Cross-border provision of public services for Wales: Further and higher education - Welsh Affairs Committee Contents

Memorandum submitted by the Department for Innovation, Universities and Skills (DIUS)


  1.  This Memorandum provides the Government's views on the cross-border issues in the field of Further and Higher Education. It sets out:

    —  the Department for Innovation, Universities and Skills (DIUS) mission to create a world class skills based economy through investment and reform in the sector;

    —  the policies and arrangements to deliver this in England and how, following devolution, there are similarities with or divergence from Wales;

    —  the success of our policies and the nature and extent of their impact on cross border flows; and

    —  the mechanisms in place for consultation, joint planning and collaboration between Governments, institutions and partners at all levels; and highlights future arrangements for the delivery of Further and Higher Education (F&HE) in England.


  2.  The creation of the new Department for Innovation, Universities and Skills (DIUS), in the Machinery of Government changes in June 2007, provides the opportunity to focus policies and funding to widen access to and increase participation in F&HE to raise skills levels; generate world class research and innovation and develop an improved partnership and engagement with employers to meet the challenges of the 21st century:

    Britain can only succeed in a rapidly changing world if we develop the skills of our people to the fullest possible extent, carry out world class research and scholarship and apply both knowledge and skills to create an innovative and competitive economy. The DIUS mission is to work with our partners to meet these challenges. (DIUS Mission)

  3.  The importance of an effective F&HE system remains at the heart of the Government's strategy for the long term development economic and social success of Britain.

  4.  The report of Sir Sandy Leitch on UK skills needs (Prosperity for all in the global economy—World Class Skills) set out the challenge to which the government responded in the Leitch Implementation Plan. The new economic mission required for colleges and the FE sector to boost workforce skills is the key theme of the Government's White Paper Further Education: Raising Skills, Improving Life Chances March 2007. And in April this year we published, Higher Education at Work—High Skills: High value a consultation document which describes a strategy to achieve growth in high skills (Level 4 and above).

  5.  It is within this context that the Memorandum considers the cross border issues post devolution in F&HE in the areas of:

    —  student recruitment and retention;

    —  student finance;

    —  research funding; and

    —  institutional engagement with employers on both sides of the border.


  6.  Devolution operates differently in different areas. Institutional funding and student finance are devolved; research is funded through the Science budget and employment is co-ordinated by DWP. England and Wales have pursued policies to meet their specific skills and economic goals. In F&HE, and while there are many similarities, devolution has provided the power for customisation and therefore increasing divergence.

  7.  HE student support policy in England is delivered through the local authorities and the Student Loans Company. Most student support functions were devolved to the Welsh Assembly Government in 2006 and are similarly delivered by the local authorities in Wales and the SLC.

  8.  Formal liaison on student finance exists through the Quadrilateral meetings between DIUS officials and the Devolved Administrations. Meetings are held three times a year, to discuss areas of overlap and mutual interest in relation to Higher Education Student finance, including governance, funding and capacity of the SLC. The role of Chair is rotated between the four countries. DIUS also co-ordinates the Key Performance Indicators agreed by each Administration with the SLC. In addition, there is informal liaison between officials to share policy decisions on the student support package and protocols regarding communications strategies.

  9.  The UK is treated as one nation in the European Court, therefore elements of student finance relating to EU students and UK residency are not devolved. All four UK countries have to agree to the same provisions. DIUS leads on this and works with colleagues in the Devolved Administrations to secure agreement when changes are required. Other mechanisms are established for collaboration and consultation to deal with specific issues as they arise. eg consultation with the Welsh Assembly Government on the proposals for the Sale of Student Loan Debt Bill, currently going through Parliament.

  10.  The Learning and Skills Council (LSC) has responsibility for the planning, commission and funding of post-16 education and training (excluding HE) in England. The LSC delivers in line with its annual Grant Letter from the Secretary of State. The Welsh Assembly Government (WAG) plans and commissions FE in Wales. The LSC has regular contact with all DAs on a range of different policy areas. For example, on FE learner support, the LSC has regular contact with all DAs every six months at which they discuss policy; and they also have ad hoc informal contact with their Welsh counterparts.

  11.  DIUS and the LSC liaise with the Devolved Administrations on policy areas that have UK wide implications ie the 14-19 agenda, qualifications reforms and the implementation of the Leitch reform, where both countries are developing similar policies, but targeted to their particular needs. The establishment of Lifelong Learning Networks (LLNs) which promote progression from further education to higher education have supported access to and provision of, cross-border programmes.

  12.  UK-wide responsibility for science and research through the seven Research Councils rests with DIUS. Institutional funding generally is devolved; and since the Further and Higher Education Act 1992, has been through each of the four UK Funding bodies. In England, the Higher Education Funding Council for England (HEFCE) and in Wales the Higher Education Funding Council for Wales (HEFCW). The section on research funding in this Memorandum outlines the system of research funding in the UK which operates in partnership with the UK Funding Bodies, the Research Councils and a range of collaborative initiatives. However, the funding of research follows the "Haldane principle" and it is appropriate for DIUS to be involved in strategic decisions about support for science through the annual Grant Letter to HEFCE, but not in decisions about support to individual projects.

  13.  One of the key components of the Government Public Service Reform is that "Devolution and delegation to the front line is required to design and deliver effective services". The devolution of education and skills is a part of this wider Government strategy. In many areas similar policies and products exist but differ in the way they are applied.


Higher Education


  14.  The Higher Education Institutions (HEIs) publicise and market their course provision. The applications process for full time undergraduates is managed on a UK-wide basis by the Universities and Colleges Admissions System (UCAS).

  15.  Since 2003, acceptances from students domiciled in England to UK Higher Education Institutions (HEIs) have risen by 10.8%. However there was a large increase to 301,798 in 2005 (from 277,079 in 2004), followed by a fall in 2006 to 289,229. The size of the increase in 2005 and subsequent fall in 2006 is generally agreed to have been mainly due to a proportion of students seeking to gain places at HEIs prior to the introduction of variable fees in 2006.

  16.  There has been a large increase in numbers of full time undergraduates in 2007 to 307,000, the highest ever. Early indication from UCAS data for 2008-09 indicates a continued rise in numbers. The evidence does not suggest students are being put off by the introduction of variable tuition fees in 2006-07 as many predicted.

