£50m tuition fees funding goes to England

Around £50m of assembly government funding per year will flow into English universities due to a tuition fee grant for students living in Wales.

Details of exactly how the grant will be funded have emerged for the first time in figures released to BBC Wales under the Freedom of Information Act.

The assembly government will meet the cost of extra fees for students from Wales attending any UK university.

The education minister said the policy was affordable and right for Wales.

From September 2012, tuition fees at Welsh and English universities will increase but students from Wales will be subsidised by the assembly government wherever in the UK they study.

This means they will pay no more than they pay now.

The total spending on grants for Welsh students over the next nine years will be £1.5bn, of which £427m to English universities.

The figures show that the total cost of the new grant will be £183m in 2015-16, the first year that all students at university will be subject to the new fee arrangements.

Of this, £51.7m will go to English or other UK universities outside Wales who have accepted students from Wales.

However, the assembly government insists the policy is affordable as Welsh universities will benefit from £85.3m in 2015-16 raised from charging higher fees to students from elsewhere in the UK.

In addition, the university teaching budget will be cut by 35%.

The policy would not be cost-neutral as proposed changes to the way loans are repaid in future, including lifting the repayment threshold from £15,000 to £21,000, would cost the assembly government £18.7m in 2015-16.

In January, BBC Wales revealed that universities in Wales received an estimated £80m less funding than universities in England in 2009.

Over a decade, the funding gap grew from just £20 to £900 less per student.

Paul Davies AM, Welsh Conservative education spokesperson, said he had concerns about whether the assembly government's tuition fees policy was financially sustainable as a result of the latest revelations.

"There is already a growing funding gap between English and Welsh universities, which means less investment in world-class facilities and fewer experienced teachers and lecturers to help our universities compete and help educate the entrepreneurs and intellectuals of tomorrow's Wales," he said.

"The historic under-funding of Welsh universities will not be achieved by subsidising English universities to the tune of £50m every year at the expense of the Welsh higher education sector."

The assembly government made a number of assumptions in costing its tuition fees policy and insisted the figures provided "an illustration only".

The success of the policy depends on Welsh universities receiving additional fees income from students from the rest of the UK, therefore if numbers decreased in future, Welsh universities would face a financial shortfall.

Katie Dalton, president of students union NUS Wales, defended the assembly government's plans for tuition fees saying they were good for Welsh students.

She told BBC Radio Wales: "We were extremely pleased with the outcome for Welsh students."

With regard to the estimated £50m that would leave Wales, Ms Dalton added: "The model suggests that the money will be replaced by increased fees coming from non-Welsh students from the rest of the UK - mainly English students.

"Looking at the devastating cuts hitting the teaching budget in England...that's not happening to the same level in Wales so it's actually been suggested that the funding gap may actually narrow."

Education minister Leighton Andrews told BBC Wales the policy was "right" and "affordable."

A Welsh Assembly Government spokesperson said: "The minister's statement on 30 November last year made it very clear that the additional fee support to be given to students ordinarily resident in Wales will be funded by a transfer of resources from the HEFCW [Higher Education Funding Council for Wales] teaching grant.

"The net cost of the £97.6m for 2015-16 is the rough equivalent of a 35% cut in the current HEFCW teaching grant.

"The financial modelling already provided extends beyond the current budget period and offers an illustration only.

"The model we have set out is affordable and sustainable but the balance of funding between different elements of the higher education and student finance resource budget going forward will be dependent on future budget decisions.

"The policy we have announced is the right one for Wales. We are protecting students ordinarily resident in Wales from the impact of higher fees and increased levels of student debt."