How will Wales regulate its universities in the future?

The National Assembly for Wales’ Children, Young People and Education Committee has brought forward its “post-legislative scrutiny” of the Higher Education (Wales) Act to inform the discussion on Wales’ new “tertiary” bill (due in Spring 2020) – and it has strong views.

The new bill must provide a way of making sure providers, above all their governing bodies, “are incentivised to embrace any national priorities” and “combine them seamlessly and meaningfully into their own strategies” – because the fee and access plan approach has “failed in this respect”.There must also be a “far better conception” of what student interests are, and the bill “should seek to safeguard them”.

Back in 2015, most of the sector’s eyes were on Jo Johnson and his steering through parliament of the Higher Education and Research Act. This was the legislation that abolished the old Higher Education Funding Council for England, and created the “tough, new, student focussed” Office for Students. Much less attention was paid to its Welsh equivalent – the Higher Education (Wales) Act 2015 – partly because it felt like a classic Welsh fudge.

The funding council stayed in place – albeit with “more emphasis” being placed on its regulatory role. It gained statutory authority for the approval of fee and access plans – very much in the old English-annual-OFFA mould as the gateway to higher rate tuition fee income. Quality Assessment became something institutions had to commission – by asking the Quality Assurance Agency to do it, as they had always done. Add a few other twiddles to do with new providers, and there we were – much less focus on the “market”, a co-regulatory tone and a traditional reliance on (undergraduate) access regulation as a lever for accountability. “Continuity” was very much the name of the game.

Sittin’ on the dock of the bay watchin’ the tide roll away

But things are changing. Scotland’s system of outcome agreements and England’s regulator both appear to offer – at least if you’re sat in Cardiff bay – much more in the way of university accountability, and better “bang” for public investment “buck”. And the Senedd has noticed – as Lynne Neagle points out in her National Assembly for Wales’ Children, Young People and Education Committee report on Post-legislative scrutiny of the Higher Education (Wales) Act 2015,

“The contrast [between the 2015 act and] with published plans for the proposed tertiary education bill could not be starker. Whilst the HE Act 2015 stressed continuity, the new bill is expected to have transformation at its heart. We expect to see a bill which seeks to significantly reshape the post-16 education sector in Wales, bringing together diverse providers in a sector which will have a very different dynamic under a new arms-length Commission.

Since 2015 we’ve had Ellen Hazelkorn’s review of sector funding and system regulation, where the headline was the creation of a single “tertiary” super-body, a bunch of high profile governance scandals and lots of prep in the run up to legislation that will create the new tertiary body – which will finally start being debated in the new year.

Mind the gaps

Part of the problem is about gaps. Because the 2015 legislation related back to the student support regulations made under the Teaching and Higher Education Act 1998, neither part-time nor postgraduate were properly regulated. Wales Education Minister Kirsty Williams argued that they had not “identified an urgent reason to designate these courses as qualifying courses for the purposes of a fee limit”, but HEFCW CEO David Blaney disgareed, particularly where there were providers only doing PT or PG.

“It’s not to say that there is a quality problem with those providers”, he said to the committee. “The reality is that we wouldn’t know because they’re not required to go through the quality machinery that our regulations otherwise require. So, there could be a problem”. Given some of the focus on PG and PT in Wales, the committee concluded that the 2015 act is “rooted in the higher education landscape of its time” and “too focused on one type of provider: regulated institutions offering full-time undergraduate courses”.

I got the power

Then there’s powers over stuff like compliance with Fee and Access Plans or good governance. HEFCW told the committee that

“the sanctions available to HEFCW via the Higher Education (Wales) Act 2015 operate slowly and are largely existentially threatening to providers. This makes the sanctions difficult to use and does not allow for swift formal intervention to address problems proportionately through our legal powers.”

David Blaney went on to explain:

“We can direct, we can get people to spend money on activity, but all of that can be legally challenged. Then, in the extreme, we can refuse to give them a fee plan, which means that we close them, effectively, because their access to income dries up overnight. Are we going to go there? Well, actually, they have to believe that I might, but it would be a pretty nuclear option to do it.”

Providers naturally argued the opposite – but given some of the high-profile governance stories in the press, they didn’t get very far. The committee is therefore calling on the Welsh Government ensure that the new Tertiary Commission “has the scope to imagine and put into place” the “detailed powers, interventions, incentives and sanctions it feels are required for the effective regulation of a varied and dynamic tertiary education sector”.

On access we get echoes of English sector lobbying over OFFA. The sector said that the current regime was “bureaucratic, resource intensive for HEFCW and focus too much on inputs”. The timeframe is also an issue – “the process requires plans must be written without knowing how effective the last two plans have been”. It’s hard not to predict a shift to outcomes, longer time frames and an end to minimum spend expectations, as we’ve seen OfS implement in England.

On national priorities, there’s a tartan tilt. “HEFCW’s most prominent lever, fee and access plans, relate only to the relatively narrow objectives of widening access”, says the committee, and “in our view, beyond widening access, HEFCW’s ability to lever delivery of national priorities is surprisingly restricted if such priorities are not accompanied by associated hypothecated funding to providers”.

It goes on:

We agree with the Minister that in future, tertiary education providers that benefit from public subsidy and funding should be expected to contribute to a wider range of national priorities, and that, on the whole, the focus should be on outcomes and not outputs or inputs”. See outcome agreements in Scotland.

The student interest

And then there’s students. In the committee’s view, the 2015 Act and other relevant legislation offers a “minimalist conception” of student interests that is “out of touch with student expectations and current debates” in the sector. Fascinatingly, Kirsty Williams had a go at fronting this out by referring to the tests providers have to pass to have their courses individually designated:

“[…] the three crucial questions that those providers have to answer are quality—is what they’re providing to students of a good quality—the financial viability of the institution—again, to try to protect the interests of the students who may find themselves embarking on a course in an institution that isn’t viable—as well as their contribution to […] public good.”

But the committee was having none of it. Buoyed up both by contributions from Universities Wales and NUS’ able Wales President Rob Simpkins, the committee concluded that the lack of wider requirements on issues like the overall student experience, student well-being, or value for money – was unacceptable, and had actually got worse.

It concludes that seeing “student interests” in terms of course quality and provider financial sustainability – the “threshold model” – is increasingly anachronistic in the context of sophisticated student expectations and an ever-increasing focus on “for example student well-being, the overall student experience, and graduate employability. In our view every student should have their reasonable expectations met by any provider in Wales”.

There is a sense in which this is the report you could expect – the current regulatory approach, and HEFCW’s role within it – is already very much on the way out. In making a set of tough recommendations Senedd members are aligning themselves to the governmental direction of travel, and giving Kirsrty Williams pre-backing for a powers push that anywhere else would have caused partisan politicking. It’s almost like she planned it.

Where this goes next will be interesting. England’s eventual response to Augar will have a big impact if it ever emerges, but away from the fees question Wales will be looking to carve a role out for its new tertiary body that is simultaneously more powerful than HEFCW, retains the “character” of co-regulation, causes universities to better aligned with national priorities, and sets up the “student interest” in a more meaningful way than “public subsidy” or a Barber-esque obsession with “student outcomes”. And if all that sounds like trying to have your Welsh cakes and eating them, you’d be right.

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