Paper from the Minister for Education and Skills to the Finance Committee for their review of Higher Education Finances
Introduction
1. As outlined in the Welsh Government Policy Statement on higher education, I believe that Welsh Higher Education is a success story. The sector contributes more than £3 billion a year in gross expenditure to our economy and Universities are significant employers, with more than 24,000 employees. They play a major role in supporting higher-end skills development, as well as generating opportunities for further growth through innovation and engagement with businesses.
2. The Welsh Government remains committed to opening up higher education to all those with the potential to benefit from it. We have seen success here too – the number of Welsh-domiciled students enrolled in higher education in the UK has risen from 93,405 in 2000/01 to 102,110 in 2011/12.
3. Our universities generally score highly in surveys of student satisfaction. They have been more successful in achieving participation by students from non-traditional backgrounds than other areas of Britain. They have considerable strengths in research and teaching and we are proud that Wales is a net importer of students and its higher education system is held in high regard around the world.
4. Changes to higher education funding and student finance arrangements in Wales introduced in 2012/13 have put the HE sector in a much stronger financial position.
5. Part one of the paper will outline the governance and control framework for the modelling of student finance and higher education to ensure that the policy is sustainable, its impact on finances, on regulation and legislation and of course on students and their ability to benefit from higher education. I will also outline my future plans for a review of higher education and student finance in Wales.
6. Part two of the report is a contribution from the Chief Scientific Advisor on the performance and funding of research in Wales.]
Part 1
Tuition fee income and support, the financial impact
7. In 2010, the previous Minister announced the Welsh Government’s response to the UK Government’s decision to significantly increase tuition fees in England. The basic tuition fee in Wales was increased to £6,000 (since revised to £4,000) per annum from academic year 2012/2013 and higher education institutions (HEIs) are able to charge tuition fees up to £9,000 per annum, providing they can demonstrate a commitment to widening access and other strategic objectives through fee plans approved by the Higher Education Funding Council for Wales (HEFCW). Welsh students are eligible for a Tuition Fee Grant (TFG) to cover any
real-terms increase in fees.
Governance and control of the modelling of student finance and higher education expenditure
8. Student Finance policy is underpinned by a sophisticated financial model which takes into account the current financial provision set aside for higher education in Wales as well as other sources of institutional income such as tuition fees. Forecasts are reviewed regularly as new or more robust data becomes available. Updated forecasts are produced by the Knowledge and Analytical Services Department at regular points during the financial year to ensure that the latest information regarding student behaviour, demographic trends, take-up rates, socio economic factors and other relevant data are taken into account.
9. Decisions to amend the assumptions contained in the model are based on advice from a Student Support Forecasting User Group (SSFUG) of officials which includes representatives from Higher Education Division, Knowledge and Analytical Services, Corporate Services Division and HEFCW.
10. In addition to discussions at the SSFUG, the high-level modelling assumptions are discussed at the Higher Education Funding and Student Finance Project Board and the Higher Education Delivery Programme Board. These Boards are made up of Welsh Government officials and key delivery partners including the Student Loans Company, HEFCW, Higher Education Wales and the Welsh Local Government Association.
11. The revised assumptions, data and macro economic factors are entered into the student finance model, which produces future forecasts.
Original tuition fee grant (TFG) financial modelling (2010/11)
12. To support the HE policy changes introduced in 2010, detailed financial modelling was carried out on the impact of increased tuition fees at universities and the additional funding that would be provided to Welsh domiciled full-time undergraduate students to cover any increase in fees.
13. In order to complete the initial modelling, a number of assumptions were made regarding expected student numbers, loan take up and a number of other factors. These assumptions were based on previous years’ trend data as well as future estimates about student and institutional behaviour.
14. The original modelling for the TFG was carried out in autumn 2010 and various scenarios were modelled. The models have been released following Freedom of Information requests in February (ref Ed33) and March (ref Ed53) 2011. The modelling scenarios included maximum tuition fees of £7,000 and £9,000. The information can be found via the following link: http://wales.gov.uk/publications/accessinfo/disclogs/dr2011/addysg/?lang=en
15. The policy announced in November 2010 was based on the following assumptions for academic year (AY) 2012/13:
· a maximum variable tuition fee of £7,000 per annum (pa) at Welsh and English HEIs;
· a fee of £3,500 pa for Northern Irish HEIs; and a tuition fee of £2,190 pa at Scottish HEIs (2011/12 fee increased by inflation of 2.7%);
· 100% of students taking up tuition fee grants;
· financial year split: 51.5% previous AY and 48.5% current AY;
· future years’ forecasts were based on tuition fees, both loan and grant elements, increasing by inflation each year. Inflation was forecasted as 2.7% for 2012/13 onwards:
· continuing students would not be eligible for the new support and would be subject to the existing package.
