Cynulliad Cenedlaethol Cymru

Welcome to today's meeting of the Children, Young People and Education Committee. The public items of this meeting are being broadcast live on Senedd.tv. The Record of Proceedings will be published as usual. The meeting is bilingual, and simultaneous translation from Welsh to English is available. We have no apologies. Are there any declarations of interest from Members? I can see there are not.

We move on now to agenda item 2, which is a scrutiny session on the Welsh Government's draft budget. Please can I introduce the Cabinet Secretary for Education and the Minister for Further and Higher Education? Can the officials please introduce themselves? We'll start with Claire, please.

Thank you. Hello. I'm Claire Bushell, deputy director for finance and governance for education, culture and Welsh language.

Ruth Meadows, director of tertiary education.

Georgina Haarhoff, director of education.

Bore da. Emyr Harries, deputy director for education infrastructure, governance and finance.

Thank you for joining us this morning. You're very welcome.

Chair, could I just make a declaration of interest as well, please? I need to declare that I've got a close family member who is currently a student at Swansea University.

Okay. Members have a series of questions this morning; I'd like to start, please. With a general 2 per cent inflation-only increase applied to the total cash elements of your revenue budget, you've had to decide which budget lines require more than a 2 per cent increase, meaning some budget lines have had less than 2 per cent, and, therefore, a real-terms reduction. How have you gone about making such decisions?

Thank you very much, Chair. As you've highlighted, the approach to the draft budget this year was to offer a roll-forward budget for departments. As part of that, the education main expenditure group received an inflationary uplift of £37.4 million for revenue and £7.5 million for capital. That 2 per cent inflationary uplift is much lower than the amount of consequential funding that was received by Wales, which was £242 million in revenue and £84 million in capital for 2026-27.

Within the constraints of this budget, I have taken the decision to prioritise the 2 per cent inflationary uplift to the areas of greatest need and in line with my priorities. These decisions have been guided by a clear set of priorities and principles, to ensure that we deliver maximum impact for learners and the wider education system. First of all, we've prioritised funding to protect core services and meeting our statutory obligations. That includes funding for public sector pay, which is key to maintain workforce stability. For example, £8.9 million—nearly 24 per cent of our inflationary uplift—has been allocated to support public sector pay, which will provide arm's-length bodies, further education colleges and sixth forms with a 2.2 per cent increase to support 2026-27 pay awards. That includes £7.8 million allocated as part of Medr's overall uplift of £21.5 million, to ensure pay parity in FE colleges and sixth forms, which is a very important principle for us.

The balance of the inflationary uplift has gone on supporting my priorities for education. That includes £9.1 million—just over 24 per cent of the revenue uplift—to support additional learning needs in schools, settings and colleges. That builds on the extra £8.2 million that I announced in October for schools and colleges this financial year. I've allocated £16.4 million—a 4.1 per cent increase—to the local authority education grant for 2026-27, taking the total funding next year to £418.6 million, providing support to schools through local authorities.

As well as extra funding for ALN, this provides an extra £8.9 million to the school standards strand, supporting foundation learning and school staff. That raises our total school standards funding to over £178 million in 2026-27. A further £2.5 million is allocated via the equity strand of the LAEG for attendance and family engagement activities, and we discussed that in the Chamber this week. There's £2 million to support the Curriculum for Wales grant programme, following my announcement of over £44 million over three years to ensure national support to schools and settings across priority areas, and also to support personalised assessments in 2026-27. That builds on the extra £10 million invested from 2025-26 to support literacy and numeracy.

There's a £21.5 million uplift through Medr to support post-16 education, as well as the support for ALN, which is £4.1 million, and to continue pay parity for FE colleges and sixth forms. It includes additional funding for the financial contingency fund in FE of £0.4 million, £0.4 million for junior apprenticeships, and also £2.5 million to support the costs of initial teacher education in higher education. That follows the representations from the Minister for Further and Higher Education and also my visit to Swansea University's ITE partnership. We've had the capital uplift of £7.5 million, and the majority of that—£7.1 million—will support our sustainable communities for learning programme, which we are obviously really committed to.

These haven't been easy decisions for me to make, but they have been necessary to protect front-line services. I am acutely aware that there are areas that have not benefited from the level of funding that I would've liked to have seen, and these are difficult choices for me. I want to be transparent with the committee that some priorities have had to be balanced against the wider constraints of the budget. Just to give you one example of that—and I'm sure we'll come on to discuss this further—one of the things that I wanted to recognise through the budget was to provide additional funding to Medr for increased post-16 participation. We're seeing a very significant rise in FE learners, which is really good news for FE, but I haven't been able to recognise that under the constraints of the 2 per cent roll-over budget.

Thank you for that very comprehensive and honest answer. Carolyn.

This is a restated budget, a roll-over budget—as you said, a 2 per cent uplift. Inflation is running at 4 per cent. You said that this is lower than the amount of consequential for Wales. I've been told it's a provisional settlement as well, going forward. Local authorities have had that funding through now. I'm really concerned—. I'm sorry, I'm going to my next question, aren't I, here, too soon. 

It's okay.

How difficult is it? We're hoping, I'm hoping, and I'm sure you are as well, that that extra money is going to go into public services—through local government, that's the funding avenue—to properly fund education, given all that money that was allocated to them. How difficult is it for you, basing your budget now on this provisional settlement, when it would've been nice to present it all there, fully, at this moment in time? It must be very difficult for you.

You make an important point, which is that the education MEG is only part of the picture for education. The vast majority of funding that goes to schools goes via local government. Wherever I've been able to, I have put the money through the MEG in pots that go directly to schools, and I've done that consistently since coming into post. But I am really worried about the implications of a roll-over budget for local government. Last year, we were able to provide £262 million extra for local government, and that was issued to local government with a letter that said it was to recognise the pressures in schools, particularly additional learning needs, as well as, of course, social care. That hasn't been possible this year because they also have a restated budget. And I think, as I've said to the committee, it has been very difficult to make, you know, what have been really heart-searching decisions about what we could prioritise within the main expenditure group.

The finance Secretary has been really clear that this is the start of the process, and I hope that, as we go through this process—. Obviously, there'll be discussions with opposition parties, but also sessions like this are really important. I'm sure you, as a committee, will want to make your views heard. And I really hope that we will be able to secure more funding for education, including through the local government settlement. For my part, I have made the strongest possible case all the way through this process for education. I have made that vocally and loudly, and I will continue to do that.

Okay. Thank you. Vaughan, please.

I just wanted to take on just some of the language we're using. So, you're talking about an inflationary uplift of 2.3 per cent, but inflation's been running at 3.5 per cent to 3.8 per cent and the budget yesterday said the expectation was for it to be 3.5 per cent and then fall after that. So, 2.3 per cent is less than inflation. Does that mean that the Government will re-look at the draft budget and look again at the headline inflation, as well as what that will mean in terms of service costs? Because, even within the education sphere, some parts of the costs rise faster than others.

Last week, with your ministerial colleagues from the health and social care team, they helpfully indicated that the planning assumption for public sector pay is about 2 per cent. I know one of the Ministers is a former trade union officer. If they were a current trade union officer, I don't think there's any way in the world they'd settle for 2 per cent. And health service inflation is about 4 per cent. So, I'm trying to understand whether the actual pressures on a headline level or within services are going to be part of how the Government looks again at its budget settlement following yesterday and the up-to-date inflationary assessment. Because saying that 2-and-a-bit per cent is an inflationary rise doesn't match the facts. I appreciate why the finance team wanted to call it a roll-over, but, in real terms, it's a reduction.

