Spending Review: the great NHS bursary gamble

The Secretary of State for Health, Jeremy Hunt, is at present embroiled in a bitter dispute with the British Medical Association (BMA) over his proposed changes to the contracts of junior doctors in England. A range of Royal Colleges have set out their opposition, and some 98% of junior doctors have now voted for strike action. Though both sides are now in talks at ACAS, there is no guarantee of a swift resolution.

Thus it’s maybe not the most propitious moment for the Government to risk further conflict not just with doctors, but almost all of the major healthcare professions involved in the NHS. Yet this is what the Chancellor invites with his announcement in the Spending Review that NHS bursaries will be scrapped and replaced by the standard system of student loans for new students from 2017/18. Ostensibly, this allows for the numbers cap on healthcare students to be lifted and 10,000 new training places to be created – though, as has been well documented, such shifts from grants to loans also helps reduce the government’s budget deficit.

From what has been made public, the proposals would mean that, over time, more than 100,000 students would move from a system where no fees are charged and the maximum maintenance loan is (for study outside London) £2,324 a year, to a system where both fee loans and maintenance loans would total at least £17,200 per year. This is no small change: whereas other undergraduate students have moved in this direction over four major sets of reforms since 1998, this would travel essentially the same distance in one single leap.

In his statement last week, the Chancellor referred to the change as one affecting ‘student nurses’, though that’s not really an accurate description of a system which funds not only trainee nurses and midwives, but students in a range of allied health professions such as radiography and physiotherapy, as well as doctors and dentists in the latter years of their undergraduate courses. In most cases Health Education England (HEE) provides teaching funding directly to institutions; doctors and dentists, have their £9,000 fees paid by the NHS in the years they receive the bursary.

Up until the 1990s, nursing and midwifery training was similar to an apprenticeship, with training schools attached to hospitals; student nurses and midwives were regarded as NHS employees and funding was paid as a salary. Two reforms then created the system we have in place today: first, “Project 2000” moved nursing and midwifery training into the higher education sector via a combination of diploma and degree-level courses, and so the salary was refashioned as a bursary. Second, the system was expanded to incorporate a range of healthcare professions in 1998, as the Blair government sought to offset concerns about the introduction of fees for other undergraduates in that same year, and as a means of incentivising students to work in the NHS. Diploma-level study is no longer available and there have been some amendments to the exact proportions of bursary and loan funding since 1998, but 17 years on the system retains the same basic structure.

Universities UK and the Council of Deans for Health (COD) published a joint statement in July, arguing that a shift from grants to loans was necessary both because universities were not receiving enough funding to cover the costs of training, and to increase the level of support healthcare students received for their living costs. Unsurprisingly, they have welcomed the announcement, though with a gloss of concern that the details need to be considered carefully. By contrast, trade unions, professional bodies and NUS have been strongly critical. Unison has argued that the change will create staff shortages, a concern echoed by the Royal College of Midwives, the Society of Radiographers and NUS.  The Royal College of Nursing has said that though they welcome a commitment to addressing staff shortages, “student nurses shouldn’t be the ones having to pay for it.” This division of opinion would appear to be reflected in the HE sector more broadly, if less publically – some vice chancellors are happy that this funding problem is being resolved in their favour, but others are very concerned about the impact on recruitment if student debt rises so significantly.

It should be said that nothing is yet finalised, and the proposals will be the subject of a consultation in the New Year. It’s also true that few regard the present situation as satisfactory for students or institutions. Bursaries were once generous in comparison to other undergraduate funding but have been allowed to fall behind. The ‘reduced-rate’ student loan students can take out for living costs has been frozen since 2009/10 and the bursary has not kept pace with inflation; it’s long been the case that NHS students were disproportionately likely to apply to university hardship funds. Meanwhile, the COD argues that the gap between the funding provided by HEE and the true cost of providing training was 8-12% per annum. The numbers applying for nursing courses exceed the supply, and not enough nurses are being trained to meet demand from the NHS.

Even so, this particular solution is both a political and academic gamble. Nursing and midwifery students in particular are, on average, older, poorer and more likely to be women and to have children than undergraduates generally. All of these are factors academics have previously associated with greater debt aversion; given previous experience we would expect to see a significant dip in applications at least in the first year of the new system, and, given what we know about mature student applications and given the scale of the change, there is a chance that dip could be sustained in at least some of the professions, with significant consequences for NHS workforce planning. UUK and the COD have suggested that to offset such concerns the NHS could pay part of the student loan off after a few years in service as a retention bonus, but there’s been no immediate sign this provision will feature in the new system.

Universities cheered by the prospect of increased income should also exercise caution. NHS bursary students are not in the remit of OFFA at present, precisely because of their separate funding arrangements. It seems likely that exception would be revisited if NHS bursaries were scrapped, and institutional bursary and scholarship provision extended just at the same time as the Student Opportunity Fund is cut by up to half. And, if recruitment levels do drop, the government will place all the more emphasis on HEIs making good the problem, given they argued for the change.

There are problems too even if critics are proven wrong and recruitment levels increase by the 10,000 extra places the government has forecast. It’s by no means clear that the NHS has the capacity to provide the necessary placement opportunities and supervision of trainees, most especially in an environment where enormous efficiency savings are being sought over the next few years.

Finally, there is the risk the government takes with public opinion. George Osborne’s emphasis on student nurses in his statement was curious, as bursaries are paid to other groups and these are the very students it might be thought would attract the greatest sympathies of the public. Opponents of the change will be unforgiving in their portrayal of his motives and the consequences. If the debate is framed as the government loading up vulnerable student nurses with impossible debts, and combined with the perception that the government is now out to get not only junior doctors but trainee doctors too (to say nothing of midwives, physiotherapists and so on), risking the ability of the NHS to care for us all, it could mean a steep price is paid by everyone concerned.

Update (12/01/16): Since this article was written, the Department of Health has clarified the changes as presently proposed would only affect nursing, midwifery and allied health professional students, and not medical or dental students. They have not given any reason; it is perhaps because of the need to avoid further conflict as outlined at the beginning of the article. It would seem unlikely the Department would wish to maintain a separate system for medical and dental students indefinitely, so this point will be one to watch in the coming weeks.