Disabled Students Allowance: a case to watch

Disabled Students Allowance is a non-means-tested grant which exists to provide extra financial help for students who have a disability, ongoing health condition, mental health condition or a learning difficulty.  It is managed centrally by SAAS and is currently under review.  A look at the most recent spending data for DSA and the position in other parts of the UK adds to the picture of grant playing a diminishing role in student support in Scotland in recent years, in absolute terms and relative to other jurisdictions. The outcome of the review will be worth watching with that in mind.

DSA as a proportion of grant spend

DSA is the single largest block of grant spending after the Young and Independent Students Bursaries.  It is much smaller than either, but as YSB and ISB decline in value DSA accounts for a growing share of the remaining grant budget.  In 2012-13 it was worth 7.5% of total spending on non-repayable grants: see here Grant shares. Next year, if spending on DSA stays the same in real terms, it will be worth around 10.5% of the total: if it returns to its higher 2011-12 level, it will be around 13%.  How much is spent on DSA is therefore becoming an increasingly significant issue in relation to the grant budget as a whole.

Patterns of spending on DSA in Scotland

Spending on DSA rose by 80% in real terms between 2001-02 and 2008-09 – see DSA spend and claims  (figures all shown at current prices).  It then began to fall.  The chart also shows how claimant numbers rose up to 2011-12 and then fell for the first time in 2012-13.  It also shows that the average value of a DSA award has fallen steadily over the period, almost halving in real terms between 2001-02 and 2012-13.  In particular, between 2010-11 and 2012-13 spending on DSA (excluding a new element for travel grants – see below) fell by 21% in real terms.

The chart takes into account the transfer of travel grants for disabled students into DSA from the now defunct system of general travel grants, from 2011-12.  This represents a significant amount of new spending under this heading (over £0.574m  in 2012-13).  The government is unable to provide the equivalent figure for 2011-12, so the numbers for that year cannot be securely included in a like-for-like comparison of spending between years: the chart shows what the position would have been if the same spending on travel grant as reported for 2012-13 applied (the overall total shown for the year is correct).

From these charts (figures 4 and 5) in the official statistical publication the decline in applicants appears to be due to a fall in the number citing dyslexia.  Figures for all other disabilities in total remained steady. Spending however fell for both groups.

The official statistical publication states: “SAAS‘s policy on DSA support in 2012-13 is similar to 2011-12 policy (although there were some minor changes to the existing policies as part of ongoing efforts to improve procedures on DSA payments). However, there are still a number of factors that may have had an impact on the decrease in number of students and payments made through DSA. For example, improvements in technology may mean that equipment costs less than previous years, and as institutions improve services for their students, this may mean that fewer students require support from the DSA.”

UK comparisons

If one explanation is improvements in technology, and changes in what institutions provide to students, a similar fall in DSA spending and claims might be expected to be seen elsewhere.   DSA was a well-established part of student support prior to devolution and exists in all parts of the UK.  Technological developments, and even changes  in institutional practice, will not only affect Scotland.

Figures for DSA spending and claims in England, Wales and Northern Ireland were recently published up to 2012-13 by the Student Loans Company. Claimants have risen in England, Wales  and Northern Ireland  since 2009-10 (the first year covered in the most recent SLC publication).  Spending also rose in all three other jurisdictions over the same period, rising by between 13% and 28%  in real terms, despite slight dips in England and Northern Ireland in 2012-13.  The Scottish fall in applicants and spending over the same period is very distinctive. See here:  DSA UK comps

A comparison of the average value of a claim shows that between 2009-10 and 2012-13 it rose in real terms by 1% in Wales, fell by 3% in England and by 23% in Scotland. The average fell by 21*% in Northern Ireland compared to 2009-10*.    Although the averages for Northern Ireland  and Scotland were the same, the average value of a DSA claim in Scotland was 64%* of the figure for Wales and 72*% of that in England in 2012-13, a much wider gap than in 2009-10.  (*Figures updated from original post, to give fall in NI since 2009-10, and correct 70% and 80% previously provided incorrectly for Welsh and English comparisons)

Total spending on DSA was also higher in England and Wales (though not Northern Ireland) when looked at per head of the total population of full-time state-supported students: see the table below. The proportion of all students claiming was also higher in England and Wales.  Technical differences in how students are counted cannot be enough to account for the difference. The spending figures for Scotland in 2012-13 were also well below what would be expected based simply on the Barnett formula.

 ¹ As published by SLC for England, Wales and Northern Ireland in November 2013.  SAAS does not publish a figure for full-time students: figure obtained by removing the number of  students declared as receiving part-time support from the total of 135,375.

The SLC notes that its 2012-13 figures are still provisional, because claims for any year can be submitted well after the year end.  So the 2012-13 figures for England, Wales or Northern Ireland may still rise.  The data published by SAAS does not include the same caveat.  Past statistical documents show no history of later revisions to Scottish figures published for a particular year.

There may of course be other differences in the nature of schemes which could explain the higher general spending on DSA in England and Wales which a closer examination would reveal. But it would still be the case that by last year DSA represented a significantly more substantial source of non-repayable support, and for a larger proportion of students, in England and Wales than it did in Scotland. 

