Political uncertainty likely to delay Augar post-18 education reforms

Out-Law News | 06 Jun 2019 | 3:34 pm | 3 min. read

The resignation of UK prime minister Theresa May and the selection process to find her replacement is likely to delay proposed reforms to the way in which further and higher education in England is funded, experts have warned.

Philip Augar's review of post-18 education and funding (216-page / 5MB PDF) recommended reducing the university tuition fee cap to £7,500 a year, with the difference made up by increased public funding based on the cost of the course to deliver and its "social and economic value to students and taxpayers". The report also focuses on improving technical and vocational training in England, as well as part time and later life learning for adults.

However the findings of the review, which was instigated by May, would require support from the new prime minister, as well as the UK parliament, according to universities expert Gayle Ditchburn of Pinsent Masons, the law firm behind Out-Law.com.

"Not only will the new prime minister need to pick up the baton on this, they would also need to get it through parliament," she said. "Whilst there is broad support for many of the recommendations, those which could be considered to be regressive, such as the extension to time limit for loan repayments, are unlikely to receive parliamentary support."

"A key issue for the government will be how the projected £1.5 billion cost of the reforms to the UK Treasury would be sourced, in addition to the breadth of other calls on the government purse," she said.

Ditchburn Gayle

Gayle Ditchburn

Partner

Whilst there is broad support for many of the recommendations, those which could be considered to be regressive, such as the extension to time limit for loan repayments, are unlikely to receive parliamentary support.

"The report acknowledges that the new market regulator for higher education in England, the Office for Students, has competition, choice and student interest at its heart. However, the report seems to forget that the growth in competition in the market has only just been allowed to accelerate as result of the implementation of the new regulatory framework, which only comes fully into force in August this year. The benefits of the new regulatory regime to improving widening participation, quality of provision and student outcomes cannot yet be quantified. It would seem premature to further the Augar recommendations without any parallel evaluation of the effectiveness of the new regulatory framework so that a holistic approach can be taken," she said.

Universities in England can currently charge domestic students on their courses up to £9,250 per year in tuition fees. Students are entitled to a government loan to cover their tuition fees and maintenance costs, and graduates begin to repay these loans, with interest, on earnings above £25,000 a year. Payments cease 30 years after the period of study, regardless of whether any debt remains.

The review recommends the reduction of the fee cap for university-level courses to a flat £7,500 per year from 2020-21 until at least 2022-23, after which it would increase in line with inflation. Maintenance grants, which were abolished in 2016, should be reintroduced for students from low-income households. The report also recommends reforms to student loans including an extended repayment period to 40 years, reduced interest rates while borrowers are studying and a lifetime repayment cap.

The proposals recommend that the new student finance package should be renamed a "student contribution system", to reduce the current emphasis on loans and debt, according to the review. Under the new system courses would be funded through a combination of government teaching grant, varying with the "reasonable costs" and "social and economic value" of each course; maintenance costs by way of parental contribution or maintenance grant; and student contribution.

Education finance expert Pippa Whitmore of Pinsent Masons said that while the recommendations seemed "on the face of it to be drastic", the proposals appear to be a "rebalancing where the funding is coming from rather than cutting budgets".

"My biggest concern is that a future government decides to lower the fees cap but not replace the shortfall with teaching grants, which would be a drastic change which a number of institutions couldn't weather," she said.

Whitmore Pippa

Pippa Whitmore

Legal Director

The proposals appear to be a rebalancing where the funding is coming from rather than cutting budgets.

"Inflation could also mean an actual cut in real terms, especially with the three-year freeze proposed by the report. There is little clarity on how government would work out the teaching grant allocations: there seems to be a suggestion that it would depend on the actual cost of courses but it's difficult to see how this would be calculated in practice given the varying cost bases," she said.

On further education, the review proposes that the government provide additional support to colleges, including investment in the workforce and allocating at least £1 billion in dedicated capital investment at the next spending review. The government should use this funding to create a national "network" of high-quality technical and professional education across the country, avoiding "counterproductive competition" between providers.

The review has proposed that 'colleges' be given a protected title, similar to that conferred on universities, to more clearly distinguish them from other types of further education training provider. Similar tuition fee caps and loan and maintenance support allowances should apply to higher level college qualifications as apply to university qualifications. The government should also improve its collection, collation, analysis and publication of data related to further education provision, according to the report.

Pippa Whitmore said that the "vast majority" of the report's conclusions on improving further education provision "make a great deal of sense", although again there were questions over how this would be funded.