Universities Wales Chair’s New Year Message

2016 – New year, new challenges, new opportunities

It’s traditional in the New Year to look both forward and backward, reflecting on the past year and thinking about the future. In doing so it strikes me that some things don’t change very much: I continue to believe that our universities, and the growing proportion of people studying at them, will be fundamental to creating a globally competitive economy in Wales. Where once we depended on coal and steel, we now depend on a highly educated population that can create and navigate a world-beating knowledge economy for our future wellbeing and prosperity.

Wales’ universities are national assets. We don’t just teach our students — although the National Student Survey says we do that superlatively well — but we are major generators of investment and income for the wider Welsh economy. Universities provide an astonishing return on the investment made in them by the Welsh Government. An independent report in 2015 showed that with a relatively small amount of public money, Welsh universities created a huge economic impact for Wales, generating £4.6 billion of output in 2013/14. Higher education is a major economic actor in itself, creating almost 50,000 jobs in Wales (3.4% of the Welsh total). Confidence in a growing economy in turn generates an environment that will foster greater creativity and prosperity. And this is what will achieve the quality of life we aspire to: a society where a world-class health service, the elimination of poverty and a secure and rewarding future are available for all.

Graduates are key players in Wales’ economic growth. Employment can offer a route out of poverty, and universities have a central role in developing the high-level skills that allow people to create an inspiring career. More graduates are in work this year than at any time since 2007, and they earn almost £10,000 a year more than people without degrees. In Wales, 92% of graduates from full-time first degree courses are employed or in further study six months after leaving. Three and a half years after graduation, a higher proportion are in full-time employment than the UK average.

OECD data show that long-term economic growth is above all determined by knowledge accumulation and technological progress, and there are few sectors of the Welsh economy that are better placed to grow and generate export earnings than universities. Welsh universities already have the highest percentage of world-leading research in terms of its impact of any part of the UK, with almost half of it considered to be having a transformational effect on society and the economy.

However, the end of 2015 saw the publication of the Welsh Government’s budget for 2016/17, which proposes a cut of £41.4m (32%) to investment in universities in Wales. Welsh universities are understandably seriously concerned by this reduction, which could reach £61m or 47% in a single year when in-year cuts are taken into account. Furthermore, the proposed reductions are in addition to six successive years of major cuts to the HE budget, with a total reduction of £365m or 81% since 2010/11. While we have managed successfully to compensate for these reductions through tuition fee income up to now, that will not be possible if the proposed reduction goes ahead.

The area of greatest concern in the proposed funding shift is the inevitable decline in public funding for areas that are crucial to Wales’ social and economic growth: research, part-time and high-cost subjects as well as Welsh-medium teaching through the Coleg Cymraeg Cenedlaethol. It is subjects such as science, technology, engineering, mathematics and medicine that would be difficult to fund under these proposals. Subjects that are critical to our future.

My hope for 2016 is that these matters are fully and carefully considered. Our universities in Wales have the capacity to be the main agent of change for our future: with the people of Wales we can create a strong, knowledge-based economy and society. With your support we can be sure that this proud nation will be a leader not just in the UK, but in Europe and the world.

Professor Colin Riordan

Chair, Universities Wales