Thank you very much for bringing this debate. I think it's really important to both our students, but also to our overall economy. First, I want to congratulate Cardiff Metropolitan University, which has been designated Welsh university of the year by The Times and The Sunday Times, which is focused on its courses that are designed for hands-on learning, including the very important food technology department, which I recall was visited by the vice premier of China. On his very short visit, he decided to go there. That is typical of the type of work that Cardiff Met does. It's very practice-focused, professionally oriented education, which is vital for developing the sort of graduates that we need to regenerate our economy.

I'm delighted that one of its 37 new degrees is going to be in early years education, which is probably the most neglected and most important aspect of pedagogy, yet more traditional universities regard this as not very important. The courses in applied entrepreneurship and innovation management that are going to be starting in the next academic year of course are exactly the sorts of courses that we need to help us tackle our historic low productivity, which has dogged us for all time. So, I have to acknowledge that all universities are reeling from the impact of COVID, but I think it is unrealistic to think that the Welsh Government is going to be able to meet that £500 million gap estimated by the Institute for Fiscal Studies. 

Cardiff University is particularly vulnerable to the massive drop in international student enrolments. Previously, they used to benefit from over two fifths of the overall income coming to Wales from international students. And it's perfectly evident anecdotally that these students have not arrived in the sort of numbers you would normally expect at this time of year, as they normally arrive earlier than UK students, just to familiarise themselves with the area. Cardiff predicts that it will only take in 60 per cent of its original target for international undergraduates and 40 per cent of its postgraduates.

These are worrying figures for lots of reasons. First of all, it will obviously increase pressure on the deficit in the pension funds, and also it means less money for research. And of the Higher Education Funding Council for Wales innovation and recovery fund, none was allocated to Cardiff, presumably because it is, overall, stronger than many other universities. At the moment, Cardiff predicts a £67 million deficit—that comes from its chief financial officer—and it's going to have to bridge it by a raid on its reserves. Luckily it's got those sort of reserves to enable it to do that, but it does make it very vulnerable, going forward, in future years.

Cardiff is our largest university and our only Russell Group university. Overall, Cardiff's contribution to the Welsh economy is very significant. It previously constituted nearly half the £5 billion that it is thought universities contribute to the Welsh economy. And it isn't just the consequences of the COVID pandemic; it is the double whammy of both COVID and leaving the EU, which is really very worrying for the loss of research and innovation funding, which used to come particularly from foreign students, but also the European regional development fund money, which obviously will cease as a result of our leaving the European Union. And the reason why ERDF money is so important—its contribution to Wales has been £334 million, according to Professor Kevin Morgan—is because ERDF money is allocated on the basis of need, and had the overt objective to raise Welsh prosperity to the average for the rest of Europe. In future, the UK research and innovation money that Cardiff and all the other universities will have to bid for could be allocated simply on the basis of open competition, which means that them that have get more. And we know that Oxbridge gets a far bigger slice of the overall pie and takes in far fewer state-educated students.

Lastly, I just want to highlight the crucial role that universities play in our regional economic development. That is a point that was emphasised by Professor Morgan in a recent webinar. If we don't have the research-based evidence of what works and doesn't work, we're going to be in a much more difficult place to ensure that we have the most strategically impactful regional economic policies that we need to have. So we all need to worry about the financial health of our universities, but unfortunately, I think it's unreal to think that the Welsh Government is going to be able to bridge the gap. We face very difficult times ahead.