Yes, well, the Office for Budget Responsibility did issue revised forecasts yesterday and we're going to have to carefully look at the impact of any changes as part of our preparations for the final budget in 2026-27. I know that the committee discussed pay assumptions with the health team last week; we have the same pay assumptions of 2.2 per cent. We've remitted the Independent Welsh Pay Review Body to look at pay for next year and, when that report comes back to us, we will have to look at any difference that there is between the 2.2 per cent that is in the budget and what the recommendation is.

I have been really clear that we want to make sure that we fully fund pay pressures because, otherwise, what happens is that there are cuts at local level and it's a balance between increasing pay and laying school staff off, which just makes all the issues we've got with workload and other pressures more acute. But I also, obviously, have to be cognisant of the further education issues and post-16 issues and make sure that we can continue to honour that pay parity that we're committed to. So, you know, this is a real challenge that will have to be looked at and, hopefully, we can look to try and address through the final budget.

Okay. I'll stop there or I'll talk for the whole session.

Okay. In our session on school improvement and learner attainment on 6 November, you told us that boosting standards in schools and colleges continues to be one of the First Minister's four priorities, despite the First Minister telling the Committee for the Scrutiny of the First Minister during the summer that the third priority, of opportunity for every family, which related to both housing and education, now simply reads 'more homes'. In light of this, how confident are you of receiving a share of the currently unallocated £380 million that is available for the final budget, given that education no longer appears to be the First Minister's headline priority?

Thank you. Obviously, we discussed this, didn't we, on 6 November? Education remains a key priority for the Government. I've been very clear on my priorities for education. Those are improving attendance, raising attainment in literacy and numeracy, improving delivery of curriculum and ALN, all underpinned by improved learner well-being.

But, obviously, we are pursuing these ambitions now within the limits imposed by current funding. As I said earlier, the Cabinet Secretary has been clear that the draft budget is a starting point. So, I will be making the strongest possible case for as big a share as we can achieve of the £380 million, bearing in mind that should also, in my view, involve extra money for local government. As I said, I've been very clear throughout this process about the huge funding pressures in education, and I'm hopeful that the discussions that will take place now, until the final budget in January, will deliver some additional funding. I've done everything that I can within the MEG to prioritise funding for those priorities.

I recognise that there are very significant pressures in the system. Obviously, we've discussed at length ALN. Although I have extra money for ALN, it is not the full amount of money that I anticipated we need to meet pressures in ALN. And the consequentials that were received in Wales were, in part, due to the pressures they're seeing over the border in ALN as well. They were very clear about meeting their special educational needs pressures. So, getting more money is a priority for me, and delivering on our priorities is a top priority for me and for the Government.

Thank you. We now have questions from Carolyn, please.

Thank you. As you mentioned earlier, schools' core budgets are—. Well, they actually come from the housing and local government budget, and then they're funded through local authorities. The Welsh Local Government Association reports £71 million of in-year pressures on school budgets and, in 2025-26, estimates £137 million of pressures. So, we discussed, just a minute ago, that 2.5 per cent uplift will be a real-terms cut, basically, to education. We've had petitions—as Chair of the Petitions Committee—on ring-fencing education and ALN as well. Just your thoughts on that, going forward. I know it makes it difficult for councils, and we try to give them that flexibility, but just your views on that, please.

Okay. Well, as I said earlier, it is really challenging for local government. Obviously, I've seen those figures as well about the pressures of £137 million for 2026-27, and the WLGA have produced a report on their concerns about sustainable funding in education. I know that they're particularly worried about their ALN pressures and, indeed, some local authorities even have ALN on their risk registers, which shows the level of the concern. So, I have been consistent in everything I've said within the Government. When I've pressed for more funding for education, I've been clear that it is also about more funding for local government, because that is how we fund our schools directly.

I think, as well, I want to make the point to the committee that, in the run-up to an election, it can be tempting to put money into eye-catching initiatives. My experience as Cabinet Secretary is that what schools and colleges need is core funding to do their day-to-day business. That is how we make the biggest difference to children and young people's lives.

In terms of ring fencing, that's been a very long-running issue. The challenge with ring fencing is some local authorities spend more on education than they get through the revenue support grant, so you wouldn't want to stop those local authorities. Torfaen has got a great record of prioritising investment in education, and I wouldn't want to impinge on that. Just to flag that we will be laying regulations before the end of this Senedd term to bring into force the changes we're making following our review of the local government formulae for funding schools. We've got 22 different ways of funding schools in Wales, which is not where we want to be. So, that has been reviewed thoroughly and I'll be laying regulations in March 2026 with a view to those coming into force in April 2027, in time for that academic year. And although that's not about the size of the cake, it will, hopefully, give us a lot more transparency about how the money is being spent and importantly will also give us clarity on how much they're spending on ALN as well. So, it's a step in the right direction, and I think there will need to be further discussions. Obviously, there's the Luke Sibieta report, there was the work the committee did when I was Chair. These are difficult issues and I think we need to keep moving them forward.

We've also got petitions—there'll be a debate soon on the Learner Travel (Wales) Measure 2008—on school transport. And, again, that comes out of education funding, through local authorities. So, I just wanted to raise that.

After several years where school reserves were historically high, they have reduced now so that they are only £66 million, equating to £148 per pupil. This shows that the majority of schools are using much of the resource available to them now, but do you think it also warns of impending problems regarding the financial situation of schools?

Well, obviously, we have had high levels of reserves in recent years, but we anticipated they would be temporary, and the latest data is that school reserves have decreased by a further 43 per cent to £66 million at the end of March. We know that schools are using their reserves to manage the increasing pressures that they're facing. That's the top subject whenever I meet with schools, the financial pressures that they're facing. So, I think it's understandable that, where they've got reserves, they are looking to try to hold on to those as best they can. But what we've also seen now is an increase in the number of schools that have budget deficits as well. So, it is a worrying picture. I think what it also reflects is that, obviously, next year, there'll be a one-year budget settlement, which I think is probably understandable under the circumstances but, ideally, schools need three-year settlements and local authorities need three-year settlements so that they can plan better and make the best use of their funds.

My third question is about the teachers' pay award. You've said that you hope that you can meet the actual requirements of that pay award of a 4 per cent uplift and it will mean extra money in the budget. With having the restated budget, the roll-over budget, publicly announced, and local authorities are having to work towards it and schools are having to work towards it, are you having discussions with unions and education that this is, hopefully, a provisional budget and you're hoping that there will be a shift? Are they aware of that? Because I've seen some publicity regarding what this budget actually means at the moment, because schools and local authorities will have to start planning now, I guess, based on the budget that's in front of them.

Well, just to say that, in terms of this year's pay award, we've put the funding in to meet the difference in the allocation that local authorities had and the 4 per cent that I agreed. I laid the School Teachers’ Pay and Conditions (Wales) Order 2025 to implement this change, and we've made funding available this year to local authorities via the local authority education grant to cover the period from September 2025 to March 2026, and that money then will be formalised in the second supplementary budget, and, as part of the draft budget to support the full year impact of the pay award, there's 17.8 million, which is being baselined for 2026-27, so that is covered for the current pay award. And, as I said, we've also made the money available to Medr to make sure that that is also provided for.

Just to let the committee know as well, we've also made provision for ALNCOs to move to the leadership scale, and we've done that in the same way. Some money has gone into the LAEG this year, but then £4 million is baselined in the draft budget. So, that is positive, that we can honour that commitment that we've made.

In terms of when the IWPRB report on next year, then we'll have to see what they come back with and have those discussions, or whoever's in charge will have to have those discussions.

Okay. Thank you.

Thank you. The next question is from Natasha, please.

