Thank you, Deputy Presiding Officer. Universities are a crucial element of our economy, producing over £5 million of outputs every year. They are anchor institutions in their local areas, providing opportunities for jobs and supply chains, and diverse populations of students and staff. Their contribution is also felt across Wales and beyond through their innovative work on innovation, research and skills development. 

The Welsh Government takes pride in its investment and support to our universities. We have increased HEFCW's budgets by some 82 per cent, enabling them to reintroduce innovation and engagement funding and to increase the funding level provided on quality-related research. The HEFCW funding for the academic year 2022-23 is almost £103 million. The outcomes of the research excellence framework of 2021 show the great impact that Welsh universities are having. It was judged that 83 per cent of the research work presented was world leading, or was excellent on an international stage. This research foundation encourages the spread of information, technological innovation and inward investment.  

As Members will know, research in universities is funded by a mix of funding from businesses, charities, community organisations, as well as the Welsh Government, the UK Government and the European Union. I will return to the matter of European funding in due course. In this challenging financial time, it is crucial that the research and innovation sector in Wales collaborates on shared priorities, and concentrates on tackling the major challenges that we face as a nation. We have invested £2 million this year in the Welsh innovation network, which was established in order to facilitate co-operation and partnership between universities in Wales and beyond, with a broad variety of public sector, private sector and third sector involvement. 

Of course, HEFCW is a key partner in investing in universities, and we will continue to work with them to see how we can develop strategically the way in which research funding is allocated in order to gain grants from other sources. I welcome the practical approach of the sector and its willingness to collaborate in order to be more competitive on a UK-wide basis. Through collaboration, we will ensure the best value from research funding from HEFCW to support innovation and research. In future, university funding will come under the new commission on tertiary and higher education. In response to James Evans, the commission will be expected to play a key role in the research system, working closely with the UK research councils. It will continue with the work of the Higher Education Funding Council for Wales on increasing the amount of research funding from the UK that comes to Wales.