Welsh Affairs Committee
Oral evidence: University Research Funding, HC 1261
Tuesday 13 June 2023
Ordered by the House of Commons to be published on 13 June 2023.
Members present: Stephen Crabb (Chair); Simon Baynes; Virginia Crosbie; Ruth Jones; Mr Rob Roberts.
Questions 53 - 84
Witnesses
I: Professor Ian Walsh, Provost of Swansea and Cardiff Campuses. University of Wales Trinity Saint David; Dr Ben Calvert, Vice-Chancellor, University of South Wales; Professor Maria Hinfelaar, Vice-Chancellor and Chief Executive. Wrexham Glyndwr University; and Professor Cara Aitchinson, President and Vice-Chancellor, Cardiff Metropolitan University.
Written evidence from witnesses:
University of South Wales Trinity Saint David
Cardiff Metropolitan University
Witnesses: Professor Ian Walsh, Dr Ben Calvert, Professor Maria Hinfelaar and Professor Cara Aitchinson.
Q53 Chair: Good morning. Welcome to this meeting of the Welsh Affairs Committee where we are continuing our examination of research funding for universities in Wales. We are delighted that we are joined by Professor Cara Aitchinson, President and Vice-Chancellor of Cardiff Metropolitan University, Professor Ian Walsh, Provost of the University of Wales Trinity Saint David, Professor Maria Hinfelaar, Vice-Chancellor and Chief Executive of Wrexham University, and Dr Ben Calvert, Vice-Chancellor of the University of South Wales. We are very grateful that you have been able to give us your time this morning. My plea, as ever, to my colleagues asking questions and to our witnesses is if we can keep questions and answers as concise as possible, that will help us get through the material in the time available.
I will go into it by asking an initial question about how you would characterise the overall contribution of EU structural funds to the research activity that your universities have been undertaking in recent years. I hope that will lead us into a discussion about the consequences and impact of changes to that funding. Dr Calvert, would you like to go first?
Dr Calvert: Thank you. It has been significant. We are not a research-intensive institution. In your previous meetings you have been talking to people with greater research intensity, but in our own terms this is very significant. Our access to EU structural funding is around £3 million, I think. In our budget last year it was around £4 million. More important than that is what it has enabled us to do and the impact that we have been able to make in our region from doing it. Access to those funds has given us an opportunity to undertake long-term, collaborative, strategic partnerships.
By way of example, we participated heavily in the KESS scheme, which is placing PhD students in businesses around our region. We have had 40 to 50 PhD students who have been engaged in that programme. That has been very helpful for SMEs particularly, who are able to invest significantly in their own activities. Of course we are in an SME-dominated hinterland, so that is important, but it is not just SMEs. We have had 12 or 13 PhD students who have been placed with Tata Steel on programmes around decarbonising the steel plant. We do the laboratory work in Treforest and then we go to the plant to scale up.
I characterise the access to EU funding as enabling long-term regional, collaborative, against national priorities, strategic research activity. While we are not research-intensive, in that regard it is a very important part of a smaller portfolio. It has been significant and the impact potentially will be significant if it is not replaced.
Q54 Chair: Thank you very much. Professor Hinfelaar, in the time that you have been at Wrexham University do you feel that you can see a clear line between the way that European money, structural funds, has been used by the university and actual real outcomes in the wider economy in which the university sits?
Professor Hinfelaar: Yes, I can. The main campus is based in north-east Wales, which was not a priority zone for European regional development funding, but we also have a research campus called OpTIC, which engages in research in photonics and optics. That is based in mid-north Wales in St Asaph and that campus was eligible for engaging with ESF funding and ERDF funding. The key project in recent years, which had a huge impact, is the centre for photonics expertise. Over a period of four years, that received £7.3 million and it is a collaboration that we were leading. Members were USW, Trinity Saint David I think were involved as well, Aberystwyth—a number of Welsh universities—but most importantly working with local small and medium-sized enterprises. We supported over 100 companies over four years, across the territory of these four universities. There has been a powerful impact on job creation but also retention of employment and operative power within those organisations.
It has proved very difficult to fill that gap because as this is close to market research, working with individual companies and helping solve their problems using this particular technology and expertise, every single case is different. It is not the big solution to everything, which is what UKRI funding will tend to look for. UKRI funding tends to be focused on very large projects where there is a particular scientific development that can be replicated across a particular sector, with obviously huge benefits. The typical ERDF and ESF funding tends to be smaller in focus, more localised, and that is where we have a gap now. We are still working through trying to find replacement funding, which is really difficult, and we want to keep the momentum going, so that is in play.
Q55 Chair: One of the insights we heard from the previous group of Welsh universities that we had in an earlier evidence session was about the historic dependence of Welsh universities on European funding for research and innovation in a way that is perhaps not comparable with English universities. We talked a bit about why that was the case and whether Welsh Government have been spending less than the equivalent amount spent in England on that kind of innovation funding. Is that a picture that you recognise?
Professor Hinfelaar: I will kick off and then others might want to add to that. I think it is a mix because there was the ERDF funding. The Welsh Government, through the funding council HEFCW, have also put funding in place under the Welsh Innovation Network. In addition to that, we have the equivalent of what in England is referred to HEIF funding. In Wales it is called the research innovation Wales funding, which is about innovation and working with companies in the area, knowledge transfer partnerships, and that is really beneficial. The amount of funding is not at the same level as European research funding would have brought. I suppose it is at the system level where that dependency has evolved rather than at the individual university level.
Chair: That is helpful. Thank you.
Professor Walsh: The key thing to understand for me is that you have to look at the nature of the Welsh economy, which is largely based upon SMEs and microenterprises. We don’t have many large corporate headquarters in Wales; therefore, much of the R&D is undertaken by small and medium firms who rely upon the relationship with sympathetic universities who understand their plight, who are rooted in the communities and are able to understand the very real challenges those companies face day to day in developing products, taking them from concept through to production reality. Much of our support for industry funded through ERDF and ESF is very focused at that local level. It is not the kind of research typically funded by UKRI, which may be more international and focused on publishing. Ours is focused upon delivering results to the economy and seeking to move the needle to raise the GVA in Wales, which is historically below that engendered in the UK.
The funding that we have received through Europe has been instrumental in creating the ecosystem whereby SMEs are able to start competing with businesses across the UK on a slightly more equal footing. As an aside, we have been doing a project recently and as part of the research—this is a couple of science parks around the Oxford area—we asked companies there why they located. Yes, it was because of access to high-level research but actually it was because of access to hedge fund managers who lived in that part of the world. We don’t have that kind of ecosystem in Wales, so European funding, ERDF or ESF, has been instrumental in helping us to level up the playing field for Welsh SMEs.
Q56 Chair: Your university is in close proximity to the Mid and West Wales region, which has been one of the primary beneficiaries of European funding over the 20 years. What highlights or points of success would you point to to show how well European money has been used through the university to, as you say, move the needle?
Professor Walsh: I will cherry-pick one project as an example of a case in point. For the last round we have been involved in a four-way partnership with the Life Sciences Hub in Cardiff Bay, Cardiff University Medical School and Swansea University Medical School on a project called Accelerate. This project delivered support for companies seeking to develop medical products or devices and to connect them with the health service. In the course of the last four or five years—I will quote some figures—we have worked with 133 companies to help them introduce new products to their portfolio and 158 new products to the market. We have been involved in producing 163 new jobs. That is an example of real-world impact. The element in our university is called ATiC but the overall project was called Accelerate.
