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Spending Round 2013: effect on student support in England

July 1, 2013

The 2013 UK government spending round  was announced on 26 June. Maintenance grants in England will be frozen in cash terms in 2015-16, representing a £60m loss to students, and the national scholarship programme in England cut from £150m to £50m, with that funding to be switched entirely to post-graduates.

Strikingly, the reductions to student funding were more clearly described, and further in advance,  in the official UK budget documents than was the case for this autumn’s grant reductions in the Scottish budget process, enabling the media immediately to report the precise effect with technical accuracy 2 years in advance, and to criticise it – as in this Guardian editorial.

The NUS has expressed concern that institutions will withdraw their match funding for student support: “the funding was due to be matched by universities, leading to a total cut in support for undergraduate students of £300 million a year”. The UK budget does not withdraw the matching £150 million from institutions, although they appear to be facing a general reduction in teaching grant of £45m.  So the concern is presumably that without the incentive to put this funding into student support, institutions will channel it elsewhere.  That will presumably depend on how this feeds through into the regulatory system run by the the Office of Fair Access (OFFA).

This OFFA document suggests that prior to the 2013 spending round,  total planned expenditure of access related work by 2016 had been  £809m, of which £298m would be on bursaries and £241m on fee waivers.  So the NSP cut, plus the cash freeze in grants,  will have a significant impact, though the change is less sudden and, bearing in mind that these figures exclude non-repayable grants paid through the Student Loans Company for English students,  less in proportionate terms than the reduction in non repayable support in Scotland this year (likely to be around 25%, although the published documents for Scotland do not allow a precise figure for grant  reductions to be calculated).

The NUS criticises the reduction in grant support as likely to lead to an increasing reliance on commercial debt, suggesting there is no matching increase planned to student loans (although lost fee waivers will lead more or less automatically to increased student loan borrowing for fees). Certainly, the government document is silent on loans and the main  narrative does not refer to an increased RAB charge.  However, loan costs are noted as being included in the departmental figures in table A.10, where they rise by £1.5bn between 2014-15 and 2015-16.  It is not immediately clear whether that is the same as previously planned or includes some compensation for lost grant. As loan levels are already higher in England, pushing them higher again may of course be regarded as untenable even if it was affordable.

Even allowing for the starting point of higher debt, an account in the Guardian offers an interesting contrast to the relaxed attitude in Scotland  towards replacing grant with loan:  “But Cable, who settled late, made clear to friends that he had to fight hard to see off some “horrid” Treasury ideas about six weeks ago.  One source said: “It was a real list of horrors….They were wanting, in some places, to get rid of student grants and convert them all into loans.”

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