Thank you, Chair. On the funding of schools' core—. I'm sorry, my apologies—I'm totally in the wrong area. My apologies. You summarised previously that your priorities are improving attendance, raising attainment in literacy and numeracy, supported by the curriculum and ALN reforms and underpinned by a commitment on well-being as well. So, I'd like to know how satisfied you are that you've been able to adequately fund the work to take forward the priorities that you've laid out in the past.

Well, I've done what I can within the constraints of a 2.2 per cent roll-over budget to protect the priorities that I have set out, really. So, in terms of attendance, we're building on the £7 million that we provided this year with an extra £2.5 million in the draft budget. That's £1 million for FEOs, £1 million for enrichment activities and £0.5 million to further embed community-focused schools. So, that will take our total investment in FEOs to £10.5 million a year.

In terms of ALN, I've been able to provide an additional £5 million for schools, which is going out via the LAEG for ALN and an extra £4.1 million as part of Medr's uplift to support ALN in post-16 education—obviously, FE colleges and sixth forms—and that builds on the £8.2 million of in-year funding that we discussed. We've also increased funding for specialist placements for complex ALN by £3 million, and, when taken together with the ring-fenced VAT allocation, VAT compensation, that brings the budget to £19.9 million in 2026-27. But, as I said, the pressures in terms of ALN are acute. Local government have been very clear about that. I did try to secure more funding for ALN. In fact, it was quite a bit more—an additional £18 million to meet the pressures, because it's not just about the current pressures in ALN; we also want to move to a more inclusive system, which means changing our way of working.

Then, just in terms of curriculum, following the £10 million in 2025-26, we've allocated an extra £2 million to the curriculum and assessment BEL. That's partly for the grant schemes, but also to support the work we're doing on personalised assessments and the move that we're making to age-related expectations. On well-being, and that underpins everything, there is a small increase of £670,000 to the whole-school approach budget, which is currently about £14 million, and that money is to embed trauma-informed practice in schools. So, I've done the best that I can with the resources that are available to make sure that we focus funding on our priorities.

Okay. Thank you for that. My next question is about free school meals. There was a lot of talk about expanding it towards secondary schools and, from my understanding, you said in January you hoped it might be considered as part of the Welsh Government's spending review in the summer. So, did the decision to present a roll-over budget rule out such a policy change being considered, or were there other reasons behind it? 

Well, I am committed to improving our food in school offer. I was at Whitmore High School recently, meeting with secondary school learners who spoke really powerfully me about the impact of not having enough to eat on their performance in school. That was really powerful. You'll be aware that the Department for Education in England have committed to changing their criteria so that all families on universal credit get free school meals, going forward. I was very keen to do that, but, obviously, given the constraints of the roll-over budget, that meant that I didn't have the funding to do that.

However, because we've got this pot of money that is sitting there for discussion, we are making plans in the hope that we will get some additional money. It's not just as easy as saying, 'Well, right, we'll make all learners eligible for that.' We know from our universal primary free-school-meal offer that there are issues with capacity of kitchens, capital expenditure, and also capacity within local authorities to deliver. So, we have made a small amount of money available to local authorities this year to start scoping how we would do that in the event of more money becoming available.

I have a sub-question to the question I've just asked you, in relation to the amount that's served to children in receipt of free school meals at present. I've had it raised with me and I know you have as well. It's really sad that a lot of children don't feel that they're getting enough. So, what's being done to ensure—? I appreciate all the figures that you've given me, and I appreciate the money that's being spent on it, but how are you going to ensure that children who are receiving free school meals at present receive an adequate amount?

Portion size is really important, and, at the moment, it's quite a blunt tool, with little ones having the same amount to eat as much bigger children. It's challenging because of the financial pressures in local government, but I have committed to increasing the unit rate for school meals, which will be a help to local government. As part of the regulations that we're taking through the Senedd on healthy eating in schools, we will be addressing the issue of portion sizes. As I said, I went to Whitmore, and it was a really powerful discussion with the young people there. I don't want to be in a situation where young people are telling me they're hungry when they're studying for their GCSEs.

Okay. Thank you very much, Cabinet Secretary. The teaching and leadership BEL is forecast to be £11 million overspent this year against the £34 million budget. So, can you just please explain to the committee why that is the case, and is it a matter for concern? Also, where do you expect to find the money to meet this overspend? Given the budget is staying at £34 million in 2026-27, could the same thing happen again the following year?

This is a technical issue and will be addressed by the supplementary budget. Shall I ask Claire to explain this?

Yes, certainly. It's in relation to the teachers' pay award, the £10.4 million. That will be formalised as part of the second budget, the supplementary. So, it's just that we're going to receive the money later.

Okay. So, what's the date of the supplementary budget?

It's usually around about February.

Next year? Okay.

There's only a small overspend once that's taken account of, which is £800,000, which is due to ongoing discussions we're having with the EWC about fee subsidies for next year.

Okay. Great. Thank you very much.

Thank you. We have some questions from Cefin, please.

Thank you, Cefin. Can I just assure you that there's been no reduction in funding for Welsh language education for next year? Actually, there's been an increase because we've made available—. Well, I've been given a recurrent allocation of £700,000 from the centre to fund our very successful Welsh-medium late immersion programme.

What has happened is that there's been a decrease of £2.426 million to the Welsh in education BEL, but that doesn't represent a cut; it's because it's an administrative transfer of Adnodd's funding of just over £2.4 million to the curriculum and assessment BEL, and that follows a change in the sponsorship management role for Adnodd from 1 April, and the same transfer was actioned in the first supplementary budget 2025-26. Now that Adnodd are fully operational and relationships with Government are fully embedded, it was agreed that we would transfer that budget in order to reflect the ongoing relationship with Adnodd, and, with the other funding from the curriculum and assessment BEL for Adnodd, that takes their funding to over £4 million in 2026-27. So, there's not been a cut, I can assure you of that. It's just, again, a technical thing. I'll see if Claire wants to add anything.

You're right, it's just a transfer to the curriculum and assessment BEL.

Obviously, we're not going to cut Welsh-medium education money. The challenges are significant, the new legislation, and we've talked, ourselves, about the problems we've got with the recruitment and retention of staff. We are committed to delivering on this agenda.

We can give committee a note if it would be helpful.

I was just going to say that maybe a technical note on that would certainly help, yes.

I'm happy to take that question, Chair. Firstly, I know that the committee has been very supportive of junior apprenticeships and the ethos behind the offer. I know that you're aware that they're an innovative approach to preventing our 14 to 16-year-olds from disengaging by offering them the opportunity to experience full-time vocational learning in further education settings.

As Medr is responsible for allocating the funding to our further education institutions, we feel that it's sensible for them to manage the funding for junior apprenticeships, and, as the delivery arm of the Welsh Government for FE, Medr is also responsible for the operational delivery of the junior apprenticeship programme. So, while we in the Welsh Government provide the strategic direction and the funding, Medr retains autonomy in how the programme is implemented. And we think this is a positive thing as well because what it does is it ensures that there's that element of flexibility to respond to different local needs and sector priorities. We continue to monitor the impact of junior apprenticeships through regular engagement with Medr, with colleges and with schools as well, and that includes tracking learner participation and achievement rates and also progression outcomes.

Could I just follow up on that? Again, we welcome the uplift in support of the junior apprenticeship scheme. So, have you given Medr a steer as to how you would like that money to be used, because, clearly, there is some disparity across Wales around where the junior apprenticeship scheme is currently being supported, and there are gaps where it's not? So, have you given Medr a steer or have you left those strategic decisions to Medr alone?

Thank you, I'm happy to talk to that as well. I should say that both I and the Cabinet Secretary have really been pleased to have the opportunity to visit colleges delivering the junior apprenticeship programme and to speak to learners who are involved there. The programme is, clearly, very valued by learners, their families, schools and colleges as well. So, the Cabinet Secretary and I regularly meet with Medr, along with officials also, to consider opportunities for the way that the programme can be expanded, and that includes discussing how additional money might be allocated.