We are looking with those partners now beyond European funding to see how we can maintain those relationships and partnerships in a more standalone world, where we don’t have that big block grant. That has delivered real tangible benefits across not just west Wales and the valleys but also into east Wales. The longer-term benefits are the relationships that have been forged between the universities, two of which are research-intensive and our own, which is research-informed. It has allowed us, as Graeme Reid noted, to have added strength and diversity, the diversity of universities working in harmony with each other to deliver real benefits.
Q57 Chair: Thank you. Drawing again on some of what we heard from the first panel of Welsh universities, all of them spoke to us about this sense of a cliff edge approaching with the ending of European funds and lack of clarity about what will follow that. By their very nature, European structural funds are time-limited, but they are clearly being used to fund projects that are meant to be fairly permanent and long standing. We got a sense from them that they are quite heavily exposed to the change in the funding scenario; they quoted numbers of potential job losses and their serious concerns about what is following. Am I right to say that you, the cohort of Welsh universities in front of us, are in a similar position, or is it a bit different because of the partnerships and other activities that you have been talking about? Professor Walsh, would you like to continue your remarks?
Professor Walsh: I would not use the word “cliff edge” but the words “a steep and rapid transition”. We were facing real concerns and are still facing concerns about securing the continued engagement of some really talented people across the universities in Wales whom we are in danger of losing because of the uncertainty. Obviously there was a lot of discussion around SPF as being the answer going forward but I think it is clear—my colleagues can speak for themselves—that shared prosperity has been maybe a match towards the social fund aspect and not towards the ERDF, which had a very distinctive R&I strand. We have had to work really hard in the last couple of years to transition teams. I would not say that it is an absolute cliff edge but we need support to help us through the transition period to adjust to the new realities.
I will make one very quick point. The nature of the European funding was that your team was committed to delivering the outputs of that European-funded project. I think all the universities were faithful in the aim, which means that then you can’t release those teams to bid for UKRI money until they have finished their ERDF. There is that transition period to take us from heavy dependence on ERDF and ESF through to what comes next, and what comes next needs to have a slightly longer timescale for project planning.
Q58 Chair: Thank you very much. Professor Aitchinson, you and your teams at Cardiff Met have worked incredibly hard to build a really strong brand around the university and, certainly from the information we have seen, done some quite distinctive and innovative things in different sectors, not least tech. Do you look slightly enviously at the amount of European funding that Cardiff University has received?
Professor Aitchinson: No. I think the amount we have received is probably proportionate to our scale, albeit that we have grown significantly over the last five or six years. Building on Professor Walsh’s comments, I think for us the important thing about EU structural funds was the scale geographically. They allowed us to engage in pan-Wales projects of not just SMEs but all sorts of businesses and industries, but they also operated at a longer timescale. In other words, they were bigger projects, which I think means they were more meaningful. They had a more meaningful impact over a larger geographical area over a long period.
I will give you one example from Cardiff Met, from the opposite end of the tech work that we have been doing; it is very fundamental, basic work around food and food production. The food and drink industry is an incredibly important sector to Wales, not just domestically but also for exports. We have received just over £20 million from structural funding since 2017. About half of that has been directed at project called the HELIX project, which has been about food innovation: how do we develop new products that sustain businesses and communities, particularly in rural areas; how do we get those products to market; how do we cope with changing markets particularly post-Brexit?
I will give some stats, because I think the impact is very meaningful. We have undertaken quite extensive economic impact analyses. There is a £206 million economic impact from Project HELIX. It is a pan-Wales project. We work in Anglesey, Ceredigion and Cardiff. It straddles HE and FE, which is very timely with the new CTER work. It has created or protected 2,800 jobs and developed 713 new products. Many of the products that we see in shops and supermarkets in Wales have come through our food innovation centre. It has accessed 281 new markets. This is a phenomenal impact for a sector that is absolutely fundamental to the sustainability of communities across Wales. It is not a south-east or a north Wales issue. It has kept west Wales people in jobs and has attracted people to the region.
For us, the real challenge is how we can translate those impacts into similar impacts from the Shared Prosperity Fund, which has a much shorter time horizon and has a narrower geographical focus because of its relationship with local authorities. We want to think big; we know there are big challenges in Wales and we want to make a positive economic impact, but to do that the funding mechanisms also have to think big in geography and timescale.
Q59 Chair: On the conversations that you are having around what now follows—you talked about the Shared Prosperity Fund—have you had any meaningful engagement with either UK Government or Welsh Government on this? Who do you speak to about these strategic issues?
Professor Aitchinson: We have, everything from the local authority, which in our case is Cardiff Council, right through to the Secretary of State for Wales. We have had positive engagement with all stakeholders and I think we all share an understanding of the problems or the challenges or the difference that we are trying to make. Where I think we don’t quite agree is about mechanisms and process. We have done some analysis of our likelihood of winning shared prosperity funding. This sounds incredibly pessimistic but we cannot see that we will achieve the equivalent of more than 5% of what we achieved under structural funding, so a 95% difference.
Q60 Chair: Is the statistic that Professor Aitchinson referred to similar for all of your institutions?
Professor Hinfelaar: Yes, and to back that up—maybe not so much expressed in percentages as the Shared Prosperity Fund does something entirely different to what ERDF funding used to do in supporting university research—the clearest example that I can offer you is that we are now through to phase 2 for two bids under the Shared Prosperity Fund, one with Wrexham local authority and one with Flintshire local authority. The one with Wrexham local authority is a very interesting one because it is about support for the further development of our science discovery centre for young people. It is for anyone from age of five upwards to about 12 or 13. It is a fantastic facility located right in the city centre of Wrexham, which already exists but we want to expand it.
We put in bid under the Shared Prosperity Fund to expand it and we are through to phase 2, which means we have a pretty good chance of getting that, but that is completely different to the work that we are doing that I told you about earlier at OpTIC, at the upper end, the furthest end, of the spectrum for science, technology, innovation and research. Most likely we will be able to draw down shared prosperity funding for getting young people engaged with STEM but we will miss the bulk of the funding that we used to be able to get for the high end. That is creating a gap at the other end now, unfortunately.
Q61 Chair: Understood. I think some of my colleagues are going to extend the discussion on the Shared Prosperity Fund, but do the panel want to make any further comments on the overall impact of the work you have been doing with the existing structural funds?
Professor Walsh: I will make one comment. It wasn’t perfect with the European structural funds. You had West Wales and the Valleys, east Wales, so there was that artificial line drawn down from the centre, and Powys was in another category. I am from Powys. It allowed you to develop these regional collaborations. Yes, it was aggravation through bureaucracy to have a project split east and west but you could still do it and have a project that covered the whole of Wales. The SPF does not allow us to do that because it is divided among 22 local authorities. We can see the benefits of very localised focused spending but it does not give universities the opportunity to develop the larger-scale pan-Wales projects where we can share the benefits across the country.
Chair: That is really helpful. Rob, do you want to come in with a supplementary?
Q62 Mr Rob Roberts: Yes, thank you, very briefly. I am currently a student of Wrexham University. I am doing a MBA with Wrexham.
Professor Hinfelaar: I hope it is going well.
Mr Rob Roberts: I don’t know yet. We will find out. I wanted to pick up on something that Professor Hinfelaar said about the OpTIC campus in St Asaph being eligible for funding whereas the main campus in Wrexham was not. I don’t think there is any doubt that the Shared Prosperity Fund is new and will need tweaking along the way and it is not a wonderful thing yet, but surely that is a flaw in how the EU structural funds worked as well. We hear that it is not a replacement for EU structural funds and it gets held up as if the EU funds was a wonderful system. That does not seem like a wonderful system. Surely you want your funding for a project, not for a project that is based in a specific area. The project is the project. Was the previous system flawed as well in that way?
