Children, Young People, and Education Committee

We'll now move on to the next item, which is to move into private session. So, I propose, in accordance with Standing Order 17.42, that the committee resolves to meet in private for items 4 and 6. Are Members content? Yes, I see that Members are. We'll move into private session.

We are now back for the next item on our agenda, which is the Tertiary Education and Research (Wales) Bill. This is our first formal evidence session on the Tertiary Education and Research (Wales) Bill. I'd like to welcome the Minister for Education and Welsh Language, Jeremy Miles MS, and he has officials with him today, who are Zenny Saunders, deputy director, post-compulsory education and training reform, David Morris from the policy team, and Cath Wyatt, who's the Bill manager. Good morning, everybody; you're all very welcome.

We've got a number of questions to get through this morning, so I'll make a start by asking: what are the policy objectives this Bill is intended to work toward?

Thank you, Chair, for that. I think the broad context in which the sector and the Welsh economy in Wales generally finds itself is one of very significant change at the moment, whether that's the response to the climate emergency, whether it's the response to our new relationship outside the European Union, whether it's the response to COVID, whether it's the impact of technological change. I think any of these would be, on their own, a very significant set of challenges and, indeed, opportunities in some ways for Wales. But they're all happening at the same time, and I think it's therefore really important that we enable our post-16 sector to be futureproofed to be able to respond nimbly both to some of these challenges and also to the opportunities they include as well, and to do that in a way that is collaborative, which supports our learners, and which helps drive forward research and innovation across that range of fields and beyond. And so the vision that we have for the Bill and for the sector is one where there's a strategic, coherent, sector-wide approach to how we deliver post-16 education, which has, I suppose, at its heart this idea of a single sector, but with a diversity of providers. I think the Bill is designed to deliver that.

There are a number of challenges that the tertiary education sector has consistently faced over recent years. They're not unique to us in Wales. Other nations are facing the same challenges. The approach that we adopt in the Bill draws on the approach adopted by other, similar sized nations—for example, Scotland, New Zealand—and some of those challenges are common, so for us here in Wales it's about an increasingly competitive environment both within the UK and internationally. It's about the existing framework, the existing structures leading effectively to insufficient collaboration, duplication of roles, and that lack of coherent learner pathways around different parts of the post-16 sector, and I think those challenges are exacerbated by the structures and the funding boundaries that we have to date. The Bill is an opportunity to put that right.

Thank you. So, how exactly will the Bill help to achieve these policy objectives?

Well, I think if you take the strategic vision and the futureproofing, the Bill establishes a commission—it's a single, national body with that clear remit across all parts of the post-16 education sector, and it has nine duties on the face of the Bill, which, for the first time, actually, enshrine in law that strategic vision that we have for the sector. So, I think, in approaching it from that perspective, it meets those fundamental objectives.

But I mentioned to you collaboration in my initial answer. I think the Bill provides the commission with an opportunity, for example, to fund collaborative projects between different sectors, whether that's around quality or widening access or in research and innovation. It provides the commission with the tools to develop so-called articulation agreements, which help smooth the path, if you like, between level 4, level 5 and degree-level qualifications. Whether it's around greater collaboration with apprenticeships, whether it's around improved co-ordination and a sharing of learning and teaching practice across the sector, I think all of that helps with the collaboration priority that I described.

But again, as I mentioned, the learner's journey is fundamental to this, and that question of parity of esteem is one that we've all spoken about for many years. The question is how do you deliver that. And I think the Bill provides us with the tools to do that. The fact that both vocational and academic providers are included within the same strategic umbrella of policy auspices, if you like, will encourage that, will encourage more collaboration, less competition, and that is good for parity of esteem. But I think, at the other end, it's about having a common view of quality across all parts of the sector, and that, I think, will also drive parity of esteem for our learners.

The question of outcome agreements is a really important part of the Bill. I know the predecessor to this committee was interested in the post-legislative scrutiny of the 2015 Act, for example, on how you complete the chain, if you like, between the national priorities on the one hand and the decisions taken by institutions on the other. In the Bill, the outcome agreement provides that line of sight, if you like, in a very transparent, public way so that we have a balance between the national priorities and their implementation on the ground by our diverse range of institutions.

Thank you. So, in its paper to the committee, the Higher Education Funding Council for Wales argued that much existing legislation has simply been hard-wired into this new Bill. Why is new legislation needed?

I want to be clear: there are strengths in the current legislation. The Bill is a departure in many, many significant ways that I'm sure we'll come on and talk about, but there are some strengths in the existing legislation. And so, the task in hand, I think, is to keep the strengths that we have in the current legislative framework and remove the obstacles, and for that to allow the sector to evolve, if you like. So, this is a process of building on those existing strengths, but there are a number of fundamental differences, as I said, which can't be achieved simply by tinkering around the edges, if I can put it like that, really. So, the Bill strikes that balance, in my view, between maintaining the existing advantages but moving us forward and helping the sector to move forward.

In establishing the commission, the Bill obviously dissolves HEFCW. So, I thought I'd put on record, if I may, Chair, my thanks to the funding council for the work it's done for many years to deliver for Wales through funding, advising on the sector and regulating the sector. HEFCW and HEFCW staff have used their influence to help deliver Welsh Government priorities, but also a much broader agenda of societal and economic benefits for Wales. So, I just want to put my thanks to them on the record, if I may.

Thank you, Minister. Just following on from that, you talked about continuity. So, is continuity the reason why there wasn't a more thorough and fundamental clean-slate approach to the legislation? After six years of developing it, it could have been—. You know, you've looked at this for the last number of years.

As I was saying, it's striking the balance, isn't it, between maintaining the current strengths and moving us forward. Just to say, when I came in as Minister, I took a look at the Bill afresh, really, and you will have seen changes in the Bill from the version that was consulted upon. That was partly driven by the very valuable response we got to the consultation on the draft Bill, and also partly by my appetite and enthusiasm for putting our strategic vision, which we've just been talking about, in the Bill itself. It is a Bill of firsts, actually, so I don't think that it is simply replication, really, and I think, in many ways, there are those elements of clean slate.

So, it's the first time we've put strategic duties on the face of the Bill. It's the first time we've brought all aspects of post-16 education and research and innovation together. It's the first time that we've required proper facilities for post-19 education, rather than reasonable facilities—a technical distinction but important, as members of the committee will know. That's the first time we've done that. It's the first time we've created a stand-alone funding power for the commission to fund apprenticeships. So, I think this is a Bill of firsts, actually, in many, many ways.

Thank you. I've just got a couple more questions. Regulation-making powers leave considerable scope to adjust policy. Will you be publishing draft regulations to allow the Senedd to scrutinise them, and the Bill as a whole?

Yes. There's a range of regulation-making powers in the Bill. Some are subject to negative procedure, some are subject to affirmative procedure, and I guess they come in different categories, really, Chair. Some of them are in the Bill to enable the sector to be futureproofed. Those are powers that may not be used for some time, for example. That's one set. There's a set of technical regulations that will need to be made.

There are then regulations that have a more substantive policy impact at an earlier stage, and I anticipate it will be helpful from a scrutiny perspective, and from a legislative perspective, for those to be available as soon as they can. So, an example of that would be the regulations in relation to post-19 proper facilities provision. The committee will know that the Wales Centre for Public Policy's doing a piece of work for us in exactly this space to help us understand what the most effective interventions can be to deliver a lifelong learning provision. I'm anticipating that'll be available before the end of the year, and then that will provide us with the context in which to bring forward those regulations. So, there will be some in the more substantive policy area.

Just in terms of timings overall, my officials are working on a legislative implementation plan at the moment. Implementation is a big task in relation to the commission, and that, I think, will help—obviously, we'll share that as soon as we can with the committee—to shape some of that.

Okay, that would be really helpful. Thank you, Minister. And finally from me: what assessment have you made of the United Kingdom Internal Market Act 2020's effect on the Bill's provision?

I may ask one of my officials to help with that question, if I may, Chair. Zenny, could I ask you to help us with that?

Yes. Our lawyers have considered it—a number of months ago now. We have considered it, and we continue to make sure that there's a read-across in relation to it. The advice we've had from our lawyers is that there isn't an implication there, and it doesn't affect the actual drafting of the Bill, as is, at the moment.

Okay, thank you. That's really helpful. We'll now move on to some questions from Members, and the first set from Buffy Williams. Buffy.

Thank you, Chair. Good morning, Minister.

Morning.

My first question is: we know that the Bill gives Ministers 47 powers to make regulations, and the explanatory memorandum says a chief executive officer will be in place in January 2023—what is the current time frame for establishing the commission and introducing the powers, and is this achievable?

On the question of the legislation, when we are able to share the legislative implementation plan with the committee, that will help, I think, in terms of the particular regulations and help describe at which points they're most likely to be useful and necessary.

On the question of the appointment of the CEO specifically, it's my intention, really, to try and maximise the period that an interim CEO is in place before we establish the commission. I think that would be a very helpful way of approaching it. So, we would hope to be in a position to advertise that post in the first half of next year, really, to allow for that appointment to take place at the earliest opportunity.

In relation to the broader set of questions around the time frame, there is a very significant body of work that will be needed in order to establish the commission. I don't propose to take any short cuts in relation to that. It's obviously fundamental that the commission is both fit for purpose and commands the confidence of the range of providers and stakeholders that it will need to work with in the future. I'm very conscious that we provide our stakeholders with sufficient time to engage fully with that process. I don't want to put them under the burden of unrealistic timescales, but equally I want us to make progress as rapidly as those principles allow us. So, my ambition remains to establish the commission in 2023, but, as you would expect in relation to this kind of body of work, implementation would need to be staged. So, my intention is to establish the body in 2023 and for implementation to take place in 2024 and into 2025. I've established a stakeholder strategy and implementation board. We had our first meeting a week or so ago. That's an evolution of a previously existing forum, and that will have a key role in this, in helping us understand how best to implement in a way that meets the needs of the commission but also commands the confidence of stakeholders.

Thanks, Buffy. Sioned, do you have something on this specific point that you want to come in on?

Yes. Good morning, Minister. I just wanted to ask about how stakeholders can respond to the consultation in the first instance, because, of course, it took 12 weeks for the Welsh Government to publish a summary of the previous consultation before the election. So, the Government clearly felt that there was a need for considerable time to assess those responses, but they now have six weeks to assess a Bill of 600 pages. And given that the initial consultation was held before the election, and therefore it wasn't certain what the results of the election were going to be, and, as you mentioned in your responses to the Chair, there are a number of firsts, as you called them, in this Bill since you took the reins, and bearing in mind this exceptionally difficult year for the sector in facing the pandemic, do you not think that six weeks of consultation on this Bill is a little ambitious, and perhaps isn't right?

Well, I think that that period—. If I understand the question properly, and please forgive me if I haven't, but I think that it's in the hands of the committee to set that period, because it's a committee consultation, not a Government consultation. So, I think it's in your hands in that sense.

But the broader ranging point that you made in terms of ensuring that stakeholders have enough time to contribute to this, that's very important. That is why I made the comments that I made about the timetable for establishing the commission itself. And the work that the consultation and implementation board has started to do is a very important element of shaping that in the future as well.

