No way, says Wales

The Welsh Assembly was planning to introduce top-up fees until the opposition parties revolted. How can the principality's universities survive without the extra cash, asks Lucy Hodges
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The Independent Online

The Welsh history of feuds and revolts is alive and well in the new assembly. Conservative members, with the Lib Dems and Plaid Cymru, have given Labour's assembly government a bloody nose on top-up fees by voting them down. That has left the carefully crafted plans for Welsh universities to charge up to £3,000 a year like their English neighbours in disarray. For the past week the Opposition leaders have been in wall to wall meetings with First Minister Rhodri Morgan or in choreographed dinners with Welsh vice-chancellors to reach a compromise.

The hope is that a solution will be found to ensure that Welsh higher education does not lose out financially compared to England - or at least lose out any more than it does already. "This is a crucial test for devolution," says Jane Davidson, Wales's Education Minister. "If the Assembly fails the test, it's going to be much harder for us to get more powers. Extra powers do bring extra responsibility."

When the Welsh Assembly came into existence, Davidson adopted what was seen as a canny wait-and-see policy on top-up fees. So, while Tony Blair was being bombarded with brickbats from Old Labour MPs, she was able to avoid trouble by postponing a decision. It made her friends with students and lecturer unions in Wales although Welsh vice-chancellors were less sure about the tactic. One observed that Davidson was burying her head in the sand. Now, 18 months on, and with the Higher Education Act firmly on the statute books in England, that comment is beginning to look prophetic.

Davidson says that during that period Wales had a chance to look at the funding options for higher education in the principality. To reassure the vice-chancellors that they would not lose out as a result of the postponement she promised that they would receive the same money per student as the English institutions charging top-up fees. That promise holds for one year. So next year, 2006, when top-up fees are introduced, Wales will have to find an extra £14m - and that money will come out of the Assembly Government's core budget.

A year ago Davidson asked Professor Teresa Rees, pro vice-chancellor of Cardiff University, to chair a review into the funding options for Welsh higher education in the long term. The 14-member group included representatives of further and higher education, and Maureen Woodhall, an academic who carried out pioneering research into the subject in the 1970s and 1980s. It also included Rob Humphreys, the president of the Welsh Lib Dems and Darren McGinley, the president of the students' union at Trinity College Carmarthen. So it was clearly a representative and authoritative group and it sought solutions based on evidence.

Their report came up with a distinctively Welsh recommendation. It proposed unanimously that Welsh higher education institutions be allowed to charge deferred flexible fees of up to £3,000 so as not to disadvantage the sector compared with England. To ensure that poorer students were not deterred from higher education this would be accompanied by a national bursary scheme created by slicing off money from the fee income of every institution. The means-tested bursaries would go to all Welsh students from low income families. The decision by a coalition of Tories, Lib Dems and Plaid Cymru to sabotage the report two days before it was published reflects the balance of power in the Assembly.

At the general election Labour lost its one-seat majority when Blaenau Gwent went independent. So the Opposition parties were itching for an opportunity to embarrass the assembly government. What better issue than the much loathed top-up fees?

Now, however, the rebels are experiencing a fast learning curve. Professor Rees has been giving briefings on her report to explain the tricky issues surrounding Welsh higher education funding and why the review group chose the option it did. Wales is a net importer of students: 37 per cent of Welsh students go to England to study but 44 per cent of students at Welsh universities come from England. The report says that minor fluctuations in these cross-border flows could lead to Welsh students being squeezed out by better qualified applicants from elsewhere. It could also cause major viability problems for some institutions and have serious financial implications for the assembly budget.

University vice-chancellors regard the Conservative opposition as opportunistic. They argue that Conservatives stand for minimal state involvement in people's lives and maximum personal choice, therefore they should support deferred flexible fees. "The Tory position is totally untenable," says one vice-chancellor. "They are voting against their core ideology to give Labour a bloody nose. This is politics of the worst kind."

