input: What did the meeting talk about to control HEFCW's powers of intervention?
  Lynne Neagle AM: Good morning, everyone. Welcome to the Children, Young People and Education Committee. We've received apologies for absence from Suzy Davies and there is no substitute. Janet Finch-Saunders is joining us from the Assembly offices in Colwyn Bay via video conference. Can I ask Members if there are any declarations of interest, please? No. Okay. Item 2, then, this morning is a post-legislative scrutiny session on the Higher Education (Wales) Act 2015. I'm very pleased to welcome Kirsty Williams AM, Minister for Education, and Huw Morris, who is director of the skills, higher education and lifelong learning group in Welsh Government. Thank you, both, for attending, and thank you for the paper that you provided in advance. I will just start the questioning by asking whether you are planning to repeal the 2015 higher education Act, or will it be amended by the post-compulsory education and training Bill?
  Kirsty Williams AM: Thank you very much, Chair. I'm very pleased to be with the committee again this morning, although it's in slightly unusual circumstances. As a piece of post-legislative scrutiny, this was a Bill that was taken forward by a different Minister in a different administration, but I think it is really valuable work in the context of the question you just set out: what can we learn from the implementation of this piece of legislation as we move forward with our reform journey and with this Government and my proposals to introduce a new commission for tertiary education? There is much, at the moment, that lies within the 2015 Act that we will look to bring forward into the new legislation, but there are certainly experiences--and I'm sure we'll come on to some of the evidence that has been received about what's worked, what perhaps hasn't worked--that we all want to reflect on and be mindful of as we take forward the new Bill, including the report of this committee as part of it. So, it is our intention that this Bill will be superceded by the new PCETR Bill.
  Lynne Neagle AM: Okay, thank you. We've got a series of questions now from Sian Gwenllian.
  Sian Gwenllian AM: Good morning. Do you believe that the Act has fulfilled all the Government's objectives? Where are the weaknesses?
  Kirsty Williams AM: Diolch yn fawr, Sian. As I've said, it's a bit difficult to place myself in the mind of the previous Minister when this legislation was first envisaged and then taken through. You'll be aware that there were four main reasons for the introduction of the Bill: around regulation of institutions in Wales; safeguarding the contribution made to public good arising from Welsh Government's financial support for the sector; maintaining a focus on fair access; and preserving and protecting the principle of institutional autonomy. I think the evidence that has been received by the committee to date shows that there are different views about the effectiveness of whether all four strategic aims have been achieved. I think those strategic aims are still really, really important and certainly will underpin our thought process going forward, but we have to recognise the higher education and research Bill across the border in England, the implementation of new student support measures in Wales, as well as the report that was done by Ellen Hazelkorn, I think, means it is appropriate that we move forward with different proposals, not just regulation of the HE sector but the post-compulsory sector as a whole. We will look to see what we can do to strengthen or whether there is more that we need to do to achieve those four objectives, because I think those four objectives are still very, very relevant. But we have to have legislation now that is fit for the circumstances we currently find ourselves in and, hopefully, futureproofs us for how we want to see the sector develop in the future.
  Sian Gwenllian AM: Do you feel perhaps that the legislation itself hasn't been strong enough, and that you then have had to drive some of these objectives through the annual remit letter, rather than through legislation, and that's why the strengthening is required?
  Kirsty Williams AM: Certainly, I see the remit letter as a really, really important way in which national priorities and the priorities of an elected Government can be clearly stated, communicated to the Higher Education Funding Council for Wales, and then HEFCW use their powers to ensure that that happens. So, certainly, I see the remit letter as being a very important mechanism for ensuring, as I said, that those national priorities are clearly articulated, and then change happens.
  Sian Gwenllian AM: Has the current legislation been framed around institutional autonomy so that it's not possible for institutions to fulfil any national outcomes, and is that going to be an element of the new Bill?
  Kirsty Williams AM: Well, certainly, the 2015 Act contains numerous provisions that protect universities'privileges and autonomy. And that's really important, and those are principles that I am committed to in any legislation that I bring forward. We'll certainly be looking to see how we can carry those protections into the forthcoming Bill, but, at the same time, we do have to ensure appropriate regulation and accountability of institutions for their public funding and the privileges that they enjoy. And I think there are a number of ways in which that can happen. We have a very positive working relationship with the Higher Education Funding Council for Wales, and I am very fortunate to have a very positive working relationship with the sector. The remit letters are a really important way in which we can lay out those national priorities. I don't think there's anything in the legislation per se that prevents those national priorities being articulated and being acted upon.
  Sian Gwenllian AM: I don't think that's what HEFCW has said in their evidence. They've said that the Bill has been framed in a way where it's not possible for institutions to fulfil any requirements. You're talking about the remit letter; maybe you need to have that discussion there, but, in terms of the Bill itself, you can't make them fulfil any national outcomes. Shouldn't there be a discussion looking to move in a direction where there are national outcomes being set through legislation, because there is public money going into that?
  Kirsty Williams AM: Well, I don't know whether we need national outcomes through legislation, because those national priorities, potentially, will change over time. What is really important, and what we will be seeking to do in the new legislation, is look to move to a system of outcome agreements. So, there is a very clear expectation that the commission will have, in regulating the sector, and co-ordinating and funding the sector, to create a system of outcome agreements, where those outputs will reflect national priorities, and that's one of the things that we've consulted on, and will look to take forward in the new legislation.
