Vice-Chancellor’s March all-staff email

Dear colleague

Yesterday I took part in a photo shoot for the Students’ Union’s joint campaign with the University to persuade students to register to vote.  This involved giving away free ice cream on a beautiful but freezing March day.  It seemed to be working very well though, which is good because as I mentioned last time, a change in the way voter registration takes place means that it’s important that students take the few minutes needed to register themselves.

The General Election is almost upon us and is one of the biggest uncertainties surrounding higher education in the UK.  Higher education seems over a period of years to have moved from a backwater where there would be occasional tweaks to the system and flexing of the funding to one where the whole basis of how we work is potentially subject to radical change.  The introduction of higher fees and gradual uncapping of student numbers after the 2010 election has dramatically changed the higher education landscape.  And while it is wholly unclear what the next government will look like – at the time of writing both main parties remain neck and neck in the polls with both of them far short of any prospect of an absolute majority – we do know that the next government will be led either by Labour with Ed Miliband at the helm or by the Conservatives with David Cameron continuing as Prime Minister.  What might either of these outcomes mean for higher education?  It’s impossible to say with any certainty because of course there could be all sorts of political dynamics to which either a coalition or a minority government would be subject.  But both main parties have now said enough about their policies on universities and related issues such as immigration to give us some clues.

A Labour government led by Ed Miliband would set the maximum fee level that English universities could charge at £6000.  There has been an indication that the funding gap this would leave in England – around £3bn – would be made up by changing the tax incentives around pensions; the idea being, presumably, that those who had already benefited from a successful career, perhaps on the basis of a university education, could afford to make a sacrifice in support of those at a much earlier stage in life.  Much will depend on the amount of money that actually comes back to universities via the funding council; money will be tight and the difference might not be made up in full.  One effect of this change is that it might make legislation to regulate universities in England less of a priority since the funding council would once again have financial levers and could regulate by setting conditions related to the teaching grant.  What this would all mean for Wales is an open question; here too the funding gap would need to be filled although there would be big savings on the tuition fee grant that could be redeployed.  Making changes to funding systems is notoriously complex, however, so it’s fortunate that in Wales we already have a review of student funding in place which will be able to consider these matters, including any unintended effects.  We could expect a change to the fee system in England to cause a degree of turbulence and uncertainty, as these things do, which would make planning difficult.  On immigration, Labour have made the very welcome announcement that they would remove students from the net migration count and would explore ways of improving the post-study work visa.  A more obviously welcoming tone from the Home Office would certainly be helpful.  On research funding Labour have made positive noises, but there has been no indication of whether the cash ring-fence round the science budget will be continued.  It’s worth noting that before the 2010 election, the then Secretary of State Peter Mandelson warned us to expect to have to make efficiency savings of 20-25%, which would certainly have affected the cash available for funding research.

If the new government is led by David Cameron we would have no reason to expect that the fee system would change.  It’s conceivable that there might be a review of course, and what we do know is that there is little political appetite for raising the £9000 cap on fees.  By the end of the next parliament, then, the £9000 fee would only be worth something in the region of £7500 at 2012 prices.  Or to put it another way, university costs will continue to rise year on year but income per student won’t. As the economy picks up the affordability of the scheme improves (because the Treasury can anticipate that more of the money lent by the Student Loan Company will be paid back), but in time it will nevertheless need to be reformed to some degree if it is to be sustainable. What effect any such reform would have on the Welsh system remains to be seen and we will always be faced with the problem that changes made in England could compel changes in Wales, so long as we remain in a competitive system with English universities.  On immigration, a Conservative-led government looks unlikely to dismantle the hurdles that have been systematically placed in the way of international students wishing to come to this country to study.  Theresa May recently said that students should stay within the net migration target if there is another Conservative administration, although it is difficult to find anybody else who agrees with that.  Not even UKIP would keep students in that target.  So we would clearly continue to face risks around visa policy in the absence of any reassurances from the Conservatives on this point.  There is no question that the Coalition’s visa policy has been damaging to universities and we will continue to argue strongly that it should be changed.  The process of obtaining a visa to study here should be streamlined and made much more user-friendly, the additional costs that have been imposed should be reduced and the post-study work visa should be restored.  On research, the Chancellor George Osborne has been a notable supporter of science and research funding during this parliament, and has managed to retain the same level of cash for this area as we had in 2010, although inflation will have eroded its value somewhat.  This against a background of deep cuts in other areas.  The track record says that there would be likely to be a continued emphasis on the importance of investing in science and innovation if there is another Conservative-led administration.

The related questions of the UK’s relationship with Europe and the future of the UK itself will affect all of us.  If Cameron wins we will have an in-out referendum on Europe in 2017, or perhaps sooner if UKIP have influence in the new parliament.  As I’ve said before, exit from Europe would be damaging for UK universities because operating in a community of 500 million citizens from 27 member states is much better in terms of research opportunities and student and staff mobility, not to mention diversity, than not doing so.  Personally I don’t think we should be afraid of a referendum because the arguments for staying in are strong, but there is clearly the possibility that the UK might leave.  That in turn might strengthen the case for Scottish independence, and indeed the recent dramatic rise of the SNP makes that possibility more likely once again.  The influence of smaller parties on a minority government or the lead partner in a coalition can be considerable, and so it’s not impossible to envisage a scenario where the UK leaves the EU and then begins a process of breaking up itself, or indeed these things happening in parallel.

The sum total of the above is that we face a period of extreme uncertainty.  The only thing we can be sure about is that whatever government is in power, resources will be very tight.  Short of a complete reorganization of our financial and economic structures and system, the state of the public finances dictates that there will be large spending cuts still to come.  There is a comprehensive spending review in the autumn which could result in less money flowing to higher education.  The visa policy and the uncertain constitutional future of the UK could make it a less attractive place to study and work for the best talents.  Changes to the student funding system could have unintended effects.

Given that we have little or no control over many of these matters, it makes sense to focus on the things we can control.  We had some great news this week in that we have received an award of £17.3m which will be externally matched at a rate of 2:1. The money is from the UK Research Partnership Investment Fund and will allow us to set up a Research Foundation in Semiconductor Technology in partnership with the semiconductor company IQE, with the aim of driving innovation and economic growth.  This award builds on our great REF success and will cement our well-established partnership with IQE to create a global hub for compound semiconductor technology.  It was also great to see that research by Professor Emma Renold of the School of Social Sciences was credited as one of the catalysts for significant amendments to the Welsh Government’s Violence against Women, Domestic Abuse and Sexual Violence bill.  This is a hugely important issue for society that is increasingly affecting universities (or at the very least we are becoming much more aware of it). I’m delighted that Professor Renold has been able to have such positive influence in shaping government policy and that Cardiff University is able to lead the way.  I will come back to this matter in the future, so far as the University itself is concerned.

These kinds of successes will allow us to get ahead of the game and deal with whatever external developments there may be.  It would be foolish not to take account of the changing political landscape, but experience shows that universities cope well with political change and are capable of fighting their corner, as we do on visa policy and on Europe, not to mention various funding issues.  But at base we will succeed by concentrating on what we’re there for, and what we’re good at, and I’m very confident of the future in that respect.

With best wishes

Colin Riordan

Vice-Chancellor