Before we move on to student recruitment, it's increasingly the view of many experts that we're heading for a 'no deal' Brexit. Can I ask both of you what specific plans you've put in place in the event of such a 'no deal' Brexit happening and us crashing out next spring?
Well, I think it's really difficult for us to prepare for a 'no deal' Brexit, but obviously we need to think through very carefully what that might look like, and I think that scenario planning is starting to happen. I think it's very different, again, for FE compared to HE. So, in relation to FE, what we do have is funding—ESF funding—which the UK Government has said that they will underwrite until 2020. So, in March next year, if there is no deal, the immediate impact on FE is unlikely to hit in the way that we may have feared. The problem then becomes: what exactly is the deal with the EU in future, because we will have some kind of relationship, and what that impact will be on the broader economy and our ability to work with companies locally, and industries, to provide that link between training needs? So, the colleges, basically, are providing the training for lots of the apprenticeships, and so if the number of companies reduces, then that is likely to have an impact. So, there are specific sectors that we are more concerned about than others. Farming is obviously one that we are concerned about, because that could have a difference in terms of day one of no deal. If your markets are not there, that could be quite an immediate impact. Health and social care—obviously, we are concerned that there are a number of people who work in that sector who are EU citizens. What is the impact? Are they going to feel unwelcome? Are they likely, then, to return home? Where will that skills gap, therefore, be? So, that's a problem for us. Construction is already an issue for us in terms of skills shortages. So, one of the things we're doing is we've developed these regional skills partnerships where we ask local employers, 'What is it that you need in terms of skills development?' and we are now asking further education colleges to respond to that need. So, rather than them just getting people through the college system, who are easy to get in because they're doing courses that they're excited about, let's try and encourage them to do courses where we know there are skills shortages. So, that is a new structure that we've developed that is already having an impact; there's a £10 million project there. So, we're already putting things in place for those situations. In manufacturing, obviously, if there's no deal, the rules of origin, that could have an immediate impact. Just-in-time—we could have real problems in terms of dislocation there; and hospitality and tourism. So, those are the sectors we have most concerns about, and all of them have very strong links to the FE sector.
From the HE perspective, from a point of principle, we just have to keep working towards some kind of deal. Although the prospect of no deal, maybe, has risen up the agenda, we have got to be consistent in our messages to the Westminster Government: we need a deal. Wales cannot afford to crash out of the EU without a deal. If that worst-case scenario was to happen, because of the underwrite guarantee, actually, for European regional development fund and European social fund programmes in the HE sector, it would be business as usual. And because of the current underwrite guarantee, the forthcoming bids for Erasmus and Horizon 2020 would be covered, but they would be the last applications that could be made. You'll be aware that there are some proposals for an extension to that guarantee, but from my understanding and our understanding of it, that would only give us third-country status for Horizon 2020 and Erasmus. What that does mean is that we would have limited access to the Horizon 2020 programme, and if you look at the activity that is currently being undertaken by the Welsh HE sector under that programme, that would mean that we'd probably lose about 50 per cent of that work, because that's the split between the bits we would still be able to access and what we are currently accessing. As I've already said, we have made a guarantee for EU student support for the next academic year, but, without clarity from the Treasury, I don't think it would be prudent of me to commit Welsh Government to anything further than that. So, we continue to push the message that a 'no deal' would be catastrophic. What can we do? You'll be aware that we have been working with Universities Wales to access resources under the European transition fund, under the Global Wales programme, to look to boost international marketing of the HE sector and to talk about the strengths that we have in the sector. And we continue to look at other opportunities within the EU transition pot of money to assist the universities and the FE sector in that regard. We also continue to look to respond to the Reid review proposals, about how we can beef up our own research and continue to engage with UK Research and Innovation to make sure that, with any research money that comes out of that negotiation, Wales is in a competitive position to be able to bid successfully for that.
Okay, thank you. We're going to move on, then, to talk about student recruitment. I'm going to, because we've got a lot of questions, appeal for brief questions and answers that are as concise as possible, please. Hefin.