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A Framework for Higher Education in Scotland: Higher Education Review Phase 2


A Framework for Higher Education in Scotland: Higher Education Review Phase 2

3 Higher Education in a Changing World

Lifelong learning policy in Scotland is about personal fulfilment and enterprise; employability and adaptability; active citizenship and social inclusion to build a Scotland where people have the confidence, enterprise, knowledge, creativity and skills they need to participate in economic, social and civic life. Higher education and the higher education sector have a crucial role to play in fostering this lifelong learning culture for Scotland and developing the skills and knowledge for a smart, successful Scotland.

Where are we now: Teaching and Learning

There has been a significant increase in participation in post-compulsory education in Scotland and, within that, those undertaking higher education courses. The increase in higher education is only partially fuelled by those taking degrees. The bulk of recent expansion has in fact been in people taking courses at SCQF levels 7 and 8 - usually HNC/Ds, mainly at further education colleges - which has increased more than threefold since 1986/87.


Within this increase there is a significant growth in the number of people studying on a part-time basis.


Participation: again, a major element of that increase is the expansion in the numbers of people taking HE courses at our FE colleges - now accounting for around a quarter of all higher education undertaken in Scotland.

*The Age Participation Index (API) is used to measure the number of Scots who entered higher education anywhere in the UK for the first time. It is calculated as the number of young Scots (aged under 21) who enter higher education as a percentage of the population in Scotland aged 17.


Participation by socio-economic groups: despite the increasing numbers of those taking higher education in HEIs, including those taking full-time undergraduate courses, the proportion of those entering HE from socio-economic groups IV and V, as measured by UCAS, has not changed in recent years.


As would be expected, this expansion has led to an increase in the numbers of graduates and diplomates.

Compared with 1986/87, the numbers of students gaining:

  • HNC/D and equivalent qualifications have increased more than threefold
  • first degrees have doubled
  • postgraduate qualifications have nearly doubled.


Compared with OECD countries, at 39.2%, Scotland had a graduation rate from first degrees * above that of all OECD countries for which data are available, the average being 25.9%.

* The gross graduation rate is defined as the number of people graduating from higher education first degrees during the year as a percentage of the population at the typical age of graduation.


Overall, retention in the UK, and Scotland, is significantly higher than in other OECD countries where the average drop-out rate is around 40%.

* Projected learning outcomes and efficiencies. Based on the proportion of full-time students expected to obtain a degree or transfer to another institution.

Retention Rates* in Higher Education





Total UK















Source: UK Funding Councils' Performance Indicators on Higher Education


The overall distribution of higher education qualifications by subject category in Scotland is not dissimilar from the OECD average. The largest concentration of qualifications are awarded in the fields of social sciences, business and law with an average (across the OECD and in Scotland) of every third graduate obtaining a degree in this area. The subjects where Scotland has a higher proportion of graduates are life and physical sciences, maths and computer science.


Around 10% of students in HEIs are non-EU international students. As well as enriching the student experience and offering international links for the future, these students contribute some 70 million in fees to institutions and are estimated to spend over 120 million off-campus - so benefiting the economy more widely.

Where are we now: research and knowledge transfer

Relative to its size, Scotland has a strong, diverse research base producing 1% of the world's published research with less than 0.1% of the world's population. The results of the 2001 Research Assessment Exercise demonstrated that Scottish higher education institutions have responded effectively to the challenges and incentives it set with a rate of improvement in average rating between 1996 and 2001 that is faster than in the other parts of the UK. The RAE has encouraged departments to think strategically about their research visions, objectives and resources and emphasised merit assessed by peer reviewed published work.


Scottish institutions are also very successful at securing, in intense competition with other UK higher education institutions, UK Research Council funding.


The chart below shows the distribution of SHEFC funding for research and the correlation between this and the ability to win UK Research Council funding by individual Scottish HEIs.


Where we are now: Overall Funding

The largest single source of funding for the sector is from the Scottish Executive via SHEFC. 8 The Executive plans to increase the funding to SHEFC by over 100 million over 3 years - just under 7% in real terms. This will take the level of funding the sector receives via SHEFC from over 700 million to over 800 million. In addition, HEIs will receive tuition fees from the Student Awards Agency for Scottish and EU students which amounted to almost 90 million in 2001-02.


Higher education institutions are funded from a variety of sources and have proven adept at diversifying their income base. On average, public funding accounts for about 56% 9 of their income - a proportion which has been decreasing as the value of income from other sources has grown significantly in real terms. This varies significantly from institution to institution.

Public funding includes SHEFC grants, Research Council grants and payments from SAAS.


