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Scottish Budget – plans for student funding to 2015-16

September 30, 2013

Background to my piece in The Scotsman examining the Scottish Government’s budget plans published in September 2013 and considering their potential impact on student support and the funding of teaching in higher education.

The tables referred to in the piece are here: Budget 2015-16 tables.

The Scottish Government  budget plans up to 2015-16.

The previous plans from September 2012.

The estimate of tuition fees as approaching three-quarters of the budget line is based on the most recently available data for SAAS spending on fees, which are the figures for 2011-12 shown here.  This gives £210m for full fees, and £222m for all fees. This is equal to 73% of the total of £302.4m in the relevant budget line for 2013-14.  This is before taking into account that since 2011 student numbers have risen slightly and the government is providing more support  for free tuition for part-time students.

An analysis of the reduction in student grants in Scotland is available elsewhere on this site.

A strong indication that demand is growing more than fast enough to compensate for falling numbers of 18 year olds comes from the most recently available UCAS data on acceptances rates for 18 year olds (see table 10).  This shows that even though acceptances in absolute terms have been rising,  the percentage of successful applicants in Scotland has fallen since 2009, meaning more applications are being made.  The acceptance rate currently stands at around 5-6% below the 80% which held relatively steady over the middle of the decade.   This data covers the period to 2012: the figures for 2013 will not be available until early next year.

For UCAS’s latest estimates of the year-on-year changes in the absolute number of acceptances, see table 1(c) in the document linked at the foot of this news release. It is worth noting that over a longer period – ie  since 2010-11 – Scotland is still ahead of England and Wales in terms of the overall increase in acceptances.  After a large dip in 2012, England has only just exceeded its 2010 levels, and in Wales the figures are still lower than in 2010 (Northern Ireland is well ahead of everywhere else on this measure). However,  the immediate momentum in UK higher education is towards expansion and this would make the task of defending any contraction in places in Scotland more difficult – particularly if demand remains high.

GDP deflators used to calculate the value of 2012-13 spending in the real terms up to 2015-16.

The assessment that grants must be absorbing around two-thirds of the saving on this line between 2012-13 and 2015-16 comes from calculating how much of the £40.3 million would have been needed to keep the fee element at the same real terms value and ascribing the rest to grants.  Assuming that the fee figure did not increase in 2012-13 and was still £222 million (see above),  increasing this by expected inflation over the period gives £235.5m by 2015-16.  Therefore, of the £40.3m reduction,  £13.5 million, or one-third,  is assumed to have been found by freezing the real terms value of the fee element, leaving the remaining two-thirds to fall on the grant component.

Data on the level of SAAS fee over the last 10 years is provided  here.  From 2006-7, when the fee rate for a degree was raised well above inflation, to £1700 pa, as part of the mechanism for controlling cross-border flows, inflation increases were then applied in 2007-08, 2008-09 and 2009-10.  At that point the fee rate reached £1820, where it has remained for the subsequent 4 years.  Using Treasury deflators, had its real terms value be maintained it would now be worth around  £1970 (8% higher) and by 2015-16, its expected value would be just over £2050 (13% higher).

The estimate that SAAS fee payments appear to account for around one-quarter of universities’ income from the Scottish Government for teaching Scottish students (£1820 compared to an average £5359 in teaching grant per student provided by the Scottish Funding Council, produced by dividing the total teaching grant by the number of funded places: taken from Tables 2 and 5 here).  To give a sense of the impact of this, the SFC average teaching grant per funded place rises by 1.6% in 2013-14, after adjusting for the removal of rUK students from the funding formula.  Once the zero uprating of the SAAS component is added in, this falls to 1.2%.

The estimate for 40% of higher education being provided in colleges is drawn from Table 4 of  Participation Rates for Entrants to Scottish Higher Education 2011-12

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