Viability of Welsh Universities

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Dear Higher Education Funding Council for Wales,

How many universities were scored 'high risk' by HEFCW in the November 2017 institutional risk review process?
How many universities were scored 'moderate risk' by HEFCW in the November 2017 institutional risk review process?
If this was different from the previous year, please give the scores for 2016 and any identified factors accounting for any change.
For the following universities:
Abertystwyth
Glyndwr
Cardiff Metropolitan
please supply any correspondence between their governing bodies and HEFCW regarding their risk assessment.
Of the three universities listed above, which (if any) have had agreement from HEFCW to increase their borrowing in the last 12 months and by how much?

Yours faithfully,

Julie Williams

info, Higher Education Funding Council for Wales

2 Attachments

Dear Julie
 
I am writing to confirm receipt of your email below requesting information
under the Freedom of Information Act 2000.
 
Under the terms of the Act, we will respond to your request no later than
19 December 2017, which is 20 working days from receipt of your request.
 
In the meantime, please contact me if you have any further queries.
 
_____________________________
Dale Hall
Council Secretary | Ysgrifennydd y Cyngor
Tel | Ffôn 029 2085 9665
Email | Ebost [1][email address]
[2]www.hefcw.ac.uk
 

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Emma Morris, Higher Education Funding Council for Wales

Dear Julie
Further to your request of 21 November under the Freedom of Information
Act 2000, we have reviewed the information that we hold that falls within
the scope of your request and set out our response below.
 

* How many universities were scored 'high risk' by HEFCW in the November
2017 institutional risk review process?

 

* How many universities were scored 'moderate risk' by HEFCW in the
November 2017 institutional risk review process?

 

* If this was different from the previous year, please give the scores
for 2016

 
Through our Institutional Risk Review (IRR) process, we monitor the
governance, management and strategic direction in the higher education
sector in Wales, and consider universities’ financial sustainability. The
current definition of Low, Moderate and High risk in our IRR process is as
follows:
 

We have no
Low Risk major concerns.
 
Some risk
and/or
accountability
issues
identified
which may raise
concerns about
Moderate long-term
Risk sustainability
  and which HEFCW
needs to
understand
better through
further
engagement with
the
institution.
Institutions
which face
High threats to
Risk their short to
medium-term
sustainability.

 
 
We undertake the IRR reviews annually, and communicate the outcomes to
universities through IRR letters. The latest IRR review was concluded in
September 2017 (not November 2017), and the risk classifications agreed in
that review were as follows:
 

* Two institutions assessed at High risk

 

* Two institutions assessed at Moderate risk

 

* Four institutions assessed at Low risk

 
 
In the IRR reviews carried out at the equivalent point in 2016, the
summary risk classifications were as follows:
 

* One institution assessed at High risk

 

* Two institutions assessed at Moderate risk

 

* Five institutions assessed at Low risk

 

* If this was different from the previous year, please give the scores
for 2016 and any identified factors accounting for any change.

 

* For the following universities:

* Aberystwyth
* Glyndŵr
* Cardiff Metropolitan

please supply any correspondence between their governing bodies and HEFCW
regarding their risk assessment.
 
We have judged the information relevant to both of these requests to be
exempt from disclosure under the Freedom of Information (FoI) Act for
reasons outlined below.
 
Section 43 (2) – Commercial interests
Section 43(2) of the FoI Act provides exemption from disclosure where the
release of the information would, or would be likely to, prejudice the
commercial interests of any person (‘person’ may be an individual, a
company or any other legal entity).
 
We consider that this exemption applies to information we hold which
accounts for the change to the profile of our IRR risk assessments between
2016 and 2017. We also consider that this exemption applies to the
correspondence we hold between ourselves and the governing bodies of
Aberystwyth University, Wrexham Glyndŵr University and Cardiff
Metropolitan University regarding our IRR risk assessments of those
institutions. This is because in both instances the information contains
sensitive material which, if disclosed, would in our view significantly
risk harming the commercial interests of institutions.
 
In undertaking IRR assessments, we take account of a wide range of data,
information and engagements with institutions. The process integrates a
financial sustainability assessment with an assessment of risks associated
with the key areas of governance and management; strategic direction;
student and quality; research and knowledge transfer; and estates. Our
internal IRR documentation and correspondence with institutions about out
risk assessments of them include specific references to a range of
information which is commercially sensitive and not currently in the
public domain. The information covered by your request contains one or
more of the following:
 

* Details of institutions’ financial plans and forecasts, including
information relating to future planned income and expenditure;
cash-flow and financial sensitivity analyses; capital investment
plans; borrowing plans; and information on plans in respect of student
fees and pay costs.

