Download Autumn Statement and Spending Review: Analysis briefing

Autumn Statement and Spending
Review: Analysis briefing
George Osborne delivered his autumn statement coupled
with the Conservative Government’s Spending Review on
the 25th November.
Below is NUS’ analysis of how these proposals will impact
on students and apprentices in both further and higher
education.
Further Education
The protection of the FE budget this spending
review is bittersweet to say the least. George
Osborne announced yesterday that the core
adult skills budget and 16-19 base funding
will both be protected in real terms, which
we can in part, put down to the hard lobbying
of students, college staff and sector
organisations over the past year, but given
repeated cuts to areas in both these budgets
since 2010, it feels like quite a hollow victory.
In the detail of the CSR document itself, the
Treasury have announced that there will be a
£360m saving from supporting budgets for
19+ learners. We can assume some savings
will be made as the outcomes of area reviews
are realised, which in all likelihood will come
from staffing cuts in both teaching and
supporting services, potential campus closures
as courses are ‘rationalised’ across greater
areas and an even tighter squeeze on delivery
and services.
The extension of the 24+ Learner Loan
scheme to 19-23 year olds is a smoke and
mirrors policy bought in to shift funding onto
Autumn Statement and Spending Review: full
analysis
the shoulders of second chance learner and to
normalise debt for young people. The problem
is that 19-23 year olds are in limbo when it
comes to student support in FE. There is no real
support if you want to do a Level 3 course, with
many students having to self-finance their
college fees if they want to take a Level 3
course. The policy on face value looks good, a
loan to pay your course fees instead of
financing them yourself upfront, however,
unlike a university loan there is no maintence
included so you could easily not complete your
course due to financial stresses which in HE,
maintence support eases. Currently in the 24+
scheme, the majority of people who take up the
loan are women in their late 20’s taking courses
in areas such as health and social care and
business admin. There is no expectation that
these courses lead to jobs where the student
will reach the £21,000 repayment threshold
meaning plenty of this money will never be paid
back to the government.
A Level 3 qualification for young adults is the
very least we should be able to offer our
students in further education. There are plenty
of reasons a student starts a Level 3 course at
19 from poor careers information, advice and
guidance to a change in family circumstance,
and to penalise them for this seems anything
but progressive.
In contrast, the extension of the loans for
higher level skills in FE will predominately sit
with students taking engineering, sciences and
technology courses who are more likely to be
men and more likely to be able to access a role
with career progression and competitive
salaries.
The decision to expand the University
Technical Colleges programme is worrying,
they are not delivering the quality vocational
education for 14-18 year olds they promise.
Exam results in UTC’s are lower than their
school equivalents, and although still in their
infancy, some UTC’s have already had to close
their doors due to a low enrolments. The
government would be better funnelling the
money wasted on UTC’s into schools to support
them to deliver a mixed academic and
vocational curriculum, plus properly investing in
a national careers service which gets more
young people onto vocational pathways.
Allowing Sixth Form Colleges to become
academies should have a positive financial
impact as they will no longer have to pay VAT
which takes a huge chunk of money from each
college budget which could be spent in the
classroom and on students. However, the move
to an even more fragmented education system
with more free schools and more academies is
concerning as it takes power away from local
authority control as well as there being no
requirement for academies to consult parents,
staff and ultimately students in decisions they
make.
The creation of five new national colleges
specialising in digital skills, high speed rail,
nuclear power, on shore gas and oil and
creative industries will only be successful if
students are given adequate financial support
to be able to access this type of specialised
education. In essence students will be
accessing university style provision, so the
willingness to consult on maintenance loans is
welcomed, however, we urge the government
to make sure there is adequate grant provision
for disadvantaged learners wanting to study in
these subjects. Again, it’s worth bearing in
mind that without a substantial change in
careers information, advice and guidance
provision these colleges won’t even be a
consideration for so many young people.
In addition, students expect investment in
green energy and want to see a more
sustainable and environmentally focused
economy so it is disheartening to see the
government continue to push for skills
investment in fossil fuels rather than using this
as an opportunity to develop a specialist college
to look at green renewable energy.
Apprentices
The announcement to create 3 million new
apprenticeships by 2019/2020 isn’t new
news, and although we welcome the expansion
of apprentice provision, 3 million seems like a
rather large and arbitrary number. To reach
their target businesses and organisations will
need to create 1,500 new apprentice places
every day. With sectors setting the direction of
travel for programme design, we need to make
sure that quality and access are at the heart of
all apprentice provision, with adequate time
spent learning both on and off the job. Colleges
should play a major role in apprentice delivery
and apprentices themselves should be able to
access more of the support afforded to students
in colleges.
The proposed Apprenticeship Levy will be set
at 0.5 per cent for large businesses. This should
raise around £3bn a year to support
organisations to take on more apprentices with
big businesses footing the bill for training costs.