Table 1 shows the student numbers that would be eligible for support
Table 1 - student numbers by Academic Year
|
Student number projections (thousands) |
2012/13 |
2013/14 |
2014/15 |
2015/16 |
2016/17 |
|
Welsh in Welsh HEIs full fee-loans |
11.991 |
21.982 |
30.433 |
32.837 |
34.182 |
|
Welsh in other UK HEIs full fee-loans |
5.043 |
9.243 |
12.795 |
13.806 |
14.371 |
|
EU students |
0.803 |
1.485 |
2.061 |
2.225 |
2.316 |
|
UK (non-Welsh) students in Wales |
8.679 |
16.055 |
22.288 |
24.063 |
25.049 |
Table.2: Forecasts for financial year 2012-13 to 2016-17 (Based on above assumptions)
|
Grant/Loan (Millions) |
2012-13 |
2013-14 |
2014-15 |
2015-16 |
2016-17 |
|
Tuition Fee Loans |
145.2 |
161.6 |
169.7 |
174.7 |
179.2 |
|
New Fee Grant |
31.5 |
92.7 |
147.3 |
182.9 |
198.9 |
|
RAB* Charge |
47.0 |
53.4 |
58.0 |
61.4 |
62.9 |
* RAB – Resource Accounting Budget
16. The assumptions contained in the modelling were revised when institutions in Wales submitted their fee plans (to HEFCW) containing estimated fee levels. Whilst at that stage it was not possible to confirm the exact average fee level in Wales, it was decided that the modelling should take a prudent approach and assume an average fee of £9,000 pa. The revised modelling can be found in Table 3:
Table 3: Forecasts for financial Year 2012-13 – 2016-17
|
Grant/Loan (Millions) |
2012-13 |
2013-14 |
2014-15 |
2015-16 |
2016-17 |
|
Tuition Fee Loans |
141.6 |
157.8 |
166.0 |
171.3 |
175.9 |
|
New Fee Grant |
51.8 |
150.4 |
236.1 |
292.5 |
314.3 |
|
RAB charge |
44.5 |
47.5 |
48.2 |
49.5 |
50.3 |
Tuition fee grant financial modelling (2012/13)
17. The final forecasts prior to academic year 2012/13 were produced in July 2012. The following assumptions were agreed:
· a maximum variable tuition fee of £9,000 pa;
· 100% of students taking up a tuition fee grant;
· financial year split: 51.5% previous AY and 48.5% current AY;
· future years’ forecasts are based on tuition fees, both loan and grant elements, increasing by inflation each year. Inflation was forecast at 3.22% in 2013/14, 3.3% in 2014/15 and 3.3% in 2015/16.
Table 4 shows the student numbers that would be eligible for support.
Table 4 Student numbers by Academic Year
|
Student number projections (thousands) |
2012/13 |
2013/14 |
2014/15 |
2015/16 |
2016/17 |
|
Welsh in Welsh HEIs full fee-loans |
11.908 |
21.183 |
29.128 |
31.366 |
31.895 |
|
Welsh in other UK HEIs full fee-loans |
6.149 |
11.148 |
15.397 |
16.580 |
16.860 |
|
EU students |
1.079 |
1.962 |
2.730 |
2.948 |
3.000 |
|
UK (non-Welsh) students in Wales |
10.614 |
18.753 |
25.601 |
27.501 |
27.953 |
Table 5: Forecasts for financial year 2012-13 to 2016-17 (as of July 2012)
|
Grant/Loan (Millions) |
2012-13 |
2013-14 |
2014-15 |
2015-16 |
2016-17 |
|
Tuition Fee Loans |
138.9 |
155.3 |
164.3 |
170.8 |
176.1 |
|
New Fee Grant (a) |
51.8 |
150.8 |
238.0 |
296.4 |
319.5 |
|
RAB Charge |
43.6 |
46.7 |
47.7 |
49.4 |
50.3 |
(a) £5,535 from 12/13 – difference between current fees and £9k
Current tuition fee grant financial modelling (2013/14)
18. Using up-to-date information provided by the Student Loans Company (SLC), HEFCW, UCAS and HESA and taking account of the Ministerial statement on the 13 September 2012, the following changes to the assumptions contained in the student finance model were agreed:
For 2012/13;
· a tuition fee of £8,680 pa for Welsh students at Welsh HEIs (HEFCW average);
· a tuition fee of £8,385 pa for Welsh students at English HEIs (Office for Fair Access (OFFA) average);
· a tuition fee of £9,000 pa for Welsh students at Scottish and Northern Irish HEIs;
· a tuition fee of £8,902 pa for other UK students at Welsh HEIs (HEFCW average);
· 98% of students taking up a tuition fee grant; and
· financial year split: 51.5% previous AY and 48.5% current AY.
