Why should Wales subsidise English universities?
As the argument about increased tuition fees for English universities intensifies in the run-up to Thursday’s debate in the House of Commons, the Welsh Assembly Government last week announced that fees for students in Wales would rise to a basic level of £6000 per year, with a possible increase to £9000 “in certain circumstances”.
I’m a bit surprised that the WAG made this announcement in advance of the vote in Westminster, as it seems to me to be by no means certain that England will introduce the post-Browne system that Wales is copying. If the increased fee measure for England doesn’t get through Parliament then Welsh universities will find themselves out on a limb.
More generally, I find it extremely disappointing that there seems to be absolutely no independent thinking going on in Wales about Higher Education funding. The responsibility for this is devolved to the WAG, but time and time again it simply copies what the English are doing. What’s the point of having devolution if you haven’t got politicians willing and able to be different from the Westminster crowd?
One thing that Welsh Assembly Minister Leighton Andrews did announce that isn’t the case in England is that students domiciled in Wales would be protected from any tuition fee rise by a new system of grants, meaning that the Welsh Assembly will pick up the tab for Welsh students. They will still have to pay the existing fee level of £3290 per annum, but the WAG will pay the extra (between about £3K and £6K). This is good news for the students of course, but the grants will be available to Welsh students not just for Welsh universities but wherever they choose to study. Since about 16,000 Welsh students are currently at university in England, this means that the WAG is handing over a great big chunk (at least 16,000 × £3000 = £48 million) of its hard-earned budget straight back to England. It’s a very strange thing to do when the WAG is constantly complaining that the Barnett formula doesn’t give them enough money in the first place.
What’s more, the Welsh Assembly grants for Welsh students will be paid for by top-slicing the teaching grants that HECFW makes to Welsh universities. So further funding cuts for universities in Wales are going to be imposed precisely in order to subsidise English universities. This is hardly in the spirit of devolution either!
English students wanting to study in Wales will have to pay full whack, but will be paying to attend universities whose overall level of state funding is even lower than in England (at least for STEM subjects whose subsidy is protected in England). Currently about 25,000 English students study in Wales compared with the 16,000 Welsh students who study in England. If the new measures go ahead I can see fewer English students coming to Wales, and more Welsh students going to England. This will have deeply damaging consequences for the Welsh Higher Education system.
It’s very surprising that the Welsh Nationalists, Plaid Cymru, who form part of the governing coalition in the Welsh Assembly, have gone along with this strange move. It’s good for Welsh students, but not good for Welsh universities. I would have thought that the best plan for Welsh students would be to keep up the bursaries but apply them only for study in Wales. That way both students and institutions will benefit and the Welsh Assembly’s budget will actually be spent in Wales, which is surely what is supposed to happen…
POSTCRIPT: Leighton Andrews’ speech to the Welsh Assembly can be seen here.
In the Dark 
December 5, 2010 at 1:02 pm
Dear Peter,
I was interested to see your comments on this issue as I could make no sense of the WAG announcement when it came out. I now see that that is because there is no sense.
I don’t agree with the proposals made in England, but they do at least have a logical consistency — cut state funding per student by around 4000 pounds per year and demand that the students then pay additional fees to fill the gap and more or less retain teaching funding at current level, at least in those universities who can get away with the higher charge.
The Welsh proposal appears to be to slice the money off the teaching budget, give it to the students as grants, who then give it back to the university, so all that happens is that the money goes round in a circle (perhaps with the politically-convenient illusion that new money has appeared from somewhere). So for each Welsh student this does nothing to fill the 4000 pounds per student per year state funding cut that is presumably being imposed in Wales as well as England. Only for English students coming to Wales is the current funding level maintained.
Additionally a bunch of money leaks (note pun opportunity resisted) out of Wales to help support English universities, many of which are direct competitors to the Welsh universities, albeit to the benefit of Welsh students.
It’s a bizarre proposal which looks likes a disaster for the Welsh universities if it goes ahead.