Yes, thank you for that answer—

Perhaps we could make a suggestions to this committee, Chair, that we do look at extending the consultation period.

It's because we have 13 sitting weeks to complete the first part, so that's why we are in that position. Perhaps we can discuss that later.

Could we move on to Buffy again, sorry? Buffy Williams.

Thank you. How are the organisational practicalities of the transition from one body to a new organisation being managed to ensure that implementation challenges don't negatively impact on the early operation of the new body and sector?

Just in the way I was starting to touch on in my answer to your previous question, there's been work going on, if I can put it like this, in the background for a while in relation to this, including through workshops with stakeholders, and that is about identifying the strategic requirements for the commission. There are, in parallel with that, a number of projects under way, working with HEFCW, to look at the human resource and organisational design of the commission, and the processes and systems that will be required in order for it to be fully operational. There'll be more projects in that space coming on line in the next few weeks.

And then the work that my officials are doing to scope that high-level implementation plan will cover the legislative requirements that you've just touched on, but will also deal with some of the key pillars, as we're calling them, in the Bill, so, for example, around the registration system or around the quality framework, around the extended further education provision I was just talking about. So, those are all part of that high-level implementation plan. As I say, the implementation will need to be staged, so I envisage it being established in 2023 and then the implementation of those pillars occurring in the following year and into 2025. I think, again, just to repeat, that will all be shaped as well by the work of the strategy and implementation board that I've convened.

Do you believe that the requirement for the commission to give Welsh Ministers any information they request could result in registered providers or key partners not sharing information with the commission, particularly when it is commercially sensitive, as stated by HEFCW?

I think that's one of the areas that we could probably put in the category of building on existing legislation, really, because those are powers that, in a HEFCW-specific way, already exist in the current legislation. So, the new commission, obviously, will be the expert, if you like, in terms of post-compulsory tertiary education across Wales, working alongside the providers, and Welsh Ministers will only ask for the information that they need, in the way that they do at the moment under the current equivalent arrangements with HEFCW. So, it's the Further and Higher Education Act 1992, which some colleagues will be familiar with, that provides the underpinning statutory equivalent for that in the current statutory regime.

So, the Bill does extend that, but only in the sense that the commission's remit is broader than HEFCW's remit, so, clearly, the power to require information touches on sectors beyond the higher education sector itself. And I just would say that, as with all information and data sharing, it will clearly need to comply with the data protection principles and data protection legislation. So, colleagues will be familiar with those, I don't need to rehearse those principles. But, those will obviously apply to information requests in future, as they do at present.

Thank you, Minister. Chair.

Sioned Williams.

Thank you. I wanted to ask a few questions regarding how the powers that Welsh Ministers will have over the commission and some providers will have an effect on any arm's-length autonomy and the ability of the commission to fulfil its duties and functions. So, I wanted to ask: as well as appointing the board, Welsh Ministers also have powers to fund providers directly outside of the commission and to modify the commission's plan unilaterally, so to what extent will the commission really be arm's length? Isn't there a fundamental misunderstanding here, which is perhaps to be seen in the explanatory memorandum, that there is a tension that has been perceived between sufficient policy control and this concept of an arm's-length body?

Well, on one level, those principles are ones that all legislation creating a new body has to tackle. So, this is a familiar context for what the Government does in establishing an arm's-length body. The starting point, I would suggest, is this: if we as a Government wanted to keep those powers, we wouldn't be proposing the Bill. So, that's the starting point in terms of our approach to the question. The creation of the new body is going to ensure that significant powers and responsibility and funding will be with the new body.

This will be the biggest body, I believe, outside the Welsh Government, apart from the health service, in terms of the magnitude of the budget and the impact. Therefore, we need—I am sure that everyone agrees with the broad principle here—we need to strike a balance between freedom to operate on one hand and accountability on the other hand. I am certain that the committee wouldn't perceive it as being adequate if I appeared before you as Minister and said, 'Well, that's not my responsibility, it's the responsibility of the new body.' In terms of scrutiny and democratic accountability, we need a line between the actions of the commission and the role of the Minister for education in that regard.

In terms of the specific point that you mentioned in your question, board appointments will happen on the basis of the open, transparent process that happens for public appointments, and Ministers in the Welsh Government will approve those. That already happens with HEFCW. We did respond to feedback that we had from stakeholders during the consultation asking us to remove from the Bill the powers to appoint the research committee appointees. So, we've done that.

We also have powers, as we have at present, under the Learning and Skills Act 2000 to continue to fund some aspects of further and higher education. It's not a general power, it's a specific power that is tied to parts of the Education Reform Act 1988 and, on the whole, the focus of those powers is professional qualifications. If you look broadly at how the powers have been allocated—and this is a very broad look, so there are exceptions at the margins, just to be clear about that—the powers in terms of things that lead to specific qualifications lie within the scope of the work of the commission, and things that are in the field of employability are still within the Government's hands. So, that's the broad allocation. So, if you look, for example, at Jobs Growth Wales and Working Wales, there are elements of those that require direct funding from the Welsh Government, and retaining those financial powers allows us to continue providing that kind of scheme.

Thank you. Chair, it has just struck me, because I wasn't here at the beginning of the committee meeting this morning, I should declare an interest in that my husband works for Swansea University.

So, what is the rationale for Welsh Ministers themselves being able to modify the commission's strategic plan unilaterally after consultation? This appears to be a significant power. So, why isn't there a more collaborative approach set out?

Well, this is related to the same point, isn't it? The principle, the fundamental, baseline concept in this sense is that the Bill requires the commission to respond to the priorities of the Welsh Government from time to time in their strategic plan. So, that's the fundamental principle. As I mentioned earlier, the predecessor committee in the last Senedd was eager to hear about what more could be done to ensure the line of sight, as I mentioned, between the principles and priorities of an elected Government on the one hand, and the actions in the sector on the other hand. So, if you take that principle as a baseline, we need to ensure that the commission does respond to those principles.

As you said in the question, there will be a requirement to consult with the commission if the Government or Ministers were in a position where they wanted to make reforms to the plan. And I would think that it would be under very restricted circumstances that that would happen in practice, but there is a requirement to consult, and any action in that area would have to happen on the basis of public law principles of course; that may be obvious.

But what I would contrast with that is the remit letter—the system that exists at present. So, completely unilaterally, as you said in the question, Ministers can propose one of those every year—that's the usual practice—and that sets the terms for funding HEFCW at present, for example, and that's consistent entirely with the operational independence of HEFCW. And I would say that the new system is more strategic, more long term than that, and maybe more transparent as well.

I don't think that you could expect any Government to devolve this kind of funding or budget without us as a Government having some kind of baseline control, a backstop, on the strategic element that accompanies that.

Thank you. And following on from that, I would like to ask what the rationale is for that backstop. What is the rationale for keeping that power to dissolve higher education corporations with seemingly no safeguards for providers set out on the face of the Bill?

Well, I do agree that those powers are backstop powers. That's the first thing to say. You are right in that sense, certainly. We thought about this and we had a short conversation about this in the Chamber. We did think about the best way of tackling this issue. The powers that are retained in the Bill, they're the same powers apart from some technical modifications on the margins given that a new body is being created. They are the same powers in substance as the powers that exist at present. And the reason is: in the worst case scenario, where the institution is not in a position to invite the Government to do this, without these powers it's not clear to me how we could ensure that an institution could be dissolved in an ordered way that safeguards students, for example.

So, that's the purpose of this. It is a backstop. And as I said more broadly, the use of the powers would be subject to the principles of public law in any case. But you've raised this point, and various universities have raised this point directly with me as well. And, so, I'm perfectly happy to look at whether there are other things that we could do in this part of the Bill that would give people more security that this is a backstop rather than anything else.

Yes, because that does mean—. You mentioned at the beginning that consistency is one of the objectives of this Bill, but this does give an inconsistent power over the providers, doesn't it, because some have a royal charter, for example, so you couldn't intervene in the same way with those. So, do you accept that that does create an inconsistent power?

Well, if the committee has specific suggestions about how to strengthen this part of the Bill, I would have an interest in hearing that, because I certainly want to continue this discussion that we've started to have in order that we can maintain people's confidence in this part of the legislation. I think that's important.

Okay. Thank you.

Ken Skates.

Thanks, Chair. Good morning, Minister. I'm just going to ask a few questions about regulatory machinery, if that's okay, beginning with this: to what extent does the Bill create a cohesive and seamless regulatory and funding framework, considering that there are different funding mechanisms for different types of provider and different regulatory machinery?

Well, I think it does. That is the intention, and I think the Bill delivers on that. I think there are two parts to your question—one is around the funding, and one is around the regulatory intervention, so I'll take each in turn, if I may.

So, on the funding, there is a range of things that it's within the power of the commission to do, and a range of things that, because of how education is delivered much more broadly than that, is outside its compass. So, the Bill provides for the commission to fund the full range of tertiary education—so, HE, FE, training and apprenticeships. So, naturally, within that, there is a wide and diverse range of providers—so, universities, FE colleges, local authorities, private providers. So, there's a complex and diverse landscape of provision. The principle in the Bill is that the funding powers are designed to follow the type of education provided rather than the type of provider. So, that is the consistent principle in the Bill, and I think that's a really foundational point in the Bill, really; that drives an awful lot of the other benefits in the Bill.

But that coherent funding approach can't remove what are the fundamental differences between different types of tertiary education and how they are funded more broadly. Sorry, I'm not being very eloquent. But what that means in practice is, higher education courses, in the main, are funded by tuition fee income, they're demand led and driven, basically, by student choice. That's one kind of model. In relation to further education, that's funded, secured largely by way of grant funding, and, if you're in the apprenticeship space, apprentices need to be in employment. So there is a range of different ways in which different parts of the sector are structured. And recognising that, the commission's powers are, I think, as coherent as it's possible to be in recognising those different models, because they have to operate within one common funding structure. And I think that's where the integration and the coherence and the collaboration come from. So, that's on the funding side of things.

On the regulatory side of things, the policy intention is that, initially, only HE providers will be required to register with the commission, and then there'll be, obviously, conditions of registration around quality, around governance, around financial sustainability, around learner protection. In the FE space, the regulatory mechanism is different, because the funding mechanism is different. So, in that space, the commission is able to impose terms and conditions on the funding, which also includes requirements around financial assurance and quality and so on. So, the mechanism for the regulatory oversight may be different, even though the overarching policy context is the same.

Okay. Thanks. Can I just then ask, on a specific point, what the rationale is for only extending freedom of speech and academic freedom to providers of higher education, and not including further education in this?

Yes. Again, in a way, that's a different manifestation of the earlier point, which is, it's a single sector but with a diverse range of providers. And so—. I suppose I should start by saying both higher and further education institutions across the UK, actually, already have a duty to ensure that freedom of speech is secured for staff, students and speakers under the Education Act 1986. So, that's the kind of base level, if you like, of requirement in all parts of the UK, I think. So, we as a Government believe very strongly in the principle of academic freedom and free speech across the education system, and are generally assured that that is being upheld.

