Education Finance

Higher Education Funding

1 July 2014

Article by Helen Jones, National Assembly for Wales Research Service


Image from Flickr by Kevin Saff.  Licenced under the Creative Commons.
Image from Flickr by Kevin Saff. Licenced under the Creative Commons.



On 2 July 2014 the Finance Committee’s Higher Education Funding report will be debated in Plenary.

Finance Committee’s Inquiry

On 6 March 2013, the National Assembly for Wales’ Finance Committee agreed to conduct an inquiry into higher education (HE) funding in Wales. The inquiry focused on the funding of HEIs in Wales, the financial impact of the Welsh Government’s tuition fee grant policy on HEIs and students in Wales, and whether the Welsh Government is delivering value for money in this area.

The inquiry started taking evidence in July 2013 using a range of engagement methods including a survey with prospective undergraduate students in year 12 and 13 in Wales and first and second year undergraduate students currently studying at HEIs. Assembly Members also participated in web chats with undergraduate students at HEIs in Wales and England and written responses were received and oral evidence taken from a range of witnesses.

During the course of the Finance Committee’s inquiry, several announcements were made.

The Diamond Review

On 18 November 2013, Huw Lewis the Minister for Education and Skills announced a Review of Higher Education Funding and Student Finance Arrangements in Wales, to be chaired by Professor Sir Ian Diamond. The review is due to produce its first report in the autumn of 2015 and the final report containing recommendations by September 2016. Priorities for the review will include:

  • widening access – ensuring that any future system has widening access at its core objective, is progressive and equitable;
  • supporting the skill needs of Wales;
  • strengthening part-time and postgraduate provision in Wales; and
  • long-term financial sustainability


Wales Audit Office Higher Education Finances report

The Wales Audit Office published a report on Higher Education Finances on 21 November 2013. The report stated that the Welsh Government responded quickly to the UK Government’s decision to establish higher tuition fees in England however its appraisal of policy options and potential to consider changes to their assumptions were limited.


The report highlights that the cost of the Tuition Fee Grant for 2012-12 to 2016-17 is now predicted to be higher than forecast in November 2010, increasing by 24 per cent from £653 million to £809 million. The report stated that “the Welsh Government and HEFCW have implemented the new tuition fees policy effectively, although further action is needed on part-time tuition fees, to address weaknesses in processing student finance applications, and to strengthen the regulation of higher education”.


Higher Education Bill

On 19 May 2014, Huw Lewis the Minister for Education and Skills introduced the Higher Education Bill. Previously the Welsh Government had relied on terms and conditions attached to public funding channelled through the Higher Education Funding Council for Wales (HEFCW), to regulate the sector. This funding was given to universities by HEFCW for teaching and other activities for example widening access. The primary purpose of the Bill is to establish a legal basis for a revised framework to regulate higher education in Wales.

Finance Committee’s report

In May 2014 the Finance Committee published its report which included 18 recommendations for the Welsh Government to consider under the following themes; HEFCW funding, HE policies in England, the student loan book, the impact on students and student choices, widening access, part-time study, research and post-graduate funding, funding for expensive subjects and Welsh medium provision.

The Welsh Government’s response accepted the majority of the recommendations and stated they would:

  • undertake further modelling on student debt to obtain a more complete understanding of the long-term implications;
  • work with the Student Loans Company (SLC) to investigate the reasons for non-payment of student loans;
  • formally request that the SLC undertake a review of its communication strategy to ensure that information is being communicated effectively; and
  • refer consideration of cross border flows, concerns over living costs, widening access, part-time and post-graduate funding to the Diamond Review Panel.
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