What might the Augar review mean for Wales?

In Wales, we’re not used to seeing Wales feature heavily in UK-wide news coverage of major English policy announcements.

The blurring of lines between what is and isn’t devolved is a common frustration for wonks in Wales and one which finds a regular outlet on Twitter accounts such as @ThatsDevolved.

However, this week many of the news stories covering the Augar review did acknowledge devolution and in particular the potential impact the review’s recommendations would have on the Welsh system. Prior to the publication of the review we saw headlines about how Augar could “torpedo the Welsh funding settlement” and since then we have seen headlines about Wales potentially having the highest tuition fees in the UK.

Diamond delivery

The Welsh funding settlement in question, a series of reforms following the Sir Ian Diamond’s review of higher education funding and student finance in Wales, is still in the process of being implemented. That review involved students, universities and political parties, and gained consensus from all those involved due to the way the recommendations set out a progressive package of maintenance support and a long-term sustainable funding settlement for higher education.

The maintenance support part of the package came into place this year (2018/19), while this year’s remit letter for the Higher Education Funding Council for Wales (HEFCW) included three-year projections outlining funding increases for HEFCW as the new arrangements work their way through the system. And since the implementation of the new maintenance support package in Wales, much has been made about the initial data which suggests large increases in the number of students choosing to study part-time and postgraduate courses in Wales as a result of these reforms.

Consequences and consequentials

Headlines about the demise of the Welsh funding system are somewhat premature, although there are of course implications for Wales in what the Augar panel recommends. Developing a full understanding of those implications will take more time and how the UK government chooses to respond to them will factor heavily into what the recommendations mean for Wales.

The biggest headline grabber was the proposed fee cut to £7,500 which, if implemented, could leave Wales with a higher fee of £9,000. There are large cross-border flows between England and Wales – in 2017-18 around 23,000 Welsh students chose to study in England while 32,000 English students chose to study in Wales. This means a fee cut in England is likely to necessitate a cut in fees in Wales to maintain student mobility across the border.

A fee cut in Wales would mean a shortfall in the overall level of funding for the sector in Wales and, as such, a shortfall in the sustainable level of sector funding recommended by the Diamond review.

Tucked away on page 204 of the post-18 review in England is a single sentence on potential Barnett consequentials – “Funding for devolved administrations under the Barnett formula is estimated to add an additional cost of approximately £0.9bn.” This funding for the devolved administrations would be dependent on the UK government opting to provide the level of investment Augar recommends, and the distribution of that funding across the three devolved nations isn’t immediately clear. However, the identification of substantial consequentials does suggest that any potential shortfall in Wales could be addressed and that the package of reforms recommended the Diamond review could continue to be delivered.

Another factor that the report recognises is that, although student loan repayment terms are devolved, England and Wales have set the same terms for repayment since 1998. The review notes, “due to the commonality in loan teams, the Welsh Government in particular may wish to consider the implications of any changes made to repayment terms in England.” This is complicated by the principle that Annually Managed Expenditure programmes in the devolved nations – like student loans – should generate broadly similar costs to those introduced by UK government departments. There will need to be further analysis and discussion on what some of the proposed changes would mean for Wales in this area.

Beyond that, the panel’s recommendations around maintenance grants fall somewhat short of the level of support and progressiveness of the Welsh system where those from lower income backgrounds receive 90 per cent of their maintenance support as a grant. And the review’s focus on bringing greater balance to funding across modes and levels is something that is already reflected in Welsh education funding and policy. Recommendations on new level four and five qualifications in England will also potentially contribute to the further divergence of the English and Welsh qualification systems, a divergence already pronounced at levels two and three, and in apprenticeships.

Working with the devolved nations

Like most parts of higher education in the UK, understanding what the Augar review means for Wales will take some time. Although it seems fair to suggest that the panel’s conclusion in the impact section on page 203 that “they do not anticipate any major change in cross-border student behaviour as a result of our proposals” should have a number of a caveats.

A response to the review will be for whoever is the next Prime Minister and who they appoint to their cabinet. What is essential is that when that response is being developed, the impact on the devolved nations is considered and that the devolved administrations are meaningfully involved.

Join us on 2 July in London for a one day conference to analyse and digest the Augar review and begin to build the response.

One response to “What might the Augar review mean for Wales?

  1. Sound analysis here from Kieron and Universities Wales. If the funding settlement for England is as modelled by Augar, there will be a Barnett consequential for Wales – but the key issue for Universities and other HE providers in Wales is the extent to which this will be transferred directly to HEFCW (or its successor body) or whether it might get re-directed elsewhere. I’m very clear in my own mind that Welsh Universities will need that Barnettised consequential (if not more) to ensure their sustainable future.

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