In relation to academic freedom specifically, stakeholders in their consultation responses asked us to improve, if you like, the provisions in the Bill in this space, which we've done. The protections of academic freedom for higher education providers really reflect the fact that HE institutions have the freedom, if you like, to determine the content, the teaching, assessment, admissions, appointment of academic staff—all of those fundamental principles and building blocks of HE. That operates very differently in FE, where there's a curriculum, there are Government funding decisions, teaching staff are regulated by the Education Workforce Council. So, I think academic freedom would be slightly incongruous with some of those approaches. So, I think it's really about—. It's about the diversity of provider and also the expectations that we have of different parts of the sector.

Okay, thank you. An incentive for universities to apply for registration is likely to be that their students will have access to higher levels of tuition fee support. The student support regulations are therefore a key component of the future system, but they're made under a different Act. Why weren't the powers consolidated into this Bill?

So, that's an important point. There are two answers to that question, really. One is that it's not principally a consolidation Bill; it's principally a reform Bill. That isn't the main answer, but just to say that. But the real issue, I think, in substantive terms is this: so, the student loan book is essentially managed in a set of relationships between Welsh Government and the Treasury in Westminster. That's the way in which the loan book is managed. And you couldn't, I think, substitute the commission, for example, for the Welsh Government in that relationship.

But I think, more fundamentally even than that, the commission will have a very, very substantial budget indeed, but the Welsh Government, obviously, is the body responsible for public finances in Wales at large, and so it will decide how much funding is provided to the commission, obviously. If the commission had powers over student finance and eligibility criteria in that space, that would extend beyond that principle, effectively, and the commission itself would, I think, be able to decide on the extent of the public funding available to the higher education system itself, which I think would be a very different scenario, and I think would have, potentially, much broader public finance implications, and I don't think that would be appropriate.

Thank you. It's a complex area. Thanks for your answer on that.

I'm just going to turn to some of the concerns from stakeholders and also from HEFCW. What are your views on the concerns of some that the Bill is too detailed, too prescriptive, and therefore risks preventing it from being futureproofed?

I don't think that is the case. As with all these things, and I know as you know, there is a balance to be struck, isn't there, between being prescriptive and providing flexibility. So, I anticipate, in this space, that regulators probably would argue for more flexibility, and the regulated probably would argue for more restriction. So, that's where you would expect the starting point for this discussion to be. But we have been alert to this during the consultation. So, there's a clear theme in consultation around the access and opportunity plans—currently, the version of that is the fee and access plans—and we heard a lot in consultation about those being too prescriptive, too bureaucratic and so on. So, that's come out of the consultation. And I think, in any number of ways, really, whether it's about registration or about outcome agreements—we touched on that earlier—that is a principle by which you can link strategy to implementation, but how that looks will definitely be co-constructed between the commission and the sector. And so I think there's quite a lot of room for flexibility and evolution in there, for example.

Just finally from me, Chair, HEFCW. Minister, you'll be aware that HEFCW believe that the intervention powers that they have under 2015 legislation are very difficult to use in practice. First of all, would you agree with them? And then, consequent to this, how does the Bill address HEFCW’s concerns? How are the intervention powers different from the Higher Education (Wales) Act 2015?

I might ask David Morris to help us on some of the detail of this, if I may, but the commission will have a recourse to a range of interventions to deal with situations where institutions are either failing to comply or have failed to comply with ongoing requirements. But maybe I can ask David to help us with a little bit more of perhaps the weaknesses that HEFCW have identified in the current arrangements.

Yes. So, I think what you’re referring to there is some of the concerns HEFCW had about what they can do within the current regulatory framework in terms of intervening with institutions in respect of quality, specifically. There are a few powers around direction or advice and reviews on quality, and also in respect of compliance with fee and access plans, which cover quite a specific set of things within the plans. I think HEFCW’s concern was that the ultimate regulatory step under those plans is, effectively, to reject a plan, which would be catastrophic for an institution and not particularly constructive to good regulation.

I think what we've sought to do in the Bill is to enable a more staged approach that the commission could take, and one of the advantages of having the register as the main regulatory framework is that it can cover a much broader range of regulatory matters of quality, governance, finance, equal opportunities, but also the learner engagement code, and then there might be other regulatory or registration conditions in the future. And what the commission can do is take a staged approach. So, firstly, if it had a concern, it could issue advice to an institution, which an institution would have to have regard to. That might be the starting. It could initiate a more detailed review of that provider in respect of its regulatory concern, and that could, again, be quite—. I think that would be quite constructive. It could, ultimately, issue directions to those providers if it felt there was a really urgent need for regulatory action. And then you have the ultimate, sort of nuclear option of deregistration, which we would hope would only be used in the very last resort, if ever. So, we think that that staged approach, across the suite of registration conditions, that the commission can take, is a bit more flexible than the current arrangements.

And then I should also say that we also have the outcome agreement provision. The outcome agreement is, effectively, terms and conditions of funding, but that provides another means for the commission to take regulatory action with providers that it funds. So, combined, we think this would, hopefully, give the commission appropriate flexibility, but also provides transparency about what the commission’s powers vis-à-vis providers are, and we hope that that strikes the right balance.

Thank you. Thanks, Chair. That’s all from me.

Thank you, Ken. Sioned, did you want to come in on this point?

Yes, thank you, Chair. Just going back a little bit to what you've described there in your responses to Ken Skates in terms of the complexity and diversity of the landscape in terms of provision, if I understand what you said correctly, one of the key objectives of the Bill is to ensure fair play and a level playing field across providers. So, I just wanted to ask, perhaps, about ensuring the requirements in terms of charitable status, consulting the student voice and quality: are they going to be just as relevant for each provider in terms of HE, when the Bill responds to the regulation according to the kind of provision rather than provider? Could you give a bit more detail on that, please?

Yes, just to echo what I said earlier, this reflects the ways that exist within the broader system of funding providers in the sector generally. So, if you're a university, income from tuition fees is one of the main ways in which you are funded. So, we have, in this context, the register, which means that you have to be registered in order to take advantage of that. Existing on the register offers a regulatory gateway—you then have an opportunity to regulate, and the Bill allows the commission to do that.

In the FE sector, given that grants, on the whole, are the main source of funding, there is an opportunity through the grants process to provide specific requirements. Of course, some providers who are, on the whole, FE providers will also offer some courses, or course elements in the HE sector, and they will have to register as well in order to have access to the funding streams that come in the wake of that. So, it just depends on what the main source of funding is, and that's the basis for your decisions in terms of regulation.

Okay. Thank you, Sioned. We'll now move on to questions from James Evans. James.

Thank you, Chair, and good morning, Minister, good to see you. I've got two questions, Minister, one on lifelong learning and one on collaboration. So, on lifelong learning, Minister, the Bill talks about the importance of lifelong learning, and that's right, but in the Bill, it does only say that the commission needs to secure reasonable facilities for those over the age of 19, and not proper facilities. So, on the face of it, those who are over 19 are probably going to get a lesser standard of education and opportunities. So, how is this in line with the ambition of your Bill for lifelong learning?

Well, this is really, from my point of view, a very, very important part of the Bill, and I'm really pleased that the first strategic duty of the Bill, when you read it, is one that requires the commission to promote lifelong learning. I've spoken many times elsewhere about the importance of Wales being a nation that provides people with a second chance, and I think this is pretty fundamental to that. It reflects what I know we're all very proud of, which is our tradition of adult education in Wales, so I think it's a big step to put that into law in the way that the Bill does, and I was very keen to make sure that, when I approached the Bill afresh, it had that focus in it.

In line with our commitment to expand lifelong learning, the Bill actually provides not solely for the requirement to provide reasonable facilities, which is the existing provision in law post 19, by the way, but extends the requirement to provide proper facilities, which is a higher level of obligation, to those post 19 who are eligible learners, and the definition of 'eligible persons' is set out in regulations. These are the regulations I was talking about at the very start. And when I was talking to you about the report that the Wales Centre for Public Policy is providing for us, and the regulations defining those—sorry, just to belabour the point, but just so we're clear what this does, the regulations that define eligible persons—is the mechanism in the Bill that allows the progressive expansion of lifelong learning for the first time. So, it isn't simply 'reasonable facilities', it's broader than that.

So, the question you might—. I think implicit in your point is: if there are proper facilities between 16 and 19, why are there not proper facilities for everybody post 19? The starting point for that is that the cohort of people post 19 is, obviously, much larger, and so there needs to be a progressive expansion of lifelong learning through that age range, and that's what the regulations provide us with the flexibility to do. I think we will want, together, to return to the substance of that while we have the benefit of the report from WCPP. It'll be published before the end of the year and I'm sure the committee will have strong views on it.

Thank you for that, Minister. My second point is on collaboration. So, commission consent is required before Welsh providers can share commission funding with collaborating bodies. Welsh Ministers can set regulations regarding giving consent. Is this a new requirement, and to what extent could it be an additional barrier to collaboration when, obviously, one of the big challenges is to try and drive collaboration between people?

Well, I think, perhaps with the term 'collaborating bodies', anything that seems like a consent requirement might look like a barrier, but actually, in substance, it extends collaboration in the following way: the commission will not have a direct regulatory or funding relationship with collaborating bodies. They are bodies who are collaborating with other bodies who have that direct relationship—so, they're once removed, if you like, from that relationship to the commission. And there might well be, how we'd anticipate, collaborating bodies working with registered HE providers, for example, and others. So, what the mechanism provides is an extension of that funding beyond the direct relationship into third parties, so it enhances that ability to collaborate, but I'm sure you would all expect that in the absence of that direct relationship between the commission and that third party, there is some mechanism for that to be consented, just on the basis of value for money and public funding principles, and that is what the Bill provides.

Thank you, Chair. Thank you, Minister.

Thank you, James. Moving on now to some questions around quality assurance, Laura Anne Jones. Laura.

Thank you, Chair, and morning, Minister. I just wanted to talk to you about quality assurance and Estyn, and the fact that the Bill doesn't provide for a single cohesive quality assurance system that can be built by the commission itself, and perhaps that it's too prescriptive regarding how the quality assurance system will work, in particular in relation to Estyn. The Bill makes provision for the quality assurance framework, but maintains the two current, separate quality assurance mechanisms of reviews of higher education and the inspection of Estyn of other post-16 provision. Welsh Government originally consulted on the potential of one quality assurance body for the whole tertiary sector, so what is the rationale, Minister, for the approach taken in the Bill to the quality assurance system, because that's obviously of considerable interest to universities who have argued for the need to align with the UK-wide quality assurance system and retaining the role of the quality assurance agency? Thank you.

So, if I may, I'll just answer some of the specific points and then take a step back to look at how we got to this point, really. So, on the specific questions, there are detailed provisions in the Bill around the role of Estyn in particular. The need for that is to ensure that Estyn is able to operate within the law, basically, so it provides a statutory underpinning for the role of Estyn in relation to the provision of, for example, FE education, and, obviously, officials have been working closely with Estyn around what they would need in order to be able to discharge those responsibilities. So, that's why those are set out, I think, reasonably fully on the face of the Bill.

