Scottish Government

Enterprise and Culture Committee Actions

Response

16/146. The Committee is of the view that, whatever the detail of the final proposals, the introduction of top-up fees will result in an additional income stream to higher education in England. That is the explicit aim of the policy. If higher education in Scotland is to maintain its competitive advantage and avoid becoming competitively disadvantaged in the future, it will be essential to lever additional funds into the sector. While this can in part be achieved by various measures which can be taken by institutions themselves (detailed in this report), we believe that significant Executive funding will also be necessary.

The Executive recognises that Scotland's distinctive higher education system is a valuable asset which must be protected and developed for the good of the nation. We have a good track record of investing in our higher education institutions (HEIs), having increased funding in real terms every year since devolution. By 2005/06, we will have increased annual funding for the HE sector from 600 million in 1999/2000 to over 800 million by 2005/06.

We responded promptly to concerns in the sector about the impact for Scotland of the DfES proposals by setting up a third phase of our Higher Education Review. Involving over 80 representatives from some 20 organisations, the results of this detailed and thorough process will give us the robust information we need to make informed decisions as part of the forthcoming Spending Review. We are committed to ensuring that Scottish higher education maintains its competitive edge.

41. The Committee considers that to introduce a White Paper materially affecting matters devolved to the Scottish Parliament, without dialogue with the Scottish administration, suggests a lack of communication by the UK Government with Scottish Ministers. The Committee considers that it is essential that in future the UK Government takes account of the potential consequences for Scotland of its proposals.

The Executive acknowledges that the White Paper has potentially an indirect and direct impact on Scotland. Both the Executive and the UK Government have acknowledged the need for closer and more regular consultation on these issues by instituting quarterly Ministerial meetings.

43. The Committee considers that the way in which the White Paper was developed and published does not reflect a sound and effective policy making process in the devolved context. In light of this experience, the Committee recommends that the Scottish Executive and UK Government review and develop their protocols and practices to ensure that they are effective in addressing the complex inter-relationships of policy development and implementation which exist within the UK in a post-devolution context.

The Executive has taken steps to build on its existing relations with the UK Government, with the recent creation of a dedicated UK Liaison Team in the Office of the Permanent Secretary. The team is working closely with colleagues in the Scotland Office and the Department for Constitutional Affairs to better support and strengthen the Scottish Executive's relations with the UK Government at both Ministerial and official levels.

49. The Committee supports the principle that higher education is fundamental to Scotland's economic development and success. Highly skilled and educated people, world-class pure and applied research, and the cultural, economic and social benefits of universities to individuals and their wider communities are and will continue to be key elements in Scotland's growth.

The Executive fully appreciates the role our world class universities have in growing the Scottish economy. We make this clear in our Framework for Higher Education, our Lifelong Learning Strategy and in A Smart, Successful Scotland. We welcome the Committee's support for this key component of our strategies to grow Scotland's economy.

62. The Committee considers that Scottish higher education currently has a number of strengths arising from its distinctive character: it's wider accessibility; its closer links between the further and higher education sectors; its traditions of excellence and achievement; and its long history of providing useful knowledge to society. Scottish higher education is already different to English higher education education and the Committee considers that there are opportunities to build on this diversity.

The Executive welcomes the Committee's appreciation of the distinctive nature and strengths of the Scottish higher education sector. As well as informing the next Spending Review, the outcome of our Phase 3 Review will help ensure that future policy developments take account of, and enhance the particular character of the Scottish higher education sector.

67. The much lower levels of support for part-time students, including mature part-time students, creates a barrier to improving the education and skills of people of all ages. The Committee recommends that the Executive should address this situation, maximising the benefits to individuals, families, communities and the wider economy.

As part of the review of funding for learners, the Executive is currently working to obtain more information on the reasons why people choose to study on a part-time basis, what sort of part-time study they want and what may prevent them from doing so.

While many people do support themselves while studying part-time, it is possible that more would find higher education more accessible on a part-time basis because of disability or caring responsibilities, but would be unable to support themselves while they do so.

We therefore need to identify whether there are significant numbers or groups of such people and, if so, what type of additional support they need.

71. The Committee is of the view that in making available any additional resources for higher education in Scotland there should not be a presumption that these will be allocated solely to the University sector and that the strategic importance of the further education sector should also be addressed.

We will carefully consider the needs of both the further and the higher education sectors during the forthcoming Spending Review. Our Lifelong Learning Strategy places considerable emphasis on the need to continue to look at further and higher education side by side.

81. The Committee considers that cross-border flows of students are a positive asset, enriching both individual student experience and the wider university culture. The Committee recommends that the Executive should monitor cross-border flows carefully over the years to come to see if there are significant changes.

The Executive agrees with the Committee that cross border flows of students are a positive asset to Scotland. This is recognised in our Framework for Higher Education, which highlights the fact that the presence of students from outwith Scotland enhances the environment for all students - both academically and culturally. We agree with the Committee's view that there is a need to monitor changes, given that it is too early to predict with any degree of certainty the impact of changes on the flow of students to Scotland from the rest of the UK, Europe and the rest of the world.

90. The Committee recommends that the Executive should explore further collaborative marketing for Scottish universities in targeted overseas countries, potentially exploiting Scotland's well-recognised global brand, and its distinctive tradition of learning.

The Executive agrees with the Committee that collaborative promotion of Scottish higher education in overseas markets is an important area of activity, and has increased its funding to Education UK Scotland for this specific purpose. Our Framework for Higher Education sets out our existing commitments, and makes clear our future policy intentions in this area. Further, the international higher education dimension is currently being considered as part of the Fresh Talent Initiative as well as within the Phase 3 Review.

