Our inquiry examined the way in which cross-border issues affect the quality and delivery of further and higher education services in Wales. There are now significant differences between further education policies in Wales and in England. Some learners need to cross the border to attend college, usually because of geographical convenience or to attend a specialist course which is not readily available on their own side of the border. We recommend that the Learning and Skills Council and the Welsh Assembly Government take steps to ensure that cross-border access is maintained and encouraged, particularly when local authorities in England take over responsibilities which currently rest with the Learning and Skills Council. Employers need clearer information about the government training schemes available on both sides of the border and we recommend that the Department for Innovation, Universities and Skills and the Welsh Assembly Government work together to ensure that employers understand the support available to them and how they can gain access to it. More joint working is also necessary in order to consider the potential impact of proposed new policies relating to further education on both sides of the border and to anticipate unintended consequences that could do damage well before decisions are made. At all times the needs of learners and employers must be kept to the fore rather than the convenience of institutions and authorities.
Wales is developing its own distinct approach to higher education. However, the need to maintain shared high standards throughout the UK, and common interests such as shared markets for staff and student recruitment, mean that in practice there is a high level of interdependency between the nations. The higher education sector in England is much larger than that in Wales so that Wales is bound to be subject to some of the consequences of policy changes across the border. Differences in spending priorities between Wales and England have led to a funding gap between the amount which higher education institutions in Wales receive compared to what they would receive if they were funded on the same basis as higher education institutions in England. This is estimated at £61 million on 2005/06 figures.
Witnesses told us that if this funding disparity continues, higher education institutions in Wales will become unable to compete effectively with institutions elsewhere in the UK and in other European Union nations and that this would limit their contribution to growing the economy in Wales. Welsh higher education receives a smaller share of UK research funding than would be expected from its relative size and if the funding gap continues to grow, this will make it increasingly difficult for higher education institutions in Wales to compete on an equal basis with English institutions for research funding, with the prospect of a downward spiral developing. We believe that research councils should not just follow excellence, but must also foster it and we recommend that the Department for Innovation, Universities and Skills makes available a specific allocation of research funds to develop research capacity in economically deprived areas. This would enable more higher education institutions to gain a track record of success and so be able to compete more effectively for research funds from other sources. However, it must be acknowledged that it will be harder for Welsh higher education institutions to attract research funding if the funding gap continues.
It is clear that communications between the Department for Innovation, Universities and Skills and the Welsh Assembly Government have not been sufficiently effective. Some of the responsibilities of the Department for Innovation, Universities and Skills are UK-wide whereas others relate only to England, and our evidence suggests that this has given rise to confusion, both within and outside the Department. We recommend that the Department ensures that the devolved administration is fully consulted and involved in the early stages of planning which might lead to any further decisions with regard to higher education policy in England. Cooperation and mutual scrutiny as 'critical friends' should be a benefit of devolution to both sides. The Department should establish processes to ensure that the territorial extent of any policy and the potential for wider impact are clearly identified and communicated by officials before implementation. We also recommend that, unless and until any alternative structure is put in place, the coordination of higher education policy should be a top priority for the Joint Ministerial Committee.
Throughout all the strands of our inquiry, our evidence has suggested that the decision-making processes on each side of the border needs to be more coordinated, more coherent and more transparent. There is a need for officials within Whitehall to have a better understanding of devolution as there is an impression that some officials believe that it means that they can 'forget' about Wales. Similarly there is a need for officials and Ministers in the Welsh Assembly to take a greater interest in developing policies across the border. Devolution provides an opportunity for Wales to do things differently and for different approaches to be road-tested on either side of the border, but in both cases the objective must be to do things better for the sake of learners, employers and the wider community rather than being different just for the sake of it. In particular, officials in Wales and both in Whitehall and at a regional level in England need to be outward looking and sensitive to the realities of our long and porous border. It should be a cause for celebration and cooperation rather than an obstacle to efficiency and effectiveness. We look to the Wales Office to improve communications between the Welsh Assembly Government and the UK Government and to ensure that they are fit for purpose.