And on the other point around the existence of more than one approach to quality assurance and more than one body, if you like, the Bill delineates the responsibilities of Estyn and the designated body for HE provision, again, by type of provision, rather than by provider. So, just as the funding does that, so does the quality assurance. So, there will already be, for example, FE colleges in Wales providing higher education who are inspected both by Estyn and through the HE quality assurance processes, so that is already a feature.

I think how the Bill takes that forward into a more coherent whole is that the Bill requires Estyn, for example, to agree its plan of inspections for provision within the compass of the commission's remit, obviously, agreeing that with the commission on the one hand. And obviously, the designated body is actually doing the quality assessment on the commission's behalf, so the root of all of this, really, is the commission's oversight of quality assurance generally.

As you say, we did consult on a different approach, but, essentially, we've listened to stakeholder feedback in relation to this area, and as I was mentioning earlier, the approach is evolutionary, if you like, and we absolutely recognise the existing strengths in the role that Estyn plays, that QAA plays, but I think a holistic understanding, which the commission will have, both in terms of its commissioning arrangements with Estyn and its designation arrangements with the higher education body, I think the fact that all comes back to the commission allows that coherent picture of quality right across the sector, regardless of the nature of the provider, if you like. I think it's also important to say, by the way, that HE in Wales will, as a consequence of this, remain part of the UK-wide quality assurance infrastructure, although this will enable greater alignment with Welsh priorities, so, I myself think that strikes the right balance.

Minister, on that, on the Estyn thing, isn't the Bill effectively replicating the Estyn duties that are already included in existing legislation?

Well, as I say, some of it is about that, isn't it? We are building on the strength that Estyn delivers in that space now. And, as I was saying, it's an evolution from that. We've listened to what stakeholders have told us about that, but there's still strength in the existing system.

Thank you, Minister. What is the rationale for the commission to be able to address the quality of education for any tertiary education provider in Wales, even if they're not registered or funded or connected in any way with the commission? And to what extent do you believe this is proportionate?

Well, I do think it's proportionate. I think, on the question of quality, you could imagine public interest circumstances in this space, it seems to me, in there being some external inspection of provision that may be beyond the regulatory remit of Estyn directly, or the funding remit of Estyn directly. So, there are circumstances where providers who are not within the compass of Estyn, if they're not providing quality education, might have a reputational impact on the system at large. So, it's to deal with those, I think rare, circumstances, hopefully, but there may be public interest reasons for that to be justified.

Minister, just lastly, the post-legislative scrutiny of the Higher Education (Wales) Act 2015 found that there were, or could be, instances of publicly funded bodies delivering higher education provision that the Higher Education Funding Council for Wales had no legal powers of oversight over. To what extent are you content that this won't be the case in this Bill and that there will be oversight of all publicly funded tertiary education?

Well, I can give the committee the assurance that I'm content that all publicly funded tertiary education providers in Wales will be subject to oversight through the Bill. So, we have the register, which provides for higher education providers who want designation for Welsh Government student support, and we've got providers in receipt of any other form of grant funding, for example FE institutions, who can be regulated via the terms and conditions of that funding. So, I'm happy to give the committee the assurance that I'm content with that.

Thanks, Chair.

Okay, thank you, Laura. We'll now move on to some questions around apprenticeships and sixth forms from Ken Skates. Ken.

Thanks, Chair. With regard to apprenticeships and sixth forms, first of all, the Welsh Government obviously wants apprenticeships to be more responsive to employer demand. The Bill, though, is silent on any mechanisms and structures to help inform or resource the development and review of frameworks. Can you just outline the rationale for this?

Well, the current—. As I know that you know very well, the current arrangements for delivering on apprenticeships is clunky, if I can put it like that, and it's based on legislation that we know is outdated, really. So, the ambition in the Bill in relation to apprenticeships is to, again, strike the balance, as we are seeking to do in so many of these policy areas, between maintaining the link to national economic priorities on the one hand but enabling the provision and design of frameworks to be nimble, flexible and engaging stakeholders fully on the other hand, so that we can make sure that national priorities are nimbly delivered in a responsive way. That's the underpinning principle in the reforms that the Bill brings forward. And the commission therefore is going to be able to review and implement its own processes and its own mechanisms for developing and for reviewing the frameworks. I anticipate that framework developers would be commissioned to refresh frameworks and there'd be a review cycle for that, and there'd be a role—a significant role—for stakeholders as part of that to help in the process of reviewing development. So, in a sense, on the earlier questions about 'Isn't the Bill too prescriptive?', the point here is to allow that to develop flexibly.

Thank you, Minister. And just regarding sixth forms, sixth forms are going to be within the scope of the Bill. What has the feedback been from that sector?

I think the sector has been broadly supportive of the proposals. So, I mentioned at the very very start that we'd been inspired by what's happened elsewhere in the world, in particular for example New Zealand. They haven't, I think I'm right in saying, included the equivalent of sixth forms in their provision, so we are doing something new in this space. I think the sector has been broadly supportive of the proposal. I think school leaders and college principals recognise that there is an opportunity here to both promote a more coherent workforce development, professional learning and best practice, but also to make a reality of that journey that we all want learners to be able to be on, which is a seamless journey between pre and post 16, and I think including maintained sixth forms within the legislation brings it within that kind of coherent ambit then. I think that will absolutely foster that collegiate way of working that I think is a key ingredient to that seamless learner journey.

Thank you. And how confident are you that changes in the Bill regarding the specification of apprenticeship standards for Wales will be enough to bring about a more responsive approach?

I am confident that we've struck the right balance, really. I was saying a little bit earlier about how clunky the current system is, and, under the Bill, frameworks will have to comply with the core requirements in the Welsh apprenticeship specification. That will be issued by Welsh Ministers, obviously following consultation with the commission and with other stakeholders, and that is the vehicle, if you like—the specification is the vehicle—for Welsh Ministers to be able to articulate those cross-cutting policy priorities, really, to make sure that we are reflecting the changing economic circumstances. So, I think it strikes that balance.

Okay. And qualifications obviously are a part of apprenticeship frameworks. They're regulated by Qualifications Wales, and they're created using, usually, private awarding bodies. How does the Bill improve the various interfaces between employers, awarding bodies, the commission and Qualifications Wales?

We would expect the commission to work closely with Qualifications Wales and the awarding bodies in developing the frameworks for apprenticeships, for example, but perhaps, Chair, with your indulgence, we could write to the committee and give a little bit more colour about the relationship that we envisage might be possible.

That would be really helpful.

Yes, that would be very helpful. Thank you. Sorry, Chair, I'm just conscious of time, but just one last question on apprenticeships: what do the funding powers for apprenticeships, as set out in this legislation, mean for the current contractual arrangements, and what's the long-term future for the apprenticeship procurement exercise under this Bill?

Okay. We've done a procurement exercise for apprenticeships to be delivered at levels 2 to 5. The contract for that was commenced in the summer, at the beginning of August, and it extends for the next four years. So, that's one aspect of the future landscape over the next few years. Funding for universities for degree apprenticeships are currently via a grant, but, clearly, universities are autonomous organisations, so that and the fact that the new contract is going to be in place now for the first four years means that, in the short term at least, it'll be difficult to align. But, just to provide context for that, by 2025, which is the four-year period, that will be probably at the end of the first academic year in which the commission's operations are going to be fully felt, if you like, and so the contract will be coming to an end very early in the operational life of the new commission. So, it will provide an opportunity at that point.

Excellent. Thanks, Minister. Thanks, Chair.

Okay, thank you, Ken. I'll just bring in James Evans on that same subject. James.

Just really quickly, Minister, on apprenticeships, your counterpart in Cabinet, the economy Minister, brought forward the young person's guarantee this week, and I just want to know how you're working together to make sure that this Bill works hand in glove with what your colleague wants to do, to make sure you're all singing off the same hymn sheet in Government and there's no silo working between departments.

The economy Minister and I work very closely together. The young person's guarantee is one example of that. Clearly, it has a dimension that is around education, and it has a dimension that is around training and also about employment, so that can only be delivered with the kind of joined-up working that we already have. But I think, more broadly than that, if you look at the employability plan that Vaughan Gething has announced, the principles in that align very nicely and very clearly, I think, with the principles in the vision that we have on the face of this Bill. So, that doesn't happen by accident; that's the product of a lot of co-design and joint working, and I can assure the Member I agree with him that that is the only way we can deliver on these objectives.

Okay, thank you.

Moving on now to Sioned Williams. Sioned.

Thank you, Chair. I wanted to talk a little bit, initially, about Welsh-medium provision. What will the role of the Coleg Cymraeg Cenedlaethol be in tertiary education, and how will the commission and the coleg interact in practice? Of course, I welcome the fact that this Bill sets duties on the commission with regard to the Welsh language, but is there an expectation that the commission will take every reasonable step to meet reasonable demand, which is what it says on page 3 of the Bill? Does that go far enough, do you think, considering the need to create a million Welsh speakers by 2050? So, could you provide clarity, please, on the relationship between the new commission and the coleg Cymraeg, acknowledging that we do have a national independent body in Wales that has a great deal of expertise in this field and is already responsible for promoting and increasing Welsh-medium and bilingual provision in the post-compulsory sector in Wales? Thank you.

Well, because of those broader responsibilities that you mentioned, and the things that are already in place, and have been for years, that's why the responsibilities of the coleg Cymraeg are more broad-ranging, in one way, than the responsibilities of the commission. The coleg was created to provide independent oversight, strategic plans and management and so forth, and its remit has been broadened recently, and the programme of work talks about the possibility of further expansion and creating a statutory basis for the coleg. So, the commission and the coleg need to work strategically together to provide post-16 education through the medium of Welsh, and the Bill provides the flexibility to allow that to happen in a way that is innovative, I would say, and which is very flexible. That's true of the relationship with the coleg, and it's also true of the relationship between the commission and the National Centre for Learning Welsh. So, there are a variety of providers specifically in the field of Welsh-medium provision that make a broader contribution, if you like, to the aim that you mentioned in the question as regards Cymraeg 2050. So, the relationship is going to be very important.

You referred there to these carve-outs in the Bill for Welsh Ministers' powers around funding and securing Welsh-medium provision. So, to what extent might these hinder the commission's abilities to deliver its strategic duties and its strategic plan objectives in relation to Welsh-medium provision?

I don't think it will hinder it. There are two elements in this, the first of which is the ability of Welsh Ministers to provide a funding stream to the commission with specific terms related to Welsh-medium provision. That's one element. The second element is the ability to continue to fund the coleg Cymraeg. So, because of the contribution that you mentioned in your previous question to the broader language strategy, it is important that those powers continue. But, as you mentioned, there is a strategic responsibility on the commission in this regard, and, as I'm sure you know, there are various examples in the explanatory memorandum of how this could look in practice as a result of meeting the specific duties. But it's vital, of course, that the commission does collaborate with the coleg and the national centre in order to ensure that this is secured.

But how is that going to be achieved? That's the question, isn't it? In terms of the powers that Ministers will have, and in terms of the way that the centre and the coleg are funded directly, and then the duties on the commission to achieve this, could you give us a bit more detail about how you see all of that interacting in a regulatory way?