This graph gives an indication of the overall income of Scottish HEIs and the sources from which this is secured.


This graph gives an indication of the proportion of their overall income which HEIs secure from various sources.


Overall, from a SHEFC grant of 609 million in 2000-01, higher education was estimated to be worth more than 2.5 billion to the Scottish economy - and of every 5 higher education spends, 4 of that is spent in Scotland.


In summary, the Scottish higher education sector is already performing strongly in many important areas:

  • At 50%, participation by young people in higher education, whether in higher education institutions or further education colleges, is at its highest ever.
  • Teaching Quality assessments indicate that over three quarters of teaching is rated as Excellent or Highly Satisfactory.
  • We attract more than our share of international students.
  • Our diverse research base produces 1% of the world's published research with less than 0.1% of the world's population.
  • The average increase in Scottish research quality in the 2001 Research Assessment Exercise was greater than for other parts of the UK.
  • Scotland's HEIs secure some 12% of the UK Research Council funding, 14% of UK Government Departments' research funding, 14% of EU research budgets for the UK and 35% of UK universities' royalty income for Intellectual Property with 9% of the UK population.

This is a record of excellence in the delivery of teaching and learning and in research outcomes of which our institutions, and Scottish society, can rightly be proud. But we cannot be complacent - there are areas where there is more to be done. The expectations of higher education are changing and it is important to look forward.

The wider context

Scottish higher education is a system in transition. The external challenges to be met, and not exclusively by higher education, are well recognised - demographic changes, responding to the informed learner, changes in demand for learning and when and how this is accessed, and new developments in teaching and technology. The momentum of the internationalisation of education and research is speeded up by the new information and communication technologies and has increased competition: between HEIs, between countries and commercial and other organisations, both for students and for those who work in higher education. The competition to attract and retain talented researchers and research funding in this international marketplace is growing ever more fierce.

Bodies and processes beyond Scotland with which we need to continue to keep in touch, and seek to influence, currently include:


The Prime Minister's Initiative (PMI): to attract more non-EU overseas students to the UK to generate additional income for our institutions and to boost trade and diplomatic links. The Scottish Executive has contributed towards the funding and strategic development of PMI since its inception in 1996.

General Agreement on Trade in Services (GATS): to facilitate progressive liberalisation of trade among the various members of the World Trade Organisation (WTO). The overarching aim is to achieve non-discriminatory market access for service suppliers to boost international trade. Negotiations are conducted by a series of requests and offers facilitated by the WTO. The target date for completion of the current round is 1st January 2005. The UK Government leads, but works closely with the Executive on issues concerning education, including higher education.

Bologna Process: The Bologna Declaration, signed in May 2001, is a commitment in principle and practice to create a comparable and increasingly converged system of graduate and post-graduate education across Europe, in order to maximise transferability and mobility within Europe. Governments, institutions and other stakeholders are currently working on the necessary detail to achieve these objectives. The process is expected to be completed by 2010. The Executive is working with the DfES to take this forward.

OST: The UK Department of Trade and Industry's Office of Science and Technology (OST) funds the seven UK Research Councils, which provide funding for particular research projects and postgraduate research studentships across the UK. The OST also funds the larger share of the Science Research Investment Fund (SRIF), a joint programme with the HE funding bodies, including SHEFC, for developing science research infrastructure in HEIs.

EU Research Programmes: The Sixth Framework Programme (FP6) is the European Union's main instrument for the funding of research in Europe. The main focus of FP6 is the creation of a European Research Area which will foster scientific excellence and improve competitiveness and innovation through increased co-operation, complementarity and

UK-wide review of research assessment: Sir Gareth Roberts, at the request of the four UK HE funding bodies, including SHEFC, is leading a review into the means by which research at UK higher education institutions is assessed. The review is expected to report in May 2003, followed by a further phase of consultation.

Charitable research funders: research charities are now major funders of the science and engineering base, spending over 600 million a year on scientific research across the UK. In 1999-2000 the Wellcome Trust alone spent around 350 million on science research across the UK.

The Scottish context

Lifelong learning has had a high profile in Scotland since devolution.

Life Through Learning; Learning Through Life which provides the overarching strategy for lifelong learning in Scotland within which higher education has an important role to play in delivering the desired outcomes.

The Executive's Science Strategy for Scotland, published August 2001, looks to higher education to deliver many of its objectives. 10

All three of the core objectives of the Executive's enterprise strategy in A Smart, Successful Scotland: Ambitions for the Enterprise Networks11 are significantly dependent on the activities of our higher education sector. Growing businesses, better skills and global connections all benefit from higher education activity and feature as part of this higher education review.

