Review of higher education in Wales: terms of reference

Higher education is one of Wales's greatest national assets. Our universities educate our future workforce, drive research and innovation, support public services, strengthen communities and contribute to our culture and language. 

However, universities in Wales now face profound challenges which require bold and fundamental reform if the sector is to continue to prosper. 

The financial sustainability of the sector is under significant strain. Universities face rising operating and workforce costs, constrained income growth, and significant domestic and international student market competition. 

The UK Government has taken steps to reduce the cost of the student loans system in England, undermining the affordability of the student support policy in Wales established by the Diamond Review in 2018. Students and graduates are increasingly concerned about the costs of higher education, student debt, the costs of living whilst studying, and the impact of loan repayments. The Welsh Government’s fiscal position is also expected to remain constrained in the coming Senedd term.

Competition for domestic and international students is growing due to immigration policy changes and a decline in the numbers of young people. UK Government reforms to research funding will require a new approach for Welsh institutions to remain at the forefront of research and innovation.

The scale and urgency of these pressures means that the underlying funding sustainability of Welsh universities and the Welsh student support system must now be addressed. Wales needs a national response to this critical national challenge. 

Therefore, the Welsh Government is appointing an independent panel to consider these issues and make recommendations on the funding and organisation of higher education in Wales. This work will ensure that the sector is ready to face the challenges of the next decade and beyond, a higher education sector that delivers for the people of Wales.

To secure a stable and sustainable higher education sector and student finance system, ready to serve the needs of Wales into the 2030s and beyond.

The panel is asked to make recommendations for policy which: 

• enable a sustainable and resilient higher education sector
• ensure that higher education delivers the skills and innovation needs of the Welsh economy and Welsh public services
• increase the proportion of Welsh Government student support funding which is spent in Wales, and incentivise more Welsh students and graduates to study, work and train in Wales
• increase the numbers of students undertaking higher education through the medium of Welsh and bilingually
• ensure students from all backgrounds can access higher education if they are suitably qualified by ability and attainment
• enable universities to deliver globally competitive research and which brings economic investment to Wales 
• support a more collaborative and coherent tertiary education sector in Wales, where universities work closely with local partners, employers, and other educational institutions
• maximise the value of public and student investment in higher education

The panel is asked to consider:

• Welsh Government funding of higher education, including the provision of higher education student loans and grants for tuition fees and living costs, and grants for institutions provided by Medr
• the financial sustainability and efficiency of higher education institutions, and their contribution to identified priority skills needs of the economy
• the appropriate structure, organisation, and governance of the higher education sector
• the role of government capital investment in higher education and the needs of the higher education estate
• funding for, and the quality of, research and innovation in universities
• the proportion of the population (both at age 18 and later in life) who participate in higher education, and the barriers to participation including the cost of living
• the movement of Welsh students outside of Wales for higher education, and the graduate destinations and outcomes of students in and from Wales
• the provision of Welsh-medium and bilingual higher education provision, and opportunities for higher education students to use and improve their Welsh language skills
• the terms and conditions of Welsh Government student loans, including the financial effects of graduate debt and repayments
• the funding and delivery of alternative pathways through higher education, including part-time provision, level 4 and 5 qualifications, higher education in colleges, and higher and degree apprenticeships, as well as postgraduate and doctoral provision

The Welsh Government faces a constrained financial outlook in the near-term. Therefore, the recommendations of the review must be fiscally neutral for Welsh Government’s non-ringfenced Resource Department Expenditure Limit spending on higher education and student grants.

The recommendations of the review must also be affordable to the Welsh Government within the spending constraints on student loan expenditure and impairments allowed by HM Treasury under the Statement of Funding Policy for the devolved administrations.

The panel, including the chair, will be appointed by the Deputy Minister for Skills and Tertiary Education. They will be independent experts and collectively bring diverse backgrounds and expertise to the work of the review. 

The panel may also seek external specialist advice to support its work. 

Panel members are appointed as individuals and are expected to provide impartial advice. 

Panel members will be expected to remain mindful of the Nolan Principles of Public Life and: 

• think strategically
• be open minded
• be evidence based 
• seek best value and efficiency
• be collaborative
• embrace technology and innovative approaches

The panel will report at a frequency determined by the chair in agreement with the Deputy Minister.

Records of meetings of the panel will be duly kept and be confidential, to enable full discussion and debate.

The chair will meet from time to time with the Deputy Minister, to update them on the work of the review.

The pressures facing our higher education sector are urgent and immediate and must be addressed quickly. A provisional timeline for key deliverables is set out below. The chair and the Deputy Minister may agree to amend this timetable:

• Terms of reference approved: August 2026.
• Panel members appointed: September 2026.
• Phase 1 report regarding funding and student support provided to the Welsh Ministers: summer 2027.
• Phase 2 full report provided to the Deputy Minister: winter 2027 to 2028.

The Panel’s reports will be provided to the Deputy Minister, who will consider its recommendations for future policy.

The Welsh Government will seek to make changes to funding student support policy, informed by the recommendations of the panel, in time for the start of the 2028 to 2029 academic year.

The Welsh Government will convene a Stakeholder Advisory Group, containing representatives of key organisations in Wales affected by the scope of the review.

The Stakeholder Advisory Group will support the panel by providing evidence, insight and practical challenge from across the sector. It will act as a forum through which the panel can test emerging analysis, issues and recommendations, helping to ensure that its conclusions are informed by a broad range of perspectives and are grounded in the operational realities of higher education and the wider tertiary education system in Wales. The Stakeholder Advisory Group will not be responsible for making recommendations. The chair will be responsible for liaison with the Stakeholder Advisory Group.

The Stakeholder Advisory Group will include nominated representatives from key stakeholder organisations, and its members will be confirmed shortly.

The chair will meet regularly with appropriate spokespeople of the opposition parties in the Senedd, to update them on the work of the review and emerging findings. The Deputy Minister and chair will be available for scrutiny by the relevant Senedd committee(s).

Members should be aware of all actual, perceived, and potential conflicts of interest and notify the chair before any meeting. The secretariat will maintain a register of notified conflicts. If any conflicts of interest should arise for panel members during their term, the chair is responsible for determining mitigations to address them.

The Skills and Tertiary Education Directorate will provide secretariat services and access to Welsh Government resources. 

Other cost-generating activities will be agreed by the chair and the Welsh Government before the costs are incurred.

The Deputy Minister for Skills and Tertiary Education may amend these terms of reference in agreement with the chair.