I don't see that there is a regulatory tension there. What we're creating is a new duty, as it were, to accompany the powers that already exist and are already in place. We have the funding stream for the coleg Cymraeg, and we have the funding stream for HEFCW, and we are creating a new duty, if you like, to extend in a variety of ways on the face of the Bill the Welsh-medium provision. This will look different. If you look at the output from this, it will look different, I think, in different parts of the sector.

So, on the one hand you have sixth forms in Welsh-medium schools in Welsh-speaking communities, where the provision, the workforce, the resources and qualifications et cetera are all provided through the medium of Welsh. So, that's one scenario. On the other hand, you have a greater variety, if you like, for example in FE. Some institutions serve communities that are predominantly Welsh speaking or bilingual, and there are some where the use of the Welsh language is less, and you'd expect—and this does happen in practice—that the provision would be more unbalanced in some parts of the sector. So, it does depend on where the starting point is, if you like, in terms of how that duty will look in practice.

Thank you. The next question, perhaps, is how the Bill will provide for consistent powers and a consistent approach to Welsh-medium provision across these types of tertiary education providers. Will there be a difference? You suggest that there will be a difference because of that starting point that you mentioned, but will there be a difference in the way that private training providers and higher education providers are treated in respect of Welsh-medium provision?

I wouldn't expect to see the type of provider forming the basis of the difference. I would expect to see the difference arising from the provision; that is, what is the provision at present, is it good enough—if I can use that shorthand term—and if it's not good enough, for example, what, in relation to the funding source and the terms of that, is the commission doing to drive improvement? So, the duty is consistent but the implementation method is different, and the important thing is that it is the provision that drives the difference, not what kind of provider is involved.

Thank you, and one further question to conclude, on learner voice. I raised with you in the Siambr, if you recall, the point that NUS Wales have called for the learner voice to be included in the strategic framework section of the Bill and for it to be a condition of registration. If the Bill's aim is to create a learner-focused system, why is it absent from the suite of strategic duties?

The learner engagement code is one of the innovative things in the Bill that strengthen the voice and ability of the learner to seek representation across the sector, and that's also the way to ensure, in terms of the commission, that that happens in a way that supports learners generally. Compliance with the requirements of the code will be one of the terms that will need to be agreed and met in terms of registration and in terms of funding. So, any provider on the register who receives financial support through the commission will have to provide assurance that learners have a voice. But you're right—and you mentioned this in the Chamber—NUS Cymru has mentioned this to me directly as part of the implementation board that I mentioned at the outset. So, my officials are now in discussion with the NUS to understand in further detail their concerns, and certainly I would welcome the deliberations and views of the committee on this issue as well.

Thank you, Chair.

Thank you, Sioned. Thank you, Minister. I've just got a couple of further questions, Minister. Just going back to a point that James Evans raised earlier on the consent issue, there's no current contractual relationship between Welsh Government and apprenticeship subcontractors. Do main contractors currently need consent from Welsh Government to subcontract and pass on funding, and if not, what's the rationale for changing this?

Chair, if I may—I try not to do this too much—I may write to you in relation to that. It's a point of detail that I don't have at the tip of my tongue at the moment, if that's okay.

That's fine, Minister. I know you have a number of things to write to us on, so we'll look forward to that. That's not a problem. And just a final question from me, then, is: what's the rationale for maintaining the Learning and Skills Act 2000 local curriculum entitlements and Welsh Ministers' powers in relation to them? To what extent is this a barrier to creating a single, cohesive, lifelong system?

I think we can distinguish between the powers that are going to the commission and the powers that Welsh Ministers are retaining. I think it's under the Learning and Skills (Wales) Measure 2009, which amended the 2000 Act, but it does amend the 2000 Act that you referred to, and that is, I think, the source of the distinction. The balance to be struck here is one in which Ministers retain the powers effectively in primary legislation to vary the learning domains, which are the key building blocks of that curriculum, but the delivery and design within that will be with the commission, effectively, so there's a blend of responsibilities, if you like. And the rationale behind that, of course, is to ensure that the tools are in the right place, if I can put it like that, to ensure that seamless curriculum journey pre 16 and post 16. I think the committee will know that Estyn is doing a piece of work at the moment in reviewing the post-16 curriculum, and that will provide a body of evidence that will enable us to look at the post-16 curriculum as well in this space.

Thank you, Minister. I can see that no other Members of the committee have any further questions, so that's the end of the session. Thank you and your officials for joining us today and for answering our questions. A transcript will be sent to you for checking, and, as you've mentioned, there are some points that you'll be writing to us on. If there is anything further, we will write to you as well to clarify some other points, following our private meeting. We will now proceed into private session, as agreed under item 3.

Good afternoon and welcome to the continuation of the Children, Young People, and Education Committee. We are taking our second formal evidence session this afternoon on the Tertiary Education and Research (Wales) Bill. This is our session with representatives from the Higher Education Funding Council for Wales. You're very welcome, it's good to see you here. We have David Blaney, who is the chief executive of HEFCW, and Bethan Owen, deputy chief executive of HEFCW, the Higher Education Funding Council for Wales. So, welcome, everybody.

We'll move straight into questions. We've got quite a tight timescale again this afternoon. I'm just going to start around policy objectives. Can you briefly set out HEFCW's role and involvement in both the Hazelkorn report and the drafting of this Bill, please?

Certainly. Thank you for the invitation. Just a caveat before we start: we're still ploughing our way through the Bill and the associated documentation, so there might well be things that we have missed, which we will comment on and then regret saying. But we are planning to submit to your call for evidence and that will be a submission that is cleared by our full council, as well; we've cleared that with them this morning.

In terms of us and our role in all of this, obviously, we're a Welsh Government-sponsored body, subject to all sorts of legislation. We're not in the higher education sector; we don't represent them, we fund and we regulate them and we influence them to try to deliver Welsh Government priorities. And just as we're not the sector, neither are we the Government, of course. We're funded by them, we have a remit from them, but we are independent of Government, which allows our expertise to be deployed over a long term for the benefit of Wales. And we have a good track record. When we advocated for the establishment of a new arm's-length body, it was grounded for us in a clear sense of wanting to better meet the needs of Wales; it wasn't a reflection of perceived inadequacies.

In terms of our role in this, we have been supportive of these proposals since we submitted our views to Ellen Hazelkorn some six years ago, and you've got that in paragraph 2.8 of our written submission. So, we come at this as an organisation that has been an arm's-length funder and regulator in Wales for nearly 30 years. This is our day job, and without wishing to sound in any way arrogant, we do have expertise to offer.

In the period between the publication of the Hazelkorn report and the publication by Welsh Government of the draft legislation about this time last year, we were engaged with only as an external stakeholder, in common with many other organisations, and we had very limited opportunity to bring our expertise to bear. In our response to the draft legislation last December, we expressed disappointment that the legislation, as then drafted, represented what we thought was a missed opportunity, and I'm afraid that that remains the case for us, which is putting us in a slightly uncomfortable position giving evidence here this afternoon, of course.

Thank you for your opening remarks there and the answer. Just moving on to the point you raised around the missed opportunities, in your evidence to the committee, you question the evidence base for the use of outreach agreements in the Bill to deliver benefits. Can you expand on this point, please?

Yes, certainly. The explanatory memorandum published with the Bill cites that a key advantage of the proposed approach on outcome agreements would be the ability of the commission to take a whole-system view—and I quote—to

'promote coherence across the tertiary education sector as whole.'

It's not clear to us how the outcome agreement approach would achieve this. We currently operate fee and access plans, which are a similar tool—they're not the same, but they're similar—and we've given evidence in the past to the post-legislative scrutiny of the 2015 HE Wales Act that the fee and access plans have a range of limitations, the most significant of which is the time that has to elapse between a provider developing a plan and the point at which we can see whether or not it's been delivered. That is years—four years or more, at times—because they have to develop it well in advance of the year they're going to implement it, and we have to wait until the data is available afterwards to see what's happened. They also, of necessity, focus on the individual institutions' intentions and provide relatively little means of incentivising commitments to collaborative development and delivery, because it's their plan and it's about them. I'm an observer on the board of the Scottish Funding Council, which operates an outcome agreement process that we understand to be similarly challenged. So, I think we would say you shouldn't really expect such an approach to provide significant policy leverage in the short term. These are a long-term and slow tools.

Thank you. Do you believe legislation is necessary to achieve the policy objectives of the Bill and are these policy objectives clear to you?

If we go back to Ellen Hazelkorn's analysis, that outlined the issues, I think, perfectly well. It's not about Brexit. It's not about COVID. Hazelkorn predated both of those. Neither is it just about the challenge that's facing higher education. As we indicated in our 2020 response, the thrust of the Hazelkorn report was, and I quote,

'to establish a clear vision for the PCET sector in Wales, with a clear intention that the sector should be cohesive and integrated, with administrative arrangements which facilitated better the meeting of employer and student needs, and removed the tensions around current interfaces between the sectors.'

That's the prize. It's a vision that doesn't seek homogeneity but harmony, which focuses on complementarity rather than competition. Is legislation necessary? Well, you can get so far by establishing clear expectations around behaviours, but in the end, to really capture that prize and to deliver better on the nine strategic duties that have helpfully been added to the front of the Bill, new, harmonised and simplified statutory arrangements are required.

Thank you. In your view, has the Bill taken the right approach in restating powers and duties from other pieces of legislation, such as the local curriculum requirements?

One of the more significant difficulties we have with the draft legislation is the retention of pre-existing legislative machinery. The statement of policy intent, which was published a little bit after the Bill was published, gives an indication of the number of existing powers that will be restated one way or another in this new regime, and we think that's quite a substantial amount of existing legislation carrying on.

In our view, it fails to provide a legislative platform that will drive the establishment of a single, cohesive post-compulsory education and training sector. So, there's an argument about continuity, but I think we've got so much continuity that actually, what we have, in large measure, is the pre-existing arrangements bolted together. Again, we're not arguing for homogeneous providers, but we are arguing for harmonising the machinery of regulation to deal with the complexities of the current arrangements and barriers.

I think what we have here is the prospect of substantial transitional disruption, potentially significant transitional costs, which have been laid out in the explanatory memorandum but probably will be higher than they have indicated there, as they admit. I think, unless we can secure some adjustments to some of these proposals, we'll have missed the opportunity to make the step change in arrangements. I think we could have been more ambitious.

Thank you. And finally from me, do you want to tell us anything further on the policy objectives, the evidence base for how the Bill will realise change, and the need for legislation?

I think—and again I think we've referenced this—the Hazelkorn report outlined the backdrop quite well. I think the explanatory memorandum focused on one aspect of that, really, which was the challenges facing the higher education sector. Challenges face all of the sectors, but we didn't see that in the explanatory memorandum, so I think there was a slightly sort of biased focus in there. Maybe that actually underpins the fact that we've got machinery that doesn't actually step back and take the ambitious step of having a harmonised regulatory and funding approach. So, I think, somewhere along the way, the point of Hazelkorn has been missed a bit, and so we have something that is not quite going as far as it could. But we will be very happy to work over the coming months to try and suggest adjustments that might help.

