Student Finance

Lord Hunt of Kings Heath Excerpts

Wednesday 11th October 2017 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the Minister for making that Statement. In her speech at the Conservative Party conference, the Prime Minister promised a major review of university funding and student financing, yet details about that review were absent from what the Minister said this afternoon. What are the review’s terms of reference, who will conduct it, what is the timetable, and when will the Government make a Statement to both Houses on it?

Ministers did not say anything either here or in the Commons about the policy on maintenance. Are the Government considering restoring maintenance grants, as they briefed to the media? They have also said that they will publish the revised resource accounting and budgeting charge—the Government’s estimate of the portion of loan that will never be repaid by graduates, which has risen steadily under the jurisdiction of this Government. Have they calculated the impact on the RAB of this latest announcement? If so, why have not they published it with the announcement?

Separately, there is a question about the impact on the department’s own budget in this and future financial years. Will the Government make an additional allocation for the department to cover the costs of the announcement, or does it imply cuts in education spending? Will there be any reduction in funding for universities as a consequence of these changes?

[Viscount Younger of Leckie]

I thank the noble Lord for his questions. First, as I said, the Prime Minister indicated that there would be a review. Actually, the tuition fee system is kept under constant review, so what she announced was that more detail and information would come out towards the end of the year on what is proposed. However, I cannot go into further detail at present.

The noble Lord also asked about maintenance grants. No, there is no plan to bring back maintenance grants, but he will have to wait until the end of the year to see what further announcements might come, as Jo Johnson said earlier in the Commons.

As the noble Lord will know, the resource and accounting figures come out regularly. I understand that the latest figures will be out soon. They will show that we are on track in effect to write off—as of before the announcement—around 30% of all the loans. This is all part of the complicated funding formula used for the tuition fee system. Of course it should be noted that, with the changes that we have announced, the write-off will go up slightly to between 30% and 40%.