Our next item is an evidence session on the Scottish Further and Higher Education Funding Council, continuing our work on examining the spending decisions made and outcomes delivered by some of the key public bodies within our remit. I welcome Laurence Howells, Professor Alice Brown and Dr John Kemp, all from the Scottish funding council. I believe that Professor Paul Hagan is also on his way. Is that correct?
Yes, indeed.
He will join us shortly.
Professor Brown has some opening remarks.
I apologise for Professor Paul Hagan’s late arrival. He has been on a train from Glasgow since before 7 o’clock this morning, so that is a bit of a challenge.
We very much welcome the opportunity to meet the committee this morning. Members will be relieved to know that I will not repeat the content of our submission, but I do want to make a few brief comments.
I draw the committee’s attention to my introductory remarks on the first two pages of our submission, where we provide some examples of how, working with our partners, we have added value in different ways, whether in widening access, skills development, the development of innovation centres or growing research excellence in Scotland.
I want to step back for a moment and look at the establishment of the funding council. When I became chair of the council, I was told that there was a book in the cupboard that provided a history of university funding. As you can imagine, it was not exactly a bestseller or a riveting read, but it points out that the funding council and its counterparts in England, Wales and Northern Ireland can trace their roots right back to 1914, when the objective of the state was to provide sustainable funding for universities in recognition of the fact that they needed to be supported given the consequences of the first world war.
In more recent times, members will be aware that the current Scottish funding council is a result of a merger of the former Scottish Further Education Funding Council and the Scottish Higher Education Funding Council in 2005. Our function is to secure the coherent provision of high-quality further and higher education and research, and we have a duty to ensure that provision is made for assessing and enhancing the quality of funded post-16 education.
11:30The funding council’s decisions support the delivery of the Scottish Government’s national performance framework and its economic strategy. The Scottish Government sets national priorities and issues guidance to the funding council based on its priorities and policies. It is for the funding council to implement such guidance and we do so following discussion with our key stakeholders.
It is worth saying a couple of words about who our stakeholders are, because they are quite extensive. In the sectors that we cover—specifically, colleges and universities—our key stakeholders include staff, trade unions, students, through the National Union of Students and Student Partnerships in Quality Scotland, or SPARQS, and representative bodies such as Colleges Scotland and Universities Scotland, as well as the broader education system as a whole. The Scottish Government and Parliament are also stakeholders, as is local government, and indeed the United Kingdom Government, particularly the Department for Business, Innovation and Skills. There are also other non-departmental public bodies and public agencies, such as Scottish Enterprise, Highlands and Islands Enterprise, Skills Development Scotland, Creative Scotland and so on with whom we also work extensively.
Funding bodies in other parts of the UK, which are observers at our board meetings, are also key stakeholders, because we have to be aware of developments elsewhere, and there are also other relevant organisations such as learned academies, research councils, research charities, the European Commission and professional bodies. There is a whole range of stakeholders, and we try to work with them all to ensure the delivery of high-quality education and world-leading research. Examples of extreme collaboration are evident in our submission to the committee.
Change has not ended there. As members will be aware, our role developed with the introduction in 2012 of outcome agreements, with college regionalisation and Office for National Statistics classification. With more focus on outcomes such as widening access or having internationally competitive research, much more engagement and negotiation with individual institutions are involved. The significant enhancement of activity to promote the exploitation of research for economic and societal benefits, for example through our innovation centres, has been another change.
As a result, outcome agreements provide an explicit link between public investment and delivery on Scottish Government priority areas, but they also facilitate a relationship of engagement between us and our stakeholders that promotes dialogue and enhanced mutual understanding of the issues, so that when we engage with individual universities or colleges we have the opportunity to learn at first hand about the pressures that they face and about their ambitions and aspirations.
All of that has meant significant organisational change for the funding council itself and a change in the role of staff within the organisation, and that reform is on-going. We have a new strategic plan for 2015-18. Our previous strategic plan outlined the changes to be made, and the new one focuses on embedding those changes and realising their full potential. We are also implementing the Scottish Government’s three-step improvement framework for Scotland’s public services, all of which means on-going organisational change for us.
Our vision in that plan is to make Scotland the best place in the world to learn, to educate, to research and to innovate, and we see our task as being to care for and develop the whole system of colleges and universities and their connections and contribution to Scotland’s educational, social, cultural and economic life. We cannot do that alone, and that is why partnership working is central to our efforts and why there needs to be much greater collaboration from all parties concerned. The theme of our strategic plan is ambition, and we will be building on the strong foundations that currently exist.
I shall now pass over to my colleagues, Laurence Howells, Paul Hagan—who, thankfully, has now arrived—and John Kemp. We would be delighted to answer your questions.
Thank you, Professor Brown. I welcome Professor Hagan, not just to the Parliament but to Edinburgh. I believe that you have had a bit of a journey this morning, but I am glad that you have made it.
I take the opportunity to apologise for the delay in our getting round to all of you. I think that we had said that you would appear slightly earlier, so thank you for waiting. The first question is from George Adam.
Good morning. I would like to ask about outcome agreements, which Alice Brown mentioned. Universities are explaining how they deliver national priorities and, with outcome agreements, there is more focus on outcomes. Are we doing enough to widen access through the outcome agreement process?
The outcome agreement process is one of discussion and debate between us and the universities. The beauty of the outcome agreement approach is that we can tailor things to different institutions. There is always more that we can do. It is clear that the sector is making progress on widening access but more needs to be done. As you know, there is currently a commission on widening access, which will give new impetus to that. There has been significant progress on improving access, which has been steady and slow. More needs to be done.
There has been really good progress on the relationship between different parts of the education system, not just between colleges and universities but between schools and universities. My colleague John Kemp can give a little bit more detail on that.
George Adam asked whether enough was being done. As Laurence has said, there has been progress on widening access over the past decade, since we published “Learning for All”, which was a widening access strategy. Progress has been fairly slow and steady in some areas but more recently, in the past few years, progress on widening access to people from the most deprived areas has speeded up slightly, since the outcome agreements came in.
There has been more significant progress in areas such as articulation, with the number of people articulating—that is, entering university with a higher national qualification—having doubled in recent years.
On the question of whether that is enough, the First Minister has set out an aspiration—which she has tasked the commission on widening access with looking at—that by the time a child born last November can enter university, they will have an equal chance of entry regardless of which deprivation quintile they come from. That is quite a substantial change, so quite a lot will need to be done over the remaining 17 and a half years to reach that deadline. We are working with the commission on widening access on ways in which that can be done.
We hear regularly that certain universities are doing a lot better than others. Is there an explanation for that? It seems to be easier for people from certain backgrounds to access the more modern universities and institutions.
All our universities are different and they all face different challenges in widening access. Some universities take in a significant number of their students through articulation—sometimes one in five of their students come in through that route—which makes it easier to widen access, because among HE students in colleges those from the more deprived quintiles are slightly overrepresented. Articulation is a big reason for some universities having different figures from others.