Andrew
December 5, 2010 at 1:16 pm
The one thing that isn’t clear yet is how much the cuts to recurrent funding will be, and to which subjects. It’s not clear (at least not to me) whether it will indeed be the £4K you mention. In England the teaching cuts are worse in Arts and Humanities than in STEM, for example. We won’t know what is going to happen in this respect until after the Draft Budget passes and HEFCW knows what its budget is.
Leighton Andrews’ own own blog post suggests that Welsh universities will not be cut as much as England.
December 5, 2010 at 1:06 pm
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December 5, 2010 at 2:46 pm
Dear Peter,
Indeed, if the Welsh cut to recurrent teaching budgets were significantly less then that could square the financial circle and maintain Welsh competitiveness, so it will be interesting to watch that. Would such a decision imply that the Welsh have to make deeper cuts to some other part of the public sector budget?
As far as I understand, in England we can expect all subjects to have more or less the same level of cuts in absolute terms, which are so severe as to wipe out the Arts And Humanities core teaching support entirely, with the STEM support surviving only because it starts out higher. But we won’t know for sure until HEFCE’s grant letter arrives in due course.
It will also be interesting to see what further concessions might be made in coming days to try and buy off the LibDems in advance of the vote, following today’s “year’s free tuition for poorer students”. In particular how many of those concessions amount to the government spending the universities’ money rather than their own.
cheers,
Andrew
December 5, 2010 at 3:24 pm
I’ve added a link to Leighton Andrews’ statement to the Welsh Assembly from Tuesday. It does answer some questions, including: (i) if the vote does not pass through Parliament then Wales will not go ahead with the scheme he announced; (ii) teaching grants to Welsh universities will be reduced by “only” 35% and the subsidy will continue for all subjects, unlike in England; (iii) there will still be caps on student numbers in Wales, unlike in England.
What he doesn’t answer – or if he does I didn’t hear it – is why the WAG finds it desirable to fund Welsh students to go to England. Would it want to pay fees for Welsh students studying in the USA?
December 5, 2010 at 4:32 pm
I’m very worried about the 35% cut. If applied uniformly it means science departments lose much more cash. It’s probably good news for other departments in Welsh universities, but bad news for STEM.
December 5, 2010 at 4:16 pm
Sounds like great news for Liverpool University. Owing to geography they have traditionally attracted stacks of Welsh students. I guess this flow will continue.
The VC of Liverpool Uni should write to the members of the WAG to thank them.
December 5, 2010 at 4:31 pm
Bristol is probably also similar…
December 5, 2010 at 5:32 pm
I take a much more optimistic view of the Welsh higher education funding policy than Peter does.
Peter asks why should Wales subsidise English universities.
There is no reason why it should, but under the new policy, there will be a two-way subsidy across the border. Welsh students attending English universities will pay fees of up to 9000 pounds, part funded from their bursaries which will be worth up to about 6000 pounds; this money for those bursaries will indeed come from the Welsh budget. However, English students attending Welsh universities will pay fees of up to about 9000 pounds to Welsh institutions, which they will pay for themselves through the loan system over the following decades.
The number of students from England studying in Wales is, as Peter showed in his figures, considerably larger than the number of Welsh students studying in England. Therefore there will be a net flow of money from England into Wales. This will be additional income for Welsh universities and it may in part make up for some of the historic underfunding of Welsh higher education compared to that in England (something that goes back twenty years at least).
I would argue that it would be unfortunate if students from Wales could only afford to attend universities in Wales, and such a state could lead to an inward-looking mentality in Wales. My local education authority in Wales was perfectly prepared to pay my fees (and living costs) for me to attend an English university in the 1980s.
The details of spending on Welsh universities has yet to be announced, so we cannot make a final judgement of the new policy. However, the statement a few weeks ago by the Welsh finance minister in response to the U.K. Government’s Comprehensive Spending Review declared a cut to higher education in Wales of 12%, a much smaller cut than that being imposed on the English university sector. That smaller cut is being achieved by cutting other areas of spending more.
