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Martin Paul Eve

Professor of Literature, Technology and Publishing at Birkbeck, University of London

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This post is part of an ongoing series where I intend to develop my full personal (not institutional) response to the HE Green Paper. Comments are welcome to refine this.

The Green Paper states:

There are a number of requirements placed on HEFCE-funded providers which do not apply to alternative providers. Many derive from treating HEFCE-funded providers as ‘public bodies’. This is despite the fact that the income of nearly all of these providers is no longer principally from direct grant and tuition fee income is not treated as public funding. Alternative providers are not treated as public bodies. As a result there is an uneven playing field in terms of costs and responsibilities. For example, the cost to providers of being within the scope of the Freedom of Information Act is estimated at around £10m per year.

In principle, we want to see all higher education providers subject to the same requirements, and wherever possible we are seeking to reduce burdens and deregulate. However we may wish to consider some exceptions to this general rule if it were in the interest of students and the wider public.

Question 23: Do you agree with the proposed deregulatory measures? Please give reasons for your answer, including how the proposals would change the burden on providers. Please quantify the benefits and/or costs where possible.

Provisional response:

I do not agree with the proposed deregulatory measures, which provide poor accountability on public funding as well as hampering various practices that have aided competitive benefit in other areas. There is also a legal problem here as the coverage for FE institutions and HE Corporations is absolute under the FOI act; it is not dependent upon receipt of public funds. This would require an amendment to the FOI act.

Firstly, it is disingenuous that “tuition fee income is not treated as public funding”. After all, the State is here underwriting the loans that are used to pay for tuition at any type of institution that has access to the loan book. This is because the income contingent repayment loans administered by the Student Loans Company are underwritten by a 30-year write-off period guaranteed by the taxpayer, the shortfall from which is called the Resource Accounting and Budget (RAB) charge. The RAB charge has consistently been uprated to a higher level than initial government estimates creating a serious debt bubble that will materialise in 2046. Because these loans go to institutions, however, any write-off is a public subsidy of otherwise private risk and debt. To state that HE providers are not benefiting from public funding here can only be said to be an accounting trick.

I do not, therefore, believe that HE institutions should be relieved of their compulsion to comply with Freedom of Information Act Requests. Instead, I believe that this important regulatory oversight should be made on new, private providers as well. It is clear that these institutions are receiving public subsidy via the RAB charge. Ensuring the accountability of these institutions for what they do with public money is vital. The current government has made an explicit pledge to be the “most transparent government in the world”. If the government intends to re-route significant expenditure of public funds to unaccountable bodies via this indirect and time-deferred route, it will be hard to square with such rhetoric.

Furthermore, FOI requests have provided significant benefits to the general public (and HE institutions) in the past. A good example of this is the 2013 BIS Select Committee Inquiry into Open Access. At that inquiry, non-disclosure agreements with publishers were criticised by the Committee for providing a non-transparent process (for publicly funded institutions) that disrupted the formation of a market. Subsequently, FOI requests to UK universities by Stuart Lawson (acting in a private capacity) have shown the extent to which this space is monopolised by a few large providers. This FOI imperative has helped to ensure that institutions are better able to negotiate pricing agreements and ensures that non-disclosure agreements are not used to create cartel-like environments against publicly-funded institutions.

Removing the FOI requirement is also out of step with other elements of the Green Paper that call for transparency. For instance, the Green Paper notes that “75% of students think they ‘probably’ or definitely ‘did not’ have enough information on how tuition fees are spent”. Removing the right to ask institutions to be accountable will not help in this respect.

Importantly, there are also substantial legal hurdles to the implementation of this aspect. I here quote extensively from Andrew Gray’s response to the paper, an expert on FOI law:

There are four problems with the specific proposal to remove Higher Education institutions from the scope of the Freedom of Information Act – i) the legal framework is complex, and a “public funds” test is not the sole issue involved; ii) in any case, institutions would remain publicly funded after these changes; iii) removing institutions from the scope of the Act would not produce a “level playing field” either in the UK or internationally; and iv) all these aside, including institutions in the scope of FOI brings a net benefit to the country.

Firstly, the system by which Higher Education institutions become subject to the Freedom of Information Act 2000 is complex, and does not work as described by the proposal. There is no general “public bodies” test as such. Instead, under the Act, HE institutions can become conditionally subject through receiving HEFCE funds (schedule 1, para 53(1)(b)); through being designated as eligible to receive such funds (53(1)(d)); or through being an associated body (eg a constituent college) of any such institution (53(1)(e)). There is no test for the amount or proportion of income represented by this funding, so the note in para 17 of the proposal that “…the income of nearly all of these providers is no longer principally from direct grant” is moot.