The current review of DSA in Scotland

In June the Scottish Government issued a consultation paper which noted that:

“In accounting terms, there is a disconnect between [the] professional assessments and the budget that supports the scheme. After assessments are carried out, recommendations are submitted to SAAS who hold the budget for the scheme and have ultimate responsibility on spend.   This consultation is being undertaken to explore the possibility of bringing budget responsibility closer to those who are tasked with making the assessments. All of what follows is predicated on the assumption that from the student perspective, there would be no apparent change in service delivery apart from faster turnarounds following assessment.”

Responses to the paper were published on 31 October  and are mixed, with some supporting and others opposed to the move. The government response has not yet been made.

Around half the text providing introductory background to the proposal concentrates on the rise in spending up to 2011-12.  That implies that this is seen as a particularly relevant piece of context for the review, even if the document does not suggest that there are any plans to reduce the amount spent. It says:

“The number of students in receipt of DSA is increasing. In 2011-2012, 4,495 students received DSA; this is 120% higher than in 2002-2003 and 1.35% higher than in 2010-2011.

The amount paid out through DSA has increased by 75% since 2002-2003 to £9.022 million in 2011-2012. [Note: this is in cash rather than real terms and includes the shift of travel grants into DSA.  The real terms like-for-like increase over the same period was 32%; by 2012-13, it was 6% – roughly in line with the growth in general student numbers. The 2012-13 figures were not publicly available until October 2013.]

The cost of providing support through DSA has been increasing without any corresponding evidence that the number of disabled people within the general population is increasing or that this growth pattern mirrors improvements in diagnostic techniques [Note: while the level of disability in the general population is mentioned, the possibility is not considered that more disabled students are making it through the education system with good enough qualifications for HE, perhaps partly as a result of the long-term effects of the Disability Discrimination Act 1995]. The number of students qualifying has more than doubled between 2002 and 2012 and is still going up [Note: as seen, the trend change in 2012-13] In large part, this increase is explained by the numbers of students diagnosed with dyslexia.”

The issues raised by devolving budgets

Devolving budgets would raise the issue of how far DSA remained entirely demand-led rather than cash-limited for all or some types of claims.  The consultation paper does not discuss this at length but, recognising that budgets would have to be set for institutions in advance,  does note:

“We have a lot of evidence in terms of historical spend, but future spend predictions are obviously more difficult. Any system of budget allocation would need to be flexible enough such that support could be provided for the unexpected or the exceptional” and “there would need to be some flexibility in recognition that budgets set in advance could not take account of exceptional demands”.

It asks:

“What sort of safety net would be required in order to support institutions dealing with exceptional cases? e.g. A scheme developed along the lines of Discretionary Fund allocations with in-year re-distributions? Retention of a top-slice by SAAS with a view to further demand-led allocations?” 

Special arrangements for  unforeseeably complex or expensive cases would surely be unavoidable here.  The more difficult day-to-day question is how devolved budgets would interact with an unexpected higher demand  from unexceptional cases, as happened with the rise in claims for dyslexia over the first decade of the century.  Further, the reference to “top-slicing” an element of the budget for SAAS leaves unclear whether the total DSA budget would become a fixed amount each year or whether the element retained by SAAS would remain completely open-ended.

If the decision is taken to proceed with a system of devolved budgets it will be technically challenging to couple that with maintaining the current completely open-ended spending arrangements.  Even if there is a central top-up pot, devolved budgets usually come with incentives not to over-spend locally, inducing prudential caution in those making decisions on the ground.   Indeed, some might doubtless argue that that would be an advantage of a different approach.

In that case, however, there should be honesty about the implications for individuals of the move from a system where every student’s claim is currently assessed purely on need to one where the availability of resources managed locally will form part of the decision.  It may not mean a worse system: it might prove better for some.  But fundamentally it would be a system where the government would be in a stronger position than it is now to control the overall level of spending, at the expense of those who would otherwise have benefitted from more or higher awards being made.  Given the recent reductions in YSB and ISB, such a development would become part of a larger story about a less generous line on grants in Scotland.

Relevance of the 2012-13 spending figures to the current review

A decision to devolve budgets would also require a decision about how much to devolve. The consultation paper does not discuss this, but transfers of financial responsibility between public bodies are usually based on recent spending patterns.  That raises the interesting question of how the unusually low – in recent terms – 2012-13 spending figures will be taken into account.  The figures for 2013-14 will not be known for some time.

It would certainly make sense to understand what drove the fall in spending in 2012-13, before its effect – and a rate of spending now well below the UK average – is potentially cemented into the system for the long-term.  Given that even a second year of lower spending would be unusual in recent terms, there would be a strong case for arguing that any system of budget devolution needs to have an in-built recognition from the start that spending in 2012-13 was unusually low by recent Scottish standards, and exceptionally low in UK terms.

Even if there is no change to the current arrangements, understanding better the fall in 2012-13, particularly if it is sustained or even repeated again in 2013-14, would make sense, as part of monitoring the ability of the system to support wider access in the widest sense.