input: Why did Eluned Morgan disagree with Suzy Davies when talking about the official commitments to help the Wales universities to get through the transition period?
  Lynne Neagle AM: Good morning, everyone, and welcome to the Children, Young People and Education Committee. We've received apologies for absence from Janet Finch-Saunders. I'd like to take this opportunity to welcome Suzy Davies to the committee, and to thank Mark Reckless and Darren Millar, who have left us, for their service and hard work as members of the committee. Can I ask whether there are any declarations of interest, please? No. Okay. We will move on then to our evidence session on our inquiry into the impact of Brexit on higher and further education. I'm very pleased to welcome Kirsty Williams, Cabinet Secretary for Education, and Eluned Morgan AM, Minister for Welsh Language and Lifelong Learning. Can I just ask you to introduce your officials for the record, please?
  Kirsty Williams AM: Bore da, Lynne, and thank you for the invitation to join you. Eluned and I are joined this morning by Huw Morris, who's the group director at SHELL--skills, higher education and lifelong learning--and Marie Knox, who is deputy director, overseeing European transition.
  Lynne Neagle AM: Okay, thank you very much, and thank you for coming. We'll go straight into questions, then, and the first questions are from Suzy Davies.
  Suzy Davies AM: Thank you. I'd like to ask you both, if that's okay, a little bit about preparedness. But if I could start with higher education, I understand that--I don't know, it must be about 18 months ago now--Ken Skates told another committee in this place that there had been nine sector analyses done. Presumably, one of those was HE, because of the--well, Welsh Government had a presence, and still does, in Brussels, related to higher education. Apparently, those have now been superseded by work that's been done by Cardiff University. I don't know if you've got any comments on that research, or whether it's been brought to your attention yet.
  Kirsty Williams AM: Well, Suzy, following the vote, I was very keen that we work very closely with colleagues in higher education and further education, to get an understanding from on the ground about the potential impact. So, in terms of preparedness, we started that group in the September, and that work from that group, which includes both HE and FE, has been instrumental in helping the Government form its views, which were articulated in the Government's White Paper,'Securing Wales'Future'. There has been ongoing work being done--as the debate in London and Europe becomes a little bit more clear, then it becomes a little less clear, and then a little bit more clear, but, bearing in mind the difficulties of working in an ever-changing field, we have been refining those approaches. Each institution has been looking at their own institution, because, as you can imagine, although we have an overview of the sector, the challenges are very different for individual institutions--so their exposure, for instance, to the number of European Union students that they have at their college, or the work that they might be doing with Horizon 2020, or their success--and there has been considerable success in the HE field in securing structural funds for various projects--the exposure and the potential impact of leaving the EU, in a'no deal'or in a'deal'scenario, is very, very different. But I don't know if, Huw, you want to talk any further.
  Suzy Davies AM: Maybe just to use the'no deal'scenario is probably the easiest, isn't it?
  Kirsty Williams AM: The'no deal'?
  Suzy Davies AM: Well, yes, because that's the worst-case scenario, so let's look at that one.
  Huw Morris: As the Cabinet Secretary mentioned, the higher education Brexit working group's been meeting since September 2016 and has been looking at that in general. More recently, when the prospect of no deal became talked about, officials have been visiting individual institutions to talk to them about their preparedness for that. As you'll be aware, the funding for much of the activity is secured, we believe, even under a'no deal'scenario, until December 2020; that's a letter we had from the Chief Secretary to the Treasury. I think the research you're referring to may be research that Cardiff University has been doing with the Bevan Foundation and others. I know there's a report due to be launched later today. We have been doing our own research and looking at the impact on HE, FE and apprenticeship providers.
  Suzy Davies AM: Well, that's really helpful because my understanding was that this Cardiff University research had superseded all those nine sector analyses.
  Huw Morris: That may be true for the economy brief. Certainly, there are published papers by Max Munday and a team at Cardiff University on the impact of Brexit on the Welsh economy, but for HE and FE and apprenticeship provision, it's as the Cabinet Secretary outlined.
  Suzy Davies AM: So, are there any formal risk assessments that are available for us to scrutinise, for example? For HE and FE for that matter.
  Kirsty Williams AM: Well, the Higher Education Funding Council for Wales have been doing some specific work; I can't comment on how wide they would want that to be shared. We have been doing some broad analysis, as I said, for the sector, looking at what we can do to mitigate the risk, bearing in mind that each institution is an autonomous institution, a principle that they guard really jealously, and rightly so. So, we have been, as Huw said, because the prospect of a'no deal'has become, perhaps, more to the forefront, officers have been visiting each institution to try and make sure and to satisfy us, as people who fund part of their activity, that they have their own plans in place to deal with these scenarios. We continue to work alongside them to push the issues that we can help them with. So, for instance, we continue to work with officials in Westminster around Erasmus+ provision in a'no deal'scenario, what a UK stand-alone project would look like, the impacts of a'no deal'on Horizon 2020. So, we look at the broader picture and we are encouraging continually individual institutions to make sure that they themselves are looking at their specific needs within that.