  Sian Gwenllian AM: Okay. That's clear enough. What about private providers? The Act, or the Act as it stands, makes it a requirement for a regulated institution to be a charity, and that means it's not possible to regulate alternative private providers under the Act, even though they can provide higher education in Wales. What is your view on this, and will the new legislation continue with the requirement of being a charity?
  Kirsty Williams AM: Okay. So, I think, first of all, it's important to make the distinction between the scale of private providers, and what could be termed as'unregulated providers'in the Welsh system, as opposed to the English system. And I think that's a really important distinction to make. So, currently, under the current legislation, unregulated providers can only access Welsh Government student support if they're designated on a case-by-case basis. So, we do have a circumstance where--and a process in place, to manage this. So, we have a specific designation policy, which is operated on our behalf by HEFCW. Only six organisations were designated on a case-by-case basis in the 2018-19 academic year, so the scale here is small. Three of those were further education colleges. So, when we talk about a private provider, perhaps people would have a view of a private university, but, actually, three of those were FE colleges, which we would all be familiar with. And the three private providers were the Centre for Alternative Technology, the training arm of the Church in Wales and the Newport and District Group Training Association. All three of those are actual charities. So, in order for their courses to be specifically designated, the three crucial questions that those providers have to answer are: quality--is what they're providing to students of a good quality; the financial viability of the institution, again, to try to protect the interests of the students who may find themselves embarking on a course in an institution that isn't viable; as well as their contribution to private--sorry, not to private good--public good. And we are considering how that part of the sector will be regulated in the forthcoming legislation. But, Huw, I don't know if there's anything else to add?
  Huw Morris: Well, just to say that there are a very small number of private providers, as the Minister has outlined, and, in comparison with England, where I think the last figures said that there were between 300 and 400 private providers in England, you get a sense of the differences that exist there. And, if you look at what happened over recent years, it has been those small private providers across the UK who have been most financially challenged and a number of them have stopped their operations, with consequences for the students. So, we've been keen to put students at the front of things to make sure that the institutions that they're enrolling with are strong and have good quality.
  Sian Gwenllian AM: Okay. So, what you're saying is that you will continue with a charitable status, or not--
  Kirsty Williams AM: At this stage--
  Sian Gwenllian AM: --or are you still thinking about it?
  Kirsty Williams AM: Well, at this stage, I think the charitable status will continue to be an important part of what we will take forward.
  Sian Gwenllian AM: Just turning finally to part-time fees and postgraduate fees, do you have an intention to regulate this part in the new legislation?
  Kirsty Williams AM: I have to say that, at present, we've not identified an urgent reason to designate these courses as qualifying courses for the purposes of a fee limit. And there are a number of reasons for that. Actually, the current Act--the 2015 Act--does not permit the fee regulation of postgraduate courses, other than PGCE courses for IT purposes. In the case of part-time courses, I'm currently content that fee levels are not exceeding the amount of student support made available by the Welsh Government. So, I think we are, at this moment, relaxed about that, and there are some difficulties around deciding and introducing fee limits on postgraduate courses. I think what's really important to me is the success at the moment of attracting people to postgraduate and part-time study in Wales, as a result of our reforms to student finance. But, clearly, we'll need to keep that under review. But, at this current moment, the Act precludes fee regulation in some areas and there's not a pressing policy need that we've identified to date.
  Lynne Neagle AM: Okay. Thank you. Okay, we're going to move on now to some questions about the level of ambition in the higher education Act and any lessons for the PCET Bill, from Janet Finch-Saunders.
  Janet Finch-Saunders AM: Thank you. To what extent has the 2012 university funding system limited Welsh Government's policy leverage over the sector, and how has the HE Act addressed this beyond the levers offered by fee and access plans?
  Kirsty Williams AM: Of course, the Act was introduced as a direct result of the changing scenario around finance and the different ways in which, because of the reduction in HEFCW's budget, the level of influence that HEFCW would be able to exert over institutions through the imposition of terms and conditions of funding--. So, the Act was introduced in part to address that shift in influence and the Act also has provided HEFCW with a range of new powers of intervention and sanctions in the case of non-compliance by institutions. Personally, I wholeheartedly believe that tertiary education providers should contribute to national goals and outcomes as part of what I'd describe as a civic mission. I'm determined that any legislation that I bring forward and any commission that I establish will be empowered to enable that to happen through its regulatory and funding powers. Of course, the funding situation has shifted again now because of the introduction of what is commonly known as the Diamond reforms, but our new system of student finance does again shift the parameters of influence that HEFCW or any new tertiary commission could have. But, as I said earlier, it's not to say that institutions have had a free reign. We have been able to use the remit letter and our relationship with HEFCW to progress agendas that we would want to see. So, for instance, you'll be aware, in my remit letter, I am concerned about issues around how people working in the sector are paid. We've been able to successfully see all institutions sign up to becoming living wage employers, all institutions sign up to the Welsh Government's code of ethical procurement. So, it's not to say that the Act has meant that we've had no influence, but there are opportunities now, because of the change in financial circumstances once again, to look at that in any forthcoming legislation.
