Welsh Bill may point to England’s HE future

Higher education in Wales has emerged from a difficult period and is now projecting itself with greater confidence than in the recent past. A series of mergers involving mainly post-1992 institutions has been completed and some potentially transformative university projects, such as Swansea University’s Science and Innovation Campus, are advancing.

But it is the introduction of a Higher Education (Wales) Bill last month that may interest observers on both sides of the border. Particular attention is being given to Welsh developments because it may give clues as to whether a future Labour-led government in Westminster will pursue the sort of regulatory approach that Labour in Wales is taking forward.

The Bill’s most radical feature is its stipulation that all HE providers in Wales who wish their HE courses to attract student support – crucially, eligibility for student fee loans – must be charities (which public universities and FE colleges already are). In one simple stroke, the Welsh Government would undercut the ability of for-profit institutions to gain a foothold in the principality.

The need for a new regulatory regime in England (and Wales) is now uncontested. Since aborting a draft HE Bill in England two years ago, David Willetts has reaffirmed the need in the medium term, for a single regulatory framework to replace England’s current ‘muddling through’ Operating Framework.

Even Willetts’s former special adviser, Nick Hillman, has described the need for a new regulatory structure in England as now being “urgent”.

And big overspends in BIS’s budget for HE, as a result of the uncontrolled growth in HNDs/HNCs in private institutions, has kept the matter of regulation in England firmly on the agenda.

So legislation in England will be expected sometime in the next Parliament, whoever wins the General Election. It is the nature of this legislation that is provoking interest, and Wales’ attempt at HE regulation could signal how Labour will approach the issue. Indeed, Labour’s shadow HE minister, Liam Byrne, recently hinted at introducing a similar stipulation that HE providers receiving student support must also be charities.

It is no secret that the political sensibility in Wales is generally closer to the European social model than either Blairite reformism or a Willettsonian free market. However it remains uncertain whether a left-leaning UK government would go so far as legislating against allowing students at for-profit providers being eligible for student support – particularly given the recent entrenchment and growth of alternative provision in England. But Labour’s legislative move in Wales makes this an option that will be seriously considered.

The Bill proposes changes to the regulatory powers exercised by the Welsh Government’s arms-length funding council, HEFCW. So-called Fee Plans (analogous to Access Agreements in England) will continue in Wales – though relaunched as Fee and Access Plans.

HEFCW will continue to approve Fee Plans (there is no Welsh ‘OFFA’), and they will likely cover a five-year period rather than the current maximum two-year term. Some sector figures fear that the new Fee and Access Plans will become an all-purpose means for a future government to tighten control over universities, though the Welsh Government denies that this is their motive.

Other bodies, such as the National Union of Students Wales, welcomed the Bill as a signal that the Welsh Government is sticking to its broadly anti-market posture.

The Welsh Government clearly views the provision of student support (including for the payment of tuition fees) as a de facto and de jure form of public investment in HE providers, despite the public accounts registering only the much-discussed ‘RAB change’ as a net cost to government.

It is on this basis that the Bill compels all providers who opt in to their students receiving financial support for full-time HE programmes to be subject to a new statutory binding Financial Management Code set out by HEFCW.

This would replace the familiar Financial Memoranda that Welsh universities receive from HEFCW (on a similar model to English practice). If the Welsh HE Bill is passed, universities and other providers not in receipt of grant-in-aid from the funding council would be bound by the code.

HEFCW’s powers in relation to quality assurance, which will continue to be exercised via the QAA in Wales if the Bill passes, will be decoupled from the Financial Memorandum, with HEFCW’s powers in this area put on a clear, self-standing basis.

There has been a mixed reaction to the Bill in higher education circles in Wales. On the one hand it is thought that the Bill is incrementalist in avoiding the feared harmonisation of the corporate status of all universities in Wales (as proposed in the Welsh Government’s preparatory Review of HE Governance).

On the other hand, the Bill’s proposed new legal ‘power of entry’ into HE providers’ premises – as inspectors can in schools or colleges – caused some in the sector to blanch at the prospect. This power would probably only be exercised in extremis when provider’s practices fall under intense public scrutiny, and it is surely inconceivable that a public university in Wales would ever lock their doors in a face of a visit from the QAA.

Whether these and other new legal powers are necessary and proportionate for chartered universities and HE corporations will doubtless be discussed during the passage of the Bill. Eyebrows were also raised by the inclusion in the Bill of some Henry VIII Powers (allowing a government to repeal certain elements after the Bill has passed in to law), albeit in limited areas.

The HE Bill is likely to pass the National Assembly. However as the Welsh Government currently lacks a clear majority, it is likely that there will be some non-government amendments and so it could evolve further before ultimately passing. Either way, the Bill gives a tantalising insight into what a future government in England may consider as they design a new regulatory framework.

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