 

* As yet unpublished student recruitment data for the current academic
year, and forecast data covering the next several years.

 

* Details of institutions’ marketing strategy and data.

 

* Details of institutions’ plans and ambitions with respect to future
strategic direction, not covered by their published strategic plans.

 

* Institutions’ future plans in specific strategic areas, including
changes to course portfolios; research and knowledge transfer
activities; and estates and capital development plans.

 

* Information about planned changes to senior staff structures and/or to
individual senior positions.

 
All of this is commercially sensitive information that other competitor
higher education providers would find of value. If the information were
disclosed it could cause substantial prejudice to institutions’ planned
activities, potentially put them at a competitive disadvantage, and
consequently harm students’ interests over the longer term.
 
The Section 43 exemption is a qualified exemption, which means it can only
be relied upon where we are satisfied that the public interest in
maintaining the exemption outweighs the public interest in disclosure.
HEFCW recognises that there is a public interest in transparency and
accountability for expenditure of public money. However, that interest is
protected in general through a number of methods, including the audit and
subsequent publication of higher education institutions’ financial
statements, and the audit of HEFCW conducted by the Wales Audit Office.
After weighing the substantial prejudice likely to be caused to
institutions’ current and near future commercial interests by disclosure
of the information you have requested against the likely benefit to the
wider public, we have concluded that, on balance, the public interest in
withholding the information requested outweighs the arguments for
releasing it.
 
Section 36 (2) – Prejudice to the effective conduct of public affairs
Section 36 (2) provides exemptions from disclosure if, in the reasonable
opinion of a qualified person, release of the information:
 
(b) would, or would be likely to, inhibit (i) the free and frank provision
of advice, or (ii) the free and frank exchange of views for the purposes
of deliberation.
(c) would otherwise prejudice, or would be likely otherwise to prejudice,
the effective conduct of public affairs.
 
We believe exemptions 36 (2) (b) and (c) apply to the information you have
requested. HEFCW’s Chief Executive is designated as a “qualified person”
under section 36, and it is his reasonable opinion that section 36 (2) (b)
and (c) correctly apply to the information which you have requested.
 
In support of applying exemption 36 (2) (b): A prerequisite of HEFCW
meeting its responsibilities for monitoring universities’ governance,
management and strategic direction is that it is able to engage in fully
open and frank dialogue with those universities in order to understand
better their plans and how they are managing risks, including those
identified through our IRR process. Such dialogue is predicated upon
mutual trust and due respect for the sensitive and confidential nature of
the issues being discussed. Disclosing information about the factors and
reasons which have resulted in changes to the number of institutions we
have assessed in each of our IRR risk categories (‘High’, ‘Moderate’ or
‘Low’) between one year and the next  would reveal sensitive and
confidential information about individual institutions. Likewise, to
disclose correspondence between ourselves and the governing bodies of the
three named universities in your request would reveal sensitive and
confidential information about those institutions. In both instances, we
believe releasing the information would significantly undermine the trust
between HEFCW and the institutions it assesses, and prejudice further
dialogue.
 
In support of applying exemption 36 (2) (c): The disruption that would be
caused by disclosure of the information would adversely affect HEFCW’s
ability to meet its wider responsibilities and objectives in securing
sustainable higher education provision in Wales. We would be concerned if
it were no longer possible to fully meet our obligations because
universities feared that details of financial, student recruitment and
other sensitive information that they had shared with us would be
immediately put in the public domain.
 
The Section 36 (2) (b) and (c) exemptions are qualified exemptions, which
means that they can only be relied upon where we are satisfied that the
public interest in maintaining the exemption outweighs the public interest
in disclosure of the information. We have considered the following factors
‘for’ and ‘against’ disclosure
 
For disclosure:
We recognise that there is a general public interest in transparency and
promoting public understanding of the issues. We appreciate that in this
particular case there may be interest from, in particular, current and
prospective staff and students of the three named universities in the
release of information about HEFCW’s risk assessments of them. We also
recognise that there might be a general interest in the reasons and
factors which have determined changes to the overall profile of risks of
the institutions that we assess between one year and the next.
 
