The Western Mail today leads with an important story on how a so-called “brain drain” is affecting the nation. 

The main data for the story is taken from an excellent report, entitled Welsh Graduate Mobility and undertaken by the Welsh academics Dr Gillian Bristow, Dr Madeleine Pill, Rhys Davies and Dr Stephen Drinkwater. 

The study “seeks to establish the extent to which Wales retains its graduate labour in employment; to estimate the labour market outcomes for “Welsh‟ graduates (i.e. those born in Wales) and to investigate whether and how these may change and what factors may become more significant over time.

In so doing, the report focuses on analysing the location and employment outcomes of successive “young” graduate cohorts since the 1992 expansion of Higher Education. However, it would seem that one of the more controversial findings of the report, and one that undermines the whole basis of the current Welsh Government higher education policy, has been missed in the Western Mail’s story.

According to the authors, this research has reinforced the clear link between migration to study and migration of graduates to work. This link seems particularly strong in Wales where, as has been demonstrated, ‘locals’ represent the most significant source of graduate labour. Thus, encouraging locals to study and stay in Wales is more likely to have an impact on graduate retention rates than seeking to either retain those who come to Wales to study, or to attract those who have no prior Welsh home or study links”.

This, of course, is in complete contrast to the current tuition fee policy that has been established by the Welsh Government. Unlike Scotland, Welsh students will get a tuition fee reduction regardless of where they study in the UK, leading to fears that the brightest students will inevitably go over the border to the best universities in the UK and, as the report suggests, stay there in the future to develop their careers.

As the authors point out in their conclusions on page 75, “current Welsh Government policy on HE fees could be regarded as incentivising Welsh student migration. This highlights interesting tensions between what policy might clearly be desirable as far as individuals are concerned and what might be better for a region in economic terms”.

In other words, whilst Welsh students individually may well benefit from a regime where they get subsidised to study anywhere in the UK, the economy of Wales may well be the loser in the long term.

Did the Welsh Government did examine in any detail the economic impact of restricting tuition fee subsidies to Welsh institutions, as has happened in Scotland or, as opposition spokespeople have suggested, this entire policy was drawn up on the back of “fag packet”? Certainly, judging from the responses from Welsh higher education in today's Western Mail, that particular elephant in the room continues to be conveniently ignored.

It is not only the long-term economic benefits that are critical here.

With around 16,000 Welsh students studying in English universities in 2009-10, if this level of cross border flow remains, then the Welsh Government will be transferring nearly £90 million from the Welsh budget to the English Higher Education system every year, a figure that would make even John Redwood’s eyes water.

Will this transfer be compensated by the full fees of £9,000 that will be paid by the 25,000 English students who currently study in Wales? It is a balancing act on which the political credibility of the current Government may depend and, some may say, the equivalent of crossing the Niagara Falls on a tightrope.

If, English students, as the Bristow report suggests, choose to stay and study in their local universities during the next few years and there is, for example, a ten percent drop in numbers from across the borders, then it could see a hole of £23 million in the finances of Welsh institutions annually.

Is this likely? Well, the latest data from the admissions agency UCAS suggest that it could be the case - applications from England are down 8.3 per cent, while those from Scotland and Wales have dropped 0.8 per cent and 1.9 per cent respectively. The picture on applications should become clearer at the end of January, when final figures are announced.

Will the Welsh Government make up this funding shortfall? I doubt it given other priorities. In fact, I can already see the blame being placed firmly on Welsh universities for not doing enough to market themselves properly to English students rather than on the policy itself.

But this is all conjecture. As the Welsh Government has itself admitted, I don’t think anyone really knows what will happen until the students arrive for the next academic year, which is hardly the best way to develop and implement government policy.

At best, nothing will change and the continuing inflow of English students will compensate for supporting reduced tuition fees for Welsh students. However, if they do not materialise in sufficient numbers and if there are any reductions which will have a significant impact on the financial position of Welsh institutions, then accusations of policymaking on the back of a fag packet will return, but this time with far more serious consequences.

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