Okay. Thank you. We'll now move on to questions from Members. The first set of questions are from Buffy Williams.

Thank you, Chair. Hi, David.

Hi.

My first question is: HEFCW had to implement the Higher Education (Wales) Act 2015. Can you tell us what the regulatory and legal challenges were, and if you believe this Bill might lead to a repeat of any of those challenges in your view?

Thank you. I'm happy to hand over to Bethan.

Thank you, David. So, it took us approximately two and a half years to put in place the initial processes and systems for implementing the 2015 Act. And that was between March 2015 and September 2017. And it was a further two years before the full process was established, with the first fee and access plans for 2017-18 being monitored in 2019. So, that was an implementation timescale without the added complexity of establishing a new organisation.

An example of one of the challenges that we had in developing the machinery was a requirement to develop a new financial management code, which, effectively, duplicated a document that we already had, though not precisely. And that Act was very prescriptive about the content of the financial management code, which, after consultation, was to be approved by the Minister and then laid before the Senedd—a time-consuming process, and the process for amending the code was also equally time consuming, so inhibited the natural development of these sorts of documents.

So, we welcome the brevity of detail in this legislation relating to the commission's role in the oversight of financial and governance matters. We think that's a positive development and has taken account of the challenges in the 2015 Act. And that approach allows the commission to determine appropriate and proportionate processes, subject to consultation, and to deliver those functions and amend them in future, as necessary.

The current timescale for the commission to start operating in 2023 is undoubtedly challenging and, based on the experience of the 2015 Act that I've just described, it will take much longer for all of its functions to be fully implemented. In saying that, I'm not saying that the establishment of the commission should be delayed, because it will need to exist, with employees in place, before the work of developing the regulatory machinery can begin. All of these will be new and they should be developed by the commission staff, who'll need to conduct appropriate consultations with stakeholders, and, of course, be subject to scrutiny and final approval by the commission's own board. As the commission will be accountable for operating these procedures, they should also be responsible for their development. So, in that, we are saying the processes shouldn't be developed outside of the commission. So, the commission needs to exist to get this work started. And, given the compressed timescales, there will need to be transitional arrangements, so that the existing powers for funding and regulating that we have can continue in the commission until the commission has fully formed processes for its own powers.

Thank you. Can you talk us through your concerns about the sharing of information with Welsh Ministers, and outline what changes you think are needed?

Okay. I'll take that one, David.

Thanks.

In our opinion, maintaining the trust of providers so that they can share information, including commercially sensitive information, and share that with us in confidence, is essential for maintaining a proper understanding of the challenges, risks, opportunities that providers are facing. It'll be important for the commission to be able to secure the same trust with all the post-16 providers and, in practice, that will mean that not all of the information held by the commission would be shared directly with the Government and Ministers.

We believe—though, again, subject to not having fully gone through the detail of the Bill—that, as drafted, the legislation may require all the information that the commission holds to be made available to Welsh Ministers. That's our reading of section 128. In saying that, of course it's essential that Ministers and relevant Government officials are made aware of risks faced by providers, particularly where they might impact on Government priorities, or where Government resources may be required to address the risks. But the detailed oversight of providers should sit with the commission. And an example of this sort of information would be financial forecasts that are provided to us in confidence, and that establishes a much better understanding of the challenges that lie behind those figures.

Okay. Thank you. In your evidence, you raise concerns with losing staff and expertise as a result of uncertainties during the transfer to the commission. Can you tell us more about your concerns?

It's been six years since the recommendations were made to establish a commission, but there's still no certainty for HEFCW staff about future employment and roles in the commission. What is clear is that HEFCW itself will be dissolved when the commission is established. We're concerned that the arrangements for the transfer of HEFCW's activities and staff to the commission are so uncertain that we risk losing the staff and their expertise. And the uncertainty for staff is not predominantly about securing a role in the commission, but rather a concern about how the organisation will operate and implement the proposed legislation. And staff retention will both be a risk for HEFCW until its dissolution and also for the new commission.

Thank you. Thank you, Chair.

Thank you, Buffy. Moving on now to questions from Sioned Williams. Sioned.

Thank you, Chair. I want to ask some questions about the influence of Welsh Ministers on the commission and providers. You responded to the Bill's draft consultation saying that there is an underlying theme in the legislation, namely that the Welsh Government is reluctant to embrace the concept of an arm's-length body. What are the benefits of being an arm's-length body, and what changes would therefore be needed to achieve that in this Bill?

I'll pick that up. And just apologies—I've got some comms issues, so, if I disappear, Bethan will have to start mid-sentence.

The point of the arm's-length body is to provide the expertise for, in this context, regulation, funding and oversight of the post-16 providers. A lot of that is detailed technical expertise, and with that expertise available through the commission to Ministers and Government officials, our view is there should be no need for the Government to work around the commission, or to work through the commission, in ways where there is no choice for the commission in how to respond. As an arm's-length body, the commission should be trusted to implement the Minister's remit and strategies approved by Government. It also allows the Government not to become embroiled in the operational issues, in the way that Bethan was just describing, associated with funding, regulating and monitoring the performance of providers. And respect for that expertise and a relationship built on trust are fundamental and spelt out explicitly in the Welsh Government's own framework agreement, which governs the way it relates to arm's-length bodies. So, it creates the space for the expertise to do what it needs to do, and for the Government to be comfortable that that's happening without having to do it itself.

As is the case with us at the moment, the commission will be captured by a raft of legislation, would have its strategic plan and annual operating plans approved by the Minister, would be accountable to the Minister and to the Senedd, would have to respond to Welsh Government policy priorities, and would depend on the Minister for a funding settlement annually. And our view is that those arrangements should provide sufficient line of sight, as I think the term is, and there's no need for further control mechanisms and further means for the Government to intervene directly in what's going on at the level of providers. And there are numerous examples in this draft legislation of that happening. And the danger is that introducing those sorts of provisions, which allow—if we can use a slightly pejorative term—a Government to interfere at an operational level, actually creates unclear governance arrangements, unclear responsibilities, causes confusion, can cause delay, and would undermine the ability of the commission to deliver properly for the benefit of Wales, because it wouldn't be clear whether providers were responding to the commission and the steers and the influence that it can bring to bear, or the Government. So, we think it's generally sensible, if you've got an arm's-length body, to let it do the business.

It's probably just worth saying another thing: providers, in the main—and, certainly, at the moment all of them in Wales—are charities, and their trustees have to make decisions that deliver the charitable objectives of the provider. So, if the legislation increases the extent of control that the Government can directly exert on providers, that's arguably not compatible with charities legislation, could undermine the non-profit institutions serving households status of the providers and potentially bring their accounts on to the Government books. We've seen that happen with FE in Scotland and, to put it politely, it's resulted in very significant challenges, so, again, best avoided. I could give you a list of all the instances, but we won't; our documentation shows some of them. But the final point, really, to make is that, in most of those instances, it's not clear to us what the underlying rationale is for the Government to wish to retain or to introduce those powers. And without a very clear rationale, our view is, for the reasons I've identified, that it would be better if we could adjust those provisions.

Thank you. I was going to ask what you thought was the rationale for this, but you've answered that question. What's your view therefore on the restating of the powers for Welsh Ministers to dissolve a higher education corporation? Could you tell us about the role that this power played during the creation of the University of South Wales, so we can understand its potential scope?

So, in circumstances where a body wishes to merge with another—an HEC wishes to merge with another university, for example—there would be an instance where you would want do dissolve the HEC, because it's no longer necessary as a legal entity. So, Government having the power to do that under those circumstances I don't see as a problem. The difficulty with the legislation as proposed is for Ministers to dissolve an HEC against the will of the governing body, and we see that as a significant problem. We're not entirely sure that there's a clear rationale for that put in the explanatory memorandum, and let's not forget there are only three providers in the system that are HECs, so why does—? Whatever the rationale—and there's talk of a backstop; I'm not sure backstop to what. But why does that apply to only three of the institutions in the whole system? Totally unclear to us, unless we've missed it. And, actually, this kind of echoes a provision in the 1992 Act, and this was tested by Welsh Government about 10 years ago, and the legal advice was, in the end, 'It's not operable.' Unless the governing body actually supports the dissolution, it's effectively impossible for the Government to exercise this power. So, if that's the case, it doesn't seem to make an awful lot of sense to put it in the legislation in the way that it currently is.

Thank you. Could I ask you what your view is on the power that Welsh Ministers will have to modify the commission's strategic plan? Is this power conducive to achieving the aims of the reforms?

Well, I think that, essentially, goes back to the conversation we were having a minute ago about arm's length. If you've got an arm's-length body that you trust and which has the expertise and which develops a strategic plan through a process of consultation with all relevant stakeholders, it's not at all clear to me that it's useful or sensible for the Government unilaterally—albeit it has to consult the body, but in consulting it doesn't have to take any notice, so unilaterally—to change the strategic plan, particularly because it could put stuff in there that the commission is actually incapable of delivering. It's the commission that will know what's possible, not the Government. So, again, that would be an area where we would suggest that some amendment would be helpful.

Thank you. Are there any other points in relation to the arm's-length principle that you'd like to raise?

Well, I think the thrust, really, of what I'm saying is: you either want an arm's-length body or you don't. If you do, do it properly, and, if you don't, don't. I mean, that's fine; it's within the remit of Government to propose any legislation, but this seems to be a bit hybrid, and I don't think that's—it's not clean, and operationally that would be difficult.

You said in your written evidence that, in your opinion, there was a basic misunderstanding, perhaps, and that there is a tension between adequate policy control and the concept of being an arm's-length body. Do you think that that's the bottom line here, that there's some sort of misunderstanding at the core of the aim of this principle in the Bill?

I think there's definitely a tension. Whether it's a misunderstanding or whether it's intended, I can't comment—it's not clear to me from the explanatory memorandum. But I think it's very clear that there's a tension between the concept of an arm's-length body and some of the clauses that actually prevent that arm's-length body from owning that space, albeit that it will be constrained in many ways, as I've described this afternoon, by legislation and by remit and by funding and all the rest of it. It's not going to go rogue—there's no space for it to do that. So, it's a slightly peculiar tension.

Thank you very much. Thank you, Chair.

Thank you. Now moving on to questions from Ken Skates. Ken.

Thanks, Chair. I'm going to ask some questions about the regulatory machinery, David. I'm just going to read a quote from you in terms of your response to the draft Bill:

'It hard-wires in the pre-existing arrangements, making the delivery of key anticipated benefits of greater cohesion and consistency unattainable.'

That's a pretty strong statement saying that it could be unattainable. Is that still your view?

I'm going to say 'yes' and then let Bethan explain why I've said 'yes'. [Laughter.]

We can't clearly see how the legislation, as drafted, will allow the commission to develop a consistent approach across all the post-16 provision. And of course we appreciate that such an approach will take time to develop, but the extent of prescription in the legislation that largely mirrors existing arrangements means, from what we can see, that there's very little room for the commission to develop a more joined-up approach.

