Annex 1

Higher Education Funding Council for Wales: evidence to the Richard Commission

This evidence:-

• explains the constitutional position, responsibilities and mission of the Higher Education Funding Council for Wales (hereafter HEFCW);
• describes the context of its work in terms of the place of the higher education (HE) sector in Wales in relation to the UK and beyond;
• addresses issues which arise from this and which are relevant to the work of the Commission, with particular reference to those which the Commission has indicated it would like us to address.

Constitutional position

Responsibilities

The HEFCW is responsible for the administration of funds made available by the National Assembly for Wales and others for the provision of education and the undertaking of research by higher education institutions (HEIs) in Wales and the provision of prescribed courses of higher education in further education institutions (FEIs) in Wales, and the performance of such supplementary functions as are required of it by the Further and Higher Education Act 1992.

Matters related to tuition fees and most aspects of financial support for students are not devolved and the Council has no role in relation to them. The National Assembly has introduced the Assembly Learning Grant, which is available to certain students in both higher and further education. The Council has no role in the administration of the Assembly Learning Grant but it does administer, on the Assembly’s behalf, hardship funds made available to institutions to pass on to students.

Mission

The context

The great bulk of higher education in Wales is provided by its 13 higher education institutions. They have diverse missions which provide, in different measure, for the education of students, the pursuit of scholarship, research and outreach (or third mission) activities in relation to the economy, society and culture of their local communities, Wales and beyond.

The Open University (OU) is a significant provider of higher education in Wales but is funded for its work across England and Wales by the Higher Education Funding Council for England (HEFCE).

The following table shows the number of full-time and part-time students enrolled in different categories of institution in the academic year 2002/03¹.

F/T

P/T

66,729

39,210

In aggregate, HEIs in Wales receive 43% of their funding from HEFCW. This proportion varies from 23% (in the case of the University of Wales College of Medicine) to 73% (in the case of the Royal Welsh College of Music and Drama).³

Annex 2 is a map showing the location of providers of higher education in Wales (apart from the Open University). It also shows the location of English providers in close proximity to Wales.

Higher education has to operate in a UK and, increasingly, a global context. 31% of students at HEIs in Wales are from elsewhere in the UK (the great majority from England) and 10% are from the rest of the world. 40% of Welsh domiciled students in higher education in the UK are in institutions in other parts of the UK (again predominantly in England).⁴

This means that HEIs in Wales must be competitive with institution in England in terms of both the student experience and the career opportunities of academics. This has particular implications for the equipping of laboratories, libraries and other learning resources, as well as the quality of lecturers and researchers. These pressures are growing as institutions across the UK and beyond compete more fiercely for students and for the best researchers. The growth of e-learning represents a further challenge in the competition for students.

The modest scale of the HE sector in Wales (only some 5% of the sector across the UK) and the mobility of students and academics means that developments in higher education policy and practice in England invariably impact forcefully on Wales. (The same factors are at work on Scotland but not quite to the same extent because of the significantly lower level of cross-border movement of students between England and Scotland).

Thus, if there were to be a higher level of investment in higher education in England, institutions in Wales would quickly become uncompetitive. This is true also prospectively, in that academics will assess where their best long-term prospects lie. This issue is crystallised by the proposal in the recent English White Paper on higher education for the introduction of top-up fees from 2006/07, coupled with the Assembly Government’s announcement that there will be no such fees in Wales before 2007/08 at the earliest.

It is also relevant that major sources of funding for research are provided from UK sources, most notably from the UK research councils, which are the responsibility of the Office of Science and Technology (OST) of the Department of Trade and Industry. The dual support system, under which general funding for research is provided by the funding councils and project funding is provided by the research councils, underpins successful research in HEIs across the UK. A crucial element of this is the joint investment by the OST and the Funding Councils on research infrastructure. For Wales, this has drawn from the OST £14 million for the financial years 2002-03 to 2003-04, with a further £25.2 million likely over the following two years.

There are UK mechanisms, such as the Science and Engineering Base Co-ordinating Committee, on which both the Assembly Government and HEFCW are represented, to ensure that a coherent approach is secured and that Wales’ voice is registered in the UK context. This is reinforced by the direct involvement of the Assembly Government at Ministerial and official level on particular issues. Also, in respect of general UK policy development and matters involving the Privy Council (such as proposed changes to the Royal Charters of the universities) the Secretary of State for Wales can play an important role.

At the same time, HEIs in Wales and HEFCW are sensitive to the particular needs of Wales in general and its diverse communities. But we can only succeed in serving them well to the extent that higher education in Wales is competitive within the UK and internationally.

