Fees policy 'taking university cash,' finance directors say

Finance directors of Welsh universities say the Welsh government's student fees subsidies are leaving their sector with an uncertain financial future.

They have told BBC Wales they can not be sure there will be enough money left for them after the subsidising of Welsh students who study elsewhere in the UK.

Welsh students pay fees of no more than £3,500 wherever they study, with the Welsh government supplying the rest.

The Welsh government says its policy is "fully costed and sustainable".

The Welsh Higher Education Finance Directors Group says that no-one knows from year to year how many Welsh students will choose to study in England, Scotland and Northern Ireland.

This has led to financial uncertainty and left universities in a "considerable period of flux".

Universities in Wales see some of their money come from the Higher Education Funding Council for Wales (Hefcw).

But the finance directors say there is considerable doubt there is enough money in the pot to pay for the policy of subsidising tuition fees from the Hefcw teaching budget.

They said its core annual funding had dropped 36% over two years from £367m in 2010/11 to £213m in 2012/13.

If the demand exceeds the current assumed budget then they say funding will have to found from one or all of the following:

• Transfers from other budgets such as those for part-time and post graduate teaching or research

• Fines from Welsh institutions deemed to have exceeded their quota of grant

• A Welsh government policy change of fee support for students

• Additional funding for higher education in Wales

The finance directors' group said: "It is far too early to determine if any of these measures will be required or to judge which, if any, of these may be applied.

"It is also uncertain as to whether Hefcw/Welsh government can legally apply them or has the appetite to do so.

"This leaves the sector with an uncertain financial future together with the dilemma of being required to control the number of Welsh-domiciled students entering higher education in Wales while no similar control is or can be required of English universities."

Higher Education Wales, which represents universities and colleges, said it could not comment in detail until the scenarios proposed by the finance directors were "replaced with hard facts".

A Hefcw spokesperson said: "The fact is that universities in Wales can look forward to greater levels of income over the coming years, so long as they continue to recruit students.

"Moving to a new regime naturally generates some operational uncertainties but even whilst the new operational arrangements are bedding down, Wales continues to be a good deal for students."

'Stark warning'

A Welsh government spokesman said: "While responsibility for the funding of the HE sector in Wales lies with HEFCW, we can confirm that the HE sector in Wales will be better off under the new tuition fee regime than it would have been previously.

"Latest forecasts show that the amount of income available to the HE sector in Wales from tuition fees and HEFCW will increase significantly during the lifetime of this government.

"This has been achieved against a backdrop of funding cuts from the UK government."

Welsh Conservatives education spokesperson Angela Burns AM described the directors' comments as "yet another stark warning from senior directors in higher education funding".

She said: "After the recent reshuffle, the education minister [Leighton Andrews] said 'bad luck, I'm back', but the real bad luck would be if he fails to start listening to the education sector.

"He could start by taking his £3.6bn tuition fee subsidy back to the drawing board.

"We also need to hear further reassurances from the minister that his policy of forcing universities to merge won't lead to campus or course cuts."

Welsh Lib Dem Education spokesman Aled Roberts said: "Clearly, the current policy is not financially sustainable.

"We need to know how the Welsh Labour government intends to make up the shortfall and how it will deal with the long-term effects of funding reductions on the competitiveness of Welsh higher education institutions."

Plaid Cymru education spokesman Simon Thomas accused the Welsh government of sticking its head in the sand about higher education funding.

"Unless the inequality in the system is addressed, the Welsh government will continue to subsidise other universities while underfunding Welsh ones," he said.

Academic economist Ken Richards, who has been involved with student funding committees for the Welsh Assembly, told BBC Radio Wales: "This extra grant is going to cause problems both for the assembly and universities.

"It would be very difficult to see it being maintained."

He said that students in EU also get the same funding whereas if financial support was offered as a grant it would need only be offered to Welsh students.