This week on the podcast student finance has exploded into the headlines – but is the English student loan system really doomed?
Backbench Labour MPs are pressing the chancellor to act, polling has revealed widespread antipathy for above-inflation interest rates, and Rachel Reeves has clashed with Martin Lewis over the freeze to repayment thresholds.
Now former OfS access tsar John Blake has launched The Post-18 Project, our Wonkhe think tank, by arguing that a review of higher education funding is unavoidable and that a graduate tax should be one of the options. So is the government going to act, or will it be bounced into action?
Plus UKRI has found itself in a perfect comms storm over the future of curiosity-driven research funding, and Michael Salmon sits down with Welsh minister Vikki Howells to discuss the challenges facing tertiary education.
With Ben Ward, CEO at University of Manchester Students’ Union, Smita Jamdar, Partner and Head of Education at Shakespeare Martineau, Michael Salmon, News Editor at Wonkhe, Vikki Howells, Minister for Further and Higher Education in the Senedd and presented by Jim Dickinson, Associate Editor at Wonkhe.
https://docs.google.com/document/d/1eI01mWOOKugOPe4kpo7__3_4reDbsVF7GrTf8LBje3s/edit?usp=sharing
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Transcript (auto-generated)
Jim Dickinson: Welcome back to The Wonkhe Show, your weekly guide to this week’s higher education news, policy and analysis. I’m your host, Jim Dickinson, and I’m here to help us work out who’s going to blink first. As usual, three excellent guests. On the world famous Oxford Road, Ben Ward is CEO at University of Manchester Students’ Union. Ben, your highlight of the week, please.
Ben Ward: Well we’re back in semester two and the campus has come alive again, and I have to say just walking around our refreshers fair it really does re-energise, no matter how long I do this, just seeing people finding that thing that will transform their university experience is really nourishing.
Jim Dickinson: What’s your favourite new society this year, Ben?
Ben Ward: Well the skydiving one is back actually, which I’m sure I’m going to see more paperwork about.
Jim Dickinson: In Birmingham this week, Smita Jamdar is Partner and Head of Education at Shakespeare Martineau. Smita, your highlight of the week, please.
Smita Jamdar: Jim, so far this week I’ve done very little apart from deal with some quite difficult cases. So could I take a privilege and talk about my highlight of last week, which was attending a conference organised by the College Alliance, which was looking at how we get NEETs and adults who were excluded from education back into education and hopefully onto higher education. And it was one of the most interesting, potentially inspiring conferences – if we can deliver what we could deliver – that I’ve been to. So it was fantastic.
Jim Dickinson: Excellent stuff. And in Oxford this week, Michael Salmon is News Editor at Wonkhe. Michael, your highlight of the week, please.
Michael Salmon: I did wrack my brains, but I am ill. The weather is terrible. I keep having one bad night’s sleep after another. So I’m going to just have to pin my hopes for a highlight on our Wonkhe team meeting tomorrow, which controversially is being held on a Friday in London. But let’s hope that proves—
Jim Dickinson: I like Friday. When did we decide this and why?
Michael Salmon: Yeah, anyway.
Student finance
Jim Dickinson: Right, so yes, we start this week with student finance – student loans, debt, all of that stuff – which has suddenly caught light in the news. Michael?
Michael Salmon: Yeah, well, “suddenly” is one way of putting it. I mean, a not insignificant part of my job is keeping an eye on and sort of trying to read between the lines of what’s going on in the mainstream press. And it’s spicy out there at the moment for HE student finance. It has really been all of January. There’s been one story after another, kind of provoked by this sort of slow burn of unhappiness about the changes in the budget – freezing the student loan repayment thresholds for Plan 2 borrowers in England.
The last week has been up to fever pitch. The Observer did a big story about the backbench Labour MPs that are pushing the government to do something. The Sunday Times commissioned some polling that found, to the surprise of probably very few, that people really hate this idea of interest rates. Quite a lot of Labour and Green voters are pretty keen on student loan write-offs. Rachel Reeves has been forced to defend the system a couple of times, which is always an indication that a story is cutting through when the Chancellor starts getting asked about it a lot.
Wes Streeting has popped up – after, ex-NUS president Wes Streeting, after about a decade of silence on anything to do with higher education, has suddenly said, “Oh yeah, we need like a national conversation.” Over in Wales, the government has made a very interesting announcement about not following England’s move, which I’m sure we’ll talk about. There’s loads and loads going on. And the question is, does it get to a point where the government is sort of bounced into action? I mean, obviously at the moment they have their hands full with much bigger things, but it does really seem to be building to a head at the moment.
Jim Dickinson: Yes, fascinating. Now, there’s been no end of coverage of this. Let’s get a flavour of it from Elliot, a caller to Sheila Fogarty’s show on LBC.