Against disclosure:
Disclosing the information would very likely adversely affect the
relationship between HEFCW and each institution subject to our IRR
process. It would not be in the public interest if, as a consequence of
disclosure, it was likely to stifle the future provision of information to
HEFCW by universities, or if it would otherwise adversely affect HEFCW’s
ability to fulfil its role due to a breakdown in the relationship between
the parties concerned. Also, it would not be in the interests of students,
staff or the wider public if disclosure of any sensitive information
referred to in IRR documentation and correspondence were to exacerbate the
risks which they referred to, or inhibited courses of action being taken
by universities to address those risks and make the necessary changes and
improvements to secure their long-term sustainability. In either case,
these would lead to poorer decision making and, ultimately, less effective
use of public monies. There is also a public interest in minimising
student disruption and the potential adverse impact on their studies that
might be caused by disclosure of the requested material through increased
media and press exposure and the related demands on institutional staff
and management time.
 
In view of these considerations, we hold that releasing the requested
material would adversely affect the relationship between HEFCW and the
institutions it funds, and hinder the ability of HEFCW to undertake its
proper role of maintaining oversight of the public investment within the
higher education providers in Wales. Furthermore, we hold that its release
would likely hamper or even undermine the efforts of all institutions to
address their various risk issues and strengthen their financial
sustainability, which is counter to the fundamental purpose of the IRR
process. Consequently, we have concluded that, on balance, the public
interest in withholding the information requested outweighs the arguments
for releasing it.
 

* ‘Of the three universities listed above [viz. Aberystwyth University;
Wrexham Glyndŵr University; Cardiff Metropolitan University], which
(if any) have had agreement from HEFCW to increase their borrowing in
the last 12 months and by how much?’

 
We have a Memorandum of Assurance and Accountability with institutions
that we fund which sets out the terms and conditions of funding provided
by HEFCW to those institutions.
[1]www.hefcw.ac.uk/documents/publications/circulars/circulars_2015/W15%2032HE%20Memorandum%20of%20Assurance%20and%20Accountability.pdf
 
The Memorandum includes details of the particular circumstances under
which an institution must seek written approval from HEFCW to increase its
financial commitments (Annex C of the Memorandum refers).
 
We would not disclose information about any institution that has
approached us for approval for an increase in its financial commitments
before details of the institution’s borrowing commitments have been
reported through its audited financial statements, which are published
each year. Prior to an institution’s accounts being placed in the public
domain, we would view information we held about an application from an
institution for HEFCW approval to increase its financial commitments to be
exempt from disclosure under Section 43 (2) – Commercial interests of the
FoI Act. We believe this exemption would apply because, in our view, the
release of such information would significantly risk harming an
institution’s commercial interests as it would mean disclosing
commercially sensitive financial details not currently in the public
domain, and which other competitor higher education providers would find
of value.
 
We believe, however, that the public interest in transparency and
accountability for expenditure of public money is protected and served in
this instance through the audit and subsequent publication each year of
every higher education institution’s audited financial statements. The
financial statements can be downloaded via links from the website of the
British Universities Finance Directors Group (BUFDG) at:
[2]https://www.bufdg.ac.uk/network/financia... .[Aberystwyth
University’s link on this website does not work, so please access the
information here
[3]https://www.aber.ac.uk/en/finance/financ.... The audited
financial statements for any given financial year are published on
institutional websites once finalised.
 
Any institution funded by HEFCW which has reported through its audited
financial statements that it has increased its financial commitments
during the year will have - where that commitment falls within the
criteria set out in our Memorandum of Assurance and Accountability –
received the relevant approval from HEFCW prior to undertaking the
commitment.
 
 
I hope this is helpful to you, but please contact me if you have any
further queries.
 
If you are dissatisfied with our response to your information requests you
may ask us, in writing, to conduct an internal review. You should do so
within two calendar months of receipt of this response. In that instance,
a review will be carried out by a senior member of staff who has not
previously been involved with the request. We will inform you of the
outcome of the internal review as soon as possible.
 
If you are unhappy with the outcome of the internal review, you may refer
the matter to the office of the Information Commissioner who can be
contacted at:
 
Information Commissioner’s Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF
 
Website:
[4]https://ico.org.uk/
[5]https://ico.org.uk/global/contact-us/pos...
 
Tel: 0303 123 1113 (local rate); 01625 545 745 (national rate)
 
 
Emma Morris
Knowledge Management & Corporate Information Manager /
Rheolwr Gwybodaeth Gorfforaethol a Rheoli Gwybodaeth
hefcw
Cyngor Cyllido Addysg Uwch Cymru | Higher Education Funding Council for
Wales
Tel: 029 2085 9664 | [6][email address
[7]www.hefcw.ac.uk    
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We welcome correspondence in English or Welsh
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