November 2011 for consideration by BIS.

The remainder of this report is organised as follows:

Section 3 briefly outlines the changing context for the regulation of HEIs

Section 4 presents an overview of findings from the review on particular regulatory areas

Section 5 sets out conclusions and recommendations arising from the review

Appendices provide supporting materials including standalone case study reports.



3 CONTEXT FOR INSTITUTIONAL REGULATION

3.1 Beneficial v problematic regulation

Effective regulation should be viewed positively. It can be beneficial when it is used to demonstrate rigour and provide assurance to stakeholders. As in other sectors, HE benefits from regulation that is transparent, accountable, proportionate, consistent, and targeted only at cases where action is needed. Regulation must also be dynamic and responsive to new developments. The costs of regulation must be minimised while securing the benefits.

Students and employers need to be confident that providers of HE will deliver high quality outcomes. Banks need to be confident that their investments will be repaid and the taxpayer expects proper accountability for public funds. Good regulation can enhance the HE sector‟s reputation, support greater business opportunities and reduce the cost of borrowing. It reduces risks for students as they make key decisions with significant financial obligations.

However, there are a number of ways in which problems with regulation can arise for HEIs, with the result that it becomes a burden rather than a benefit. Regulation that results in duplication of requirements, that does not build on existing practice, or is introduced too quickly without sufficient time for consultation, can quickly become burdensome in its implementation. Also, there are areas of legislation, which although inherently beneficial for demonstrating accountability and transparency, can lead to increased burden due to the way they are implemented. This can be due to short and frequently changing timescales and inadequate guidance for implementation, and limited understanding of the operational processes in HEIs by those responsible for introducing the legislation.

3.2 Changing context for HE regulation

The broader context for regulation is indicated by the Government‟s ambition to eliminate any avoidable regulation and bureaucracy through removing unnecessary existing, and minimising new regulation. Quality of the design of new regulation should be improved and enforcement regimes should be risk-based and inspections minimised2. A „one-in, one-out‟ rule has been introduced whereby policymakers developing regulatory proposals must also identify deregulatory measures. The objectives of this approach are to reduce costs, remove laws which are no longer needed, change the culture of the Government‟s approach to regulation and promote economic growth.

Forthcoming fundamental changes to the HE landscape in England set out in the White Paper and the Technical Consultation3 will also have significant implications for the sector‟s regulatory environment. The Government‟s aspiration is to simplify the new regulatory framework and apply a risk-based approach while protecting student and public interests and promoting a well-functioning market. This includes measures to increase competition and „level the playing field‟ for different types of HE providers. These changes will make it easier for alternative HE providers, including overseas and private providers, to enter the market.

In addition to the HE regulatory framework, and as HEBRG‟s recent work has highlighted, there are a range of professional, statutory and regulatory bodies (PSRBs) with which providers of HE also have to engage, some with a 'prescribed statutory or regulatory responsibility to accredit HE programmes and determine standards‟. A HEBRG/HESA survey

2 Better Regulation Executive, December 2010. Reducing regulation made simple: Less regulation, better regulation and regulation as a last resort. 3 Department for Business, Universities and Skills, August 2011. Technical Consultation – a new, fit-

for-purpose regulatory framework for the Higher Education sector.



found that much of the information collection burden on institutions arises from returns required by PSRBs, many relating to medical and health care education4. Further to this, there are many more bodies that do not relate directly to government departments but operate in an accrediting relationship with HE programmes. Some of these are more closely aligned with industrial sectors, and since the Government is encouraging closer engagement between HE and industry, there is the potential for more regulation to arise from such bodies.

There are relevant initiatives which will serve to monitor the effects of the changing regulatory environment on the sector, in addition to HEBRG. One is the Interim Regulatory Partnership Group set up by HEFCE and Students Loan Company to advise on and oversee the transition to the new regulatory and funding systems for HE. Membership is drawn from the public bodies involved in implementing the changes and it will be a means of coordinating change and interworking that will be necessary to deliver the new regulatory framework.

Additionally, the White Paper mentioned the HE information landscape and that it should be redesigned as a joint piece of work involving HEFCE, HESA and other agencies. This will involve a one year Feasibility Study and Impact Assessment to provide the basis for any redesigned information landscape. This work will be undertaken through the Interim Regulatory Partnership Group. A reduction in any regulatory burden on HE providers arising from data collection may be secured in the longer term through this initiative.

3.3 Non-HE regulatory context

The current community of English HE providers comprises approximately 129 HEIs, 200 plus FE colleges (with 21 of these FE colleges recruiting over 1,000 HE students) and approximately 100 private (for-profit and not-for-profit) providers. This is likely to grow substantially within a few years and it is anticipated that many more HE providers, including overseas and private providers with a range of corporate forms will enter the market.

Existing HEIs are private and autonomous chartered or statutory bodies. Their legal status for the most part is that of exempt charities. Despite not being public bodies or authorities, HEIs have to ensure accountability for the substantial public funding they have received to date, by complying with a range of generic regulation outside of the HE regulatory framework. Analysis for the review found there are approximately 135 non-HE specific pieces of legislation and regulations which apply to existing HEIs, overseen by at least 13 different government departments or agencies (these are listed in Appendix Three). In many cases this regulations apply to all types of organisation, but in others it is because HEIs are classed as quasi public bodies or authorities, or as organisations delivering public benefit. Other types of alternative HE providers have fewer responsibilities under the same legislation.

The changing funding and policy context in English HE has prompted questions on the continuing relevance and appropriateness of HEIs being subject to these same requirements and conditions as public sector bodies. In particular, the move to a more marketised environment and the ambition to provide a „level playing field‟ for all types of HE providers has offered the sector a timely opportunity to consider potential areas for deregulation.

Since the Government‟s expressed aims are not only to reduce the regulation of HEIs but also to enhance their autonomy, there is a potential appetite for evidenced based proposals to be considered that may result in existing generic regulatory requirements being changed. This is in line with the Government‟s overall aim of reducing red tape and its emphasis on monitoring „rogue‟ or higher risk businesses or organisations rather than compliant ones5.

4 HEBRG, 2011. Professional, statutory and regulatory bodies: an exploration of their engagement with higher education. 5 See http://www.redtapechallenge.cabinetoffice.gov.uk/home/index/.

http://www.redtapechallenge.cabinetoffice.gov.uk/home/index/



4 THE NON-HE REGULATORY LANDSCAPE

4.1 Introduction

The specific regulatory areas covered by the review were corporation tax returns, freedom of information, procurement, employment law, equality and diversity, health and safety, and estates and infrastructure.

A majority of the consultees to this review indicated that their key areas of concern, and for which they believe it might be appropriate to consider some form of deregulation, are the requirements for HEIs to:

Complete corporation tax returns despite rarely reporting a corporation tax liability

Comply with the Freedom of Information Act due to being classed as public bodies by the legislation

Comply with EU procurement regulations, due to the proportion of HEIs‟ income derived from public funding to date, but which may be subject to change due to the new funding environment for English HEIs

Be subject to aspects of employment legislation which affect post-1992 HEIs and FE Colleges, due to their origins within local authorities

Be considered as public sector employers, and therefore have to comply with additional public sector duties for the purposes of equality legislation.

The remainder of this section outlines the findings from the review on each of the regulatory areas covered, discusses the issues raised and assesses whether there is demand for change. It also indicates the status of any current negotiations or interactions between the relevant regulators and the sector.

4.2 Corporation tax returns

The issue of corporation tax returns was highlighted in the recent White Paper, in which BIS stated it would consult on the matter with other government departments. In addition, HMRC is working with the British Universities Finance Directors Group (BUFDG) at present to investigate the options for simplification of the calculations and the potential for moving to exception based reporting for HEIs.

Currently, existing HEIs have to spend substantial sums annually in completing corporation tax returns, even though there is evidence that they rarely report a corporation tax liability6. This has been the case since 2006 when the tax rules were tightened and the „gateway test‟ removed. The change resulted from abuse of charity status for tax avoidance purposes stemming from charities in other sectors.

The process of gathering the required data to complete the corporation tax return can be costly for HEIs in internal and external resource. This is because of the amount of consideration which needs to be given as to whether different aspects of the business are non-primary purpose trading, and therefore not exempt from corporation tax.

At present, despite filing nil returns, the annual cost of using advisors to complete the return and ensure that no tax is due can range from between £1K and £40K for an institution per annum. Potentially, much of this effort and cost could be reduced by simplification of the calculations, improving the guidance available to HEIs as to when corporation tax may be payable and exception based reporting.

6 BUFDG. March 2010. Corporation Tax Survey Report.



Suggested changes during this consultation included improved guidance for HEIs on when the tax is due, examination of the possibility of creating different types of charities, including a distinct category which HEIs would fit into such as large public charities, the re-introduction of the gateway test, and with it moving to a more targeted, risk-based approach to reporting.

Where HEIs are conducting some taxable activities, for instance where they have set up limited companies and the profits are gifted back into the parent HEIs, these companies will still have a reporting obligation to HMRC. However the administrative effort of completing these returns is much lower than that for the HEIs. It will not be possible to remove the reporting obligations for these companies because in some circumstances a corporation tax liability could arise.

4.3 Freedom of Information

Freedom of Information (FOI) is the regulatory area about which existing HEIs expressed most concern during this consultation. Universities, along with FE Colleges are specifically included in the Freedom of Information Act which designates them as public authorities for the purposes of the legislation.

Many consultees to this review expressed their support for the principle of transparency and the original aims of the FOI Act, particularly in relation to HEIs‟ governance and accounts information. However, they believe that there remains to be an alignment between the original purpose of the FOI Act and how it is now being applied.

There is a raft of issues around complying with FOI, which are well documented, but are due in large part to the increasing numbers of requests, their complexity and resulting costs incurred by HEIs from responding to these. UUK estimates that the costs of compliance in the HE sector are around £10 million per annum7. Moreover this is considered to be a conservative initial estimate, and does not take into account non-quantified costs such as external legal fees, or staff time and resource associated with appeals.