Elliot (LBC caller): Hi, Sheila, thanks for having me on. I’m a nurse in a dementia nursing home. I graduated in 2023 and I have £105,000 of student debt. Now, I need to be earning £90,000 a year just to break even on the current interest rates I’m being charged – that’s not paying any of the principal. That’s because I dropped out of my final year to help with the pandemic response and had to fund a retake of that year. Less than a week ago, the Chancellor said the status quo with student loans is fair and reasonable. Now I’d just like to ask you a straightforward question, Wes – do you agree with Rachel Reeves that this level of student debt is fair and reasonable for me and my colleagues in healthcare?
Wes Streeting (LBC clip): You are calling to my past as a former president of the National Union of Students, and I have not forgotten my roots and the things that I campaigned on back then. I do think it’s fair to ask graduates to make a financial contribution to not just our own university education, but widening access and opportunities to universities, because when it used to be the case that everyone’s fees were funded and they got maintenance grants for everyone, a very small and often privileged group of people got to go to university and the rest were left behind. And so in order to expand access to universities, graduates were asked to make a contribution.
Now, in all of the systems that we’ve seen to charge students or indeed graduates, I don’t think any of them have got it right. So the upfront fees that Labour introduced after 1997 were a real problem. Then they moved it to graduate repayments. I thought, well, that will be better. But then the fees were whacked up to £3,000. But then the coalition came in and they trebled them to £9,000 and then people are left with these eye-watering levels of debt. And while the debt is written off after, I think it’s 30-odd years, isn’t it, the debt gets written off. I appreciate that for you, Elliot, that is not a very inspiring message, and that when you get your statements through from the student finance, it is very demoralising when you see that your repayments are going in, but the interest being charged is even higher. Because it’s a combination of things for people, isn’t it? It’s the sort of sword of Damocles hanging over them, but it’s also – Rachel Reeves was quick to say it’s fair because you only pay if you can afford it – even if you can afford it, it’s still having an impact on the money you make as a young person.
Well, in the context of cost of living, I am uncomfortable about the marginal tax rate that graduates have. And now I feel, to be honest, I feel like one of you lot now from your generation who had free education. You know, when you go to university, my generation, we used to sit there and listen to your generation going, “Oh, of course, we had it all grant in our days.” And it’s like, “Oh, bully for you.” And now I feel like one of the bully-for-you people because my student loan is paid off. And I did notice, by the way, every time I got my payslip, you noticed the deductions.
So the long and short of it is, I do think we need to look in the round at all of this. I think there’s a debate for us to have as a country about what our priorities are, and there are all sorts of things you could do with student finance. For example, you could say the interest rate is too high, or you could say that the repayment threshold is too low, or you could say that the amount that’s taken each month is too high. There are lots of variables – they all, by the way, come with costs.
Jim Dickinson: Well, Ben, this is fascinating, isn’t it? Because that exchange really highlights the big problem, which is there is a big subsidy in that scheme. But for Elliot, what Elliot can see is this massive debt load in the bottom right-hand corner of his student loan statement.
Ben Ward: Yeah. I mean, look, no one is happy about this system. We see both sides of the equation now suffering. Universities are suffering financially. Students are suffering financially. And it feels like we’re approaching a sort of Dearing or Browne moment for dealing with the powder keg that is the university finance system. You know, there is a huge time bomb on the student loan system that we’ve always known about right from its creation, and it probably gets even worse for those who are studying post-2023, where the repayment thresholds are removed and the write-off window is extended. So this is something that is, in your words, a wicked problem that really needs looking at.
Jim Dickinson: Yeah. I mean, there’s all sorts in here, isn’t there, Smita? I mean, that graduate, who is presumably the sort of graduate that Wes might expect would vote for the government and would vote for the government again – that graduate sounds really, really angry. And to some extent, given their circumstances, you can see why.
Smita Jamdar: Oh, I mean, 100%. If you listen to that call, it’s so powerful, isn’t it? To say, “I’ve got debt of £105,000 to study, to do a job that society desperately needs me to do, and which is never going to be phenomenally well paid.” So I think it is a really difficult situation for government – that many of the people that would be expected to vote for them are going to be precisely in this situation.
For me, I think one of the problems is just looking at this very narrowly isn’t going to help. As Ben said, the problem now is we’ve got a system that works for no one. It doesn’t work for the individual. It doesn’t work for universities. And it doesn’t work for taxpayers, because they are funding something, but they’re not funding it necessarily in the most constructive way.
And I just think – I know it always feels like a default just to say we do need to look at it all again – but I can’t see a way out of it without some hard questions about what education is for. I really don’t like the idea that the only people who benefit from higher education are those who directly study in it. We all benefit from a skilled workforce and from people who can do fantastic things like surgery or building bridges or whatever it is. So we really do need to start asking some questions, but where is the time or the mechanism to do any of that rather than just tweaking what is really not a satisfactory system?