We're pleased that the increased funding for this financial year has already enabled two more colleges to begin offering the programme, so there are seven colleges altogether now offering junior apprenticeships. They're not the only offer in town when it comes to the 14-16 provision as well. I think it's important to note that there are other valuable alternatives on offer across the country, and that ranges from vocational pathways to specific targeted initiatives, such as things that promote science, technology, engineering and mathematics participation to girls. So, we do work closely with Medr on this, and it's pretty much a joint approach, if you will.

Yes. So, with those different offers available, have you any thoughts about what you would like Medr to do with that extra money? Are you just leaving it to Medr or is it a joint approach, really?

I'd say it's a joint approach. I have conversations with the principals of colleges to see how their 14-16 offer is working. I think it's really important to keep that localised focus, that sometimes what works in one area doesn't fit perfectly in another area. There can be different local pressures and demands; things like learner travel can come into the equation as well. So, I think it's important just to keep that regular dialogue and that joint working, and ensure that the voices of learners and the FE colleges and schools are at the heart of that decision-making process.

Okay, diolch.

Thank you. We now have a question from Vaughan, please.

Thank you. Bore da, Gweinidog. I've got some questions that follow on from this point around how much flexibility or how much uniformity you want within the system. The University and College Union have issued a call for additional post-16 funding, specifically higher education funding, to be dealt with on a needs basis, and I think that that really translates into funding to save jobs. Now, obviously, some institutions are further ahead in making difficult choices about the range of their courses and the jobs. But UCU want a needs basis rather than an allocation based on the size of the institution. Can I ask if that's something you've considered, and, if so, what you do or don't want to see happen in the future?

I think the most important thing is that we can all have different interpretations of what a needs basis actually means. I do meet regularly with UCU, so I'll make sure that this is on the agenda for my discussion the next time that I meet with them. Now, ultimately, it is for Medr to decide how it allocates funding in line with the terms and the steer that we, as Ministers, provide. Medr then monitors and is assured regarding the uses of new funding by institutions. In doing that, what Medr does is to consider a range of factors, and that includes ensuring best value for public funds, the size of institutions as well—that's also crucial—and, with capital funding, the baseline costs of capital investments. So, for example, if you're replacing a boiler, that's going to cost the same regardless of the size of an institution. So, ‘needs basis’ is certainly not a simple phrase to unpick.

While there could be good reasons for allocating funding on a needs basis, what we also don't want to do is to create any perverse incentives, whereby institutions that have managed their finances well could be disadvantaged and lose out on public investment. So, we do need to be really clear on what we mean by 'institutional needs'. That can vary based on the financial circumstances of an institution, the students it serves, its size, location and other factors. Also, I'd end by saying that this is exactly the kind of conversation I want to really tease out through my ministerial advisory group, because we are looking at the future funding model, and all of this is ripe territory and up for discussion.

So, you've got this overall ring fence that allows you to understand the choices that Medr are making. They're arm's length, so you're not trying to reach in to direct individual choices. If I'm wrong about that, please say. But there was £19 million that went in in February this year for additional funding pressures. I'm interested in your take on how that's done, particularly given that you mentioned about what's best value for the money, and how you come back and assess that, and whether that's informing your conversations about future funding. And then, your point around the strategic view that you give to Medr, and you expect them to go ahead and make decisions and deliver.

I certainly make my views clear to Medr on the way that money is or isn't allocated across the sector. I think a good example to show how that works in practice is the fact that, with the allocation of that £18.5 million capital spending, Medr put in place a funding floor there, to ensure that each university received a minimum of £1.3 million. Because, without that, our largest institution would have acquired a much larger slice of the funding there, and then our smaller institutions would have been left with very little. I was particularly pleased that Medr put in place that funding floor. That is something that I would like to see considered further in the future. Again, these are the kinds of conversations that I'm having within the ministerial advisory group.

Just to go back to how that capital spending was used by universities, Medr has given me a full and comprehensive report back on that, digging down into each institution. The headline thing is that the funding has helped to relieve short-term revenue pressures and ensured that vital investments in capital and infrastructure were able to continue, despite the financial challenges facing the sector. I was really pleased, a few weeks ago, to be able to go and visit the University of South Wales to see the topping out of their new Calon building, which was part funded through this particular capital funding stream, and to be able to see that in practice. This is a brand-new engineering centre of excellence and will transform the learner experience and build links with industry. That's something that I'm really pleased we were able to support.

Excellent. I want to move on to some high-cost areas. In your paper, you note the engagement you have with vice-chancellors of universities and the additional £2.5 million for initial teacher training. Was that a unanimously supported allocation? Because we've heard from our own engagement with stakeholders that it is a high-cost area and there's a challenge about having the right numbers and the right quality as well. So, was that seen as a unanimously supported view from the sector, or were there differing priorities, either around general funding or indeed this area of high-cost courses?

I'm happy to explain how all of that came about. It's through my one-to-one meetings with vice-chancellors that several of them—. Seven out of the nine institutions in Wales engage in initial teacher education, and several of them drew to my attention a disparity, in that courses that are commissioned through Health Education and Improvement Wales for health are fully funded, but, with our ITE provision, increasingly, those universities were having to put their hands into their own pockets to subsidise that. It just seemed as though it was an area that was ripe for review, really, to get that equity across the system, and to meet with the Cabinet Secretary's goal of ensuring that we've got that pipeline of teachers coming into the system.

To give you some examples, in 2024-25, Cardiff Met spent just under £1 million to subsidise the ITE programme there, and Bangor University just over £400,000. While I'm aware of the big headline priorities in the sector, with the decrease in international students and the fact that we also increased the tuition fee cap to get more money into the sector that way, this was an area that just seemed as though it was absolutely right for review, and I'm really glad that we've been able to put that additional money into the system.

In terms of your broader conversations with the ministerial team within the Government, how far do high-cost courses within higher education feature, because obviously you've got a different route for health and social care training, which I understand, having been Cabinet Minister in that department, but this broader challenge of other high-cost courses and how they're funded, because it's only ITE that's highlighted. I'm just trying to understand if this is the one area that you've asked for or taken within the allocation, or if there's a wider conversation to be had with the Government about funding high-cost courses.

This was an area that we had jointly identified as being a pressure within the system. We would like to be able to put more money in to support that. So, just to give some flavour around that, with expensive subjects we're looking at things like clinical, medical, dentistry, conservatoire provision, and then with a high-cost subject premium, it's things like science, engineering and technology, maths, IT and computing. We certainly don't want to see a situation where our universities in Wales are having to pull back on the delivery of those subjects, which are really crucial to the economy of Wales, because of the costs that are associated. So, this is an area that we are very closely keeping an eye on. We've identified it as a pressure in the system. We would like to be able to deliver additional funding there. And it is, again, something that has already come out through my discussions with vice-chancellors and the ministerial advisory group.

Okay, thank you. I need to ask something that isn't in the papers. It's not covered, but I've had more than one person talk to me about a specific allocation. It goes back into what is and isn't ring-fenced. My understanding has been that there's a £2 million sum that's been ring-fenced for a specific institution, the Royal Welsh College of Music and Drama. I can't understand that because it isn't in the papers. So, is this either speculation or untrue? If it isn't, I'm happy to stop there. If it is, could you explain why that allocation has been provided and why it isn't in the papers?