  17.  The numbers of students from Wales attending full time undergraduate courses in the UK has been rising steadily over the same period: from 16,276 in 2003 to 17,366 in 2007—an overall increase of 6.7%.

Cross border flows

  18.  In 2007-08, 8,483 English applicants were accepted to Welsh HEIs. Whilst this outnumbers the Welsh domiciled students in English HEIs it represents a smaller proportion (3%) of the total number of English students studying anywhere in the UK. 96% of students from England study in England. This has remained a fairly constant proportion.

  19.  By comparison 5,306 (31%) of Welsh domiciled undergraduates accepted places at English HEIs in 2007. The numbers of Welsh domiciled students studying in England has fallen since 2006 while those staying in Wales have increased from 60% to 69% between 2003 and 2007. The reasons for students' choice of study are complex and influenced by a range of factors. However the introduction by the Welsh Assembly of a fee grant in 2007 to offset the introduction of the increased fees in Welsh HEIs for Welsh students studying in Wales is likely to be a significant factor in the decrease in students going elsewhere in the UK. This is a matter for the Welsh Assembly Government. DIUS does not see any negative issues in the current patterns of study, but would certainly want to keep an eye on any significant trends in the longer term.

  20.  The flow between England and Wales is much greater than from either country to Scotland or Northern Ireland.


  21.  Student retention rates in the UK compare very well internationally. The UK ranks 5th in the OECD for first degree completion rates, out of 23 countries who report data in this area. A university education is now open to more students than ever before and the Government is totally committed to providing opportunities for all people to achieve their potential and to maximise their talent.

  22.  In 2005-06, the completion rate of 78% in HEIs in England was slightly higher than at HEIs in Wales, 77%. Fewer students from English HEIs leave university without any award (14%), compared with 16% in Welsh universities. Retention rates by country of domicile are not available.

  23.  These latest figures are before the introduction of variable fees in England in 2006-07 and (the increased tuition fee rate) in Wales from 2007-08. Failure to complete degree courses is triggered by a range of factors including financial, academic and personal reasons. The Government welcomes measures that HEIs and partners put in place to support students experiencing difficulties which might affect the successful completion of their study.

Widening Participation


  24.  Widening participation in higher education and fair access are key elements of the Government's strategy. Following the 2003 HE White Paper: "The Future of Higher Education" Aimhigher became operative as a national outreach programme in August 2004, working most intensively in disadvantaged areas, to increase the number of young people who have the abilities, qualifications and aspirations to benefit from HE.

  25.  Aimhigher works alongside other measures to widen participation, such as HEFCE's widening participation allocation, the Office for Fair Access (OFFA), and the maintenance grant for students from poorer backgrounds. In 2007, Ministers announced that Aimhigher would continue until at least 2011.

  26.  The evidence shows that young people from disadvantaged backgrounds are getting more places. Latest published UCAS figures show that for those applicants aged 18 or under from England, the proportion who are from the lower four socio-economic groups has risen from 28.7% to 29.4% in 2007-08.

Reaching Higher

  27.  Reaching Higher is the Welsh Assembly Government's 10 year strategy for a competitive and sustainable higher education sector in Wales. The Welsh Assembly Government has a target in conjunction with HEFCW to work the Communities First areas (of greatest disadvantage) to widen access to higher education. Welsh colleagues report that the success of their policy, with a growing number of people from the Communities First areas accessing higher education.

Part time students

  28.  The number of students in England who are undertaking part-time undergraduate courses rose from 313,045 in 1997-98 to 420,195 in 2005-06 (an increase of 34% over the period). HEIs are increasingly offering greater flexibility in the mode of study. Recent research commissioned by DIUS showed that working adults hold a generally positive attitude towards HE and 30% would consider applying to university if the circumstances were right. (University is Not Just for Young People: Working Adults' Perceptions of and Orientation to Higher Education).

  29.  70% of the 2020 workforce is already beyond the age of compulsory education. To achieve the ambitions of the Leitch review to develop world class skills means we need to develop higher skill levels amongst the current workforce. The traditional full-time university attendance model is not likely to attract either employees or employers because of the time needed away from work, family and the costs involved. Therefore in future part-time study will play an increasing part in achieving the Leitch ambitions by flexible techniques such as bite-sized learning opportunities, flexible timetables and innovative teaching approaches such as e-learning and learning in the workplace.

  30.  Latest figures available show that in 2006-07 of 454,315 English domiciled part time undergraduate students studying in the UK 6,125 (13.5%) attended HEIs in Wales. (Figures based on a HESA Standard Registration Population basis).

Further Education

Adult Student Recruitment and Retention

  31.  Provision for adults and employers operates on more of a demand led basis, where funding follows the learner. (14-19 provision is covered in paragraphs 133-147.)

  32.  The FE sector includes a number of different types of colleges: General FE; Sixth Form; Agriculture and Horticulture; Art, Design and Performing Arts and Specialist and Tertiary Colleges. In the academic year 2006-07 these totalled 378, with 199 falling in the General FE category. The number of learners aged 19 and over in General and Tertiary FE Colleges in 2006-07 was 2,060,600.

  33.  The outcome of learners in FE is measured in terms of retention (the number of starters who complete their programme of learning); achievement (the number of completers who achieve their qualification aim; and success (numbers of starters who achieve their qualification aim). The LSC sets targets for colleges by type and by level.

  34.  In 2006-07 the average rates for retention (87%), achievement (89%) and success (78%) were similar to 2005-06. The LSC learner surveys do not differentiate learners' country of origin within the UK so it is not possible to analyse participation and outcomes in relation to learners from Wales against those from England.

Cross border flows

  35.  There is some localised data which suggests, as we would expect, that cross border study is likely to be significant in some border counties. Data from the Hereford and Worcestershire Lifelong Learning Network show:

    —  at March 2008 there were 745 Welsh students studying FE or HE in English institutions;

    —  Hereford College of Technology having the most (460), followed by University of Worcester (139) and Hereford Sixth Form College (87); and

    —  the remaining institutions had much smaller numbers.

  36.  This is a snapshot from one area, but generally, we have not identified any particular issues in this area in relation to those living on or near the Welsh border.


