Wales adds up price of freedom

January 19, 2001

Despite devolution, Welsh education is still under-funded, Tony Tysome finds.

When the Welsh National Assembly began to operate in July 1999, further and higher education chiefs in Wales could have been forgiven for thinking "things can only get better".

As former Welsh Funding Councils chief executive John Andrews says in the Higher Education Funding Councils for Wales annual report, under the Welsh Office both sectors had been through a funding squeeze that had "an inevitable effect on their ability to maintain their estates and offer the full range and quality of provision".

Funding council figures show that the assembly has had to address years of efficiency gains in higher education, which only last year left the sector's 13 institutions with an estimated operating deficit of more than £3 million. It has also begun to drag the Welsh further education institutions out of a hole that in 1996-97 had them in a collective operating deficit of nearly £4 million.

The assembly's first moves, which have put further education firmly back in the black and raised the higher education unit of resource for two successive years, were welcomed. But the honeymoon period has been brief.

Funding chiefs, university and college heads and union leaders have not taken long to conclude that although things might be better under the assembly, they are still far from rosy. And things are forecast to get worse in comparison with England.

Figures from the HEFCW show that cash injections from the assembly for 2000-01 and 2001-02 pushed year-on-year percentage rises in funding for higher education teaching in Wales up higher than in England, and brought them level with Scotland. But projections for the following two years show Wales once again falling far behind England and lagging slightly behind Scotland.

A funding councils report on the financial health of Welsh higher education forecasts improvements through to 2003-04, but notes: "The level of operating surplus is too low to generate sufficient cash for future investment. The sector is vulnerable to even small variations in income and expenditure."

The implications of this were rammed home by higher education heads when they addressed the assembly's Dearing-style higher education inquiry last month. Keeping up with England was not a question of national pride, they said, but one of addressing real problems of historical under-funding, growing competition for staff and students, and the higher costs of maintaining universities and colleges in dispersed, often rural locations.

Phil Gummett, the HEFCW's head of higher education, said: "The issues are to do with whether the sector can remain competitive in relation to the rest of the United Kingdom. The difficulty is that we have been operating for several years with a unit of resource below that of England, and just as we thought things were coming back to an equal footing we see we are being left behind by the English settlement. At the moment, there is a great deal of concern in the sector that there will be serious recruitment difficulties if we cannot be funded at least at the same level."

Sir Adrian Webb, vice-chancellor of Glamorgan University and chairman of Heads of Higher Education Wales, said that keeping funding for Welsh institutions equal to that of English universities was essential if they were to maintain excellence in teaching and research and remain relevant to the Welsh economy.

He said: "We need, over a long time, to be better funded than in England because we have to cope with the problems of dispersed population, as well as poor funding in the past."

Early last month, union leaders met Jane Davidson, the assembly's minister for higher education. An analysis by the Association of University Teachers showed that in 2000-01, Welsh institutions would get £121 less per student than in England, and £1,444 less than Scotland, and in the following year £216 less than in England and £1,567 less than Scotland.

Welsh institutions have grown more jittery over the funding imbalance since last year's student recruitment round, during which many universities and colleges struggled to fill places. Cross-border competition was blamed. Some prestigious English universities took in more students after the Higher Education Funding Council for England raised maximum numbers by 4 per cent - a move it will repeat this year.

Even the bigger Welsh universities were affected. Sir Brian Smith, vice-chancellor of Cardiff University, said: "It is a very worrying situation. Cardiff is competing well, but I do not think that is necessarily the case for the rest of the sector. And I do not think we will feel so safe next year or the year after if it carries on like this."

Further education institutions only recently escaped big efficiency gains, which reached nearly 11 per cent in 1997-98. Nearly a third of colleges are now considered to be in marginal or unsatisfactory financial health.

The WFC's financial forecast predicts stability only if "optimistic" estimates of non-pay expenditure prove accurate. Even then, as in higher education, projected surpluses will be insufficient to sustain investment, which will lead to more borrowing.

Richard Hart, the funding council's head of further education, said colleges were preparing for post-16 reorganisation. A National Council for Education and Training in Wales will take the reins under the WFC umbrella. Four post-16 regions in Wales will have an advisory committee, chaired by a council member, but these will lack the decision-making powers of England's local learning and skills councils. They will have to answer to the national council.

It would be hard for the assembly to ignore the sector's pleas for help. An assembly spokeswoman confirmed: "There is no question of the assembly's running away from this issue."

But it seems unlikely that the assembly's response, which will probably follow post-16 reorganisation and the outcome of its higher education review this year, will make Welsh institutions feel as financially secure as their English counterparts. Richard Hirst, the WFC's finance director, noted: "The position in Wales has always been slightly different. The Welsh Office got a block budget that it had to disaggregate and allocate as it saw fit. The view was taken at that point that there were bigger priorities, such as the Welsh National Health Service."

Jane Davidson said "considerable attempts" had been made to cut the funding disparity between Wales and England. The assembly's figures showed that the gap had been reduced from £126 per student to £33 per student in two years, she added. "The assembly negotiated a good settlement for higher education this year. We are awaiting the review by the committee, and it is likely that there will be funding attached to the outcome," she said.

The best hope for Welsh universities and colleges may lie in a variety of measures that will encourage them to cooperate more.

Proposals for mergers in higher education, contained in a WFC paper last year, got a poor reception from vice-chancellors and principals. The HHEW, in its submission to the assembly's review, calls the paper "a destabilising event, partly because it lacked a sufficiently broad strategic vision or analysis, and partly because it excited invidious uncertainties".

However, the WFC's latest position, summarised in its submission, steps back from "merge or bust" solutions. It says that although the status quo is not an option, institutions may be able to avoid mergers if they can collaborate more closely. Survival would also require "a commitment by the national assembly to maintain the unit of resource at least at the level of England", it adds.

Dr Gummett said mergers between higher and further education institutions were a possibility. WFC rules barring these have been removed "to allow us to look at this imaginatively". He said: "There is a lot of discussion about progression routes and the sharing of facilities. I can imagine joint executives between further and higher education and strategic planning between universities and their associate colleges."

But the funding council says it recognises that there will be no quick fix and that it must be institutions, rather than civil servants, that make the moves.

Modular path fades without leadership

Attempts to make Welsh further and higher education more efficient and tuned to the needs of learners by modularising and unitising the curriculum will fail without stronger leadership, a study has concluded.

Although there are some examples of good practice after ten years of modularisation, "universities and colleges in Wales will need further encouragement and assistance if they are to make significant further progress in any sensible timeframe", a report on the findings says.

The study was commissioned by the Welsh Funding Councils from David Robertson, professor of policy development at Liverpool John Moores University, after recommendations from consultants KPMG found that greater outside intervention may be needed.

The report, which has gone out for consultation, says: "much of the encouragement and assistance required by universities and colleges involves changes in the macro-policy environment, many of which are outside the authority of institutions, and some of which are arguably outside the remit of national bodies in Wales alone."

The study found that modularisation had not made any significant reductions in curriculum duplication. Resistance to change was found in awarding bodies, professional bodies, subject disciplines, managers, administrators and academics.

Academics questioned management competence and suggested that modularisation had added to inefficiencies by requiring institutions to "multiply the things they do badly, namely, the management of assessment and the management of multiple transactions".

The study concludes that "the factor most conspicuous by its absence" in taking modularisation forward is leadership.

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