That allocation was made through the economy main expenditure group, and questions about that would need to be directed via that team and the Cabinet Secretary for Finance and Welsh Language. If I can just confirm that, as part of the discussions we had ahead of the publication of the draft budget, we did identify general high-cost subjects as an area that required some funding—so, medicine and all those things that the Minister referred to—but we weren't successful in securing that funding.

Why has it gone through the economy MEG?

Well, I think you'd have to ask the Cabinet Secretary for finance and the economy team about that. It's not come through our MEG.

That's odd, because you've just listed a range of areas that are crucial to the economy where there are challenges and costs, and I don't understand how the Government identifies that one area. If you're in the university sector and you're watching this, as I'm sure they will be, why has one institution been treated more favourably than the others? I generally don't understand why that choice has been made. I appreciate you're saying it's a question for others, but the Cabinet Secretary for finance regularly says it's not up to him to make allocations, it's up to portfolio Ministers to do that. So, why a specific ring-fenced allocation? Because that's what you're saying, so what I've been told is true. Why one ring-fenced allocation for one institution and not for all the others, where they've got a significant impact on the economy, as you've set out? 

Well, all I can say, really, is that we made a case for high-cost subjects in higher education. I think it was £2 million that we had sought to make sure, and, obviously, that benefits not just universities, but also helps me with making sure that we've got teachers in things like STEM. Under the roll-over budget arrangements, we weren't able to secure that funding, but, as with the other areas where we haven't been able to secure funding, I'm hopeful that, as we go through this process, we will get funding through for that.

Okay. Well, it seems odd to select one institution for high-cost support and not others.

Can I just—sorry to interrupt—clarify what you're saying there? That there's one institution that is having ring-fenced funding allocated to them through Medr.

And it's odd because Medr is supposed to be an arm's-length body, without being told, 'Here are specific allocations.' That's the broad strategic scenario you just outlined again. We had Medr in last week and they didn't indicate to us that there was a specific sum. If I were in a different institution I think I'd be asking, 'Why am I not being treated the same?'

Chair, I'm happy to provide a little bit of background to this. If the committee wants to look at the Murphy review from 2016, it sets out the fact that the funding for Wales's only conservatoire was considerably lower than that on offer to English providers, and so I believe that this is all about trying to address that disparity. 

Well, at a time when there are lots of funding pressures, I think if I were in a different institution, I would be able to point out that I have other services for the economy and the cultural needs of the country that I'd want to have considered. And it's not in the papers. That's the thing I find is really odd, that it's not in the papers, and I would expect that funding for HE institutions on specific areas would be highlighted in the budget papers. 

It's not in our papers because it's not in our main expenditure group. That's why it's not in our budget papers.

Well, I'd be interested if our sister or brother committee has got a specific allocation highlighted to it, and the rationale for it. But the other part is: why aren't other high-cost courses considered in the same way? And I think that's problematic, not to have an explanation for that, because in the rest of the higher education there are lots of high-cost areas where we recognise a direct impact on our economic future. I understand why ITE has been highlighted. We have challenges there that are well versed through this committee, but, yes, nearly as much as what has gone into ITE is going in a different area. I think that's odd, and not to have it highlighted or explained I think is more unusual. There we are. I think we might want to follow that up in writing. 

On to student support. In the draft budget, £900,000 of additional moneys were allocated for increasing the educational maintenance allowance eligibility thresholds. I still think this is a really positive policy innovation and I’m glad to see you continue to support it as a ministerial team, but the draft budget also indicates just over £14 million of historical underspends in the student grants budget expenditure line. Could you explain how that's arisen, as well as your choices, then, about reprioritising that funding? And I'd want to be clear, whilst you want to continue supporting students who are in and want to get those people to stay in further and higher education, how that underspend has arisen, and then how you're choosing to use it.

Yes, certainly. The first thing to say is that funding for student support grants is demand led, so they're forecast there and they're closely monitored. Despite our increase to maintenance grants, the forecast expenditure on student grants has fallen for 2026-27, at £269.2 million. This is due to a range of factors, really, including lower than expected entry into HE since the pandemic, and the frozen levels of household income eligibility for student grants. But what that's enabled us to do, then, with that underspend is to reallocate some of the funding within the education MEG towards other priorities. That includes, for example, £5.5 million for the Student Loans Company to support the administration of the student loan system in Wales, and it also includes £8.5 million to support Medr with key priorities as well.

But it is important to emphasise that this reprioritisation isn't in any way a cut to support for students. We continue to offer the most generous student living costs support package for full-time undergraduates in the UK, with the highest levels of non-repayable grant support targeted to those most in need. I'm particularly pleased as well that maintenance grants will increase for the first time since 2018, so all eligible students will see their grant increased by 2 per cent as part of that overall uplift to maintenance support of 2 per cent. That's an increase that is linked to the consumer price index and ensures that we continue to offer that most generous level of support. It'll be open to all new and returning full and part-time undergraduate students, and also support for postgraduate Master's and doctoral studies will increase by 2 per cent as well.

I'm pleased also with our part-time student support package, and the fact that we've got the most generous postgraduate contribution to the cost support package. Our support for Master's study is considerably more generous than other parts of the UK and, of course, as you said, Welsh Government has protected EMA for the academic year 2026-27, with a further increase in the household eligibility thresholds planned as well.

As I set out in my statement to the Senedd on Tuesday, what we need to do is to look at the continued financial sustainability of our student support policy as well. Our grants and loan system is both complex and significantly affected by HM Treasury restrictions. Again, that's something that I plan to incorporate into the forthcoming evidence paper, and the call for submissions on the tertiary education participation and sustainability issues. 

Okay, thank you. I'll stop there because I want to make sure that other questions get asked.

Can I ask one question? How is Careers Wales funded? We've been talking about the importance of work experience with young people now, just to see that they're on the right pathway. I asked Medr about mapping out jobs in the area. We've been talking about apprenticeships, and we've had a debate on that in the Economy, Trade and Rural Affairs Committee. And possibly, if they could work with the city growth areas, like the Cardiff compact are doing—. So, I'm thinking about that, so I just wondered—. When I asked Medr about work experience, they said that it's up to Careers Wales. 

Just in terms of careers, that sits with Jack Sargeant, so it's in the economy MEG. I'm aware that the committee has made a number of recommendations in your post-16 report about careers advice. It's something that I'm really keen on, because Careers Wales does something called targeted work experience with some of the most disadvantaged kids, and they've got a really good retention rate. I think they've got a really key part to play in preventing children becoming not in education, employment or training. At the moment, that funding sits with Jack Sargeant, but we do discuss that regularly, and I'll ask Vikki to talk about Medr. 

Yes, just to come in on that point you made there about Medr and skills mapping. So, myself, the Cabinet Secretary for Education, the Cabinet Secretary for Economy, Energy and Planning and the Minister for Culture, Skills and Social Partnership meet monthly on the vocational education and training ministerial board. Skills mapping is something that we are currently looking at, but that wouldn't come under the remit of Medr. So, we're looking at where the skills mapping is already being undertaken with different things like the regional skills partnerships, and seeing where we might need to work to shore up the system. 

Okay, thank you. 

Okay. We now have some questions from Russell, please. 

Thank you, Chair. Good morning. How is the £1.2 million funding for the Seren Academy helping learner participation? 

I'll take that question on Seren. Just to say that I'm very proud of our Seren programme. Myself and the Minister last week attended the tenth anniversary celebration of Seren, along with Lord Murphy who undertook the original review. We heard some really inspirational stories from learners who had been able to fulfil their dreams, really, through Seren, and some of those learners were really disadvantaged, including one of the learners who was a refugee. It was fantastic. Not only had they gone to places like Oxford and Cambridge, but they had pursued academic careers here in Wales. So, I'm very proud of our Seren programme. We have changed the delivery model, and that is in order to ensure a more consistent offering for Seren learners throughout Wales, because there was a little bit of variation, and we're monitoring learner participation rates.