  Suzy Davies AM: Well, if there is something that's shareable, I'm sure we'd be very pleased to see it--
  Kirsty Williams AM: Anything that we've got--
  Suzy Davies AM: --particularly with FE, actually, because, of course, we haven't got a HEFCW for FE; you're doing that regulation yourself. I'd expect to see that type of work evidenced somewhere from within Welsh Government, and we would be able to see that then.
  Eluned Morgan AM: So, if I could just make some points on FE. We've been actively engaging with the FE sector. We've spoken to every one of the colleges about how they see things developing. I think it's quite a different response than what is going to be happening in HE.
  Suzy Davies AM: Yes, because the student thing isn't such an issue, is it?
  Eluned Morgan AM: You've got to remember that the FE colleges are much more anchored within their communities, they're much more localised, and so, for example, the number of EU students in these colleges is significantly lower. The number of staff in these colleges--I think they've analysed that there are only about 71 people. So, we're keeping in touch with them and we're letting them know what we are being told in terms of the Home Office settled status and what we can do to protect those 71. But that's a much bigger issue, I think, for higher education.
  Suzy Davies AM: What are they telling you about European social fund funding, though, because, as you say, they're locally anchored--the impact on FE of ESF funding is probably more significant than the issues we're talking about with higher education. How are you finding this out? Is this through one-to-one conversations?
  Eluned Morgan AM: We are engaging with them all, and, obviously, we're engaging with ColegauCymru, who've done their own analysis, and what we found, in particular, is that the real problems are probably in relation to ESF funding and apprenticeships. But what you've got to remember is that that link between apprenticeships and the local work community is absolutely crucial. So, if--
  Suzy Davies AM: Yes, that's why I asked.
  Eluned Morgan AM: --the economy nosedives, or if there's an issue that we see--just the dislocation of companies in those areas as a result of Brexit--then that will inevitably have an impact on the number of apprenticeships that will be on offer. So, it's those kinds of things, but at the moment I think it's worth pointing out that about PS15 million a year goes into the FE sector just in relation to apprenticeships.
  Suzy Davies AM: Can I just come back finally on that, before handing over? In both your areas of responsibility, there's going to be an impact on Welsh Government in how it responds to that, as well. Can you tell me a little bit about the European transition team, which I think is about building resilience within the Welsh Government to deal with the impacts of Brexit? Is that a formal arrangement you have with officials? I don't really know much about this team, but it seems to meet fortnightly to get Welsh Government ready for Brexit, so could you just give us some clues on this?
  Marie Knox: Yes, in terms of the European transition team, that's the central co-ordinating group that pulls together all the leads in each department who are pulling together the work on European transition. So, I attend that group in relation to higher education and further education, and, obviously, other representatives in terms of agriculture, transport, the economy, et cetera.
  Suzy Davies AM: It's great that you're on that group, but what does it actually do? That's the bit I wasn't sure about.
  Marie Knox: I guess it provides the governance structure for the Welsh Government as a whole in relation to European transition. So, individual departments do their own work, and the European transition team provides the governance structure, and, also, they lead on the discussions with the Department for Exiting the European Union, No. 10, the Joint Ministerial Committee--those kinds of ministerial arrangements.
  Suzy Davies AM: Thank you. I've had enough time, I think.
  Lynne Neagle AM: Llyr.
  Llyr Gruffydd AM: I'll ask my questions in Welsh, if I may. This discussion between HEFCW and higher education, these challenges in terms of how ready they are for the changes to come, and the work that the Government is doing with FE, I suspect, is happening at an organisational level. So, I just want to hear a little about where the student voice comes into that discussion and where the engagement happens in terms of the students.