It is too early to judge whether there will be a change in the number of English students studying in Wales. It is actually a challenge for Welsh universities to ensure that they maintain standards in teaching, facilities and the reputation of their degrees so that they can continue to attract English students.
The policy announced by the Welsh Assembly Government has clearly been thought out in some detail. A full assessment will be possible only after the precise figures for funding are made available. But my response at present is positive (though it is rather different to the policy I might have introduced).
December 5, 2010 at 6:49 pm
Still, the WAG’s announcement has got the Daily Mail very annoyed so it can’t be all bad.
December 5, 2010 at 7:26 pm
The Daily Mail’s news article on the issue was its main front-page story. (The figures given there by the Taxpayers’ Alliance are actually wrong.) A similar story was on the front page of the Telegraph.
I suspect that one political consequence of the new policy is that it kills hopes for the implementation of the Holtham Commission’s recommendation that Wales be funded by the United Kingdom Treasury on the basis of need, rather than through the Barnett Formula. Politicians in England will ask why Wales is able to fund students at a more generous level than students in England are funded, or not funded (the answer is that cuts have been spread more evenly in Wales, rather than targetting students as in England).
December 5, 2010 at 8:07 pm
Yes, it’s interesting that the Mail and the Torygraph are both complaining because they think Wales is having a cushy time at the English taxpayer’s expense. In fact the WAG budget had a severe cut this year in line with public spending in England as dictated by the Barnett Formula. What’s different between Wales and England is their choice of priorities. The former has decided to protect its subsidies for HE as much as it can, the latter has decided to put nearly all the burden on the students.
December 5, 2010 at 8:26 pm
I’ll note that the online Daily Mail editorial article currently has alongside it a link to an article “SEXTROLOGY; It’s the thinking woman’s guide to the zodiac… so are you and your partner perfect celestial bedfellows, or is disaster written in the stars?”
Enough said.
December 5, 2010 at 5:51 pm
Bryn,
I posted a comment on Leighton Andrews’ blog and his answer makes me a bit more optimistic.
However there are two things you don’t consider. One is that English universities will no longer have a cap on student numbers. Welsh institutions will. Moreover the system of Welsh assembly grants (currently £1890) towards tuition fees for those students electing to stay in Wales is vanishing as of this academic year.
Thus English universities will be able to recruit more students than previously, and also Welsh students studying in Wales will have to pay about £1500 more than they currently do under the new arrangements. I predict a large increase in the number of students leaving Wales to study in England, and a decrease in the number of English students coming to Wales.
I’m positive about many aspects of the announcement, although I personally I think it’s all far too timid, and would have preferred to see a much broader view of the whole HE sector in Wales. I think Wales should implement a Bologna style degree system, withdraw from the REF, etc.
Peter
December 5, 2010 at 7:12 pm
Peter,
We shall have to see what effect the lifting of the cap on student numbers in England will have. If it had been done under the old fees system, it is likely that student numbers would have gone up significantly in England. However, we might expect that there will be less enthusiasm for going to university once the English fees go up to 6000 to 9000 pounds per annum. What will happen is therefore unclear.
Your point about the replacement of the current 1900 pound bursary is not one that has attracted much attention. Indeed it took me about a day to appreciate this after the Minister’s policy announcement. The new system will require a net payment of about 3300 pounds in fees by each student from Wales (the fee of up to 9000 pounds minus the new bursary), rather than about 1400 pounds per annum at present (3300 – 1900 pounds). This in practice will mean an increase in funding for Welsh universities, paid by students from loans. An increase is, unfortunately, absolutely necessary. The additional income, if used wisely, could be very useful.
Your point above about whether Welsh students would be funded to study in the United States (for example) is important. I have not heard the answer.
The new policy on teaching funding does not prevent future reforms. Pulling Wales out of the Research Excellence Framework would be radical, but feasible if some adequate alternative mechanism could be found for research funding. Implementing the Bologna system in Wales alone would be difficult. It would mean that the gap between a bachelor’s degree and a master’s would be two years of study in Wales, but only one year in England, with a Welsh master’s degree being of much greater value but being much more expensive.