The concern is that it increases the risk of creating silos or separation within the commission itself, largely along the lines of current activities, rather than encouraging a consistency of approach across all modes of provision that would require the commission staff—I'm talking about an operational model where staff could have some level of understanding across all of the post-16 provision. Again, we have examples, but what we've seen as the benefit of a harmonised system is minimising the friction at the interfaces between separate systems, and, in the end, that's for the benefit of learners. And we have that at the moment, and different funding regimes are unhelpful in avoiding such areas of friction. And, as David said earlier, we're not looking—. A harmonised system doesn't mean homogenous institutions—everybody providing the same thing. But a harmonised regime can support a range of provision and the current education system in Wales shows that. We have a diverse range of higher education providers, but they're funded and regulated within the same machinery.

Okay, thanks. I'm just going to ask about research and innovation in general. Your written evidence suggests that you have concerns that Ministers could influence research activity through modifying the commission's strategic plan. Can you just elaborate on that and also, it may sound obvious, but just identify what would be so wrong in Ministers influencing research activity, particularly given that policy is set by Government? How would that adversely impact outcomes?

I think one of our concerns is to—. And the explanatory memorandum doesn't really provide the rationale for the research section of the Bill, and in particular why Government would continue to need to be able to fund independently of the commission. If the commission is to be responsible for the strategic funding of research and innovation of post-16 providers, as well as the regulatory oversight of those providers, then it could be the sole conduit of Welsh Government funding for those providers. If there are circumstances for funding where funding should continue to be provided directly, then a reasonable expectation might be for the commission to be consulted and asked to advise prior to the funding decisions being made.

One of our concerns would be that if the intentions of the Bill were to reduce the ability of the commission to sustain the unhypothecated research funding streams that HEFCW currently provides, which are provided as part of dual support funding for higher education research. So, HEFCW provides the infrastructure funding—we call it 'QR', quality research funding—but the dual support comes from the research councils' project-based funding. There have been reviews—the Diamond review and the Reid review—that recognise the need for sustaining that unhypothecated funding. So, our concern would be that if, in the Act, it's specifying areas of research to be funded, it introduces a risk that that’s funded in place of the unhypothecated funding, which is focused on long-term research development. That would be our main concern.

You mention as well that Ministers will retain some powers to fund research through other existing legislation. Can you tell us more about this and how those powers are used now, as far as you’re aware, anyway?

I certainly don’t know the details of the actual legal powers that are used, but there is certainly funding that is provided directly to universities for research, albeit that a significant amount of that will be European-sourced funding at present. I think, again, looking at the report that Graeme Reid prepared on Government research and innovation funding in Wales, he noted in his report that it had not been possible—total amount of research funding provided by Government to higher education providers. We think the commission is an opportunity. If the commission is either the main source of funding or is required to be part of such funding decisions, that would be an opportunity for better co-ordination of the investment being made by Government in higher education research provision.

Okay. Thank you. Broadly speaking, a register is used in England, isn't it, to regulate higher education providers. Is it successful? Are you able to give us an indication, as far as you're concerned, of how effective it is?

It's certainly taken time for the Office for Students in England to establish their registers. Our sense of the regulatory approach that they have linked to the registration of providers is that it’s very compliance based, it’s largely data driven, and there's very little engagement with institutions other then when risks and significant risks have arisen. So, the approach we believe is certainly very different to our engagement approach, which is regulatory, funding and engagement. The registration regulation approach in England, we believe, has made it difficult for the Office for Students to use regulation as a policy or to drive policy priorities.

Okay. Thank you. And are you able to offer, in a very helpful way, any suggestions on how the regulatory and funding machinery could be improved within the Bill?

We certainly think that at least applying the same baseline expectation for all providers should be considered in the Bill. So, regulatory machinery that, at least at a baseline level, applies across, we think, would be an improvement. At the moment, the registration is only a requirement for providers in receipt of student support. So, it’s essentially higher education provision that would require registration and the regulatory machinery that comes with that.

I'm just going to go back to research, just really briefly, and innovation, if you could just help us understand a little more, or me understand a little more, whether there could be detrimental consequences emanating from the Bill for research and innovation. And in particular, if we just use one example, the Advanced Manufacturing Research Centre in Broughton. That was taken forward in partnership with industry and higher education institutions predominantly on the English side of the border, but also with input from Welsh institutions and, of course, with the local area boards that really led on that project. Is it your view that a project of that significance would be less likely as a consequence of the change that will come from the Bill, or would there be no difference? Because, essentially, what matters is the research that comes from universities and through universities working in partnership with industry. If there's no change, does it really matter that much in terms of the quality of the research and the impact that it has on the economy?

I'll answer, and if David wants to add. I wouldn't say that it's less likely, but, again, going back to the commission being part of that discussion and bringing the understanding that it has of what provision there is in Wales, what providers can bring to it and an understanding of what Government priorities are for establishing that research. I think there is scope to be much more joined up and take advantage—more advantage—of the skills that should be available to Government within the commission.

That's helpful. Thank you. David.

Just a little bit to add to that. To come back to one of your earlier questions, I don't think there's any difficulty with Government setting broad priorities for any of this, to be honest. The debate becomes the level of detail at which those broad priorities are expressed. If we look at things like semiconductors and the semiconductor businesses that are growing around south-east Wales, actually, the research underpinning for that really came from funding from the funding council, long before I was at the funding council, in unhypothecated research funding, 15 to 20 years ago, whatever it was. I think we just need all of us to remember that, whilst we might be able to see broad priority areas, our capacity at a meso level as an intermediary body, let alone at the Government level, to actually see where the new knowledge is going to come from is pretty limited. It's the people who are at the chalkface, as it were, who need to be able to be fleet of foot. And I think the more we try to get specific and fund individual projects and things like that, the more we run the risk, actually, of removing the capacity for the research machinery to respond to opportunities as they arise, and to see those opportunities for new knowledge that somebody in my position can't possibly see.

Thank you. Thanks, Chair, that's all from me.

Thank you, Ken. We'll now move on to some question from James Evans. James.

Thank you very much, Chair, and good afternoon. In your view, to what extent do you think the Bill will make an effective contribution to the lifelong learning goals of the Welsh Government?

At the moment, as the Bill has different requirements for each part of the system, as I've already mentioned, it appears to us that it will make it challenging for the commission to facilitate the establishment of a cohesive PCET sector. It might make it difficult for the commission to engage consistently with providers across the sector, and the commission might not be able to get assurance that all providers meet similar basic requirements. Replicating current processes, albeit within one organisation, might maintain a provider-focused approach, rather than one that is learner led. So, at the moment, with the caveat that we're yet to go through the full detail of the Bill, we can't fully see those opportunities.

Okay. Thank you. Do you still have the concerns that you set out in your draft Bill response regarding the equal opportunities registration condition potentially not being applied to all providers?

Yes, the emphasis on responsibility to encourage participation, we feel, should be placed on all providers in the post-16 sector. So, we feel that the commission should have regulatory powers to achieve that for all the providers, and not just those who are in receipt of student support. So, an understanding of why the other providers shouldn't also be on the register is what we would be asking.

Okay. A key part of the Bill is also around collaboration as well, so, in your experience, what helps drive collaboration between providers? Do you think the Bill reflects that, and to what extent do you think the Bill will improve collaboration between different providers?

Regulation, which is largely what the Bill covers, attaches to individual providers, and, of course, while regulation is required for maintaining quality of provision, learner experience, sustainability of providers, it's not an effective tool for incentivising collaboration. It's certainly not as effective as the use of funding, albeit funding with appropriate terms and conditions incentivises collaboration. So, I think the commission will need to have sufficient funding to be able to allocate grants for strategic collaborative initiatives and have the flexibility to use that funding. HEFCW having flexibility in our funding powers has been critical to supporting the sector during the pandemic, so flexibility and the ability to provide funding to incentivise strategic collaboration will be important.

Having said that, while we believe that the commission should have similar flexibility to that which HEFCW has at the moment, there should be an obligation for the commission to maintain a reasonable balance of funding, given the range of provision that the commission will be funding, and an expectation that the commission maintains a reasonable balance across all the post-16 provision, including research, will be important to ensure stability in the distribution of funding, certainly in the early stages of the commission.

On funding, the Bill requires providers to gain permission of the commission to pass on funding to collaborative bodies, so does HEFCW require providers to seek its permission to pass on funding, and could this requirement be a barrier to collaboration between providers?

There are many circumstances where institutions may pass on funding, and we don't provide approval for most of these arrangements. However, our terms and conditions of funding do cover this and clearly state that the providers remain accountable for the funds that we provide and they must retain sufficient oversight so they can ensure that the funds are used for qualifying purposes under the Act. So, that's the mechanism for ensuring a clear line of sight, so the funding that goes through us to providers and forms part of our accountability and assurance processes.

Our reading of the section in the Act that requires approval from the commission is that it seems too prescriptive, but even then, they don't seem to us to cover all the scenarios where there could be collaborative arrangements. The section, I think, is seeking to address the provision of consent by the commission for funded providers to pass funding on to collaborating organisations, but as currently worded, it seems a very burdensome approach and will probably be problematic for the commission to implement and for providers to comply with. In addition, I think the Welsh Government will set the parameters for such approvals and that further complicates the mechanics and raises issues, again, about arm's-length arrangements. So, we think the legislation needs to be much higher level to ensure that the commission can respond appropriately and with flexibility to mitigate the risk that that section is trying to address. As I said, we address it in the terms and conditions of funding, which appear to us probably to be more effective. This is a section where we think, in practice, it will be very burdensome and challenging to implement.

Okay, thank you very much. Thanks, Chair.

Thank you, James. Moving on to questions from Laura Anne Jones. Laura.

Thank you, Chair. Good afternoon. I just want to ask you a couple of questions to start off with on quality assurance and Estyn. Can you talk us through your views on the approach to quality assurance in the Bill and whether you believe the Bill will allow the creation of an effective quality assurance system for tertiary education? And you set out the approach of designating a higher education quality assurance body, that will be less flexible than other potential arrangements. Can you tell us more about that view? Thank you.

Sure. Good afternoon. The legislation places a duty on the commission to assess, monitor and promote improvement in the quality of education and training. That's fine, that's very similar to the requirements on us now from the 1992 Act. But, having said that, it also goes on to specify what Estyn must inspect, it requires the commission to fund Estyn to do that, and gives Estyn powers to do it whether the commission wants them to or not. And so what you end up with, actually, is a replication of the current Estyn responsibilities hard-wired into the new legislation, along with the responsibilities of the commission. So, they both have statutory powers in the same space and both have responsibility for quality. In our view, that hard-wires complex and excessively detailed arrangements with confusing duplication of responsibilities into this primary legislation.

There's a bit of that that goes on now, actually, between us and Estyn, and we work well with them, but this was the opportunity to remove some of that complexity, and it hasn't been taken. And Estyn's plans would have to be approved by both Welsh Ministers and the commission. So, again, more complexity, more additional work and potential tensions of perspective going on between them. So, as I say, we're not being remotely critical of Estyn, we work well with them, but it's just unclear to us why they've chosen to retain the current arrangements in the discrete sectors that are bolted together, rather than take the opportunity for a fresh and more holistic approach.