  Janet Finch-Saunders AM: Thank you, Minister. Do you share HEFCW's views on the benefits of having national targets to get institutions to address national priorities? Is this something you wish you could do?
  Kirsty Williams AM: Well, it's not something I wish I could do; I think that we're doing it. Self-praise is no recommendation, but, because of the working relationship that we have, I think we're seeing some success in using the remit letter to influence national outcomes. So, I've just talked about living wage; we're also using our remit letter to drive transparency over senior leaders'pay, the gender pay gap within institutions. For instance, as part of this Government's commitment to improving mental health, we've been able to use the remit letter and some funding to be able to drive change and some improvements in mental health in the higher education sector. These are national priorities and we're acting upon them and we're using the multiple levers we have at the moment to engage in universities. And, I have to say, universities have risen to that challenge, and I'm very grateful to them for doing that.
  Janet Finch-Saunders AM: Thank you. Are there plans to give the proposed new PCET funding body more effective policy levers to align the sector to the social, economic and civic needs of Wales? And, if so, how will this be done?
  Kirsty Williams AM: Well, as I said in answer earlier, I'm determined that we ensure a sense of civic mission for the entirety of the sector, including our institutes of higher education. You'll be aware, Janet, that, in the consultation exercises that have been undertaken by the Government so far on PCET reform, we will be introducing more formal outcome agreements, whereby institutions might be given by the commission very clear expectations of how they're expected to contribute to national priorities.
  Janet Finch-Saunders AM: Thanks. We've heard that the HE Act, by focusing on individual institutions, did not encourage collaboration, even for widening access activity. Was this a missed opportunity and how will this be taken forward in the PCET Bill?
  Kirsty Williams AM: I think we can strengthen our sector by closer collaboration. I think what sets us apart in Wales is that this Government is determined to create a legislative regime and a regulation regime that encourages collaboration and co-operation, which is in stark contrast to the marketisation and the competition that we see being regulated for and legislated for across the border in England. That's one of the reasons why we are going to introduce the new PCET reforms--to create collaboration, not just between different higher education institutes but actually across the sector. So, this is a prime opportunity where we can create a framework that demands and encourages collaboration, not just, as I said, in between individual institutions but across the entirety of the sector. We're doing that because that means we can avoid duplication, we can fill gaps that there currently are and we can create a system that allows for a seamless passage for students to move between the different parts of post-compulsory education that are currently available, where, sometimes, those students find barriers.
  Lynne Neagle AM: Okay, Janet?
  Janet Finch-Saunders AM: Thank you--that's great, thank you.
  Lynne Neagle AM: We've got some questions now around HEFCW's powers of intervention from Dawn Bowden.
  Dawn Bowden AM: Thank you, Chair. We received substantial evidence from HEFCW suggesting that powers were inflexible and hard to use--I think HEFCW called them'threatening'--saying that they make sanctions difficult to use and so on. Are you satisfied that HEFCW's powers are useful on a preventative day-to-day basis?
  Kirsty Williams AM: If I may disagree slightly, I don't think their powers are frightening. It's very clear what powers are available to HEFCW, and they're certainly more than just the ability to, maybe, lean on an institution. Clearly, there is a system by which there is the ability to, you know, ramp up and escalate levels of intervention in the sector by HEFCW, but I certainly wouldn't describe them as inflexible or not having weight.
  Dawn Bowden AM: I think they were saying it was difficult to use for swift interventions--they found it a bit cumbersome. They explained to us that they often take informal measures or actions in their role as regulator, and they've explained that the small size of the sector enables good relationships to be developed. How can such measures work in the tertiary education body when there clearly will be many more than the 10 providers?
  Kirsty Williams AM: Well, looking ahead to the new Bill, I would want to see and be very keen to ensure that there are sufficiently flexible--did you use the word soft--and soft regulatory powers that the commission could exercise. Those powers, for instance, could include the ability to offer advice and guidance, rather than, maybe, punitive interventions, and powers to undertake enhanced monitoring of institutions to ensure compliance with regulatory conditions. So, I would expect the commission to be able to have a series of abilities to intervene, from the soft, flexible type, which is non-punitive but actually allows people to go in and support institutions, through to something that would be, as I said, more punitive, if they felt that an institution was in danger of not providing quality or financial failure.
  Hefin David AM: Can I just come in there, on the point that was made? The issue that seemed to me to come from HEFCW and from the universities is that the dial seems to have only three steps. So, rather than having a graduated series of actions that they can take, it seems to step from--what did he call it--a'meeting without coffee'to--
  Kirsty Williams AM: That's a very HEFCW thing to say.
  Hefin David AM: --potentially institutions going bankrupt, and there don't seem to be many steps in between that. I'd invite you to say whether you'd like to remedy that in future.
  Kirsty Williams AM: I think, as I said at the beginning of the session, this is why this post-legislative scrutiny is useful, because we can reflect on that feedback. As I said, I would expect to be able to ensure that the commission had a range of powers that could address--from that soft power and those early conversations to being able to, as I said, issue, perhaps, advice and guidance to an institution, so there would be a more graduated escalation. Huw, is there anything else that I've missed out?