Jim Dickinson: One of the things that I think is really interesting in that call, my colleagues, is when Wes says it is right that students or graduates make a contribution, he doesn’t say – you know, I mean, there’s a world of difference between making a 10% contribution and a 95% contribution, for example. And that’s part of the problem, isn’t it?
Michael Salmon: Yeah, it completely is. I mean, I think that’s why we get these sorts of stories bubbling up every now and then – sort of campaigns, petitions. But the move at the budget, as it slowly dawned and filtered through into the popular consciousness of those graduates affected by it – I think it’s those who graduated between 2012 and 2022 – quite how bad this is going to be, quite how out of order they find the idea of changing the terms and conditions. That’s essentially how people are framing it – changing the target amount they need to hit by fiddling around with both thresholds and interest rates in a way that was sort of never quite been explained clearly.
Yeah, you know, it’s really unsurprising that it has become a big, big issue this time. And these kind of government lines on it – like, “Well, you know, we expect everyone to make a contribution” – is not cutting through at all because, as you say, it’s about whether it’s a small contribution, a reasonable contribution, or one that just feels deeply unfair.
Jim Dickinson: One of the features in the Gordian knot, Ben, is that, of course, that graduate, on Plan 2, with £100,000 worth of debt, is over their lifetime going to pay exactly the same as someone with a much lower level of debt, because almost all of them are just going to pay the graduate tax for 30 years. It doesn’t seem like there’s a way to explain that in a way that makes sense to people. And that’s partly because we use the language of fees and debt, isn’t it?
Michael Salmon: Yeah. Well, I mean, the sticker price has always been the difficult thing. You know, when we had the debates in 2010 about graduate tax versus fees, that was always the – you know, universities wanted something linked to a price. But in reality, it lasts for 30 years – from the new plan, 40 years.
But the recent decision to freeze the repayment threshold – the lowest earners will be paying something like an extra £5,000 over the life of the loan repayment period. There is no way that we talk about, “Don’t let this put you off going to university, it’s not a debt, it’s a tax.” But of course, it is a debt when you’re trying to balance it with other things that you’re trying to achieve in your life, whether that’s getting on the property ladder, starting a family, or all of the rest of it.
Jim Dickinson: You know, part of the argument I think, Smita, is that you can make it feel more like a progressive tax. I mean, in no circumstances is what you wouldn’t do – for someone in Elliot’s situation, you wouldn’t charge them an extra year. But then on the other hand, we’re about to hurl our way into a Lifelong Learning Entitlement, and the whole point of that is that for the gobbets of learning that you undertake, you accrue debt based on that level of credit that you have taken on. Now, you can’t really combine those two concepts without upsetting everyone, can you?
Smita Jamdar: Absolutely. There seems to me to be, as we’ve known for a long time with the Lifelong Learning Entitlement, how it sits alongside the existing systems we’ve got, the existing expectations that students have about how the funding works, what they’ll pay – even taking into account that that’s changed over time. None of this really hangs together terribly well. And that, I think, was presumably what Wes Streeting was talking about when he was suggesting that we do need to have another look at the whole thing.
But there isn’t a coherence here. There isn’t a really clear message you can give young people. I’m always struck by the fact that universities, rightly, are expected to focus on the provision of clear information, etc. But how many of the people who took these loans really understood at the time what the implications could be for them and what changes could be made over the lifetime? And it doesn’t exactly inspire confidence in other people to say, “Yes, I will take on this debt because I know exactly what it’s going to mean for me in five, ten years’ time.” It’s really not a very useful system for helping people make those long-term decisions.
Jim Dickinson: No, and I think that’s Martin Lewis’s point as well. Obviously it’s cut through so far that the Money Saving Expert is all over it – Money Saving Expert alarm has gone off. Look, he’s been very consistent on this for a long time. He’s spoken in the last week about how immoral it is to be changing the terms of things that were poorly understood in the first place, and government would quite rightly regulate credit companies from doing this kind of retrospective changes to terms and conditions. When Martin Lewis breaks the fourth wall on Newsnight and stares into the camera, you know you’ve got a problem, don’t you?
But Michael, I guess one of the questions is, why was this slipped into the budget? What is going on? We don’t really know what’s going on in the Treasury, do we? Was this just a sort of late-night way to make Rachel Reeves’s numbers add up, or is something else going on in terms of the overall sustainability of the system?
Michael Salmon: I mean, I think longer term, we do have indications that the government is concerned about the overall cost to the Treasury – to the country’s bottom line – of managing the student loan system and is looking for ways to squeeze additional bits of funding out of it. I mean, I think there was a sort of short-term – if you remember all the OBR-related crises that preceded the budget and lots of leadership speculation – there was an immediate need to find some money.
