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Written Statement - Statement on the Review of Higher Education Funding and Student Finance Arrangements in Wales

Huw Lewis, Minister for Education and Skills

On 18 November 2013 I announced that I had asked Professor Sir Ian Diamond, current Vice Chancellor of Aberdeen University, to chair a Review of Higher Education Funding and Student Finance Arrangements in Wales. I also announced that an expert panel would be established to support Sir Ian and given the importance and wide-ranging scope of the review that I would be inviting political parties in Wales to nominate individuals to join the Review Panel.

The review will commence this Spring. In Autumn 2015 Sir Ian will produce a factual summary of the evidence he and his review team has collected as part of their work.  His final report, including his final recommendations, will be issued by September 2016.

Welsh Government priorities for the review include:

  • widening access – ensuring that any future system has widening access at its core objective, is progressive and equitable;
  • supporting the skill needs of Wales;
  • strengthening part-time and postgraduate provision in Wales; and
  • long-term financial sustainability.

The full Terms of Reference for the review are attached at Annex A.

It is important to remember that our Higher Education sector starts this process from a robust financial position.  

Despite challenging economic circumstances and overall funding cuts from the UK Government, the Welsh Government has ensured the overall funding flowing in to Welsh Higher Education continues to be strong.  HEFCW distributed funds will increase from £358m in 2012/13 to £381m in 2013/14 and when one includes the incoming tuition fee payments, every Higher Education institution in Wales will receive more income than it did in 2012/13.  The Wales Audit Office has reported that the sector is forecasting an increase in overall income from £1.26bn in 2010/11 to £1.45bn in 2015/16.

Overall, funding to the sector in 2013/14 will increase by 13.8% and latest forecasts suggest that the existing funding regime will contribute an additional £290m during the lifetime of this Government when compared to the previous funding formula. Income is forecast to continue to increase up until 2021.

This is a healthy position from which Prof. Diamond can begin his work.

Given the complex and difficult issues to be explored, it is essential that the Review Panel consists of individuals who are expert and experienced in their field, who can carry the confidence of the higher education sector, and who between them have a deep understanding of the issues to be covered.

I am also grateful to all political parties in the Assembly who have provided constructive support in establishing this review.  

I am pleased to confirm that the panel will include the following:

  • Professor Sir Ian Diamond (Chair): Principal and Vice-Chancellor of the University of Aberdeen.  Previously Chief Executive of the Economic and Social Research Council. Chair of the Research Councils UK Executive Group (2004-2009), and former Deputy Vice-Chancellor at the University of Southampton. Chairman of the Universities UK Research Policy Network Committee, Chair of the Universities UK Group on Efficiency, and a member of the Scottish Science Advisory Council, the Council of CBI Scotland and the British Council Scotland Advisory Committee.  
  • Professor Colin Riordan: President and Vice-Chancellor at Cardiff University and Chair of Higher Education Wales. Professor Riordan is Vice-President and Board member of Universities UK, and Board member of the Leadership Foundation for Higher Education, the Edge Foundation, NARIC, UCAS and the Equality Challenge Unit. He is also Chair of the UK Higher Education International Unit.
  • Rob Humphreys: Director for Wales, Open University, and Vice Chair of Higher Education Wales. Former Director for Wales of the National Institute of Adult Continuing Education (NIACE). Former panel member for both the first and second “Rees Reviews” of HE funding and student hardship and fees; and the “Graham Review” of part-time HE fees and funding in Wales.
  • Stephanie Lloyd: President National Union of Students (NUS) Wales.
  • Martin Mansfield General Secretary Wales TUC. Former college lecturer. 2003-2005 worked as economic development special advisor to First Minister and Cabinet.
  • Professor Sheila Riddell: Director of the Centre for Research in Education Inclusion and Diversity, University of Edinburgh. Previously Director of the Strathclyde Centre for Disability Research, University of Glasgow. Led the Economic and Social Research Council (ESRC) Review of Widening Access Provision in Scotland and England.
  • Dr Gavan Conlon: Partner at London Economics and expert in the economics of education. Co-author of Higher Education in England: Do The Alternatives Add Up. Provided expert advice and analysis to the UK Department for Business, Innovation and Skills and the Department of Education, the European Parliament and OECD, also provided expert evidence to the UK Parliament’s BIS Committee Inquiry into Higher Education Fees and Funding.
  • Glyn Jones OBE: Chief Executive of Grŵp Llandrillo Menai. ColegauCymru Board member and former principal of Pembrokeshire College. Former member of the Programme Monitoring Committee of the European Structural Funds and the Wales Employment and Skills Board.
  • Ed Lester: Former Chief Executive of the Student Loans Company. Currently Chief Land Registrar and Chief Executive Land Registry. Trained accountant - worked in the oil and banking industries where he was a Treasurer and Head of Corporate Finance for the Finance House of HSBC. Former CEO Motability Finance and NHS Direct.
  • Gary Griffiths: Airbus UK Head of Early Careers Programmes; member of the 'Webb Review' Panel; sits on several advisory bodies including the Aerospace Sector Skills Strategy Group, Airbus Strategic International Project for Skills and UK Higher Engineering Apprenticeship Group. Currently working on the Aerospace 'Trailblazer' for the development of apprenticeships in England.