  Huw Morris: Just to build on what the Minister has said, there's a range of ways in which we interact with all institutions that are going to be in the tertiary sector, and some of that is about providing information. So, HEFCW provides information--it sends around circulars, it produces reports and it holds events. There's staff, management and leadership development activity, which can create a culture amongst the leaders of institutions, but also amongst their governing bodies, to help them move in a particular direction. We would hope that's in the direction of the civic university approach that the Minister has outlined. We use those mechanisms and informal interactions with FE college principals, with the work-based learning provider network, with sixth forms and others, and we would want to see, I hope, in the tertiary sector some alignment of those things. When things go badly wrong, there are a range of mechanisms. I think what stands behind HEFCW's comments is that before we had a loan-based system of student finance, there was a system of block grant allocations and conditions could be attached to those grant allocations by HEFCW. I don't think we're going to be going back to that system in the foreseeable future because of the pressures on public finances--
  Hefin David AM: That wasn't how I understood it. I understood it to be the fact that you use these informal powers and then the next step up is quite a severe sanction and there's not much in between those.
  Huw Morris: So, in--. Shall I carry on?
  Kirsty Williams AM: Of course, yes.
  Huw Morris: In the Hazelkorn review, there's quite a lot of focus on that and looking to learn from other national systems where outcome agreements provide a broader measure of the range of things the institutions do and a mechanism for tracking how things are done through the provision of information back to the institution to help them know how they're doing. And potentially, in some of these other institutions, funding is linked to some of those things.
  Kirsty Williams AM: And, of course, what always has to be--. What we have to strike the balance of as well is at what point those powers seem to be--and the ability to direct--interfering with the principle of autonomy within an institution. So, there's that balance to be struck, isn't there, about creating a regulatory regime, which I'm very keen and the Act attempted to do, which was to enshrine institutional autonomy, and that's really, really important, but also a regulatory regime, the ability to influence and to develop and to deliver national outcomes and the power to intervene in that sector, which you know, better than probably anybody else in this room, guards that institutional autonomy very, very, very dear indeed. And that's the balance that we need to try and strike as we go forward with the new commission proposals.
  Lynne Neagle AM: Okay. Thank you. Dawn.
  Dawn Bowden AM: Thank you, Chair. I think, in terms of the levels of measures--and I understand what you're saying--but I think what HEFCW were saying was that they try as far as possible to use informal measures and they are able to do that because of the size of the sector--just 10 institutions to work with. The post-16 sector, however many we're talking--50 plus providers--it's probably going to be less likely that they would be able to have that sort of relationship with the leaders in those institutions. So, the informal measures might not be as prevalent as they are currently, possibly.
  Kirsty Williams AM: Yes, but also, what's incumbent upon me as the Minister is to ensure that the commission is set up in a way where it can have that relationship with the sector, because what's really important to remember is that HEFCW will be replaced. We're not asking HEFCW suddenly to go from regulating a small number of institutions to suddenly regulating 50. We'll be creating a commission that will be structured in such a way that it can have those relationships. Because, of course, whilst HEFCW will face changes, our relationship with and how we manage the FE sector and the apprenticeship sector will also shift. So, the point is that we need to create a commission that will still be able to be close to the sector, close enough to be able to provide that soft regulation, those really important relationships in a way--. So, it has to be created in such a way and resourced in such a way that it allows that to happen, and that's my intention.
  Dawn Bowden AM: Okay. Well, then, of course, the University of Wales said to us that they felt that there was the potential for HEFCW to issue directions enforceable by injunction to remedy minor matters. So, I think, from what you're saying, you wouldn't be expecting that to happen. Just the fact that they've got the power doesn't necessarily mean that that's what they're going to do.
  Kirsty Williams AM: Well, I think it's important to recognise when HEFCW can enforce its directions by way of an injunction. If they were to do that because a university was breaking fee limits or because there were real questions about the quality of the provision or whether a university was not complying with the financial management code--personally, I wouldn't describe those as minor matters, as a Minister, if we had an institution that was significantly falling down on quality and HEFCW were using these powers to intervene. I wouldn't describe that as a minor matter.
  Dawn Bowden AM: No. That's fair enough. And, actually, on that point, we've had some recent high-profile issues in Swansea and Trinity St David, and HEFCW still haven't yet used their powers of intervention. Do you find that surprising?
  Kirsty Williams AM: I think what they have done in these circumstances is, perhaps, used their ability to support those institutions through what, undoubtedly, have been challenging times. Given the fact that there are ongoing legal processes attached to Swansea University, I think it would not be appropriate for me to comment any further, because there are still matters in train with regard to that institution. But clearly, our expectation on HEFCW is to ensure that they are using their powers to support those universities, and I would expect them, if they felt necessary, to use the full remit of their powers if they felt that that was what they needed to do. Now, I have to trust their professional judgment that that has not been necessary to date, but our expectation is that they would do that if they felt it was necessary.
  Dawn Bowden AM: Okay. Thank you. Thank you, Chair.
  Lynne Neagle AM: Hefin David has some questions now on fee and access plans.
  Hefin David AM: Are you concerned that neither the regulator nor the sector seem to have any confidence in fee and access plans?