  37.  Finance should not be a barrier to taking a higher education course. Since 2006-07 universities in England can charge full time tuition fees up to an agreed cap (£3,145 in 2008-09); but no student or their parents have to find their tuition fees either before or during their studies. The student finance package is designed to ensure that all those who have the ability and wish to go on to higher education can do so and that those from low income backgrounds get the help they need.

  38.  The support package is based on a combination of grants and loans. The total estimated cost in 2007-08 is: grants £918 million; and maintenance and tuition fee loans £903 million.

Higher Education


  39.  Broadly speaking England and Wales currently have the same eligibility rules, based on residency, immigration and nationality criteria. Students apply to their country of ordinary residence for their student support package, wherever in the UK they choose to study.

  40.  Currently eligibility checks and assessment of applications are undertaken by the local authorities and the SLC.

Full time student support

  41.  There are four main elements for Students entering HE on/after 1 September 2006:

    1. Fee loan: to meet full costs of variable fees—up to £3,145. This is available to all eligible students and is paid direct to the HEI.

    2. Maintenance loan: 3 rates depending on where they are studying. (25% is subject to means-test).

    3.   Maintenance grants (re-introduced in 2006-07): up to £2,835 in 2008-09.

    (i)  New entrants in 2008-09: Full amount available to those with household incomes up to £25,000, partial grants for household income of £60,005.

    (ii)  New entrants in 2006-07 or 2007-08: full amount available to those with household incomes up to £18,360, partial grants up to household income of £39,305.

    4. Extra targeted support:

    (i)  Disabled student allowances—(non means tested) are available to help meet the additional costs of study incurred by disabled students.

    (ii)  Child care grant—(means tested) annual maximum for one child is £7,735 and for two or more children £13,260.

    (iii)  Adult dependent grant—(means tested) worth up to £2,510 (£2,575 in 2008-09).

    (iv)  Parents Learning Allowance—(means tested) worth up to £1,435 (£1,470 in 2008-09).

  42.  In addition a minimum university bursary of £310 (in 2008-09) is available to students in receipt of the full maintenance grant and who have taken out a maintenance loan from the SLC. Universities who wish to charge the variable fee produce an Access Agreement, which outlines its bursary structure and has to be approved by the Office for Fair Access (OFFA). Most universities offer more than the minimum amount and also have a range of other bursaries based on different criteria.

  43.  Students may also apply for support from the Access to Learning Fund, a university-administered fund for students experiencing financial hardship. Student parents may also be eligible to receive Child Tax Credit from the Inland Revenue.

Support in Wales

  44.  Currently there are two main differences between England and Wales. The first is the introduction in Wales in 2007-08 of a tuition fee grant of (£1,890 in 2008-09) that only Welsh students studying in Wales receive. This was introduced in 2007-08 along with the increase in their tuition fees to the England cap. This is aimed at encouraging more Welsh students to study in Wales.

  45.  The second is that the increased income thresholds for the maintenance grants, which will come into effect for English students studying anywhere in the UK in 2008-09 will not be applicable in Wales. The income thresholds for all students in Wales have been uprated for inflation only and will be at the same levels as English students starting their course in 2006-07 or 2007-08.

  46.  There are two future improvements in the English student support package which the Welsh Assembly is not proposing to follow. The first is that English domiciled students that receive an Education Maintenance Allowance (EMA) will in the future be given a guarantee of the support available to them if they choose to proceed into higher education.

  47.  The second is that students who take out their first loan in or after September 2008, and enter repayment in or after April 2012, will be eligible for a "repayment holiday"; and will have the choice of putting their student loan repayments on hold for up to five years. This will be of benefit to graduates at times of particular need, for example when buying a property or starting a family.

Take Up Rates

  48.  In the 2006-07 academic year 33% of English domiciled students applying for some form of support received full Maintenance Grants, 23% received partial grants, 43% received no grant. In the same year 33% of Welsh domiciled students received a full Assembly Learning Grant, 29% a partial grant, 38% no grant.

  49.  The Government wants to ensure that all students eligible for a maintenance grant apply for one. DIUS officials have worked with the SLC, the Office for Fair Access, HEIs and the National Union of Students to increase take-up. One measure has been a change in the student support application form requiring applicants to "opt out" of data sharing information about household income in order that the SLC may follow up cases and to enable the HEIs to contact eligible students who do not apply for a Bursary.

  50.  Provisional 2006-07 figures show that the average maintenance loan taken out by new entrants in that year was £3,360 for English domiciled, £3,210 for Welsh domiciled. The average tuition fee loan was £2,730 for English domiciled, and £1,720 for Welsh domiciled.


  51.  Income Contingent Repayment (ICR) loans replaced the mortgage style loans for students taking out a Government student loan for the first time in September 1998. ICR currently operates the same way across England and Wales. Repayment is partially reserved and administered on behalf of the four UK Administrations by the SLC and HMRC through the PAYE or Self Assessment Tax system.

  52.  Repayment starts the April after borrowers finish (or leave) their course and in any month that their salary exceeds £1,250 gross per month (£288 per week or £15,000 per annum equivalent). Repayments are collected at the rate of 9% of any income over the threshold. These arrangements are the same in England and Wales.

Part time students

  53.  In England and Wales, part-time undergraduate students who take less than twice as long as their full-time equivalents to complete their course are able to apply for a means-tested Fee Grant and a Course Grant to assist with course related costs.

  54.  In addition to HEIs' own marketing information, DIUS publishes a yearly guide entitled "Guide to financial support for part-time students in higher education" which is specifically tailored for people considering part-time study.

Course Grant

  55.  In 2008-09 part-time students will be able to apply for assistance with course related costs worth up to £255 in England (£1,050 in Wales) a year on top of the fee grant.

Fee Grant

  56.  In 2008-09 there will be three different rates of fee grant depending on the intensity of the course. The total amount that can be awarded to a Welsh-domiciled student, depending on his/her individual circumstances is potentially greater than that available to English-domiciled counterparts (subject to eligibility of additional targeted support). Part time disabled students in both countries have access to individually assessed Disabled Students' Allowance.

Targeted Grants (in Wales)

  57.  From September 2008 eligible part-time, Welsh-domiciled students will also be able to access targeted support which is currently available only to full time undergraduates; this will be provided through a pro-rated version (reflecting intensity of study) of the Childcare Grant, Adult Dependants' Grant, and Parents' Learning Allowance. Part time students in England are not eligible for targeted support other than the Disabled Students Allowance.