In addition, however, any institution operating within the Further Education sector is automatically subject to the Act (53(1)(a)) as is any institution operated by a Higher Education Corporation (53(1)(c)). These provisions are not conditional and are not affected by their sources of funding. Were all public funds of all kinds to be withdrawn overnight, the Act as it exists would still leave any HEC explicitly subject to FOI.
This sits strangely alongside the general thrust of this section, which is structured around increasing the powers and capabilities of HECs. Removing the link between FOI and HEFCE would exempt one group (predominantly older and more influential institutions) while leaving the other entirely subject to the Act. For example, the University of Oxford would be exempt, but Oxford Brookes University would not. The alternative would be to remove all HE institutions, including HECs, from the scope of the Act – but this is not a proposal raised in the consultation, which has chosen to focus on the argument that public funds are the main driver for FOI applicability.

This leads into the second point, the definition of “public funds”. If we were to accept the position that “public funds” is the key test to determine FOI applicability, it is clear that there would still be substantial public monies channeled into the higher education system after the effects of the ongoing reforms. Tuition fees, though notionally private payments, are supported by a publicly-organised loan scheme. The public purse will underwrite the loans that are used to fund tuition fees, and make good losses that arise through long-term defaults or writedowns. It is hard to see this as devoid of public involvement.

Meanwhile, the broad outline of public research funding will not substantially change. The government has committed to maintaining the dual support system, and while the review is consulting on how best this can be structured (see eg Questions 24 and 25) it is clear that institutions will continue to receive income in a similar form, from a body which has taken over the existing HEFCE research funding role. This is undeniably public funds, and – importantly – as it currently comes through HEFCE, it would trigger the FOI applicability requirements even were tuition costs to vanish entirely from consideration. Funding from the research councils is also substantial, and again comes from public sources.

There are also other non-trivial (though relatively smaller) sources of public income for HEIs, including grants for providing FE courses, public sector capital spending, income from NHS trusts or local authorities, etc. While perhaps not enough to constitute public funding in and of themselves, they do support the position that, broadly speaking, these institutions remain publicly funded despite the question of tuition fees.
Thirdly, the consultation raised concerns about a “level playing field” among institutions. If HEIs were to be removed wholesale from the 2000 Act, it might or might not materially affect the FOI status of Welsh or Northern Irish universities (who would be covered by a change to the 2000 Act, but have different funding systems), but could not affect the FOI status of Scottish universities (controlled by the Freedom of Information Act (Scotland) 2002) – leading inexorably back to an unequal playing field across the UK.

Internationally, there are similar problems. The position that “public” but not “private” universities should be subject to Freedom of Information regulations is a widely accepted principle across a range of countries, ranging from Bulgaria to New Zealand. In 2005, I carried out a study which identified that in 67 countries with FOI-type legislation, 39 included public universities in the scope of the legislation, 27 were unclear, and only one explicitly excluded them – and this one was planning to extend the scope of the law. In the majority of jurisdictions, private universities were not covered, though some countries extended limited FOI powers to certain aspects of their work. Under any reasonable definition, the existing “public” British universities will remain quasi-public institutions. They will continue to receive public funds through various channels, and to be heavily influenced by government policy. If asked, the architects of these proposed reforms would no doubt – emphatically and repeatedly – state that they do not consider it a privatisation, and the university governing bodies would agree. Given this, withdrawing their FOI compliance requirement would be unusual; it would place them in a different legal position to most of their overseas counterparts.
Finally, applying Freedom of Information laws to universities is, and will remain, a net good. The cost to the sector – ultimately borne by the public purse – is minor in comparison to the benefits from transparency and efficiency that FOI can bring. This is true for universities as much as it is for other sectors.

From a national perspective, these bodies are responsible for spending several billion pounds of public money, and for implementing substantial portions of the government’s policies not just on education, but on issues as varied as social inclusion, visitor visas, and industrial development. All of these are matters of substantial public interest. On an individual basis, these bodies can have remarkably broad powers. They regulate employment, housing, and substantial portions of daily life for hundreds of thousands of people. In areas with a very high student population, they can have an impact on their local communities rivalling that of the council! The benefits from public awareness and oversight of these roles is substantial.