  Kirsty Williams AM: I think the concept of a fee and access plan is an important concept. Whether we can do them better, whether we can reflect on what's happened to date and create a better system of what's included in a fee and access plan and how those fee and access plans can be monitored, there's an opportunity to do that in forthcoming legislation.
  Hefin David AM: So, have you been aware of specific issues yourself? Have they brought them to you?
  Kirsty Williams AM: Well, no, not in the sense that they've brought them to me to talk about specifically. From my perspective, fee and access plans are focused very much on inputs, and, really, I'd like to think about outputs and outcomes, more importantly--what are the outcomes of the fee and access plan, not necessarily just how much money has been spent on them. I think, certainly, to really understand the success of the fee and access plan, you have to question whether an annual basis is an appropriate timescale for a university to be working to, and whether we could have something that was focused over a longer period of time. Because, when you think about it, you write the plan and then you're into it, and then, the next thing you know, you're writing your next year's plan. So, I think there's an opportunity there to look to restructure. So, do I see a place for fee and access plans going forward, as part of our outcome agreements? Yes, I do. Can we do them differently to make them more effective? Yes, I think we can.
  Hefin David AM: So, why would introducing outcome agreements make them work any better?
  Kirsty Williams AM: Well, I think they're going to be a part of an outcome agreement--part of that wider expectation. So, fee and access plans are there to address an issue around, primarily, changing the nature of people who go to university and making sure that nobody is put off from pursuing that. So, that's part of a wider piece of work that I'd want to see as an outcome agreement. But, as I said, I think looking at outcomes for students and outcomes of that activity, rather than the inputs of the activity, over a longer period of time, is probably a more effective way of doing it. I think it's still--. In a way, it's difficult to make a final judgment on whether fee and access plans in their current format have worked, because we need to know what'll happen to those students in the future. But undoubtedly, despite the limitations of them, I do think we're making progress in terms of access, but I don't think we can necessarily point to the fee and access plans as being the driver for some of those improvements.
  Hefin David AM: No, I appreciate that, and some of the things you're saying reflect some of the discussions we've had, but what was clear is that the process and bureaucratic nature of the way you present fee and access plans doesn't work, particularly given the fact that, four years on, early fee and access plans are still being evaluated. There's a real problem there. So, what you're saying--can I just pin down what you're saying--is that we may be moving away from yearly fee and access plans to something that's longer term and outcome focused.
  Kirsty Williams AM: That's my preference. So, I think the principle--I'd like to think we can all agree around the principle of what a fee and access plan is hoping to achieve, but I think there are better ways of doing it, and I think we should take the opportunity of reform to look at how we can do it better.
  Hefin David AM: So, with that in mind, I think we're talking about the future of the Bill, the consultation on the PCET reforms closed in summer 2018--with these important issues in mind and things that are currently ongoing, have you had further dialogue since then with key stakeholders like, for example, Universities Wales and others?
  Kirsty Williams AM: On the Bill or on fee and access plans in particular?
  Hefin David AM: I'm thinking about fee and access plans as an issue that suggests that there is a need for deep consultation, so with that in mind, with things like that, have you had further discussion?
  Kirsty Williams AM: Oh my goodness me, civil servants in the department are constantly in discussion with a range of stakeholders as we continue to develop legislative proposals. I meet on a regular basis with both HEFCW--I meet separately with the vice-chancellors, and I've been very keen to develop a stronger working relationship with chairs, and perhaps we'll come on to issues of governance later. So, we are constantly discussing with stakeholders all options for change--
  Hefin David AM: I suppose the message I'm getting as chair of the cross-party group on higher education is that there could still be more direct consultation with stakeholders. That's the message I've received. Now, I've got no evidence to say it has or hasn't happened, but that's the message I've received.
  Huw Morris: If I could just chip in for a moment, the Minister's outlined that there is very extensive, ongoing communication both ways with the sector, but the challenge of preparing a Bill is the balancing act between gathering in information--and there's been a general consultation process and a technical consultation process--and wanting to make sure that the Bill that's laid next year hasn't been discussed with anybody else before it comes to be considered by the Senedd. So, the broad principles have been discussed, but specific details of what goes into a Bill or policy instructions that inform a Bill haven't been the subject of consultation--
  Hefin David AM: Because that happens at Stage 1.
  Huw Morris: Indeed, yes.
  Hefin David AM: Okay. Sorry, can I move on to the next item?
  Lynne Neagle AM: Oh, you're going on to the next section.
  Hefin David AM: Yes, unless there's anything specific--
  Lynne Neagle AM: Yes, I just wanted to clarify, if we're moving to a longer term approach to this, how will the new body be able to establish that things are actually working, that the powers are working, if we're working on a five-year time frame?
