Welcome to Higher Education Spotlight – a quarterly newsletter designed to support colleagues working within the Higher Education Sector. In each edition we will place the spotlight on particular issues impacting Higher Education, with an article from one of our specialist Higher Education lawyers.
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- Autumn brings change
- The Resource Library – events, recent articles and webinars from Bevan Brittan lawyers
- The news that matters – an overview of recent news stories
A warm welcome to the September edition of HE Spotlight
Since our last HE Spotlight we are delighted to have welcomed Rachel Soundy as a new corporate partner in the Higher Education team at Bevan Brittan. Rachel has joined us from Eversheds Sutherland’s education team and specialises in advising education institutions on mergers and acquisitions, joint venture arrangements, corporate structures, and constitutional and governance matters.
In other news, we are thrilled to have secured a position on the London Universities Purchasing Consortium (LUPC) legal services framework. This is a significant step in expanding our Higher Education offering as it will enable us to provide legal services to the wider higher education sector across the UK, where the firm already offers pragmatic legal advice to a growing number of universities and Higher Education Institutions (HEIs).
We hope that the start of the new academic year goes well for you.
After 18 months of remote learning, this Autumn sees the return of students (in some shape or form) to campuses across the UK, and for any HEIs hoping for stability and normality, the chill autumn winds unfortunately bring a storm of pensions related problems covering financial, legal and industrial relations.
In this edition of HE Spotlight, Nigel Bolton, a pensions Partner who joined our employment practice earlier this year, outlines Universities Superannuation schemes.
There may be trouble ahead
The long drawn out process that is the Universities Superannuation schemes (USS) triennial valuation culminated in the joint negotiating committee, made up of employers and scheme trustees, agreeing the basis for future funding of the scheme, but without the support of the UCU. Whilst proposed large contribution increases for employers and employees have been averted, pension accrual rates have been reduced, salary thresholds have been capped and employers have provided significant boosts on the covenant side. Yet, once again, there are threats of strike action over reductions in pension benefits, calls for independent reviews of the governance structure of the scheme, calls for scheme redesign amid a significantly high opt out rate amongst younger employees, and concerns as to the financial impact of both the current additional covenant support and whether further increases in deficit could impose greater covenant stresses on employers. Having a good understanding of both existing policies and procedures, the current benefits structure, and a clear communications strategy will all be key elements in the months ahead!
It’s time to face the music
Whilst cash flow changes have been limited by the small level of contribution increase to the USS, the same couldn’t be avoided in relation to the increase in contributions to the Teachers’ Pension Scheme (increasing by 40% in September 2019) to 23.68%.
There are still significant pressures for employers already hard pressed after the pandemics first two waves. The spectre of costing in adjustments and increases for the age discrimination judgement in the McCloud Case - as it applies to this scheme (and any other public sector scheme which an establishment contributes to), and the impact of Guaranteed Minimum Pensions (GMP) equalisation on any scheme they participate in (non-academic schemes), they will likely face future contribution increases rises at the next review in 2024. And all of this on top of the prosed NI increase means HEIs will face a difficult year in terms of cash flow planning and a need to be careful around expenditure, and if they aren’t already doing so - maximise their use of salary sacrifice and smart pension arrangements to generate NI savings for themselves and their staff.
And a new dance
At a time when both industrial turmoil and cash flow constraints may be a concern, legislation will throw up new steps for all employers to take as a result of the Pensions Act 2021. Whilst both the covenant and cash flow issues may both restrict HEIs borrowing ability and increase the cost of borrowing due to restrictions on ability to service debt and available security, leading to plans to respond to the pandemic by improving education, service or support for employees and students having to be carefully considered and the costed new legal considerations will start to come into play.
Part of the increased powers given to the Pensions Regulator to impose civil and criminal sanctions means that they are currently consulting on changes to the notifiable events regime. A future breach of the notifiable events regime or the requirement to provide an accompanying statement, could be punishable by a fine of up to £1million.
The existing list of notifiable events (designed to allow the Regulator to reduce any risks around schemes falling into the Pension Protection Fund) has some significant changes proposed.
There are two new notifiable events:
- a material sale - anything which provides more than 25% or annual revenue or 25% of gross value of the assets of the employer, or
- a granting of security - where the lender would rank ahead of the Pension scheme. This covers fixed and floating charges and all assets charges, extending existing security to cover more assets or for increase lending or granting new security again the 25% revenue (consolidated this time) and gross assets are key tests.