Some universities also have higher demand for particular courses, which makes it more difficult to widen access. They have a lot of students with five As in their highers who all want to study medicine, for example. It is more challenging to widen access in such areas.
We have a range of support for widening access in universities, partly aimed at getting articulation to work well, partly aimed at improving retention for access students, and partly aimed at working with schools to help prepare people so that they can compete for courses where demand is extremely high.
I have one final question. Universities Scotland said that outcome agreements are focused on the council’s relationship with individual institutions, with a
“risk that they are inadequate to address shared strategic opportunities”.
What did Universities Scotland mean by that?
I cannot speculate on what Universities Scotland meant by that but from my perspective I think that it is about the balance between an individual set of relationships and our systems across the system as a whole. Outcome agreements undoubtedly focus more on individual institutions and their contribution but they also recognise the fact that each institution is individual in its locality and in the service that it provides.
It is important to get the balance right between what individual institutions do and contribute and how we can work in partnership, possibly across institutions. For example, all our activities in research pooling and innovation centres are partnerships across multiple groups of institutions, and we try to get those strategic things right.
I think that what Universities Scotland is referring to is whether we have got the balance of those two things absolutely right. The balance needs to change over time, depending on the issues of the day. My view is that we have got the balance right and that there needed to be a shift away from uniform national policies to policies that were more focused on individual institutions.
Laurence Howells’s point is about how we balance the diversity, which is important. One of the strengths of the Scottish system is in ensuring that there is a strategic approach to which all are signed up. Among the many examples of that approach is what is done on widening access. For example, under the “Learning for All” strategy to which John Kemp referred, we hold an annual conference for principals of all the universities—we are planning the next one now—which I think is a valuable way of bringing them together to share some of their direct experiences and to think more strategically as a collective, recognising the different pressures that individual institutions in their different parts of Scotland are under and considering how they can respond to those.
Does that type of strategic joint working help with the widening access agenda? As I said earlier, some institutions seem to be taking up more of the slack than others.
Absolutely. There are representatives from different universities on the commission and we have an access and inclusion committee in the funding council, which is an excellent committee that is very up to date and at the forefront of some strategic discussions on widening access. So, we play our part in different ways but very much in partnership with the various principals.
I stress that in addition to outcome agreement meetings, the board and executive members get the opportunity to visit all our universities and colleges—I know that the committee is going to look at colleges another day—and have strategic dialogue meetings. Again, that is an opportunity for our board to be up to date and aware of developments and to have the strategic discussions that are so important when choices have to be made on how to move forward.
Laurence Howells said twice in his first answer that more needs to be done to widen access. What specifically does the Scottish funding council have to do more of to assist with widening access?
Two things were in my mind. First, we need more of the work that we have been doing already on additional places and improving articulation between universities and colleges so that there is a clear route through. Secondly, we need to enhance, improve and develop what has been called contextualised admissions, which is where universities take a wider range of factors into account in assessing talent and ability. Those are the two priorities that we are looking for: making the system as a whole work better and thinking about how individual universities look for the most talented applicants.
A commission on widening access is sitting and will report early next year. We hope that it will give advice on what more needs to be done. We believe that more needs to be done because there continues to be a disparity between the proportion of people from more deprived areas who go into higher education and the proportion of those from the least deprived areas who do so. That is a fairly stark disparity, but the Government aspires to address it over the next decade and a half or so, and quite a lot will need to be done.
Professor Brown, you were clear in your statement that you feel that the outcome agreements from 2012 have done a lot to increase the accountability of universities for their spend of public money and you gave examples of how exactly that had happened. Is there anything else in outcome agreements that could further enhance that process?
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Again, I will ask my colleagues to come in, but my impression is that the outcome agreements are evolving. When they started, they were for one year only, which presented particular challenges for those who were running big organisations. They have now moved to cover a three-year period, which is much better, as it allows for a different kind of dialogue.
The outcome agreements have evolved and improved considerably since they were established, and we are always looking at ways in which we might improve them, which is where the dialogue with Universities Scotland and with individual institutions becomes important. In general, we want to be open to improving the outcome agreements, because there is a lot for both sides to gain from them.
When I was appointed as chair, one of my first actions was to meet the university principals, who wanted to ask me about outcome agreements and so on. I feel that the agreements have provided the university sector with an opportunity to demonstrate clearly to its stakeholders and to its communities more generally what the universities do. There are great stories to be told. The outcome agreements are valuable in many ways, not least in making things much more open and transparent.
Universities have a huge amount of money that comes in from non-state funding sources such as research councils, the European Union, charitable foundations and philanthropy. Since 2012, have the outcome agreements improved the way in which universities are accountable for using that money?
We see the priority as being accountability for using our funding. The outcome agreement is an agreement between the university and the SFC about what our funding buys.
In addition to accountability, it is important to stress—as Alice Brown did—that the outcome agreement is a dialogue between us and the institution. It is partly a funding agreement that defines what the university will do with our funding, but it is also about the dialogue that gets us to that position. That involves discussing the institution’s priorities and how they relate to the aims that we are seeking to promote, and reaching an agreement on how we mutually fund something that takes us closer towards those things. That is the main benefit of the agreements.
So you argue that the outcome agreements for your funding, which is provided by the Government, have helped the accountability process for other areas of funding, because institutions are having to look at what they do well.
That is certainly the case. To emphasise John Kemp’s point about dialogue, we are anxious in engaging with the institutions to hear their ideas on how to improve things. One example is the transitions 20/40 programme at the Royal Conservatoire of Scotland, whereby pupils who would not normally have access to the conservatoire are encouraged and supported at an earlier stage in their development; many of them are now moving on to courses at the conservatoire.
The dialogue involves a significant exchange with institutions about the new ideas that they have, what could be done differently and how we can support them to do those things.
I agree with John Kemp that accountability for SFC and Scottish Government funding is primarily the area in which we are interested, but of course institutions are significantly accountable to other bodies, too. If institutions do not discharge their responsibilities properly, the funding sources will soon dry up, so it is certainly not in their interest not to pay attention to that aspect.
I am sorry about your delayed journey, Professor Hagan—I am sure that the Minister for Transport and Islands will be asked some questions about that. [Laughter.]
I spent some time at Stanford University in California, and I was overwhelmed by the partnership, involvement and engagement between business and the university. One of the eight outcomes—thank goodness you refer to outcomes and not targets—in your strategic plan for 2012 to 2015 concerns “university/industry collaboration”. Given the amount of public money that is provided to universities, how much—if any—do you receive of the £441 million of income that universities generate from knowledge exchange activities? Given Scotland’s poor record in creating small businesses, that knowledge transfer activity is very important. Do you go for equity participation or equity involvement, or do you simply give universities the money and hope that something comes out at the other end?