Consultees to the review report that a significant proportion of the increasing number of FOI requests made every year are sector-wide, often considered to be apparently spurious „fishing expeditions‟ by suppliers or marketers (though not defined as vexatious or blanket in the Information Commissioner Office‟s terms).

Also, many requests despite consuming large volumes of staff time (for staff across HEIs, not just of those with responsibility for responding to FOI requests) in responding to requests, tend to result in very little visible output or gains in terms of transparency. Moreover there is a risk that the requirement to comply with FOI has the potential to drive behaviour in individuals and organisations to behave counter-intuitively in a less than transparent way.

At issue in terms of potential changes to FOI essentially is whether:

1. On the whole, HEIs should be removed from FOI altogether. This is the preference for a great many of the consultees who contributed to this review, not least in the light of the move to a more marketised environment, in which existing HEIs are recognised as autonomous private bodies operating on a „level playing field‟ with their competitors. Although this seems to run contrary to the Government‟s transparency agenda, there should be further consideration of why existing HEIs are included in FOI.

2. The legislation might be improved by the addition of an exemption for unpublished research results, similar to the exemption contained in the Scottish legislation8. This is in

7 Universities UK, September 2011. Efficiency and effectiveness in higher education: A report by the

Universities UK Efficiency and Modernisation Task Group. 8 Under section 27(2) of the Scottish Act, information is exempt if part of an ongoing programme of

research, where there is an intention to publish a report and disclosure would substantially prejudice



the light of recent high-profile cases of ongoing research being subject to FOI requests. An amendment to the Protection of Freedoms Bill has been tabled to seek a research exemption9. This would be beneficial to the research intensive institutions, but would not alleviate the difficulties from complying with FOI requests on other matters. In particular, it would have little impact on non-research intensive HEIs including smaller institutions, which are unlikely to have dedicated FOI staff and are impacted disproportionately.

3. Broader exemptions, in particular for HEIs’ outputs, including teaching materials and unpublished research results, and also business intelligence about HEIs‟ management, organisation, policies, operations and „ways of doing business‟ (but not governance and accounts information). This, many existing HEIs argue, is essential as the sector moves into a more commercial and competitive environment. For others it is less of an issue. Other possible exemptions might include disclosure rules in litigation. Where there has been a court ruling disallowing disclosure, an FOI request can then be made and have to be granted in spite of this.

4. The reach of FOI should be extended to cover alternative providers from an equitable point of view to help achieve a „level playing field‟. If existing HEIs cannot be removed from FOI, many consultees would wish to see the reach of the Act extended to cover alternative providers (including private HE providers), and particularly to those with degree awarding powers. Alternative providers, while appreciating the need for a level playing field, feel that this will not be achieved by bringing them into areas of generic regulation, with a historical focus on public authorities, such as FOI. It might be assumed therefore that alternative providers could be resistant to such a change.

Forthcoming changes to this area will stem from the Protection of Freedoms Bill (currently passing through the House of Lords and likely to come into force by the middle of next year) which contains a number of amendments to the FOI Act and Data Protection Act (DPA) 1998. In particular, this will place a new requirement on public authorities to make datasets available for re-use in a specified re-usable format and extend FOI requirements to additional organisations. This has led to concern around the impact of the Bill on the protection of intellectual property. UUK has proposed that guidance is needed on this for the HE sector, and is working to ensure that where there are IP or commercial concerns, there will be provision for a licence that would restrict use.

In addition, the Justice Select Committee is preparing a memorandum on post-legislative scrutiny of the Freedom of Information Act which is expected to begin shortly. There is an expectation that this process could provide an opportunity for the sector to secure changes to FOI as it applies to existing HEIs.

4.4 Procurement

Alongside FOI, procurement is the other key regulatory area of concern for HEIs. EU rules govern the way that all public contracts above a certain amount are conducted in a bid to ensure fair competition, transparency and equality of access to public contracts.

Larger HEIs particularly want to be removed from the requirements of EU procurement rules which they find overly bureaucratic, costly in staff time and legal fees and prevents them from acting quickly to procure due to the required lengthy Official Journal of the European Union notice periods. Also, some HEIs report that on occasion they have been prevented from

the programme, the interests of the participants, the public authority or the publisher. This applies to ongoing programmes of active research, but is subject to a public interest test. Under section 27(1), information is also exempt if it is due to be published within 12 weeks. 9 See http://www.publications.parliament.uk/pa/bills/cbill/2010-

2012/0189/amend/pbc1891509a.3351.html.

http://www.publications.parliament.uk/pa/bills/cbill/2010-2012/0189/amend/pbc1891509a.3351.html

http://www.publications.parliament.uk/pa/bills/cbill/2010-2012/0189/amend/pbc1891509a.3351.html



working with existing partners and preferred suppliers. There is considered to be a need for excessive rigour in the procurement process, to offset the risk of litigation from unsuccessful suppliers. In addition, the procurement ceiling for having to comply with the regulations is considered to be set too low. Procurement regulations are of less concern for smaller HEIs and FE colleges as their procurement costs tend to be lower than the threshold for compliance.

Under the terms of the EU statute on public procurement, a public body is defined as one that receives more than 50 per cent of its funding from pubic sources. There is an existing test, known as the „Cambridge Test‟, which has been established in the HE sector to demonstrate whether or not a HEI, is “subsidised for the most part by another contracting authority” as set out in the 2006 regulations. This determines whether the regulations apply and HEIs therefore have to follow the EU procurement regulations.

This is a grey area at the moment for those institutions with less reliance on public funding than others. At issue more generally for existing English HEIs in the future, will be whether loans to cover student tuition fees will be considered to be private or public funding. It could be argued that in relation to student fee income only the Resource Allocation and Budgeting (RAB) charge should be considered public funding10. This will affect the balance of public / private funding for HEIs and determine whether they should be covered by EU procurement regulations or not. The HE White Paper considers that this will be public funding, but there have been recent suggestions to the contrary in ministerial speeches.

This interpretation could remove a significant number of institutions from these regulations if the balance of student loans is considered private funding. If this is the case, and in the light of the new funding arrangements to be implemented from 2012, many existing English HEIs will receive less than 50 per cent of their income from public funding.

Universities UK Efficiency and Modernisation Task Group‟s report recommended recently that the Government should clarify the proportion of graduate contributions that will be considered public funding11.

Since alternative providers will also be able to offer and provide student loans in future, in theory this could result in EU procurement rules also applying to them (a move which private providers may be likely to resist).

Another issue for consideration is that this situation could mean that some HE providers remain within procurement regulations and some outside, with the added complexity of the potential for this to change over time depending on the balance of public / private funding they receive in any time period. HEIs will continue to receive substantial public funding for research.

Successfully arguing the case that student loans should be considered private funding may be more problematic at EU level, and a ruling may have to be sought by the UK Government on the matter. There is potential for some reform of EU procurement regulations through current EU level initiatives. Reform of public procurement legislation was one of the priority actions articulated in the Single Market Act, adopted in April 2011. Recently, the European Commission undertook a recent consultation and research on how to simplify procurement rules12. They will draw on the contributions to the consultation in preparing future legislative proposal on the reform of the EU public procurement rules later in 2011.

10

Estimates of the RAB costs (taxpayer subsidy) vary between 30-37%. 11

See http://www.universitiesuk.ac.uk/Publications/Documents/2011/EfficiencyinHigherEducation.pdf. 12

See Summary and full evaluation report and supporting studies at:

http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/evaluation/index_en.htm.

http://www.universitiesuk.ac.uk/Publications/Documents/2011/EfficiencyinHigherEducation.pdf

http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/evaluation/index_en.htm



4.5 Employment law

Employment legislation and regulations apply generally to all types of employers in all sectors and there are few specific regulatory requirements on HEIs as employers. However, there are two potential areas for deregulation which have been suggested applying only to post-1992 institutions stemming from their origins within local authorities. Implementing these changes would clearly affect employment rights and would not be uncontroversial. They are:

Requirements on post-1992 institutions to use two large pension schemes, the Teachers Pension Scheme and Local Government Pension Scheme, mean that these have to be offered to staff, although they can choose to opt out. At present access to the TPS is guaranteed to lecturers under the Teachers‟ Pensions Regulations 1997, schedule 2, paragraph 6, and access to the LGPS to non-lecturers under the Local Government Pension Scheme Regulations 1997, Regulation 4, paragraphs 2 and 3; access cannot be denied to staff. The Universities and Colleges Employers Association (UCEA) is working with BIS to establish what changes could be made to increase flexibility and allow HEIs the choice to be able to offer other schemes to employees.

The Redundancy Modification Order13, whereby an employee can count service with an 'associated employer' (i.e. other current or former local authority employers) towards the service requirement for a redundancy payment and, if appropriate, for calculating that payment. This can be costly and time-consuming to administer for institutions.

Another issue in relation to employment matters, which affects chartered institutions, is the requirement to gain Privy Council agreement even when minor changes are required to old statutes, for instance to reflect changes in employment law. One recent example was the introduction of new regulations affecting paternity leave. Making changes to statutes can be a lengthy process (in some cases taking up to 12-18 months).

Changes made by the last Government allowed chartered institutions to restructure their statutes and move some areas into ordinances. However, some HEIs suggest that this change should also apply to additional areas, such as employment, to allow them greater flexibility, and that a review of this would be helpful. This requirement should be considered in the light of the move to making HEIs more autonomous. Examination of the role of the Privy Council has been one element of the BIS Technical Consultation, A new, fit-for-purpose regulatory framework for the Higher Education sector.

4.6 Equality & diversity

HEIs are considered to be public authorities under equality legislation. No employers should discriminate on the basis of any protected characteristics, but public sector employers have an additional duty to take supplementary steps proactively to foster equality. There has been a public sector duty for race for the past 10 years, for gender and disability for five years and the 2010 Equality Act has now extended this to other protected characteristics.