Like-for-like refinancing appears to be exempt, but great care as to the terms would need to be taken.
The other new steps to consider are when and how you communicate with the Regulator and the pension scheme. Reporting will be required at decision in principle stage i.e. before any negations or agreements have been entered into with the other parties. This is to force employers to consider the impact and any mitigation in relation to any final salary scheme. But a further notification by an ‘appropriate person’ (from the employer), must provide the Regulator and trustees with notices and statements covering the corporate event proposed, the risks to the scheme arising from the event, and any mitigation offered to offset those risks i.e. when heads of terms have been agreed, and must include any material changes since the decision in principle notification.
With most HEIs having their own stand-alone schemes as well as USS, participation to juggle these proposed new requirements is likely to come into force just as employers need to deal with covenant or security issues or make changes to improve cash flow.
Whatever the driver for change is, any HEI looking to make any changes to covenants or any contracts which may impact on cash flow, should seek specialist advice at the earliest planning or feasibility stages of any project.
If you would like to discuss this topic in more detail, please contact Nigel Bolton, Partner.
On Demand webinars
Public Procurement Bootcamp
Roundup of recent developments – policy and case law
Evaluation – choosing the evaluation criteria and scoring methodology
Evaluation – conducting the scoring and moderation process
Evaluation – documenting the evaluation process
Procurement Bootcamp: Q&A Webinar
Subsidy Control Series (Parts 1 & 2 in our four-part series)
Electric vehicles and landowners – it’s time to get plugged in!
Employment Eye: Focus on Higher Education - Summer 2021
Assessment of rent in the pandemic - a headache for some time to come
How Covid-19 has reshaped the university estate
LIBOR….The end is nigh: update your finance arrangements now!
Updated Immigration Advice for Employers
Ground rent reform - the rise of the peppercorn!
Maya Forstater tribunal appeal: summary and impact
Department for Education
Higher education providers: coronavirus (COVID-19)
Guidance | Last updated 17 August 2021
Coronavirus (COVID-19) operational guidance for higher education providers.
Arrangements for the assessment and awarding of vocational, technical and other general qualifications: 2021 to 2022
Consultation outcome | Last updated 6 August 2021
The department’s response confirms that exams and other assessments should go ahead in academic year 2021 to 2022. The permitted scope of adaptations for vocational and technical qualifications included in performance tables, Functional Skills Qualifications and T Levels, is also outlined.
Cash boost to create new flexible approach to apprenticeships
Press release | 3 August 2021
Sectors including the creative, agriculture and construction industries can now bid for a share of a £7 million fund to support the creation of new flexible apprenticeships.
National Skills Fund
Guidance | Last updated 29 July 2021
An overview of the National Skills Fund, which aims to help adults to train and gain the valuable skills they need to improve their job prospects and support the economy.
Post-16 qualifications at level 3: guidance for providers
Guidance | 14 July 2021
Guidance for post-16 education providers and other professionals working in the post-16 education sector.
Higher education and mental health: analyses of the LSYPE cohorts
Research and analysis | 28 June 2021
A study looking at the differences in mental health among students and non-students. It finds that levels of common mental disorder are higher in young people who are attending higher education compared with those who are not.
HE student mental health and wellbeing: sector insights
Research and analysis | 28 June 2021
An exploratory study with higher education providers and sector experts to gain an institutional perspective on student mental health and wellbeing.
Graduate outcomes (LEO): subject by provider 2018 to 2019
Official statistics | 24 June 2021
Provider level employment and earnings outcomes for 2018 to 2019.
The Prevent Duty in higher education (HE): training and guidance for practitioners
Collection | Last updated 22 June 2021
New guidance was added to this collection of materials on the Prevent Duty for those working in higher education.
House of Commons Library
Universities Superannuation Scheme
16 August 2021
Looks at the consultation on the 2017 valuation of the Universities Superannuation Scheme (USS) and the proposed reforms.
Coronavirus: GCSEs, A Levels and equivalents in 2021
26 July 2021
This briefing looks at the cancellation of public exams and the replacement systems for awarding grades in Summer 2021, in light of the pandemic. It also provides information on plans for summer 2022, and some historical information on what happened in summer 2020.
Coronavirus: HE/FE return to campus in England 2021
7 July 2021
This briefing paper discusses Covid-19 announcements affecting the Further and Higher Education sectors in England from January 2021. It outlines areas such as the return of students to campuses and refunds for students affected by the disruptions.