We do not take an equity share. The priority is ensuring that businesses are supported and that research is translated for the benefit of business and industry. Our institutions are pretty good at spinning out companies and creating new companies—in fact, they are as good as those in many other countries around the world. Our investment in that space is about trying to make it even better and to smooth the interaction between business and industry. That is why we have actively engaged with Universities Scotland in the implementation and development of its five-point action plan to deliver benefits for business and industry.
What matters is that we translate the research for the benefit of the economy, which will benefit through the creation of small companies, the growth of companies and the jobs that will emerge as a result of that engagement. That is sufficient for us.
I talked to a professor who had developed a voice unit that was way ahead of its time—I will not say which university was involved. Why, when I asked what his plans were to transfer it to market, did he show a total lack of interest—it was some time ago—on the basis that all he wanted to do was go around the world presenting a paper on it?
Our universities have moved a long way from that and a much higher proportion of academic staff and researchers in them are now working towards the translation of their research. Many people go into research because they want to make a difference to the world in some way or another. Many of them are interested in pursuing an academic career. However, in recent years, our universities have moved towards the translation of research.
That is backed up by the push from the research councils, which want their investment in research to be translated for the benefit of the UK economy. The research excellence framework, which assesses research every few years, now includes an impact assessment, and the funding that flows from the funding council is influenced by success in that. That impact is beyond academic publication; it includes benefits to the economy, health, wellbeing and culture of the country.
Forgive me, Professor Hagan—that might be your view of the world, but I talk to businesspeople. There seems to be a divide between the hallowed cloisters of the universities and the aggression of creating and pursuing business.
I disavow your comment about being one of the best in the world. I was involved pretty heavily in European business, and I know that we are not transferring knowledge from universities to market. There is no go-to-market philosophy in the universities, as far as I can see. Of course, you will correct me.
I will describe exactly where the go-to-market philosophy is engaged. I refer you to our eight innovation centres, which have been established to feed the demand from industry for research and development. Some major industries in Scotland and global industries, as well as small and medium-sized enterprises, have engaged in the development of the innovation centre programme. The thrust of that programme is demand-led development of research for the benefit of the economy and the people of Scotland. The culture of our universities is already changing.
Perhaps the culture is not changing quickly enough. I ask you for specific examples of when the funding council has influenced course provision in a way that significantly improved outcomes for employers and students. We have business studies courses but, if I look at the curriculum of universities, I see no real connection, although I understand that there are commercial units.
In another committee, we have been considering internationalisation and exports. I talked about the relatively small number of start-ups. Given the reputation that we have for research and development, innovation and partnership, £441 million is not a lot of money. Will you give me some examples?
Of course, that is the money that goes into the universities. It is not the money from which businesses and the economy benefit. There are two things. What flows through—
I am sorry to interrupt, but think how much more you could do if you took an equity share, for example. If that money was recycled through the universities, think by how much more your funding would be increased.
Some of our universities take an equity share, but the funding council does not. The funding that stems from the equity share that the universities take can be recycled to support business, industry and the further development of research in the institutions.
As the matter has—rightly—come up a couple of times, I ask why you do not take an equity share.
We fund research and we fund development. The intellectual property that is associated with that is owned by the institution and the researcher, not the funding council. We would need to impose a condition of funding that allowed us to take an equity share.
One of the major issues in any business arrangement between two partners—between a university and a business or industry that is interested in exploiting the IP, for example—is having another player at the table or another slice of the cake. If our universities are negotiating on a reasonable basis, securing investment and using the return on that investment effectively, I am not sure that we necessarily have a place as a middleman. However, I am open to other opinions on that.
The discussion is interesting and, to be honest, I do not think that you are answering the question, Professor Hagan. I still do not understand. If such an opportunity arises, is there anything to stop you taking such a share? Does anything block you from doing that in your rules?
I do not think that we are absolutely blocked from doing that. That goes back to incentives and trying to keep an entrepreneurial culture in our universities so that they actively seek to make deals happen. In our experience, there tends to be a myriad of deals, from very large ones to relatively small ones.
We try to balance the needs of teaching, research, innovation in the economy, widening access and the cultural contribution. Our role is to create a healthy, entrepreneurial and active university sector that engages. The experience of universities that have had the benefit of deals from industry and money coming back means that they are hungry for more and keen to do more and to reinvest that money.
The research councils—
I am sorry; I will bring you back in shortly, Professor Hagan. I am struggling here. If there is nothing to prevent you from doing something such as Chic Brodie suggested, I am struggling to understand why you would not do it in some cases, although you might not do it in all cases. You might provide a grant in some cases, but in other cases you might take a small equity stake, particularly in times of austerity and difficulty with finances. That might bring money back into the system, which would increase your ability to fund other projects. Surely that happens elsewhere in the world. Why does it not happen here?
We tend to fund the long-term infrastructure in universities rather than specific projects. If we were funding a specific project, we would probably do that in partnership with a range of partners. The scope for the state to benefit from co-investment in the system is definitely worth thinking about, but we are trying to shift the culture so that it is more entrepreneurial and so that more of the activity that has been described happens.
We are just trying to get you to be more entrepreneurial. Maybe that is what we are struggling with.
What would Professor Hagan do if he had £441 million—apart from buying Abellio ScotRail? Any investor has a right to say that they want a share of the IP, a return or shares in the company. We just do not do that in Scotland. It is great news that the culture is going to change, but the way to change it fast is to say that that is what you will ask for, so your demand on the public purse will ultimately be less and there will probably be a lot more than you get just now.
I am happy to take away and explore the option. However, the research councils do not take an equity share. I go back to our earlier discussion about outcomes. The outcome is the benefit for the economy and the people of Scotland. In this case, that is probably best discharged through company growth and the creation of wealth and jobs.
I was going to let the matter go there but, if you took an equity stake, what would stop that being of benefit to the people of Scotland, economic growth and so on?
We will take the issue away and consider it.
Okay. Thank you very much.
I will continue the discussion about employers and higher education institutions. Your submission says:
“we are in a unique position to anticipate, and to respond to, student and employer needs and gaps in higher and further education across Scotland.”
We have heard previously that there are up to 150,000 information technology vacancies across Europe, including vacancies in Scotland and the rest of the UK.
In the report, “Engineering UK 2015: The state of engineering”, EngineeringUK said:
“engineering enterprises are more likely than average to have hard-to-fill vacancies for professionals (31.7% compared with 17.6%) ... Furthermore, nearly half ... of engineering enterprises said that hard-to-fill vacancies meant they had delays developing new products or services”.
Given the issues in those two large areas, and given that you have a national programme on access to high-demand professions—reach Scotland, which is about access to dentistry, law, medicine and veterinary medicine—and the access to creative education in Scotland project, or ACES, why is there no project that focuses on STEM subjects, when we know that there are a huge number of vacancies out there?
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The two projects that you mentioned are widening access projects. As well as those, we have a series of interventions on skills, which will tackle some of the issues that you talked about.