Nick Bourne, the Conservative leader, rejects such comments. All the parties are looking for "a way forward", he says. "I am very much against top-up fees. Just as secondary education is universal and free, I think tertiary education should be too."

The Lib Dems take an even stronger line. "We are opposed to top-up fees," says Peter Black, the party's education spokes-man. "In fact we are opposed to tuition fees altogether. We believe that education should be free at the point of access." A similar view comes from Plaid Cymru. "We believe that higher education should be funded out of general taxation," says Janet Ryder, its education spokesman. "We firmly believe that the whole community benefits. We are negotiating with the other parties. What is paramount is the welfare of students in Wales. So long as we ensure that Welsh-domiciled students get a good deal and that Welsh higher education is funded equitably, then fine."

As we went to press, the parties were seeking a compromise on the issue of Welsh students attending Welsh universities. The Assembly government was hoping to stick to the idea of a flexible graduate contribution of up to £3,000. Most Welsh institutions would want to charge that except perhaps for Trinity College Carmarthen and the North East Wales Institute. But, because the Opposition motion outlawed top-up fees, this change would have to be accompanied by a fees bursary or scholarship for all Welsh students of £1,800 a year. That would reduce the £3,000 fee to £1,200, equivalent to the flat-rate fee that all students pay now.

The big question is where the money will come from for all these scholarships for Welsh students. The cost is around £50m for the academic year 2006-7 and that figure will rise because the policy will encourage Welsh students to stay in Wales to study. The cost is one of the thorniest issues that assembly members are having to grapple with because they have no revenue raising powers. Universities are keen that the cash should not come from a bigger top-slicing of the fee income because that would leave them worse off than their English counterparts.

Davidson seemed to accept that last week. "Anything we do comes smack out of the assembly budget and will require cuts in other services," she said. But the universities are worried. Amanda Wilkinson, director of Higher Education Wales, the umbrella group for Welsh universities, is anxious about further delay. "We need a decision now," she says.

"University prospectuses have gone out and applications are coming in in the autumn. It's not right that we are not able to tell students anything about what the level of their contribution will be."

Universities are also worried about the long-term funding of higher education in Wales over and above the immediate issue of top-up fees. The Rees report contained some worrying figures about the underfunding of Welsh universities. It is much larger than previously thought, says the report, standing at £330m for the period 2005/6 - 2007/8. That is more than double the previous estimate.

"We've still some way to go in explaining to politicians the important role that higher education plays in the Welsh economy," says Robert Pearce, the vice-chancellor of Lampeter.

To many observers it seems ironic that Welsh politicians should act to prevent universities receiving a new stream of funding from students when the higher education system needs it so badly. If it is true that Welsh universities are so seriously underfunded compared with their English counterparts, that means that Welsh politicians are using the money that should be going into higher education and spending it on things like health and other aspects of local government.

And, if that issue is not addressed, Welsh higher education institutions will suffer a brain drain as academics leave for better funded universities in England and abroad.

The Welsh crisis: the fee argument

Why has the Welsh assembly voted down top-up fees?

Because Wales has a different political culture. Top-up fees were a hot political potato in England, but they are even hotter in the principality. Seizing the moment when the Labour assembly government had lost its majority, the opposition parties were able to give it a big thumping. In future, these parties will have to be consulted on every contentious issue.

Why do vice chancellors want top-up fees?

Because their institutions will be underfunded without them, compared with England. (In fact, they would be underfunded even with them.) And that will lead to a haemorrhage of good staff. With more students attending university and no extra government funding, income has to come from somewhere. "You are faced with more students paying more in fees or fewer students paying less," says David Warner, principal of Swansea Institute. "There is no bottomless state pit."

Aren't students put off higher education by having to pay more?

Not according to a survey in the Rees report of more than a thousand 16-year-olds in Wales. It found that they were not put off by the thought of debt. They classified debt as good and bad. Good debt was investment in your education or a house, because it meant you could improve your prospects and have somewhere to live. Bad debt was credit card debt brought about by too much time spent in bars and nightclubs.