Careers guidance in schools, colleges and universities (England)
1 July 2021
This House of Commons Library briefing paper looks at the requirements on schools, colleges and universities in England to provide careers guidance, the quality of the advice provided, and also the organisations working to provide careers advice.
Student loan statistics
23 June 2021
More than £17 billion is loaned to students each year. The value of outstanding loans at the end of March 2021 reached £160 billion. The Government forecasts the value of outstanding loans to be around £560 billion (2019‑20 prices) by the middle of this century. The expansion of loans has raised questions about graduate repayments and ultimately the cost of the system to the taxpayer.
Sexual harassment in education
21 June 2021
Concerns have been raised about sexual harassment in all stages of education. This paper provides information on the requirements on schools, colleges, and universities, and covers relevant recent developments.
Equality of access and outcomes in higher education in England
2 June 2021
This paper looks at equality in undergraduate education in England. It summarises the latest data on access and outcomes before looking at Government policy, the role of the Office for Students, and the actions and responsibilities of universities.
Office for Students (OfS)
Funding boost to support student mental health
17 August 2021
Eighteen projects across universities and colleges in England will receive funding to support student mental health as part of a £6 million programme.
Grants announced for universities and colleges
30 July 2021
The OfS has allocated £1.2 billion in funding to universities and colleges across England. An additional £10 million of funding has been allocated for high cost subjects to universities and other higher education providers.
New trial for short higher education courses
21 July 2021
The OfS will launch a new Challenge Competition to fund projects delivering short courses in higher education – forming part of the government’s approach to delivering its new Lifelong Learning Entitlement.
New conditions will allow regulator to clamp down on poor quality and standards in higher education
20 July 2021
The OfS is consulting on new regulation to protect quality and standards in higher education in England. The new requirements will allow intervention more frequently in universities and colleges where courses fall below expectations and require improvement.
OfS confirms funding reforms
20 July 2021
OfS has confirmed changes to how it will distribute funding to universities and colleges for 2021-22.
Fewer students positive about their course amid pandemic
15 July 2021
Results from the National Student Survey (NSS) show that more university and college students have concerns about their educational experience this year compared to last year. The survey highlighting particular issues around the availability of learning resources.
OfS sets out approach to calculating monetary penalties
8 July 2021
The OfS has set out how it will calculate a monetary penalty when it imposes one on a university or college.
New OfS analysis finds university finances in good order
25 June 2021
Analysis for the OfS finds that the finances of universities and other higher education providers remain in broadly good order, despite the continuing impact of the pandemic and a range of other issues.
Office for Students to examine assessment practices
23 June 2021
The OfS has launched a review of the use of inclusive assessment practices that disregard poor spelling, punctuation and grammar when students’ work is assessed.
New analysis explores local variations in graduate opportunities
2 June 2021
Graduates are most likely to enter well-paid jobs if they live in London or the South East, although opportunities for highly-skilled work can be found widely across the country – according to new analysis by the OfS.
Universities UK (UUK)
How universities can attract vital regeneration and development funding for their regions
16 August 2021
Dr Nick Lancaster, Director of Innovation & Enterprise at the University of Bedfordshire, outlines how universities are the ideal channel for regional regeneration through collaborative research and development.
Universities welcome record numbers of students
13 August 2021
Record numbers of applicants have secured a place at their first choice of university this autumn, with universities preparing to maximise opportunities for in-person teaching, support and social activities for a much fuller experience this year.
Universities to improve external examining systems
12 August 2021
UUK and GuildHE have asked the Quality Assurance Agency (QAA) to work with them to support universities review and improve their external examining practices.
USS employers back changes to the pension scheme
13 August 2021
Employers representing 95% of USS membership responded to UUK’s consultation. Support measures were put forward, to save the Defined Benefit part of the scheme. There was also employer support for investigating the feasibility of conditional indexation, a governance review of the USS pension scheme, and a flexible cost option for scheme members.
Student vaccination – a sector statement
12 August 2021
In a joint letter published today, sector representatives have outlined the ways higher education providers are engaging, explaining and encouraging new and existing students to be vaccinated.
Office of the Independent Adjudicator
As we approach the new academic year
19 August 2021
Some coronavirus-related considerations for the 2021/22 academic year.
OIA publishes further case summaries of complaints arising from the impact of Covid-19
29 July 2021
A third set of case summaries of complaints arising from the impact of coronavirus has been published. The summaries include complaints about changes to accommodation, disciplinary action, and course delivery and assessments.
