The future of higher education funding in Wales

Professor Sir Ian Diamond says a combination of fees for loans and a maintenance grant should be the basis of new student finance arrangements for Wales.

Over the past two years I have been privileged to lead an independent Review of the funding of Higher Education in Wales. The review team included representatives from across the political spectrum as well as further and higher education and industry; heard evidence from many stakeholders; and there were over 100 submissions to a call for evidence. What is clear from all the evidence is the immense value that the people of Wales put on higher education as a driver, for Wales, of economic development and social cohesion. In addition higher education does not work in an educational vacuum. It needs to be part of an education system funded to be both effective and efficient and which has strong links and partnerships with higher education in the wider UK and globally.  

There has, in recent years, been a debate in many countries as to the relative roles of the state, the individual and wider society in the funding of higher education. The review team contends that nations that invest in higher education benefit from the high skills that graduates bring to the economy, from research that impacts both on economic growth and the well-being of citizens, and from the contribution of universities to the wider enrichment of culture and civil society. In addition higher education transforms lives and can make major inroads into reducing inequality through being a significant driver of social mobility. Higher education is thus, as many commentators have observed, in part a public good – it produces benefits that accrue to society as a whole.

Individuals also benefit directly in economic terms, through higher lifetime earnings and the ability to better match their skills with jobs, and also experience a wide range of social benefits. They also benefit indirectly through being part of a socially cohesive society. In addition research can impact on the economic performance of industry and commerce and on the performance of organisations in the not for profit sector. Therefore it is the view of the review team that the funding of higher education should be a partnership between wider society and the individual.

In making recommendations about the funding of higher education courses, the review team has been guided by the long standing Robbins’ principle that entry into higher education should be on the basis of intellectual ability alone, not on the ability to afford it. In addition the panel celebrates the fact that some learners will, for many reasons, choose to articulate into higher education, whether on a full or part-time basis, after a period in further education or some years after leaving compulsory education.

Furthermore, in the twenty first century, as knowledge-based societies require employees with ever higher skills, it is equally important that for postgraduate education entry is based solely on aspiration and ability. There must not be a glass ceiling above undergraduate higher education for those from disadvantaged backgrounds; and so the Review recommends that it is in Wales’ interests that postgraduate taught courses should be treated in the same way as undergraduate courses.

Building on these principles, the review proposes a system of funding full time education that is at its heart simple, but which recognises the holistic costs of higher education, namely both fees and maintenance; and, using a phrase coined by NUS Wales, contends that it is the ‘pound in one’s pocket’ that is the driving force in enabling students both to enter higher education and to get the most from it. Thus the simple system has loans for fees (to a maximum agreed by the Welsh Government), payable back as a proportion of future earnings, together with a generous means tested maintenance grant that includes an element of universality in the spirit of the Welsh Government’s long term philosophy of progressive universalism. This recommendation is in contrast to the new system in England where there will be loans for both fees and maintenance.

The review team recommend that fees should be constant across all subjects; but further recognise that some subjects cost more to teach and hence the Welsh Government, through the Higher Education Funding Council for Wales, should provide the funding to enable such expensive subjects to be taught effectively.

Whilst the review believes that most families should contribute to maintenance it is also recognised that in some cases this may not be possible and so the potential for income-contingent loans to bridge the gap, for an individual, between the means tested grant and the maximum grant is included. And special mention is made of students with a disability, students who are parents and those who have experienced a period of care.

The review team thought deeply about whether Welsh students should be funded to study out of Wales and concluded that it is in both the students and, indeed, Wales’ interests to enable students to study across national boundaries including in Europe and, potentially, further afield.  But the Review also proposes that the Welsh Government should incentivise students, in the medium term, to bring their skills back to the benefit of Wales.

For many students, higher education study on a part-time basis is a positive choice that best suits their circumstances and again, the Review believes that such students should be encouraged, not least as longer working lives, technological change, demand for ever higher skills and changing career patterns for individuals have become the norm. A triple partnership between higher education providers who should deliver part-time higher education in a way that enables students to ‘learn while they earn’; the state, which should provide a system that incentivises part-time study; and the student is recommended. To incentivise part-time study further and recognising that loans have a higher propensity to be paid back, fees are lower for part-time study.

In bringing these principles together the Review proposes a system that is, at its heart, simple, is progressive and aims to provide the student with both the opportunity to manage their finances and to benefit fully from a university education. It proposes a funding approach to maximise the flexibility of the learner to move through the Welsh system via the mode of study of their choice, and to do so in the medium of Welsh, should they so choose.

Research is of course central to a twenty first century higher education system that is of huge benefit to Wales. World class research works through creating new knowledge, deepening human understanding and, where appropriate, impacting on economic growth, health and well-being, and social cohesion. The review team believes firmly in the model of higher education where teaching is informed by the latest research and scholarship and also in the dual support system of funding research that has served the nations of the United Kingdom so well. Funding strategies that support research, encourage a new generation of researchers to be trained in Wales (supported by a partnership between the state, the university and industry or the not for profit sector), and which maximise the knowledge exchange of both commercial and social research are therefore a central part of the Review’s recommendations.

Finally, the review team recommend strongly that the Higher Education Funding Council for Wales should be charged with a number of regulatory roles and also with continually reviewing the Welsh higher education landscape so as to identify interventions that can improve any part of the landscape. In order to effect this, the review team recommends that the Higher Education Funding Council for Wales should have an unhypothecated fund to drive such interventions in line with Welsh Government policy.

The review team is delighted to recommend unanimously to the Welsh Government this package for the future funding of higher education. It is a package that comprises interlocking elements and should be seen in its entirety; it therefore requires implementation as a whole. It fits within the team’s core values that the education, research and knowledge exchange delivered by higher education can transform Wales and provide enormous opportunities for all those who have the ability to benefit from it.


  1. I would like to acknowledge the immense commitment put into the work of the Review by all members of the Panel, and by the hard work and dedication of the talented group of Civil Servants who supported the review most notably Jackie Davies, Alison Bryant, Donald A’Bear and Stefanie Taylor; as well as, in the latter part, Greg Walker from Colleges Wales
  2. This article draws in part on the foreword to the Review, written by the author.


Professor Sir Ian Diamond has led the Independent review of higher education funding and student finance arrangements for Wales. He is the Principal and Vice-Chancellor of the University of Aberdeen.

One thought on “The future of higher education funding in Wales

  1. The review is very relevant to the future of nursing education, about which I have already commented on in an earlier article. I strongly believe that whatever is agreed for other students should apply equally to nursing students – with the following provisos:
    1. Tuition fees should be waived for students who commit to working in NHSWales for a specified period (?3 years)
    2 the debt from student loans should be “forgiven” after 10 years service to the NHS.
    As well as helping student recruitment this would also alleviate some of our nurse shortage problems

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