While the HEIs consulted agree with the principles of the Act, a number of consultees to the review reported that they can find complying with the public sector duty time-consuming, bureaucratic and costly. There may also be variation in the ways in which regulations are interpreted and applied across HEIs. According to the perception of some consultees to this review, there may be a tendency at one extreme to „gold-plate‟ the implementation of regulations, perhaps due to a culture of „risk-averseness‟ within some HEIs, as opposed to simply complying with them. However, this is not a view held throughout the sector, and others reject this perception altogether as being ill-founded.

13

See http://www.lge.gov.uk/lge/core/page.do?pageId=119733.

http://www.lge.gov.uk/lge/core/page.do?pageId=119733



The legislation applies to students as well as to staff and there is some concern that equality regulation will restrict HEIs‟ ability to raise scholarships or endowments for particular groups (such as national or regional groups), where these do not include those with protected characteristics. Some institutions have suggested that more helpful guidance in this area would be beneficial.

The prevailing view from the consultation has been that the Equality Act has simplified the requirements of compliance, enabling equality officers to focus their time on more productive development activities. However, in the light of the changing policy and funding environment, there remains a question as to why existing HEIs should continue to be considered as public authorities, and therefore have to comply with additional public sector duties, without this applying to alternative providers.

4.7 Health and safety

4.7.1 Health and safety legislation

Since the 1974 Health and Safety at Work Act, a plethora of legislation has grown up, compounded by the introduction of EU legislation from 1992. The changing health and safety (H&S) culture is a key part of the current Government‟s deregulatory agenda. In general, a lighter-touch, risk-based approach to regulation is supported with a focus on higher risk industries and tackling serious breaches of rules. However, HEIs are not subject to any additional H&S legislation or regulation than any other type of institution or organisation.

Consultation with HEIs for this review has suggested that there is little requirement to change H&S regulations. Instead, institutions consulted consider H&S as a quality issue and the sector has engaged successfully with the Health and Safety Executive (HSE) and fire authorities to develop specific sectoral guidance. The regulatory impact does vary however by size of institution and focus. For instance, research intensive institutions require more full time H&S specialists embedded in faculties due to their laboratory-based work.

The Government has set up the Lofstedt Review of H&S legislation. In its response to the Review, the Universities Safety and Health Association (USHA) identified a range of regulations that have improved H&S. USHA members‟ views diverged on whether regulations or approved codes of practice (ACoPs) need to be simplified, but overall they suggest that guidance contained within ACoPs could be made clearer overall. Also that it would be useful to consolidate regulations rather than make amendments to a particular set.

At present fines or punishments for HEIs when they occur are low as the courts view them as public bodies and fine accordingly. A potential consequence of the marketisation of the sector could be that there will be an additional punitive element to such fines in future.

One area where there has been a reported increase in H&S regulation, licensing and inspection is by the Home Office in relation to national security and compliance with counter-terrorism legislation. There is a drive to make HEIs more security conscious, and this is particularly the case with regulation of radioactive, chemical and biological materials.

Another area considered to be increasing is environmental regulation from the Environment Agency, which is described as more bureaucratic and less risk-based than other regulators. Sector wide, the view is that this area is over regulated.

4.7.2 Vetting and barring

There was a recent review of the Vetting and Barring Scheme (VBS) for the protection of children and vulnerable adults and the Criminal Records Bureau (CRB). Changes proposed for VBS form part of the Protection of Freedoms Bill. The aim is for the commencement of relevant provisions, creation of the new barring regime and the introduction of continuous records updating coming into effect from 2012. The new disclosure and vetting service would come into effect from 2013. The aim is to significantly reduce the scope and impact of the



VBS. The wording of the draft Bill provides that regulated activity will be limited to children under 16 (rather than under 18) and vulnerable adults, and this will affect FE colleges more than HEIs. Universities UK and GuildHE plans to explore how the revised scheme will operate in light of the impact on institutional arrangements for dealing with students on placements. There is also the issue of programmes of study requiring work placements which that bring students into contact with children and vulnerable adults, such as teacher training or nursing students.

4.8 Estates & infrastructure

The main regulations which apply to estates are EU legislation for procurement and Freedom of Information requirements, both discussed in below. Land-use planning regulations differ depending on local authorities and HEIs‟ experiences can vary accordingly. This is a particular issue for institutions with campuses in more than one local authority area. Despite their distinct nature, consultees report that planning policy can overlook HEIs and FE colleges. For instance the National Policy Planning Framework mentions education just once. However, the aim of the national framework is to shape local decision making and remove local differentiation in planning policy which should be of benefit.

Results of this review did not suggest any requirements in the area of planning regulation which should be subject to change. However, some institutions have highlighted that the requirements to comply with environmental regulations, and in particular reporting carbon reduction targets, are considered to be more onerous than those for other sectors.

4.9 Additional areas

Two other regulatory areas not mentioned specifically in the White Paper but raised repeatedly during this review relate to the impact on HE providers of the UK Border Agency (UKBA) regulation of the points based system for international visas and the VAT Cost Sharing Exemption.

4.9.1 VAT Cost Sharing Exemption

The VAT Cost Sharing Exemption is a provision in European law that allows organisations to form groups to achieve cost savings and economies of scale. Once formed the groups are relieved of a VAT charge on their supplies if all the conditions of the exemption are met. This exemption has not been implemented in respect of HEIs, and the European Commission has become increasingly interested in ensuring that there is a consistent approach to the operation of the exemption throughout Europe. HMRC completed a consultation recently on this and responses are to be published in the autumn.

4.9.2 Points based system for immigration

A recent HEBRG review14 of the impact on HEIs of complying with the points-based system for immigration (aimed to contribute to the reduction in net migration) found that the rapid implementation of the points based system (particularly Tier 4, the student route) for immigration regulations has been a complex process. Both operating the system and keeping up to date with frequent regulatory and policy changes consumes significant resources in HEIs. The HEBRG Tier 4 review found that the introduction of Highly Trusted Sponsor (HTS) status had the scope to improve operation, but it is unclear what impact further changes to HTS and the requirement for all Tier 4 licence holders to achieve HTS status will have.

14 SUMS, 2011. Review of the impact on UK higher education institutions of complying with the points

based system for immigration (Tier 4). HEBRG.



The consultation for this review also found that issues for HEIs arise not least from the frequent changes to the implementation of the regulations by UKBA, which can „change from one week to the next‟. Very little notice is given for changes and the supporting documentation for the regulations is considered by many consultees to be poor. Moreover, compliance visits are believed to be carried out inconsistently and there is perceived to be little understanding across UKBA of the HE sector. Additionally the annual renewal process for HTS is considered to be excessive in comparison with other regulation in the HE sector, and not in keeping with the trend towards a risk-based approach to regulation, or the HE sector‟s reputation for compliance.

Since this review was not tasked to focus on the regulation of immigration as it applies to HEIs, no specific recommendation is being made in this area.

The next section discusses the main cross-cutting themes and issues and presents the recommendations arising from the review.



5 CONCLUSIONS AND RECOMMENDATIONS

5.1 Cross-cutting themes and issues

In summary, the main cross-cutting themes and issues arising from the review are:

Issues with how existing HE providers are defined, and how this may be set to change within the currently changing policy and funding context

The move to a more marketised environment and the ambition to provide a „level playing field‟ for all types of HE providers, which raises questions as to why legislation and regulation should apply differently

Variations in the HE landscape, policy context and in some cases legislative framework in Scotland, Wales and Northern Ireland, and the implications and impact on the other home nations of making any changes to the non-HE regulatory environment in England

The need to adhere to regulations designed to ensure a safe, fair and orderly society generally and HE sector specifically, and the necessary focus on safeguarding students and their experience.

These issues are outlined and discussed more fully below.

5.1.1 Definitional issues

This shifting funding and policy context in English HE has prompted questions on the continuing relevance and appropriateness of HEIs being subject to the same regulatory requirements and conditions as public sector bodies. A key area of enquiry for this review therefore has been how existing HEIs are defined and how this may be set to change within this transforming context.

Existing HEIs are private and autonomous chartered or statutory bodies. However, they are brought within the scope of various legislation and regulations, outside of the HE regulatory framework, due to being specifically classed as:

Quasi public bodies or authorities

Organisations delivering public benefit

Organisations in receipt of large scale public funding.

Many existing HEIs share the view that since the sector is made up of private, autonomous bodies and that this is recognised by Government, this should therefore be reflected properly in the regulatory environment by removing any additional „public sector‟ requirements. Added to this there are a number of instances where alternative HE providers (including both not-for-profit and private providers) have fewer responsibilities under the same legislation.

Added to this, universities which used to be polytechnics (post-1992 institutions) are included in certain legislation whereas those that were always universities are not. Another complicating factor is the recently changed categorisation of FE colleges. Colleges have similar status to post-1992 universities, have also been incorporated since 1992 and have a standard structure as exempt charities. Until 2010, FE colleges were classed as private organisations by the Office of National Statistics (ONS), but they now are considered to be public sector organisations. This is being challenged at present and the ONS will review the issue of college status in summer 2012. Meanwhile, Government departments are taking action to deregulate FE colleges, in an attempt to demonstrate that FE colleges are independent and should continue to be classified as autonomous organisations, and not public sector bodies.



The outcome of the marketisation of HE in England is not yet clear, but it is anticipated that the current already heterogeneous community of 129 existing English HEIs, 200 plus FE colleges and 100 or so private providers is likely to grow. There are estimates that the number of private providers could grow to over 300 within a few years. It is anticipated that many more HE providers, including overseas and private providers, with a range of corporate forms, including those with charitable status, will enter the market. Moreover, some alternative providers will have or will be in the process of seeking degree awarding powers and in some cases university title. In addition some existing HEIs may change their legal status and partnerships may be formed between different types of HEIs. There could also be a growth in private sector loans, and privately sponsored students.

In this changing context, existing binary distinctions are likely to make less sense and how HEIs are defined and categorised is set to change in future as different types of providers enter the market and it adapts to change. Clarity on how HEIs should be defined for legislative and regulatory purposes would therefore be helpful.