Bryn.
December 5, 2010 at 7:23 pm
Hi Peter,
The other thing that differentiates England from Wales is that the WAG has decided to keep the educational maintenance allowance, which encourages kids from poor backgrounds to stay in school after 16. Therefore, I think Leighton Andrews has possibly managed to square the circle: keep the universities decently funded, not burden students with a mountain of debt, and encourage wider participation in HE. This is all based on the assumption that people still come across the border from England, and so we get all that nice tuition money, but I don’t see why this should stop. I take your point about there still being a cap on numbers in Welsh universities, but I don’t see the point of it since it will no longer save the WAG any money and suspect it will get removed. On a lighter note, I was on the HE demo in Cardiff and we heard about the WAG announcement as we were marching, which led someone to suggest that perhaps we should stop and go home.
Steve
December 5, 2010 at 7:41 pm
The funding cap will save the WAG money as it limits the amount it has to give directly to Universities.
I repeat that I’m in favour of most of what has been suggested by the WAG, but it would be even better if it removed the part of the subsidy that goes to England and consequently led to a smaller funding cut for Welsh institutions. If we kept the support for Welsh students in Wales, and set the fee at (say) 5K instead of 6K for English students we would have more students in Wales, with higher levels of funding than in England. That would be excellent for the sector.
December 5, 2010 at 8:35 pm
Dear Peter et al,
This has been a very informative discussion and I need to retract my negative comments in the first reply above. In fact, as especially well articulated by Bryn’s 5.32pm message above and Leighton Andrews’ blog, the proposal has a lot to commend it provided the WAG is indeed able to continue to directly supply funds to universities that keep the teaching budget per student roughly the same as in England.
Rather than criticising I should have been commending the WAG’s attempts to maintain a sizeable public contribution to the cost of educating Welsh students.
I have also come to appreciate the desirability of moving the headline fee figure to something like the actual economic cost and supplying a grant to cover a large part of it, which makes the actual cost of the course and the nature of government support much clearer to the students (I still find it common for students to believe that the current 3300 pound fee is paying the complete cost of their course). The Welsh proposal achieves this nicely while ensuring that both Welsh and English students end up paying the same regardless of where they choose to study (though not the same as each other).
cheers,
Andrew
December 5, 2010 at 9:59 pm
I’m also much more positive than when I wrote the blog post, although I still think what is a good proposal could easily be made even better for Welsh institutions and there’s still a lot of uncertainty about what the impact will be on individual departments.
I think the main reason why I’ve become more favourable to the proposal is because the Daily Mail hates it so much.
December 6, 2010 at 7:46 pm
The problem is that under the existing system we don’t get enough funding per student from govt anyway, at least to cover science degrees. I think a lot of people in British universities realise that English universities may finally get this now under the new system (although some subjects will be badly hit in terms of student numbers and some universities – most likely Ex-polys – will close). The Scottish universities are already fretting about getting left behind because they are underfunded under their current system, I suspect the same will happen with the Welsh universities. Perhaps the problem is that there are too many universities and too many people going to university to do pointless 3-year degrees when they could be doing more useful training in less time. If only the various UK Govts would have listened to these complaints before, but it is a sad state of affairs that we are left to welcome the new structure as the least-worst thing on offer. The current system gives the worst side of a socialised system: everyone is equal – equally poor!
Regarding the current crop of academics and their debt-free educations, well I had some sympathy with the current students (I was one of the last to get a maintenance grant although I had to take out 5K in loans too). That was until I worked out that PhD students today get an extra 6K per year stipend in real terms compared to when I did my PhD (and they get it for longer now, too). That rise occured because of the last fees rise and it more than makes up the difference in debt for the current students. It won’t in the future, but who’s to say the stipend won’t rise again to compensate for the higher fees (and postdoc and permanent staff salaries to cope with it). Perhaps that’s another reason why there are many profs in favour of change. It’s a dangerous experiment though…. the pay-off could be great or it could be a disaster, I don’t know. Maybe this should have been introduced more slowly, but no doubt it would then be even more likely to stall in some political quagmire and we would all be worse-off with some half-hearted measure that continues to underfund universities.
