Good morning. Thank you very much, indeed. I just wanted to talk about, really, the financial sustainability of the higher education sector because, as we know, there's been all sorts of things going on in the press. So, can I just start with, actually, quite a technical question and ask you what the financial indicators look like for the universities here in Wales, and are there particular indicators that are really flashing warning signals to you?
Well, shall I just start with a couple of contextualising comments and Bethan can come in then with some detail? It's undeniably the case there are financial challenges facing our universities. They result from three main causes: one is the impact of the demographic dip of 18-year-olds, which is deeper and longer in Wales than it is elsewhere in the UK. There are increased pension costs and, actually, increased costs generally. And, of course, we also have current uncertainty as a result of the Augar review in England, and whether that might play into Wales, and also Brexit. These challenges are not unique to Wales; the majority of the UK universities are actually taking out cost one way or another. So, this is not a Welsh issue. Before the Diamond review of fees and funding in Wales, there was a pre-existing funding gap in resource between England and Wales, and even now, that's still the case. So, Welsh higher education institutions are approximately £40 million worse off than they would be in the English system. That's a challenge, and that is a result from a political decision to invest in students, and that's fine. The money's gone into the system but it hasn't gone into universities, necessarily. So, these are serious challenges for institutions to manage, but I think it is a managed situation. We're not seeing a crisis; we are seeing some real challenges, and there is a distinction, I think, between—. We have to understand, though, that taking out cost to balance the books has a detrimental effect on the capacity. Obviously it impacts on the people who lose their jobs immediately, but there's a medium to longer term impact on the capacity of the system to deliver for Wales. They are taking out capacity; they're not cutting at fat now, they're cutting out core capacity. And so, the range of the curriculum, the range of research and innovation, the range of the contribution that universities can make will be diminished by that. And against that backdrop, the introduction of the Diamond reforms is hugely important—delivery of that is going to be really important—and we are really pleased to see the Minister able to meet her commitments in respect of that. The Diamond money is coming in. This forthcoming year will be the first year we see an increase in the resource, through us, to higher education. And the projections in future years are better still, and that will be extremely important. The performance of the sector is very good; we had the national student survey results out yesterday. Wales is still the best in the UK, which is excellent. We have the best impact from research in Wales across the UK. So, all of that is very positive, but that is also being done at some cost. There are some very tired staff in universities, and we've seen some stuff in the press recently about some of the impact of stress there as well.
Can I bring you back to the financial element of that? Can I just ask a question: what are the university reserves looking like at present?
Here, I refer to my learned friend.