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Big announcements for universities in the Budget

Alex Leonhardt

Alex Leonhardt

Former Senior Political Affairs Officer
Universities UK
Although today’s Budget was in addition to the Spring Budget, there were certainly plenty of big announcements for the higher education sector – and some controversial ones.

Maintenance grants to loans

The headlines will be dominated by the decision to abolish student maintenance grants in England from 2016-17 and replace them with loans – and to increase the maximum amount available to £8,200 per year outside of London. This is up from the current figure of £7,245, which includes a mixture of loan and grant.

Universities UK recently called for an increase in the maintenance cash available to students, so we are glad that the total has been increased.

The sector and the government have a serious job following the announcement. In the short term, we need to communicate clearly the fact that there is more overall maintenance support available than ever before. In the medium term, we must monitor what behavioural impact the changes have (if any) on participation from under-represented groups.

This may all sound familiar: they are the same concerns, and the same tasks for government and the sector, that were pressing when the new funding system was introduced early in the last Parliament. That time, many of the concerns about impact on participation among under-represented groups did not materialise. While this is a source of optimism, it is not a reason for complacency.

Freezing the maintenance repayment threshold
Another controversial announcement was that of a consultation on freezing the threshold after which students begin to make repayments at £21,000 for five years. This was one of the options considered by the Student Funding Panel which Universities UK set up, and I’m sure the evidence gathered by them in their final report will be helpful to the government in considering this.

Inflation-linking fees and teaching quality
The other major measure affecting higher education was the announcement that universities in England will be allowed to upgrade their tuition fees above £9,000 in line with inflation from 2017-18, so long as they can demonstrate high-quality teaching. Universities UK has recently pointed out the inflationary pressures affecting universities and their ability to provide the highest quality education, so the fact that the Chancellor has listened to this is welcome. The government’s focus on ensuring a high quality of teaching alongside any increases is understandable.

I think it’s safe to say that the government  is at least looking into whether the  Teaching Excellence Framework announced last week by Jo Johnson should be used as the metric as to whether institutions should be able to increase tuition fees, and Universities UK will certainly be taking part in the consultation process for this. Whatever measure eventually used  must avoid introducing a raft of burdensome bureaucracy, while also ensuring that the measures chosen do in fact measure the quality of teaching, and not just (for instance) the prior attainment of the student body, or their propensity to choose careers with higher salaries.

This announcement on fees actually represents something of a change of direction for government policy, and may end up being the most important announcement made today.

Policy in the recent past has been focussed on ensuring students are well-informed, and allowing competition between providers. This announcement represents a much more hands-on approach: using a government-owned measure to intervene in the market and differentiate between fees chargeable by different institutions. The sector as a whole will have plenty of questions about what the long-term results would be of allowing only part of the sector to increase fee levels in the long-term.

So far as I can see, this new system, with differentiated fee caps, would require primary legislation which would need to be introduced in next year’s Queen’s Speech to be in place ready for 2017-18. While it may be possible for the government to make ingenious use of existing powers and secondary legislation, it would certainly be neater to introduce a new structure.

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