Information and communications technology provides a good example. There is a shortage of ICT professionals in Scotland—according to “Skills Investment Plan For Scotland’s ICT & Digital Technologies sector”, the gap in Scotland is about 11,000, which is part of the larger gap in Europe that you mentioned.
In May, we met employers from the IT industry and departments from our colleges and universities to talk about how we address the mismatch between what the colleges and universities are producing and what employers want. We followed that up—I think that it was on the Friday before last—with a meeting with the colleges and universities about how we will respond. We are encouraging people to come together and ensure that the suite of available courses meets employers’ needs.
Sometimes the issue is not just numbers but getting the right courses. When we got the employers, the colleges and the universities together, the colleges said, “The destination stats for people who have done our courses are not great, so if you think that there is a shortage, why aren’t you employing those people?”, whereas the employers said, “They do not have quite the right skills.” We need to match the courses better to employers’ needs.
We will encourage the colleges and universities to come together in some form of partnership—it might be similar to the Colleges Scotland energy skills partnership, which operates in part of the engineering sector—to ensure that the courses are right and are badged to employers. The aim is that employers know that, when they take on someone who has done a certain course at a certain university, that person will have the skills that are needed for the job and, crucially, students will know that, when they enrol on a course, it will lead them into a particular part of the industry, rather than into a situation in which they have graduated and employers say, “No, that’s not what we need.”
By and large, employers are happy with the output of colleges and universities, but there are mismatches in areas such as ICT, and we want to work with colleges and universities to ensure that the mismatch disappears.
You were right to say that the reach and ACES national programmes are about narrowing the educational attainment gap. Will you put in place a similar project for ICT and engineering?
We do not have a specific plan to include ICT in the widening access project, but that could—
Can you say why?
The reason for the high-demand professions projects is that, if someone wants to get into medicine or some of the creative subjects, they need five As at higher—and for medicine, they need experience of working in a hospital, which advantages young people whose parents are doctors and so on. The reach programme is intended to address that issue, rather than a shortage of doctors, which is not an issue. That is not to say that we could not address skills and access in combination. We can look at that.
In its report, EngineeringUK said:
“The calibre of STEM graduates also needs attention”.
It went on to talk about employers’ concerns in that regard, saying:
“Heading the list is the troubling finding that nearly half of those respondents (48%) experiencing problems have concerns about the quality of STEM graduates. This ranks just ahead of the problem of a shortage of STEM graduates (at 46%).”
Are you doing anything to address that? I know that you touched on the issue earlier.
We are expanding the number of STEM graduates. Some of our additional places are specifically for STEM subjects, which will increase the proportion of students at university who are studying them. A bigger issue is that there are quite a lot of STEM students in the system, but a lot of them leave those subjects behind and do not go into STEM industries. The issue is about the attractiveness of STEM post university, because those students have numeracy skills that are attractive to a whole number of areas.
As I say, the issue is partly about expanding the number of STEM graduates, which we are seeking to do, but, to return to my earlier point, it is also about getting a better match between what is in the courses and what employers need. STEM graduates are attractive to many areas beyond engineering and science. We probably supply far too many for those industries. The issue is about getting a big proportion of the graduates we supply into the right industries.
My first question is about the Scottish index of multiple deprivation. On Friday, I was at the West Highland College graduation. Do you agree that, for rural areas such as Fort William and Ardnamurchan, the SIMD is a crude measurement that does not reflect students from poorer backgrounds? What are you doing to get a more accurate reflection of such students?
We recognise that the SIMD does not work as well in rural areas as it does in urban areas.
It does not work at all.
No. We are aware that there is an issue, even in urban areas. For example, the proportion of the population in Aberdeen who are from the more deprived data zones is far smaller. We are very much aware of that in our interactions with the universities in Aberdeen. We do not have one target for all.
In rural areas, because of the small population and the more mixed data zones, the SIMD works particularly badly. We are keen that institutions use a basket of measures to describe what they are doing in relation to widening access, some of which relates to individuals, not data zones. That helps to give a bit of richness to understanding how well they are doing.
That needs to be done fairly quickly, because the latest paper that you sent to the Public Audit Committee said that the University of Highlands and Islands had 4 per cent of students from poorer backgrounds compared with Glasgow and Forth Valley, which have around 35 per cent. That looks like it reflects poorly on UHI.
Rest assured that when we look at how well UHI and Robert Gordon University are doing, we contextualise that by looking at the figures on where they are drawing students from. We recognise that it is different for Glasgow.
But those are the figures that you gave the Public Audit Committee—let us leave it at that.
I move on to my second question. What is the funding council’s role in national pay bargaining for further education colleges?
We do not have a direct role in that—it is a negotiation between the colleges and their staff. Our role is limited to funding, supporting the system and, from time to time, reflecting on the system’s operation and how it impacts on each college.
It is Government policy to have national pay bargaining. On Friday, I was told that UHI and West Highland College have the lowest-paid lecturers in the whole sector. If you look at the further education sector, you can see that the difference between a lecturer’s salary at UHI and at James Watt College is £5,000 a year. The cost of living is no less in the UHI area, but UHI cannot offer lecturers more money. It cannot fulfil the Scottish Government’s national pay bargaining requirements for a national pay scale because of the lack of Scottish Funding Council funding. Do you acknowledge that, if the Government wants national pay bargaining requirements to be fulfilled, you will have to step in and either have some colleges stand still for five years or bring UHI up to the level of other colleges?
My understanding is that we are not directly involved. The discussions between Colleges Scotland and the unions on national pay bargaining are about equalising the pay increase each year, rather than immediately sorting out the underlying disparity. However, you are right that that disparity has an impact on institutions. I am not clear as to when they plan to tackle the issue.
The institutions are funded by you. To pay staff, they have to get that money, or they will stop doing courses.
My third question is on the back of Gordon MacDonald’s point. During last week’s health questions in the Parliament, we had eight questions on the shortage of general practitioners. In other weeks, we have had questions on the shortage of nurses. This week, there has been huge media interest in the shortage of radiologists. There are also shortages of many other health professionals as well as of people in the STEM subjects, and we have heard about the drastic shortage of Gaelic teachers.
One of your responsibilities is to do workforce planning and to look at the skills that are required by our economy in the future. If you are looking at that and doing your job right, why do we have 29,000 fewer places in FE for under-16s, 150,000 fewer part-time places, 74,000 fewer places for over-25s and 24,000 fewer IT places? In schools—I hope that you talk to schools, because people will not get into further or higher education unless they have the qualifications—in national 4 and 5 last year, we had 29,000 fewer pupils sitting computing. That does not exactly sound like you are on course and at one with the Government or indeed the economy in meeting skills shortages. Will you address the points that I have made? After all those cuts, there were 3,000 additional full-time places.
I ask Professor Hagan to talk about the issues to do with medical subjects, and then John Kemp will talk about FE places.