Future years’ forecasts are based on;
- a tuition fee of £8,291 pa for Welsh students at Welsh HEIs in 2013/14 (HEFCW average), 2014/15 and 2015/16;
- a tuition fee of £8,507 pa for Welsh students at English HEIs in 2013/14, 2014/15 and 2015/16 (OFFA average);
- a tuition fee of £9,000 pa for Welsh Students at Scottish and Northern Irish HEIs in 2013/14, 2014/15 and 2015/16;
- a tuition fee of £8,718 pa for other UK students at Welsh HEIs in 2013/14 (HEFCW average), 2014/15 and 2015/16;
- for Welsh domiciled students, the tuition fee loan would increase by inflation in 2013/14, 2014/15 and 2015/16, and the tuition fee grant element of fee support would decrease accordingly. Inflation was forecasted as 3.22% in 2013/14, 3.1% in 2014/15 and 3.2% in 2015/16;
- a tuition fee grant take-up rate of 98%;
- a financial year split: 51.5% previous AY and 48.5% current AY.
Table 6 shows the number of students eligible for support.
Table 6
|
Student number projections (thousands) |
2012/13 |
2013/14 |
2014/15 |
2015/16 |
2016/17 |
|
Welsh in Welsh HEIs full fee-loans |
11.821 |
21.198 |
29.196 |
31.447 |
31.978 |
|
Welsh in other UK HEIs full fee-loans |
6.056 |
11.058 |
15.294 |
16.473 |
16.751 |
|
EU students |
1.006 |
1.835 |
2.554 |
2.760 |
2.808 |
|
UK (non-Welsh) students in Wales |
11.006 |
19.606 |
26.297 |
28.117 |
28.537 |
Its should be noted that actual information on student numbers for 2012-13 are not yet available
Table 7: Forecasts for 2012-13 to 2016-17
|
Grant/Loan (Millions) |
2012-13 |
2013-14 |
2014-15 |
2015-16 |
2016-17 |
|
Tuition Fee Loans |
139.8 |
155.6 |
164.4 |
171.4 |
176.7 |
|
New Fee Grant (a)(b) |
47.2 |
127.2 |
185.7 |
219.3 |
229.7 |
|
RAB Charge |
43.9 |
46.8 |
47.6 |
49.5 |
50.5 |
(a) £5,535 from 12/13 – difference between current fees and £9k
(b) actual outturn data from SLC for 2012-13 was £47.8m
Differences in the modelling from 2011 – 2013
Chart 7.1
19. Since the initial forecasts the expected cost of the tuition fee grant (during the lifetime of this Government) has decreased from £1.2 billion over five years to £809 million.
20. One of the main reasons for the decrease in the forecast cost of the tuition fee grant is that the average tuition fee for Welsh students has reduced from £9,000 pa to £8,680 pa for 2012-13 and from £9,000 pa to £8,291 pa for future years.
Chart 7.2
21. There has been a slight reduction in the expected cost of the tuition fee loan, with the costs dropping from £830 million over five years to £808 million over the same period, this reflects a change in the expected take-up rate from 100% to 98% (from AY 2013/14).
Additional Income into HEIs
22. In addition to the tuition fee grant provided by the Welsh Government, HEIs also receive income from other sources, for example tuition fee income from non Welsh domiciled students studying in Wales and funding for research.
