Wales’ universities have a big effect on the economy. Nicola Porter looks at the challenges they face and at how they will be affected by reform face
When education minister Leighton Andrews walked on stage at Cardiff’s City Hall to accept the title ofWelsh Politician of the Year, few even among his opponents could deny his impact on the sector. Having unveiled his blueprint for higher education, Andrews is the prime mover for change in this vital sector.
Wales’ universities are economic powerhouses, employing thousands of people and turning over more than £1.2bn every year. And these powerful institutions are going through big changes that could have knock-on effects for the rest of the economy.
Thirty-eight per cent of university funding comes from the Welsh Government’s education department, and its guardians want better value for money. “Wales is not achieving full potential of investment made in higher education,” says Roger Carter, head of research, business and communities at funding body the Higher Education Funding Council forWales (HEFCW). “Despite considerable strengths, the service offered to students and employers is not as good as it could be, or as strong as it needs to be.”
HEFCW had pushed for the number of Welsh universities to be cut from 11 to six by 2013. Outlining his proposals at the end of November, Andrews said: “It is imperative thatWales “thinks big” on research to ensure our institutions are not left behind. The higher education sector recognises the need for change and supports us.”
But he did not go all the way with HEFCW’s proposals in his latest announcement. Andrews said the mergers of the University of Glamorgan, Cardiff Metropolitan University and University ofWales, Newport should go ahead, following a consultation. The proposal prompted criticism from some at Cardiff Metropolitan, including independent governor Robin Morrison and professor of entrepreneurship Brian Morgan. The latter said there was no evidence that bigger universities were more cost efficient. But Andrews rejected plans in North Wales to merge Glyndwr University with Aberystwyth and Bangor for the time being.
The prevailing view is that fewer but stronger universities working in collaboration will help clinch more big business contracts and research grants. Positioned in one of the poorest parts of the UK, with fewer blue chip companies than anywhere else, Welsh universities are at a disadvantage compared with England in clinching big business deals and research.
At the same time, they are under pressure to raise their game in a weakening economy and with reduced investment. Rationalising universities is seen as necessary to counteract a 4 per cent cut in funding that has already started to bite.
But the merger plans have also been met with concerns about job losses. Eluned Parrott, Liberal Democrat assembly member for South Wales Central, says she was shocked the minister has declined to rule out significant job losses as a result of proposed university mergers in south eastWales. She adds: “It is right that the universities should work more closely together and offerWelsh students the best educational experience but they each have unique goals and cultures that need to be respected.”
There is a lot at stake. Wales’ universities employ an estimated 15,000 staff as well as spending millions on local companies and suppliers. They are also doing more for business. A report by Higher Education Wales (HEW), Investing for the Upturn, indicated that in 2008/09 Welsh universities earned £157m in research income, twice as much as in 2000/01. The sector also won £238m of export earnings forWales in 2007/08. According to HEFCW, the institutions generate income from collaborative research that’s above the UK average, and from regeneration and development programmes.HEW agrees that universities need to change the way they operate to remain competitive in the emerging global knowledge economy. Research is seen as the key to future economic prosperity, and Welsh universities need to be in the mix.
Right now, Wales has ten universities with a physical presence – one fewer than in 2010, following the merger of University ofWales, Lampeter with Trinity Saint David in Carmarthen. The Open University is a significant player. And the University of Wales, now earmarked for merger, had a big impact before it was wounded by problems with courses it validated at other institutions.
Together these institutions educate more than 130,000 students. Cardiff University is the largest with almost 29,000 students, according to HEFCW’s student completion rate figures.
Since devolution, successive Welsh governments have strived for better links between universities and business, as well as more innovation and income. At the end of 2008 the Welsh Government overhauled its knowledge transfer and commercialisation policy placing it under Academic Expertise for Business (A4B), supported by a six-year £70m funding line.
According to HEFCW, that initiative has been followed by record increases in research income and collaborative partnerships with companies such as Airbus in Flintshire. The Universities Heads of the Valleys Institute is also seen as a potential economic driver for South Wales.
Some officials complain thatWelsh universities are not winning enough big contracts with large companies. But others in higher education say a focus on links with big industry is misplaced in a nation dominated by smaller companies. They say the barriers between smaller business and academia preventing business owners approaching Welsh universities need to be broken down.
The Welsh Government believes funding shortfalls can be overcome by efficiencies and mergers, but others disagree. Hywel Thomas, pro vice-chancellor of engagement and international at Cardiff University, says building a successful higher education sector, based on the quality of student experience, research and collaboration, needs investment that compares favourably with institutions elsewhere. “There is still a great deal of uncertainty about where the future lies for the sector and how sustainable the funding model is in the long term. For universities, this uncertainty has raised questions about how to ensure support for high-cost subjects such as science, technology, engineering, medicine and dentistry.”
There are fears that, with European economies in trouble, European grant funding will dry up; concerns are mounting that competitor nations are moving ahead in their research capacity and science as the UK’s investment in higher education is cut.
“There are potential economies of scale from creating larger universities, but the change process can initially lead to lower productivity and additional cost,” says Ian Howse, public sector director at advisory firm Deloitte. “The challenge facing the vice-chancellors and their leadership teams is how to get through the change process as quickly as possible and into a situation where it’s business as usual, while being sensitive to the need to follow an equitable process.”
Robert Huggins, director of the Centre for Advanced Studies at Cardiff University, was part of a research team investigating the productivity ofWelsh universities. The research, in alliance with Strathclyde University, concluded thatWelsh universities were bringing in more income to local economies than any other region in the UK.
But Welsh universities’ productivity – based on full time employees – was below the UK average overall, with only Cardiff, Glyndwr and Swansea universities performing above.
There is still lack of clarity about future plans, and not enough direction from policymakers, says Huggins. And there are other barriers to be overcome: “Welsh universities are doing their best to engage in relative terms with a weak business community. If Wales is a nation of smaller businesses, then there is a cultural barrier to collaboration.”
Some suggest that collaboration between universities has declined as they compete more for the students who are their main source of income. Swansea Metropolitan University has been earmarked by the education minister for a merger with Trinity Saint David and the University of Wales.
But David Warner, vice-chancellor at Swansea Metropolitan University, says the claim that universities are inefficient is wrong. “We are always being exhorted by the politicians to act more efficiently and effectively and to cut our backroom costs.” he says. “But there are figures to prove we are already the most efficient university in the UK and moving forward.”
Michael Scott, vice-chancellor and chief executive of Glyndwr University, says falling student numbers – down by 13 per cent this year – are a barrier to progress: “As businesses and individuals face financial pressures, the affordability of education, training, research and development come under intense scrutiny. The benefits of such projects can sometimes be sacrificed to short-term cost cuttings with consequential losses to the economy and business.”
There was relief at Glyndwr when the education minister said it would not have to merge with Bangor and Aberystwyth and proposed a review of higher education in the region. “Glyndwr University is an important part of the community in north eastWales and that link is integral to the university’s identity,” says Scott. “Whatever the outcome of the government’s restructuring plans, it is important that the people of north east Wales retain a university that understands their needs and is dedicated to meeting their interests.”
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