There was a note in the Office for Budget Responsibility’s paperwork on the budget that they said changes to the student loan repayment threshold were being made even right up to the wire. So it was clearly quite a live issue and the extent to which it was thrown together – I really don’t know whether there was any planning for the sort of political fallout from it or how much DfE were involved in these decisions, because obviously now they become front and centre with dealing with the response.
Jim Dickinson: Yeah, it is a little bit of a mystery, especially given what Labour said in opposition, which is a point that you have been hammering home all the way through 2026 so far. They said graduates will pay less each week. Essentially what they’ve done with this move is they’ve extended the amounts that – you know, those people who are able to pay off their Plan 2 student loan will now be paying it off for a little bit longer.
Ben Ward: All I was going to say on Wes is, obviously, whilst he has form on this as a former president of NUS, he’s got his own challenges with the NHS workforce plan. And there is a dementia nurse on there talking about this level of debt. How on earth is he going to incentivise and persuade people to go into those professions?
Jim Dickinson: Yes, because there’s that really weird, uneasy sort of relationship between DfE’s funding and then that sort of top-up that exists in the health service, isn’t there, for their costs? But of course, the other thing, Ben, is presumably he’s got his eye on – notwithstanding all the other political chaos this week – he must have his eye on attempting to replace Starmer.
Ben Ward: Well, I mean, I don’t know when this podcast is going out, but that may well have happened by the time that it does. Yes, I mean, I think there’s clear political manoeuvrings going on in the whole range of things. He’s remained relatively silent on the issue of student finance, so as not to be pigeonholed. But this has a huge bleed across into what’s happening with the NHS. An interesting turn – he puts the dichotomy in that interview on LBC between Rachel Reeves putting more money into getting waiting lists down, all money into this system, but the two are intrinsically linked.
Jim Dickinson: So we’ve got a combination of what feels like an above-inflation interest rate, a repayment threshold that’s much lower than perhaps morally they were ever promised – I guess the Martin Lewis point – a really challenging graduate labour market, and lots of other fiscal drag in the other parts of the tax system, kind of dragging them down too. Is it just, you know, whiny young millennials or whichever generation we’re talking about? Is it just whining people that suddenly find themselves in journalism jobs? Or is there a real case here around the kind of plight of the young?
Smita Jamdar: Oh, I 100% think there’s a real case here for the plight of the young. And the conference that I talked about at the beginning was talking about a very different demographic of young people and even adults, but who are still youngish adults, much younger than me. And there are a couple of points made there which I think are really important.
The first is it’s absolutely clear that the brunt of austerity has been borne by the young. So this generation coming through – they’ve grown up with lots and lots of cuts, very limited services. They haven’t seen the benefits of a tax system that looked after them, and yet they’re being repeatedly told that it’s right and proper that they should pay for what they’ve got, but nobody has supported them. I think there’s something psychological about that.
And the other thing is they’ve grown up in a time of polycrisis. They just lurch from one thing to another. The global financial crisis into Covid, into the collapse of the rules-based international order. All these things take their toll and we need to look after our young people an awful lot better, just so that those approaching pension age like me have somebody actually willing to work and contribute to public finances in the future. Leave aside all the democratic issues around the disengagement these young people feel with the system that has let them down. I find it astonishing that they’re presented as entitled in any way. There is a generation of people who’ve grown up benefiting from a really strong public sector, and it’s not them.
Jim Dickinson: Now, Michael, we’ve got a new colleague, have we not, who’s added his voice to the debate?
Michael Salmon: Yeah, it’s been a big week in the sort of extended Wonkhe cinematic universe. Our affiliated think tank, the Post-18 Project, which we launched last spring, has now got its first proper director. And it’s John Blake, the former access and participation director at the OfS. He left at the end of last year and he’s now popped up in The Times and on the Post-18 Project website saying that the system is “doomed”, in his opinion, which is a nice eye-catching beginning to his tenure.
He’s really thinking about it from political terms and in reputational terms, as opposed to getting into the weeds of Plan 2, Plan 5, repayment thresholds. This policy-level conversation is more saying that the social contract between the higher education system and the population has been broken by this system, and a review of some kind – either of student finance or ideally of higher education funding more widely – is inevitable, needs to happen. The government needs to decide: does it want to just be bounced into it, or does it want to start thinking about planning for this?
[Times Radio clip on John Blake and the Post-18 Project]
Jim Dickinson: I’ll tell you what, Ben, one of the things – I mean, clearly, maybe we’ll get a review, and of course, to some extent, what a review will probably do is address things for a future cohort or a future set of cohorts. But one of the issues, I guess, where I’d got to a couple of weeks ago was, if you try and do something for existing loanholders, there’s always a kind of financial implication. And if the government is spending money on that, what it’s not doing is spending money on current students or current universities.
