Wales’ tertiary education and research sector is something we should all be proud of.
This is why I want to ensure it not only remains sustainable but continues to build on the achievements of the past five years.
These achievements include our progressive higher education funding policy, which has ensured financial barriers do not hold back talent and ambition. Welsh full-time undergraduates studying away from home outside London are entitled to £12,345 in maintenance support, with up to £8,100 in grants for those from the lowest income household.
Our financial package for part-time study has opened higher education to thousands more students since 2018.
Welsh universities led the UK for the proportion of their research whose impact is considered internationally excellent or world-leading in REF 2021.
The pandemic had a tremendous impact on every aspect of education, but the tide has started to turn. Further education has seen a revival in participation in recent years, helped by increased funding for colleges and the continuation of the Education Maintenance Grant and Welsh Government Learning Grant. Last year there was an 8.5 per cent increase in school leavers progressing to college and it is promising that early data suggests a similar increase this year.
A time of challenges
But I am mindful that there are significant challenges facing tertiary education, not just in Wales, but across the UK.
Yesterday in the Senedd I set out what I believe are now the five most pressing challenges for higher and further education in Wales in the coming years, and how I will use the remainder of the Senedd term to work with the sector to address them.
Increasing participation must continue to be a priority. Wales has a smaller proportion of young people attaining level 3 (A Levels and equivalent) than other UK nations. Our higher education entry rate at age 18 is also the lowest in the UK at 30 per cent, and although a larger proportion of students appear to enter HE in Wales in their twenties, we want more to see university as part of their future at 18.
The Welsh Government has a long-standing goal of 75 per cent of working age people being qualified to level 3 or higher by 2050. To achieve this, we need to expand access to a full range of vocational, technical, and academic pathways from age 16, which is why we are already reforming both 14-16 and post-16 qualifications.
And our tertiary education sector must be ready for a significant decline in the numbers of young people. The number of 16-year-olds in Wales is expected to fall by 17 per cent between 2027 and 2037. As a result, demand for university places across the UK could fall by almost 20 per cent in the 2030s.
Lifelong learning is already well ingrained in Welsh higher education. In 2022-23, 36 per cent of Welsh students studied part-time, compared with 23 per cent of English students, and 44 per cent of Welsh students were aged 25 and above compared with 36 per cent of English students. And during this Senedd term we have been able to increase the numbers of part-time learners in further education for the first time in a decade.
This is a platform to build from, but we will need to go further to enable adults to upskill around work and family commitments, at all levels, by providing more flexible, part-time and lifelong learning opportunities.
Unintended consequences
Another challenge relates to the unintended consequences of growing competition between providers. The competition in student recruitment is fundamental to the financial challenges now facing our universities and it will only intensify from 2030.
The removal of student number caps has permitted some UK universities to grow their domestic enrolments – often by lowering entry requirements – at the expense of the rest of the sector, including many of our excellent universities here in Wales. A future where higher-tariff providers continue to expand their enrolments at the rate of the past few years cannot be sustainable for the wider UK sector.
So I agree with the UK Government’s white paper that the future for tertiary education lies not in greater competition, but in increased collaboration. We have already worked with the Competitions and Markets Authority (CMA) to clarify the position on collaboration between universities. Medr is working to map subject provision so we can better understand which subjects may be at risk in the future from growing competition and changes in student preferences. Now we must look at how we enable closer collaboration in practice, and create the right incentives in funding and regulation for institutions to act more collaboratively.
I believe working in partnership will also be key to addressing the financial challenges facing not only institutions, but also students.
Our financial support for tertiary education and students is significant, totalling over £1.2bn this year alone. Despite taking the difficult decision to increase tuition fees in the past two years and again next year, education must remain affordable. This is why we provide generous student support and a more progressive repayment policy in Wales. We will therefore consider cost-of-living pressures for students and learners in the ongoing evaluation of the Diamond reforms. But the challenges facing the public finances are likely to last, and we need to consider how every penny spent to support institutions and students is delivering the greatest value possible.
Delivery
Finally, a thriving tertiary education sector must deliver for our economy. There are already excellent examples of this – such as the role of Cardiff University to support the compound semiconductor manufacturing hub, or the work of the North Wales Tertiary Alliance to power the new reactors at Wylfa with a skilled workforce. But we will need to change our approaches to vocational skills and research and innovation, both to respond to UK Government reforms, and to ensure that our economy has the skills and ideas to boost productivity and reduce inequality.
We have begun some of the work needed to meet these five challenges but must go further. In the coming weeks, we will publish an evidence paper, alongside a call for submissions from stakeholders, which will set out the challenges in much greater depth, and call on the sector to comment and advise on what more we need to understand about them.
I have also invited representatives from across the Welsh sector to join a new Ministerial Advisory Group, to consider these challenges in depth and in the spirit of social partnership.
Together, this work will provide a comprehensive evidence base upon which to deliver further reform, and help us to secure a thriving future for our tertiary education sector in Wales in these challenging times.