23. The following assumptions are contained in the modelling for tables 8 and 9 which assumes that:
· current levels of cross border flows and student recruitment continue at current levels.
24. Data for the financial year 2016-17 has not been included as information concerning Welsh Government budgets is not available at the present time. The budget for HEFCW will be dependent on finalisation of the UK Government settlement to the Welsh Government and the agreed budget provision for the Department for Education and Skills. However, it would be prudent to plan on the continuation cuts to budgets in 2016-17.
25. The planning assumptions of possible reductions would need to be applied to the overall Education and Skills budget, and then consideration would need to be given to areas where funding is protected such as schools etc.
Table 8: forecasted additional income for HEIs in cash-terms (financial year)
Chart 9
Table 10: forecasted additional income for HEIs in real-terms (financial year)
Chart 11
26. In cash terms, income to Welsh HEIs is projected to increase in each year for the lifetime of this Government.
27. Income from funding body grants is projected to decrease over the next few years. However, the contribution from non Welsh domiciled students’ fees is expected to increase. All other sources of income are likely to remain at a relatively similar levels.
Cross-border flows
28. Wales is a net importer of students from other parts of the UK, and as a result institutions in Wales receive far more fee income from those students than HEFCW pays in fee grant to institutions outside Wales.
29. Chart 12 shows the value of fees projected to be paid by HEFCW to HEIs outside Wales and the value of fees projected to be received by Welsh HEIs from outside Wales.
Chart 12
Table 13 Student numbers by academic year
|
£million |
2012/13 |
2013/14 |
2014/15 |
2015/16 |
2016/17 |
|
Welsh into English |
15.1 |
41.1 |
60.3 |
71.3 |
74.7 |
|
Other UK into Welsh |
29.0 |
79.7 |
119.5 |
146.4 |
157.0 |
Student Debt
30. The Programme for Government commitment (and in its predecessor “One Wales”) to students to mitigate the cost of any increase in tuition fees introduced by the UK Government has been driven by our belief that that access to higher education in Wales should be on an individuals ability not what they can afford to pay.
31. Chart 14 forecasts the projected debt level for Welsh domiciled students when compared to their English counterparts during the next 10 years (based on the current student finance systems in both countries, excluding interest charges). It demonstrates the impact that the tuition fee grant and the partial cancellation of maintenance loans policies have had on Welsh students.
Chart 14
Notes:
i. For illustrative purposes only. Exact figures for projections should not be used.
ii. Historic data up to present (including 2011/12 totals) is based on Student Loan Company data on numbers of borrowers and total amount owed.
iii. Projections based on most recent 4 year average of changes in numbers of borrowers and amount owed.
Conclusion
32. The tuition fee policy introduced in 2012/13 will remain in place for the term of this Government. The policy has been fully costed and remains sustainable. The Higher Education Funding Council for Wales (HEFCW) has concluded the average increase in funding for HE institutions (HEIs) in Wales is 13.8 per cent in 2013/14. Based on the assumptions contained in the student finance model, the HE sector will continue to receive increases in total income until at least 2015-16, if institutions are able to recruit their allocated numbers of students. However, these figures will be dependent on the outcome of the next spending review and its impact on Welsh Government funding.
33. Even in the current economic climate and with significant pressures on government funding, income to the HE sector in Wales remains strong and is forecast to increase over time without significantly increasing debt on the part of Welsh domiciled students.
34. The financial model that supports this policy is reviewed on a monthly basis by officials and updated when new information is obtained.
Other implications of HE funding reform
35. The new higher education funding and statutory student support arrangements have direct implications for the way in which HEFCW discharges its functions (the funding implications have already been dealt with above).
36. HEFCW has a statutory duty, under the Further and Higher Education Act 1992, to secure that provision is made for assessing the quality of education provided in institutions for whose activities the Council provides, or is considering providing, financial support. HEFCW currently discharges this duty via the Quality Assurance Agency (QAA) and enforces specific requirements concerning the quality of higher education via conditions attached to the funding it allocates to institutions. HEFCW’s requirements in respect of institutions’ financial health and governance arrangements are also implemented via conditions attached to funding made available to institutions. These conditions are included in the financial memoranda between the Council and individual institutions.