  Kirsty Williams AM: So, we have a close working relationship with the National Union of Students. I meet with them regularly, and officials are in constant touch with the student voice. They have been very clear, and I think there is a huge amount of consensus between the Welsh Government, what the universities are asking for and what the students are asking for. You'll have seen, only earlier this week, the very powerful campaign by NUS Wales about the importance of Erasmus+ arrangements. There is a huge amount to be gained for Welsh students and young people participating in the Erasmus programme. Many of us, I know, have had the opportunity to study abroad as part of our own studies, and there's a lot to be gained from it. We've been very clear from the outset, as have the sector and the student voice, about the importance of participation in that scheme. NUS are also very concerned that there should be no negative impact on the quality of faculty. Our HE institutions, to a greater extent than FE, have faculty staff from the EU--it runs at about 11 per cent. That adds great diversity and strength to the quality of teaching within our institutions. Clearly, that is a concern for students. They want to have the best teachers, they want access to the best learning opportunities, and we've been very clear about the importance of providing security and stability for those staff, making sure we send very clear messages that they're very welcome and we value their contribution. NUS, again, also value the diversity in the student population. Again, as far as we've been able to, we've been able to give messages about the security of funding for European students for the next academic year. I wish I could go further, but that's out of my hands. We're working to the limits of what I feel comfortable in being able to guarantee without further guarantees from Westminster. So, we've been working closely with the student voice, and I think, Llyr, what's very clear is there is a consensus about what is important across the Government, the institutions and student voice. So, that is making sure we send very clear messages about Wales's institutions being open for business and that we welcome both EU and international students, that we value the contribution of faculty, and that we want to be able to continue in Horizon 2020. That's especially important if we're looking at attracting postgraduate work and postgraduate students into our system, as well as Erasmus+. The issue of post-study work visas, again, is very important. As I said, there's a consensus, I think, between the Government, the institutions and the students about what we need the UK Government to achieve for us.
  Lynne Neagle AM: Before we move on to student recruitment, it's increasingly the view of many experts that we're heading for a'no deal'Brexit. Can I ask both of you what specific plans you've put in place in the event of such a'no deal'Brexit happening and us crashing out next spring?
  Eluned Morgan AM: Well, I think it's really difficult for us to prepare for a'no deal'Brexit, but obviously we need to think through very carefully what that might look like, and I think that scenario planning is starting to happen. I think it's very different, again, for FE compared to HE. So, in relation to FE, what we do have is funding--ESF funding--which the UK Government has said that they will underwrite until 2020. So, in March next year, if there is no deal, the immediate impact on FE is unlikely to hit in the way that we may have feared. The problem then becomes: what exactly is the deal with the EU in future, because we will have some kind of relationship, and what that impact will be on the broader economy and our ability to work with companies locally, and industries, to provide that link between training needs? So, the colleges, basically, are providing the training for lots of the apprenticeships, and so if the number of companies reduces, then that is likely to have an impact. So, there are specific sectors that we are more concerned about than others. Farming is obviously one that we are concerned about, because that could have a difference in terms of day one of no deal. If your markets are not there, that could be quite an immediate impact. Health and social care--obviously, we are concerned that there are a number of people who work in that sector who are EU citizens. What is the impact? Are they going to feel unwelcome? Are they likely, then, to return home? Where will that skills gap, therefore, be? So, that's a problem for us. Construction is already an issue for us in terms of skills shortages. So, one of the things we're doing is we've developed these regional skills partnerships where we ask local employers,'What is it that you need in terms of skills development?'and we are now asking further education colleges to respond to that need. So, rather than them just getting people through the college system, who are easy to get in because they're doing courses that they're excited about, let's try and encourage them to do courses where we know there are skills shortages. So, that is a new structure that we've developed that is already having an impact; there's a PS10 million project there. So, we're already putting things in place for those situations. In manufacturing, obviously, if there's no deal, the rules of origin, that could have an immediate impact. Just-in-time--we could have real problems in terms of dislocation there; and hospitality and tourism. So, those are the sectors we have most concerns about, and all of them have very strong links to the FE sector.
  Kirsty Williams AM: From the HE perspective, from a point of principle, we just have to keep working towards some kind of deal. Although the prospect of no deal, maybe, has risen up the agenda, we have got to be consistent in our messages to the Westminster Government: we need a deal. Wales cannot afford to crash out of the EU without a deal. If that worst-case scenario was to happen, because of the underwrite guarantee, actually, for European regional development fund and European social fund programmes in the HE sector, it would be business as usual. And because of the current underwrite guarantee, the forthcoming bids for Erasmus and Horizon 2020 would be covered, but they would be the last applications that could be made. You'll be aware that there are some proposals for an extension to that guarantee, but from my understanding and our understanding of it, that would only give us third-country status for Horizon 2020 and Erasmus. What that does mean is that we would have limited access to the Horizon 2020 programme, and if you look at the activity that is currently being undertaken by the Welsh HE sector under that programme, that would mean that we'd probably lose about 50 per cent of that work, because that's the split between the bits we would still be able to access and what we are currently accessing. As I've already said, we have made a guarantee for EU student support for the next academic year, but, without clarity from the Treasury, I don't think it would be prudent of me to commit Welsh Government to anything further than that. So, we continue to push the message that a'no deal'would be catastrophic. What can we do? You'll be aware that we have been working with Universities Wales to access resources under the European transition fund, under the Global Wales programme, to look to boost international marketing of the HE sector and to talk about the strengths that we have in the sector. And we continue to look at other opportunities within the EU transition pot of money to assist the universities and the FE sector in that regard. We also continue to look to respond to the Reid review proposals, about how we can beef up our own research and continue to engage with UK Research and Innovation to make sure that, with any research money that comes out of that negotiation, Wales is in a competitive position to be able to bid successfully for that.