Student Income and Expenditure Survey (SIES)

  58.  The SIES is a periodic survey of full and part time student income and expenditure survey, debt, savings and financial hardship and a range of personal information which enabled an overall assessment to be made of the experiences of students with different characteristics and backgrounds. The last survey was in 2004-05 and was jointly commissioned by DIUS and the Welsh Assembly Government. The numbers of Welsh students interviewed was small (300 out of the total 3,700 in 2004-07).

  59.  The sample for the 2007-08 survey has been extended to include a larger number of Welsh students around—700. As a result it should be possible to make an improved assessment of the financial circumstances of Welsh domiciled students who study in England or Wales. The final report will be published in early 2009.

Administration of Student Finance—The Student Loans Company (SLC)

  60.  Currently, the SLC administration of Student Finance Wales differs from the Student Finance England service in the following ways.

  61.  SLC administers both FE and HE student finance in Wales. This enables an easier transition into higher education. (For example, HE students do not have to re-evidence their personal identities when they apply to higher education if they have already done so).

  62.  The discretionary service SLC provides to universities for the administration of bursaries works in the same way across Wales and England, except that Wales partially fund the on-going service costs and there is some use of the national support service for publicising Welsh university bursaries.

  63.  All customer-facing services in Wales are provided in both English and Welsh languages.

Customer First

  64.  Following a wide ranging end to end review of the Student Finance in England in 2005, Ministers agreed to a major change programme to transform the Student Finance system.

  65.  From September 2009 the SLC will take responsibility for the delivery of the total student finance system in England. Local authorities' role will be phased out as they no longer have responsibility of the assessment of new students. The development of Customer First is on the agenda of the Quadrilateral meetings and DIUS and the Devolved Authorities will monitor progress.

Student Finance Information

  66.  DIUS is committed to deliver the right message to the right people at the right time. To ensure we deliver on this objective an annual Communications strategy and Delivery Plan is developed with and agreed by Ministers. DIUS fully utilise the directgov website for all our "e-comms". A multi media campaign on the new student finance package was launched in October 2007.

  67.  When providing Student Finance information in England, detail on the charges made by Welsh, Scottish and Northern Ireland institutions is included. This is important to students in England who may wish to study there.

  68.  Plans for advertising campaigns and general dissemination of student finance information is shared with the Devolved Administrations via the Quadrilateral meetings. Since devolution of student finance arrangements to Wales, DIUS continues to hold informal meetings with communications colleagues in Wales.

  69.  There is mutual agreement that cross border communications should be avoided. We work hard to ensure this and brief our contractors and delivery partners. However there is an inevitable risk of cross border information, (for instance, when using radio and TV advertising). On an operational level, we like to know what each other is doing, to prevent nationwide campaigns running simultaneously.

  70.  Communications are subject to a programme of research and evaluation to ensure our messages are delivered effectively. Findings feed into future campaigns. 2006-07 findings show that: 86% of students and 79% of parents understand that financial help is available; and 77% of students and 78% of parents understand that repayment is income contingent and know the repayment thresholds.

Sale of Loans Bill

  71.  The Government is currently taking a Bill through Parliament which will give it the power to sell some of the student loans book. This is not a privatisation, but will enable a programme of sales of the student loan book, in order to transfer the risk associated with ownership of a large and growing asset from the public sector to the private sector. Monies gained from any sales of the Loan Book are expected to transfer to the Treasury.

  72.  The sale of student loans will make no difference to the terms and conditions for individual borrowers. Repayment rates and thresholds will remain the same for all loans, whether sold or unsold. The loan system will continue to be administered by the SLC.

  73.  Following engagement with Welsh colleagues by DIUS officials the Bill will include a clause that will give Welsh Ministers enabling powers to sell loans (for which they are already responsible) when they deem it appropriate to use these powers. It is anticipated that the Bill will receive Royal Assent in July.

  74.  We are aware that the Welsh Assembly Government is undertaking a review of its student finance system. DIUS is pleased to assist and officials will be meeting with the consultancy team.

Further Education

Student Finance

  75.  Financial support for learners in further education is intended to overcome financial barriers to learning which otherwise might discourage people from taking up learning.

  76.  The LSC has reciprocal arrangements with the funding councils for Wales and for colleges and providers close to the borders. However, it is not expected that colleges and providers in England will recruit entire groups of learners from outside their local area. Such learners should be referred to the possibility of a distance learning or Ufi programme delivered by their local provider or hub in Wales or Scotland. If the learning programme is not available through this route, permission to enrol the learners must be sought from the provider's LSC partnership team.

  77.  In England, there are three main programmes of Government sponsored financial support for adults engaging in non HE based learning, which are in addition to the level 2 or level 3 entitlement and any relief from course fees that may be applied initially by further education providers:

    —  discretionary Learner Support Funds.

    —  Adult Learning Grant.

    —  Career Development Loan.

discretionary Learner Support Funds (dLSF)

  78.  dLSFs are the main source of financial support for students in further education who need help with additional costs associated with their learning such as books, travel and childcare. Funds are allocated to colleges and targeted at those experiencing the greatest financial difficulty and in priority groups such as low skilled and low income individuals.

  79.  Reciprocal arrangements exist between Wales and England, so that Welsh students attending colleges in England would be eligible to receive dLSF; this is true also for English students attending Welsh FE institutions.

Adult Learning Grant (ALG)

  80.  ALG is specifically aimed at those on low incomes undertaking full time learning and is not available to those who are on "out of work" benefits. It is intended to boost participation and improve retention.

  81.  It offers up to £30pw to adults on low incomes studying full-time and undertaking their first full level 2 or level 3 qualifications. It is available for up to two years but can be extended to three years for learners progressing from level 2 to level 3.

  82.  To be eligible for the grant, learners must have been resident in England for three years prior to starting their course. Welsh learners, studying in England, who meet the residency criteria are eligible to apply. However, discussions with colleagues in the Welsh Assembly (Student Finance Division, Department for Children, Education, Lifelong Learning & Skills) have confirmed that it would be difficult to set up any reciprocal arrangements as an equivalent (or even similar) scheme to ALG does not exist in Wales.