37. The current arrangements for higher education tuition fees are underpinned by the Higher Education Act 2004 which makes provision for institutions in Wales charging fees above the basic amount (currently £4,000) to secure equality of access to higher education.[1] These arrangements have been implemented under the new fees regime in the form of fee plans and in March 2011, HEFCW was designated as the body with statutory responsibility in Wales for the approval and enforcement of fee plans. In line with the new arrangements for the regulation of tuition fees from 1 September 2012, all institutions in receipt of funding from HEFCW which seek to charge fees above £4,000 per annum for full-time undergraduate level courses are required to have an approved fee plan in place. An institutional fee plan must set out measures, such as outreach work and financial support, to be delivered by the institution to promote higher education and equality of access to higher education. HEFCW’s ability to enforce fee controls and fee plan commitments is also underpinned by conditions attached to funding which the Council allocates to institutions.
38. Under the new funding arrangements introduced from academic year 2012/13, a significant proportion of higher education recurrent grant funding (previously allocated to institutions by HEFCW under section 65 of the Further and Higher Education Act 1992), will start to be paid out by HEFCW through student tuition fee grants. Such grants to which eligible students are entitled to are outside the regime through which the Welsh Government makes funding available to HEFCW to fund higher education. Over time this shift in funding will have implications for the continued discharge of HEFCW’s functions.
39. HEFCW’s influence over the higher education sector through conditions attached to the recurrent grant allocated to institutions will reduce over time as a significantly greater proportion of institutions’ funding is derived from tuition fees. This has implications for the way in which HEFCW:
· imposes fee controls and enforces fee plan commitments;
· makes provision for the assessment of the quality of higher education; and
· provides assurance about institutions’ financial health and governance arrangements.
40. The higher education landscape is undergoing significant change both in terms of the type of provision and the nature of the provider base, for example, growth in e-learning and distance learning and a more differentiated provider base with more higher education courses being offered by FE institutions and by other providers. In addition, as the recurrent grant allocated by HEFCW to Welsh HE institutions is replaced by fee income, it will become increasingly difficult to rely on HEFCW’s existing functions in order to: enforce fee controls, assess the quality of higher education provision and provide assurance about the use of public funds. The regulatory controls administered by HEFCW need to operate in relation to the full range of courses which the Welsh Ministers automatically designate for statutory student support. Consequently, HEFCW’s functions need to be amended to reflect the higher education landscape changes and the tuition fee support and funding arrangements.
41. The Welsh Government considers that all institutions and other providers offering higher education courses which are designated for the purpose of statutory student support should be required to comply with regulatory controls in order to protect the interests of students, taxpayers and Welsh society (although there will be a greater measure of control in respect of those courses which are automatically designated for the purposes of student support proportionate to the nature of support made available). A new regulatory framework for higher education is needed to provide assurance about the financial health and governance of higher education providers and the quality of their provision, to enforce fee controls and to safeguard equality of opportunity to access higher education in Wales. The Welsh Government’s intention is to bring forward a bill during this Assembly’s term to seek provision for HEFCW to have regulatory oversight of all higher education courses automatically designated for statutory student support delivered in Wales. The specific provisions to be sought are described in the sections which follow.
Challenges and Opportunities
42. The HE sector has experienced much change. New types of providers have entered the market in recent years and significant numbers of HE courses are now being taught in further education colleges. Devolution has brought new powers to Wales to enable the Welsh Government to work more closely with universities and other HE providers. Implementation of the Browne review’s recommendations by the UK government has brought fundamental change to the way in which higher education is funded. New higher education funding arrangements have brought consequential changes for the way we support learners in higher education.
43. Structural changes driven by successive Welsh Governments have resulted in a Welsh higher education sector that is stronger and more sustainable. In April this year, the former University of Glamorgan and University of Wales, Newport merged to become the new University of South Wales serving the whole of the south-east Wales region. The University of Wales, Trinity St David and Swansea Metropolitan took effect in August 2013.
44. The Welsh Government will work in partnership with HE providers and with HEFCW to deliver our shared ambition for a world-class higher education system in Wales that serves the interests of learners and the nation in the twenty-first century. We believe that this close cooperation between Government and the sector itself can work to mutual benefit.
45. To ensure that Wales has the skills it needs to meet the challenges of the future, universities and students have to have access to the resources and support they need. The Welsh Government has set a clear strategy in terms of tuition fees and support. The UK Government continues to make a number of piecemeal changes, some of which may have an unintended impact on universities in Wales.