  Lynne Neagle AM: Okay, thank you. We're going to move on, then, to talk about student recruitment. I'm going to, because we've got a lot of questions, appeal for brief questions and answers that are as concise as possible, please. Hefin.
  Hefin David AM: How does the Welsh Government account for the fact that EU student applications in Wales this year--that Wales is the only country in the UK to have seen a significant drop?
  Kirsty Williams AM: Okay, well, I think the first thing to remember is that we will not get a full picture of student recruitment until, first of all, November and then the true picture, because some institutions, as you would know, have two admissions dates--we won't get the full picture until the spring. I think it was inevitable, given the change in Government policy with regard to student support, which had previously allowed European students to benefit from a tuition fee grant, and given the fact that that option is no longer available to them, that that has had an impact on EU recruitment, and there's no point trying to hide from that.
  Hefin David AM: So, together with leaving the EU, that's a double-whammy effect that's hitting Wales harder than the rest of the UK.
  Kirsty Williams AM: It just puts us in the same position as EU students applying to England, but it was inevitable. This was looked at by Diamond. It was anticipated that this could be a consequence of the change in policy, and I think we see that reflected in the initial figure, although, as I said, we won't get the true picture until the first census in November, and then, ultimately, the final picture in the spring.
  Hefin David AM: How concerned are you by that?
  Kirsty Williams AM: Clearly, we want our universities to be able to attract students from both the EU and from around the world. The fact that the tuition fee grant arrangements may have had an impact on European Union students at this stage does not preclude the fact that Wales, up until now, has been successful in recruiting international students. So, the change in the fee regime should not be a barrier to the recruitment of international students, because, actually, international students outside of the EU make up a bigger proportion of students not from the UK who come to our institutions.
  Hefin David AM: That's a fair point, but it's unfortunate timing, though, isn't it?
  Kirsty Williams AM: I think, from a public policy point of view and moving towards a sustainable way of funding our HE sector, then both my priority and, I would say, the priority of the institutions was to see the implementation of Diamond, which is what we have done.
  Hefin David AM: Okay, that's fine. What about the fact that we've got a relatively imbalanced higher education profile compared to other countries of the UK with regard to high, medium and low-tariff universities? We've got one high-tariff university, and they're the ones that tend to show the growth in recruitment of EU students. Are you concerned about that balance of profile in the HE sector?
  Kirsty Williams AM: As I said in answer to your question earlier, there is a difference reflected in the exposure of institutions to EU and international students. I would argue that it's not necessarily the case that institutions that are not high-tariff are not able to do very well in this sector. If you look, for instance, at Swansea University--if you look at the work Swansea University has done, that shows you what is possible.
  Hefin David AM: What is Swansea's success, then? What can we learn from Swansea?
  Kirsty Williams AM: What I think is important--and this is not about any one institution--what I think is really important is that we look to--. And I can't force institutions to do this. It's a combination, I believe, for all universities, of getting their offer right--so, having a curriculum at their institution that is attractive and offers courses that people want to study. It's about that curriculum being delivered in an excellent fashion, so high quality ratings for teaching, as well as having an infrastructure that is attractive to students. So, it's all about getting the offer right and providing what students, both domestically and internationally, want.
  Hefin David AM: But the evidence would therefore suggest that that model of success that you've just outlined is happening in Swansea but it isn't happening in other institutions, and they're seeing a drop.
  Kirsty Williams AM: Well, as I said, I think what we can see from Cardiff, Swansea and others is that it is possible to do very well in the sector.
  Hefin David AM: So, Cardiff, Swansea and Bangor--but the others, not.
  Kirsty Williams AM: As I said, what we can see is that, if you get the offer right, I think we have something very special that the HE sector can market itself on.
  Lynne Neagle AM: Llyr, you've got a supplementary.
  Llyr Gruffydd AM: Just coming back to the drop in EU students, you mentioned that one of the reasons probably is the change in the funding that's available to students coming here. So, does that suggest that, under the current regime, Wales was punching above its weight in terms of attracting students and we've lost that advantage? I know we're gaining in other ways in introducing the new system, but really we're not much different to England in terms of fees now, so why would they come to Wales as opposed to going anywhere else?
  Kirsty Williams AM: I think you're right; there was an added incentive, potentially, to come to a Welsh institution because of the availability of the tuition fee grant. That advantage is no longer there, which is why we need to work alongside the sector, as we're doing with the Global Wales programme, to increase their ability to market HE in the round across the world. I think we've got a strong offer that we can speak to people about. I'm very proud of what our institutions can deliver for people. It's a fantastic, warm environment to come and study in, at great institutions. There's something for everybody, whether you want to be in a city like Cardiff or whether you want a coastal experience in a small town like Aber. So, we've got a lot to offer and that's why it's really important that, although we have seen a change in the tuition fees, which may have an impact, we are investing with universities, for instance, in the Global Wales programme.
