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Changing grants to loans will hit the poorest students

The sums don't work - and the losers are students, argues James Elliot.

Can you imagine a system where the poorer your parents are, the more debt you have to pay off after university? That’s exactly what George Osborne announced in last week’s budget, with the proposal to abolish maintenance grants for students from the poorest families and to replace them with loans.

The logic of the grants and loans system is that the more your parents earn, the more they will contribute to your living costs while you study. That isn’t true for students with parents can contribute but don’t, and it is unbearably difficult for students who have strained relationships with their family, particularly LGBT youth, because their parents make support conditional on accepting their values. But until yesterday, that was the system. Deeply flawed - but nonetheless keeping the pretence of being ‘progressive’.

Now students whose families earn less than £25,000 will have their £3,387 a year maintenance grant converted into a loan, and this is tapered off up to those who earn under £40,000 a year, who will have their £547 grant converted into a loan, from 2016-17. The perversity of this system is that the richer your family, the less you need in loans, but the poorer you are, the more money you have to take out as a loan, plus interest. That interest, accrued over time, is effectively a charge on the student for being from a low-income family.

Coupled to this announcement on grants is the news that fees will be allowed to rise in some institutions, in return for ‘teaching excellence’. Osborne’s budget document set out that measures to improve teaching will include, “allowing institutions offering high teaching quality to increase their tuition fees in line with inflation from 2017-18, with a consultation on the mechanisms to do this.”

This is Osborne’s confirmation of what higher education analysts and students have been worried about. That Jo Johnson’s new “Teaching Excellence Framework” is going to be used a justification to introduce higher fees. Johnson deleted lines from his original speech at UUK about ‘financial incentives’, but Osborne has made it clear in the budget this means fees. John Morgan of the Times Higher Education has made an educated guess that a fee rise will be delayed until after ‘English Votes for English Laws’, which would make sneaking a fee rise through for English universities much easier.

Johnson will outline his ‘TEF’ in a Green Paper in the autumn, usually a precursor to primary legislation that will be necessary in the event of a fee hike. The TEF, based on the ‘Research Excellence Framework’, will use a set of what Johnson calls ‘outcome-focused metrics’, as yet undefined, to rank universities on the basis of teaching quality.

Johnson has already said that he plans to, “assess the employment and earnings returns to education by matching Department for Business, Innovation and Skills and Department for Education education data with HMRC employment and income data and Department for Work and Pensions benefits data.” This means that the ‘outcome-focused’ metrics will probably be graduate earnings.

The driving forces behind these policies, along with those of the cuts to Disabled Students Allowance (DSA) from 2016/17, are partly financial and partly ideological. Namely, they are a market-worshipping response to a financial problem for a government unwilling to stump up the cash to pay for Higher Education. The Department for Business, Innovation and Skills (BIS), which Universities sits under, has been asked to find another £450m of cuts, while student numbers are increasing and vice-chancellors pay packets evade any belt-tightening.

Underlying all this is the failure of BIS to get its numbers right on student loans. The ‘RAB Charge’, which measures the percentage of student loans that are not repayed, hit 45 per cent a year ago, meaning the £9,000 fee system cost just as much to the Treasury as the old £3,000 system, and could end up costing more.

Rather than following in the footsteps of Germany by abolishing fees and properly funding education through general taxation, the Tories are continuing on the road to the recommendations of the 2010 Browne Report, which was to remove the cap on tuition fees altogether, shift all funding onto the student in the form of fees and loans, and let the market rule in a privatised university sector.

This budget takes us closer to that, telling students they will pay more in fees, and that the poorer their family are, the more debt they will have to pay off for maintenance. Meanwhile teachers are told that unless those same students get high-paying jobs afterwards, then their teaching will be considered of low quality. This isn’t Willetts’s “students at the heart of the system”, nor is it Johnson’s “teaching at the heart of the system” - this is profit at the heart of the system, and we will pay the costs.


James Elliott is on the NUS National Executive Council and an organiser for the National Campaign Against Fees and Cuts.

James Elliott is Deputy Editor at Left Futures. He tweets @JFGElliott.

Photo: Getty Images
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The future of policing is still at risk even after George Osborne's U-Turn

The police have avoided the worst, but crime is changing and they cannot stand still. 

We will have to wait for the unofficial briefings and the ministerial memoirs to understand what role the tragic events in Paris had on the Chancellor’s decision to sustain the police budget in cash terms and increase it overall by the end of the parliament.  Higher projected tax revenues gave the Chancellor a surprising degree of fiscal flexibility, but the atrocities in Paris certainly pushed questions of policing and security to the top of the political agenda. For a police service expecting anything from a 20 to a 30 per cent cut in funding, fears reinforced by the apparent hard line the Chancellor took over the weekend, this reprieve is an almighty relief.  

So, what was announced?  The overall police budget will be protected in real terms (£900 million more in cash terms) up to 2019/20 with the following important caveats.  First, central government grant to forces will be reduced in cash terms by 2019/20, but forces will be able to bid into a new transformation fund designed to finance moves such as greater collaboration between forces.  In other words there is a cash frozen budget (given important assumptions about council tax) eaten away by inflation and therefore requiring further efficiencies and service redesign.

Second, the flat cash budget for forces assumes increases in the police element of the council tax. Here, there is an interesting new flexibility for Police and Crime Commissioners.  One interpretation is that instead of precept increases being capped at 2%, they will be capped at £12 million, although we need further detail to be certain.  This may mean that forces which currently raise relatively small cash amounts from their precept will be able to raise considerably more if Police and Crime Commissioners have the courage to put up taxes.  

With those caveats, however, this is clearly a much better deal for policing than most commentators (myself included) predicted.  There will be less pressure to reduce officer numbers. Neighbourhood policing, previously under real threat, is likely to remain an important component of the policing model in England and Wales.  This is good news.

However, the police service should not use this financial reprieve as an excuse to duck important reforms.  The reforms that the police have already planned should continue, with any savings reinvested in an improved and more effective service.

It would be a retrograde step for candidates in the 2016 PCC elections to start pledging (as I am certain many will) to ‘protect officer numbers’.  We still need to rebalance the police workforce.   We need more staff with the kind of digital skills required to tackle cybercrime.  We need more crime analysts to help deploy police resources more effectively.  Blanket commitments to maintain officer numbers will get in the way of important reforms.

The argument for inter-force collaboration and, indeed, force mergers does not go away. The new top sliced transformation fund is designed in part to facilitate collaboration, but the fact remains that a 43 force structure no longer makes sense in operational or financial terms.

The police still have to adapt to a changing world. Falling levels of traditional crime and the explosion in online crime, particularly fraud and hacking, means we need an entirely different kind of police service.  Many of the pressures the police experience from non-crime demand will not go away. Big cuts to local government funding and the wider criminal justice system mean we need to reorganise the public service frontline to deal with problems such as high reoffending rates, child safeguarding and rising levels of mental illness.

Before yesterday I thought policing faced an existential moment and I stand by that. While the service has now secured significant financial breathing space, it still needs to adapt to an increasingly complex world. 

Rick Muir is director of the Police Foundation