103. The Committee recognises that Scotland's size and culture makes its universities ideally placed to gain advantage from collaborating on world-class research. The Committee recognises the benefits that flow from research collaboration but believes the amount of such work taking place in Scotland needs to increase significantly, and urges the Executive to continue actively to encourage creative, innovative and effective collaboration in research and other areas

The Executive agrees that there is scope for the higher education sector to extend the extent of collaboration on research between institutions in order to generate critical masses of internationally competitive research. The Scottish Higher Education Council (SHEFC) is making good progress with a pilot initiative to pool research activity in Scotland across several areas, including physics, economics, biological science and the creative arts.

108. The Committee is of the view that a pre-existing problem in recruitment and retention, caused at least in part by falling comparative pay scales, is likely to be exacerbated by any additional income stream to English universities. Precise timescales and effects are impossible to model but the Committee is clear that the trend would be for the situation to worsen over time. The Committee therefore recommends that the Executive works with institutions and representative bodies, including trade unions, to address recruitment and retention issues for Scottish higher education.

The Executive understands the need for Scottish higher education to be supported by a well managed and well rewarded workforce. The latest Universities and Colleges Employers Association (UCEA) data suggests that Scotland has the fewest recruitment and retention difficulties in comparison to all other regions of the UK. Nevertheless, the Executive appreciates that there are a number of issues affecting the attractiveness of the higher education labour market, and consequently has asked for the Phase 3 Review to examine in detail factors affecting staff recruitment and retention.

111. Whilst mindful of the UK pay bargaining structure in place in universities, the Committee considers that Scottish universities may suffer competitive disadvantage in providing benefits packages for research staff. The Committee considers that Scottish universities may be able to work collaboratively to examine means of counteracting this disadvantage, for example by offering longer term contracts.

The Executive will encourage the sector to consider this recommendation in relation to the range of other factors which affect recruitment and retention of high quality staff. As identified above, this is an area being explored by the Phase 3 Review.

123. The Committee recognises that the taxpayer must be assured that any investment is being used as effectively as possible. The Committee recommends that the Executive should actively assess the economies of scale that could be achieved by sharing aspects of university operation, potentially on a regional or even national basis. The Committee considers that resources released by such action could then be redirected to core teaching and research activities

The Executive outlined in the Framework for Higher Education our commitment to achieving best value from government investment in higher education. It makes clear our intention that HEIs should look to collaborate wherever it is beneficial to do so, and thereby maximise the effective use of public resources. We believe that such collaboration could also take place between HEIs and FE Colleges. Collaborative efforts may also be extended in places beyond the educational sector to include the private and public sector.

Nevertheless, we should not overemphasise the savings that can be made through collaboration, as experience shows economies in this area are hard won. Furthermore, as HEIs are autonomous bodies, it is right that the lead should lie with HEIs to assess the scope for economies of scale in specific areas. It is rightly part of SHEFC's role to secure best value for the public investment in higher education. We therefore look to the Funding Council to work with institutions to identify potential areas for such collaboration and, where appropriate, to facilitate such activity.

132. The Committee believes that universities have a responsibility to continue to seek other sources of funding, and to work to maximise best value for public funding. The Committee considers that there is considerable scope for universities to increase their links with business, industry and employers, and recommends that universities, their representative bodies, the Funding Council and the Executive considers carefully the findings of the Lambert Review with a view to stimulating such links.

It is rightly part of SHEFC's role to secure best value for the public investment in higher education and as such, we would look to the Funding Council to work with institutions in this regard.

The Executive agrees that there is great scope for increasing links between universities and business. The Lambert Review however identifies this as much, or indeed more, of an issue for the business sector as for universities. The Executive will consider carefully the recommendations in the Lambert Review in consultation with the higher education sector, business and other stakeholders.

138. The Committee recognises the benefits of endowment funding, and recommends that universities should continue their efforts in this area. The Committee believes that in the longer term there is no reason why it should not become a more significant part of university funding than is now the case.

The Executive agrees with the Committee's view that there is scope to explore the potential to increase income from endowment funding, even though the sector recognises this is unlikely to account for more than a small income stream in overall percentage terms.

Our Framework for Higher Education welcomes the UK Government's initiative to highlight and strengthen the incentives which already exist for private giving from individuals and organisations to educational institutions. The Framework clearly sets out the Executive's commitment to linking with the DfES Endowment Task Force and acting on its recommendations. The Executive has led meetings between DfES representatives and Development and Finance Directors of Scottish Universities, and awaits the findings of the DfES report.

We are also using the Phase 3 Review to explore other options for increasing the non-public sources of funding available to higher education.

144. The Committee recommends that, if the aspiration is to grow the Scottish economy, the Executive should increase its investment in higher education as a percentage of the overall budget.

We have made clear our commitment to maintain the competitive edge for Scotland's HEIs. Using the results of the Phase 3 Review, and taking account of all the competing priorities on the Executive's resources, we will make informed decisions about the appropriate level of funding for the sector during the next Spending Review.

147. Finally, the Committee considers that the proposals in the White Paper, if implemented in their current form, will have an adverse impact on Scottish higher education, particularly on its research sector. The Committee therefore intends to draw this report to the attention of all Members of Parliament for Scotland, so that they can be fully informed prior to the consideration of proposed legislation at Westminster.

The Executives notes the Committee's intention to draw the attention of Westminster MPs to the contents of this report.