  Kirsty Williams AM: As we've heard, we can't really properly assess fee and access plans in the current arrangements, because it takes time for those cohorts of students to go through and activities to go through. Being able to move to a system where fee and access plans, for instance, could be over a three-year period I think allows universities to be more strategic in some of their investments and some of their activities around fee and access. In a single-year plan, it's almost knee-jerk, it's the need to demonstrate that you're doing something, and doing that within that period of time, rather than a more strategic view--. Can I just say, I know it's not quite subject to this, but we're really moving forward in terms of access and broadening access into the HE sector. For me, student financial support is one aspect of it, but if we're really thinking about social mobility and attracting people into higher education that have never been part of higher education before, our early figures would suggest--they're early figures, and they're subject to change, but in terms of our change to our student support regime, we have seen a 58 per cent increase in the number of postgraduates applying for student support in Wales. When you think about it, when many of us went to university, a degree was the thing that set you apart. Now that more and more students are going to university, it is that postgraduate qualification that sets you apart, but your ability to carry on studying is often limited by access to financial support, so a 58 per cent increase in postgraduate I think is great for those individuals, but it's also great for our economy. We've seen a 35 per cent increase in part-time undergraduates that have been supported by the Student Loans Company; the Open University have reported a 67 per cent increase in students from Wales's most economically disadvantaged areas registering with them; a 57 per cent increase in disabled students; and a 30 per cent increase in black, minority ethnic learners. So, I think that's a really, really positive basis for our sector to continue to work on broadening access.
  Lynne Neagle AM: Okay, thank you. Sorry, Hefin--carry on.
  Hefin David AM: I'll move on to managing risk, if that's okay. The feedback from Universities Wales suggests that, with the outcome of the 2015 Act, institutions with the strongest track records are more highly regulated than the riskier private alternative providers. Do you think that Act has struck the right balance?
  Kirsty Williams AM: I think the Act has created a system where the level of regulation is proportional to the amount and the nature of public moneys received by institutions.
  Hefin David AM: Okay. Those were the words used by Universities Wales--
  Kirsty Williams AM: No, no, I'm not disagreeing. My view is: I believe that the Act has struck that proportionality. When you look at public moneys going into institutions, I think that the Act is proportionate, myself.
  Hefin David AM: So, do you think it's in the interests of students, then, to be at private institutions--? I've seen those private institutions and how they operate; I've seen them at first-hand--they don't operate to the same rigour as public institutions, and they're less regulated.
  Huw Morris: Can I just chip in? I think that the category'private'covers quite a wide range of things, and many private institutions are also charities. We don't have the presence of some of the large private charities that are present in other countries, but Stanford and Harvard would count as private universities. So, I think we need to be careful in focusing on the inherent quality of things. We've made charitable status a key reference point in the operation of things at the moment. I think there has been attention drawn to some private providers, particularly in England, but I wouldn't tar them all with the same brush, necessarily.
  Hefin David AM: But they fall outwith--if they're not charitable providers running validated courses, for example, they fall outwith the strength of regulation that is currently in place on the universities in Wales.
  Kirsty Williams AM: So, we would regulate them on a course-by-course basis, so it's back to the issue of proportionality, isn't it? So, you are automatically regulated for all your courses, if you're one of our main universities, but there is a process that is run by HEFCW on a course-by-course basis to validate alternative providers. And as Huw said, I think we should recognise the nature of that is very, very, very small in Wales, and there is a process to ensure quality provision. If there were concerns about the quality of that provision, that course could be deregulated.
  Hefin David AM: And I'm aware that there are a small number of private institutions in Wales, but are you concerned that in the future the landscape may change, particularly with the opportunity to recruit more part-time students? Do you think the landscape may change in future and that the 2015 Act, as designed, wasn't equipped for that, and will the next Act, then, be equipped?
  Kirsty Williams AM: I think it's right to say that maybe the previous legislation didn't futureproof for changes. I'm not anticipating a mass influx of alternative providers, in the sense that we've seen across the border, but we will need to ensure that the new commission has powers to regulate and to futureproof.
  Hefin David AM: Okay. Thank you, Chair.
  Lynne Neagle AM: Dawn.
  Dawn Bowden AM: Thank you. We had some evidence from the University and College Union that were concerned about the governance of universities, actually, as being a bigger problem than the regulatory framework in many ways. Can you tell us, perhaps, how the HE Act addresses the issue of poor governance, or is it really just limited to responding to the symptoms rather than the poor governance itself?
  Kirsty Williams AM: Well, I think it's true and fair to say that the Bill does not directly address issues around governance in the sector. HEFCW do have well-established assurance practices in relation to governance that would predate the 2015 legislation. But governance--we've talked briefly about some recent history within the sector that I think has certainly brought the issue of governance to the fore once again, and I think there are two important things that we're trying to do about that in the current time, prior to any legislative changes. The first is, as I just said to Hefin, I have sought to have a more direct relationship with chairs of universities and have that one-to-one relationship with them, not in the presence of their vice-chancellors. I challenge them, they challenge me, and I think we've deliberately tried to establish a regular routine of that since I took office. And you'll be aware that, collaboratively--and I'm glad that this has been done in this way because I think if you do it this way, we're more likely to get some success and change--Universities Wales and HEFCW have worked together to undertake an independent review of governance. And I think it's really important that parties have come together to recognise the issues and to agree to take action, because I think if we'd have tried to impose something, we'd have more resistance. So, there is an independent review going on at the moment--
  Dawn Bowden AM: Is that the risk review process in--?