5.1.2 Achieving a level playing field

The move to a more marketised environment and the ambition to provide a „level playing field‟ for all types of HE providers has offered the sector a timely opportunity to consider potential areas for deregulation. Proposed changes to eligibility for HE funding and the Government‟s desire to open up the sector to greater competition does raise questions as to why legislation and regulation should apply to some HE providers and not to others. The prevailing view among existing HEIs consulted for this review is that this „level playing field‟ should be able to recognise commonality of purpose, notwithstanding legal status.

As mentioned in the White Paper and elsewhere, the move to a more competitive environment with an increasing number of alternative providers entering the market requires a truly level playing field. Therefore there does need to be equity and universality in the application of legislation and regulation to different types of HE provider. At issue is whether there should be a levelling up or down of regulatory requirements to ensure their universal application.

Views are mixed on this point, with alternative providers preferring that additional regulations are not imposed on them, and highlighting the tax benefits for instance to existing HEIs of their charitable status in the context of a level playing field. There is consensus however on the principle of equity and that clarity is required.

5.1.3 Home nation differentials

The HE landscape and context is very different among the various home nations. Scotland, Wales and Northern Ireland are not making the funding and policy changes which are taking place in the English HE sector. The devolved governments in each of the three home nations are not introducing the measures to increase competition and a more marketised environment with respect to HE which is taking place in England. Moreover, in some cases the legislative framework is different in specific areas, such as Freedom of Information in Scotland where there is a separate Act, but the same legislation covers England, Wales and Northern Ireland.

There is little sense in other parts of the UK of alternative providers waiting to enter the market in the same way as in England, and no similar moves to encourage alternative providers with providing access to public funding. The policy focus in Wales has been on the regionalisation agenda and reviewing governance of HEIs, and a similar agenda is developing in Scotland, with reviews of both FE and HE governance taking place there.

Although HEIs in the other home nations are also private, autonomous bodies, and in some cases their reliance on public funding is also reducing, there is clear divergence in HE policy in the different parts of the UK. Therefore the implications and impact on the other home



nations of making any changes to the non-HE regulatory environment in England will have to be considered carefully. The potential impact of any non-HE regulatory changes on the HE sectors in each of the home nations should be considered through active consultation with those nations.

5.1.4 Safeguarding students and taxpayers

There is a clear need to adhere to regulations designed to ensure a safe, fair and orderly society generally and HE sector specifically. Any major consideration of changing the regulatory environment has to focus on safeguarding students and their experience. Where students will be investing larger amounts of their own money, they may be self-motivated to find out more about their HE provider and issues of regulation could grow in relevance as a consequence.

Regardless of legal definitions, HEIs are providing a public benefit and will continue to be the recipients of large (albeit reduced) amounts of public funding. Students and employers need to be confident that providers of HE will deliver high quality outcomes. Banks need to be confident that their investments will be repaid and the taxpayer expects proper accountability for public funds. Good regulation can enhance the HE sector‟s reputation, support greater business opportunities and reduce the cost of borrowing. It reduces risks for students as they require legitimate information to equip them to make important decisions with significant financial obligations.

However, regulation has to be clear on its purpose and intended benefits, proportionate and clear where there may be contradiction of purpose. Many consultees to the review have highlighted the risk of drawing resources away from their main business of teaching and research and providing a high quality main student experience to comply with regulation.

The major safeguard needed for students is financial sustainability of HEIs. When a student is committed to such levels of expenditure they need assurance that their HEI is in good financial health and is effective. This assurance will be provided mainly through institutions complying with the HE-specific regulatory framework, rather than through the types of non-generic regulation which have been the subject of this review.

5.2 Barriers and risks of change

Regulation is required to maintain a minimum standard and avoid any reputational consequences from an insufficiently regulated sector. This is particularly the case during an uncertain period in which the HE regulatory framework itself is altering and new measures to increase competition in the sector are being implemented.

Public perceptions at present of existing HEIs are that high standards are met. As students increasingly behave as consumers, there is a potential risk for them in deregulating HEIs. There is a risk of the loss of transparency for students in deregulation of areas such as the public sector duty in equality and diversity or in FOI, and thus changing this positive perception of the sector.

There is also the issue of institutional autonomy which should be considered in applying regulation or considering any deregulation of the sector. One size regulation does not fit all even among the existing HEIs due to their diversity, for instance what is fundamentally important to research intensive institutions may be different from what is important to post-1992 institutions with large allied health programmes.

In addition, there are clear advantages for HEIs of being considered as quasi public bodies and therefore as low risk, compliant organisations. Examples are the cost of borrowing from banks which has been historically low for HEIs, or (anecdotally) that they are not subject to the same levels of punitive fines as private sector organisations by the courts when things go wrong. There is a risk therefore that HEIs would lose this status.



5.3 Recommended changes to the non-HE regulatory landscape

Recommended changes to the non-HE regulatory environment as it impacts on HEIs arising from the research, consultation and analysis undertaken for this review are set out in the table below, along with their priority and the responsible government ministry.

Figure 2 Recommended amendments

No Regulatory area

Recommendation Priority Government ministry responsible

1 General Review the definition and categorisation of English HEIs in light of market changes and how they should be treated in future generally for non-HE legislation and regulation.

H BIS

2 Provide definitive guidance on what proportion of the graduate contribution (if any) will be classed as public funding.

H BIS / Treasury

3 Consider the potential impact of any non-HE regulatory changes on English HEIs in each of the home nations through active consultation with those nations.

H BIS

4 Corporation tax returns

Consider simplification of the calculations for corporation tax returns.

H HMRC

5 Improve the guidance available to HEIs as to when corporation tax may be payable and move to exception based reporting.

H HMRC

6 Examine the possibility of creating different types of charities, including a distinct category which HEIs would fit into such as large public charities, to enable a more targeted, risk-based approach to reporting.

M HMRC

7 Freedom of Information

Review whether existing HEIs should be removed from FOI altogether.


8 Consider the addition of an exemption for unpublished research results, similar to the exemption contained in the Scottish legislation.


9 Examine whether there should be an exemption for HEIs‟ outputs more broadly, including teaching materials, unpublished research results, and management or business information and intelligence (but not governance and accounts).


10 Review whether FOI should be extended to cover alternative HE providers.


11 Procurement If the decision is that the graduate contribution is mainly classed as private income, thereby taking most HEIs out of the threshold for EU procurement regulations, seek advice as to whether a ruling from the EU will be required to avoid future challenge.

H BIS

12 Monitor the European Commission‟s proposed reform of procurement legislation and any impact this could have on HEIs.

M BIS

13 Employment legislation

Review and establish changes which could increase flexibility for post-1992 institutions of the pension schemes they can offer to their employees.

H BIS

14 Consider removal of post-1992 HEIs from the Redundancy Modification Order.

M Department for Communities & Local Government

15 Review whether chartered institutions should be able to further restructure their statutes and move the additional area of employment into ordinances.

M BIS Privy Council

16 Equality and diversity

Consider in the light of the changing policy and funding environment, whether existing HEIs should continue to be considered as public authorities in respect of equality legislation, and therefore have to comply with additional public sector duties.

M Home Office



APPENDIX ONE KEY SOURCES

The main publicly available sources drawn on for the review are listed below.

6th Annual JISC infoNet, GuildHE and Universities UK Information Legislation and Management Survey. 2010. Available at: http://www.jiscinfonet.ac.uk/foi-survey/2010.

BCC report, May 2011. Health and Safety: a Risky Business?

Better Regulation Executive, December 2010. Reducing regulation made simple: Less regulation, better regulation and regulation as a last resort.

BUFDG. March 2010. Corporation Tax Survey Report.

Cabinet Office, 2011. Government‟s Red Tape Challenge website. Available at: http://www.redtapechallenge.cabinetoffice.gov.uk/home/index/.

Cabinet Office, 2011. Making Open Data Real: A Public Consultation.

Department for Business, Universities and Skills, 2011. Consumer Protection Consultation. Available at: http://www.bis.gov.uk/assets/biscore/consumer-issues/docs/e/11-970-empowering-protecting-consumers-consultation-on-institutional-changes.

Department for Business, Universities and Skills, June 2011. Students at the Heart of the System. http://c561635.r35.cf2.rackcdn.com/11-944-WP-students-at-heart.pdf.

Department for Business, Universities and Skills, August 2011. Technical Consultation – a new, fit-for-purpose regulatory framework for the Higher Education sector. Available at: http://discuss.bis.gov.uk/hereform/technical-consultation/.

Department for Work and Pensions, March 2011. Good Health and Safety, Good for Everyone. The next steps in the Government’s plans for reform of the health and safety system in Britain. Available at: http://www.dwp.gov.uk/docs/good-health-and-safety.pdf.

Gillies, M., 2011. University Governance: Questions for a New Era. Higher Education Policy Institute.

HEBRG, 2011. Professional, statutory and regulatory bodies: an exploration of their engagement with higher education. Available at: http://www.hebetterregulation.ac.uk/OurWork/Documents/HEBRG_PSRB%20report_FINAL.pdf.

Huber, M. 2011. The Risk University: Risk identification at higher education institutions in England. Centre for analysis of risk and regulation, LSE. DISCUSSION PAPER NO: 69, July 2011.

JM Consulting Ltd., 2005. The costs and benefits of external review of quality assurance in higher education. HEFCE. Available at http://www.hefce.ac.uk/pubs/rdreports/2005/rd17_05/.

King, R. October 2011. The risks of risk-based regulation: the regulatory challenges of the higher education White Paper for England. Higher Education Policy Institute. Available at: http://www.hepi.ac.uk/455-2002/The-risks-of-risk-based-regulation--the-regulatory-challenges-of-the-higher-education-White-Paper-for-England.html.

Middlehurst, R and Fielden, J., 2011. Private Providers in UK Higher Education: Some Policy Options. Higher Education Policy Institute.