Ben Ward: Yeah, indeed. I mean, look, there are 2.3 million angry people now on the Plan 2 system, from 2012 to 2023, and they are going to exist in the system – paying taxes, voting – for the next 30 to 40 years. So that will be a time bomb for whoever is in government. But every pound, you’re right, you spend on them isn’t a pound being spent on current students and university or tertiary education. And that is a trade-off.
Jim Dickinson: And then Michael, we’ve also – because one of the floating questions has been, is Wales going to do what England has announced it will do on Plan 2, because we share Plan 2 with Wales. What’s going on there?
Michael Salmon: Yeah, I remember on the day of the budget, we were all sort of looking through the documents, spotted this thing, thinking, “Whoa, what does this mean for that sort of decade’s worth of English borrowers?” And then at some point, it was about 8.30pm, one of us was like, “Wait, hang on, what about Wales?” They’re still on Plan 2. They refused to follow England into the Plan 5 system, which has lower interest rates but has 40 years’ worth of repayments. They saw it as a regressive move.
And then this question began to sort of swirl about – had they told Wales about that? Technically, Welsh ministers need to give their OK for this. It’s not that England decides for Wales on this aspect of repayment. And yeah, we just got the announcement at First Minister’s Questions in the Senedd – Eluned Morgan, in kind of no uncertain terms, said, “We’ve decided we’re not following England down this route.” Obviously they have an election coming up very soon, and it’s not just the local elections, it’s the proper Welsh national elections. And they also have this sort of review going on. The higher education minister said to me this week that they don’t want to pre-empt what that’s going to find. But yeah, it’s still quite a shock, and it’s going to have some pretty big consequences for how the Welsh system fits into the kind of envelope that the Treasury gives it.
Jim Dickinson: Yeah, let’s hear what the First Minister had to say.
Eluned Morgan (Senedd clip): Only the Welsh Labour government ministers can set the repayment threshold for Welsh borrowers. The UK government can’t determine the threshold for Welsh students and any change requires a decision by the Welsh government. And I want to make it clear today that we have no intention of freezing the thresholds and following England in this regard. We’ll work with the UK government to understand the full implications of the change. We need a proper impact assessment and that’s clearly where we stand.
Jim Dickinson: She hadn’t even been asked about it. It was like she’d got some notes ready – she thought, “I’d better defend this without being attacked.”
I mean, look, Smita, this just underlines the problem, doesn’t it? This is very important politically, but my God is this complicated to fix. Once you get out into devolution lands – I mean, blimey.
Smita Jamdar: Oh, 100%. And I think, as the point you made earlier in this conversation, we end up with different people having very different experiences in a system where they’re essentially in the same category as the other people who are in some other position. So it is becoming hugely complicated, and all of that will have different electoral impacts. I mean, who even knows what the political position in Wales is going to be in a few months’ time and what the position around tuition fees will be there?
I mean, I dread to bring them up, because it’s not about Wales particularly, but Reform, for example, have put forward their own proposals around student loans. So we do have – this is a political question now as well as a financial one and as well as a fairness one. And the risk is that we will end up in a relatively small country with numerous different systems that will add to the confusion as to trying to get people to understand the system. It isn’t easy to understand now – it will be even worse once we have divergent systems going on across the graduate cohorts and across the country.
Jim Dickinson: I mean, one of the really interesting things, Ben, is that we sort of know from various budget documents and from the auditor’s report in Wales and Scotland that new modelling from DfE indicates that the repayments that they thought graduates were going to be making are not hitting those numbers. That’s either something going on in the wider economy, or it’s making loans to people whose courses just aren’t delivering the returns, and so on.
On the one hand, you’ve got potentially a Treasury and a government saying, “Look, we need more of this money paid back.” And then on the other hand, you’ve got the Martin Lewis position, which is, “Hold on, you can’t just change the terms after people have made the loan ten years later.” How on earth do you resolve that?
Ben Ward: Well, it’s an unresolvable thing, isn’t it? Because it points in so many different directions. It points to a sudden drop in graduate recruitment due to employer costs, the rise of AI, all sorts of complicated things that are impinging on it. But it just feels to me, as I said at the very start of this, we’re approaching the political and economic climate where we were within the lead-up to the Dearing review, the Browne review – universities saying that they’re in bits, graduates saying that they can’t take much more of this.
So I think John Blake is right to say that the whole thing needs reinventing. The risk we run in having that conversation – necessary conversation though it is – is that the answer will be, “Well, we can’t afford universities anymore.” And if you look – or yet fewer of them – absolutely. If we think it’s expensive to have universities, you only have to look at the experience of places that don’t have them to see how expensive it is not to have them as well.
So we need to start this conversation with, at its heart, what a sustainable system that benefits people and delivers what it needs to deliver to as many people as possible is – not from how do we tweak terms and conditions of loan repayments. That’s the wrong place in my view to start this conversation.