Recurring themes in the responses to the consultation and discussion with the HE Review Advisory Panel in undertaking this review were the importance of responsiveness, relevance, quality and coherence. These are the same themes which underpin the Executive's strategy for lifelong learning.

Responsiveness and relevance:

  • of learning to life;
  • of learning opportunities to learners' and employers' needs;
  • of funding mechanisms to learners throughout life, and;
  • of government interventions where market deficiencies require them.

We aspire to a high quality learning experience for all learners, across all aspects of provision in Scotland, which is fit for purpose, in the widest sense.

We attach importance to clearer roles, relationships and expectations. Within the publicly-funded sector which supports learning at many levels and in many ways, the Executive wishes to see each of the bodies it funds work collaboratively to deliver a joined-up and coherent system.

Extract: Life through Learning; Learning Through Life.

Developments such as the recently established Futureskills Scotland and the publication of its first employers' survey in November 2002, The Scottish Labour Market 2000 and proposed follow up activity, provide important data which can be used by providers (and learners) to identify labour market needs and opportunities.

In addition, the last few years have seen the creation of bodies such as Careers Scotland, and learndirect scotland to provide better, relevant information for both users and providers of learning opportunities. And, more recently, the outcome of the National Debate for Education underlined the importance of schools (and colleges) working with the higher education sector recognising the more connected context in which higher education in Scotland now operates and the importance of easing the transitions for learners through the education system.

Labour market supply

As we move towards a knowledge based economy and the need for an ever more skilled and flexible workforce, higher education has an important role to play in delivering the science, knowledge and skills to sustain this. The vocational nature of higher education is often undervalued in debates on specific labour market needs - for example, when it is argued that an increase in participation in higher education reduces the level of relevant vocational skills in the population.

A significant proportion of higher education is focussed on meeting local and wider labour market needs, on delivering degree and other vocational courses ranging across all industry groups from engineering and construction to hospitality and the performing arts, architectural technology and computing to journalism and communication studies. Alongside this, there is also a raft of courses available which, while not necessarily demonstrating a direct link to a particular occupation or specialisation, provide learners with transferable skills and abilities which are much valued in the workplace. The value to the individual and the labour market is evidenced in the fact that 9 out of 10 graduates are in employment compared with 5 out of 10 of those without formal qualifications and graduates, on average, benefit from significantly higher levels of lifetime earnings than non-graduates.

Vocational skills are about more than specific job-related skills - they are about not only knowledge, but also attitudes and behaviour. A critical need in Scotland is to develop entrepreneurial skills in the workforce. Higher education has a crucial role to play in developing these attitudes, behaviours and skills.

Widening participation therefore not only opens up options and choices for people who may never have aspired to continue in education and so increases their life choices, but also provides a rich and varied pool of skills for the economy. Where supply does not meet demand, increasing recruitment and retention may be more a matter for the labour market than the learning market. It is for the learning market to respond to demand of students and employers in offering relevant and flexible provision; it is for the labour market to provide the conditions to ensure people then follow through and remain in the occupations required.

Public services

The provision of the appropriate number and type of higher education places in courses which supply our public services 12 in Scotland is particularly important in meeting the Executive's objectives - especially in health and education - providing doctors, nurses, health professionals, teachers, social workers, among others. In developing a strategy for higher education and looking to the longer term, account needs to be taken of the potential impact of policy imperatives on the numbers of trained people required in the workforce, the type of skills required, and new working practices.

For instance, the National Health Service is undergoing enormous change with advances in medicine and in the way in which healthcare is delivered. Central to the reform of NHSScotland, to improve healthcare services for patients, is a workforce which is flexible and responsive and supports change in service delivery. Workforce development in NHSScotland, encompasses a range of planned activity in the education and training of staff, recruitment and retention, new ways of working and job redesign, changing roles and career packages and pathways. New arrangements have been set in place to take this work forward through the implementation of 'Working for Health', the first Workforce Development Action Plan for NHSScotland. 13

It is important that within the Executive, and in conjunction with the Funding Council, there is a clear understanding and communication of requirements and dialogue with HEIs. We need to ensure that a better understanding of workforce requirements in these sectors leads to the development of an appropriate supply of skilled people.

Next steps

We have grouped the steps which need to be taken to deliver our higher education under three main headings:

  • Teaching and Learning
  • Research and Knowledge Transfer
  • Governance and Management.

A further section considers aspects of funding and suggests further work on that.

There are a number of themes which cut across all these headings, in particular: diversity within a strategic framework, relevance, flexibility, collaboration and adaptability of systems.