And then on the issue of designation, the legislation allows the commission to designate, both in the FE and the HE space as I get it—so FE could ask Estyn to do stuff, or they could decide not to, but Estyn will do it anyway. And in the HE space, they could ask a body like the QAA to do it, or they could decide not to. And we have in the past had situations where funding bodies like HEFCW have done the teaching quality assessment themselves and not given them out to another body. So, it could be done. But then if you read the rest of the clauses in that area and the explanatory memorandum, it's very clear they absolutely expect that a body will be designated in the higher education space, and they name QAA in the explanatory memorandum. So, it's not just what's on the face of the Bill, it's what's in the explanation that also pertains. And our view is that this is just overcooking it. We think that section 49—I won't read it out, but section 49 is great. It basically says, 'The commission's got to do this, and it might or might not allow other people to help.' That's enough. And the rest of it could be left to the commission to sort out, consulting as appropriate with stakeholders, and so on and so forth. So, this is an attempt to specify a level of detail that is unnecessary and, incidentally, also still misses the issue about responsibility for quality of transnational and international provision not delivered in Wales and therefore not necessarily covered. So, there are also gaps, and this is what happens: if you try to specify, you inevitably end up missing something. And if you're taking the approach of specifying everything, the bits you miss are left out forever. And once you've got legislation, the only way you can morph it is to change it through a primary process again, you can't just do it slightly differently, because you've got to stay within the letter of the law, as it were.

Thank you. You've answered pretty much all my questions in one go, actually. Thank you, David.

Okay.

Basically, what you're saying is there's duplication and there's a missed opportunity here to clean things up, happening already, which seems to be a shame. But what you just said on the last point, about the transnational education and getting the quality arrangements for transnational education and degree apprenticeships et cetera, it's not being addressed. And it was a question I didn't ask the Minister earlier—it's the only question I forgot to ask. So, can you just expand on that, because obviously that's quite important?

I'd make two points, I think. It's not yet clear to us from our reading of this how some transnational education will be captured by these quality arrangements, and it matters. If you think about where the risks are, actually that's where there's quite a lot of risk. And so, we think either we need to understand better where it is captured, or it needs to be made more explicit. Or, alternatively, the whole lot needs to be made less explicit and the commission can then be more flexible in its interpretation of what's in and what's out.

In respect of the degree apprenticeship stuff, again, it's interesting that the Minister this morning talked about parity of esteem in the context of the quality regime, and there will be an overarching quality—I forget the exact phrase they use—but a sort of quality statement, which is fine, but then, what you've got is actually different regimes operating underneath that, which are conceptually quite different. So, the HE quality regime essentially assumes that they will do the right thing and tests the systems for making sure they do.

The Estyn inspectorate regime is essentially saying in order to be sure it's happening, you have to get into the classroom. Now, these are very different conceptual approaches to quality. They can sit comfortably under a sort of motherhood-and-apple-pie overarching statement, but if you're talking about parity of esteem, I'm not going to say here which I think is better, and actually, they both have strengths and weaknesses, of course. But they're not the same, so it's not clear to me how that actually fosters parity of esteem between vocational and academic activities.

Thank you very much. Thanks, Chair.

Thank you, Laura. Moving on to questions from Sioned Williams. Sioned.

Thank you, Chair. I want to talk a little now about the learner voice to start. In your view, to what extent will the provisions in the Bill create a more learner-focused system?

So, I think my sense of it is that the only place where I can see a manifestation of a more learner-focused approach in this Bill is in the provisions for learner engagement and learner protection.

On the issue of learner protection, my reading of it is I think there are two issues being conflated. One is how to protect students against the impact of a course closing, and the other is how to facilitate transfer from one course to another. They're not the same thing. There might be occasions when the solution to one is actually the other—so, if a course closes, transfer—but they're not the same thing. On the former, the issue about courses closing, the provisions essentially echo arrangements in England where in practice, it's been very difficult to establish learner protection plans that are terribly meaningful, because firstly, it's almost unheard of that a provider will leave students dangling; they always see the students through a course, even if the course is closing. Of course they would; they do care about their students, and also the reputational damage of leaving them hanging would be very damaging.

So, it doesn't often happen, but if there were difficulties, the specific circumstances of the course and the students, and the location of study and the subject studied, all of these come to bear. So, actually, a learner protection plan at an institutional level would be at such a high level that it would be almost useless in terms of understanding how you would protect the individual students in those circumstances. And of course, some students will be happy to move elsewhere; others will not be able to move elsewhere, and so on. So, there's a complexity that an overarching plan doesn't really get into, so I'm not sure they're hugely useful.

And in terms of students changing courses, again, historically, very few students wish to. Typically when they do, they wish to change courses within an institution. Again, they don't necessarily—and very rarely—want to up sticks and go somewhere else. The movement between institutions is not helped by the fact that when a student is lost to the institution, the income that is associated with the student is also lost. So, it's not in the initial institution's financial interest to lose the student, and of course, what they should do is make sure the experience is good, so they don't want to go in the first place.

But I don't see anything really in this legislation that's likely to change that, and also, students often have to repeat periods of study on their new course, quite often for sound academic reasons, they need the underpinning for the rest of the course, but that costs them time and money, and again, I don't see anything in this legislation that addresses that.

And then, the final bit on this is about learner voice and strengthening the learner voice, and we have a very strong track record in HEFCW of working with NUS Wales, who are observers on our council. In strengthening the learner voice in HE, we are aware that this is less well developed in other parts of the post-compulsory world, and we would welcome the concept that good learner engagement should be expected across the whole of that provision, and it's not clear to us why there should be provision in the legislation to set different expectations for learner engagement for different providers. The only reason you might is if you're specifying those expectations at too detailed a level, and, obviously, somebody who comes in for one staff development course on one day is going to be engaged with it differently from somebody who's there for three years. But the generic expectation should be the same, and we're not entirely sure why there's this differentiation. It comes back again to that point about parity of esteem. If you have different expectations about the way in which learners can engage, then I'm not sure how that helps parity of esteem. Interestingly, we note that this area of the commission's work is due to be subject to Welsh Government guidance, including, and I quote,

Thank you very much. Well, once again, you have answered the following question that I had, about the learner protection plan. So, thank you for answering several points in one answer there.

Moving on now to Welsh-medium provision, the Bill appears to allow Welsh Ministers to set terms and conditions for funding intended for Welsh-medium provision in a more detailed way than is permitted for other provision. Based on your experience, is this likely to be an effective approach?

We're not at all clear why they want to do this, and again, our experience—and we've worked long and hard with the Coleg Cymraeg Cenedlaethol, and indeed we were instrumental in establishing it—our experience is actually you need to be in there working with the providers. A top-down approach doesn't work, and you need to also be working with the students who might wish to study through the medium of Welsh as well. So, it's a collaborative approach, but essentially bottom-up, understanding what the issues are on the ground, and understanding what the opportunities and demand and supply balance can be, with support, and the coleg Cymraeg does an excellent job in that respect. It's not at all clear to me how direct terms and conditions in respect of this particular bit of provision are going to help. Now, it might be we just don't understand it, but we can't see that at the moment.

Thank you. What are your views, therefore, on the general approach that the Bill adopts in relation to Welsh-medium provision?

We would see it as being helpful to have a clear expectation that the commission would work with the coleg Cymraeg, and the coleg Cymraeg has a remit now that started in HE but has extended into further education as well, and it's the body that has the expertise in the development and promotion of Welsh-medium education. We don't actually see clearly how those expectations are grounded, so we don't see what the expectations are about the commission working with the coleg Cymraeg. It might be that you don't need to specify this in legislation. Part of what I think is that, actually, it would be better if half of this wasn't specified and you just had more flexibility, but I think a clear expectation that the coleg Cymraeg is where the expertise sits, and that's where you should support—support the coleg Cymraeg and work with it to help develop Welsh-medium education.

Okay, Sioned? Diolch. Just a quick couple of questions, finally, from James Evans. James.

Thank you. I want to quickly touch on apprenticeships. So, in your experience of degree apprenticeships, what are the main challenges to an apprenticeship system that is responsive to employer demands, and to what extent does the Bill address them and Welsh Government's wider priorities around developing apprenticeships?

Thank you, James. Degree apprenticeships are an example of HE provision that's currently being funded quite differently from other higher education funding provision such as the part-time study that we fund. We don't know what the rationale is for maintaining the difference in the long term, though the Bill includes a section specifically to deal with apprenticeships, which appears complex and potentially might constrain future developments. Our experience of developing degree apprenticeships has highlighted some mismatch between employer demand for degree-level apprenticeships and the Welsh Government's priorities and the frameworks available at that level. There's demand for higher level business management, care provision, where, currently, frameworks are only available for IT and engineering degree apprenticeships.

So, there appears to be a policy conflict between, on the one hand, aiming to meet employer needs, but not being able to enable the degree apprenticeship frameworks and make the provision available to do that. Whether the commission are going to be put in a position that they are able to do that—and establishing the frameworks is going to be part of the commission's responsibility—so, trying to manage that mismatch, or rather, avoid the mismatch, will be important. And the position is also complicated, clearly, by options available to students and employers outside Wales. So, if options are not available within Wales, then there are providers in England who will meet the demand. So, Government interventions only really work where there isn't student choice, alternative choice. The commission needs to be able to operate a system that isn't trying to manage a mismatch between what the commission can do and what the Government priorities are.

But also, just to note that it's not clear to us that the degree apprenticeship, or the apprenticeship machinery more widely, can evolve to something that is much more of a mainstream part of funding for post-16 provision.

Okay, thank you very much for that. And finally, are there any other points you want to raise in relation to apprenticeships and the Bill generally?

Just a general point. I think I said at the beginning, we intend to respond to your call for evidence, and we'll be sharing that with our council before we do it, whereas the document we submitted for today's hearing had to be produced without our council having the opportunity to look at it. And we've had a steer from our council in the last couple of days we've been with them that when we respond to your call for evidence, we will go beyond what we normally do and try and make suggestions for ways in which the legislation might be adjusted to address some of the issues that we see. Otherwise, all we'll do is end up sounding critical, and we want to be helpful. So, that's just a trailer for you to look forward to our submission in December.

Many thanks. You've certainly whetted our appetite for your document. We shall look forward to receiving that as well, and I'd just like to put on record my thanks to both David Blaney and Bethan Owen for coming to give evidence this afternoon. It's very much appreciated. Just to say that there will be a transcript available for you after this meeting to check over, and thank you very much once again for coming in to give evidence. Diolch yn fawr.

Thank you.

Diolch yn fawr.

Thank you.

We'll now move on to the next item on our agenda, which is papers to note. So, the papers to note are set out on the agenda and in the meeting papers. Are Members content to note those papers? I can see Members are content.

And I now propose for the next item on the agenda, in accordance with Standing Order 17.42, that the committee resolves to meet in private for the remainder of this meeting. Are all Members content? I see Members are content. We'll move into private.