Wonkhe blog: Employment Rights Act 2025
Shine Jackson (blog clip): Hi, I’m Shine Jackson, an employment partner at Mills & Reeve specialising in the sector. After months of parliamentary back and forth, the Employment Rights Act 2025 finally made it into the statute books just before Christmas, with wide-ranging implications for the sector. From new rules on unfair dismissal and zero-hours contracts, to tougher requirements on sexual harassment and major changes to industrial action, these reforms will have a real impact on how universities manage their people and risk. In my blog, I’ve set out five things that sector leaders need to know to prepare for these reforms, with a handy table of implementation dates.
Research funding
Jim Dickinson: Now, next up, research funding – a messy week for UKRI. Ben?
Ben Ward: Yeah, indeed. I mean, you could argue it was a perfect comms storm, but actually it’s just a follow-on from previous announcements in how they will approach research funding over the coming few years. So lots of speculation on curiosity-driven or fundamental science research, but it’s set against the background of UKRI having radically changed its budget allocations for the coming years. So unsurprisingly, lots of focus on industrial strategy areas, much less clarity about the individual research councils.
Smita Jamdar: Well, Jim, I had some thoughts about this, and it struck me that this demonstrates a number of different things. First of all, how hard it is to communicate quite complicated changes in a way that can’t then be either deliberately or inadvertently misunderstood and represented as something they’re not. Because I think UKRI’s explanation, as Ben said, is that this is a development of something they’d already announced.
And the second thing is, we can all get people to accept in the abstract that there is limited money and we have to make decisions and we have to do strategic things rather than just what we’ve always done. But as soon as it affects something that people care about, then suddenly it ceases to be strategic. So it appears to be that it’s to do with particular challenges around the financing of one research council rather than a general issue. But because this is a research council that is seen as important by many, that’s not where we make the cuts.
And I know we shouldn’t keep going back to the conversation we’ve just had about student loans. This is the challenge facing government: we need to do more with less, but nobody agrees on what the less should be. Where the less should happen is – this is a communications problem which UKRI need to get a handle on, rather than a substantive problem. There is a substantive issue, but it’s not caused by the thing that people are angry about.
Jim Dickinson: Yes, this idea that it might be a comms problem more than anything else was something raised in parliament. Here’s a clip.
Ian Chapman (parliamentary clip): So we made some decisions – decisions about really being deliberate in our choices. And the right thing to do, and indeed what we planned to do, was to then talk about those decisions to stakeholders, to those affected, go blow by blow and bring people on the journey of why we’ve made those choices, before we then communicated to the outside world. We were not able to do that because of information leaks outside the organisation. And so we ended up having to rush comms out when we hadn’t done that engagement, for which I am very sorry. I realise that this causes upset, it causes uncertainty, it causes people to actually worry about their jobs, quite fundamentally.
Michael Salmon: Yeah, so that was Ian Chapman sort of trying to say that there was a plan in place but things had to be rushed out. I should also say it wasn’t just one research council. So there was the Science and Technology Facilities Council – the STFC – which was announced to be seeking some quite big cuts.
Jim Dickinson: Yeah, that was like a 30% reduction that they’d been asked to model.
Michael Salmon: Yeah. I think they think they’ve overspent a lot – things like international subscriptions, energy costs have gone up more than they expected. From what he said to the committee, it sounded like previous planning had been quite optimistic about how much the government was going to give to UKRI.
But there’s been other – I think three or possibly four other research councils have temporarily paused grants. You know, these mysterious messages appearing on the website saying, “Hang on, don’t apply yet, more info soon.” And loads and loads of speculation started to build up among researchers.
Ian Chapman had to write an open letter. It came out at sort of Sunday teatime, which is always a bad sign. I mean, I think the whole story speaks to worries in lots of UK universities and elsewhere in UK research that curiosity-driven research is no longer such a priority. UKRI’s line is, “Oh, well, look at this bucket – we’ve got this big bucket that we call curiosity-driven research and we’re going to keep spending lots on it.” It’s debatable how much that is true because they’ve essentially put all of QR funding in that bucket.
I think, on a larger scale, it speaks to – UKRI has become very good under Ian Chapman, and with Patrick Vallance as minister, of doing this sort of macro vision for UK research which accords with the government’s priorities. This whole “picking winners, focusing on our strengths” approach. How does that translate, as Smita was saying, down to the level of individual researchers and research teams and specific disciplines? It’s OK to say life sciences is part of the industrial strategy, but if I’m in a research centre or a team that works in one specific area, what I’m interested in is knowing where’s the continuity of grants? Are things that I was planning to apply for being cancelled? What does it mean for me and my career? And that’s a real challenge in terms of communications, but also in terms of operations.