  Lynne Neagle AM: In terms of the drop that we've seen in Wales, which is differential amongst institutions, will you be taking any specific action to try and prevent Brexit exacerbating that?
  Kirsty Williams AM: We are working with HEFCW and individual institutions, as I said, to test their preparedness. We can't tell them what to do in that sense, but we can, because of our governance arrangements and HEFCW's monitoring arrangements, continue to test with them. I meet regularly with vice-chancellors and separately with the chairs of the institutions and separately again with HEFCW representatives, and the sustainability of the sector and recruitment issues is always something that is on the agenda.
  Lynne Neagle AM: Thank you. Julie.
  Julie Morgan AM: The additional PS6. 4 million that went to HEFCW in the 2017-18 year, which I think you say is partly because of Brexit and partly because of demographic and recruitment challenges, what do you expect to see as a result of that spending?
  Kirsty Williams AM: That funding was allocated, as I said, to enable HEFCW to deal with any short-term implications arising out of demographic changes, because we've seen a drop in the number of 18-year-olds, and the initial implications of EU transition. It was allocated as part of HEFCW's overall grant in aid, and therefore the council was given discretion as to how it was to be apportioned to the sector. The money was brought forward a year, because, in conversations with HEFCW and the institutions, they felt that that money would be more useful earlier on. So, it was money that was brought forward into the allocation for 2017-18, as opposed to 2018-19, because they wanted to have that resource earlier rather than later. With regard to additional resources, you'll be aware that we have made an additional resource of PS5 million available to mitigate the freeze in tuition fees, and PS5 million has been made available to HEFCW to kick-start the work on postgraduate support until we're in a position to fully implement Diamond at the postgraduate level.
  Julie Morgan AM: You say that the money is used at the discretion of the universities. So, you don't have an analysis of how that was spent.
  Kirsty Williams AM: The financial allocation, as I said, was agreed with the funding council and it was there to help universities with any cash flow issues, but if you'd like further details I can provide those as much as I'm able.
  Julie Morgan AM: I think it would be interesting if we know what the money was spent on and, of course, that money is now not available for the next financial year, so there's no way of carrying on what they were doing with it, presumably.
  Kirsty Williams AM: Well, as I said, it was part of the overall allocation to HEFCW. With specific regard to dealing with the impact of Brexit, you'll be aware that we have reached an agreement in principle on the funding of PS3. 5 million to the Global Wales initiative. This was an application that came in from Universities Wales looking at specifically targeting and beefing up international work and international recruitment work to support them at this time, and we're currently working with Universities Wales on the exact details and outcomes they would expect from that investment.
  Julie Morgan AM: And do you have any estimate of how many students you hope to attract by that?
  Kirsty Williams AM: That is subject to continuing negotiations with Universities Wales before we let any contracts with them. What's important is that that work is based on research that has been done by Universities Wales to look at the optimum markets that we should be targeting, specifically the United States of America and Vietnam.
  Julie Morgan AM: And will this money be used equally between all the universities?
  Kirsty Williams AM: We expect that all institutions--should they have a desire to participate--will be able to be assisted, as well as the overall global branding from Universities Wales and the new Study in Wales initiative.
  Julie Morgan AM: Thank you. I think we've covered the EU student fees, haven't we?
  Lynne Neagle AM: Okay. Do you want to ask question 12?
  Julie Morgan AM: Has the Welsh Government explored the possibility of looking at different immigration rules for international and EU students who may wish to study here?
  Kirsty Williams AM: Okay. Well, with regard to immigration, clearly, this is something, at the moment, that is out of our hands, and I have to say, it hasn't got off to a great start when initially the post-study work visas were issued just for a number of institutions in the south-east of England, with no consultation with us and I don't believe with the Scottish Government either. So, we have campaigned, pushed, cajoled, lobbied, and I was very glad that in December last year, the Home Office did then make that scheme available to Cardiff and to Trinity Saint David. We continue to press the point that we do not believe that, first of all, international students should be included in any immigration targets. I think all the evidence suggests that the British public don't regard international students as immigrants, and therefore we do need to make sure that they are taken out of the targets and we can continue to press that message with the UK Government. At the moment, you'll be aware that Welsh Government has looked at a specific piece of work on whether there was any scope for specific immigration policy for Wales, although I must say that was mostly in the field of actually the workforce rather than students. You'll be aware that this week the Government's migration advisory committee--there are so many committees these days--have said that they don't believe that there is a case for a separate provision for EU students, as opposed to international students. But we want an immigration system that makes it as easy as possible for those students who want to benefit from education in Wales, and indeed the UK, to be able to do so.
  Lynne Neagle AM: Thank you. Llyr.
