Thank you very much. Llywydd, I have today published the Government's response to the recommendations from the review of higher education and student finance in Wales. I am keen to reiterate my appreciation for the time and effort that Professor Diamond and his panel members, from across the political parties, sector and industry, dedicated to the review between April 2014 and this summer.

Since publication of the report in September, there has been much interest from Assembly committees, parents, students, and the wider higher education sector, including policy and funding experts.

I welcome that interest, scrutiny and constructive engagement. Indeed, observers from elsewhere in the UK suggest that we in Wales are leading the way in fundamentally shifting higher education finance towards a progressive, stable and sustainable system. Therefore, I have given a great deal of thought to the practical implications of implementing the review panel’s recommendations, seeking to ensure stability and sustainability. I’m clear that Wales needs a sustainable and progressive higher education funding settlement that supports students when they most need it, and enables our universities to compete internationally.

As I made clear on 27 September, Cabinet endorsed the principles contained within the report, but our response builds on our key established principles: that we maintain the principle of universalism within a progressive system, that we have a whole-system approach, that investment is shared between Government and those who directly benefit, that we enhance accessibility, tackling barriers such as living costs, and that student support is portable across the UK. I can confirm that, subject to full Treasury approval, we will implement changes to student support funding, covering full-time, part-time undergraduate and postgraduate students from 2018-19.

In the context of austerity in the United Kingdom, the fundamental shift to improved and progressive maintenance support across modes and levels of study can only be achieved by releasing funds currently used to provide tuition fee grants for full-time undergraduates. The Diamond report modelled a range of household income thresholds for those eligible for means-tested support. We have decided to go with the proposal to set the upper threshold at £59,200. This is an increase of around £8,000 on current arrangements for means-testing. I believe this to be a fair and sustainable arrangement. Under this proposed system, we expect more than a third of Welsh students to be eligible for the maximum grant and the average student to receive £7,000 a year in grant support. The revised system of support will mean that students will receive the equivalent of the national living wage during term time while they study, with a maximum level of support of over £9,000 a year for full-time students and a pro-rata version available for part-time students.

I am proud to confirm the Government’s intention to deliver the first system in the UK and be an international model of best practice that is consistent, progressive and fair in its support for full and part-time undergraduates and for postgraduate students.

As set out in my agreement with the First Minister and our programme for government, we are committed to promoting and enhancing both academic and vocational routes into and through further and higher education, including both full and part-time opportunities that will benefit learners of all ages, employers and communities. Our response recognises the consensus that it is the fear of not being able to meet your daily living costs, rather than the prospect of paying back loans once in work, that is the bigger issue for accessing and progressing through higher education. Securing the stability and sustainability of our higher education and student finance arrangements is crucial. I can therefore confirm that we are implementing, with only minor modifications, the full Diamond package, whilst also delivering a future dividend for further and higher education. This, of course, would be subject to normal Government budget negotiations and process.

It is important that we do not implement policy that would have unintended consequences. Therefore, there are some areas where I believe it is sensible for the Government to pause and consider the next steps. These areas include recommendations on the Coleg Cymraeg Cenedlaethol, which need to be considered alongside the recently announced task and finish group, the implementation of monthly maintenance payments, incentives for graduates, the University of Wales Press, and the sharing of risk between Government, institution and student. Through the consultation exercise we invite those with specific interest to engage on these matters.

Similarly, given the current economic climate, there are a number of recommendations with financial implications that will need to be considered as part of future budgeting rounds. These include recommendations on quality research funding, knowledge transfer, the Learned Society of Wales, and the unhypothecated amount allocated to the Higher Education Funding Council for Wales’s recurrent budget. However, I will be asking my officials to work with HEFCW so that they can gain an understanding of the projected financial implications for their budget.

To ensure stability and sustainability, I have decided to maintain the current intensity threshold on support for part-time study. However, we will continue to work with the sector on ways to support and promote study at lower intensities. We will also maintain current equivalent or lower qualification controls, but commit to exploring extending those subjects and priority areas that will be exempt. Alongside publication of our full response, we have published a consultation on student support funding. I welcome the consensus that greeted the principles of Professor Diamond’s report, and, in that spirit, Presiding Officer, I now seek views on the practical implementation of our proposals.

Llywydd, it was the 'pence of the poor' that helped found and build our great civic universities. It was the great reforming progressive individuals, communities and Governments that helped open up higher education through institutions such as the Open University. It is the work of NUS Wales, through their ‘The Pound in Your Pocket’ research, that was bold enough to address student funding priorities head-on. And it this Government now—working, I hope, with parties across the Chamber—that will secure a stable and sustainable higher education funding and student finance package that can help transform the lives of our citizens and of our nation.