Jim Dickinson: Yes, because it’s not just like there’s one funding body sat between me and government – there’s the actual research councils as well as UKRI, isn’t there? And I guess by the time it filters all the way through, there are lots of opportunities for people to get very – perhaps justifiably – paranoid and upset.
Ben Ward: Yeah, absolutely. There’s so many different cooks involved in this. Interestingly, the headline-grabbing things, particularly around fundamental science, around our work at CERN – the UK continuing to fund CERN’s central costs, for instance, but actually money for individual UK projects in the Large Hadron Collider probably going to be cut.
This presents a really complex ecosystem, but if we go back to the state of university finances, most universities are already losing money on this work anyway, and further uncertainty into the system isn’t helpful.
University of Sussex judicial review
Jim Dickinson: Now, one of the things that’s been happening this week is the judicial review into the decision from the Office for Students to fine the University of Sussex over free speech. David Kernohan from the team has been reading the briefs.
David Kernohan (pre-record): Hi, so this is DK here. I’ve been keeping an eye on the judicial review of the Office for Students’ decision to fine the University of Sussex £585,000 for alleged breaches of conditions of registration E1 and E2. This has been going on in the administrative bit of the High Court. And let me tell you, it’s been absolutely fascinating to watch what is going on and the legal arguments that are being marshalled.
There’s two key articles on the site I’d urge you to keep an eye on, because the last thing you want in this podcast is me trying to explain points of law. There is an article based on the University of Sussex’s skeleton argument from a few weeks back, and one on the Office for Students that I did during the trial itself because I managed to get hold of the Office for Students’ skeleton argument.
There’s lots of stuff going on here that has got implications much wider than the actual decision itself. I did a note on Wonkhe the other day about the role of the university visitor, which I think is really interesting, because the University of Sussex has a royal charter. It has a university visitor who is supposedly the exclusive authority on the way the university applies its own regulations and rules, because one of the reasons that the Office for Students made the fine is because they didn’t believe the university was following its own rules on delegation of authority.
This becomes a point of contention, but the upshot could potentially mean that the Office for Students doesn’t actually have the authority to regulate universities with a royal charter in this way. This would obviously be a huge deal and a massive problem for the work that the Office for Students actually does.
So that’s been absolutely fascinating. I’m really not sure which way that’s going to land. I initially thought it wasn’t going to be a big issue, but I’m becoming more and more convinced that it might be. We will be getting a written judgment in maybe three or four weeks’ time. That will all be on Wonkhe as soon as we get it. But yeah, this has been absolutely fascinating stuff.
Secret Life of Students event
[Pre-recorded promotion for the Secret Life of Students conference – “Learning to be Human in an Age of AI” – March 2026, tickets available at wonkhe.com/events]
Interview: Vicky Howells, Welsh Minister for Further and Higher Education
Jim Dickinson: Now, finally this week, Michael has sat down with Welsh Minister Vicky Howells to talk about – well, let’s have a listen.
Michael Salmon: So I’m joined today by Vicky Howells, Minister for Further and Higher Education in the Welsh Government. Minister, thank you so much for coming on The Wonkhe Show this week. We’re going to talk about the call for evidence that’s been launched on the future of Wales’s tertiary sector, but I hoped we could briefly start by addressing the First Minister’s announcement yesterday, which for us at Wonkhe Towers was a pretty big deal – that the Welsh Government has no intention of following England with the threshold freeze on graduate loan repayments, which as we’ve seen has been a real source of controversy in England. What can you tell us at this point in time about the Welsh Government’s thinking?
Vicky Howells: So, as the First Minister said yesterday, we’ve no intention of freezing thresholds for Welsh borrowers. Only Welsh Government ministers can set the repayment threshold for Welsh borrowers, and any decision would be made by us in Welsh Government. We’ve been looking at this proposal and we don’t really feel that it’s a good fit for us and with the values that underpin the Diamond package. We’ve got no intention to freeze the threshold here in Wales. We are working with the UK government to understand the financial and operational implications of our decision. But you’ll be aware as well that we’ve just launched this paper and this call for evidence on the whole future of the tertiary system here in Wales. And a large part of that is about financial sustainability. So we don’t want to pre-empt that call for evidence by taking any decision now, and it’s certainly not a decision that this Welsh Labour government would take.
Michael Salmon: As you’ve mentioned, this call for evidence that’s recently opened is thinking about the whole of the future of the tertiary system in Wales ahead of the elections. Perhaps you could just sort of briefly talk our listeners through what it is and also maybe why you’ve decided to go down this route?
Vicky Howells: Yeah, absolutely. So I’m really proud that we’re the first administration anywhere in the UK to launch such a large and comprehensive call for evidence. And I wanted it to be honest and really candid about the challenges facing the sector. So we’ve set out five challenges which we’re asking people to give submissions on, and we feel that they are the five core problems facing not just here in Wales but across the UK as well.