Currently the majority of apprentice places go
to the Over 25’s with businesses using
government money to train staff on poverty
apprentice wages rather than creating the
opportunities for young people in industry that
are sorely needed. We propose that
organisations employing apprentices should use
some of the funds they are allocated through
the apprentice levy to top up the apprentice
minimum wage of £3.30 p/h to the national
minimum wage, because as Nick Boles MP said
at AoC Conference this year, an apprenticeship
is basically a job, therefore NUS thinks you
should probably pay them properly.
Higher Education
Rumours that NHS bursaries for healthcare
students in England were in the firing line for
the CSR had been rife for some weeks. In his
statement, the Chancellor confirmed these
rumours were largely true, and announced that
from 2017/18, bursaries would be scrapped and
replaced by loans. The exact details of the
proposals have yet to be confirmed at the time
of writing, but they are expected to be the
subject of a consultation in the New Year.
Changing NHS bursaries to loans was a policy
suggested by the Council of Deans of Health
(CoD) and the Universities UK, the
representative body of universities. The two
organisations released a statement supporting
such a move back in July when the government
announced their cuts to maintenance grants.
The Council of Deans of Health (CoD) have
released some information on the proposed
changes as they understand them, though this
is not strictly an official document. In it, they
confirm that the changes will affect new
students from 2017/18 and that the intention is
to move healthcare students to the system that
applies to other undergraduates, with the same
loan rates and supplementary grants. They say
these changes apply to nursing, midwifery and
AHP (allied health profession) students – a
notable absence is any reference to medical
and dental students, who at present move on to
the NHS system after the fifth year of a
standard undergraduate degree course.
Although fees are not addressed in the briefing,
it is our understanding that the change will
mean healthcare students will pay fees at up to
£9,000 as for other undergraduates. As things
stand, Health Education England ‘commission’ –
that is, provide the teaching funding for –
places on nursing, midwifery and AHP courses,
and separately the NHS bursary scheme pays
for the £9,000 fees of medics and dentists once
they are in the scheme. It’s not clear if fees for
medics and dentists will continue to be paid for
later years, nor what will happen to funding for
graduate-entry medicine.
The government says the reforms will mean
another 10,000 training places over the
Parliament, but such an enormous rise in the
debt levels of these students would surely
impact on recruitment levels.
Such a rise could have a disproportionate effect
on nursing and midwifery students in particular.
These students are, on average, poorer and
older than undergraduates in general (the
average age of a nursing student is 29) and
they are much more likely to be a parent. We
know from the research data that debt aversion
affects the poorest more, and increases both
with age and when the student is a parent.
Moreover, the funding for dependents in the
NHS bursary scheme is more generous under
the main undergraduate system, and this may
offset the ‘benefit’ of higher loan amounts for
living costs. We know that poorer students will
often try to reduce their debt exposure through
part-time work – but the intense nature of
healthcare courses means there is less
opportunity to do so. Even so, students may
take up part-time work at the risk of poorer
academic outcomes.
If these fears are unfounded and recruitment
does increase, it is by no means clear whether
the NHS will be resourced to provide the
placements and supervision that are essential
in healthcare courses. Without adequate
investment a huge increase in numbers would
mean a decline in the quality of the education
these students receive.
The fight to save and extend NHS bursaries will
be incorporated into the wider Cut the Costs
campaign, and the consultation will give us the
opportunity to address the proposals and the
problems they will create.
Policies restricting funding for Equivalent or
Lower Qualifications (ELQs) have been in
place for many years, especially after 2008
when HEFCE teaching funding was brought in to
the equation. When fees were low these
restricted funding levels did not prevent some
from taking up such study, but following the
changes in 2012 and the increase in the fee cap
to £9,000 for full-time students, very few could
afford to do so. This issue has been cited as
one of the factors behind the collapse in parttime numbers in England over the last few
years. NUS, the Open University, Birkbeck
College and many others were vocal in their
opposition to the ELQ policy, and a victory was
achieved this year with a relaxation of ELQ
rules for part-time undergraduate STEM
courses.
As with other changes, the exact nature of the
relaxation of ELQs is unclear but the inference
is that full-time undergraduate STEM courses
may also be exempted. We will need to confirm
whether this will apply only to fee loans, or to
maintenance loans in addition. However, this
could be a positive move.
Funding for the study and living costs of
part-time students has always been very
restricted in England. Labour brought in small
course costs grants in 2006 but these were
scrapped in 2012 by the Coalition; at no point
have part-time students been eligible for
childcare support, though they can receive
DSAs.
Therefore some measures to enable part-time
students to cover certain costs such as
childcare, books and equipment and travel are
welcome. It is disappointing that such funding
is only provided via loans as the evidence is
that high loan debt is not attractive to part-time
students. It will also be critical to ensure that
these loans do not impact on the benefit
entitlement of students who choose to study
part-time.
