David Kernohan is Deputy Editor of Wonkhe

Our appetite for a fully worked out version of the impressive first phase report from the Scottish Funding Council’s “Coherence and Stability Review” was only partially sated by the release of an interim progress update in March.

Now is the summer of 2021, and the promised final phase – with a ton of implementation detail – is here.

Though other national systems of tertiary education (England in particular) have leaned heavily into the market as a mechanism for change and for quality enhancement, Scotland has always been proud to walk its own path – cleaving more closely to a planned approach. The Skills and Post-16 Education Bill currently passing through Westminster covers a lot of ground that is also addressed here – the differences in approach are instructive to say the least.

Coherence as a whole-system goal

It’s not often you see reports about coherence in a system – but it is something that came through a lot in the huge consultation process that underpins this three-phase report. Scotland, even by usual systemic standards, has a large number of interconnections between various bits of thinking about education and skills. It is noted that:

around 44,000 secondary school students are part of school-college link programmes; colleges enrol around a fifth of higher education students across Scotland; and 42% of SIMD20 Scottish entrants to a degree course at university obtained a Higher National qualification at college first.

Coherence is neatly defined from the perspective of learners and industry – I particularly like the way that guidance and support is built into a national vision of access and opportunity, and (again, with an eye on England) how this is not based on sectors and providers competing against each other for funding and esteem.

During the pandemic, SFC noted that responses had been characterised by “collective resilience, adaptability, perseverance, leadership, and civic responsibility” and had sparked “innovation and creativity”. Coupled with the appeal of higher learning remaining throughout and beyond Covid-19 this feels like a rosy picture – though, to be fair the way our experiences have exacerbated existing inequality and the pressure on finances at every level are discussed in detail. For these reasons, the future of the sector is not seen as a steady state – in particular much of the report focuses on the need to support existing students and those needing to upskill or reskill.

In a nutshell

We can break the recommendations into seven chunks – impact and social recovery, skills and the education system, students’ interests, research and knowledge exchange, international reach, collaboration and system shape, and planning for the future. There’s a lot going on in each, but as far as headlines go:

Impact and social recovery

SFC are well aware that there is still a pandemic on, and accordingly recommend that the special “extraordinary” funding arrangements are rolled through to 2022-23, with the addition of a one year intervention to support graduates in securing jobs and internships through uncertain economic conditions. Going on from here, the hope is that the Scottish Government can provide sustainability via multi-year settlements linked to strategic thinking about the “vision and direction” for education and research.

Clearly impressed with this morning’s “Getting Results for Scotland” report from Universities Scotland, there is a call for a new National Impact Framework (NIF) to provide clarity about the expected outcomes from work in the tertiary education and research sector. This will map both to Scotland’s National Performance Framework and the UN Sustainable Development Goals – monitoring and steering how the sector tackles key priorities like fair work, equalities and the climate emergency. Students, employers, and other stakeholders will all have a voice in development – and as well as setting both measures and aspirations, this framework will bleed into Outcome Agreement negotiations.

Responsive and coherent skills system

These things are never a blank piece of paper – even just in 2020-21 SFC has worked to introduce Graduate and Foundation Apprenticeships to its funding model, supported national skills programmes like the National Training Transition Fund, and has worked on an Education and Skills Impact Framework that will see Scotland’s first major use of LEO data. Skills were a priority long before Covid – but the pandemic has made it clear more has to be done.

Here we welcome Tertiary Provision Pathfinders (TPPs) – who will assess current and future skills needs and student demand in the Scottish regions, with a read back across to the NIF. Unlike the Local Skills Improvement Plans (LSIPs) proposed in England, these are convened by the funding body and embed employer needs as one voice among many alongside students, and broader social and economic considerations.

On the employer engagement side specifically, a “more strategic and comprehensive” economic recovery and employer investment programme for colleges and universities will be underpinned by a new Employer and Industry Advisory Group convened by SFC. As across the whole UK, the NHS is a hugely important employer and there’s a commitment to deepen strategic relationships there too.

The starting point for thinking about skills is “meta-skills” and “mega-trends”, but the meat of the issue concerns a skills mismatch which sees some employees with qualifications far in advance of what is required for their role, while employers are scrambling to recruit in other areas (though it is noted that employers are not as great at training people as they could reasonably be expected to be). Arguably these are job-specific rather than “meta-”skills – though I can’t fault SFC for thinking longer term rather than just about immediate employer needs.

The UK policy fashion is very much for shorter courses for reskilling and upskilling – arguably Scotland has led the way here – universities recently saw a share of £25m from the National Transition Training Fund to develop and deliver micro-credentials, part of a development programme that has been running since September 2019. What’s left to do, arguably, is to address the hydra that is credit transfer frameworks – and there is a recommendation for SFC to pilot a National Micro-Credential Framework and Delivery plan to address the certification of these tiny chunks of provision and look at the stackability of micro-credentials into larger qualifications. This clearly has implications for existing targets and policies around access to higher education – there’s a suggestion the government should work with SFC to think about this.

Encouragingly, the SFC and the sector are to develop a national estates strategy, recognising the significance of university and college estates. The focus here is on sharing and collaboration, and there’s a keenness to bring industry into the mix. In thinking about zero-carbon development (a step above the current low carbon programme), national infrastructure, and digital needs – SFC are conceptualising provider estates very much as a regionally and nationally valuable asset.

The student interest

A great deal of discursive work with NUS and Sparqs underpins a nuanced understanding of what current students are looking for – in normal times a sense of belonging and place, value for money, reputational benefits, deeper subject understanding, better online and blended learning, and the prospect of further study or career progression. The pandemic has prompted a revised list – there is an expectation that blended learning may be a bigger part of the student experience than previously envisaged, students are concerned about practical work and access to facilities, digital exclusion is a huge concern as is access to mental health support – and students are understandably concerned about their next steps after qualification.

