Wanted: £4M to fund Minister's university tuition fee promise

Monday 15 January 2018

The Treasury Minister has admitted that he’s still yet to figure out how to fund proposals that would see all students in households earning less than £150,000 have their tuition fees paid in full by the government nearly two months after he first made the shock announcement.

In a Scrutiny hearing on Friday, he admitted that an extra £4 million a year will be needed from 2020 on top of the current £10.5million budget to fund higher education tuition fees, but he hasn't been able to identify a funding source for it.

Senator Alan Maclean announced in late November his plans for the States to fully fund university tuition fees for students whose parents earn less than £150,000.

He was quizzed about the budget the funding proposal will incur by Deputies Jérémy Maçon, Tracey Vallois and Sam Mézec during the Education Panel hearing.

He revealed that if his proposal is accepted, £16.8 million will be spent on grants this year, with the figure going up to £17.9million in 2019. Deputy Sam Mézec questioned where the extra money would come from to fund "a policy that costs more than the budget", which currently sits at £10.5 million for the Education Department.  

Senator Maclean replied that funding arrangements will need to be taken into account for the next Medium Term Financial Plan (MTFP). He explained that at least £3.5million should be collected through the phasing out of the higher tax allowance for parents with children at university and would be recirculated into the proposal. He also said that underspends from the Education Department will go towards the grant. However, he couldn't confirm where the remaining £4 million would come from.

Pictured: Senator Alan MacLean said an extra £4million a year will be needed in the next medium term financial plan.

Deputy Mézec pressed for an answer, saying: "You asking the Assembly to agree to a policy that will cost £7 million above budget. You have identified some funding but not the funding source." The Treasury Minister replied that the next MTFP, which is due in 2020, and the next Council of Ministers would have to find that £4million a year. "I can't tell you what is going to happen in 2020 and onwards. But I can tell you that education is a priority and we are committed to higher education funding," he said.

Summing up Senator Maclean's stance, Deputy Mézec said: "2020 is soon, you are asking the Assembly, which is due an election soon... to commit to a policy without telling where the money is going to come from."

He added: "Is it politically responsible to propose a policy without being able to say where the money is going to come from?... You have to be able to weigh things up, you can tell us what the pros are, but not what the cons are."

The St Helier Deputy warned that the next Assembly might consider they can't afford to spend £4million a year and therefore scrap the funding policy. Senator Maclean conceded it might happen, calling his proposal a "bold move." "I am asking the Assembly to make an investment and a commitment. I believe this is fair and affordable but the next Assembly will have to decide it for themselves," he claimed.

Pictured: The States Assembly will be discussing the funding proposals on 20 March.

When Deputy Mézec suggested that Senator Maclean was putting forward a "policy that produces a deficit", the Treasury Minister defended himself by saying it doesn't do so in the current MTFP. He added that higher education funding is only one item in a budget of over £700 million.

The Treasury Minister was also criticised for setting the maximum amount for the maintenance grant to £6,500, which might not prove enough for students in London, for example, who have higher expenses. Senator Maclean replied: "The view generally is that there are plenty of choices. A student could go to London but if it means it is not as desirable, there are choices to go to other places that are more cost effective." Deputy Maçon, however, questioned the rationale, asking: "Why fund someone who we want to go to university but tell them we will only fund you to go to second best place?"

Deputy Tracey Vallois also asked why the States were in a better position to "give out tuition fees" when just a few years back, funding cuts were made everywhere. Senator Maclean replied: "We have seen the result of 2016. The public finances much stronger than they were."

Following the hearing, members of the campaign group, the Jersey Student Loan Support Group expressed concerns over what would happen if full funding was not found, especially since NatWest, which currently provides a £1,500 annual loan to students, is due to stop its scheme. "The NatWest loan goes this September, NatWest pulled the plug, so if this new funding does not happen, that will not be an option any longer. No idea what happens if people need it, as no one has said anything about that," a spokesperson for the group commented on social media.

Following the end of the public consultation last Friday, Senator McLean aims to launch his full policy in early February for a debate on 20 March.