The Commission’s questions

The impact of devolution on the higher education sector in Wales

Since the establishment of the Assembly, HE in Wales has received, arguably, more attention than at any other time. Following a comprehensive and lengthy review by the Assembly’s Education and Lifelong Learning Committee, the Assembly Government published the first ever long-term strategy for higher education in Wales – Reaching Higher – in March 2002. The strategy sets demanding objectives and targets for the sector and for HEFCW to ensure that higher education in Wales is in good shape to face future challenges, internationally, in the UK and within Wales, across all of its missions – teaching and learning, research and third mission.

To enable this to happen, it calls for substantial reconfiguration of the sector and makes it clear that additional investment (over and above increases in line with GDP for core funding) will only be made in return for that. The HEFCW and the sector have responded quickly, with major proposals well in hand, including for three large-scale mergers and many other smaller but important areas of greater collaboration or rationalisation of provision. The Assembly Government has responded by providing the first tranches of significant additional resources to enable initial developments to proceed.

Equally prominent in Reaching Higher is the goal of extending access to higher education to under-represented groups and communities, where higher education in Wales already does better than other parts of the UK. Again the HEFCW and institutions have responded quickly: underpinned by substantial additional Assembly Government investment, four Reaching Wider partnerships are being established which, taken together, will cover the whole of Wales. They involve HEIs, FEIs, schools, and community groups and organisations.

The Scottish Parliament has, we understand, full competence in relation to primary and secondary legislation for higher education.

By contrast, the Assembly has powers only in respect of secondary legislation, and these do not extend to tuition fees and most aspects of student support. Discussions are in train between the Assembly and Westminster Governments about the possible devolution to the Assembly Government of powers and funding in respect of all aspects of student support.

The Scottish Parliament has used its powers to abolish up-front tuition fees, to provide for the payment of fees post-graduation by those earning above a threshold, and to introduce a system of means-tested grants. The Scottish Executive has also indicated its intention to legislate to merge the functions of the Scottish Higher and Further Education Funding Councils to form one new body.

The Assembly Government has indicated to the Westminster Government that it would wish to see primary legislation passed which would give HEFCW an explicit planning role and to enable the HEFCW and the National Council for Education and Training for Wales (which have certain staff and systems in common) to provide services one for the other. It has no power to effect these changes through secondary legislation. It is not clear whether and when the primary legislative changes sought by the Assembly Government will be introduced.

Our experience of the Assembly’s scrutiny and accountability arrangements

This has three dimensions: our relationship with the Assembly Government; our relationship with the Assembly’s Education and Lifelong Learning Committee; and the role of the Assembly’s Audit Committee.

The Assembly Government

There are regular monitoring meetings between the Council’s Chairman and Chief Executive and the Minister, and between officers of the Council and officials of the Assembly Government. These provide not only a full opportunity for monitoring and scrutiny but also for discussion of major policy and programme issues. They are buttressed by good and regular informal contact at officer level.

Increasing attention is being paid by the Assembly Government to the importance of higher education to the Welsh economy. This involves us in regular, mainly informal discussions with officials in the Assembly’s Economic Development Department, although these have recently been given greater impetus and importance by what is intended to be a regular series of meetings chaired jointly by the Minister for Education and Lifelong Learning and the Minister for Economic Development with the chairs and chief executives of the Welsh Development Agency, the National Council for Education and Training for Wales and the HEFCW. More recently, this has been given added importance by the transfer of responsibility for knowledge exploitation from higher and further education to the Minister for Economic Development.

We also have an important relationship with the Assembly Government’s Health Department because of our responsibility for the higher education of doctors, dentists and other health professionals.

We believe that these arrangements work well on the whole, particularly that in respect of our direct relationship with our sponsor Minister and the Education and Training Department. We look to strengthen the arrangements in terms of our wider relationships with the Assembly Government and see a need for full coherence across all aspects of that relationship in future.

The Education and Lifelong Learning Committee

As noted above, the Committee has shown a consistent and deep interest in higher education in Wales and the work of the Council. In addition to considerable contact in the course of its major enquiry into higher education , we have given oral evidence on several occasions. We see this as an important aspect of the Council’s public accountability, as well as giving us the opportunity to hear Assembly Members’ views at first hand and to help them understand the issues facing HE in Wales and their potential role in addressing them. We have found the discussions probing, constructive and helpful, and we believe that the Committee shares this view.

In view of the growing importance attached to the HE contribution to the economy, we would welcome dialogue with the Economic Development Committee; and the two committees might wish to consider looking at some HE issues together.

The Audit Committee

Higher Education Funding Council For Wales
May 2003