  83.  16 learners have been rejected on the grounds of being resident in Wales (to March 08).

Career Development Loans (CDLs)

  84.  CDLs is a Britain wide Government subsidised programme which operates fully in Wales. CDLs were set up in 1988 and provide interest-deferred bank loans to help individuals finance vocational learning of their choice. The programme aims to: increase the numbers undertaking vocational learning; encourage more individuals to take responsibility for their own learning; and encourage financial institutions to view learning as an investment worthy of a loan.

  85.  3.8% of CDL learners are undertaking learning with learning providers based in Wales. This equates to £2,705,241 in loans. In 2007/08, 295 new loans were issued to learners with Wales-based learning providers. The total value of loans for these learners was £1,817,153. 3.6% of the total defaults for 2007-08 are attributable to learners with Wales-based providers with a value of £674,406.

Sixth Form College Childcare Scheme

  86.  There is also the Sixth Form College Childcare Scheme which offers help to learners aged 20 or over in school sixth forms and sixth form colleges, who incur essential childcare costs whilst attending their course. Payments are income assessed and the maximum amount payable to cover childcare and associated travel costs is £155 per week per child. Eligibility requires that learners must be attending a full-time or a part-time LSC funded course, be ordinarily resident in England and have a dependent child under 15 years of age (16 for children with disabilities) for whom the learner provides care.

  87.  The place of study must be in England and the learner must be "ordinarily resident in England". However, this does not preclude a Welsh learner from applying if they are studying in England and such applications would be considered on a case by case basis. No such applications have been received. There is no similar scheme in Wales and no reciprocal arrangements exist. We do not have any data on numbers of Welsh students who have been refused help on the grounds of their residency.



  88.  Pursuing global excellence in research and knowledge; accelerating the commercial exploitation of creativity and knowledge and encouraging better use of science in Government are three of DIUS's Strategic objectives. Research in England is of high quality. In the last Research Assessment Exercise, over half of the departments were rated 5 or 5*. And at UK level, the research base is second in the world, behind the United States. There is much to build on.

  89.  Research in UK universities is funded by means of the dual support system. One stream is through Quality Related (QR) funding from the UK Funding Bodies and the second is through the 7 Research Councils.

Quality Related Research

  90.  QR funding by the relevant UK Funding Bodies is based on the periodic Research Assessment Exercise (RAE) and provides core funding to support research infrastructure and build capacity for HEIs' own determined and "blue skies" research. HEFCE QR research funding for 2008-09 is £1,460 million. HEFCW QR funding for research is £67.3 million.

  91.  The Government announced in March 2006 its intention to replace the RAE after 2008 with an assessment system based on metrics. Following consultation HEFCE is working with the other UK Funding Bodies and partners to develop these new arrangements—the Research Excellence Framework (REF). The REF will be introduced after the 2008 Research Assessment Exercise (RAE).

  92.  The REF will be developed as a single unified framework for the UK throughout 2008 and 2009. Aspects of the framework will be phased in from 2011-12, and it will fully drive research funding for all disciplines from 2014. It will make greater use of quantitative indicators in the assessment of research quality than the present system, while taking account of key differences between the different disciplines. Assessment will combine quantitative indicators—including bibliometric indicators wherever these are appropriate—and light-touch expert review.

Research Councils

  93.  The second stream of funding is through the seven Research Councils which operate on a UK wide basis. The newest Council, the Arts and Humanities Research Council, was established though the Higher Education Act, 2004, bringing together smaller bodies in the four Administrations. DIUS provides funding to the Research Councils through the Science Budget. Its role is to oversee the Research Councils in undertaking the funding of high quality research against the priorities agreed in each Council's Delivery Plan. The Research Councils then consult with their communities on areas of research that are important.

  94.  The Research Councils invest around £3 billion in research each year covering the full spectrum of academic disciplines. There is no specific regional allocation. Research Councils all have different mechanisms for allotting funding, but they work together and discuss strategy on areas that cross Council remits. Many activities are undertaken collectively.

  95.  In 2006-07 around £1,627,189k (83%) of Research Council funding to Higher Education Institutions (HEIs) was awarded to HEIs in England and £54,308k (3%) to HEIs in Wales.

  96.  In addition to funding research in universities, three of the Research Councils (Biotechnical and Biological Sciences Research Council, Medical Research Council and the Natural Environment Research Council) also support their own research institutes, some of which are based in Wales.

  97.  Research Councils also fund postgraduates in universities. This is either through a block grant to the universities who allocate the individual grants or through direct competitive recruitment.

Collaboration and UK wide initiatives

  98.  Research Councils are pursuing a strong "economic impact" agenda, to increase the impact of the research that they fund. Existing knowledge transfer programmes are part of this but the economic impact agenda is broader. Research Councils fund research across the UK, and this will affect how the university research communities consider economic impact.

  99.  Universities in both England and Wales and the Research Councils are also actively involved in European Research initiatives and secure funding for EU collaborative research with a range of partners in the UK and Europe.

  100.  In February 2005 HEFCE announced specific funding to support innovative strategic research collaboration between HEIs where this was likely to improve strength, quality and responsiveness of the national research base; and where partners had a commitment to sustained strategically-driven collaboration.

  101.  The funding aims to support innovative, leading-edge work that will carry forward work in the discipline(s) on the national or international scene. It supports collaboration by HEIs in England with other HEIs within the dual support system across the UK.

  102.  HEFCW participates in a number of UK wide initiatives to support national research and facilities. For example they are co-funders with the other HE Funding Bodies of the Joint Information Systems Committee (JISC). JISC supports education and research by promoting innovation in new technologies and by the central support of ICT services. It develops partnerships to enable the UK education and research communities to engage in national and global collaborations to overcome the challenges of delivering world-class ICT solutions and services.

Funders' Forum

  103.  The DIUS led UK Funders' Forum comprises the key funders of research in the UK and includes: representatives from the Research Councils; Government Departments and Devolved Administrations; charities; Regional Development Agencies and HEIs. Its role is to share and agree strategies for ensuring the sustainability of the research base and high quality research.

