We need a Wales-wide review of Higher Education
Both HE Finance and HE Governance.
It’s almost twelve years since I left my job as Education Minister, so I have inevitably forgotten a lot of what I used to know about higher education policy, and there have been further developments since I left the Senedd in 2016. Fortunately I wrote a fair bit about it in my book, Ministering to Education, which I launched at Cardiff University in 2014, and I have been able to refresh my memory about some of the history of the current fee system.
One of the things I have definitely forgotten more about than I have retained is the RAB charge. The Minister for Higher Education in Wales, Vikki Howells MS, rightly said in a recent statement that she wanted
more clarity on the details of HM Treasury’s rules on our student loans budget, so that we can much better plan for broader policy on student support.
The RAB charge, as former Education Minister Jeremy Miles MS said in 2024 ‘is the annual estimate of the proportion of the student loan book that will not be repaid’. The need for Treasury support is one of the factors which limits the overall autonomy of the Welsh Government over fees and student support, as Jim Dickinson noted on WonkHE after Jeremy’s statement. This study by London Economics contains some helpful background on the Welsh student support system:
By the way, if the UK Government does go through with plans that mean loan repayments kick in at the same level as the minimum wage, as seems likely from next year, then people will be asking deeper questions about the student loan system overall, and the so-called ‘graduate premium’ (the extra earnings graduates supposedly earn above non-graduates).
Although the Welsh Government does have some limitations on what it can do, it still has considerable autonomy over HE and student support. So today, I am calling for a review of higher education funding and governance. The review should report shortly after the 2026 Senedd elections, so that there is a prospect of cross-party co-operation in implementing the recommendations that it makes, as there was with the Diamond Review in 2016, which reported after the 2016 Assembly elections.
I believe that any review should examine:
the overall focus of HE policy in Wales, and whether this is now supporting the needs of Wales, its society, economy and culture
how Wales can ensure a greater proportion of its young people go on to further or higher education or apprenticeships and skills training
the balance between student funding and the financing of higher education institutions, including the different funding streams which have grown up in recent years, such as Seren
whether there ways to encourage a more sustainable future for Welsh HE by recognising the strengths of delivering a system with a greater focus on students in their communities, including life-long learning
the need for a Wales-wide system to protect strategic subjects which are under pressure within HE
How to address students’ aspirations for ‘shortage’ subjects which are not taught or are taught only in a limited way in Wales.
whether legislation is needed to strengthen the Welsh Government’s role in ensuring a strategic direction for higher education and the governance of higher education institutions, including embedding social partnership principles into university governing bodies, with representatives of staff, their unions and local communities, and a larger role for the Welsh Government in ensuring the accountability of HE governing bodies
whether there are opportunities, five years after leaving the EU and with little apparent prospect of rejoining in the immediate future, of using changes in state aid and other rules to allow a more directive approach to the higher education sector
how to prevent university administrations undermining the rights of academics to freedom of speech under the guise of HR policies
A little history might help. A tendency has developed recently to see support for student funding and support for higher education institutions as coming from separate budgets. With student fees now paying the bulk of HE funding, they are actually pretty much the same thing. Back in 2010, as the Browne Review reported and we as ministers considered what was need for a One-Wales Government response, we had to face this reality. As I wrote in my 2014 book,
it became evident to me that we should draw together the budgets for student support and higher education, and see if it was feasible to create a single funding stream for higher education.
That of course was what we did. Our objective at the time was to see if we could
create a win-win situation, in which support for our students remained in place, while universities in Wales benefitted from a better funding stream – underpinned in part by a surplus of students from other parts of the UK coming to Wales
As I explained to the Senedd Enterprise and Business Committee in 2011, the system was sustainable but would be expensive. The relevant chapter in my book gives a lot of detail on this. I suggested to Huw Lewis when he succeeded me as Education Minister that he should commission a review of HE finance, to report after the 2016 Assembly election, which he did. This was the Diamond Commission. Its proposals reflected the outcomes of the first years of the new system. The Welsh Government response to Diamond at the time is here.
