Living cost support in further education – an issue that isn’t going away

The Herald reports that the Scottish Government has agreed to find the extra £7 million colleges have reported they need, in order to meet demand for bursaries for students in further education.

Students on higher education courses in FE colleges (almost all at Higher National Certificate and Diploma or equivalent level)  fall within the national scheme of student support run by SAAS.  Those on further education courses don’t. They depend on funds which the Scottish Funding Council parcels out to colleges, who then administer them, with the possibility that the cash will run out if demand is higher than expected.  This is what appeared to be about to happen.

Demand has reportedly risen by 15% since 2011-12. This isn’t very surprising.  The recent college performance indicators confirmed that college provision is increasingly shifting towards younger, full-time students, in response to direction from the government that this is what it wants.  As the new Cabinet Secretary, Angela Constance MSP, explained:

In the last few years, colleges have successfully targeted our priority groups, which has increased the cost of student support.

This shift was always likely to push up the pressure for living cost support:  full-time students are by definition less available for work and therefore likely to be more dependent on the state.  The more the system goes this way, the heavier the pressure on FE bursary funds is likely to become.  That was a predictable effect and it is reasonable to expect the government to plan for it.

So the reaction of NUS Scotland, and opposition parties, that the increase is welcome but only a short-term fix looks right.

The problem is that the long-term fix doesn’t look too easy.  In order to protect spending elsewhere, the Scottish Government has already taken £36 million out of grants in higher education, a 40% cut which leaves total spending on HE grants at just over £50 million,  half the budget for FE bursaries, which now exceeds £100 million.

As a group, students in higher education now rely on loans for nearly 90% of their living cost support.  In theory, the Scottish government could afford to spend even more on loans, because it gets a much larger Barnett consequential for lending costs than it needs – because it has no high-fee system to prop up.  Could it use some of this headroom to help out students in FE?  As far as I know, the current Scottish government has never argued that low income students in HE should get loan instead of grant towards their living costs because of their potential future “earnings premium”.  It has simply asserted that loan allows it to make public money go further.  In 2012,  NUS Scotland embraced this argument enthusiastically for HE students and added its own twist – that public debt is better than commercial debt.  Such arguments could be made equally well for students in FE.

In England, student loans are used in a limited way for FE students under the “24+ Advanced Learning” scheme: this only covers course-related costs, however, not living costs and is limited to £300.

Ironically, if loans were extended to FE students, Scotland would find itself in a situation where the  group of full-time students likeliest to emerge from tertiary education owing the state little or no money would be those from better off households, who are disproportionately likely in turn to have done a degree – pretty much the group for which earnings premium arguments can be most convinvingly made.  That would be an interesting outcome to defend.The current position, under which government lending to students is already skewed towards those from poorer households,  is interesting enough.

Whether there is any appetite in Scotland for extending loans into FE is a different question and hard to tell: no-one is saying, if so.

The other story today – which may or may not be related – is that the Scottish government has asked the SFC not to distribute £21 million of funding previously earmarked for university research. The Herald records that:

a Scottish Government spokesman said the decision had been taken to give ministers more flexibility over budget priorities throughout the year.

He said: “The Scottish Government will be providing over a billion pounds in funding in 2015/16, having invested more than £7 billion in higher education since 2007.

“Next year our overall provision of funds for Post 16 education and training will rise, reflecting our commitment to new education and training facilities and the reforms that are part of Developing Scotland’s Young Workforce.

“As expenditure can vary in the course of the year, we have asked the funding council not to allocate their budget for next year in its entirety in the first instance, as was made clear last year. This provides flexibility going forward to align resources where needed across our funding for post-16 education.”

It was already unclear how the government was planning to cope with a cash-flat budget for student grant and fees in HE, when student numbers are rising.  Now we see the pressures in FE. It’s hard to avoid wondering how these various stories may join up.

The maths underlying the higher and further education budgets has looked challenging for a while.  The job of making it all add up inherited by the new Cabinet Secretary isn’t enviable.