Professor Hinfelaar: If you were to take the best of each, I think the positive element of the Shared Prosperity Fund is that it is indeed across the whole of Wales and there is possibly more equity in how it is distributed. The flaw, as has been pointed out, is that it is allocated through 22 individual local authorities, which does not allow for a lot of cohesion, and maybe makes it very bureaucratic, although it is early days and it will no doubt be evaluated. If it was possible to scale that up, it might be really good and if it was also possible to ensure that the quantum of funding is at a similar level I think we would all be delighted.
If you were to take the best of both you could perhaps create something that would work well for Wales rather than saying, “That one was flawed, this one is flawed and we are all really unhappy.” I think that we can probably try to learn from coming out of EU projects, what was good about them, how can we make sure that we don’t lose all of that, and how can we create a Shared Prosperity Fund that takes the best elements of it and takes it further.
Q63 Mr Rob Roberts: Does everyone see a route to that? Does everyone see a way by which the best of both could be combined, or are they too far apart to do that?
Dr Calvert: Not easily. If you think about the characteristics that are positive in the projects we have described, there is the ability to do collaborative cross-institutional work in multidisciplinary environments across a region around things that are aligned to Welsh Government priorities and also Welsh strengths. We also have the Welsh Innovation Network, with nine areas, where we think we have potential to impact regionally and nationally. It is quite hard to see how that happens when you are engaging in shared prosperity funding that is disaggregated to local authorities, where multiple benefits are being sought and the local community needs to get those benefits as well. Research and innovation is not high on the list of things when you read through the approach.
The other important thing is that the WEFO was a useful co-ordinating function for this. It understood institutions; it understood our R&I networks; it could pull people together. It is hard to see how that co-ordinating function will happen with SPF funding as it is laid out currently.
Professor Walsh: I concur. We have all complained about WEFO at various times but we miss it now. It was a very useful mechanism for creating a slightly neutral space where universities could bid in for funds and come together as consortia. I think we could have taken what was good about the European funding model and refined it. There were too many hard lines between regions and I think we need much softer lines. We might need to think how we redefine that. There is the obvious M4 corridor; there are other ways of defining Wales.
On the whole, the key thing for me is that we have disaggregated funding down to smaller units and you can’t blame local authorities for having very local priorities. They get elected by local people to do that. We need a body that is slightly above that to be able to take a higher-level view of Wales as a whole.
Professor Aitchinson: I think that is absolutely right and what we need here is some mechanism for joining these different political scales and different geographical scales. We have seen interesting discussions over the last few months. The Secretary of State for Levelling Up raised the issue in the Levelling Up Committee, and very shortly after that we all received a visit from the Secretary of State for Wales, who I think was genuinely impressed by a lot of the innovation work that was going on, particularly in the tech sector. They both committed to going back and discussing with various Ministers how we could build these connections that will enable us to tackle these different agendas at different political scales and different geographical scales.
I think that is the gap that we need to bridge. I am sure there are funding bridges but it is how we get that connectivity so that a local authority agenda can overlap with a national agenda at the scale of Wales and the UK. If we rest too much control with the local authority, inevitably the time horizon runs in accordance with local authority election cycles and the focus is more on infrastructure projects than longer-term research, development, innovation cycles. None of these things are wrong but it is about how we get all of these different parties to share a similar agenda.
Q64 Virginia Crosbie: Croeso, welcome. Thank you especially for coming here in person. I really appreciate you making the effort. It has been great to hear about some of your projects. Obviously I am particularly biased about Anglesey.
Professor Riordan, the Vice-Chancellor of Cardiff University, said to us that Welsh universities have been assured that the UK Shared Prosperity Fund would be a replacement for EU structural funds. Is that your understanding?
Professor Aitchinson: We followed up on our visit with the Secretary of State for Wales with a letter giving some additional information. He gave a very full and positive reply and he was very clear that that was not the understanding, that it is not a direct replacement. It is a succession or a progression from one funding stream to another. I guess for all of us it is about the extent to which that succession overlaps or is completely different. If we are talking about a transition in research, development, innovation funding there has to be some continuity; otherwise we get that thing that everyone is calling the cliff edge. We can’t suddenly stop doing something in one way and start doing something completely different.
We view this as a transition and perhaps it has moved a little bit further than it could have or should have initially. That is not to say that over time we could not get to a very different place but it has to be a transitional process.
Professor Walsh: I agree. In Wales we have had the Research Wales Innovation Fund, which has helped us to strengthen capacity for people to support academic research teams to bid for UKRI and other kind of more UK-focused funding, but it has not allowed us yet to compensate for the step change that we have to make. The key thing for UWTSD is how can we retain capacity and momentum on some of the strong programmes that we had, like Made, which supports the manufacturing sector across Wales. To maintain the momentum of those projects, we need that additional support. Step change is a key thing; not necessarily cliff edge but step change.
We are adjusting. I think that we have all upped our game for UKRI and how we bid for UKRI money or other UK money, but it takes time and resource at a time when all the funding streams ended from ERDF. Looking back, we were under the assumption that the replacement for European funding would be more or less on a par. It is clear what has happened is a lot more has gone into research funding and not enough into regional funding. That is where the gap is for institutions such as ours that are more dependent upon the local near-to-market research income, whereas some of the bigger research-intensive institutions are well versed in applying for UKRI money and have continued that trend. That has just been a step change. We relish it but we need support to help us over this next couple of years of transition.
Dr Calvert: UKRI funding is a different thing. The European funding is to help areas of deprivation. We live in a hinterland of poverty. It is about doing the kind of work we have described where you are very close to market, close to businesses and communities where you are doing that kind of work, using research expertise to have impact in place. That is not the same as UKRI funding. It is harder for us to get access to as well, to be perfectly honest about it. Much of our effort has been directed towards European money because there has been a flow there that allowed that activity to happen. UKRI is a different thing.
If we collectively believe that the sorts of benefits that have been accrued through the work we have described in dealing with these real problems in our localities, with real business and real people, are benefits that we want, we have to find a way of doing that which is not multiple local authorities on a electoral cycle dealing with their piece. There has to be some co-ordinating function outside of that that we can agree on and that would look at the bigger picture.
Professor Hinfelaar: On whether we expected the SPF to do the same, there was always a inkling that it would be different, that it would have a different architecture and different parameters. I think what has dogged the implementation of the SPF is it has been very slow. I remember in 2019, before Covid, there were consultation events happening. We hosted one at OpTIC in St Asaph, where UK Government came to the regions to consult with interested stakeholders about what the SPF should do, what it should look like and so on, but it took until well into 2022 for there to be clarity about how much funding there would be, how it would be structured, how it would be allocated, what the mechanism would be, so a full three years. In the meantime, of course, the clock had been ticking all the time, which is how we have ended up with this whether you call it a cliff edge. It just took too long and we have not had a chance to gear up; nobody had a chance to gear up properly.
Q65 Virginia Crosbie: You have all spoken quite a lot about local authorities. We have been given a mixed picture of the relationships between the local councils and the allocation of the UK Shared Prosperity Fund. What has been your experience?