Research Capital Investment Fund (RCIF)

  104.  The Research Capital Investment Fund (RCIF) and its predecessor the Science Research Investment Fund (SRIF) have since 2002 addressed underinvestment in research capital. The earlier SRIF fund was a temporary fund designed to reduce the backlog of underinvestment. With that backlog now reduced to manageable levels, the new RCIF is a permanent funding stream to provide ongoing funding for research capital.

  105.  RCIF is made up of a combination of funding from the DIUS Science Budget across the UK, and funding from the separate national HE budgets (including DIUS for England and the Welsh Assembly Government in Wales), and is managed by the respective funding body. RCIF is allocated by formula. The Science Budget element is calculated on the basis of Research Council research income, the HE budget formulae are slightly different, but take into account funding council block grants for research and external research funding eg from charities and business.

  106.  For the Spending Review period 2008-11 the total RCIF (science budget and HE budget combined) for English HEIs is £1,276 million; and the budget for Welsh HEIs is £56.3 million.


Higher Education

  107.  While there has been active work to promote greater contact between HEIs and employers, DIUS' work and policies relate to England only. DIUS works through a range of partners eg HEFCE, Universities UK; the Sector Skills Councils, the Confederation of British Industries etc. to drive forward the need for greater contact between both organisations.

  108.  One example between HE and employers, is through the HEFCE Strategic Development Fund, which is supporting HEI-led "employer co-funding" (ECF) pilot projects. Employers are being encouraged to fund and help design high level skills provision for their workforce to meet their business needs. To date some 29 HEIs are undertaking ECF projects—including the universities of Hertfordshire, Chester and Coventry. More are in the pipeline. These projects are looking at a number of practical issues around delivering employer co-funding. The HEFCE grant letter allocated £5/15/40 million to support 5/10/20 thousand employer co-funded places over 2008 to 2011.

  109.  We recently published "Higher Education at Work—High Skills: High value", a consultation document, which describes a strategy to achieve growth in high level skills (level 4 and above) set by Lord Leitch. The consultation was launched on 14 April 2008, by the Minister of State for Lifelong Learning, Further and Higher Education; and it focuses on our aims to raise the skills and capacity for innovation and enterprise of those already in the workforce and to improve the employability of graduates. The document proposes some changes and consults all those involved about what the barriers are from their perspective and what can be done to remove them. Further information can be found at:— The Devolved Administrations were consulted and were sent draft copies of the published strategy.

  110.  DIUS works closely with policy colleagues on the Commission for Employment and Skills, Sector Skills Councils which has a UK wide remit.

University Knowledge Transfer

  111.  The Government encourages universities to undertake knowledge transfer with business, public services and third sector organisations. The Higher Education Innovation Fund (HEIF) is the main policy intervention in England, to enable universities to build their capacity to engage with business and commercialise research, through collaboration, consultancy and contract research, use of facilities, continuous professional development and generation of Intellectual Property income.

  112.  HEIF is allocated by formula to all universities in England. The size of the allocation is related to student numbers and business income. This DIUS budget will increase to £150 million per annum by the end of the current CSR and is managed by HEFCE. HEIF helps English universities to work with business but it is not restricted to working with English businesses.

  113.  The Higher Education Funding Council for Wales have a separate "Third Mission Fund", and £6.1 million was allocated to Welsh Universities to build their capacity to engage with business.

Technology Strategy Board

  114.  The Technology Strategy Board (TSB) remit covers the whole of the UK. It aims to make the UK a global leader in innovation. With a business-led board and a business focus, the Technology Strategy Board has been established to play a cross-Government role, advising on polices which relate to technology innovation and knowledge transfer and in delivering a national Technology Strategy. Its activities include support for business-knowledge base interactions through Knowledge Transfer Partnerships and Collaborative Research and Development alongside opportunities for networking through Knowledge Transfer Networks, which are established in a specific field of technology or business application.

  115.  Working with the Regional Development Agencies (RDAs) and the Research Councils, it will jointly invest over £1 billion in the next three years around three themes: challenge-led innovation, technology-inspired innovation and the innovation climate. In addition, it will continue to work with government departments, the Devolved Administrations and other funding partners to increase the overall total.

  116.  The Devolved Administrations are working with the Technology Strategy Board on a number of activities, including Knowledge Transfer Partnerships and jointly funded Collaborative R&D projects where the DAs have, since 2004, provided over £6.7 million (WAG £4.5 million, NI £1.8 million, Scottish Govt £0.4 million) of funding. Work is underway to further strengthen the national-regional interface.

  117.  David Grant, Vice Chancellor of Cardiff University, is a member of the Technology Strategy Board's Governing Board and has a role of representing the Devolved Administrations. A Strategic Advisory Group and an Operational Advisory Group support the work of the TSB—both include representatives from the English regions and Devolved Administrations and the RDAs.

Higher Education Business and Community Interaction (HE-BCI)

  118.  The Higher Education Business and Community Interaction Survey is a UK survey process managed by HEFCE on behalf of all the UK funding bodies for common reasons of efficiency and benchmarking. The data are collected together but funding decisions are very much at the national level. HEFCW have been on the steering group for the HE-BCI since its inception.

Foundation Degrees

  119.  We are committed to Foundation degrees (Fds) as a key vehicle for expansion in Higher Education—they are an example of the type of flexible work-focused and demand-led qualifications that Lord Leitch calls for. Courses are developed in partnership with employers to ensure graduates acquire the necessary skills and knowledge required in the workplace. The qualification attracts a range of people who wouldn't normally consider taking up HE.

  120.  Foundation Degrees Forward (fdf) was established in 2003 and is funded by the Higher Education Funding Council for England and the Department for Employment and Learning in Northern Ireland in order to generate and support employer engagement strategies across higher education, with a particular focus on Foundation degrees. fdf initiatives include employer-based training accreditation and the establishment of employer consortia to develop national employer-led Foundation degrees for specific sectors.

  121.  Numerous institutions in Wales have sought advice and support from fdf in developing Foundation degree provision and have expressed interest in becoming involved with initiatives such as employer consortia. fdf has, where possible, provided consultancy and linked Welsh institutions with existing initiatives. For example, fdf has supported a creative and cultural industries project at the University of Glamorgan by linking it with an initiative in the North West of England. fdf are also facilitating the involvement of a Welsh employer organisation in the development of Foundation degrees for the heritage sector.