Higher Education Statistics Agency (HESA)
HE Provider Data: Estates Management environmental information published
19 August 2021
130 UK higher education providers submitted energy consumption and carbon emissions data via HESA’s Estates Management Record
Graduate Outcomes data 2018/19
27 July 2021
Detailed open data tables and charts from the 2018/19 Graduate Outcomes survey, including breakdowns by HE provider, subject of study, detailed occupational classification, and salary levels by personal characteristics.
The impact of the Covid-19 pandemic on Graduate Outcomes 2018/19
20 July 2021
This year's Graduate Outcomes data reflects the circumstances under which it was collected. This insight brief is intended to help users contextualise the data.
Graduate Outcomes statistics show the activities of 2018/19 graduates in 2020
20 July 2021
Results of the second annual Graduate Outcomes survey show the activities of graduates 15 months after finishing their higher education course.
HE Provider Data: Finance – Open data release 2019/20
30 June 2021
Total income for UK HE providers whose financial year matched the 2019/20 academic year was £40.8 billion with expenditure of £37.3 billion.
Higher Education Policy Institute (HEPI)
New HEPI report considers when and how universities and policymakers should listen to students
5 August 2021
A new collection of essays from HEPI with support from EvaSys - What is the student voice? Thirteen essays on how to listen to students and how to act on what they say - features contributions from student representatives, academics, a vice-chancellor, a former NUS President and survey experts as well as interviews with the Office for Students’ Student Panel.
Students highlight the challenges of their 2021 academic experience
24 June 2021
Following a year of “major upheaval”, the value students place on in-person teaching is a key feature of the 2021 Student Academic Experience Survey.
Record number of students accepted into their first choice of university
10 August 2021
A record 395,770 students, up 8% from 365,500 in 2020, have a confirmed place on their first choice of full-time undergraduate course in the UK.
450% increase in student mental health declarations over last decade but progress still needed to address declarations stigma
17 June 2021
The number of UK applicants to UCAS that declared a mental health condition has increased by 450% over the last decade, yet the report, Starting the Conversation: UCAS report on student mental health, shows there is still more work to do to reduce stigma around mental health, and to highlight the support available.
QAA and Jisc join forces to advise HEIs how to counter cyber security threat
5 August 2021
UK universities are being urged to be vigilant against an emerging cyber security threat from essay mills. The warning comes as the sector continues to deal with an unprecedented spike in ransomware attacks.
Addressing Academic Misconduct – QAA's latest research supporting academic integrity
23 July 2021
QAA is supporting its member institutions to manage cases of academic misconduct through a new research report which investigates how higher education providers deal with potential academic integrity offences and highlights the value of collaboration between providers around the handling of academic misconduct.
QAA publish new advice on online assessment
11 June 2021
QAA has published new advice on online invigilation and other solutions for ensuring good academic conduct in online assessment. It is intended to help providers consider whether to adopt online assessment security solutions for their assessments on a longer-term basis, following the swift move to online assessment at the start of the COVID-19 pandemic.
Disabled students have their say on impact of Covid-19 and their experience of higher education
12 August 2021
Findings from the Disabled Students’ Commission survey explores a number of aspects of the student lifecycle, from transition to employment.
Black Lives Matter and the student voice
29 June 2021
This report examines a sample of statements and actions undertaken by UK universities in response to Black Lives Matter (BLM) protests that occurred in the UK and around the world from May 2020.
Alliance universities play key role in regeneration and investment in local communities
20 August 2021
A collection of case studies demonstrating how universities have supported investment and regeneration in their local towns, cities and regions.
UA institutions play important role in action against climate change
11 June 2021
A selection of case studies demonstrating how universities are instrumental in the UK’s response to the climate crisis, and how work in sustainability, green growth and innovation are making a difference on both a local and national scale.
Further recent reports
Brokerage programme to be introduced for oversubscribed medical schools | Medical Schools Council
10 August 2021
Medical schools have jointly agreed to support a DfE brokerage programme, so that applicants who have met the conditions of their offers at oversubscribed schools will be given the opportunity to move to alternatives. Students that choose to move will receive a payment of £10,000 for the inconvenience.
Decarbonising Heat Networks in University Estates | Association of University Directors of Estates (AUDE)
7 July 2021
This report, carried out by the Association for Decentralised Energy (ADE), presents the results of a survey with university estates and a workshop to further explore and validate the findings.