How are you doing that? 

We're collecting data that will serve as a benchmark for assessing levels of engagement across different learner groups, and that will enable the team to identify gaps or areas with lower participation. But one of the other areas we're working on is making sure that learners who should be on Seren but haven't been identified can be included. So, teachers currently have the freedom to create a Seren cohort, to include those with high attainment, but also those who've got the potential for high attainment if they'd been exposed to Seren from year 7. They also have the ability to accept lower GCSE grades if they experience barriers that impede their academic progress. We are monitoring learner outcomes all the time—

How do you do that?

We've got progress tracking through feedback surveys, engagement, analytics, and we evaluate participant numbers. We're going to be measuring achievement rates and reviewing the cost effectiveness of—[Interruption.]—hold on a sec now, Russell—programme delivery as well. Just to say that it's not extra money for Seren, it's the same amount of money—it's £2.6 million. It's just refocused.

How is it reported?

Well, it's reported to us in the Government, yes.

Is that publicly available anywhere else, or can it be, or should it be?

It's not currently publicly available, but we're very happy to share information with the committee on an ongoing basis.

Okay. Thank you. And—

Can I just bring Cefin in quickly here?

Yes, sure. If it's about Seren, yes.

Yes, it is about Seren. My views on Seren are pretty well known: I don't think we should be using Welsh taxpayers' money to actively encourage learners to leave Wales. It does a disservice to our own universities here and I think it sends a very negative message to young people about future prospects—that they would have to go across the border for that economic benefit and so on. So, I think we should be relooking at spending money on Seren. But it's in for this year; who knows about next year. But I'm really asking about the granular detail about how we identify young people from disadvantaged backgrounds, in particular, who have the prospects of being supported well to go on to university, not encouraging them across the border in particular—not that we want to stop them either, if that's their choice—but in order to support them at an early age to fulfil the ambitions that they could well have at an early age to go on to university.

Okay, thank you. Obviously, we're not on the same page on Seren. Seren is not a programme that encourages learners to leave Wales. It is a programme that encourages learners to go to the best universities, wherever they are. I feel very strongly that we should not be in any way limiting—

No, I agree.

—the opportunities of our learners. You have to remember as well that lots of those learners come back, and we have lots of learners coming into Wales. But we do recognise that we've got more work to do in terms of identifying those most able learners. So, as part of this work we're doing, there's also—. I've just recently agreed some additional funding for some research to identify those learners that you've just described—those who've got the potential, but maybe are encountering particular barriers. So, we are actively doing that. We're also pursuing things like—. There was a learner there last week who'd been on a degree apprenticeship—it's not just academic achievement that we're trying to pursue. One of the young people last week was a refugee. He hadn't done well in his GCSEs, but his teacher had identified that he did have that potential. So, we are doing that work, to make sure that we don't lose any of those learners.

But I think it's also important to make the point as well that we need to be mindful of the interface with the pupil development grant, because we spend £128 million a year on the pupil development grant. As I told the committee in the last session, we aren't seeing that translating into a closing of the attainment gap. So, I think—. Seren is for our highest attaining learners; the pupil development grant should be closing the gap, generally. I've announced that we're doing some more work on that. I think Vikki wants to come in.

Thank you. If I could just come in on the interface between Seren and our Welsh universities. I think we might have mentioned it before, but the Cabinet Secretary and I have written jointly to the vice-chancellor of every university in Wales, inviting them to put forward what they consider their standout courses that could appeal to Seren learners, so that the Seren team can work with them on that. You'll be aware, I'm sure, that there are a number of really good residential courses that are offered at Welsh universities through the summer for Seren learners. There's one at Aberystwyth for the vet school, which we were talking about in the Chamber the other day, when we had the veterinary training up there. I think that's particularly impressive, particularly because of its ability to deliver through the Welsh language and to retain those really high-skilled individuals in rural Welsh communities.

The Cabinet Secretary and I have both undertaken some visits to Seren learners over the summer. I was really impressed with my visit to the medicine and dentistry provision at Cardiff University over the summer, to see those learners there engaging, being able to talk to each other to build their confidence and their skills, that these courses are things that they do have all the necessary talents and skills to apply for. As the Cabinet Secretary said, it isn't just about the conventional academic degree pathways. The learner that we met from the University of South Wales, who had undergone a degree apprenticeship there, was particularly impressive to speak to last week. And I did think when I was there, 'I wish we'd extended an invite to Cefin Campbell'.

Next time, perhaps.

Can I just come in as well? There are also specific targeted interventions that Medr run, through the Reaching Wider programme, where we fund universities to do that outreach to more disadvantaged communities. So, that is still ongoing.

I was going to say, Cefin is desperate for a trip, but I don't think Cardiff University is the place he wanted to go. Russell, please.

I've made my point.

Cabinet Secretary, how important is Taith?

I think Taith is really important, but this sits with the Minister for Further and Higher Education, who I'm sure will wax lyrical about how good Taith is.

I'm very happy to do that. I think the Taith offer is an incredibly important offer. It's one that's been recognised internationally for the opportunities that it provides to young people, particularly those from more disadvantaged backgrounds. And I have to say, it has featured in my discussions with the Minister for skills in the UK Government. The success of Taith has really featured quite heavily in our discussions about Erasmus+ and the future of it. It's been really heartening in those inter-ministerial meetings to see just how much knowledge there is outside of Wales of Taith, and the opportunities that it has brought to learners here in Wales.

If Taith is important, why is the budget effectively being cut? It's maintained, so it's effectively being cut. 

I appreciate the question, and it all comes back to the context that the Cabinet Secretary set out at the start. For this budget, I've maintained the funding for international learning at £6.662 million. That includes Taith and the Lessons from Auschwitz project as well. It's important to remember that Taith projects can span a number of years, and so sustaining the funding for the length of the projects is fundamental.

We have, as you've alluded to, had to take difficult decisions in relation to funding Taith, as you know. Within this year, I've taken into account the cut to the Taith budget in 2024-25, when it was reduced by £1.6 million. While that was a 20 per cent reduction on paper, it was, in real terms, a 50 per cent reduction, due to the programme running at a significant pressure.

But just in terms of delivery there, I would like to stress that what we did was to ensure that there were several actions taken to minimise the impact on learners of the previous cuts to the Taith programme from previous budget rounds. There was a focus on reductions in operational costs and the piloting of a new application process for smaller grants. What all of that has done is to try and maximise the amount that's left that can be spent on actual delivery.

Thank you. Another committee did some engagement work, and some organisations were saying that Taith is non-essential, especially when there are other budget pressures. Is Taith value for money?

I think Taith is value for money. That's very firmly my opinion. What you have to measure in order to measure its value is things that fall outside of the monetary sphere, isn't it? So, when you look at things like—

So how do you know it's value for money? Sorry to interrupt.

I would measure it in terms of things like improved learner confidence, intercultural awareness, work readiness. Staff and institutions report to us enhanced professional development, innovation and strengthened international partnerships. I've seen on my visits to Taith projects just how wonderful it's been in the opportunities that it has provided for those who are probably furthest from being able to achieve those—if you take things like pupil referral units, learners there being able to access Taith and to travel and to broaden their horizons. I think it provides life-changing opportunities for learners to study, train and volunteer abroad. And it's bringing back those global skills and that cultural awareness, that confidence, and employability. I think all of those things are really hard to capture on a spreadsheet, but they are so important for us to actually deliver for our learners.

I can appreciate it is hard to capture on a spreadsheet, but is there a figure? Is there a financial figure that can be attached, in any way at all, to help measure the value?