  Llyr Gruffydd AM: So, what are we doing from now on in then? Are we just waiting to see or are we continuing to push?
  Kirsty Williams AM: No--gosh--Llyr, we continue to push the case at the official level, and at the moment, I'm trying to convene a quadrilateral, if it can be quadrilateral in the sense that Northern Ireland aren't up and running--but certainly with officials from Northern Ireland. We're trying to arrange another quadrilateral between myself, the HE Minister for England and the new HE Minister for Scotland. If I can speak candidly, I don't believe that there's any difference between our view, with regard to the status of international students, and the views of English Ministers within the department in England. It is convincing the Home Office of that case. So, I don't think we need to persuade Sam Gyimah about the importance of this. Jo Johnson got, I think the current Minister gets it--it's a question of whether we can persuade the Home Office of that particular case.
  Lynne Neagle AM: Okay. Thank you. The next questions are from John Griffiths.
  John Griffiths AM: I have some questions on the sustainability of higher and further education. Firstly, with regard to higher education, we heard that, even without Brexit, higher education is in managed deficit, whilst the funding announcements from Diamond and Reid are awaited. So, is that a concern to Welsh Government, and could Welsh Government take away that uncertainty by outlining a clear funding commitment to the Diamond and Reid reviews?
  Kirsty Williams AM: Welsh Government is fully committed, John, to implementing the Diamond review proposals. It's a commitment that was an element of the agreement between myself and the First Minister that brought me into the administration, and we have been very clear with HEFCW about our expectations and what the implementation of Diamond will mean for grant going to HEFCW. And we've shared those figures with them. With regard to Reid, we continue within Government to discuss how we can implement the recommendations of Reid, but one of the whole principles behind Diamond was to move us to a more sustainable funding settlement for the HE sector in the round, that is fair to students, encourages those with the ability to partake in higher education to do so, especially from those from a poorer background, as well as being able to provide our institutions with the resources that they need.
  John Griffiths AM: So, you don't accept, then, that there hasn't been a clear funding commitment from Welsh Government to those reviews--the Diamond and Reid reviews?
  Kirsty Williams AM: With regard to Diamond, I would absolutely refute that. We have been very clear and we have shown HEFCW our analysis of the figures going forward in relation to what is sometimes called within the sector the'Diamond dividend', although the Diamond dividend is never as big as people imagine the Diamond dividend to be. But we've been absolutely clear with HEFCW and the sector on what that will mean. Now, with regard to Reid, those are ongoing discussions that form part of the normal budgetary process within the Government, but I think we have been as clear as we can be with regard to Diamond.
  John Griffiths AM: Okay. The second question, really, is about HE and FE and it's about European funding, which, of course, has been and is on a multi-year basis, which gives, I think, a lot of security and comfort to the sectors, knowing what the budgets will be over a period of time. So, moving from that to a yearly budgeting situation would be worrying. So, would you commit to introducing multi-year funding settlements for HE, and indeed for FE, moving forward beyond Brexit?
  Eluned Morgan AM: Shall I take this and give you a little bit of a break? She's not very well. I think the multi-annual nature of the European funding programmes has been very, very useful. People can plan, you can get staffing in place, you can have really strategic aims and I think that's really useful for the institutions involved. Of course, what we don't have is multi-annual budgeting from the UK Government. So, whilst I think we would, in an ideal world, like to see a better view of what's coming our way, it's extremely difficult for us to be able to offer that without having that multi-annual funding commitment from the UK Government. So, I think that will be a major, major loss for the institutions concerned. Of course, it's not just about ESF and apprenticeships--it's also about ERDF funding. So, you mustn't forget that, actually, there's been a lot of ERDF funding that's gone into these institutions. Swansea University, you'll be aware, has been practically rebuilt with ERDF. Also, FE colleges--we've got Coleg y Cymoedd, the college in Blaenau Gwent. These have been built, largely, with European funding. It's because of the multi-annual nature of the fact that we've been able to prepare for them that they have been able to progress. So, that will be a huge loss, but I think it's really important that we don't forget the ERDF aspect in addition to the ESF impact that there will be on these institutions.
  John Griffiths AM: Okay. As far as further education is concerned, in your paper you state that it's a priority to support the FE sector to maintain all the learning opportunities that currently take place under European Union funding. So, would you be able to give the committee an idea of the level of resource you would estimate that the sector requires to achieve that priority, and--? I'll stop there for the moment.