46. University funding and student finance models will require careful monitoring and review in the light of any further changes in policy or student numbers and flows in order to minimise potential negative impacts and ensure that universities in Wales are not destabilised as a result. With risk comes opportunity and universities must seek to maximise any opportunities in this shifting landscape.
47. The context within which Welsh higher education providers operate is changing rapidly. Fundamental changes to the way in which UK higher education is funded, together with technological innovation and increased student expectations, represent a challenge to traditional models of delivery. The distinction between different modes of delivery is becoming increasingly blurred from the learners’ point of view, with many students also working full or part time and with full- or part-time caring commitments. The HE sector in Wales can respond by developing more flexible models of provision, both full time and part time, to build a more successful and sustainable future.
International students
48. Universities and the Welsh Government will work in partnership to develop international links that will help Wales become a partner of choice for international business and investment and destination of choice for international students and staff. Wales needs to strengthen and maximise the value of the international connections already forged by universities, using those connections to drive inward investment. Wales must project the consistent message overseas that we are open for business and that international students add to the richness and diversity of the student body and are, therefore, welcome and valued. Students and staff in Wales must be supported to be internationally mobile – through physically relocating to another country, or through increased online participation with international peers.
Review of HE and Student Finance
49. I announced on 18 November, my intention to undertake a review of higher education and student finance chaired by the Vice Chancellor of Aberdeen University, Professor Sir Ian Diamond. The review will commence in the early part of 2014 and will report to the next Welsh Government in 2016.
50. This review is consistent with the Welsh Governments original announcement in the Senedd in November 2010. We made it clear that we do not support full cost or near cost fees, do not believe that higher education should be organised on the basis of a market or that it is sustainable long term for the UK to adopt a policy of having the highest tuition fees for higher education in the world outside the United States.
51. I want to see a successful higher education system in Wales supported by a robust and sustainable funding regime. I also want to see a robust student support system linked to the principles of access and fairness.
52. Given the wide ranging scope that the panel will need to cover, I will be inviting political parties in Wales to nominate individuals to join the expert panel to take forward this review.
53. Whilst the panel is being formed, I can confirm that my priorities for the review are:
· widening Access – we need to ensure that any system has widening access as its core objective, is progressive and equitable;
· supporting the skills needs for Wales;
· strengthening part-time and postgraduate HE in Wales; and
· long-term financial sustainability
Student Choice
54. It is encouraging to see so many people wanting to go on to higher education. I believe that Higher education should be available to all those with the potential to benefit regardless of age, gender, mode and level of study, country of origin and background. Universities in Wales should aspire to become the destination of first choice for students from Wales, the UK and across the world.
55. To that end, we believe that we have put in place what we believe is the most equitable student finance system we’ve ever created." Even though we are still facing tough economic and financial conditions we continue to provide targeted support for students who live in Wales.
56. For illustrative purposes, students starting their studies on or after the 1 September 2013 were eligible for:
· a means tested maintenance non repayable grant of up to £5,161;
· a means tested maintenance loan of up to £4,715
57. In addition the following support will be available to everybody regardless of household income:
· A maximum tuition fee loan of £3,575
· A tuition fee grant (non repayable) of up to £5,425: and
· a partial cancellation of up to £1,500 of their maintenance loans when they start repayment.
58. The Welsh Government’s commitment to supporting Welsh students remains unequivocal and in my view we provide the most generous student support system in the UK.
59. However, regardless of the support provided by the Welsh Government the sector has a duty to undertake additional work to support students, whatever their background. We will not make a reality of our ambitions for a high-skilled economy in Wales unless HE institutions collaborate deeply with schools and further education providers to ensure that opportunities for progression are available for all learners. I want those who are able to benefit from opportunities such as higher skills development or continuing professional development to be able to progress.
60. It follows that universities need to see themselves as partners, not just within the HE sector, but also within the wider range of stakeholders in supporting economic and skills development.
61. I also expect universities to focus on the employability of their students. Economic success for Wales depends on a highly skilled and capable workforce.