So we’re focusing on participation and equality of opportunity – ensuring that everyone, regardless of their background, can access and succeed in further and higher education. We’re focusing on that huge issue of demographic change – the substantial drop in 18-year-olds that’s coming at us very fast – and lifelong learning as well, how we respond to an ageing population and support learning through life.
We are looking at the juxtaposition of competition and collaboration – how can we support strong partnership working across the sector and break down some of those barriers? Financial sustainability, as I mentioned earlier, is absolutely crucial. We need to really take a good long look at how we can ensure that institutions can deliver high-quality education and research on a more secure financial footing than we’ve seen across the UK, including Wales, in recent years.
And perhaps the part that I’m most passionate about is how we can ensure that our institutions deliver for the economy of the future as well. I think it’s so important that we align education with the needs of the evolving economy. And I do think that that actually will tie into financial sustainability as well.
Michael Salmon: And the call for evidence was accompanied by quite a substantive policy paper setting out the nuts and bolts of the issues. One of the areas that caught our attention at Wonkhe was around student finance and this observation that there’s a pressure on the Welsh system that stems from the need to stay in step with Westminster Treasury-set rules. And it says in the paper that these will likely require that the Welsh Government reviews and possibly amends some of its policies on both student support and on student loan repayments. I mean, Wales has always been very proud about having a progressive student finance system, one that’s more progressive than England’s has become. Are those days numbered?
Vicky Howells: Well, you know, you focus there on the values of Wales and the student finance system – the values that were brought in with the Diamond reforms – and we really do intend to stick to those. It’s finding a way of doing that that will remain within that financial envelope that’s set for us by UK Treasury.
I think, coming back to those five areas that we’ve identified in the paper, that will help towards those goals. But there’s no doubt about it that it is a challenge to remain within that financial envelope. Obviously our student maintenance grants are ones that we fund ourselves outside of that. So it’s really looking at how do we want to focus those for the future to ensure that we can retain these core values.
Michael Salmon: Another part of the call for evidence that really caught our attention was the section on competition and collaboration, which you mentioned already. The paper pointed out – the word it uses at one point – that there’s been “aggressive competition” UK-wide for undergraduate recruitment in particular. And in some instances, this is becoming a risk to the viability of certain aspects of the Welsh system. And it seems to us that addressing this seriously could potentially mean some quite large changes to how the sector works, to how things like admissions work. Is this the kind of big thinking that you’re interested in hearing about in the call for evidence?
Vicky Howells: It absolutely is. And there’s no doubt about it that the complexity and the breadth of the ideas that we’re floating are ones that I’m hoping will catch the eye of UK government as well. Because some of these areas, as you pointed out, are not devolved. And I think we’ve got an opportunity here with a really strong evidence base to set a precedent for changes that could be implemented on a UK-wide basis.
But having said that, there’s still plenty of work that can be done within Wales as well, and I’m really proud of some of the collaborative efforts that have been undertaken within Wales. We’ve got the North Wales Tertiary Alliance, for example, that’s bringing together both the FE colleges and universities there. We have other examples in south Wales as well around the semiconductor areas, and all of that really helps that level of collaboration. It helps to unlock research funding as well as cutting costs with back-office issues as well. So there is plenty that we can do here within Wales, but I’m certainly wishing to cast the net wider and look at UK-wide issues as well.
Michael Salmon: Right. And if I could finish by asking a final question about research, which, as you just mentioned, forms part of one of the challenges you’ve picked out – this one around maximising public investment, both in teaching and in research. For research, there’s the context of budget constraints, but there’s also the UK government and UK Research and Innovation wanting research to be more specialised – this sort of “playing to one’s strengths” agenda. It sort of feels like – please correct me if I’m wrong – there’s a feeling in the policy paper that Welsh university research is going to need to change. Would that be fair?
Vicky Howells: I think that is fair to say, and it’s something that vice-chancellors and Universities Wales have been quite frank with me about as well, because our universities here were historically very reliant on EU structural funds to support their research activity. And so, with the end of that EU funding, our institutions really must shift now towards securing more competitively awarded research income. And so that’s why we’re asking in the call for evidence how we can support research funding and where the collaboration and specialisation of institutions can create efficiencies and those stronger agglomeration effects for teaching and employment, and our R&D as well.
Jim Dickinson: So that’s about it for this week. Remember, to go in deep on anything we’ve discussed today, you’ll find links in the show notes on wonkhe.com. Don’t forget to subscribe – just search for The Wonkhe Show wherever you get your podcasts. And if you want to get ahead of everything going on in UK HE, just click subscriptions on the site to find out more. So thanks very much to Ben, Smita, Vicky Howells, and Michael Salmon for making it all happen. We’ll be back next week. Mark will be here. Until then, stay Wonkhe.