I have invited opposition party leaders to nominate a representative for membership of the Review Panel. I look forward to hearing from them regarding their respective nominees.

  • Dr David Blaney: Chief Executive and Council Member of Higher Education Funding Council Wales (HEFCW) will represent the Council as an observer on the panel.


END

Annex A

Review of Higher Education Funding and Student Finance Arrangements in Wales

Review Panel Terms of Reference

The Review Panel will consist of a Chair and panel members that are expert and experienced in their field and have a deep understanding of matters relating to higher education (HE) sector funding and student finance arrangements.

Role:

The Panel is required to conduct a wide-ranging review of HE sector funding and student finance arrangements. It will begin its work in the Spring of 2014 and produce by September 2016 a report for the Minister for Education and Skills that provides clear advice and costed recommendations for the future funding of the HE sector and student finance arrangements in Wales.  

The Panel’s recommendations will need to be deliverable, affordable and sustainable.  

Focus:

The Review will focus on issues relating to:

  • the promotion of social mobility and widening access to higher education;
  • the promotion of postgraduate learning opportunities in Wales and for Welsh domiciled students;
  • the funding of higher education in the light of continuing constraints on public expenditure;  
  • full-time and part-time tuition fees policy;
  • cross-border HE funding policy and arrangements;
  • student finance arrangements (including maintenance support for HE and further education FE students, with an emphasis on supporting learners from the lowest income backgrounds and most deprived communities in Wales);  
  • funding routes (AME, near cash and non cash);
  • the Higher Education Funding Council Wales’ role in the delivery of student finance; and
  • student debt.

Key Considerations:

The review will need to consider medium and longer-term policy options and funding, including any potential for savings incentive schemes to provide a more sustainable future model of HE funding and to help reduce levels of student debt.

The review will also need to consider:

  • current legislation and options for reform;  
  • the financial implications of any proposed models for Welsh Government, HM Treasury, students, HEFCW and the HE sector in Wales;  
  • operational delivery systems involving HEFCW, the Student Loans Company, Quality Assurance Agency (QAA) and other UK bodies;
  • alternative policy approaches being adopted by other UK governments and internationally;  
  • the cross-border implications of any policy changes proposed for Wales (including possible legislative competence issues);
  • identified skills needs for Wales;
  • postgraduate provision and industry sector concerns and/or requirements;  
  • the extent to which current policy and funding arrangements support widening access, and what more can be done;
  • related further education (FE) sector developments, for example HE in FE activity.

Approach:

The Panel will gather and evaluate available data, research and other evidence. The Panel may need to commission research to address gaps in the available evidence base.  Close engagement with stakeholders will be a necessity.  

The Panel will have due regard to the Welsh Government’s broad priorities for HE in Wales as set out in the Welsh Government’s Policy Statement on Higher Education June 2013.

Governance and working style:

  • Panel members will observe the seven principles of public life (selflessness, integrity, objectivity, accountability, openness, honesty, and leadership).  
  • Conclusions and recommendations should be evidence-based, impartial, well-considered and robust.  
  • Records of Review Panel meetings and activities will be kept. Discussions will, however, be conducted with a protocol of confidentiality in order to promote genuine debate.