Providing financial support for part-time
students may well help more students to be
financially able to study. However, unless
something is done to incentivise institutions to
increase supply of part-time and flexible
provision, many students will simply not have
the choice of options for course available to
them. There seems to be no attempt by
government to deal with the decline in parttime provision and tackle the perverse
incentives which lead institutions to focus their
attention on full-time provision.
The government has announced a number of
changes to their plans for Postgraduate
Taught loans in direct response to the
information they received as part of the loan
consultation back in March 2015 and the
lobbying and campaigning of students,
students’ unions and other allies.
The most important changes has been the
removal of the age cap at 30. Potential
students can now gain access to an incomecontingent loan for masters study up to the age
of 60. This was the focus of the NUS #CapsOff
campaign and is therefore a huge victory for
older students. It is clear that the government
were unable to justify their position on the age
cap and accepted the overwhelming evidence
that was supplied to them as part of the
#CapsOff campaign.
There are, however, further positive changes
announced. In particular, government have
listened to the concerns of students around the
impact of repaying two student loans
concurrently, and while they have not gone as
far as changing to a consecutive repayment
system (ie. You repay your PG loan after fully
repaying your UG loan), they have significantly
reduced the repayment rate of the PG loan
from 9% to 6%. This would save a masters
graduate on a £30,000 salary £270 a year in
repayments, and someone earning £35,000
would save £420 a year.
The scheme has also been opened up to other
courses, including distance learning courses at
a 50% intensity or above, and research
masters courses. This will support many other
learners, including students with disabilities
who are more likely to take on distance
learning courses.
Finally, the scheme will be “portable” to other
parts of the UK, meaning that English students
will be able to use a postgraduate loan to fund
study at institutions in Wales, Scotland and
Northern Ireland as well as England. This is a
very important change as it ensures that
institutions in the nations which see large
cross-border flow of students from England will
not be at a disadvantage, and students are
offered greater choice in the institutions they
can apply for and receive funding. It should be
noted this portability will not be available in the
first year of the scheme.
BIS have estimated that 57,500 students will
take up postgraduate loans in the first year,
which remains set for 2016-17. This shows the
huge impact this scheme and the subsequent
changes made to it will have on the lives of so
many students. NUS welcome this scheme and
the changes made to eligibility and repayment,
suggesting that the government have listened
carefully and appropriately to the voice of
students on this issue. This, of course, would
not have been possible without the fantastic
work of students and students’ unions around
the country who lobbied and campaigned on
postgraduate funding over the past three years.
This is a great example of where well thought
evidence-based campaigning has been hugely
effective.
Government have also announced plans to
support the development of three new
university institutions. There will be a
£20million competition to set up an “Institute of
Coding” aimed at developing high-level digital
skills. They are also looking to address a “cold
spot” of HE participation on the England-Wales
border by providing funding for a new
university in Hereford. Government will also
help fund a new campus for the Royal College
of Art in Battersea.
While it is commendable to see government
investing capital into new institutions, we are
yet to see whether the first two plans will end
up being public institutions or whether this
means some form of public-private partnership.
Certainly, the increase in choice for students
will be important and may well improve access
to higher education in Mid-Wales and the West
of England.
The Tampon Tax
In his Autumn Statement George Osborne
announced that the tax on tampons (currently
at 5%) will not be removed. He argued this was
because the 5% rate is currently the lowest
“allowable” under European law. Further
comments were made around the
Government’s commitment to getting the EU
rules changed - despite earlier opportunities to
push forward negotiations with the EU on the 5
percent rate which were rejected in the Finance
Bill earlier this year.
The one small piece of condolence offered was
the £15m raised on VAT from sanitary products
would be reinvested into women’s health and
support charities, including domestic abuse
refuges - the first £5m of which will be
distributed between the Eve Appeal, SafeLives,
Women’s Aid and the Haven charities.
While additional funding to cover some of the
shortfalls many women’s charities so
desperately need is welcome, it is not nearly
enough. In the last Parliament, violence against
women (VAW) services experienced significant
cuts to funding as a result of public spending
cuts with a 31% cut in local authority funding
to sexual and domestic violence services.
Organisations such as Rape Crisis won’t have
secure funding beyond March 2016, despite a
50% increase since 2014 in the number of
victims receiving ongoing support. Many other
women’s support services are in similar
positions. It is also disappointing that on
International Day for the Elimination of Violence
Against Women, a day in which we should
collectively be thinking about and sharing
responsibility for tackling violence against
women, the Government firmly places this
responsibility on women themselves. As Labour
MP Jess Phillips aptly put in response to the
announcement that tampon tax would be used
to fund women’s services: “You’re not paying it,
George, I am.”
You can find more information about NUS’
campaign #standbyme on protecting victims of
sexual assault on campus here.
For more information contact
National President
[email protected]
Policy & Campaigns Manager
[email protected]