One concern raised by universities is that these requests pose a heavy burden on the sector and are often frivolous. It is worth considering some numbers here. In 2013 (a year with a “huge increase” in FOI requests), surveyed institutions received an average of 184 submissions; across the 160 universities in the country (including Scotland), this would suggest a total of around 30,000 submissions. 93% of these queries were handled in good time. 54.4% were disclosed in full, 24.3% were provided in part, and just 8.5% were fully withheld. Only 6.6% were rejected as the information was not held by the institution, and 0.3% rejected as vexatious. The remainder were withdrawn, still in progress, or of unclear status. 1.1% of rejected or partially filled requests prompted a request for an internal review, and slightly over half of these were upheld. Only 0.1% were referred to an external appeal (the Information Commissioner) and exactly half of these were upheld.

These figures suggest that the universities are dealing with their FOI requirements cleanly, sensibly, and in good order – probably better than many other public bodies, and credit to them for it. It does not bear signs of a looming catastrophe. Institutions are disclosing information they are asked for in more than three quarters of cases, indicating that it is material that can and should be publicly available, but has so far required the use of FOI legislation to obtain it. They are not dealing with a substantial number of frivolous requests (in this sample, an average of just five requests per university per year were declined as vexatious or repeated). And, when their actions are challenged and reviewed, the decisions indicate that institutions are striking a reasonable balance between caution and disclosure, and that the enquiries are often reasonable and justified.

It is certainly the case that implementing FOI can be expensive. However, all good records management practice will cost more money than simply ignoring the problem! It is likely that a substantial proportion of the costs currently considered as “FOI compliance” would be required, in any case, to handle compliance with other legislation – such as the Data Protection Act or the Environmental Information Regulations – or to handle routine internal records management work. The quoted figure of £10m per year compliance costs should, thus, be considered with a certain caution – a substantial amount of this money would likely be spent as business as usual without FOI.

FOI has an unusual position here in that it can be dealt with pre-emptively, by transitioning to a policy of routine publication of information that would be routinely disclosed, and by empowering staff to deal with many non-controversial requests for information as “business as usual” rather than referring them for internal FOI review. For example, it is noticeable that the majority of FOI enquiries relate to “student issues and numbers”. A substantial proportion of these relate to admission statistics, and similar topics; this is information that could easily be routinely and uncontroversially published without waiting for a request, reviewing the request, discussing it internally, and then agreeing to publish.

In conclusion, this proposal i) cannot work as planned; ii) is based on a tenuous and restrictive interpretation of what constitutes a public body; iii) if implemented, will affect some institutions substantially more than it does others; and iv) is, in any case, undesirable as a policy, and would be unlikely to lead to significant savings.

Should a “level playing field” be desired, a far more equitable solution would be to consider extending the scope of the Act to encompass the “private” HE institutions, perhaps in a more limited fashion appropriate to their status. The driving factors which make robust freedom of information regulations important for “public” institutions are no less valid for “private” ones; they carry out a similar quasi-public role and, especially from a student perspective, it seems unreasonable for them to have reduced rights simply due to the legal status of their university. Partially extending the legislation to cover private institutions would be unusual, but not unprecedented, by international standards. 

Finally, the green paper maintains a commitment to multiple streams of direct public funding: the teaching grant (subject to priority determination), QR funding, and research council funding. Claiming that the requirement to be a public body should be removed because the income of such institutions is “no longer principally from direct grant” funding would require the government to set an arbitrary cap on the amount of funding that can be received (how much is “principally”?) and still not be classified as a public body. This could be open to serious abuse and non-accountable expenditure of public funds. For instance, if simply taking “principal” to mean that the largest source of income can be non-public, then so long as an entity receives substantial funding from elsewhere, it will never be classified as a public body and never be held accountable for the way that it spends public money, regardless of how much public funding it received. HESA statistics from 2015 indicate that £13.7bn (44.5%) of revenue came from tuition fees and £6.1bn (19.8%) came from funding bodies. 19.8% may not be “principal” but it is not negligible.

While the current system is an “uneven playing field”, the proposed logic is the wrong way around. Institutions must be accountable for the public subsidy that they receive – either directly in terms of teaching grant or dual-stream research funding or indirectly through the RAB charge – and this must apply to new providers as well as old. While it is good that the government is considering ways to reduce the burden on institutions (although the introduction of many other centralised systems of oversight, such as the proposed TEF, seem to contradict this), a fundamental and important element of transparency will be lost if the government commits to underwriting unaccountable institutions. Strengthening the FOI requirement to all providers is the way to fix this, not by removing it from existing providers.