  Kirsty Williams AM: That's the Gillian Camm review. This is a review that, as I said, Universities Wales and HEFCW have agreed to do together. It's chaired by Gillian Camm, who is the chair of the Leadership Foundation for Higher Education, and she is doing an independent review to advise on changes to governance. And I welcome that, I'm very supportive of that, and that's happening at the moment. As I said, I'm glad that there's been recognition from within the sector themselves that they need to make sure, and they need to give confidence, that governance arrangements are what they should be.
  Dawn Bowden AM: So, is that something that you're going to be taking into the PCET Bill, do you think?
  Kirsty Williams AM: Yes, absolutely. We're exploring how the Bill could introduce a regulatory condition in respect of good governance, and a commission would be able to set expectations with regard to good governance. I think one of the concerns for me--and I know that this is a concern that is shared by the UCU--is the diversity of governance and who finds themselves in these really important positions. HEFCW don't hold figures on it, but from an approximation that I've asked officials to do for me, currently in the universities that we have, I would say that men make up around 56 per cent of membership of universities'governing bodies; women--44 per cent; BME--as low as 4 per cent. Of course, in individual institutions, it does vary, but I think there is some way to go to making sure that our governing bodies are diverse and that there's an opportunity to look at the student voice in governance going forward, the staff voice in governance going forward, and these are things that we hope to have discussions on whilst we bring the legislation forward.
  Dawn Bowden AM: But also, I guess--sorry, Chair--a greater understanding, that anybody going in to become a governor of one of these institutions has a greater understanding of what is expected of them. Do you think that that's a gap that needs to be plugged?
  Huw Morris: One of the things that HEFCW have led on with AdvanceHE, the body that encompasses the leadership foundation, is a development programme for governing bodies, and that started earlier--well, it's been going on for some time, but it was recommenced earlier this year, with a session for all of the chairs of universities in Wales. And I believe--I'll need to check this--that there are plans to engage with each of the governing bodies, because, as you rightly say, and this lies behind a lot of what we've been discussing, the activities of these institutions have become much more complex over recent years, and so there is a need for that training and development and understanding also of the fast-changing nature of that activity.
  Dawn Bowden AM: Thank you.
  Lynne Neagle AM: Okay, just before we move on, can I ask whether it's your plan to legislate on that, as they've done in Scotland?
  Kirsty Williams AM: As I said, I don't want to pre-empt scrutiny of the Bill, because we need to be able to come to the committee and do that in the entirety, rather than picking off individual bits of it, but we are absolutely exploring how the Bill could introduce a regulatory condition with regard to governance.
  Lynne Neagle AM: Okay, thank you very much. We've got some questions now from Sian on quality assurance.
  Sian Gwenllian AM: Okay. We've heard evidence regarding the difficulties caused by HEFCW having a legal duty to quality-assure all the provision in two further education colleges. That sounds to me like some kind of an anomaly or an unintended consequence of the Act. Could you clarify that and explain the situation in that instance?
  Kirsty Williams AM: Thank you. My understanding--and as I said, it's a bit difficult, because I can't put myself into the thought process of the Minister at the time and what his expectation was. But, certainly, my understanding is that it was not an unintended consequence, it was an expectation built into the Act that HEFCW and Estyn would work together on these matters. The Act built on what were the quality assessment arrangements in the 1992 Act, which required HEFCW to secure arrangements for the assessment of the quality of education provided by funding institutions. So, as a consequence of that approach, HEFCW's quality assessment duty currently encompasses all the education provided by or on behalf of a regulated institution. So, it is complicated, and Huw can help me out here if I get it wrong, but my understanding is that it was not an unintended consequence, that was the expectation of what would happen when the legislation was passed. Huw.
  Huw Morris: I would completely agree with what the Minister has said.
  Kirsty Williams AM: As always. [Laughter. ] At least in public, Huw.
  Huw Morris: There is the expectation that they will work together in concert. There's a lot of joint operation. I think, going forward, we would expect that to continue. We're looking to the new Bill to try to make that clearer. That was a theme in the general and technical consultation exercises that we've engaged in over the last couple of years.
  Sian Gwenllian AM: So, you're happy, therefore, that that partnership has worked. Are you happy with that?
  Kirsty Williams AM: Certainly, in our consultation for the upcoming Act, we've generally heard, certainly from our further education colleges, that they've been quite content with the arrangements. No concerns about it, certainly from further education colleges.
  Huw Morris: There are differences in the systems of quality assurance as they've historically applied to FE and HE, but I understand that that has meant that, as FE colleges become more interested in HE, they've had to learn new ways, and that's taken a little bit of time. But, I'm not aware of any dissatisfaction.
  Sian Gwenllian AM: Okay, which moves us on to this idea of having one quality assurance body or one quality assurance framework. Is that your intention and how will that work in practice?
  Kirsty Williams AM: I am aware, and we've listened to stakeholders'concerns regarding proposals to introduce a single quality assessment body. As I said, we recognise that stakeholders are broadly content with the current situation with regard to Estyn and QAA. So, we've been listening to that, following the technical consultation, and policy officials are working through options in regard to ensuring what quality assurance will look like in the commission. As I said, I don't want to pre-empt bringing forward the legislation, but the principles underlying any assurance regime would need to be coherent, need to be effective and need to be comprehensive. What we're also very clear about, and I think it is important to say, is that any quality framework covering higher education will be compatible with ENQA, which I think is really, really important going forward. And by an extension of that, it would be compatible with current UK-wide baseline standards. So, we don't want to create specific problems for the HE sector in Wales.