PA Consulting Group, 2009. Positive Accountability: Review of the costs, benefits and burdens of accountability in English higher education. Available at: http://www.hefce.ac.uk/pubs/rdreports/2009/rd01_09/.

http://www.jiscinfonet.ac.uk/foi-survey/2010

http://www.redtapechallenge.cabinetoffice.gov.uk/home/index/

http://www.bis.gov.uk/assets/biscore/consumer-issues/docs/e/11-970-empowering-protecting-consumers-consultation-on-institutional-changes

http://www.bis.gov.uk/assets/biscore/consumer-issues/docs/e/11-970-empowering-protecting-consumers-consultation-on-institutional-changes

http://c561635.r35.cf2.rackcdn.com/11-944-WP-students-at-heart.pdf

http://discuss.bis.gov.uk/hereform/technical-consultation/

http://www.dwp.gov.uk/docs/good-health-and-safety.pdf

http://www.hebetterregulation.ac.uk/OurWork/Documents/HEBRG_PSRB%20report_FINAL.pdf

http://www.hebetterregulation.ac.uk/OurWork/Documents/HEBRG_PSRB%20report_FINAL.pdf

http://www.hefce.ac.uk/pubs/rdreports/2005/rd17_05/

http://www.hepi.ac.uk/455-2002/The-risks-of-risk-based-regulation--the-regulatory-challenges-of-the-higher-education-White-Paper-for-England.html

http://www.hepi.ac.uk/455-2002/The-risks-of-risk-based-regulation--the-regulatory-challenges-of-the-higher-education-White-Paper-for-England.html

http://www.hefce.ac.uk/pubs/rdreports/2009/rd01_09/



Regulatory Policy Committee, 2011. Rating Regulation. Available at: http://regulatorypolicycommittee.independent.gov.uk/wp-content/uploads/2011/07/Rating-Regulation-July-2011-FINAL-two-blank-pages.pdf.

SQW Consulting, 2009. Quality, risk and regulation: Collaborative provision and employer engagement in higher education.

SUMS, 2011. Review of the impact on UK higher education institutions of complying with the points based system for immigration (Tier 4). HEBRG. Available at: http://www.hebetterregulation.ac.uk/OurWork/Documents/HEBRG%20PBS%20immigration%20report.pdf.

Universities Safety and Health Association, 2011. Response to the Lofstedt review call for evidence.

Universities UK, 2010. The growth of private and for-profit higher education providers in the UK. Available at: http://www.universitiesuk.ac.uk/Publications/Pages/Privateandforprofitproviders.aspx.

Universities UK, 2011. Review of the Vetting and Barring Scheme and the Criminal Records Regime. Information note number I-2011-008.

Universities UK, September 2011. Efficiency and effectiveness in higher education: A report by the Universities UK Efficiency and Modernisation Task Group. Available at: http://www.universitiesuk.ac.uk/Publications/Pages/EfficiencyinHigherEducation.aspx.

http://regulatorypolicycommittee.independent.gov.uk/wp-content/uploads/2011/07/Rating-Regulation-July-2011-FINAL-two-blank-pages.pdf

http://regulatorypolicycommittee.independent.gov.uk/wp-content/uploads/2011/07/Rating-Regulation-July-2011-FINAL-two-blank-pages.pdf

http://www.hebetterregulation.ac.uk/OurWork/Documents/HEBRG%20PBS%20immigration%20report.pdf

http://www.hebetterregulation.ac.uk/OurWork/Documents/HEBRG%20PBS%20immigration%20report.pdf

http://www.universitiesuk.ac.uk/Publications/Pages/Privateandforprofitproviders.aspx

http://www.universitiesuk.ac.uk/Publications/Pages/EfficiencyinHigherEducation.aspx



APPENDIX TWO CONSULTEES

The following individuals contributed their time, knowledge and expertise to the review.

Figure 3 Consultees

Organisation Name Role

Academic Registrars Council and QMUL

Wendy Appleby Chair of Assessment Practitioner Group, Secretary to Council and Academic Secretary

Association of Colleges Julian Gravatt Assistant Chief Executive

Association of Heads of University Administration (AHUA) and Liverpool John Moores University

Alison Wild Pro-Vice Chancellor and University Secretary

Association of University Directors of Estates (AUDE) and University of Surrey

Derry Caleb Chair of AUDE and Director of Estates and Facilities

Association of University Legal Practitioners and University of Birmingham

Carolyn Pike Director Legal Services

Bishop Grosseteste University College

Alison Smith Head of Human Resources


Dr Claire Taylor Dean of Students and Academic Engagement


Emma Sansby Head of Library Services


Guen Moyes Archivist and Records Manager


Haf Merrifield Deputy Principal


Phil Davis Head of Student Support


Steve Deville Director of Resources

British Universities Finance Directors Group (BUFDG) and University of Huddersfield

Andrew McConnell Chair BUFDG and Director of Finance

BUFDG Harriet Latham Specialist Advisor

BUFDG Karel Thomas Executive Director

Department of Business, Universities & Skills (BIS)

Gordon McKenzie Deputy Director

Department of Education Northern Ireland (DELNI)

Fergus Devitt Director of Higher Education Division

DELNI Patricia McVeigh Head of Higher Education Policy

Equality Challenge Unit David Ruebain Chief Executive

GuildHE Helen Bowles Deputy Chief Executive and on HEBRG Executive

GuildHE Nick Johnstone Policy Officer

HE Wales Pam Ackroyd PVC (Operations), Cardiff Metropolitan University

Higher Education Better Regulation Group (HEBRG)

Sir Graeme Catto Chair of HEBRG

HEBRG Dr Brooke Sperry Policy Officer

HEBRG and Bournemouth University Dr Janet Hanson Policy Advisor

Higher Education Funding Council for England (HEFCE)

Alison Johns Head of Leadership, Governance and Management

HEFCE Andrew Smith Head of Estates and Sustainable

mailto:[email protected]




Development

HEFCE David Heron Senior HE Policy Advisor

HEFCE Emma Creasey HE Policy Adviser

HEFCE Ian Gross Head of Governance

HEFCE Ian Lewis Head of Finance

HEFCE Nolan Smith Deputy Head of Assurance

HEFCE Paul Greaves Head of Assurance

HEFCE Pippa Thompson Head of Knowledge and Information Management

HEFCE Steve Butcher Head of Procurement

HEFCE Steve Egan Deputy Chief Executive

Higher Education Funding Council for Wales (HEFCW)

Richard Hirst Director of Finance and Corporate Services

Higher Education Statistics Agency (HESA)

Alison Allden Chief Executive

HESA Andy Youell Director of Quality and Development

HESA Claire Morris Company Secretary

HESA Jane Wild Director of Operations

ifs School of Finance Martin Day Vice-Principal of Higher Education

JISC Infonet Steve Bailey Senior Advisor

JISC Legal Jason Miles-Campbell

JISC Legal Ralph Weedon Director JISC Legal

Pearson Roxanne Stockwell Managing Director Higher Education Awards Division

Scottish Funding Council Brian Baverstock Deputy Director

Sheffield Hallam University Liz Winders Registrar and University Secretary

Sheffield Hallam University Philip Severs Director of Finance

Sheffield Hallam University Philip Dixon Director of Human Resources

Sheffield Hallam University Linda Mason Head of Strategic Planning and Intelligence

Sheffield Hallam University Alan Frost Head of Strategic Procurement

SkillsActive Ben Gittus Qualifications and Standards Manager

Skills for Justice Fiona Donovan Policy & Partnerships Manager

Universities and Colleges Employers Association (UCEA)

Nicola Carter Senior Employee Relations Adviser

Universities Safety and Health Association (USHA) and University of Surrey

Clive Parkinson Director of Health and Safety

Universities Scotland and Glasgow Caledonian University

Jan Hulme University Secretary

Universities UK Chris Hale Deputy Director of Policy

Universities UK Jo Attwooll Policy Advisor

Universities UK Paul Clark Director of Policy

University College London Rex Knight

University of Bath Mark Humphriss University Secretary

University of Cambridge Kirsty Allen Principal Assistant Registrar

University of Derby June Hughes Registrar

University of Kingston Andrew McEwan Director of Estates

University of Leicester David Hall Registrar and Secretary

University of Oxford Emma Rampton Head of the Council Secretariat

University of Oxford Professor Ewan McKendrick Registrar

University of Warwick Andrew Higgins Director Student Admissions and Recruitment

University of Warwick Andrew Smith Finance Director




University of Warwick Dr Giles Carden Director Management Information and Planning

University of Warwick Dr Iain MacKirdy Director Health and Safety

University of Warwick Dr Nav Patel Departmental Administrator

University of Warwick Helen Wollerton Administrative Officer (Legal Compliance)

University of Warwick Jane Hodge Deputy Director of Human Resources (Services)

University of Warwick Jon Baldwin Registrar

University of Warwick Kim Eccleston Assistant Registrar (Widening Participation)

University of Warwick Laura Meadows Assistant Registrar

University of Warwick Martin Lightbown Head of Purchasing and Insurance

University of Warwick Michelle Wenham HR Manager

University of Warwick Professor Colin Sparrow Head of Mathematics Department

University of Warwick Roberta Wooldridge Smith Deputy Academic Registrar

University of Warwick Rosie Drinkwater Director of Finance and Financial Strategy

University of Warwick Simon Gilling University Lawyer

University of Warwick Steve Wilkes Group Accountant



APPENDIX THREE LEGISLATION AND REGULATIONS AFFECTING HEIS

Figure 4 Main non-HE specific legislation and regulations affecting HEIs

Regulatory area Generic non-HE specific legislation / regulations Responsible department /

agency

Competition law UK Competition Act 1998 BIS

Corporation tax

UK Corporation Tax Act 2009 HMRC

UK Corporation Tax Act 2010 HMRC

Data protection The Data Protection Act 1998 (Implementing the Data Protection Directive) BIS