The numbers of medical and nursing places are of course strictly controlled by the Scottish Government. We implement the numbers that are given to us, and we arrange for the distribution of those places across the sector. The issue of the number of GPs and other specialised disciplines across the sector is partly to do with the choices that students make when they start and progress through their courses. There is nothing to determine that students who go through medicine have to become GPs or surgeons, or have to follow any particular discipline.
Perhaps the solution to the problem is to have some incentivisation for people who go into specialised subject areas, rather than to determine at the outset which particular part of medicine students will study. I suppose that many students who start medicine have no idea what particular disciplines are about and form their views as they progress through the course. Of course, they also form views on the basis of their particular aptitude for parts of the medical profession.
But there are huge cuts in the science subjects in schools and in the number of science teachers. We have heard all about that in the past couple of weeks at the committee.
Mary, let the witnesses answer before you come back in.
I thought that he had finished. My point is that people need to have sciences to do medicine.
On the reduction in college places, a large reason for the reduction in head count is that there are more substantial full-time courses on offer. Many of the courses that are no longer there were extremely short. It requires quite a few of those to create a full-time course. You are correct that the number of sub-16 college courses, which are often delivered in schools, has gone down. Those were often very short courses, right through the school career. I suspect that the number will go up in the next couple of years as more substantial courses related to the developing the young workforce strategy become part of what colleges do in schools.
That is partly about getting a better link between what schools and colleges do together to respond to employer need. We are not responsible for all the things that happen in schools, but colleges are working closely with schools on vocational routes that could lead to college or university. We think that those will develop fairly fast in the next couple of years in responding to the youth employment strategy.
The panel will probably agree that the SFC has an important role in providing information and advice to Scottish ministers, based on your interactions with institutions. However, a number of written submissions that we have received have made criticisms that the SFC has become too closely linked to the Scottish Government. For example, the University of Dundee said:
“At times, the Scottish Funding Council has appeared to serve more as a conduit for government policy rather than as a critical buffer between Government and universities. Ensuring that SFC is enabled to fulfil this role is vital to the success of our sector.”
Queen Margaret University said:
“Over the last few years it appears the SFC’s role in delivering a challenge function to Scottish Ministers has been diminished.”
How would you respond to those criticisms?
12:15
First, it is clear that we have two roles. Our key role is to operationalise the Government priorities that we have been asked to take forward, working in a full range of partnerships with not just colleges and universities but all our other partners. That is our key delivery role in developing and improving the education system as a whole.
We also have a role in providing advice to Government. The convention is that we provide that advice in confidence. We do that frequently on a whole range of subjects.
I am concerned if our key stakeholders—the universities and colleges—do not perceive us as acting in an objective way to create the best system that we possibly can. Part of our continuing dialogue with Universities Scotland and with individual universities is to make sure that they realise that we understand the individual pressures on them and that we act strategically to try to create the best possible system.
I should also stress that universities and colleges themselves offer advice to Government, directly and through other bodies.
It is a difficult balancing act for us. Our key role is to support the delivery of the Government’s key priorities. That is what we put most of our focus on, and those are most of the outward-focusing activities that people will see. Perhaps we need to do more with individual stakeholders to make sure that they understand that we have heard, understood and reflected on the feedback that we get from them.
Do you agree with Queen Margaret University that you should have
“a challenge function to Scottish ministers”?
We have a challenge function; we operate that when we offer advice. Challenge is maybe too strong a word, but we offer advice. We say, “If you wish to do X, this is the best way of doing it,” or “If you want to do Y, we’ll need this amount of money,” or whatever. Equally, we say, “If you want the kind of innovative educational system that you have said you want, this is the best way to achieve that.”
To take a phrase used by the University of Dundee, do you see yourself as a “critical buffer”?
We see our role as being expert implementers of the Government policy to create the best education system that we can. If that is the definition of a buffer, the answer to your question is yes, but it is not the word that I would use.
It seems a bit strong to suggest that you are a buffer between the Government and universities. How do you see your role in relation to interfacing with the universities versus the Government? Where do you see yourself fitting in there?
I see us as trying to create the best connections between a whole range of stakeholders. It is not just a binary relationship; there are the universities, the student body and the local authorities as local employers—and there is also the whole system of education and schools. I do not see it as a binary relationship—one versus the other, if you like. We all have the same goal, which is to have the best education system that we can possibly have in Scotland. Our role is to try to engineer that.
I will illustrate that a little bit. We regularly meet Universities Scotland. As was explained earlier, we also meet individual institutions. One of our recent experiences relates to the research excellence framework. I am looking particularly at Professor Hagan, because he and his team worked a lot with the different institutions to consult them about the methods of organising funding for all that. We do not do these things in isolation. When we are thinking about implementing a particular policy, it will be done through that iterative process. That kind of exchange goes on regularly between us and our stakeholders, including the universities, which are our key stakeholders.
Do you think that the two comments that I quoted indicate that there is any misunderstanding about the SFC’s role or any expectation that is not being met?
We certainly saw those comments as showing us important things to work on with the universities by going back to them and asking what they meant and what more we could do to change things, as part of our thinking about how we improve how we function and how we work. It is important to say that we meet Universities Scotland in a three-way meeting with the universities and Government. We very much take the point that such feedback is of value to us in learning about and engaging more on how we could do better.
In October, we will have a strategic meeting with the board. I found the submissions extremely useful and I will use some of the points in them to start a discussion at the board about what the board thinks of those perceptions and how we might address them.
A letter of guidance was issued on 10 September to the SFC in which the cabinet secretary stated:
“I consider it essential that you accelerate your efforts to reform and strengthen your own organisation to ensure it is attuned to the evolving political and economic environment and the needs of our communities; capable of acute analysis and effective and efficient ways of working; and of delivering effective, high-quality leadership to the HE and FE sectors it funds, ensuring that public investment delivers for learners and, ultimately, grows the economy.”
That is quite a statement. How are you going to assess your performance against those guidelines?
Continuing the improvement and development of the SFC is at the top of my agenda, and the cabinet secretary’s letter gives us a strategic framework within which to do that. We have adopted the Scottish Government’s three-step improvement programme, which gives us a method whereby we can develop and improve what we do. At the next board meeting, we will present a new way of the board itself asking questions of the executive about how well we are doing. The questions will be attached to ways of assessing or measuring how well we are doing in all our tasks.
The letter of guidance is quite a sweeping ask.
Indeed. However, it is our aspiration as an organisation to be regarded in that light.
We are not starting from nowhere, because we have been engaged in that process for some time. For example, on the impact on the economy, we have developed significant partnerships with Scottish Enterprise and Highlands and Islands Enterprise that have been refined and improved over the past few years. Working in partnership, we can have a much bigger impact and deliver on some of the requests in the letter of guidance.