Almost ten years on from Diamond, it is time to look again at how the system is working. There have been some material changes which were not anticipated in 2016 such as the rapid decline in overseas taught postgraduates. The UK government should act to address this. Changes are needed in UK immigration law to make the UK once again an attractive place for overseas postgraduates.
Meanwhile, the Seren programme has developed a life of its own. When I commissioned Paul Murphy to look at why a lower proportion of Welsh school students were applying to Oxbridge, I envisaged a pilot scheme with a short-term focus. I said at the time:
I didn’t go to Oxbridge and I don’t believe that Oxbridge is the be-all and end-all of higher education. But I had recently seen evidence which suggests there has been a decline in the number of young people from Wales securing places at these two world class Universities. I saw this as potentially down to a lack of aspiration on behalf of some teachers and a lack of confidence amongst some of our young people.
Paul reported back after I left my post as Education Minister. The Seren scheme has now exploded with an infrastructure of its own. It seems to have something of a distorting effect on the Welsh HE system, without actually helping the Welsh Government achieve its aims of widening participation rates in HE. We need to get back to basic principles.
As my friend and colleague Professor Richard Wyn Jones recently pointed out:
The Welsh Government currently spends money on higher education via two main routes. Firstly, approximately £200 million per year is provided directly to Welsh universities through the allocations of the body now known as ‘Medr’. But secondly, as can be seen in the Table, well over five times more than that is spent every year on supporting the current generation of students from Wales.
Of the £1.15 billion in question, over £0.5 billion is spent on supporting students who study outside Wales, the majority in universities that are no better than what is available in Wales – specifically the universities of Chester, John Moores (Liverpool) and the West of England (UWE).
Combining expenditure on universities and supporting students, the total spent by the Welsh Government on higher education is comfortably over £1.3 billion a year – a significant chunk of its annual budget of around £26 billion.
If that money were to be spent in more imaginative and strategic ways, this represents more than enough to maintain a genuinely excellent higher education system in Wales while also supporting Welsh students.
The table Richard used on student finance is here:
You can see how that has grown over the years. But this is the opportunity. We could create a better system without incurring costs above those already budgeted.
I’m a bit less shouty about this than Richard. But I believe that we need a cross-party review of HE finance in Wales, including student support. In an ideal world, the UK Government would also recognise that the current system based on high fees isn’t working, and a greater level of public investment would support the higher education sector and be a spur to sustainable economic growth overall. But in its absence, we need to remember that the Welsh Government has agency, and the funding, to make a difference. It can also use that funding to plan and shape the higher education sector in Wales in the way that the Welsh Government wants, rather than let it develop on the basis of the haphazard, competitive and inevitably transient ambitions of temporarily incumbent vice-chancellors and their management teams.
Fifteen years ago, as education minister, I made a speech about higher education in Wales. I said
I will be blunt and I will be candid. In the first six months I have been in this post, I have begun to wonder whether the Higher Education sector in Wales actually wants the Assembly Government to have a higher education strategy, or whether it even believes that there is such a thing as a Welsh higher education sector….
Indeed, I am not clear – eleven years after the National Assembly was created, and thirteen years after our historic referendum vote – that the higher education sector in Wales welcomes devolution or democratic accountability at all. Since our education agenda in Wales is based on the principle of democratisation, that is problematic. Our agenda is the completion the next phase of what Raymond Williams almost 50 years ago called ‘the long revolution’.
Let’s remind ourselves of a phrase of Raymond Williams from that book: ‘We must certainly see the aspiration to extend the active process of learning, with the skills of literacy and other advanced communication, to all people rather than limited groups, as comparable in importance to the growth of democracy and the rise of scientific industry.’
Our agenda of democratisation relates to our ambitions to widen participation in HE still further, to a refocusing of the relationship between higher education and government, to the governance of HE institutions, and to the role of HE institutions within their regions, their communities, and internationally.
I have re-read the speech. Much of it is still relevant.
In December 2010, I said when introducing a different student support system in Wales from that in England:
We do not believe the market will protect culture, history and language and we will intervene to protect these subjects. We will plan the development of our higher-education system in Wales. If that puts us in the European mainstream, while England swims in a different direction, so be it.
Fifteen years on, I think these principles need to be reiterated.