Professor Walsh: I am happy to go first. I sit on the regeneration partnership with Swansea city and county and I have seen the work they have done. It has been phenomenal work, where they have had to mobilise a unit to manage the SPF. It is important to mention that they have not worked in isolation; they have worked across the south-west region. I note that in the previous Committee there was reference made to the regional economic plan. I can’t fault the hard work that has been put in, but I think the point made earlier was that you can’t blame local authorities for having local agendas. As an example, we have submitted across six local authorities with 21 bids. If we got them all, it is £4.5 million. That equates to one ERDF project. You have the multiplication of bureaucracy and planning required to mobilise on these funds.
Local authorities have worked really hard. Some of the authorities that were bigger at scale had teams in place already; others were on a bit of a catch-up, I guess. Generally, I can’t fault the hard work, whether it is in Swansea, Carmarthenshire, Ceredigion. We have worked very closely with our partners in local authorities, but the challenge is it has become very fragmented because of the very nature of it.
Q66 Virginia Crosbie: Would anyone else like to share their experience?
Professor Hinfelaar: Similarly, we have very good working relationships with our local authority in Wrexham where our main campus is, but also with the other local authorities where we are based, Denbighshire and Flintshire. As well, I will bring into the mix the six local authorities in north Wales—and I know there is a good presence from north Wales here in the room—are combined as an economic ambition board for north Wales. The growth deal for north Wales is a collective effort involving six local authorities, the two universities, the two further education colleges and also the business council.
That is the kind of model that we need for the Shared Prosperity Fund. It needs to be at that higher level. Of course there is the North Wales Economic Ambition Board and there are similar bodies in south Wales and mid Wales. I think the structure exists to scale up and do it differently. We have now gone through the first round of SPF, first phase, second phase. I think it is time to stop and think and see if it can be done in a slightly more ambitious fashion, which will also facilitate the universities to work with the local authorities across our footprints in a way that will make more difference in a positive way to our communities.
Q67 Virginia Crosbie: That leads nicely on to my last question. On the level of funding that you expect from the UK SPF going forward, what have the learnings been from the projects that been funded? What have you learned? How are you adapting your programmes to meet the priorities of the local authorities?
Dr Calvert: We have a particular challenge here, and this might be specific to us. We are not in a situation where we have one local authority. We have a hydrogen research centre at Baglan, a further education college in Merthyr, a site in Pontypridd, a site in Cardiff and a site in Newport. I genuinely think that is a significant challenge for us in being able to have a concentrated conversation where everybody thinks that you are the most important thing in the space for that; it is quite difficult when you have that regional spread. We are having discussions but they have been, as described, relatively small-scale around potential capacity building. They are not anywhere near the scale that we have looked at for ERDF funding, or they are in areas where there is replacement funding for things that used to happen. For example, our Merthyr Tydfil college has access to some funding to replace work it was already doing on NEETs.
This is not for us the R&I activity, the nature of activity, that we would have accessed before that would have driven GVA. I think for us it is particularly challenging because of that regional focus, which is why a co-ordinating function that can bring institutions together with various strengths across a region is so important.
Professor Hinfelaar: On lessons learned, I think it is a case of keeping talking to the local authorities and helping the local authorities to shape those priorities. Wrexham has set up an advisory board to help review the project proposals that come in and to set those priorities. It is early days. I don’t know whether that is a practice that is shared across all 22, but it is baby steps right now. Everybody is picking their way through it and the first time, as it turns out, is probably not the best way of doing things. We may need to improve them and we need to be open to having that conversation and not all sit around and pretend that this is definitely the way to do it and this is how we are going to continue.
Professor Walsh: We have not mentioned the pandemic factor yet, but coming off the back of the pandemic local authorities are under extreme pressure to regenerate their regions and get the economy moving forward again. I think in this first round of SPF maybe the focus has been very much on meeting those very focused local authority agenda items without taking a step back and reflecting upon the impact of R&I as the bridge between the higher level of research that is undertaken for publishing or whatever through to a translation of priority to work and support regional economies.
That is the missing link at the moment. It is heavy on social, heavy on communities and place, heavy on skills development of the workforce, but it is light at the moment on that applied, near-to-market research support, which underpins those developments long term. I am hopeful that in a future SPF we reinstate or recalibrate to allow that.
Professor Aitchinson: Thinking about the local authority connections, in Cardiff we have the Cardiff capital region and 10 local authorities, so often we are not discussing things just with one. That adds an additional geographical layer of complexity that is perhaps quite difficult for Cardiff-based institutions to navigate because the social and economic needs in Cardiff are often perceived as not as great as some of the surrounding local authorities. I think what has tended to happen among colleagues at Cardiff Met is that as the structural funds have decreased, we have turned our attention much more to UKRI than shared prosperity funding. That is not necessarily a bad thing but it is a much more competitive landscape and much more labour intensive in securing funding.
It is important to point out that it is not an either/or. We can achieve many of these very applied impacts, including creating spinout companies, through funding that might originate from UKRI, research council funding. I can give you one example, and you might have come across this already because it has been publicised quite widely. It is something called the HUG. The HUG is a device that has been developed to aid the wellbeing of patients with dementia and Alzheimer’s. The HUG originated as a £400,000 Arts and Humanities Research Council-funded project that brought together people from art and design with technology. The HUG is a weighted device that provides bespoke comfort for patients and it has been so successful in its impacts and outcomes that it has been adopted by the NHS. We have set up a spinout company. You can buy this thing now on Amazon. It originated in an Arts and Humanities Research Council grant some years ago, and has gone all the way through to a spinout company and take-up by the NHS, with real world impacts on people’s wellbeing, not just patients but also families.
For us, that is the long-term goal. We want to access UKRI funding. We don’t want structural funds and we don’t want bridging funds and all the rest of it. We want to compete with world-leading universities. I think it is about how, over this transitionary period, we get to that point, so that we get to a stage where universities in Wales are securing the same percentage of funding per head from UKRI as the rest of the UK. We are quite some way short of that at the moment.
Chair: Thanks very much. That is really clear.
Q68 Mr Rob Roberts: Building on that, I am sure my colleagues will come back to UKRI later on. Universities Wales has called for £71 million in bridging funding from the UK Government. Very quickly, because I want to expand on it, have you detected any willingness on the part of the Government to address that £71 million concern?
Professor Walsh: I haven’t. Various bodies are lobbying, obviously, Universities Wales, Universities UK and so on. I think the stock answer seems to be, “There is research funding and you need to adapt.” The message I want to say to the Committee today is that all universities are adapting. We are doing our very best to adapt but we are moving from—it is not from one type of beast to another. It is not just transitioning lightly. It is moving from focused regional development. As Dr Calvert mentioned earlier, ERDF funding for research was focused on regional regeneration whereas UKRI is more about curiosity and ground-breaking research. That is where I don’t personally see that we have got the ear yet of the UK Government in understanding that difference.
I can understand why. It is very much focused on the strengths of the UK, which is the south-east, and it is very strong on blue-sky research and so on. When it comes to regional approaches such as in Wales and other parts of the UK, the north of England and so on where there are regional disparities in GVA, it is a different type of research activity, a different type of knowledge exchange. We are very much focused on civic mission, civic engagement, knowledge exchange, working with our SMEs. I am not convinced that we have got that message through yet for UK plc.
Dr Calvert: Sometimes I think the voice you hear is the university, so it feels like we are saying we just need a replacement for university funding. The voice you probably need to hear as much of is the voice of the industry that we service and the people who we make an impact for. How do you make sure you hear that, whether it is people that we are working with around emerging and mobile technologies to transform a very microbusiness, or Tata Steel on its decarbonisation plans? I think there is a question for me about how this is perceived as universities saying we have got a funding challenge, cap in hand. It is not about that. It is not about us; it is about our communities and the people that we are servicing. How we get that voice into considerations, more clearly into Welsh Government and UK Government is important.