  122.  At December 2007 some 73,000 people had enrolled on a Fd in England. We are well placed to see further increases in order to meet our aspiration of a 100,000 Fds enrolments participation rate by 2010. The Further Education and Training Act 2007 allows FE colleges in England to apply for powers to be able to award Fds. FE colleges in Wales are not covered by the Act.

Further Education Engagement with Employers

  123.  The UK Commission for Employment and Skills was launched on 1 April 2008 to assess UK progress towards achieving world class skills and an 80% employment rate. It is jointly sponsored by BERR, DCSF, DIUS, DWP and the Devolved Administrations.

  124.  DIUS and the Department for Work and Pensions (DWP) are committed to working together to deliver an integrated employment and skills service. However, skills is a devolved matter in Scotland and Wales and as such DIUS' responsibility only extends to skills provision in England. Employment is a reserved matter and DWP has responsibility for employment and welfare provision across the whole of Great Britain. Therefore, DWP is working closely with the Welsh Assembly Government and the Scottish Executive to ensure that its employment provision dovetails with the skills provision decided upon by the Devolved Administrations. (Both employment and skills are devolved matters in Northern Ireland.)

  125.  In England the main initiatives are Train to Gain and the Employers Skills Pledge. The local LSC office has signed up with other local and regional stakeholders to developing a Cross Border Memorandum of Co-operation with the Welsh Border Counties. This has been led by the West Midlands Rural Affairs Forum, where the initial focus has been on tourism.

  126.  On 12 June DIUS and the Department for Work and Pensions published the "Work Skills" Command Paper which outlined initiatives to increase skills including the extension of Skills Accounts.

Train to Gain

  127.  Train to Gain is delivered by the Learning and Skills Council. It is central to the delivery of the Government's skills ambitions. The aim of Train to Gain is to ensure that the workforce in England has the world-class skills to help the UK be a leader in the global economy in 2020. It aims to encourage employers to invest in the development of the skills and qualifications of their employees.

  128.  Train to Gain is the Government's premier service to support employers in England, of all sizes and in all sectors, to improve the skills of their employees, unlock talent and drive improved business performance. It is designed as a flexible service to meet the needs of employers and their employees. All employees, irrespective of age, are included in a discussion between a Train to Gain skills broker and the employer.

  129.  Train to Gain is already a great success. By March 2008—since national roll-out began from April 2006—Train to Gain had:

    —  engaged with 92,210 employers (37,470 since August 2007);

    —  supported 454,920 learners to begin learning programmes; and

    —  delivered 186,720 full level 2 achievements.

Cross Border Issues

  130.  Wales has its own Workforce Development Programme and its own funding stream therefore employers and learners who are based in Wales are not generally eligible for support through Train to Gain.

  131.  The employer or place of employment must be in England. Practically this means that a Welsh person can be funded provided they are working for an English employer or are working in England. However just having a Head Office in England is not a sufficiently strong link to attract Train to Gain funding—where the employee lives and works only in Wales for a Welsh subsidiary they would not be considered eligible.

  132.  Learners are requested to self declare their "Country of Domicile" on the Individualised Learning Record. This shows that in Train to Gain in 2006-07 there were just over 320 Welsh learners and so far in 2007-08 (to period 8) there are almost 500.

Employers Skills Pledge

  133.  The Skills Pledge is a voluntary, public commitment by the leadership of a company or organisation to support all its employees to develop their basic skills, including literacy and numeracy, and work towards relevant, valuable qualifications to at least level 2 (equivalent to 5 good GCSEs). The purpose is to ensure that all staff are skilled, competent and able to make a full contribution to the success of the company/organisation. The Skills Pledge is open to all employers in England, and access is dependent on where the employing organisation's head office is based.

  134.  The National Basic Skills Strategy for Wales states it will ask the Basic Skills Agency to extend their "Employers Pledge Scheme" into Wales. This scheme is aimed at SMEs encouraging employers to show commitment to improving basic skills of their employees and should not be confused with the Skills Pledge in England which is about Skills for Life and level 2 as a minimum.

Skills Accounts

  135.  Skills Accounts are a universal offer for all adults from autumn 2010 following introduction in two regions in 2008-09. We will offer accounts to 18 year olds alongside a progressive roll out to working age adults, both those out-of-work and in the workforce.

UK Vocational Qualifications Reform Programme

  136.  The UK Vocational Qualifications Reform Programme was established in February 2006 to address weaknesses in the vocational qualification system. It is supported by Ministers in all four countries. It is being introduced by the governments and qualifications regulators in England, Wales, Northern Ireland and, to a lesser extent, Scotland; working with Sector Skills Councils, awarding bodies, FE providers and various other stakeholders.

  137.  The commitment to reforming vocational qualifications in the 2005 White Paper, was reaffirmed in World Class Skills: Implementing the Leitch Review of Skills in England. The aim is to create a VQ system that is more flexible and responsive to learner and employer needs, more inclusive and less bureaucratic.

  138.  The key reform is the innovative introduction of the world's first regulated and credit based system. In the new framework for regulated qualifications—the Qualifications and Credit Framework (QCF)—reformed qualifications will be made up of units and learners will receive credit points for the completion of each unit. Credit will be recorded onto a learner achievement record, allowing achievements to be recognised and transferred between employers, providers and awarding bodies. Rational and consistent titles will greatly improve users' understanding of the available VQs Learners will be able to see more readily the progression opportunities of their VQs, including into Higher Education.

  139.  The main change for employers is the introduction of a range of ways in which their in-house training can be accredited. Taken together, these changes mean that young people and adults can choose a qualification which suits their interests and learning style and allows them to prepare to make success of their life.


  140.  We want an excellent system of 14-19 education; a system where all young people have opportunities to learn in ways which motivate and engage them and through hard work position themselves for success in life. 14-19 in England is the responsibility of the Department for Children Schools and Families (DCSF), whether young people are in school, FE or Sixth Form College.

Machinery of Government Changes—June 2007

  141.  Following the creation of DCSF and DIUS it became the policy of both Departments to replace the LSC: putting 0-19 education and training funding and commissioning in the hands of the local authority; and bringing education and training provision together with responsibility for wider children and young people's services.

