Nearly a month after it reported, it remains hard to know what to make of the Scottish Government’s review of student funding, and Ministers’ pointedly non-committal initial response. It will be clearer after today’s Scottish Budget if this has been an exercise with substantial impact.
Why did the Scottish Government have this review? Weeks before the last Holyrood elections its own Commission on Widening Access recommended (emphasis added) that the new Scottish Commissioner for Fair Access:
“should commission research, within three months of appointment, to assess how student finance impacts on the participation of disadvantaged learners in higher education. This research should consider in particular:
- Whether, and to what extent, levels of student finance impact upon access, retention and choice of institution.
- Whether, and to what extent, the balance between loan and bursary impacts upon access, retention and choice of institution.
- International practice on student finance and the impact this has on access and retention.”
New social contract?
The Commission was responding in part to concern that, eager to protect free tuition, Ministers had reduced spending on grants, now relatively low in Scotland. Soon after, the SNP manifesto promised to “review student funding to make it fairer”, citing a list of issues, including the divergence in funding for FE and HE students, and including an aspiration to “work to increase” grants. From this came the review. The reference to a “new social contract” for students in the report’s title echoes the wording in the manifesto.
The new commissioner agreed that the review should sweep up the access commission’s recommendation. Although the report does not discuss the second item on the list, ministers may feel this has all now been sufficiently dealt with. If so, the review has arguably performed much of its purpose simply by existing for a while.
That still leaves 84 pages of discussion and recommendations to deal with. As others here have already argued, the review is heavier on presentation than evidence and analysis, and ducks the issue of part-time maintenance support. For higher education, its big idea is a Diamond-like proposal of a flat rate of support at all incomes. Unlike Diamond, however, the review does not see substantial targeted grant funding as an essential element of such a system: the review’s version is funded entirely by increasing loan entitlements in Scotland’s already loan-heavy maintenance system. Diamond-lite, perhaps, rather than Diamond-like. The review recommends this course because, “We understand that the Scottish Government has headroom to consider increasing the use of student loans within existing allocations from the United Kingdom Government.”
Wait, what?
Total student borrowing in Scotland is only around half that in England, proportionate to population size. On the roughest rule of Barnett’s thumb, there must be scope for Scots to borrow more. But a review specifically charged with reviewing funding, which has been at work for a year, only “understands” there’s unused headroom? It doesn’t know that for sure from its contact with the Scottish Government? That is just odd.
But then one of the great oddities of this review of student funding is the jealousy with which the government seems to have guarded detailed information on finances, to which most members appear to have had only carefully managed access. The review’s Finance Sub-Group comprised only the Chair (Jayne-Anne Gadhia of Virgin Money), supported by staff from Virgin Money also working on the review, and civil servants. None of the other thirteen review members attended these meetings, which the Scottish Government insists were all about “assembling baseline information”. The review group discussed reports resulting from the sub-group, which are unpublished, in meetings lasting only an hour at a time (as the minutes record) and which covered this and four other strands of work. So when the time was found to discuss different options for the future in depth, and who produced and examined the detailed modelling, is far from clear.
To this observer, it looks likely the review group as a whole was having to take much of the financial material presented to it largely on trust. One figure seems extraordinarily low: an estimate of just £27m for raising the repayment threshold beyond the SNP manifesto commitment (£22,000) to the proposed English and Welsh figure (£25,000). That’s just 1% of the expected cost of the rise from £21,000 south of the border. The report does not explain how the £27m was calculated. Even when discussing the cost of raising the repayment threshold in line with the manifesto promise, an increase from below £18,0000 to £22,000, there’s no mention of the expected impact on the RAB charge or changes to expected levels of write-offs. Even basic things, such as explanations of how the main recommendation would change total support and loan entitlements at different incomes, are missing. Comparative claims are made with other parts of the UK which need backing that is not provided. There are a few errors in some of the numbers and hard-to-justify omissions from tables in the final report. This feels some way from Diamond – perhaps zirconium?
Limited by design
This feels like a review whose impact on higher education, at least, was always intended to be strictly limited. It was given a restricted remit that prohibited looking at any aspect of fees, which account for over 90% of the non-loan spending on students in Scotland. It gives the impression of having been under-resourced. It has not published or admitted to having the sort of research and evidence base typical of most such past exercises, in various parts of the UK. It relied on one online survey, focus groups with students arranged for members, one piece of commissioned research into a selection of international models, and a consultation lasting eight weeks over the Scottish school summer holidays, after which the review appears to have met only once. There were sub-groups which involved a wider range of experts on topics such as administration and benefits: but not, as we have seen, any such on finances.
Still, some good work was done and useful recommendations made. The case for a better online front shop is inarguable: the SAAS website has not been updated in years, and now feels dated compared to the Student Finance England/Wales/Northern Ireland alternatives. Likewise, the review rightly advises learning from the Special Support Grant approach well-established in other parts of the UK, to reduce the impact of grants on benefit entitlements. It correctly frets about low levels of financial literacy and understanding. On the substance of financial aid, total support at low-to-middle incomes is now quite low in Scotland, for those who live away from home. Scottish families with incomes from the mid-£30,000s and just above in particular face a substantially high expected “ability to pay” for absent children, compared to those elsewhere in the UK. In the absence of anything else, offering them access to more loan is better than nothing. It argues more needs to be done to encourage a positive attitude to student loans.
In its anxiety to speak reassurance unto power, the review suggests England is the main source of negative perceptions of loans, ignoring Scottish Minister’s’ own tendency to refer to the “burden” of student borrowing. Whether review members have not noticed this local rhetoric, or were diplomatically trying to help Ministers change the record we can’t know. But if Ministers’ response seems surprisingly guarded, perhaps some of the explanation lies here. The review suggests issuing more loans, to a government which has had a wholly uneasy relationship with student debt, quietly increasing its use while maintaining a thoroughly negative rhetoric. But what did Ministers expect? There wasn’t anything else it could realistically do. There might have been a deliberate strategy here to give the government cover for the politically difficult task of increasing student borrowing: but the low-key response calls even that into doubt.
A cliché in government is that you shouldn’t set up an independent review unless you know what you want it to recommend. The less cynical version of that advice is to avoid setting up reviews all of whose possible recommended options are likely to be unwelcome. The budget will reveal whether the Scottish Government is willing to face some political pain and use the review to offer some extra immediate help to middle income families, or even to find a modest amount to increase grants for some. But the strange banging sound coming from the engine? I reckon we’ll be hearing that a while longer.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/677269/Minutes_5_December_2017.pdf
According to the minutes of the latest student loans consultation group (page 3), the plan is to raise the plan 1 repayment threshold to £22k in April 2020.