My question relates to funding. I am also a member of the parliamentary committee that looks at the economy and internationalisation, as is Gordon MacDonald, and we know that horizon 2020 is worth €72 billion over the next six years. How are we engaging with horizon 2020 to develop and strengthen the Scottish economy through the university mechanism?
We are doing that in two ways. The universities themselves, of course, are heavily engaged in securing horizon 2020 funding, just as they were engaged in securing funding from FP7, which was the seventh framework programme for research and technological development. The evidence shows that the bulk of the funding that came into Scotland as a consequence of engagement with Europe during the FP7 period was taken by our universities, on the basis of the excellent quality of their research and its feed-in to the economy.
Among other initiatives that we are taking, we have the established interface project, which links universities with business and industry and has been working very successfully. In a relatively new intervention, we provide additional innovation vouchers that allow SMEs to engage with universities to secure horizon 2020 funding.
Do you have somebody who is dedicated to looking at the horizon 2020 programme? Are you working with the Government or Scottish Enterprise to ensure that we access that funding? As we are not—yet—an EU member state, we have to be very fast on our feet to make sure that we know what is going on.
We work proactively with Scottish Enterprise, the Scottish Government and Highlands and Islands Enterprise; importantly, we also work with, and are heavily engaged with, Scotland Europa. We deal directly with Mr Swinney’s team—the commercialisation and innovation group—in Atlantic Quay, and we meet those various partners regularly to plan out our horizon 2020 activities. As a partnership, we organised a series of events around the country in advance of horizon 2020, engaging with SMEs from across the country to promote the various opportunities that would be available, and we are continuing that dialogue with them.
Colin Beattie read out the guidance from the cabinet secretary that said that it was
“essential”
that
“you accelerate your efforts to ... ensure”
that you are more
“attuned to the evolving political ... environment”.
What do you have to do to be more attuned to the political environment?
From a research perspective, if you have read the Times Higher Education Supplement, you will be aware that significant discussions are under way across the UK with the Nurse review of the research councils and the consideration of an alternative role for the Higher Education Funding Council for England. We must be aware of and alert to changes that are happening across the UK, particularly with regard to the research agenda. My deputy, Stuart Fancey, is at BIS this morning, discussing those aspects.
As far as I am aware, the research councils are not political, so that does not answer my question.
But they are influenced by political decisions that are made by BIS.
Is that what is meant by the instruction for you to become more
“attuned to the evolving political ... environment”,
or does that relate only to the research councils?
There is a UK agenda for the research councils. I prefaced my comment by talking about research.
What does Laurence Howells think that the instruction means?
I take it to mean that we must be attuned to the environment that we are operating within and what the Government of the day is asking us to do, not only in Scotland but in the UK and, potentially, in Europe. It might also involve our doing a little bit of horizon scanning with regard to what is coming down the road and the environment in which we will be operating in future.
One of the big messages that I take from the current Government is that there is an impetus for us all to work together in more of a system with the other partners in Scotland.
I have a couple of questions about how the higher education sector responds to international competition.
In advance of the meeting, the committee asked a series of questions including one about how the funding council provides leadership and added value to universities by helping them to monitor and respond to challenges from international competitors. The University of Edinburgh has said that the SFC
“does not have particular strengths in looking at international competitors or in enabling universities to meet the demands of international competition”.
What is the role of the SFC in monitoring international competitors, and how do you help universities to respond to that competition?
We are not actively engaged in monitoring international competitors—I will be open about that. However, using the resources that are available to us, we must ensure that our universities are resourced to be internationally competitive. If you take as a benchmark for that the performance of the sector in the recent REF 2014 exercise, you will see that our institutions are as competitive as any across the UK. In addition, we refer in the documents to two publications, one from BIS and one from the Higher Education Funding Council for Wales, that consider a range of metrics for research performance across the four Administrations in the UK, and in every one of those metrics Scotland outperformed the rest of the UK.
If you are asking us how we match up against the rest of the UK in competition, accepting that the UK is ahead of much of the global competition, I would say that Scotland contributes disproportionately to securing the international position of the institutions across the UK.
It is also worth noting that we are a core member of the connected Scotland group, which is a partnership between us, the universities and colleges, the British Council, the Royal Society of Edinburgh and Scottish Development International—that is where the expertise lies to help our sector to export and be effective in the world. We see our role in supporting that but not in leading trade missions and so on.
Representatives of three of the innovation centres have been out in China, and the Chinese have been back to investigate what we are doing in our innovation centres, because they were taken with the model. In addition, the research pools in energy and life sciences visited Hong Kong and are now directly involved in bilateral partnerships with China. I should also refer to the Max Planck partnership. The Max Planck Institute does not form partnerships with just any organisation, but it has formed one with Scottish institutions. Regarding the innovative medicines initiative, the fact that we secured funding to establish the lead drugs factory for drug discovery in Scotland, against competition from across the whole of Europe and the rest of the UK, indicates that our investments have made our institutions internationally competitive.
12:30
You have listed examples of what you do to make institutions internationally competitive and have given examples of where you have been able to successfully get support, but do you have no role in monitoring what competitors are doing—for example, how successful they are in their initiatives to export expertise to attract research funding? Is there no role for the funding council in seeing what competitors are doing and possibly considering whether their initiatives would work in Scotland too?
Regarding the research agenda, our principal competitors are the other parts of the UK, and we have to make sure that we are at least as good as those if not better. In many respects, we are better than other parts of the UK. If we are hitting that benchmark, it is almost certain that we are hitting a benchmark above most of the performance of the rest of the world.
You need to watch competitors, though.
It is also a question of resource and the focus on it. Our universities are actively engaged in looking at what is happening outside, and they are involved in many international partnerships. The vice-chancellors of the six leading research institutions in Hong Kong engaged in a dialogue with the funding council and some of the principals from Scotland to find out how research pooling in the various disciplines had worked, and they were very interested in the success that has emerged from that model. We are ahead of the game in many respects, and other people are trying to emulate what we are doing in the sector in Scotland.
I offer my apologies to committee colleagues and to Laurence Howells and his colleagues for being unavoidably absent from the meeting earlier. I listened with interest to what Professor Hagan said about research, particularly in response to Mark Griffin’s questions.
There have undoubtedly been some quite serious concerns about recent decisions, particularly in relation to the removal of the global excellence fund. We have received evidence from the University of Dundee suggesting that its removal
“reduces the level of investment in internationally leading research in Scotland”.
A key partner, the Royal Society of Edinburgh, has suggested that recent changes
“might make it more difficult to sustain true global research competitiveness in Scotland”.
The University of Edinburgh went even further, pointing to some of the world-leading research that it is doing and the extent to which that research delivers a considerable saving to the national health service in Scotland. It stated:
“The response to this world-leading impact has, incredibly, been to cut REG [Research Excellence Grant] funding to the University by £14m per annum by 2017. This is, in large part, the result of the SFC decision to reduce the priority attached to supporting world leading 4* research and is unlikely to support Scotland’s Higher Education sector to perform competitively at an international level”.