  142.  Some of the main elements are:

    —  Local authorities in England to lead commissioning of 14-19 education and training, including school Sixth Form and Sixth Form Colleges.

    —  Sub regional clusters to plan and manage provision.

    —  Each FE provider with one commissioning lead.

    —  Designation system by the Secretary of State when local authorities are ready; until then Young Person's Learning Authority (YPLA) to lead and administer funding system and monitor progress.

    —  Framework set nationally, but decisions on institutional funding made locally.

  143.  DCSF will legislate for this at the earliest opportunity and are moving forward within the existing legislative structures, with a new system fully in place, subject to the passage of legislation, from September 2010.

  144.  The Government is transforming learning for 14-19 year olds—working with partners and with local authorities, the Learning and Skills Council, schools, colleges and work-related learning providers. The reforms have three main elements:

    —  raising attainment now;

    —  designing new curriculum and qualifications; and

    —  delivering on the ground.

Education and Skills Bill

  145.  Through the Education and Skills Bill in our forthcoming legislative programme we will transfer responsibility for 14-19 provision from the LSC to the local authorities and give them the funding and commissioning powers to effectively deliver the new entitlements and raise the participation age. This will streamline the post-19 skills system to make it better support our policies of creating a demand-led system and integrating employment and skills. This will make faster progress towards our ambition of achieving a world class skills base by 2020.

  146.  We will raise the participation age to 17 from September 2013 and to 18 from September 2015. We already have a challenging aspiration to get to 90% participation in education or work-based learning among 17 year olds, but we need to see an acceleration in participation in education and work-based learning at 16 and above in every area of the country if we are to achieve this and put us in a good position to move to 100% participation.

  147.  This legislation will significantly strengthen current adult funding entitlements for basic literacy and numeracy skills, adult first full level 2 qualifications and first full level 3 qualifications for learners aged between 19 and 25. These new provisions will contribute to dramatically driving up demand for skills, enabling the UK to achieve world class skills by 2020.

Qualifications Strategy

  148.  DCSF is currently consulting on a Qualifications Strategy for 14-19 year olds that will streamline the offer: young people will choose between GCSE/A level; Diplomas; Apprenticeships—or if working below this level, the Foundation Learning tier.

14-19 Diploma

  149.  The Diploma is a new qualification that combines theoretical study with practical experience. The Diploma will cover 17 disciplines, including Engineering, Information Technology, Science and Humanities. All require a student to achieve a minimum standard in English, maths and ICT, complete a project and so a minimum of 10 days work experience. Diploma students will also acquire the skills and knowledge which are essential for success in employment and higher education, both related to the discipline and those which are common, like teamwork, self-management and critical thinking skills. Schools and colleges in 146 areas across England will offer the Diploma from September 2008. All 17 will be available in areas across the country by 2011.

  150.  As well as the Diploma, GCSEs and A levels are being updated and the number of Apprenticeships is being increased. We will establish apprenticeships as a key route to building the national skills base, working with employers to help young people and adults get the skills and qualifications that employers value.

  151.  We set out our commitments on Apprenticeships in "World Class Apprenticeships", which was published in January this year. We are currently recruiting for the post of National Apprenticeship Services Chief Executive. This is a key step in establishing a new National Apprenticeship Service which will lead on delivering the apprenticeship programme.

Education Maintenance Allowance (EMA)

  152.  The EMA was introduced in England in September 2004 to incentivise more 16-19 year olds to participate and ensure that those from low-income families have the opportunity to do so. Payments range from £10 to £30 a week depending on household income and learners' compliance with their "contract". Over 527,000 young people benefited from EMA payments in 2006-07.

  153.  EMA in England are administered by the LSC and by the SLC for Wales. The schemes are similar in both countries with some small differences. eg in 2008-09 the income threshold in England will be maintained at the existing level, but will be uprated by inflation in Wales.

September Guarantee

  154.  The 14-19 Implementation Plan (2005) made a commitment to offer, by the end of September, a suitable place in post-16 learning to all young people completing compulsory education. This is known as the September Guarantee. The guarantee was implemented nationally in 2007. The guarantee has been extended to 17 year olds in 2008 to give those who enrol on one year or short courses, or who leave the activity they chose when leaving school, further opportunities to engage in learning.

14-19 Reform in Wales

  155.  The Learning Country—Vision into Action set out the Welsh Government's vision for young people in Wales. Consultation on the Learning and Skills (Wales) Measure 2008 was launched in January and set out specific proposals to give greater opportunities to young people for access to the most appropriate form of learning in order to achieve the skills required for further learning or employment. These reflect the aims of the 14-19 agenda in England, but with measures tailored for Wales. For instance, Wales have set a target of 93% of 16-18 year olds in education, employment or training and will not be introducing compulsion or legislating to raise the leaving age.

Qualifications in Wales

  156.  The Welsh Baccalaureate was rolled out in September 2007 with some 9,000 students studying across 76 schools. The qualification is gaining increasing recognition from HEIs.

  157.  Wales is working with the Sector Skills Councils and awarding bodies to make appropriate modifications to the Welsh Baccalaureate to incorporate the employer endorsed element of the English 14-19 Diplomas.

  158.  Officials in England and Wales keep each other informed. They will be monitoring the impact of the different systems on pupils moving or seeking to learn across the borders.

Looking Forward

2009 Commission

  159.  At the time the HE Bill was going through Parliament in 2003, the Government made a commitment that the current arrangements for university tuition fees would be in place till the end of the decade and there would be no change until after a thorough independent review. Our position remains the same.


  160.  Further and Higher Education is a dynamic sector. Each of the four UK Administrations faces major challenges in the context of global competition and demographic changes. Since Devolution while there have been some differences in the arrangements in England and Wales. Overall, these do not appear to have had a negative impact in the delivery and outcome for learners in Further and Higher Education.

  161.  It is likely that over time policies and systems will become more divergent as each country looks to provide what best meets its needs. This will inevitably affect student behaviour and the number and nature of cross-border engagement. That is not unhealthy and convergence and co-ordination is not always desirable nor indeed possible.

  162.  However, as each country develops its future policies, it will become increasingly important to build on some of the existing mechanisms to ensure continued early dialogue and opportunities are established at all levels, to share, learn and where appropriate consider where greater alignment is advantageous, without undue bureaucracy.

June 2008

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