December 7, 2010 at 8:58 pm
This has led to a good discussion here. One of the tabloids has spun it as “Why should English students have to pay 9kpa whereas Welsh ones pay only 3.5kpa, at Welsh universities at least?” It seems to me a good question and there might be a good answer as I certainly don’t trust tabloids to examine all sides; it’s a complex issue.
December 7, 2010 at 9:13 pm
At one level there’s an easy answer, it’s called devolution. Wales has a devolved responsibility for Higher Education as well as a number of other things. Within its budget it has decided to set a higher priority to fund Higher Education that England has done, largely because the Welsh Assembly is run by a Labour-Plaid Cymru coalition rather than the Conservative-LibDem one.
The tabloids should be asking why England is not doing what Wales and Scotland are…
December 7, 2010 at 9:42 pm
Essentially, it’s democracy: people get what they voted for (at least they get some version of the policies of the largest party or coalition).
The United Kingdom Government has decided to protect the English health budget and recurrent expenditure on English schools. As a result. the cuts in other areas will be about 19% in England. The Welsh Assembly Government is not protecting the health or schools budget, partly because health is a large part of the spending of the Welsh government and preserving it would mean severe cuts in other areas. As a consequence, there will be cuts close to 12% across most areas of Welsh expenditure. This includes higher education, although the teaching budget may be cut by about 35% (compared with a cut of 85% in England). This means that students from Wales will only have to pay about 3400 pounds, whereas students from England will have to pay close to 9000 pounds.
It is all about how the cuts are spread, and the importance given to supporting students as an issue of social inclusion.
December 8, 2010 at 7:32 pm
I don’t think it’s clear how the numbers will stack up – this could still be bad for Welsh universities depending on how student demographics are affected by the fees. The WAG and the Coalition have both cut different amounts from their higher education budgets. The Coalition has suggested that this amount will be replaced by the students themselves paying fees – this introduces a lot more freedom for university incomes to go up or down. *If* the coalition really will lift the cap on student numbers *and* more students go to some universities, *or* universities raise fees even more than the loss in govt funding *and* student numbers don’t fall proportionately, the English universities could even be better off financially. More likely is that some English unis will be better off, some worse off, but it is the new universities that are more likely to suffer (see the recent UCU report http://www.bbc.co.uk/news/education-11940832). Therefore the upper-tier English universities will prosper, the lower-tier universities who don’t adapt will fail. But in Wales, the upper-tier could continue to be tied down by the cap and fixed fees, which are there because of the surfeit of lower-tier universities which aren’t being allowed to fail or forced to be competitive. There is a real risk that if the equivalent English universities prosper, Wales could be left behind.
So isn’t that bad for the top-tier of Welsh universities? Or will the WAG allow them to charge 9K and thereby redistribute the money again in preference to the top-tier Welsh universities?
December 8, 2010 at 10:43 pm
The Welsh education minister has stated that Welsh universities will only be given the right to charge fees of 9000 pounds per annum (rather than the standard fee of 6000 pounds) if they satisfy certain conditions, including commitments to fair access. There will also be a requirement that those universities that specialise in teaching (rather than doing research plus teaching) will have to merge to form a small number of regional teaching-led institutions. That is intended to achieve efficiency and critical mass. The efficiencies are intended to protect the teaching-only sector.
The new Welsh funding system will see modest increases in the money that students from Wales will pay (up to 9000 pounds in fees, partly paid with the state bursaries of up to 6000 pounds). It is not clear how the number of Welsh students will be affected, but it is possible that the moderate increase in the net sum paid will not deter students greatly. What is far less certain is how the numbers of students from England studying in Wales will be affected: their large fee increases could deter them from study, with a consequent fall in that income for Welsh universities.
Time will tell what happens.
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