62. 91% of graduates from full-time first degree courses in Wales are employed and/or studying within six months of leaving higher education – so we are doing something right. But that doesn't mean that more can't be done to enhance the employability prospects of other students, especially those who choose to study part time. HE institutions must offer meaningful opportunities for students to engage in work experience. I also expect them to continue working with employers to identify specific training needs profiles, highlighting for example what will be needed, and when, in terms of skills, levels and qualifications. Students are becoming ever more careful about what courses and at what institutions they target and we must be able to demonstrate a clear step towards career enhancement through their HE experience. Employability is and will increasingly be key.
63. While universities will be benefitting from additional income over the next few years, the Welsh Government in return will be looking to them to play their full part in supporting our strategic agenda for Wales. HEFCW will have new powers through legislation we will be bringing forward next year, but universities must step up to the plate and make significant improvements in relation to widening access and other priorities.
Part 2
Research Grant Income from Research Councils UK (RCUK)
Table 15 Research grant income 2011-12 £000s
|
Research Council |
AHRC |
BBSRC |
ESRC |
EPSRC |
MRC |
NERC |
STFC |
Other |
Total |
|
English HEIs |
41,393 |
134,816 |
97,686 |
449,353 |
238,281 |
90,136 |
94,812 |
58,219 |
1,204,696 |
|
Welsh HEIs |
2,762 |
9,592 |
7,714 |
15,711 |
5,149 |
5,149 |
2,888 |
785 |
49,750 |
|
Scottish HEIs |
6,066 |
38,168 |
10,498 |
71,181 |
58,905 |
21,196 |
12,681 |
10,520 |
229,215 |
|
N. Ireland HEIs |
661 |
1,262 |
2,185 |
9,913 |
2,153 |
692 |
690 |
5,807 |
23,363 |
|
All UK HEIs |
50,882 |
183,838 |
118,083 |
546,158 |
304,488 |
117,173 |
111,071 |
75,331 |
1,507,024 |
|
|
|
|
|
|
|
|
|
|
|
|
England % UK |
81.4% |
73.3% |
82.7% |
82.3% |
78.3% |
76.9% |
85.4% |
77.3% |
79.9% |
|
Wales % UK |
5.4% |
5.2% |
6.5% |
2.9% |
1.7% |
4.4% |
2.6% |
1.0% |
3.3% |
|
Scotland % UK |
11.9% |
20.8% |
8.9% |
13.0% |
19.3% |
18.1% |
11.4% |
14.0% |
15.2% |
|
N. I. % UK |
1.3% |
0.7% |
1.9% |
1.8% |
0.7% |
0.6% |
0.6% |
7.7% |
1.6% |
|
All UK HEIs |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
Source: HESA Finance Records 2011-12. The ‘Other’ column consists of the Royal Society, British Academy and Royal Society of Edinburgh funding. These are not Research Councils but HESA includes them in the category for data collection purposes
1. Wales’s Research Council income has been consistently between 3.1% and 3.4%. A series of reviews – by the then Department for Children, Education and Lifelong Learning, by a subgroup of the HEFCW Research, Innovation and Engagement Committee, and most recently by the Chief Scientific Advisers Department – all looked at why Welsh HE research income is not closer to the 4.5% target set for the sector by the ‘Reaching Higher’ strategy in 2002 or the 5% in the Science for Wales strategy (based on Wales’ 4.9%, share of UK population). The leading factor seems to be seems to be low numbers of academics in disciplines relating to the highest-spending research councils, the Engineering and Physical Science Research Council (EPSRC) and the Medical Research Council (MRC).
2. Note that Welsh universities do perform strongly in grants from the Arts and Humanities Research Council (AHRC), the Biotechnology and Biological Sciences Research Council (BBSRC) and the Economic and Social Research Council (ESRC). Except for the BBSRC these bodies have only modest budgets. There are areas of genuine strength which would be funded by the EPSRC and MRC including civil engineering, psychology and neuroscience. However, scale is a significant challenge for Wales. The four main research-active universities in Wales – Cardiff, Swansea, Aberystwyth and Bangor are all relatively small in UK terms. Remaining Welsh research is of a smaller scale.
3. A number of initiatives are underway to raise Wales’ share of Research Council funding:
· Sêr Cymru – a programme to attract world-class scientific talent to Wales;
· National Research Networks - to create larger and more competitive research teams;
· Smaller joint co-investments alongside HEFCW and the main research universities, e.g. to promote Wales' research, improve research leaders' training and understand performance.
· HEFCW are focusing their research funding (the QR stream) to incentivise and reinforce ‘sustainable research excellence’.