We’ve seen already the well-considered financial support offered to students by SFC (including, memorably, both student hardship funding and support for providers to do things like cancel rent and provide technology) – here we get more on general student support around things like the school/university transitions, new work on widening access through multiple pathways (including work on institutional expectations set by providers along with students!), and measures supporting the digital skills of teaching staff.

There’s also a thoughtful proposal that would bring quality assurance processes for universities and colleges together into a single framework – and, given the widely expected growth of digital provision – set a national standard for online and blended learning. This combined framework would be – in the Scottish tradition – enhancement led, evidence based, and professionally reviewed.

Research and knowledge exchange

Scotland very much punches above its weight when it comes to research, and for this reason the main plank of discovery research funding will be maintained and existing research concentration will be maintained. But evaluation will get a refresh post REF2021 – SFC wants to know more about how providers use these funds, and how the full range of benefits are understood.

I say “funds”, as SFC does, in the knowledge that research funding does not cover the full costs of performing research. Cross-subsidy, particularly from international student fees, is a big part of this picture. There’s no easy solution here – SFC will attempt to influence UK government and UKRI work in this area, though there is a recognition that the principle of providers funding research at least partially from their own funds is “entirely proper and desirable”. The average research funding gap from 2015-16 to 2018-19 stands at £328m.

There’s also a plan to leverage historic research strengths into addressing “particularly knotty societal problems” – new mission-orientated research and KE themes and funding to tackle identified national and long term challenges will sit alongside discovery research funding. The existing Research Pooling Initiative will be refreshed, with pools recommissioned (with more money in play) to focus on challenge-orientated collaborations.All this comes alongside efforts to address issues with research culture, and to support the postgraduate research student experiences.

Turning to Knowledge Exchange, we’ve to expect a relaunch of the big current investments – Interface, and the Innovation Centres. A shiny new Knowledge Exchange Advisory Board will have oversight, and there’ll be some new metrics for success. Befitting the cross-sector theme of the report, colleges will now get a crack at a new Knowledge Exchange and Innovation Fund alongside universities.

International reach

There’s a dearth of recommendations here, with SFC wisely holding fire till the Scottish Government unveils a new International Education Strategy. The gentle suggestions are that alumni networks, provider international missions, exchange and mobility schemes, and other work the government is doing overseas should play a part – and that there needs to be a marketing strategy to differentiate tertiary education and research in Scotland as being a manifestation of “Scotland as a safe, welcoming, supportive, socially progressive, environmentally aware destination”. Shade thrown.

Collaboration and system shape

If this all feels like a wild ride so far – and if you are reading this piece outside of Scotland with a measure of envy – hold on. Though there are rises in SFC funding for both universities and colleges this year, the financial impact of Covid-19 has “exposed fragility” in the sector and, although mitigations thus far have been successful, no-one is pretending that Boards and Courts don’t face some very difficult challenges right now. SFC sees a future involving more collaboration and integration, a measure of consolidation – particularly involving support services – and longer term planning.

It is “likely” that SFC will look for longer-term financial forecasts, more data on debt liabilities, and something that looks suspiciously similar to “Reportable Events” in England.

A neat capsule summary of the university sector’s finances tells us that an increase in fee income, government support and some in-year cost savings compensated for a loss of commercial income. The sector is up in chas terms on 2018-19, and surpluses (at £43m) are in line with forecasts. Borrowing has understandably risen – up by £85m to a total of about £1.7bn, though much of this is loans from the SFC itself (interest payments are up only marginally). USS deficit related costs, an infrastructure investment backlog, and a lack of research activity are the risks on the horizon – though like the rest of the UK Scotland is watching what England decides to do with fee levels with some trepidation.

In the short term there’s a move to provide more end-of-year flexibility for colleges, with some potential tweaks to classifications allowing them to hold reserves for the first time via an ONS reclassification. The multi-college region recommendations from Phase 1 are back, and SFC seeks governmental support to move forward. SFC also wants to continue to have a role in the strategic oversight of UK funds provided as a replacement for European funding streams. Longer term, the case for uplifts to the unit of resource for learning and teaching – following a real-terms decline over the last dedicated – is well made.

The future

Investment, quality assurance, impact, and accountability will be the four pillars that support wider Scottish Government strategic intentions where they pertain to tertiary education. At an institutional level, the Outcomes Agreement will remain the key means by which these are expressed, though a “revised approach” is coming.

There will be a new working group, including the government and the college sector, to agree a plan to move towards a fairer distribution of teaching funding. You will recall that a sector-blind approach was proposed in phase 1, and this feels like where the new approach will take shape. Pilots of this approach will start with the University of the Highlands and Islands and Scotland’s Rural College (SRUC) – the two most integrated of SFC’s providers.

The whole gamut of funding premiums as policy incentives is up for review – the idea being that “non-core” funds can be used as transformational funding to support collaboration and other efficiencies.

What does it all mean?

This is a serious and well-considered report, as policy that looks beyond the immediate concerns of the pandemic and the policy weather to the wider education and skills climate. As SFC Chair Mike Cantlay puts it:

We have, by necessity, a complex and diverse system and no one-off, single solution will provide all the answers. Instead this Review aims to help design a smart environment that can respond to the partly unknown challenges and uncertainties that will continue to face tertiary education

It doesn’t shy away from posing difficult questions about the future shape of higher education in Scotland in particular, and if we don’t get all the answers that is no bad thing – we get, at least, the collaborative structures that will offer them. But we should not be beguiled by the strategic brio and supportive language – Scotland’s universities have massive, fundamental, changes ahead and though the report will be widely welcomed there will be a certain degree of tension underpinning the warm words about the sector’s contribution to national recovery.

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