  Eluned Morgan AM: I think it is important. What we've said is that we want to maintain that range of learning opportunities that is provided by EU funding. I think we've got to be clear that we are not working to this scenario. I think we've got to--. The UK Government have made us some promises and they've made some commitments, and we need to hold them to that, and so let's keep the pressure on. The moment we start saying,'No, it's all going to be okay, we'll sort ourselves out'--I think that would be a huge mistake. We have been promised that we will not lose a penny as a result of Brexit, and we need to make sure that we keep them to that commitment. I think it was quite interesting to hear what Philip Hammond said yesterday when he was in Wales, saying that the money that we will receive will depend on the future shape of the economy, which implies that he has no idea what's going to happen there, and that that shared prosperity fund will be designed around the deal. Well, that's really not what we're interested in. We were made some promises, and we need them to commit to those promises. I think we have some real concerns about the shared prosperity fund not really following through on the commitments that were made during the Brexit referendum. But, in terms of the replacements, we'd be looking at about PS15 million a year, and that would be a huge impact for us, but we're not looking at that--I don't think we should be--because they made some promises.
  John Griffiths AM: So, could you say that, if they keep their promises, then at least that level of funding would be maintained?
  Eluned Morgan AM: I think that would be a minimum, but that's just one aspect of it. That's not including the whole workplace learning money on top of that.
  John Griffiths AM: Okay.
  Lynne Neagle AM: Thank you. Suzy, you had a supplementary.
  Suzy Davies AM: Yes, just very quickly on the multi-annual point, obviously I recognise that we're talking about six or seven-year cycles with Europe, and I completely take the point that you don't really know from year to year what your budget's going to be, but Welsh Government does make multi-annual commitments. I think you did it yesterday, actually--the capital commitment is over more than one year. How are you able to do that and yet not quite feel confident that you can do that with--well, both your sectors, really?
  Eluned Morgan AM: I think it's probably easier to do with capital than it is with revenue, so that's what would make the difference. But it's--. These institutions are interested in revenue, because that's what supports the staff. The one thing we all know is that employment opportunities today--the transitional nature of employment and the fact that people are not getting the kind of contracts that we'd like them to get--that makes their lives very precarious and they're less likely, then, to be committed to those institutions. I think it's a really, really concerning thing, because what makes these institutions work well is their staff, so that makes life very, very difficult without that multi-annual commitment.
  Suzy Davies AM: They also have to raise some of their own money as well--we mustn't forget that.
  Eluned Morgan AM: No, I think that's right, and I think that there's more that these institutions can do in terms of their own funding and being more responsive to employers and the need for skills in their areas.
  Suzy Davies AM: Okay, thank you. Thank you, Chair.
  Lynne Neagle AM: So, given the precarious state of planning for the finances, are you considering letting universities charge EU students international fees?
  Kirsty Williams AM: We don't regulate the ability for universities to set fees for international students. They would be in a position to--[Inaudible. ] They are in a position to set international fees at a rate that, I guess, they feel is appropriate for the provision that they give to those students.
  Lynne Neagle AM: Okay, right. We'll move on, then, to questions from Llyr.
  Llyr Gruffydd AM: Thank you. I just wanted to pick up on the funding of apprenticeships and the long-term funding, because the ESF--the commitments take us to 2023, which takes us beyond any transition period. So, I just want to hear from you that there are assurances that the apprenticeship programme can be delivered as a whole, come what may.
  Eluned Morgan AM: Well, we're fine until 2020, because we've had that guarantee from the Government. The issue for us is the n+2 that we would have if we do have some kind of transition deal or an agreement with the EU. So, there is a risk and there is concern, beyond 2020, that that would create problems if they don't agree to fund that, which is the expectation that we have.
  Llyr Gruffydd AM: But it is a prospect that this wouldn't be achieved as you foresee.
  Eluned Morgan AM: Well, we do hope, because we've had the pledges and commitments from the Government, that they will respect what we expected and what was expected by these institutions that have had the commitment of the funding.
  Llyr Gruffydd AM: So, to what extent does that undermine the current work? Because institutions want to enter into agreements with providers and so on. Businesses want to know, if they're starting on some sort of journey, that they are going to get to the end of it some years down the line. That must be undermining a lot of the work that's going on now.
  Eluned Morgan AM: Well, as I said, because the guarantee is there until 2020, I think that, for now, people are willing to go into those agreements, and I hope that we'll have a better outlook by November of the direction we're moving in. But I don't think it's had an impact. You have to remember that the number of apprenticeships in Wales is rising, while they've collapsed entirely in England. So, it is important that we do continue, and it's important that we don't create an atmosphere here that's going to undermine the confidence of our employers in committing to training in the workplace.
  Llyr Gruffydd AM: Are you confident that the Government will achieve its targets in this context?
  Eluned Morgan AM: Yes. We're on target to reach 100,000 apprenticeships. I think we're slightly ahead of that target, I'm pleased to say. So, of course, our hope is to do that. But let's be clear: if there is a'no deal'scenario, that will have an impact on the economy, and who knows what will happen then to some of these companies that are reliant on the EU.
