Welsh universities and colleges would be paid by results under plans being considered by the Higher Education Funding Council for Wales.

The possible introduction of an "output" element in the Welsh funding formula is being looked at alongside moves to create a link between funding and emerging credit accumulation and transfer schemes.

Earlier this year, the funding council published a consultation paper which proposed a system for funding part-time provision according to the "modular credit" value of courses - worked out by multiplying enrolments by credit ratings assigned to modules.

Now it has issued another paper which suggests that plans to use data based on student completion rates to calculate teacher training funding may be developed into an output funding system for the whole sector.

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The paper says that the use of relatively smaller "units" of learning in the proposed credit-based funding scheme "places an even greater emphasis on completion as opposed to initial registration" in funding.

And it adds: "The council envisages that in the longer term funding will be influenced by output data."

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Roland Wynne, head of the funding council's higher education division, said that an output funding element could be introduced for the whole of Welsh higher education.

But the proposals were at an early stage, and the detail, including the proportion of funding to be linked to output, had not been worked out.

"This arises from indications from the Government from time to time that the funding of output might be considered, and from the question of the role of higher education," he said.

It was unlikely the council would want to consult on the possibility of "payment by results" until the whole system had moved over to credit-based funding, he added. This could mean waiting at least until the turn of the century.

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