The Further and Higher Education Act 1992 (FHEA 1992) established the Higher Education Funding Council for England and the Higher Education Funding Council for Wales (HEFCW).
The constitution and membership of HEFCW is provided for in section 62 of, and Schedule 1 to, FHEA 1992.
The principal role of HEFCW is to administer the Welsh Government’s funding of the higher education sector in Wales. Section 65 of FHEA 1992 provides that the Welsh Ministers will make funds available to HEFCW which then administers these funds for the purposes of providing financial support for certain eligible activities. These activities are listed in section 65(2) and comprise:
- the provision of education and the undertaking of research by higher education institutions in Wales;
- the provision of any facilities, and the carrying on of any other activities, by higher education institutions in Wales which the governing bodies of those institutions consider it necessary or desirable to provide or carry on for the purpose of, or in connection with, education or research;
- the provision by institutions in Wales maintained or assisted by local authorities, or by such institutions in their area as are within the further education sector, of prescribed courses of higher education;
- the provision by any person of services for the purposes of, or in connection with, the provision of education or the undertaking of research by institutions within the higher education sector.
Section 85 of the Education Act 2005 provides that HEFCW is also responsible for administering funding to institutions in Wales for the provision of teacher training.
The activities eligible for funding are to be kept under review by HEFCW.
The Welsh Government sends a remit letter to HEFCW in relation to each academic year setting out its areas of priority in relation to allocating funding.
Under section 70 of FHEA 1992, HEFCW is under a responsibility to secure provision for assessing the quality of education provided in institutions to which it provides support. HEFCW is obliged to establish a Quality Assessment Committee to assist it in complying with this responsibility. Currently the Quality Assurance Agency for Higher Education fulfils the role of assessing the quality of higher education throughout the UK.
Section 69 of FHEA 1992 provides that the Welsh Ministers may, by order, confer or impose on HEFCW such supplementary functions relating to the provision of education as they think fit. The Higher Education Funding Council for Wales (Supplementary Functions) Order 2014 (SI 2014/1464) has been made under this section and confers functions on HEFCW in relation to payment of fee grants to institutions in respect of eligible students.
Section 81 of FHEA 1992 allows the Welsh Ministers by order to give general directions to HEFCW in connection with the exercise of its functions. In the case of financial mismanagement by a higher education institution the Welsh Ministers may also give such specific directions to HEFCW about the provision of financial support for certain activities by that institution as they consider necessary or expedient by reason of the mismanagement.
Terms and conditions of funding
The Welsh Ministers are able to make grants to HEFCW and can make these subject to such terms and conditions as they consider appropriate. These conditions may impose requirements to be complied with in respect of every institution, or every institution within a particular class, that receives funding from HEFCW, but may not be framed by reference to specific institutions or particular courses of study or programmes of research (section 68 of FHEA 1992 and section 88 of the Education Act 2005).
Subject to these terms and conditions it is then HEFCW’s responsibility to determine how the grant funding it receives from the Welsh Ministers is to be allocated to individual higher education and further education institutions in Wales. In carrying out its funding activities, HEFCW must consult (amongst others) higher education institutions and have regard to specified factors, including the denominational or other distinctive characteristics of institutions (see section 66 of FHEA 1992).
HEFCW may also in turn impose terms and conditions on the funding it provides to institutions under section 65 of FHEA 1992 and section 86 of the Education Act 2005.
The terms and conditions that may be imposed by the Welsh Ministers or by HEFCW enable them to require the repayment of sums paid by them if any of the terms and conditions are not complied with.