  Llyr Gruffydd AM: Talking about the impact on the wider economy, on the point you made earlier that it's not just the direct effect on these institutions, but also on the businesses that they engage with, that is a concern in this context, that means, of course, that there is a lot of pressure in this context on the work that other departments in the Government are doing, because perhaps they are the ones dealing with some of this. So, could you tell us a little bit about how you're working with Ministers and Cabinet Secretaries and other departments within the Government to safeguard these interests?
  Eluned Morgan AM: So, as part of the employability programme, I have started going round every member of the Cabinet to ask what the impact will be on them--for example, in health, and, certainly, the economy, but here are many other areas. What's important for us is that we do collaborate and we do get this analysis, but we hope to do that on the ground through the regional skills partnerships. That's our way of ensuring that we can have an understanding, on the ground, of what's needed by employers. And so ensuring that people feed into that and that we respond to those requirements--that's where we're focusing our work. So, we're asking, for example, health boards to ensure that they feed into the regional skills partnerships.
  Llyr Gruffydd AM: Is there a danger that we're a little bit behind in this process? Because Brexit could be upon us in no time at all, and, of course, this work is still ongoing.
  Eluned Morgan AM: Well, I have been pushing and ensuring that in the direct areas facing the greatest risk, and agriculture's one of those, of course--. We have been pushing to see what we can do further, so, for example, I'm in the process of developing a policy on rural skills at present because I do think it's important that we do focus on those sectors that are likely to suffer the worst impact if the worst does happen. So, those preparations are in place as far as they can be, but, of course, it's very difficult without knowing to what extent it's going to impact on us.
  Llyr Gruffydd AM: And each sector's running on its own timescale, I would presume. But, as you've mentioned rural skills, when do you foresee that that work will appear, and when will plans or schemes or whatever you're intending to put in place see the light of day?
  Eluned Morgan AM: Well, we hope during this term that that will be published or announced. So, certainly, it is something that we have been discussing with people in rural areas directly, with the colleges, to see what the provision is there and to what extent we need to expand that, and to what extent we will need to change and move really quickly if there is no deal. That's something that I think we have to learn and we need to convince the FE sector about in terms of moving more quickly and to be more responsive to the demand that there is in the workplace.
  Llyr Gruffydd AM: Yes, because there is the dilemma you touched on earlier about providing the skills that are required for the economy and providing the courses that are easy to fill. That is a live discussion across FE and HE, but you're confident that that discussion is taking place in a constructive and positive way and moving in the right direction.
  Eluned Morgan AM: Well, it's helped that we've put PS10 million on the table, because they do understand now that we are serious about our aim of ensuring that they do respond to what employers are asking for. So that has helped a lot in terms of focus and, of course, we're in the middle of a review now as well in terms of how we fund FE, and that will certainly be a part of that.
  Llyr Gruffydd AM: Okay, thanks.
  Lynne Neagle AM: Thank you. Can I just go back--?
  Kirsty Williams AM: Sorry, Chair, could I just clarify something? The last question you asked me about--
  Lynne Neagle AM: I was just going to go back to that, yes.
  Kirsty Williams AM: --fees--. Sorry. Of course, that is in the context of a'no deal'scenario. There could be a scenario where there are reciprocal arrangements, so, if a deal was reached with the European Union that established the principle of reciprocal arrangements, then, obviously, the ability of the HE institutions to charge international fees would be curtailed. I just want to make that clear.
  Lynne Neagle AM: If there's not that agreement--
  Kirsty Williams AM: If there's no deal--
  Lynne Neagle AM: --then it will be open to universities to charge market-driven, international rates.
  Kirsty Williams AM: Yes, that's right. Sorry, I just wanted to clarify. I should have made it very clear that the answer I gave was in the context of no deal, which is what we seem to be talking about mostly this morning, but if there was a deal to have reciprocal arrangements, then that ability, obviously, would be curtailed.
  Lynne Neagle AM: Okay, thank you. Are there any other questions from Members? No. Okay, well, can I thank the Cabinet Secretary, the Minister and the officials for attending and for answering all our questions? We very much appreciate your time. As usual, you'll be sent a transcript to check for accuracy after the meeting. Thank you very much. Okay. Item 5, then, is papers to note. Members will see that there are 18 papers to note, so I'd like to suggest that we note them as a block, please, and just to flag that I would like to return to paper to note 18 when we go into private. Is that okay with everyone? Everyone happy to note those? Thank you. Item 6, 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 the whole of the meeting next week? Are Members content? Okay, thank you.
output: While talking about the official commitments to help the Wales universities to get through the transition period, Suzy Davies compared the two kinds of multi-annual commitments that one was related to revenue and the other to capital. She did not think that either of them would work, however, according to Eluned Morgan, the official commitment related to capital would matter more under such a transition period. Even if most people would focus on the revenue, they should pay attention to the capital for that it is exactly the capital that ensured the institutions to operate well under the dilemma.