Employment

Employment Relations Act 2004 BIS

The Redundancy Payments (Continuity of Employment in Local Government, etc.) (Modification) Order 1999

DCLG

EU The Working Time Regulations 1999 BIS

UK National Insurance: Service Provision through Intermediaries 2000 HMRC

UK The Tax Credits Act 1999 and Accompanying Regulations (Working Families Tax Credit) 2000

HMRC

EU The Transnational Information and Consultation of Employees Regulation 1999

BIS

EU The Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000

BIS

UK The Stakeholder Pension Schemes Regulations 2000 and 2005 DWP

UK The Occupational Pension Schemes (Minimum Funding Requirement and Miscellaneous Amendments) Regulations 2002

DWP

EU The Maternity and Parental Leave (Amendment) Regulations 2001 BIS

UK Employment Act 2002 BIS

UK The Flexible Working (Procedural Requirements) Regulations 2001 BIS

UK The Occupational Pension Schemes (Winding Up and Deficiency on Winding Up etc.) (Amendment) Regulations 2005

DWP

EU Employment Relations Act - October 2004 BIS

EU Directive to establish a general framework for informing and consulting employees in the UK 2004

BIS

UK The Occupational Pension Schemes (Winding Up and Deficiency on Winding Up etc.) (Amendment) Regulations 2005

DWP

UK Work and Families Act: Choice and Flexibility 2005 BIS

UK Simplifying the Taxation of Pensions – Update 2006 HMRC

UK Tax Law Rewrite: the Income Tax Act 2006 HMRC

UK Employment Act 2008 BIS

UK Deregulatory Review - The Occupational, Personal and Stakeholder Pensions 2009

DWP

UK Promotion of Apprenticeships in Construction Procurement 2009 BIS

UK The Work And Families (Increase Of Maximum Amount) Order 2009 BIS




agency

Employment Rights Act 1996 DWP

Transfer of Undertakings (Protection of Employment) 2006 DWP

National Minimum Wage Act 1998 & Regulations 1999 DWP

Employment Rights (Dispute Resolution) Act 1998

Trade Union and Labour Relations (Consolidation) Act 1992 DWP

Environment

EU The Groundwater Regulations 1998 DEFRA

EU The Vehicle Excise Duty (Reduced Pollution) (Amendment) 2000 DfT

EU The Water Supply (Water Quality) Regulations 2000 DEFRA

EU The Pesticides (Maximum Residue Levels in Crops, Food and Feeding Stuffs) 2001

DEFRA

EU The Biocidal Products Regulations 2001 HSE

EU The Processed Animal Proteins (England) Regulations 2001 DEFRA

UK The Electricity and Gas (Energy Efficiency Obligations) Order 2001 DEFRA

EU The Animal By-Products Regulations 2003 DEFRA

EU The End-of-Life Vehicles Regulations 2003 BIS

EU The Additives for Use in Animal Nutrition (England) Regulations 2003 FSA

UK Energy Act 2004 BIS

EU The Water Environment (Water Framework Directive) (England and Wales) Regulations 2003

DEFRA

EU The Genetically Modified Organisms (Traceability And Labelling) (England) Regulations 2004

DEFRA


EU The End of Life Vehicles (Producer Responsibility) Regulations 2005 BIS

EU The Detergents Regulations 2005 SI 2005/2469 DEFRA

EU The Waste Electrical and Electronic Equipment Regulations 2006 (WEEE)

BIS

UK The Water Supply (Water Quality) Regulations 2000 (Amendment) Regulations 2007. SI 2007/2734

DEFRA

UK The Renewable Transport Fuel Obligations Order 2007 DfT

UK Energy Performance of Buildings (Amendment No.2) 2007 DCLG





agency

EU The Fluorinated Greenhouse Gases Regulations 2008. SI 2008/41 DEFRA

EU Euro 5 and 6 Light Duty Vehicle Emission Standards 2008 DfT

EU Fluorinated Greenhouse Gases Regulations 2009 DEFRA

The Environmental Damage (Prevention and Remediation) Regulations 2009 DEFRA

Climate Change Act 2008 DECC

Energy Act 2010 DECC

Natural Environment and Rural Communities Act 2006 DEFRA

Clean Neighbourhoods and Environment Act 2005 DECC

Environment Act 1995

Equality & diversity

UK Disability Discrimination Act 2004 and 2005 DWP

The Equality Act 2006 HO

The Equality Act 2010 and resulting Regulations HO

UK The Disability Discrimination (Transport Vehicles) Regulations 2005 DfT

Estates & infrastructure

UK The Wireless Telegraphy (License Charges) (Amendment) Regulations 2000

DTI

EU The Regulation of Investigatory Powers Act 2000 HO

UK The Criminal Justice and Police Act 2001 HO

UK The Building (Amendment) Regulations 2001 and the Building (Approved Inspectors etc) (Amendment) Regulations 2001

DCLG

UK The Building (Amendment) Regulations 2003 DCLG

UK The Building (Amendment No 2) Regulations 2004 DCLG

UK Amendment to The Building and Approved Inspectors (Amendment) Regulations 2006 New edition of Approved Document F

DCLG

UK The Street Works (Registers, Notices, Directions and Designations) (England) Regulations 2007

DfT

UK The Street Works (Fixed Penalty) (England) Regulations 2007 DfT

UK The Planning (Amendment) Regulations 2008 Standard Application Form DCLG

UK Amendment to the Town and Country Planning (General Development Procedure) Order 1995 (GDPO) etc. New Validation Procedures 2008

DCLG

UK Enabling Electronic Communication of Building Control Documents 2008 DCLG

The Construction (Design & Management) Regulations 2007 DCLG

Planning Act 2008 DCLG




agency

Freedom of Information

Freedom of Information Act 2000 MOJ

Freedom of Information (Scotland) Act 2002 MOJ

The Freedom of Information and Data Protection (Appropriate Limit and Fees) Regulations 2004

MOJ

Protection of Freedoms Bill MOJ

The Re-use of Public Sector Information Regulations (Statutory Instrument) No. 1515

MOJ

Digital Economy Act 2010 MOJ

Environmental Information Regulations 2004 MOJ

Governance

Charities Act 2006

UK Companies Act 2006 BIS

EU The Small Companies and Groups (Accounts + Directors Report) Regulations 2008

BIS

EU Operating and Financial Review (OFR) and Directors‟ Report Regulations 2005

BIS

UK The Companies (Company Records) Regulations 2008 BIS

Health & safety

UK The Public Service Vehicles (Conditions of Fitness, Equipment, Use and Certification) (Amendment) Regulations 2002

DfT

EU Control of Asbestos at Work Regulations 2002 HSE

EU Dangerous Substances and Explosives Atmospheres Regulations 2002 HSE

EU The Control of Substances Hazardous to Health (Amendment) Regulations 2003

HSE

EU The Carriage of Dangerous Goods and Use of Transportable Pressure Equipment Regulations 2004

DfT

UK Occupation Exposure Limit - Framework Revision 2004 HSE

EU Directive 2002/15/EC on the Working Time of Persons Performing Mobile and Road Transport Activities DfT 2005

DfT

EU Work at Height Regulations 2005 HSE

EU Control of Vibration at Work Regulations 2005 HSE

EU Control of Noise at Work Regulations 2005 HSE

EU The Food Hygiene (England) Regulations 2005 FSA

EU The Carriage of Dangerous Goods and the Use of Transportable Pressure Equipment (Amendment) Regulations 2005

DfT

EU The Restriction of the use of Certain Hazardous Substances in Electrical and Electronic Equipment in the UK DTI 2005

BIS

UK Fire Regulatory Reform Order 2006 DCLG

UK The Electricity Safety, Quality & Continuity (Amendment) Regulation 2006 BIS




agency

UK Corporate Manslaughter and Corporate Homicide Act 2006 HO

UK The Smoke-free Regulations 2007 DH

EU Food Standards Agency Guidance Notes on Articles 14, 16, 18, 19 of the General Food Law Regulation (EC) 178/2002 2007

FSA

EU Retrofitting of Mirrors to Increase the Field of indirect Vision (Blind Spot) of Goods Vehicles 2009

DfT

The Management of Health and Safety at Work Regulations 1999 DWP

The Personal Protective Equipment Regulations 2002 DWP

The Ionising Radiation Regulations 1999 DWP

The Control of Asbestos Regulations 2006 DWP

EU Food Labelling (Amendment) (England) (No 2) 2004 FSA

UK Repealing Notification and Record Keeping Requirements for Factories, Offices and Shops 2008

HSE

The Health and Safety at Work Act etc. 1974 HSE

Immigration

UK Points Based System for Immigration Tier 2 2008 HO

UK Points Based System for Immigration Tier 5 2008 HO

UK Points Based System for Immigration Tier 4 DATE: 2010 HO

UK Earned Citizenship: Fund to Managed Transitional Impacts of Migration 2009

HO

Procurement Public Contracts Regulations 2006

Public Contracts (Scotland) Regulations 2006

VAT

UK Changes to the standard rate of VAT 2008 HMT

Value Added Tax Act 1994 HMT

National crime & prevention of terrorism

UK Proceeds of Crime Act 2002 HO

EU The Sale and Supply of Goods to Consumers Regulations 2002 BIS

EU The Money Laundering Regulations 2007 HMT

UK The Consumer Credit Regulations 2004 BIS

UK Private Security Industry Act 2001: Door Supervisors & Wheel Clampers 2005

HO

UK Consumer Credit (Information Requirements & Duration of Licences and Charges) (Amendment) Regulations 2008

BIS

UK Counter-Terrorism Act 2008

UK Chemical Weapons Act 1996



APPENDIX FOUR CASE STUDY: REGULATORY IMPACT ON A SMALL HEI


Bishop Grosseteste University College (BG) was established in 1862 as an Anglican teacher

training college for women. Degree Awarding Powers were attained in 2006 and the

institution offers courses at foundation, undergraduate and postgraduate level, as well as

professional development courses. Key characteristics of BG are its origins as a teacher

training institution, Christian/Anglican ethos and small size. With just over 2,000 students and

200 staff, the university college is classed as a small and medium enterprise (SME) and a

small higher education institution (HEI).