  Sian Gwenllian AM: But, you have touched on this, there is substantial concern in the sector about this offer to move to one assurance body for the tertiary sector. One vice-chancellor has told us:
  Kirsty Williams AM: Well, sometimes, I think it is necessary, maybe, to cause a stir. If we don't change things, it does beg the point of,'Why are any of us here if we're not here to sometimes move things forward?'And change is challenging always, but I would like to reassure all of our vice-chancellors and our sector as a whole that we're not going to do anything in the quality assurance regime that would risk what is the very high reputation and standards that Welsh universities currently comply with or would set them apart from institutions across the border or in a European context. Huw.
  Huw Morris: I agree, obviously. I think the fear is misplaced, but coming back to another theme in the conversation so far about futureproofing, what we're seeing in the figures that the Minister outlined to you earlier about the growth in postgraduate and the growth in part-time is the desire of a greater number of people at different ages to engage in higher and tertiary education, and quite often that will be in a workplace or it will be in a non-conventional institutional setting. Historically, the quality assurance regimes for work-based learning have tended to sit with Estyn; the assurance regimes for the universities have sat with the QAA. There's quite a lot of learning that all sides have got to engage in if we're going to be able to have continued high quality in these new areas that are being explored. That's an issue not just in Wales. The Augar report, which was published earlier this year in England, drew attention to this as being a major problem in the relationship over the border between Ofsted and the QAA. So, I think we're not looking to impose one institution on anybody, but we are looking to encourage greater synergy in the ways in which quality assurance and enhancement is undertaken in those different areas of activity.
  Sian Gwenllian AM: And finally, therefore, looking at overseas providers. Currently, of course, universities can award their degrees to students being taught by providers overseas. We know this created problems for the University of Wales in 2011. They faced a scandal; that's probably the best word to use there. Will the new Bill address these issues?
  Kirsty Williams AM: Well, certainly transnational education does present real opportunities for Welsh institutions, but if not managed appropriately and regulated appropriately can cause real risks to reputation to our sector. When I meet with vice-chancellors in universities in different parts of the world, and when I am visiting different countries, one of the great things that I'm able to say is that we have a sector that provides fantastic quality of teaching, excellence in research and a wonderful student experience, and that is undermined if institutions find themselves undertaking TNE activities that put that at risk. So, it's an important consideration for the health of the whole sector that any TNE undertaken by a Welsh institution has the appropriate quality guarantees built into that because it's a problem not just for an individual institution, but it could undermine the very strong reputation that the Welsh sector has as a whole. Huw, was there anything further about TNE?
  Huw Morris: Well, just to say that we are live to that, as I know HEFCW and the QAA are. We've had conversations with both in the recent past. There is quality assurance of offshore activity through the QAA. When they visit institutions with their reviews they will look at a selection of those overseas activities and there are periodic thematic reviews of the activity in particular countries. I think we would hope and believe that HEFCW, in its conversations with the QAA, would be keeping that under review to minimise the risk and maximise the opportunities.
  Sian Gwenllian AM: So, you're not actually looking to use the new legislation to strengthen the regulation around this.
  Huw Morris: The arrangements at the moment are that HEFCW uses the QAA to do the reviews and the inspections. I don't think we're currently looking to mandate the detail of how that should happen. The system at the moment works through co-operation between the institutions and the regulator to make sure the quality assurance system is improving and enhancing things. I think we would look to that as a primary mechanism.
  Sian Gwenllian AM: Okay. Thank you.
  Lynne Neagle AM: Okay. Thank you. Are there any other questions from Members? No. Okay. Well, can I thank you both for attending this morning and answering all our questions? As usual, you will be sent a transcript to check for accuracy following the meeting, but thank you both for your attendance this morning.
  Kirsty Williams AM: Thank you.
  Lynne Neagle AM: Item 3 then is papers to note. Paper to note 1 is a letter from the Minister for Education regarding the revised additional learning needs implementation plan. Paper to note 2 is additional information from HEFCW, following the meeting on 18 July, in relation to our post-legislative scrutiny of the Higher Education (Wales) Act. And paper to note 3 is a letter from us to the Welsh Local Government Association on the Childcare Funding (Wales) Act 2019. This is the letter that we agreed we would send last week. Can I ask Members if they're happy to note those? Yes. Thank you very much. Item 4 then. Can I propose, in accordance with Standing Order 17. 42, that the committee resolves to meet in private for the remainder of the meeting and for item 1 on 2 October? Are Members content? Thank you.
output: Huw Morris started by introducing the focus on learning from other nations to track the information flows and help the universities in return. Meanwhile, Kirsty Williams AM suggested a balance to be achieved by each part of the participants. However, Dawn Bowden AM questioned about HEFCW's use of informal measures which might not be as prevalent as they currently are. Kirsty Williams AM answered that it should be remembered that HEFCW would surely be replaced, and a more flexible way would be adopted to control the financial codes of universities to assure the quality of the provision.