Professor Hinfelaar: Yes, it is important to look at the impact. £71 million is a lot of money but it is about what it can do. As colleagues have said, this is not only about sustaining particular activity within universities. This is about working with industry. Take the £71 million, a very significant proportion of which would have gone, for instance, towards tech and equipment and manhours that local companies can then access and that are available to them. This is £71 million for our region. It is not £71 million for us as individual institutions, because otherwise we could be anywhere. We are based where we are and the funding from the various European strands would have gone into our local areas and obviously also pan-Wales where projects were able to be pan-Wales.
Q69 Mr Rob Roberts: Professor Aitchinson, I think you or Cardiff Met have sent evidence already in writing that bridging funding was needed until an alternative funding source was found. What kind of alternative funding sources are you looking for?
Professor Aitchinson: I think that some of these funding sources already exist but it is the way in which they are accessed or distributed. As I said earlier, we are keen to access UKRI funding but universities in Wales are starting from quite a different place. Most of the universities in Wales are very anchored to their regions as well as contributing to national economic need within Wales. We tend to be quite applied. We tend to work very strongly and effectively, I would argue, with a range of professions and we tend to focus on impact. We don’t do as much of what we might call blue-skies research, which has been much of the focus of UKRI grants in the past. There is a bridge to be made in a transition of the type of work that our university does, not necessarily away from the work that I have just described, because I think that is useful and meaningful and it is very badly needed in Wales, but the alternative sources that we can access at the moment are designed for rather different parts of the UK, rather different types of universities.
There is something that perhaps this Committee could follow up. As I understand it, when we are looking at UKRI funding, I think everyone recognises that we want to increase commitment to research and development and that we want to distribute that funding more evenly across the UK. At the moment the funding that goes to Wales is not equivalent per head of population. I think between 2018 and 2021 Wales received 2.6% of that funding, so it is not proportionate for population.
As I understand it, we examine those data through ONS data but there is a very significant time-lag. As we look at the distribution of funding, we are looking at data that are almost three years out of date. I think the first ONS release of data was in April 2023 looking at data from 2020-21. That is not going to give us an accurate picture of what is happening on the ground or what we need to happen in the future. We need to be a little more agile about some of our data sources so that we can understand the challenges that we are trying to tackle and that we do not have this time-lag effect.
Q70 Mr Rob Roberts: My final question is to everybody and I touched on it briefly earlier on. There will always be—so it seems, and I think a few of you have already mentioned it—a little bit of a conflict between the needs of the local authority and the community and the needs of universities. Do you think that the Shared Prosperity Fund in particular can be reformed to meet the needs of both, or should there be two separate strands? Does a whole separate funding regime need to be established for that purpose?
Professor Aitchinson: My preference is that there was a separate funding stream, but being realistic we are probably more likely to be looking at a modification of the existing funding stream. My preference is for something slightly separate, because I think universities have a very different purpose, mission and impact from local authorities. We didn’t give a pen picture of our universities, but certainly at Cardiff Metropolitan University the majority of our undergraduate students are now English-domiciled not Welsh-domiciled, so we are a great invisible export earner for Wales. Something like 24% of our students are international—of our Cardiff-based students. Over half of our total student population is international, because we have nearly 13,000 students in 30 partner colleges around the world.
Our mission, our purpose and the work that we are doing are very far removed from the work of a local authority. That is not to say we don’t overlap; we do and we take our civic mission very seriously in widening access to our facilities and services for the local community, but I think it is quite difficult to see how we can share in effect one pot of money when we are trying to do such vastly different things.
Dr Calvert: Benefits realisation from innovation can be quite intangible and quite long term, and with the nature of research sometimes things work, somethings things don’t work. That is quite hard to sell into a funding system where local authorities are looking for impact now for their community. That is quite hard. If we feel still that R&I is important, an important dimension of economic and social change, I am not sure it is possible to have that nature of conversation easily in that funding structure. I argue broadly for something separate as well because this is a very different thing and it does not always have that sort of level of direct benefit there but it is very important.
Professor Hinfelaar: The Shared Prosperity Fund is expected to do so much. It is a replacement funding stream to support working with disadvantaged communities within a local authority, a little bit of innovation here. There are so many different things, so many different purposes all shoehorned into what is now the SPF, and that is problematic. My answer to your question is that I think we would all still look forward to continuing to work with our local authorities, perhaps groupings of local authorities around the SPF. But then within the SPF if it was possible to differentiate between different strands, one of them around longer-term innovation with impact beyond next year, and then the other ones that are more directly around work in the community where things are more urgent and pressing. Also, to be perfectly honest, we need more money to do all of those things. That is the issue, really part of the problem.
Professor Walsh: I will make a similar point. I wouldn’t necessarily separate them off. We definitely need a ringfenced additional injection of funds to support R&I, keeping to the spirit of SPF that can be focused to address regional needs. We have the South West Wales region, Neath, Port Talbot, Swansea, Carmarthenshire and Pembrokeshire. We have Mid Wales with Ceredigion and Powys. Those clusters are established and I think having a research agenda that is informed locally is not a bad thing. I think we can do both. We are already pivoting to address more of the UKRI objectives. The challenge called for funding, but we can’t avoid the fact that we have more cash into SPF and it needs that strand that is linked to R&I. We have missed that somewhere on the journey in the planning of SPF, having a plan that is informed by regional need but one that is not totally focused on the here and now. Research takes time, R&D takes time, and that needs to be reflected in the funding model.
Q71 Simon Baynes: I think to an extent we have already covered much of the question I was going to ask, which was on UKRI. The key point is we have heard that the Secretary of State felt that there was more need to adapt to secure additional funding and the review in 2018 said much the same thing. What needs to be put in place to assist Welsh universities to secure a greater proportion of UKRI funding? I will quite respect the fact if you want to keep your answers brief because we have touched on a lot of this already, but maybe starting with Dr Calvert.
Dr Calvert: First, our efforts have to be geared that way. We have been able to access European money, it has been good for us and as a consequence we are now directing our attention towards UKRI funding in a volume and a pace that we have not before. We have made some gains in that respect. Our UKRI funding has gone up at USW over the last couple of years, from about £600,000 to £1.2 million, £1.3 million. We have made some gains there but it is a much harder, much more competitive field to access. It is also harder for us to work as a sector in that space. One of the benefits that we have described to you from European funding is the ability to operate as a sector, a relatively small sector with a critical mass in collaboration around funding streams. We are not going to sit on our hands. We will move forward and adapt and try and, as I say, our funding has increased.
In answer to your question, I am not quite sure what needs to change but we will certainly be focusing ourselves in that direction probably, as Cara said earlier, much more so than we will towards SPF funding in our locality.
Q72 Simon Baynes: I am sorry, just to add a supplementary to that for you and for the others: how confident are you that you can compete against the older universities, if I may put it that way, for the research funding?
Dr Calvert: It will be hard. We have made gains but they are relatively small seen in the overall portfolio of research income that we have had. We would not expect those gains to be significantly higher than they are now. It won’t be replacement funding by any stretch of the imagination.
Professor Hinfelaar: On UKRI, it is important to find partners because the successful UKRI bids are always partnerships. It is about establishing new partnerships with other universities across the UK in particular fields where we have strengths. I think there is a way to go in finding each other, so perhaps there could be some kind of a mechanism to broker establishing those new connections and capacity towards being able to prepare bids into large funding calls, which is where we are probably lagging behind compared with other parts of the UK.