I hear what you are saying about our competitiveness with the rest of the UK and internationally, but it appears that some of those who are delivering that international competitiveness and world-leading research have serious questions about some of the decisions that you have made and the basis on which they were made. Can you help the committee to understand the rationale behind those recent decisions?
I will try to do that. When the global excellence fund was provided, in advance of the REF 2014 exercise, that was with a view that it might be a short-term investment. However, the reality is that there is a transfer market of high-performing staff across the rest of the UK. We were conscious that that activity was under way and we and the Scottish Government did not wish to see Scottish institutions disadvantaged in advance of REF 2014, so additional investment was put into the sector by adjusting the weighting for four-star and three-star research from 3:1 to 3.11:1. The increase in weighting for four-star research was simply a mechanism through which to deliver the additional global excellence funding to the institutions that were doing the very best research.
We operate on the basis that all our universities should be involved in research and teaching. That is the board’s policy and the Scottish Government’s policy—indeed, that is the sector’s view. We distribute funding to the universities on the basis of their performance in the REF exercise, which is a research assessment exercise. Probably partly as a result of previous investments by the Scottish Funding Council, many of our institutions performed better in the REF 2014 exercise. As a consequence, although the University of Edinburgh improved its performance, many of our other institutions improved their performance as well, so the distribution of three and four-star research across the sector varied.
If we had moved away from supporting research as we did in the current model, we could have faced the challenge that we were disadvantaging institutions that had improved their performance and had done so partly because we had resourced them to improve it. Given that it was, in effect, a zero-sum game, any redistribution of funding as a consequence of the REF was going to hit some of the larger institutions. As we have described it in other places, the peloton caught up with the leaders of the group. That can be seen as a bonus for Scotland in that there is now a higher quality of peer-reviewed research across the whole sector, but it had the consequence that the University of Edinburgh saw a drop in its funding.
Not only the University of Edinburgh expressed that concern. The University of Dundee has also—
Given that they are all in the same pot and that it is a zero-sum game, the distribution of funding would change for all of them if they all improved their performance.
You have set out the rationale for what you describe as a temporary measure to bridge between REF processes. I presume that it was understood as such by the institutions themselves at the time. They may even have made an appeal to the Scottish Funding Council or to ministers about that period needing to be bridged. In that case, it is rather surprising that they feel that the approach that has been taken latterly cuts against their expectations of what was likely to happen.
It was clear from the outset that the global excellence fund might have to be a short-term measure. Indeed, the funding that was available to us—
You say, “might have to be”. However, if it was a bridging mechanism, you would have had to make that clear. Either directly or through their agencies, Governments use bridging mechanisms all the time. This morning, we have talked about a transition period at length—as you know to your cost, having turned up on time. It should be made clear that transition mechanisms are time limited, but it appears that that was not made clear in this case.
We made it clear, when we made the funding available, that it might not be there forever.
A number of concerns have been raised about funding and leadership. For example, Universities Scotland has questioned the Scottish Funding Council’s ability to introduce further additional places if its budget remains static. It states that that
“would be a retrograde step at a time when the Widening Access Commission is working to promote a step change in access to university for learners from disadvantaged backgrounds”.
Universities Scotland goes on to say that it understands the funding council to be
“over-committed in funding strategic projects”
and that
“institutions are only funded to 96% of the full economic costs of teaching Scottish and EU students”.
Do you share those concerns? If so, why?
If the additional places were to be introduced as a significant long-term measure and our budget remained static, we could afford them at the price of managing other budgets that we have, which is what we would normally do. That is the basis on which we would plan.
The issue of meeting the full economic costs of teaching is a bit more complicated. Some universities have multiple sources of income and we expect them to maximise those sources because that income contributes to covering the costs that they incur in their provision of teaching.
With regard to our priorities, we need to continue both to support widening access—which has involved us in the efforts that we have described—and, at the same time, to support institutions to make a difference to the economy. That is always going to be a balancing act within the budgets that we have.
In the context of what you have just said, do you consider your current levels of funding to be adequate?
I am sorry—I did not quite hear your question.
In the context of what you have just said, do you consider your current levels of funding to be adequate? This is your opportunity to make a pitch.
More can always be done. We have a great set of universities and colleges that do a fantastic job for Scotland. For us, the key focus is on what more we can do through working in partnership with them and other agencies. That is our key agenda. It is important for all of us to think about how we can make the whole system in Scotland more efficient and about what we need to do to make it work better.
If there was more funding, we would take it.
That is taken as read.
Much has been said about widening access. As Dr Kemp rightly said, the commission is due to provide an interim report. How much do you think that it will cost to deliver the Scottish Government’s ambition on widening access?
It is quite hard to cost that, because it is necessary to make assumptions about how access should be widened and whether that should be done by equalising upwards, so that the participation rate of what is currently the lowest quintile is the same as the participation rate of the highest quintile, or whether the world will change over the next 17 years, such that the participation rate equalises but does not increase.
There are also costs related to what would be necessary to help schools to improve attainment and to put in place the articulation arrangements that would be necessary to support universities in widening access, but we already have those costs in our budget. It is a question of how we focus those in the future.
The short answer is that I do not know how much it will cost to deliver the widening access ambition. The commission is still carrying on its work. Depending on the solutions that it proposes and the ways in which access is widened, there could be additional costs, but it is also possible that there will not be additional costs. I know that that is not a very helpful answer.
No—but maybe you will be able to answer my follow-up. Do you believe that changes are needed in how we allocate funding to universities to respond to the increased focus on widening access?
It is less a question of how we allocate our funding to universities than it is a question of how we use the outcome agreements which are, as I said earlier, a means by which we and the universities can have a dialogue about how they will meet aspirations. If, from the commission’s work, a clear aspiration emerges for targets on how we will meet the First Minister’s aspiration in 17 years, the way in which we will use the outcome agreements—which contain the widening access agreements that were set up under the Post-16 Education (Scotland) Act 2013—will be very important. It is a question of how we engage with universities on funding rather than there being an issue to do with the funding system.
However, I do not want to prejudge what the commission might say on funding. We will find out about that in the interim report in November or in the final report in March.
I would like Mr Howells to clarify something that he said. Did you say that if, in agreement with universities, you are asked to provide more university places because of the widening access agenda, some of that funding might come from private sources of income?
The universities receive funding from all sorts of sources, which they apply to their business. I do not see that as being an obvious mechanism for increasing the number of places.
Would all the money for widening access have to come through SFC funding?
The number of university places is, effect, regulated, and we fund all those places at the moment. That is how we would fund widening access places.
I am sorry, but I want to be absolutely clear about this. Is it your understanding that if additional places were required in order to meet the increase in participation by people from more disadvantaged backgrounds, funding for those places would come from public money?
Yes.
Absolutely?
Yes.
Thank you.