How do you measure well-being and opportunity and happiness and kindness? 

Are you asking me? The reason for the question is because—. It's not my view. There was engagement that was taken by another Senedd committee that said this is not essential. They're suggesting it's not value for money. That's not our committee's view, it's not my view. But I'm asking how can that be evidenced and how can the return on investment be measured. 

As Carolyn very helpfully said, lots of what we do can't be quantified, can it? I think one of the most fundamental things you can invest in is early years. That has an impact right the way through the life course, as far as the numbers of people who are in prison. You can't quantify all of these things. But it does do things. There are kids that have never been out of their village who've gone on the Taith programme. That kind of broadening of horizons is worth its weight in gold. I was one of the early Erasmus students, and I'd never had a foreign holiday when I was a child. And yet I got to go to the University of Paris as an Erasmus student. You can't quantify the enormity of that kind of advantage.

Can I bring Cefin in, quickly?

I guess what Russell is asking about—and I fully support the Taith programme—is whether you've undertaken a qualitative assessment of those experiences relating to what Carolyn was talking about. We can easily digest the quantitative, the numbers and so on, where they've been and all of those statistics, but the qualitative stuff—. What have they got from those experiences?

Do you want to say a bit about the evaluation?

We've done a number of evaluations. There's one just about to be published. I think the other bit to bear in mind is that the sector can access Taith funding, and some of the best practice that they bring back to our institutions, our schools and youth work is also really valuable. But we're about to publish a new evaluation, which we can share with you.

I think we need to capture that. That is really important.

Some teachers that I met went to Boston to look at the work they do on inclusive education there, and they've brought back those models and are using them.

ColegauCymru recently did a report on AI from going abroad on a Taith visit. There are huge amounts that come back to the policy thinking as well.

Thank you. Natasha, please.

Thank you so much, Chair. I'd like to know the Welsh Government's views on the provision of degree apprenticeships.

I'm happy to take that, although degree apprenticeships sit with the Minister for skills. The Welsh Government recognises the value of degree apprenticeships in supporting economic growth, addressing skills gaps, and providing high-quality vocational pathways alongside those traditional academic routes.

Thank you very much for your response, Minister. Do you feel that there are any sectors that could particularly benefit from degree apprenticeship provision where it's not yet available in Wales?

Currently what we've got on offer in Wales is degree apprenticeships in sectors such as digital, engineering, advanced manufacturing and construction. There have recently been expansions in the construction management and digital pathways. There are other sectors that might benefit. That could include health and social care, creative industries and green skills, and Medr is actively reviewing the degree apprenticeship frameworks to ensure that provision meets Wales's needs.

Thank you very much for your response again. What was the reasoning behind steering Medr towards maintaining the level of funding for degree apprenticeships as opposed to increasing its funding allocation?

The Welsh Government has protected the core apprenticeship budget. They've maintained it at £144 million for 2024-25. There is a planned increase to £146 million, though, in 2026-27 under the economy, energy and planning MEG in the draft budget. The Welsh Government believes that this approach ensures stability for providers and learners. But realistically, and for all the reasons that the Cabinet Secretary set out at the start of the session, opportunities for expansion in the current financial climate are limited.

Can I bring Cefin in quickly here?

Have you finished on the degree apprenticeships, Natasha?

I've still got one more, but carry on.

No, you carry on there. I'll come in after that. Sorry.

Everybody's being too nice this morning.

The Welsh Government's role has been called into question, particularly its involvement in relation to degree apprenticeships. Does the Welsh Government share some stakeholders' views that there could be more benefits in providing higher education institutions with greater autonomy when it comes to apprenticeships?

I'd say that our current approach ensures that degree apprenticeship funding delivers maximum impact for our priority sectors and groups, and that we've got a joined-up system supporting progression and lifelong learning. While England offers broader sector coverage, what we prioritise here in Wales is quality, value for money and alignment with our economic needs as well.

And what about the element of autonomy, providing them with more autonomy to have that power?

Let me just check, as this is not my portfolio area.

That's fine—I appreciate that. 

I think what you would probably have to do is to write to the Minister for skills, really, if you wanted a further answer there.

Okay, no worries. That's fine.

Cefin.

I'm just going to use the degree apprenticeships as a bit of a pivot to ask about funding for universities. We know you've given Medr a 2 per cent uplift, which, going back to Vaughan's earlier question, is a real-terms cut, given where inflation is. The universities estimate it's about an £80 million gap, and we know how great the challenges are facing universities at this current time. I'm just wondering how you're going to approach this £80 million gap in terms of maybe using some of that headroom that might be available around the £380 million and whether you intend on making a case for stabilising the financial situation of universities.

Can I just add to that? It's not just higher education, but of course you've got responsibilities for the whole education system, including post 16. I know there are pressures in FE. There are pressures about people getting places for FE. So, in answer to Cefin's question, I'd also like to understand how you view the wider picture as well, because you're not just responsible for one part of the system, and all these things flow into it. We were talking earlier about the pupil development grant, about raising aspirations and actually to do well in their life course, not just past 18. I'm trying to understand how that matches and whether you take into account people's opportunity to raise revenue, because a school in Penarth has a parent group that a school in Trowbridge or Llanrumney doesn't, and a university has different revenue-raising opportunities, and, within the sector, Cardiff has different opportunities to, say, Trinity St David's. So, I'm trying to understand how, in that picture, you see these priorities, whether you look at, individually, 'This is what we must do in higher education', and whether actually that goes into your broader consideration.

Yes, well, I think I've been quite clear, really, that we've taken a very focused prioritisation approach to where we are within the resources available, and I have looked at that from the point of view of where we can make the biggest impact to children and young people. That's why we've prioritised funding in schools. I've already explained that I'm very worried about FE participation, because not only are the numbers going up but some of our most vulnerable learners are in FE, so that is a priority area for me in terms of funding. In terms of Cefin’s point, yes, the 2 per cent budget has created challenges, but I know that Medr told the committee last week that, while the funding for HE research and innovation for the next academic year is flatlined, they've been able to provide a 4 per cent uplift for HE teaching funding. So, that is slightly better. I'm happy to talk about the wider systemic issues, if that's what you're asking me to do, but I think you probably also wanted to hear directly on HE.

Yes, I'm happy to come in there on that and just to underscore that the significant proportion of the financial shortfall facing our universities has arisen from the reductions in international student enrolment and a decline in research income, particularly as a consequence of Brexit. These are all issues that we're exploring through the ministerial advisory group. But it's important to note that, with 10 per cent of the HE sector's funding coming from Welsh Government, we can't reasonably be expected to compensate for those external funding gaps, and no vice-chancellor has actually asked us to do that, either. But, with the announcement on tuition fees yesterday, and you know that we will be matching that increase here in Wales, that's projected to generate an additional income of £19 million for the sector, following on from the £19 million that it generated for the sector last year as well.

There are children in Wales who will never even get a sniff at university if we don't invest in their education in schools and get that right, really. So, that's the approach we've taken. But I'm very happy, Chair, to talk about the wider pressures if that would be helpful.

I don't think we've got time at the moment. We've still got three questions to get through, so I'll hand back to Russell, but, if you'd like to send us a note, we'd be really appreciative of that. Thank you. Russell.

Thank you, Chair. You say that the additional £7.5 million for the Sustainable Communities for Learning programme of capital funding for investment in the education estate will mitigate some of the impacts of inflation, but that won't really cut it, will it, especially when you take into account your net-zero carbon policy. And how much is the net-zero carbon policy costing?