Professor Walsh: Somebody quoted Professor Reid from 2018 earlier. There is also the 2020 paper on strength in diversity and on the back of that we have established Welsh universities where there is network and that is fundamentally important to the future of research in Wales in allowing for consortia to emerge, which already are emerging. I can speak for my own university. This year alone we have submitted or are in development of something like 23 bids to UKRI whereas we had only 35 in the previous five years.
We have all upped our game and we are adapting but we need—to come back to this term—bridging funding, to enable us to focus on delivering amazing results for Wales through ERDF funding. In our case we have managed to retain those key staff but we have a lag now before the next funding comes through, so we are diversifying. We are trying to do commercial research, UKRI bids and university funding to keep things going, but bridging funding is crucial for the next 18 to 24 months.
Professor Aitchinson: I have two rather different suggestions. One is that it would be very beneficial to us in developing research, particularly with UKRI bids, to have easier ways of recruiting and retaining international staff. I say that as the vice-chancellor of a university that has recruited an additional 400 staff over the last five years. Many of those have been international and in areas where we have skills gaps in the UK, particularly in the high tech area. It is very expensive for people to relocate to the UK. The visa costs in particular are very expensive and have to be renewed. We are now facing requests from staff, which we are meeting because the alternative is we might lose these valued members of staff. A family of four might be looking at £10,000 just to renew visas every few years. These are huge costs and at some point it will be detrimental to our ongoing development. We want to recruit and retain staff. They become more and more qualified the longer they are with us. That is one issue for us.
The other—and again it is a funding issue—is the fee differential at undergraduate level between Wales and England. I am in my 11th year as a vice-chancellor and I still work with the same undergraduate maximum fee that I had when I started as a vice-chancellor. If we think about inflation over that period, it is difficult to sustain the level of input for undergraduates that we did previously. We are also faced with higher demands now from our undergraduate students and from governments; through civic mission and so on in Wales, we have lots of commitments that we want to address but with an ever-shrinking funding pot. We do not want to start cross-subsidising undergraduate provision from research funding and from postgraduates and, to an even greater extent, from our international students.
We do not have a level playing field across the UK because, 50 miles along the road from Cardiff, you can charge £9,250 a student and we can charge only £9,000. We do have greater costs, many for good reason, around civic mission, Welsh medium provision, translation costs and so on. If that could be looked at, it would give us a better resource base to access more prestigious sources of funding.
Q73 Simon Baynes: Are the Welsh Government looking at that?
Professor Aitchinson: They were looking at it in 2018. As vice-chancellors—Maria will remember this—we had an understanding that there would be an increase in the maximum fee that we could charge. A different discussion but one taking place at that same time was that we were all committed to introducing the real living wage across all employees in Welsh universities, which we did and feel proud of. At the time, there was a discussion about how that would bring in additional cost and how useful it would be to have the ability to charge a higher fee, in part to meet some of those costs. That did not happen and, as time has gone on, since 2018 we have had all sorts of other costs that perhaps we did not envisage at the time and now inflation. It would be helpful if that could be looked at again.
Chair: I will bring in Virginia with a quick supplementary.
Q74 Virginia Crosbie: Thank you. I want to pick up on those fees, Professor. In your view, are students in Wales being short-changed compared to their peers in England?
Professor Aitchinson: I can probably speak only for my own university. We are a student-centred university. We believe in small class sizes and high levels of class contact. We provide a high level of student support and that has increased year on year, particularly around mental health. Something like 37% of our Welsh-domiciled students come from widening participation backgrounds. I believe that we provide a good experience for them, as evidenced by the graduate outcomes and the lives that they go on to have, but that comes at a cost elsewhere in the university. You will all be aware of the current industrial dispute. People work hard. Money is tight. We want to do right by our students, but I am not sure that we can keep increasing the provision that we make without increasing the funding.
Dr Calvert: I will add a supplementary, if that is okay. They are not. If we look at the data, student satisfaction with courses in Wales is higher in aggregate than it is in the UK, for example. Our students express that we do a good job for them but, as Cara has described, that cannot carry on exponentially with a declining unit of resource and, of course, the asks are increasing. Also, there is a more generous funding regime for Welsh students in Wales in access to grants and so it is much more progressive. The issue is, simply, the unit of resource and so—
Q75 Virginia Crosbie: But you are not functioning on a level playing field, are you?
Dr Calvert: No, we are not. We probably make a pound stretch further. We are still doing a good job—
Q76 Virginia Crosbie: Yes. Imagine what you could do if you had that £9,250 that universities have in England.
Dr Calvert: For us, that would probably be £2 million or £3 million extra income a year. That would be helpful. Given the erosion in the resource—and estimates are about 30% over that period of time—that £9,000, if it had risen with inflation, would be over £11,000. It will not be a compensatory factor.
Q77 Virginia Crosbie: What is the rationale for short-changing Welsh universities?
Dr Calvert: I would not put it like that. We have had other sources of support. We had generous support from the Welsh Government during Covid, much more so than they had in England. Choices have been made to benefit the students. Some of that funding has gone to the student pocket. Every student in Wales gets an element of grant. Some of them get most of their fees paid.
There are choices here and we are all keen to make sure that we have a business model that is efficient as it possibly can be. We will not shy away from that issue. It probably will mean that we deliver an excellent service now but we are having an active conversation with the Welsh Government about the ability to do that into the future. The Minister is alert to that, is sensitive to that and understands the position, but I would not describe it as short-changing. Many of my students, 50%, are from widening participation backgrounds. The lowest two indices of multiple deprivation will benefit significantly from the Welsh funding settlement compared to English counterparts.
There is an element of choice here, but it is harder for us to compete, for sure, because we do not get the benefit of that funding ourselves.
Professor Aitchinson: The issue is that the element of choice is not a choice made by universities. It is a choice made by the Welsh Government and it does undoubtedly benefit students, but perhaps the counter side of that is that there is less money. For Cardiff Met, it would be £2.5 million a year if we could charge £9,250. With £2.5 million a year, I could put lots more people on bidding for UKRI funding. It is not necessarily the total amount of money. It is how it is distributed and the say over the distribution that we might have.
Q78 Ruth Jones: The four of you have articulated clearly the issues with R&I funding and the multiple layers from the EU to UK to local councils. These are all intertwining. The Reid report looked at funding within Wales and the Welsh Government have accepted it. What more could the Welsh Government do to help in this area?
Dr Calvert: First, there is an open line to a conversation about what is a sustainable funding future for higher education in Wales. We need to have that conversation in a tripartite way. At the moment, we have quite a lot of challenges on the cost side, as we know, and there are lots of industrial dispute challenges, but that places this issue as a dispute between employers and employees when actually we have no control over our price. We have no control over the fee that we get.
There needs to be, and I am sure there will be, a sensible, grown-up conversation about what we value, what we are trying to achieve and, in the context of tertiary education reform, what is important, what we are prepared to pay for and what we are not. We have to have that and it has to be a realistic discussion, otherwise we raise expectations beyond what can be delivered. That covers not just research but the nature of the teaching that we do, our contribution to the skills agenda, how we deal with issues of mental health and the civic mission of institutions. All of those things have a cost to them. We have to have a sensible, tripartite conversation about what that means in the future and who pays for it.
I honestly think the will is there to do that. People operate here in good faith and want to have that conversation. We also realise that other sectors are stressed and challenged too. It is not about saying we are privileging ourselves here. We need to do everything we need to do to deliver an efficient and effective service to students and to make sure our costs are controlled.