You mentioned ambition and aspiration. I want to refer back to a question that Mary Scanlon asked about short-term courses being axed or abandoned in colleges. Do you feel that some pupils’ ambitions and aspirations have suffered because of that?
12:45
The focus on full-time places for young people in colleges, which has been a Government priority that colleges have responded well to, has probably enabled more people to meet their aspirations. Widening access to higher education in colleges is the area of higher education that has the best record, and the most deprived areas are overrepresented in that part of education, which has grown quite substantially in the past few years. Over the past seven or eight years, the number of places for school leavers going into higher education in colleges has doubled, and that is creating aspiration for a lot of people. For many of those people, that aspiration will take them on to university.
Against that, some of the short courses that no longer exist were very short courses, often in leisure. We are talking about courses that lasted less than 10 hours, in some cases. We have to balance the two things. Perhaps some of the part-time courses were valuable, but many were not as valuable as full-time courses for young people.
You will be aware of concerns about severance packages for senior management at Coatbridge College. Part of the funding for those severance packages was provided by the funding council. Why did the funding council provide that, given the concerns that I know it had about those payments?
We thought about that. The difficulty for us was that had we—to use a fairly strong term—fined the college for those actions, that would simply have damaged the service that was being provided to students, because that money could not be recovered from the people to whom it had been paid. On balance, we thought that we should not burden the existing students or the new college that was being created at the time, so we felt that it was best not to pull that money back.
In that case, would you acknowledge that since some of the severance packages were funded by the previous Coatbridge College and partly by the funding council and money has left the sector, students at New College Lanarkshire have, by extension, been disadvantaged by the excessive pay-outs to the previous management?
We funded a proportion of the packages at Coatbridge College, but we funded only up to the amount of the Lanarkshire scheme, which was the 13 months, or broadly one year, payback scheme. The amount above that that was paid to some senior staff—in particular, the principal at Coatbridge College—was not funded by us. However, because that money came out of Coatbridge College’s resources, it was not available to New College Lanarkshire afterwards. I accept that.
A few months ago I had discussions with colleges that said that they were short of funding, and one had taken the novel approach of using non-cash depreciation to provide cash. Do not ask me how. It transpired that the problem was that the Office for National Statistics had reclassified some of the spend. What involvement do you have with the ONS before it changes a classification, which in that case meant that the college ended up with a severe potential shortage, although eventually the Government recovered it?
We have no involvement with ONS before—
So the ONS can just reclassify education.
Yes.
And we end up with a shortage in one area.
When the ONS reclassified, the Government engaged with it about that, and I believe that it engaged with the Treasury about the implications of that over several years prior to its happening. However, we had no direct involvement with the ONS on whether the spend should be reclassified.
Reclassification can have a severe effect on college and university funding.
It did not have a severe effect on university funding—universities have not been reclassified. It has, however, had a significant effect on how colleges operate and on how the SFC needs to operate with colleges to monitor spend, now that they are part of Government accounting.
I would like to follow up on that. The discussions are interesting. I assume that there is a discussion with the ONS at Government level about the implications of any reclassification, and I presume that the funding council had discussions with the Scottish Government about the bearing of additional legislative changes that the Government proposed on ONS classification. Is that true?
We did not have particular discussions about those issues at the time. My understanding is that some of the key issues that the ONS identified were to do with control and borrowing consents, which were nothing to do with the legislative changes at the time.
With respect, there were issues relating to ministers’ control in respect of the workings of the college sector.
Indeed.
The ONS reclassification happened before the legislative changes in 2013. I suppose that, theoretically, the Government could have used the opportunity of the 2013 act to move in the other direction, but the reclassification was prior to that.
I presume that the funding council was involved, with ministers, in that discussion.
Yes. We discuss all the time. We discussed how we would mitigate reclassification, if we were going down that road, and we discussed alternatives.
I am thinking about the overall finances of universities. Yesterday, I got the figure of £1,820 for the Student Awards Agency for Scotland tuition fee that is paid to students. That is a very rough average. Given that people who come here pay £9,000 in fees, how can we ensure with the controlled numbers that we have—I go back to my first question and the example of GPs—that Scottish universities choose students who are domiciled in Scotland, for example in the Highlands and Islands, where there is a critical shortage of GPs, radiographers and so on? How can a Scotland-domiciled student who is more likely to go back and work in the Highlands and Islands be chosen over someone from England with a £9,000 fee?
The funding that we give to universities is for Scots and EU students.
That is what I said.
The SAAS fee is only an element of that. There is our funding on top of that, which, depending on the subject area, brings the amount broadly in line with the £9,000 that comes from the fee.
The teaching grant is £5,700. That brings the figure to £7,600, which is still quite a bit less than £9,000.
The institution will not make a choice between the student who brings in £9,000 and whoever else. Our particular funding is for that level, because it cannot substitute between the two.
Institutions will try to recruit students from the rest of the UK over and above our students if they can. However, it is now impossible for a student from the rest of the UK to displace a Scottish student, because we have a target with institutions for numbers of places for Scots and EU students, and that is what we fund. By and large, institutions meet that target; I am not aware of any recent examples of their being significantly short. That does not suggest that students are being displaced.
Theoretically, if an institution had room for only 100 students in a building, it could be possible that it might take the English ones, but that is not happening. In fact, the introduction of the fees for rest-of-UK students enabled us to withdraw funding from students who used to be in our system. It used to be theoretically possible for a rest-of-UK student to displace a Scots student, but because that funding was withdrawn from our system, we used the money that we saved to purchase additional places for Scots and EU students. Therefore, there are now more places in the system for Scots and EU students than there were prior to the introduction of fees.
When does a target become a cap?
There is a cap, as well. It is there to control the SAAS costs.
You are saying that there is a cap on Scottish students, even though there are more places.
Yes. There is a cap that is over and above our target. Our target is for a particular number of places. Universities can recruit above our number of places and just take the SAAS fee, but there is a control purely to control the SAAS costs. However, where institutions want to breach that cap because they want to widen access or meet particular skills needs, an arrangement is now in place in which they can tell us in advance that they plan to go hell for leather to recruit, for example, more information and communication technology students or more widening access students, and we will, through an arrangement with the Government, arrange that they can breach the cap.
My final question is to ask for clarification. Are outcome agreements concerned with all the relevant SFC funding or just with specific funding streams?
The outcome agreements are for all the key funding streams for any individual institution. However, a multi-institution project would be managed through a different process. Basically, the vast bulk of provision to one of our universities would be covered in an outcome agreement.
The vast bulk of provision is covered, but some things around the edges are not.
Yes. For example, if an innovation centre is being managed across institutions, it makes sense to do that in a slightly different way. We try to integrate them as much as we can.
Okay. Thank you very much.
I thank all the witnesses for attending the meeting. Once again, I apologise for the delay at the start, but I think that that helped Professor Hagan. We are very glad that he made it along. We appreciate the witnesses’ time.
Meeting closed at 12:56.Previous
T in the Park