Small HEIs are defined as those with fewer than 3,000 FTE higher education (HE) students

and 4,000 FTE students overall. Small institutions are characterised by: their tendency to be

specialist covering a few subject areas; staff having to assume strategic responsibilities

quickly and hold a broad portfolio of roles; senior managers retaining greater operational

responsibility than those in larger institutions; and smaller resource bases necessitating

flexibility and adaptability to maintain necessary administrative and support roles.

Regulatory impact on the institution

For BG, HE sector specific regulation is of more concern that the generic regulatory areas

covered by this review. Although the sector specific regulatory and audit requirements with

which HEIs have to comply are embedded in BG‟s systems and practice, this landscape is

changing and boundary issues between regulators are not always clear. BG also works with

a small number of professional, statutory and regulatory bodies (PSRBs), primarily Ofsted

and the Joint Council for Youth Work. However, the institution does not offer allied health or

nursing programmes, the areas often cited by HEIs as requiring heavy engagement with

PSRBs.

BG participates in networks of regional HE providers and staff are able to contrast their

experience with how larger HEIs manage their compliance with legislation and regulations.

Smaller institutions can feel disproportionately affected by particular regulatory requirements

due to having fewer dedicated resources than their larger counterparts. This is compounded

where already limited staff time and resources are stretched due to inadequate timescales

for the implementation of regulations and legislation, and frequent changes to guidance.

Larger HEIs tend to have access to more resources to comply with regulations, such as in-

house legal teams, whereas BG has to pay for external legal services when advice is

required. Conversely, there are benefits for smaller institutions such as BG stemming from

their size, in terms of their lower levels of bureaucracy and centralised campus, which enable

more efficient communication and policy agreement.

The figure below summarises the ways in which the regulatory areas considered by this

review impact on BG.



Figure 5 Overview of regulatory impact on Bishop Grosseteste University College

Regulatory area Impact on a small institution

Corporation tax

returns

BG has one small limited company for commercial activity. The Director of Resources

is able to prepare the corporation tax return in 0.5 days. It is prepared by auditors as

part of year-end activities, at a cost of a few hundred pounds. Therefore, the

requirement to complete corporation tax returns is considered to have little impact on

BG, and not burdensome in the way which larger institutions describe.

Freedom of

Information (FOI)

The impact of complying with FOI is „hugely disproportionate‟ for a small institution

BG is at the smaller end of „public bodies‟ that fall into the remit of FoI, and unlike

some other institutions, does not have a parent body to handle requests on its behalf.

Systems are not in placed to process some of the information requested, including

financial information.

At BG, one FTE member of staff per year is required to deal with FOI, out of

approximately 200 employees. The institution is typically in the process of handling

between two and four concurrent requests. As well as taking up the compliance

officer‟s time, FOI requests tend to require input from staff elsewhere in the institution,

such as from the finance, registry, quality and estates departments.

Particular issues for BG include:

Smaller institution often respond to FOI requests where the answer is less than 0

per cent, or a small number of units, people etc. Therefore there is a risk of

exposing personal details and individuals due to the small numbers, and thus

running contrary to the aims of the Data Protection Act. At present for data

protection purposes, if the answer to a request refers to four or fewer individuals,

the information can be withheld because the students would be identifiable.

Increasing number of standard requests sent to all or many HEIs (for example, a

request to calculate the Principal‟s expenses) disproportionately affect smaller

institutions, due to consuming the same amount of staff time and resource as a

large institution.

Issues with charging for requests (currently set at £450 threshold/18 hours). This

includes exclusions, after exclusions it usually won‟t add up to 18 hrs. However,

requests may be split up into 6 new requests.

Writing a refusal notice takes time and must include stated grounds for refusal.

Very few requests are refused - the bar for vexatious requests is set very high.

Thus, withholding information can be more time consuming than releasing it.

Corresponding with requestors to clarify what they are looking for takes time (for

example, are they requesting information relating to the tax year, financial year, or

academic year?).

Employment law Employment law is approached from the perspective of a SME. BG also embeds its

ethos as a Christian institution and employer into its principles and practices.

The institution participates in the Teacher Pension Scheme and Local Government

Pension Scheme. The former is a requirement for a teacher training college. The

latter is not necessarily required, and BG is an „admitted body‟ that is allowed to offer

an alternative to employees.

Equality & diversity BG‟s ethos and mission is reflected in its equality and diversity policies and practices,

and its widening participation activities.

Since the Equality Act was implemented, impact assessments are no longer required

for equality and diversity. However, staff find they remain helpful as a way of



Regulatory area Impact on a small institution

satisfying the requirement to demonstrate objectives.

New challenges are emerging with the new priority groups, such as monitoring sexual

orientation (for the first time). Additionally, there is an anticipatory duty regarding

disability. Whereas race and gender areas are process driven, disability is also a

matter of equipment and staffing resources and requires responses to individual

situations. There is some overlap here with planning, for example in new buildings

requiring areas for new mothers to breastfeed.

The Protection of Freedoms Bill will not address commercial requests or requests for

market research purposes.

Health & safety There is little scope for change in this area. As BG is not a research-intensive

institution, it does not have many dealings with hazardous materials and related

regulations. However, some regulation/legislation does affect all SMEs, for example,

the Corporate Manslaughter Act.

Estates &

infrastructure

BG enjoys a good relationship with the local city council and is in the process of

renovating and expanding its facilities. However this is taking place within the existing

footprint of the single campus, which makes the planning process relatively

straightforward. There are some issues of interpretation with VAT law, and

designating single- and multi-use buildings. For example, the new business centre

may only be used for commercial use (no teaching), although some employer-led

activities involving students may be interpreted as education, a matter of

interpretation and enforcement.

Procurement BG approaches procurement at the level of principles, with the focus on value for

money. Complying with procurement regulation is not as practically burdensome as

FOI for BG (due to its small size and hence infrequency of reaching the EU

procurement threshold), but it remains a burden and the institution cannot react as

quickly in procurement terms as private sector providers are able to do.

Suggested regulatory changes

Key changes which BG would like to see made are:

Level playing field – a genuinely level playing field is required for all HE providers, whether they are public or private organisations, particularly in the areas of FOI and procurement. This requires the same monitoring and „protecting‟ the sector as a whole, since too much compromise could undermine fundamental principles which regulation is designed to protect. However, bringing alternative providers into a regulatory framework for the sake of it is not „better regulation‟, nor will it necessarily help level the playing field

Freedom of information – HEIs should not be taken out of FoI altogether because it is an

essential public safeguard. However there should be a litmus test of whether responding

to a request will benefit the student experience or not. There may be room for streamlining

the process, for instance by centralising its handling for the sector by a third party. Other

amendments such as reducing the threshold from the current 18 to less than 10 hours (or

£200) would at least enable HEIs to charge data aggregators for their requests.

Introducing a „research exemption‟ will not address commercial requests or those made

for market research purposes. There is a definite need to safeguard individuals‟ data and

meet the challenge of responses to requests involving small numbers and thereby

compromising confidentiality.



APPENDIX FIVE CASE STUDY: REGULATORY IMPACT ON A POST-1992 HEI

About Sheffield Hallam University

Sheffield Hallam University (SHU) dates from the opening of two 19th century schools which

later became the foundations for Sheffield Polytechnic which was established in 1969. The

institution then achieved university status in 1992. SHU is one of the largest metropolitan

universities in the country. Its two Sheffield campuses host 33,000 students, (4,250

international students), 4,360 staff and the university‟s turnover is £241 million. SHU offers

approximately 572 undergraduate, postgraduate, full and part-time courses. A key strength of

the university is its work with professional bodies, and business and industry.


SHU is subject to three domains of regulation: HE specific regulation from funders and

related agencies; regulation from professional, statutory and regulatory bodies; and more

generic regulation which applies to any corporate entity. However HEIs are also subject to

additional regulation in the areas of freedom of information, procurement and equality and

diversity due to their being accorded public sector status. These three regulatory areas have

a significant impact on the university. Moreover, the regulation of existing HEIs in these

areas is fundamentally different than for other types of HE provider.


review impact on SHU.

Figure 6 Overview of regulatory impact on Sheffield Hallam University

Regulatory area Impact on a post-1992 institution

Freedom of

Information (FOI)

SHU has to maintain a specific resource to handle FOI requests. The

demands on this resource are continually growing as the numbers of requests

have grown exponentially in recent years. Indeed by October the number of

requests received is more than double those in the previous year.

Many of these requests are unrelated to ensuring transparency of a public

organisation, and are motivated by marketing or „lazy‟ journalism. The

complexity of requests is also increasing over time, requiring a higher order of

expertise to deal with these. Many HEIs therefore have to seek external legal

advice, thereby incurring additional costs.

In the increasingly competitive environment, intellectual property, course

content and curriculum information are assets, and the university feels that

information on these areas should not have to be released through FOI.

Procurement Complying with public sector procurement requirements is burdensome for the

university in terms of the costs of the process and the lengthy timescales

involved, which are a constraint. Not only is there a requirement for complying

with the original regulations, there have been a number of court cases in the

UK and EU resulting from challenges to contract awards. These decisions

have extended the scope of the legislation and there is now a requirement to

comply with the law but also to incorporate these rulings into everyday

practice. The result is that attention has to be focussed on compliance, and

adopting a „low risk approach‟, rather than on achieving value for money to



Regulatory area Impact on a post-1992 institution

deliver the best quality learning experience for students.

A key issue is the distinction between HEIs and public sector bodies such as

local authorities. The latter focus on delivering a service for their citizens but

are not in competition with any other organisations. SHU on the other hand is

operating in a highly competitive environment, competing with institutions in

the UK and internationally. Since government intent is to increase competition

in the sector, coupled with the funding changes, there is a clear need to have

a renewed focus on value for money in procurement and existing HEIs are at

a disadvantage through their being subject to EU procurement regulations.