Professor Hinfelaar: The Welsh Government could encourage a debate about policy and strategy that joins things up. For instance, the Wellbeing of Future Generations Act in Wales is an important piece of legislation. It says that whatever we do as a nation, we have to make sure that the next generation can thrive. Part of that, clearly, is to be economically strong, to have innovation, to have strong employability prospects and so on. We need to start joining those dots and to have that strategic policy debate about how universities and more sustainable funding models for universities across the board can help to hit those agendas in the longer term. The advent of the new Commission for Tertiary Education Research in Wales, which needs to develop its strategy, is a golden opportunity to get things right.
Ruth Jones: We will watch with interest how that regulatory body develops.
Professor Walsh: The conversation is about having a conversation. Across the UK, we need a far more joined-up approach in how we see the development of universities across the UK. We have different systems in the three countries on the mainland, shall we say. Students are not bound by boundaries or borders and so they will go wherever they feel they will get the best deal.
The conversation with the Welsh Government needs to be—and is—about how we ensure that Wales remains competitive as a destination for students to come from across the Severn Bridge. I am not sure what the equivalent is in north Wales.
Ruth Jones: The A55 or the M6.
Professor Walsh: Across the Mersey. Also, we need to maintain attractiveness for Welsh-domiciled students to stay, because there are countless benefits for remaining fairly local with university studies. My two daughters both studied with us in Swansea. There are benefits.
The conversation is about how we ensure that we continue to fulfil the ambitions the Welsh Government have of a diverse university offer meeting the needs of every part of the country, but we have different economic realities in different parts of the country from logistics with students coming to the west of the country because of the lack of an integrated train network through to the cost of living if you are based in some of our bigger cities.
I have no easy answer to this. There is an open conversation with the Welsh Government. At a more practical level with research, we are actively involved with officers within the Welsh Government in developing an innovation strategy for Wales. That has been very much a team effort across Wales. I am delighted to work with the Government on that. Positive conversations are happening, but we also need that higher-level conversation across the UK about how we are more connected.
Professor Aitchinson: There is a conversation to be had among all interested parties at both UK level and Welsh level, where we see higher education as the foundation to the economy and societal wellbeing rather than as some kind of pinnacle of an academic structure. If we could invert that, it would be helpful. We have to get our universities right to get society and the economy right, rather than see it as perhaps an additional extra or a luxury after we have dealt with schools and further education.
Q79 Ruth Jones: I have one last question but I will wrap two together. This is one brief question. We asked the same question of the previous panel. Have you returned fully to face-to-face teaching?
Secondly, you have already alluded to international students, visas and things like that. Do you think that the new laws coming in from the UK Government to prevent dependence on postgrads will affect the way you are going? You have highlighted and articulated well the cost of the visas, but the number of students coming in has increased. There are lots of concerns about the balance but also the funding.
Professor Aitchinson: I have a straightforward answer to your first question. Yes, we have been delighted to return to fully face-to-face teaching, albeit with the addition of some new uses of technology that can enhance face-to-face teaching.
On international students, over the last five, six or seven years at Cardiff Met we have seen a transition from the majority of international applicants being from China to India to now Nigeria. There are different sociodemographic profiles of those cohorts of students. This is a generalisation, but Nigerian students tend to be a little bit older, coming on postgraduate courses, some of them with dependants because they tend to marry younger than the Chinese students that we had at the time. We expect it to have some impact.
We now have to limit the number of international students that we have because we have grown to such an extent that we simply cannot accommodate all the students who want to come to us. Part of the reason we cannot accommodate them is because the costs of building new university accommodation are so great now following what has happened in the economy recently and there is no external source of government funding for capital investment. We might well solve the challenge through those decisions that we make about our own strategy and our own university’s estate.
Ruth Jones: It is self-limiting in a way.
Professor Walsh: We are back 100% face-to-face, except—and you will have this answer from us all, I am sure—the pandemic has enabled universities to take advantage of an acceleration in the adoption of digital technology and digital learning, which is exciting. Students are back on campus, but we also use digital tools to enhance their learning.
We have seen an increase in international students. We are not overly exposed. Currently 9% of our student population is overseas compared to 6% pre-pandemic and we do anticipate that growing going forward. Overwhelmingly, our students are from India and China. We have not as yet experienced an issue on the dependency question but that might become an issue in the future. It does not affect us at the moment.
Professor Hinfelaar: We are back fully face to face as well, supported by digital. Some of our student services are also offered in a hybrid way. Some of our students prefer, for instance, to have a conversation with a counsellor online at a time when it is more convenient for them. We offer that mix. We also offer some fully online courses, which of course is a different matter altogether.
On the international student question, we were aware of the likelihood that there would be policy change around the ability to bring dependants for PGT students. We have been preparing the agents that we work with in various parts of the world for that news. It has already been put out to prospective students that this was likely to change. We do not expect a massive impact. Similar to Cara, we cannot take every single international student who applies anyway and so there will be a filtering mechanism. We are not overly worried about that.
It is important, though, to retain the post-study work visa arrangements because that would hit if that were to change. That would set us completely apart from major competitor countries that offer even better post-study work visas.
Ruth Jones: You make an important point. Thank you. Ben, finally.
Dr Calvert: Yes, we are back to a pre-pandemic mode of working, but we see that student patterns of engagement are different, as you probably would expect them to be. We are having a mature conversation with our community about what the future of flexible learning looks like and what we think it should be. Yes, we have gone back to a pre-pandemic mode but we are live into conversations about what this will be in the future that will best benefit our learners. There are certainly benefits. When you have an older population of people who are also balancing work challenges and so on, there are benefits to doing things remotely.
Our international student numbers have grown significantly, as many institutions have. In our last accounts, our tuition fee income from international was about 22% of our overall tuition fee income. It is a reasonable size, smaller than some, bigger than others. Our markets have changed, as Cara has indicated. We have moved away from China and through India. Sri Lanka is quite a large market for us and Nigeria has become a large market.
There are the challenges that have been described with dependants. They are manageable in scale and often we do not necessarily know whether people are coming with their dependants. All of our advice to students is to not come to the UK until they secure accommodation, but we don’t always find that that happens. They often come and will bring dependants.
We absolutely recruit with integrity. Our completion rates are high and our visa refusal rates are low. Of course, we do not issue the visas ourselves to the dependants and we do not often know. There is probably better joining up to be done with UKVI around that so that we can inform our local authorities about who is coming, but of course the change in the rules means that post next February this will be a different order of issue anyway when they cannot bring their dependants. We think about 20% to 30% of our Nigerian students end up coming with dependants, but of course that is often multiple dependants. We do not deny that it is a challenge, but we are connected into our communities to try to resolve it.
Q80 Chair: Do the Nigerian students pay the same fee as the previous cohort of Chinese students that we were talking about?
Professor Aitchinson: There is an issue there in that we charge an international fee irrespective of where the student comes—
Chair: Whether they come from the Commonwealth or Asia does not matter, there is a standard international fee?
Professor Aitchinson: Yes, absolutely. We would not want to differentiate by country. That would not feel right. There is an issue, however, with Nigerian students being able to pay fees in a timely manner because banking regulations within Nigeria limit the amount of money they can take out of the country at one time. That poses quite a challenge for us. There is this delicate interplay between the funding and the payments and UKVI regulations. As soon as you deal with one challenge, there is another one. This is our latest one.
