Augar’s differential impacts across the devolved nations

Let’s start with the most immediate question for policy-makers in Scotland, Wales and Northern Ireland. How likely is Augar to be implemented? Given other distractions, how much attention to give these proposals right now is no small judgement for those outside England, as well as those within.

As and when they judge Augar likely to have real world effects, the common interest of the two current devolved governments and the Northern Irish administration will be the Barnett consequentials. The report is premised on an injection of new cash, for student grants and compensatory top up funding for teaching costs. As reported elsewhere in Wonkhe, London Economics has estimated these two elements would cost around £3.3 billion, although that may well be optimistic. Unless all that funding is transferred from some other area of spending that falls within Barnett, then the proposals should bring some new cash to other parts of the UK (adding to the total price tag). The question then becomes how much of that is needed in each nation to deal with any unavoidable new costs that Augar also brings. At that point the three devolved administrations diverge.

A loss of £1,500 in Wales

The heavy traffic of students in both directions across the border between Wales and England is the main challenge for the Welsh government. First, will the UK government cap the amount it is prepared to send over the border at £7,500 per student? Very probably. In that case, the Welsh government will have to drop its fee: an additional £1,500 charge would be a likely disaster for the cross-border recruitment the Welsh system needs, particularly unfunded and upfront. But what happens then for Welsh students who stay in Wales to study? Retaining a higher fee just for them looks pretty much insupportable. The logic pushes towards a loss of £1,500 in fee income for all UK students in Wales.

The good news for Cardiff is that it will not need to spend any new money on maintenance grants, having already invested in those well above the level Augar proposes. Any Barnett consequentials can therefore be recycled directly into the teaching budget. Critical therefore will be how the sums work out in detail. My back of the envelope calculation suggests Wales could be alright, based on a Barnett consequential of around £180m and somewhere in the region of 100,000 FTE UK and EU undergraduates. But much depends on which parts of Augar are implemented, how and therefore how much new money is found, and from where.

The Welsh government has so far remained tied to whatever loan system is used in England. How far the Welsh government is free to pick and choose between loan scheme changes, if it wants to, will depend both on administrative ease (a different repayment period should be easy to implement, a different repayment threshold not so much) and the arithmetic of student loan financing. The second of those can only be done on the back of a four-dimensional envelope and is not attempted here.

Good news for Northern Ireland

Northern Ireland is still using something close to the 2006 English system for those students who stay there to study. It too has kept grants above the level proposed by Augar, and fewer English students go to Northern Ireland, so the loss of fee income from that group is a less critical issue. Unlike Wales, a lower fee for students from the rest of the UK in Northern Ireland raises no issues about the fee for local students, as they are already on a separate, reduced rate. Lower fees in England would reduce the cost difference between staying and going: a large number of Northern Irish students study in other parts of the UK because there are not enough places for them in their home nation. For all these reasons, Augar looks to be straightforward good news for Northern Ireland, offering more money, up to around £100 million, and minimal entanglement. The DUP influence at Westminster starts to look interesting here.

An uneven spread in Scotland

In Scotland, students from other parts of the UK account for around one in seven undergraduates. A loss of income from these students will be unevenly felt across universities. Some already charge an Augar-like fee, spreading £27,750 over four years: they could just stick where they are and give up the four-for-three principle. But most English students are in institutions charging the full £9,250. Edinburgh and St Andrews have the largest proportion of recruits from England and will feel the largest impact.

These institutions experienced a windfall when they were allowed in 2012 to bring in English-level fees for students from the rest of the UK, with no clawback. They are now in the tricky position of having to argue for compensation for loss of that benefit. Scottish maintenance grants are well below £3,000 so there may be pressure from NUS to use some of any new cash to increase spending on those, to prevent Scotland reverting to the status of least generous UK nation for student grants, and to improve support in further education. An Augar consequential of around £300m would give the Scottish government some scope to be creative. However, current gloomy projections for Scottish income tax yields might mean any extra cash never comes near higher (or further) education.

How the Scottish government responds to loan scheme changes will be worth watching, as it has recently dropped its repayment period from 35 to 30 and appears to be struggling to meet a commitment to match the English repayment threshold at its current level of £25,000.

The combination of continued entanglement and increased divergence in higher education systems makes the UK-wide implications of higher education policy changes in England more complicated with each iteration. Considered here are just the financial points. Other parts of Augar may also be influential beyond England. But for as long as it is unclear any of this is actually happening, people in other parts of the UK may be wary of investing too much time in speculating over the cross-border complexities.

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