Equality & diversity SHU would like to see HEIs taken out of the public sector duty altogether

since there is no reason for them to be considered as public authorities. The

university would be undertaking many of the activities in any event as a good

employer. Further, the additional public sector duties add little value. The

recent Equality Act has been helpful in reducing the laboriousness of

compliance, through removing the need for impact assessments.

Corporation tax

returns

Arcane rules mean that HEIs have to go through this process of completing

the returns pointlessly and simply putting money into the hands of advisors.

Employment law As a scheduled institution, any employee is entitled (enshrined in statute) to

join a final salary pension scheme, either the Teachers Pension Scheme or

the Local Government Pension Scheme for support staff.

In the context of the financial pressures over the past two-three years, the

university needs to ensure it does not become uncompetitive in its ability to

attract talented academic staff. In comparison with those offered in the private

sector, there are few additional benefits other than pension schemes, which

are a key element of remuneration packages. This is less the case for support

staff, and some flexibility here would be helpful. A sustainable solution is

clearly the overriding concern for pension schemes.

The Redundancy Modification Order (which applies to post-1992 HEIs and FE

colleges) is an anomaly but in practice is not often encountered by the

university.


Key changes which SHU would like to see made are:

FOI - ideally HEIs should be taken out of FOI altogether. In the absence of this, there should be an exemption for the results of unpublished research and also for other outputs from the university, such as curriculum information or other commercially sensitive information. In addition, any HE provider which is publicly supported through being granted access to student support arrangements should also be subject to FOI.

Procurement – if there is to be more of a mixed economy of HE providers, the same

regulatory requirements should be imposed on different types of providers to level the

playing field and avoid one group incurring additional costs.

Equality and diversity - SHU would like to see HEIs taken out of the public sector duty.



APPENDIX SIX CASE STUDY: IMPACT ON A RESEARCH INTENSIVE HEI

About the University of Warwick

The University of Warwick is one of the UK‟s leading research universities which received its

Royal Charter of Incorporation in 1965. Now incorporating a Medical School, it is situated on

a large 700 acre campus on the boundary between the City of Coventry and the County of

Warwickshire. Approximately 23,000 students (6,000 international students) study at the

University, and it employs 5,000 permanent staff. The University has an acknowledged

reputation for excellence in research and teaching, for innovation and for its links with

business and industry. In the last Research Assessment Exercise, Warwick was rated

seventh in the UK for research excellence. The University‟s reliance on public funding is

comparatively low.


With a turnover of £450 million, Warwick operates like a medium sized business. It is

compliant with regulations and practices to meet statutory obligations are embedded in the

running of the University. However the implementation of regulations often impacts

negatively on the University. In particular, the timing of new regulations and their

implementation is often counter-intuitive to the academic year and the student lifecycle. This

has notably been the case with immigration regulation.

There is also a perceived need within the University for improvements in joined up policy

making in terms of regulation as it applies to HEIs. There is a perception that individual

regulatory levers may be being pulled without a full understanding of how they interact with

one another, and may have a contradictory effect. An example of this is the potential impact

of the Government‟s higher fees and AAB policy on widening participation and the overall

strategy to improve social mobility. Additionally, the University experiences „information

overload‟ in terms of the sheer volume of correspondence received from regulatory bodies.

There is also a sense of consultation overload, with multiple consultations taking place with

tight deadlines, taking away resources from providing frontline services.


review impact on the University of Warwick.

Figure 7 Overview of regulatory impact on the University of Warwick

Regulatory area Impact on a research intensive institution

Freedom of

Information (FOI)

One FTE member of staff is responsible for handling FOI requests and educating

staff on compliance issues. Over time, requests have become more detailed, and

therefore responses take longer to prepare. The emphasis for the University is on

disclosure of information where possible. Exemptions are prohibitively difficult to

achieve in practice. If a request progresses to review stage, internal review is not a

good use of resources.

FOI has grown into its own industry – both in terms of an industry to aid responders

and an industry of requesters. One positive of this is that networking and training

events provide an opportunity for staff to learn how other HEIs operate and share

good practice.

There have also been improvements to the ICO website, as well as more

information and training on data protection.




Commercial partners may be wary of working with HE because it is subject to FOI.

Suppliers are also increasingly FOI savvy and the tender process has been made

more difficult due to the potential for unsuccessful suppliers making FOI requests.

Warwick believes research should be protected until the appropriate time to be

published. There have been FOI requests for reading lists and course handbooks,

presumably for competitive gain, by other providers or instructors, raising the

question of an exemption for other types of output as well. There is also the issue of

commercially sensitive financial information being requested through FOI.

Procurement Procurement needs to achieve value for money and control the risk and reputation

of the organisation. There are a range of current issues regarding procurement,

such as complex contracts, FOI, Bribery Act, safe harbour agreements (new

procurement system is based in the US, where the US Government can access

stored data for anti-terrorism purposes).

Due to the levels of European Regional Development Funding (ERDF) and EU

grant funding received, Warwick would probably remain within EU procurement

rules regardless of whether student loans are considered public or private funding.

Corporation tax

returns

Warwick trades through a number of subsidiary companies and currently has 2.5

FTE staff working on tax. Exemptions are currently based on proportion of

commercial activities; it could be better determined by how the money is used (i.e.

for charitable purposes). Complying with regulations on procurement, VAT and

ERDF are considered to be more onerous than completing corporation tax returns.

Employment law A recent example of how the University implements legislative or regulatory change

is the removal of the default retirement age. A great deal of preparation was

required for this, then implementation (including staff briefings), dealing with line

managers (including hard to reach academics) to engage them in briefings, then

sending out reminders, receiving and analysing feedback, undertaking equality

analysis (to check for any discriminatory effects), and employment changes. Then

the consequences and impact on the rest of the workforce needed to be looked at,

in this case at succession and workforce planning and performance management.

Often there are unintended consequences, where complying with one law or set of

regulations compromises another (for example, in terms of equality and diversity,

impact on operational planning and performance management). Warwick has a

complex and diverse community of employees. HR staff have to ensure that they

cross-refer legislation and regulation to ensure compliance across a range of areas.

Health & safety Health and safety (H&S) regulations have driven improvements in the HE sector.

HE is recognised by the HSE as a mature sector. However, there are a number of

examples of onerous regulations, which are overly bureaucratic and not designed

for the HE sector. Examples include:

Display screen equipment (DSE) and the requirement to provide eye tests and

glasses for employees. This has not changed since laptops and tablets came

into common use. DSE has a sound risk assessment methodology, but does

not keep pace with changes in technology. The estimated cost to the university

per year is £15k.

Drugs, chemicals, biological and radiological materials for research –

universities do not operate like drug companies or manufacturers and this

should be recognised by regulators. The priority for HE is to ensure the

research environment is protected, but with specifically controlled drugs, new

research work may be delayed for a year in the first instance while waiting for

approval.

Housing H&S ratings regulations have prescriptive risk elements, and local

authorities may choose to apply these to student houses (at their discretion).

There may have been some HSE mission creep re section 3 of the Health &

Safety at Work Act (protecting the wider population, i.e. students), versus




section 2 (protects employees). Section 3 may be used by local authorities for

insurance claims. At issue is not the regulatory framework but the misuse of it

by the insurance industry. Most claims do not reach civil courts, but are paid by

insurance premiums. Danger of a cycle where insurers pay anything under £10k

as part of „claims culture‟. Warwick has successfully negotiated against this.

There have been some positive gains in the area of houses of multiple

occupation where the HE sector is allowed its own system.

Home Office counter-terrorism units are helpful and try to understand HE. Has

been helpful in terms of major incident and business recovery planning.

A move from H&S legislation to H&S risk management may be helpful and offer a

constructive way forward. Sharing good practice helps to drive this.

Planning Warwick is located on the line between Coventry and Warwickshire, operated by

two different local authorities. It is easier to deal with the former, so more building

and development has taken place on the Coventry side. Commercial research

building projects are currently underway.

European Regional

Development

Funding (ERDF)

ERDF used to be regulated by the Government Offices, then by Regional

Development Agencies. Since their abolition, it is now overseen by the Department

for Communities and Local Government (DCLG). The issue with the application of

EU regulation in this case is with the frequent reinterpretation of the regulations for

audit in particular. DCLG officials are not yet up to speed on this and there are

issues with the over interpretation of the regulations. It is very onerous to manage

ERDF income, with multiple audits and funding criteria set at the time of audit, not

the time of procurement.

UKBA and

immigration

regulations

Although not the direct focus for this review, immigration regulation is a major

concern for the University in terms of both student recruitment and employing non-

EU staff. The University‟s International Office, Admissions Office, Registry, and

individual departments are involved with this area. There is on occasion no lead

time for HEIs to adapt to new regulatory changes. Other particular issues are:

The requirement to prove identity for UK examiners and fixed-term or part time

staff requires original identification even for fixed term external examiners.

Interviewing/job advertisement rules for applicants from EU and non-EU

countries, and the quota on non-EU employees. There is risk of „brain drain‟ to

the US and elsewhere. An EU first rule for permanent roles, but not for

temporary or part time staff could help.

The University‟s systems and processes need to prioritise student wellbeing

and academic progress, rather than attendance monitoring, although this is

integrated within them. Withdrawal procedures should not be inappropriately

coupled to UKBA‟s requirement to communicate a student‟s travel plans,

beyond their withdrawal to UKBA. Universities should not be impeded in ending

a student‟s academic career with them until a flight number home is provided.


Key regulatory changes, in relation to the specific focus of this review, which the University of

Warwick would like to see made are:

Freedom of information – there should be a number of sensible exemptions, in exemption

to protect the results of unpublished research. In addition, ICO should tailor its contact

with the HE sector, through a dedicated team and take a consistent approach.

Procurement – the EU threshold for inclusion in procurement regulations should be

relaxed. There is a need for guidance from Government as to what is publicly funded.

Date post:	23-Sep-2020
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