Welsh Government rejects urgent review of university finances

(Title Image: Cardiff University)

The Motion

The Senedd:

  • Notes the serious crisis facing Welsh universities, with significant job losses announced amid concerns as to the financial sustainability of individual institutions.
  • Calls on the Welsh Government to commission an urgent review of the financial sustainability of the Welsh university sector and to give HEFCW a mandate to intervene to prevent the bankruptcy of any Welsh university, though emergency loans if necessary.
  • Calls on the Welsh Government to ensure that public funding to Welsh universities is contingent on vice-chancellor salaries being no more than five times median earnings and also ensure universities are transparent – particularly in relation to spending public money.
  • Calls on the Welsh Government to remit HEFCW, and any successor body, to require universities to take student and staff views into account when making staffing decisions.

A debate we didn’t want to have

Bethan Sayed AM (Plaid, South Wales West) said this was a debate tabled reluctantly, but there were alarm bells ringing about the finances of some Welsh universities. Concerns were being raised on a regular basis and couldn’t be ignored anymore.

“….there has been a steady drip-drip of news indicating the worsening financial position of Welsh universities. We have seen successive announcements of job cuts for one, at Trinity Saint David, we are seeing news that there is a potential for up to 170 job cuts, Cardiff has announced up to 380 losses over the next five years….members of the University and College Union voted almost 90% in favour of strike action last year.”
– Bethan Sayed AM

Due to high levels of borrowing by universities, some were at risk should student numbers or fees suddenly fall, while there was now an opportunity to address excessive vice-chancellor pay.

While not agreeing with everything in the motion – particularly any attempt to undermine the autonomy of universities – Shadow Education Minister, Suzy Davies AM (Con, South Wales West) did support some of it. Universities might be independent, but they were in receipt of public funds and therefore should be more accountable in terms of how effectively that money is being spent. The days of “degrees for everybody” are over and supply of courses was now outstripping demand in some cases.

“No-one will be surprised to see me pressing again about the really serious governance concerns at Swansea (University)….We’ve had these extraordinary suspensions of senior staff, disciplinary processes no closer to being….resolved than they were nine months ago; we now see that there are serious issues with financial reporting. There is no transparency. Students don’t know what’s going on and the staff don’t know what’s going on.”
– Helen Mary Jones AM (Plaid, Mid & West Wales)

Financial pressures

Not one to turn down the chance for some Tory bashing, Rhianon Passmore AM (Lab, Islwyn) said the financial situation at Welsh universities was down to Tory cuts, which has led to £800million less being available to the Welsh Government in real terms compared to 2010-11. The Diamond Review reforms are radical and will create “a strong and sustainable funding settlement” for universities.

Rhun ap Iorwerth AM (Plaid, Ynys Môn) said universities were often the cornerstone of the foundational economy in many areas. The student funding system also shouldn’t come at the expense of Welsh institutions or make the “brain drain” problem worse.

David Rowlands AM (BXP, South Wales East) believes it’s right for politicians to ask questions about university finances and vice-chancellor pay even if they are independent. David Rees AM (Lab, Aberavon), however, added that students in Wales had the highest satisfaction rates in the UK, while universities were less reliant on HEFCW/public funding than they previously were.

Universities can manage their own affairs

Education Minister, Kirsty Williams (Lib Dem, Brecon & Radnor) said that while some AMs may prefer universities to be a government arm, they were autonomous bodies. The Senedd also passed an Act in 2015 which gave HEFCW additional powers to strengthen university financial arrangements – something she said many AMs seem to have forgotten.

“Rather than the picture that has been painted by some Members this afternoon, we have provided HEFCW with enhanced responsibilities in relation to the regulation of tuition fees; monitoring compliance with commitments made in fee and access plans and assessing the quality of provision and financial stability through….a financial management code….In addition, I have discussed with HEFCW the work they have in hand to strengthen governance arrangements in (higher education)….”
– Education Minister, Kirsty Williams

Vote

A more self-congratulatory government-tabled motion underlining the autonomy of universities was passed by 25-19.

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