Uni funding plans will need more money from 2020

Tuesday 06 March 2018

A likely shortfall of £2.5m a year in new funding plans for higher eduction from 2020 can't be found from within the existing departmental budget, according to Jersey's Education Director.

The new system proposed by the Council of Ministers has been welcomed by many students and parents - but with a predicted funding gap of £2.5m every year from 2020, questions have been raised as to how sustainable it is.

During the last scrutiny hearing on the new higher education proposals yesterday, Justin Donovan explained that - unlike other jurisdictions – 20% of the education budget is allocated to higher education only so it is not impacted by the department’s other services.

He added: “We run virtually with no contingency, we have nothing to fall back on. The rest of our budget is fully committed… we struggle to find extra money in the education budget to fund higher education.”

The Treasury Minister, Senator Alan Maclean re-confirmed to the Education Scrutiny panel, chaired by Deputy Jeremy Maçon, the new scheme will be funded in 2018 and 2019 by an ‘underspend’ of £2.9 million within that higher education budget, as well as the removal of the 'Higher Child Allowance' if the States Assembly vote it through next month.

But he said it will be down to the next assembly to decide how the scheme will be funded from 2020, for which they’ll need to allocate an additional £2.5 million every year.

Deputy Sam Mezéc asked the Treasury Minister why he didn’t bring in an interim policy instead if he didn’t know where the money would come from, and that he’s essentially asked the next States to agree to put up taxes and find savings. Senator Maclean replied that Minister “can’t sit in isolation” and that the extra funding is achievable. He added that he believed efficiency savings are “at the heart of public savings.”

Changes to the funding proposals were announced last month, with the maximum household income for students eligible to have a grant to cover tuition fees lowered by £40,000 to £110,000.

Those households between £110,000 and £200,000 a year will have a percentage of tuition fees paid, based on a sliding scale starting from a maximum of £8,325 to £925. Students from households with an income of £200,000 and above will not be eligible for any form of grant.

The scheme covers students studying on island and is also available to ‘mature students’ who decide to change careers or study a degree later in life. If aged over 25 their household income will be considered for the grant scheme.

The changes also stretched to maintenance grants which were increased by £1,500 a year, taking it to £7,500 per student. Whereas the initial proposal included a maintenance grant of at least £2,000 for students from households earning between £90,000 and £94,999.99, the new one cuts off any maintenance grants for any students whose parents earn more than £89,999.99 a year.

Pictured: The Education Scrutiny Panel, chaired by Deputy Maçon questioned Senator Maclean, Deputy Pryke and Chief Education Officer Justin Donovan on the new student loan proposal. 

The changes have reduced the estimated extra costs from £4.5 million to £2.5 million every year, which will negatively impact around 193 households with an income of over £200,000. The Treasury Minister branded the revised higher education proposal as “more effective” and “better targeted,” adding: “Why would you spend more money than you need to. The balance is right; it will get more people into higher education.”

The scrutiny panel raised concerns that lower income families may still struggle with University costs, which the Treasury Minister said: “There should be a recognition that anybody wishing to access higher education needs to make a contribution…There are other means and ways that people can reach money, including students getting a job. The options are more than just income bands.”

Deputy Mezéc questioned whether the student grants scheme can be amended to help students with the initial costs many families and students incur when they first move to university, especially as the Natwest Loan scheme has now been withdrawn. Mr Donovan said they hadn’t considered this but can look at it as “that’s currently an issue and it remains an issue.”

This is something student loans campaigner Nicola Heath, who attended the scrutiny hearing, thought was a valid point. She told Express: “There’s a lot of things that parents and students don’t think about until quite close to it and then they suddenly realise they’ve got all this stuff they’ve got to get away and they suddenly discover baggage costs for airlines or they’ve got to put it in a car and it’ all these other costs that you don’t think about when talking about the choice of university.”

Ms Heath, who is a member of the Student Loans Support Group, said the hearing did answer some questions but “there’s still areas as a group we are concerned about which is principally about how the scheme is going to integrate and we would like to see the detail on before its voted on.

The States Assembly are due to debate the proposal on 10 April, which the Education Scrutiny Panel said they’ll have their report ready for.