In an article published in the Western Mail earlier this week, Professor Wendy Larner, the new Vice Chancellor of Cardiff University, pulled no punches in her assessment of the future of her own institution in the current economic environment.
While acknowledging the university's considerable contribution and the excellent work of staff, she stated that its financial model is no longer sustainable. Research costs are being funded by the university's own budget, and there's pressure to attract more international students due to the revenue they provide.
This comes at a time when academics are advocating for higher pay, the university is facing rising costs, and students are caught in a cost-of-living crisis.
Perhaps the most telling statement is her admission that Cardiff University has no choice but to prioritise and that this "will inevitably involve making tough decisions about stopping or limiting some activities, changing the way we work, and cutting out tasks that don’t add value." In other words, to be financially viable, there may have to be efficiencies and potential job cuts.
The article exposes the challenges facing the Welsh higher education sector and if this is the position of our top university then what is the financial situation in other institutions?
Earlier this year, we learned that the University of South Wales faced a £6 million deficit, and rumours suggest multi-million-pound deficits will be announced at other institutions in the coming months.
If universities do have to make substantial cuts in their budgets, what impact will this have on the future of the economy in Wales which needs a greater emphasis on research and innovation and, most importantly, graduates with the skills required by our business community?
Professor Lerner is correct - it’s not acceptable for Welsh universities to increasingly rely on subsidising research from their own funds. Yet to a large extent, this is because Wales currently receives only £134m for research and innovation from the UK Government (or 1.8% of the UK total).
As various reports have pointed out, there are myriad reasons for this low level of funding, but the simple fact remains that if this was devolved in the same way as other responsibilities such as health, schools or economic development, Wales would receive an extra £236 million per annum.
Given this, is it right that we only receive two fifths of the funding for research and innovation that, under normal devolution arrangements, should be transferred to Wales?
Imagine the outrage if Wales only received 40% of the NHS funding it’s due under the Barnett formula. No politician would accept this, but they seem content that the funding of research and innovation, which boosts economic performance and competitiveness, is treated in this way.
It's simple - low research funding leads to low research activity which leads to low research funding and so on.
If we continue to believe that research excellence only exists in institutions across the border that already receive the highest levels of public support, how will things ever change?
Since 1999, Wales has lost out on billions of pounds of funding that should have supported our academic institutions and boosted innovative businesses.
Unless politicians, as well as universities and businesses, push hard for devolving research and innovation funding, this will continue to be a problem not only for higher education but the whole economy.
It's partly due to such funding shortfalls that universities in Wales are looking to generate additional income by recruiting more international students.
While they can add value in different ways, an over-reliance on overseas fees can be a reckless strategy especially at a time when the UK Government is looking to restrict immigration.
It has been suggested that many universities have become addicted to the easy financial fix from revenue generated from overseas students and this is at the expense of meeting the needs of learners and industries in their local communities.
Indeed, there are worries that some Welsh institutions might soon have more international students than domestic ones, which then begs the question, what is their purpose for the nation?
For far too long, there has been silence from our politicians on these challenges and no coherent strategy by the Welsh Government and other key stakeholders as to the future of the higher education sector in Wales.
That must change and rather than perpetuating the status quo that has led to this situation, there needs to be a radical rethink on how to deal with the problems facing universities, on supporting their development and, most importantly, on maximising their impact on Wales.
One of the key characteristics of a confident and prosperous nation is the strength of its higher education system and the critical role it plays in developing the economy and civic society. Owain Glyndwr saw this perfectly when, in his vision for Wales, he proposed setting up two universities in Wales, one in the north and one in the south of the country.
So did the quarrymen and farmers of North Wales who gave the local people a chance to access higher education by contributing pennies from their wages to set up Bangor University 140 years ago.
After nearly 25 years of devolution, we have the right to expect our university sector to be far stronger than it currently is. Professor Larner's article should be the wake-up call to Welsh universities that sticking their heads in the sand and pretending that it can be business as usual is no longer sustainable, financially, morally or economically.
Wales needs its universities to be the best they can for the future of our nation and hopefully this will herald the start of a long overdue debate on how we can achieve this.