Q81 Chair: Is there additional financial risk attached to certain groups of international students? Presumably, if there is difficulty collecting the fee, you could end up with UK students’ fees effectively cross-subsidising the international students.
Professor Aitchinson: You could end up with that. You could also end up in difficulty with UKVI. Many of us have tried to move to a situation where, we believe, the more of the fee we can collect upfront, the less likely we are to get into difficulty.
Dr Calvert: On your comment about subsidising, in aggregate the opposite is absolutely true. Most of our tracked data now tells us that many of our courses make a loss for undergraduate home students, particularly if you have relatively expensive subject areas based around tech and so on. You just need to walk around our simulation suite for nursing to see the £100,000 bodies that we use to do simulated work. These things are not cheap. The reality of it is that international students are currently subsidising. They used to subsidise research but they now subsidise teaching, too.
Q82 Simon Baynes: I know we are a bit tight for time and we have gone over, but we are okay? Good. I want to move on to collaboration with the private sector, which we have touched on but maybe it is worth focusing a bit on it now. According to the Higher Education Statistics Agency, Welsh universities are successful at creating spinoff and startup firms but less successful in turning that into a source of revenue. What are you doing to commercialise your research?
In asking those questions, I will add in a little bit extra so that we take it as one question. Professor Walsh, Trinity Saint David had the highest number of student startups in the UK in 2021-22. I am singling you out, which is perhaps invidious, but that is a good thing. Also, without the constraints of EU state aid rules, is there scope for universities to construct their research programmes for revenue raising and self-funding in the future? I thought I would lump it all together and go to each of you, starting with Professor Aitchinson.
Professor Aitchinson: Those stats are allied to the professional or practice-focused nature of universities in Wales. We are close to the businesses and communities we seek to serve. It is perhaps not surprising. All of our universities are strong on startups. I know that Cardiff Met for the last six or seven years has been in the top 10% of UK universities. That speaks to the entrepreneurship that exists and the closeness to market.
One of the difficulties we have is, again, that area has to be pump primed. It is quite resource intensive. There are not specific funds for that and so, again, it is a cross-subsidy issue. How do we fund all of these centres for entrepreneurship? How do we fund all of that labour-intensive work with students to get their businesses up and running, usually through small grants that we make available to them. We all want to continue to do that.
Previously some of those graduate startups and the spinouts came almost as spinouts from some of those structural funded projects. I mentioned the food innovation work at Cardiff Met. We need to be careful as we move out of that funding stream and into others that we create avenues through which we can continue to support graduates into startup jobs. That is so important for a nation that is rooted in SMEs.
Q83 Simon Baynes: Without the constraints of EU state aid rules, is there more scope for you?
Professor Aitchinson: There is hugely more scope to do this kind of work. We have not talked much about tech or robotics, but there are huge developments at Cardiff Met in the robotics field. Some of that can have significant impacts in health and social care but it can also help small startup companies that end up devising robotic devices that can be used for social good if we talk about service robotics. Again, it is the connectivity between all of these agendas. It is not either social or economic. We can do both simultaneously if we get our funding streams right.
Professor Walsh: Thank you for highlighting the University of Wales. It has an amazing record on startups. We cannot share that too often. It is great. There is no mystery. It is about hard work over more than a decade of a key team working with our students and, crucially, working with our graduates who start up their own businesses and bring them back in to talk to the next generation to bring them forward.
We have set up the International Institute for Creative Entrepreneurial Development with a colleague Dr Kath Penaluna. That has worked for a decade or more now to develop infrastructure behind our startup work. We work closely with students. Originally it started off with creatives and with art and design students. A lot of the startups are in digital tech but linked to creative, graphics, games and so on, and also leisure and tourism.
About two years ago we recognised that we needed to move the needle and focus more on STEM. In the last 18 months we have done a couple of things. We have appointed a director of commercialisation and we have created small funds to invest in graduate ideas and to enable them to take it to the next level. It may be £1,000 to get that laptop. It may be £1,000 or £2,000 more if we want to take a stake in the business. It is about trying to build up now the next wave of businesses that are more STEM-focused and therefore more likely to employ and to grow.
The key thing is working in partnership. Again, we have worked with Swansea Council and various departments, primary schools and secondary schools on entrepreneurship in the region. It is all part of an ecosystem that we feel we have developed. That now goes across the university all the way up to Lampeter.
We contributed to an EU framework called EntreComp, the entrepreneurship competence framework, which is a blueprint for embedding entrepreneurial endeavour within students. We have even taken that on the road. We have worked with Macedonia and with some of the Baltic states on distilling that. Colleagues like Kath Penaluna and others have worked tirelessly for decades. That is the secret. That was recognised by us being nominated as European Entrepreneurial University of the Year last year. It is not just an inter-UK thing. It is recognised internationally.
What was the second half of your question?
Simon Baynes: It was about whether, without the constraints of EU state aid rules, there is scope for universities to construct their research programmes as revenue-raising.
Professor Walsh: Yes. One of the reasons why we had not been able to do that under EU funding was because of the nature of EU state aid. Most of our applied research was funded by ERDF funding and the companies may have had the benefit and we had the ability to publish it, but we were not able to use that money to exploit the IP. Going forward, in every programme we work on with a company now we look to see whether there can be joint investment. We are looking at spin-in businesses as well as spinout to see if there are companies we want to work with that might add value to our research mission, to our graduates and to the economy of the university as well. The short answer is yes.
Q84 Simon Baynes: Professor Hinfelaar, I know that this is a subject that you and I have discussed. I declare an interest as a representative of part of the area that you cover as the MP for Clwyd South. What would you comment about this topic?
Professor Hinfelaar: There are two strands to this. First, we support our graduates who wish to set up their own businesses. We have space on campus, the graduate startup lounge, and we support them in other ways as well, but we do not have a stake in their businesses. That is a difference, but it is important to do.
Separately, we also have one or two activities. One example is technology called the FAST-Fan technology, which is about reintroducing the good old-fashioned technology of propellors in flight. There is new technology being developed in that space. We received funding from the Welsh Government under the SMART Expertise funding stream to develop that. We have now secured a patent and that can then become a spinout. That is a classic example of a university spinout company involving our own academic staff and also some postgraduate students working with them. It is exciting.
We regard these as two different spaces. We still want to continue to support graduate startups. Whether or not we have anything financially to gain from that, it is important as part of what we offer to our community and to our student body as a prospect that they might go for. It is important to distinguish between the two. We are active in both, but the spinout space is probably more selective because it is about where we have the high-end expertise in a particular niche that makes it credible to go down that route.
Dr Calvert: Chair, I probably do not have anything to add that that has not already been said. You have had three versions of what I would say. Yes, I echo what colleagues have said.
Chair: That brings us to the end of the time that we have allocated. It has been fascinating. Certainly speaking for my part, I found it extremely useful and interesting as well. Thank you very much for giving us your time.
I will finish with a thought that I shared at the end of the earlier session that we did with other Welsh universities. There is a body of politicians here at Westminster and, notwithstanding the fact that higher education is largely devolved in Wales, we take a huge interest in what you do. Sometimes we feel that we could do with hearing from you more on this and the work that you are all doing, which is right out there on the cutting edge with industry and solving some of the big public policy challenges of our age. There is probably a good case for getting together more often, either formally or informally, to learn about this. Certainly when we go out and about in Wales and we visit companies like Airbus and we come into contact with companies like Thales, they are always quick to talk about the collaborations they do with the University of South Wales and other universities as well. We will leave that thought with you. Thank you and thanks to my colleagues on the Committee.