While Wales considers a new fees structure, demoralised staff and insufficient income are stalling progress at the country's universities, reports Tony Tysome
A "distinctively Welsh" system of top-up fees and bursaries has emerged as the main recommendation of the Rees review of student support and fees in Wales.
Welsh institutions should be allowed to charge variable fees of up to Pounds 3,000 a year once a moratorium on top-ups in Wales is lifted in 2007, says the final report of the 14-strong review group, published this week.
But in contrast with England, institutions would have their fee income top sliced to contribute to a national scheme to provide means-tested bursaries for all students from low-income families who are studying in Wales.
And students whose home is in Wales and who study at a Welsh institution may be offered fee discounts or grants so that the amount they pay is reduced to as little as £2,000 a year.
The review group, chaired by Teresa Rees, Cardiff University's pro vice-chancellor, also calls for an independent review of the practicality and costs of creating a simple and transparent system of fees and support for part-time students by 2007-08.
And it urges the Welsh Assembly to add to fee income by significantly increasing its investment in higher education, to address a funding shortfall that most recent estimates suggest has more than doubled from £50 million to £110 million a year.
The review group rejected the English model of bursaries on the grounds that this resulted in a "cut-throat" market that is confusing for prospective students.
Maintaining the status quo or introducing fixed fees of £2,000 a year were also dropped as options on the grounds that they would overburden the Welsh Assembly's budget and could result in a flood of so-called fee refugees from England.
The Assembly, which commissioned the Rees review in July 2003, now has to weigh up the costs of the recommendations alongside political and social implications before deciding whether to go ahead with them.
The report says the proposed national bursary scheme should be self-funded by top slicing institutions' fee income by £300 a year per full-time student.
The level of fees awarded will be decided by institutions, which will collectively manage the scheme according to guidelines set by the Assembly.
There would be no need for access or fee plans or an Office for Fair Access.
The Assembly and individual institutions would be able to add their own bursaries to target particular groups of students. Providing fee discounts for students from Wales who study in Wales would mean that the Assembly would have to find additional funds to compensate institutions for loss of income.
The review group estimates that by 2009-10 this could cost the Assembly about £19 million if Welsh-domiciled students paid annual fees of £2,500, and up to £33 million if their fees were cut to £2,000.
The costs would be the same if grants were introduced instead of discounts.
The Assembly has promised to compensate Welsh institutions for the loss of fee income by comparison with English institutions in 2006. The review group estimates this will cost the country £37 million. Its members were divided over whether it would prove too expensive to add to this cost by exempting the 2006 student intake from paying top-up fees from 2007.
"Members were unanimous, however, on the need to remove the uncertainty relating to this cohort as a matter of urgency," the report says.
While Wales considers a new fees structure, demoralised staff and insufficient income are stalling progress at the country's universities, reports Tony Tysome
Fees round-up
* Variable fees of up to £3,000 from 2007-08
* A national bursary scheme created by top slicing the additional fee income of institutions. Bursaries would be means-tested. Institutions would not be required to submit access plans
* Welsh-domiciled students should be offered discounts or a fee grant so they pay a maximum £2,000 or £2,500 a year
* Independent review on how to create an affordable system of fees and support for part-time students by 2007-08
* The Welsh Assembly should significantly increase its investment in higher education to a level that reflects its decisions about top-up fees
* All stages of the implementation of the recommendations should be "equality proofed" and should draw on expert advice.