Well, the £7.5 million is obviously our share of the money in a roll-over budget. So, that is, you know—. We could always do with more capital funding; there's no getting away from that. We have already made provision for the net-zero costs as part of the budget, so that's not something that would have to come out of that money. We do view net zero as an invest-to-save approach. The buildings that we deliver are energy efficient, reducing carbon emissions and long-term utility costs for schools and colleges. And we've also invested £2 million in an elemental building condition and carbon survey of every school and college, which is assisting local authorities to prioritise decarbonisation. So, it is an invest-to-save.

Thank you. So, how much is the net-zero carbon policy costing? 

As I understand it, the additional capital cost of this commitment is approximately 12.5 per cent of the project value, around £32.6 million in 2026-27.

I've got a note in my briefing paper that says that the Welsh Government's net-zero carbon policy is estimated to be around £33 million for 2026-27. So, is any official able to confirm if that's right?

Well, I've got £32.6 million.

Okay, there we are, that's fine. And that is different to the pots of money that we're talking about in terms of the £7.5 million I referred to, that's what you're saying.

Yes, we've covered it.

Yes, okay. So, is the zero-carbon policy meaning that fewer buildings are going to be built and refurbished because of the cost of meeting those requirements?

I don't think so, no.

In terms of the programme itself, we see the inflationary increase meaning less for the same pot of money, but, with the plans that we have—and, obviously, local authorities and colleges determine which projects come forward for funding, and the pace of delivery as well—we're not seeing that kind of decrease based on the demand coming through, so we are able to manage it. And then, obviously, as the Cabinet Secretary mentioned, the schools and colleges that are delivered are net-zero carbon and therefore there are less revenue costs for the schools as well going forward.

Okay, okay.

Through the Chair, on that point, so there is the cost of the capital and an increase in that, but the point around the revenue reduction. I think the danger is it's only seen in carbon costs—which matters; I'd like there to be a future for my son and, hopefully, grandchildren to grow up in—but actually investing in these buildings isn't just a carbon reduction, it's a point about the revenue reduction. And do you understand from the capital outlay how much revenue reduction you then get by having a more efficient building? Because, actually, that is then saving money over a period of time, as well as reducing carbon output.

Yes, so we have specific case studies on net-zero carbon schools to show how the revenue cost is less. We've got some key examples, like Pen-y-Dre in Merthyr, where, actually, any surplus electricity that's generated goes to the hospital, the Prince Charles. So, there are examples like that, where—

It might be helpful to have a note on that, so we can understand the cost outlay and how that actually comes back in terms of the revenue savings as well, because, otherwise, you're only talking about the cost, and that sounds like it's a bad thing rather than, actually, that cost investment delivers a return on revenue.

I know we're short on time as well, so can you also, Cabinet Secretary, confirm or commit to releasing the remaining £16 million for the schools and £4 million for colleges of the £50 million capital repairs and maintenance grant for this financial year?

Okay, yes, thanks, Russell. I wanted to let the committee know that the Cabinet Secretary for finance has confirmed that we're getting an extra £20 million extra capital in this financial year. That will be for repairs and maintenance, which we're really pleased about.

In terms of the additional money as part of that £50 million, that's something that we monitor throughout the year with a view to releasing it when we can. So, we hope that we'll be in a position to do that. It's something—. Because local authorities, their costs and things change, projects proceed at a different pace, so we're hopeful that we'll be able to do that, but we've also had this extra £20 million today.

Okay, and will you be providing such a grant in the next financial year as well?

Well, that will depend on the factors that I've described. Obviously, the capital allocation is £7.5 million, which is less than our capital allocation by some way from the previous year. These kinds of pots of money do become available in-year. There's also slippage in existing projects. So, obviously, I'm sure any Government would want, if there's money available, to make that available as we can, really, but we can't commit to that at this stage. Do you want to add anything, Emyr?

Yes. So, it's £378 million for 2026-27. We'll go through a process now with the Cabinet Secretary for Education in terms of how that will be allocated out. And, as the Cabinet Secretary mentioned, if more becomes available in-year, we'll be able to provide that as well. 

Thank you. All right, we have one final question. Are you okay to stay for the final question?

Yes.

It's from Natasha, please.

Thank you very much, Chair. This is for both of you, actually, if that's okay, Cabinet Secretary and Minister. Should any of the currently unallocated £380 million, which we know is comprised of £231 million of revenue and £137 million of capital, become available to your budgets, how would you like to have those additional funds spent? What would be your priorities? I know you mentioned a few, Cabinet Secretary, in your earlier answer—ALN, et cetera—but I’d like to know, if that was available to you, what would you like to do. And in particular what are you currently telling the Cabinet Secretary for finance that you'd like the money to be spent on right now?

Okay. Thank you. Well, I really hope that some of that money will be coming to education and to local government for education. I've already set out the ALN pressures; they are very real, despite the extra money that we've been able to find, and they run right across the system—early years, school age and into tertiary education. I've spoken to the committee before about the complexity that schools are dealing with. They're almost like the fourth emergency service. They're picking up loads and loads of issues that they're not funded for. That needs to be recognised so that we can have early intervention and prevention. I've spoken about the post-16 pressures. We don't want learners to be on waiting lists, we want to hold on to them in education, and Vikki may want to add to that.

One of the areas also in the higher education space—. As I said, we did ask for additional money for high-cost subjects for higher education—so, STEM, medicine and things like that. One of the areas I was looking at as well are initial teacher education incentives. Obviously, I heard what the committee said about ITE incentives. The evidence is a little bit mixed in this space, but the committee made a strong case through their academics, so we were interested in funding for that. It's not actually a lot of money and could potentially make a big difference. We've talked about free school meals for secondary school children already, and capital money is always welcome, not just for new buildings but for ongoing repairs. If I could make one general point to the committee, though, what schools and colleges need, and local government to provide that funding, is core funding to get staff in front of children doing what they do best. When budgets are tight, what happens is that staff are cut, pastoral staff are cut—that increases workload, it means behaviour gets worse, it means we lose staff. So, it's about core funding for me, really, to make sure we can deliver through education.

If I can just come in on the post-16 participation pressures in particular there, this is an area where it's an absolute priority for both myself and the Cabinet Secretary to get that extra money into the system. Colleges are reporting a big increase in learner numbers so far this year. I met with the chief executive of Medr last week who told me that this does risk becoming an additional pressure for the sector. We will continue to monitor the situation with Medr closely. We're fortunate this year in that we've been able to change the funding model with Medr, holding back around £21 million to allocate once the actual numbers of learners in colleges are known. That's an improvement, certainly, to the way that we did fund based on predicted student numbers previously. But, even with that, which will be out the door within the next few weeks, there is still that huge pressure on colleges for delivery. And as the Cabinet Secretary said, we really don't want to see our young people coming out of the education system and being placed on waiting lists for college places, because the danger is, once that happens, you might well have lost them for good.

We need to be cognisant as well of the additional funding pressures that colleges are facing to support learners in this difficult financial environment. So, whilst we've had the uplift to the financial contingency fund of £0.4 million, that is under considerable pressure in every college, particularly with issues around learner travel and the increasing cost of that as well. So, it's an absolute priority for me that we get more funding into the FE system.

Thank you. Okay, thank you for joining us this morning. We do really appreciate your time, and you'll be sent a transcript for checking in due course. Thank you again.

And we'll send you a note on the technical things and the case studies on net zero. Diolch.

Thank you, we appreciate that. Thank you very much.

We are running slightly over time, so we'll move on quickly. I move on now to item 3, which is papers to note. We have six papers to note today, full details of which are set out in the agenda and the paper pack. Are Members content to note the papers together? I can see they are. 

Moving on to item 4, I propose, in accordance with Standing Order 17.42(ix), that the committee resolves to meet in private for the remainder of today's meeting and for the whole meeting on 4 December. Are Members content? We'll now proceed in private.