Tertiary Education and Research (Wales) Act 2022 (Consequential Amendments) Order 2026

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Tertiary Education and Research (Wales) Act 2022 (Consequential Amendments) Order 2026.

My Lords, this draft order was laid before the House on 2 February and is needed following the passage of the Senedd’s Tertiary Education and Research (Wales) Act 2022. The Act provides a new statutory framework for what is now known as tertiary education and research in Wales, which encompasses higher education, further education and training, apprenticeships, sixth forms, and adult community learning. The Act established the Commission for Tertiary Education and Research in Wales to regulate and fund the sector; I will refer to this body as the commission.

The Act provides the commission and Welsh Ministers with powers to fund the tertiary education sector in Wales. It repeals corresponding functions that were previously in place, including powers in the Learning and Skills Act 2000. Various pieces of UK legislation therefore currently reflect the previous system, in which the Welsh Ministers regulated and funded the sector through powers that are now being repealed.

The amendments in the order ensure that UK legislation is updated by making amendments that account for the changes introduced by the Senedd’s 2022 Act. It mainly does that by removing any references to the repealed powers and replacing them with references to the corresponding powers in the 2022 Act. These consequential amendments ensure that the legislation being amended will continue to operate in largely the same way as it does now, but with the commission integrated into the legislative framework.

Article 2 of the order updates the list of exemptions in the Value Added Tax Act 1994. It ensures that education and vocational training provision funded through powers in the 2022 Act will be an exempt supply for the purpose of value added tax. The order also amends the Income Tax (Earnings and Pensions) Act 2003. This Act makes provision about the tax treatment derived from shares in research institution spin-out companies. Article 3 of this order ensures that the definition of “research institution” in that Act includes any university or other educational institution receiving funding under powers in the 2022 Act.

My Lords, it is a pleasure to speak in the debate on this SI, which I hope is the final stage of the formation of the Commission for Tertiary Education and Research in Wales. As the draft Explanatory Memorandum to this SI explains, this consequential amendment order is made under Section 150 of the Government of Wales Act 2006, which allows the Secretary of State to make provision in consequence of Acts of Senedd Cymru. In this case, the SI makes permission in consequence of the Tertiary Education and Research (Wales) Act 2022 and of two other orders that followed the 2022 Act.

The 2022 Act brought forward welcome changes to the tertiary education sector in Wales by bringing together the higher education and research sector, the further education sector and the training sector under the umbrella of the newly created Commission for Tertiary Education and Research. As the Minister has already explained, the commission has the responsibility for funding and regulating the tertiary education sector in Wales. The 2022 Act provided a list of provisions in existing education legislation that were to be repealed. This 2026 order seeks to replace references to the repealed legislation when they appear in pieces of UK legislation. The 2026 order also takes account of the new functions of Welsh Ministers and the commission.

I was especially pleased to see that an amendment has been included that addresses the situation regarding seafarers’ wages. The amendment ensures that the apprenticeship rate can apply to seafarers carrying out apprenticeships that are provided or funded by the commission. We welcome this added incentive for young seafarers to follow their desired careers.

On these Benches, we welcome the clarity that the order provides about the powers of Welsh Ministers. As Liberal Democrats, we support the principles of devolution and believe that decisions affecting Wales should be made by democratic Welsh institutions. The SI simply implements changes to UK legislation required by legislation passed by the Senedd, and we therefore support the instrument wholeheartedly.

My Lords, this is a technical but necessary instrument made under the Government of Wales Act 2006, ensuring that the statute book reflects the reforms introduced by the Tertiary Education and Research (Wales) Act 2022. That Act abolished the Higher Education Funding Council for Wales and created the new Commission for Tertiary Education and Research—Medr—which became operational in August 2025. The commission now brings together responsibility for higher education, further education, apprenticeships, sixth forms, adult learning and research under a single strategic body.

The order does not revisit that policy decision; it simply updates legislation so that it continues to function properly following the creation of Medr. It transfers certain funding powers to Welsh Ministers or the commission, updates definitions relating to research institutions, enables joint exercise of functions, confirms the commission as the principal regulator of exempt FE charities and makes related amendments to reflect the new governance structure. Both the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments have considered the order and raised no concerns.

While the instrument is technical, it sits within a wider set of reforms that will shape the future of tertiary education in Wales. Audit Wales has emphasised the importance of ensuring that Medr’s strategic planning reflects the views of learners, employers and providers, and that its long-term planning aligns with its statutory missions. His Majesty’s loyal Opposition would be grateful if the Minister could confirm that the transition from the former funding council to the new commission has proceeded smoothly. Bringing together such a wide range of responsibilities under a single body is a significant institutional change, and it would be helpful to understand how its effectiveness will be evaluated and whether appropriate safeguards are in place for its new regulatory responsibilities. In summary, the order performs sensible and necessary consequential amendments.

I thank the noble Earl and the noble Baroness for their valuable contributions to our short and focused debate. I appreciate the comments from the noble Baroness, Lady Humphreys, who welcomed the SI and supported how it helps to embody and enact further the devolution settlement within Wales, specifically for education.

I also thank the noble Earl, Lord Effingham, for his comments. He asked about the process of developing the commission. I can confirm that the transition has been smooth. He will be aware that the commission has undertaken a series of consultations to ensure the steps it takes to implement the 2022 Act fully are informed by the views and experience of the tertiary education sector and other partners. We take that very seriously.

The commission has made substantial progress in its role as the national steward for raising standards, delivering for learners of all ages, and improving institutional collaboration and co-ordination. It is worth noting that this has included supporting over 1,000 employees facing an uncertain future at the Port Talbot steelworks to develop new skills through an innovative programme of local learning. It is important that the order allows the full transition to the commission and the switching-on of its powers, but it is not the case that the commission has not been up and running, active and delivering good for the tertiary education sector in Wales.

Having said that, it is worth noting that the Welsh Government have taken a phased approach, which is probably the right approach, to bringing the 2022 Act into force, to ensure a smooth transition from previous arrangements and to prevent disruptions for providers and learners. As I said, the next phase of implementation will take place on 1 April, when a number of the new functions will come into force. That is why we are debating the order today, pending which we will formally move the Motion to approve the order in a few days’ time in the Chamber, to make sure that it can come into force to coincide with the Welsh Government’s commencement timetable for these powers. I hope that that satisfies the noble Earl’s question on the transition.

Motion agreed.

Committee adjourned at 6.20 pm.