University vice-chancellors are bracing for steep cuts in funding later this year, as the Treasury and No 10 quarrel over plans to reduce the government’s exposure to unpaid student loan debt – which is growing at roughly £10 billion annually.
One vice-chancellor told theGuardian that the comprehensive spending review – expected in the autumn – was “looking horrific” for universities.
The Treasury is reportedly concerned that adding more loans as part of Boris Johnson’s new ‘lifetime skills guarantee’ – offering all adults four years’ worth education or training – will add billions to the government’s exposure to unpaid student loads.
Instead, officials want to focus on loans for undergraduates – forecast to reach £20 billion annually within three years – to create space for the new adult loans.
Options being discussed are a cut to tuition fees – from £9,250 per year to £7,500 – and an increase to the amount that graduates repay by extending the repayment window from 30 years and lowering the income threshold for repayments from the current threshold of £27,295 per year.
The Treasury’s newfound alarm is reportedly driven by recent post-pandemic forecasts which show another surge in the government’s resource accounting and budgeting charge – known as the Rab charge.
The charge calculates the present value of future student loan write-offs and interest subsidies that will eventually impact public finances – now running higher than 50p for every pound loaned.
“The Treasury is now being driven by the Rab charge, without really looking hard at why the graduate labour market is struggling so much,” one vice-chancellor told the Guardian.
A cut to the number of university students eligible for student loans is also being considered, which could mean the introduction of minimum entry requirements – possibly based on GCSE grades.
One option is reportedly a cap on the numbers on courses like humanities and the social sciences, or those deemed “low value”.
“There’s quite a big fight going on about what’s going to go in [the policy paper],” one vice-chancellor said. “We know something is coming and that it’s going to be bad. We just don’t know what it is yet,” another told the newspaper.
Earlier this month artists and musicians hit out at the government for neglecting the country’s “cultural national health” by enacting a “catastrophic” 50 per cent funding cuts to arts subjects at universities.
A consultation by the Office for Students (OfS) and Gavin Williamson, the education secretary, suggested halving the amount spent on “high cost” arts subjects in higher education in England including music, dance, drama and performing arts, which it said were not “strategic priorities”.
Jarvis Cocker, the former Pulp frontman, described the plans as “astounding” and said they would put off those from lower socio-economic backgrounds – leaving arts subjects to wealthy students.
“I think it will really just put off people from a certain background and that’s a pity because it’s about mixing with people with different ideas, and then you get this cross pollination of stuff that makes things happen,” he said.
Under Williamson’s plan, spending for non-prioritised subjects will be slashed from £36 million to £19 million – with cash being diverted to other areas like nursing and computing.
Institutions like University of the Arts London – which includes Central Saint Martins, which Cocker attended in the late 80s – would lose close to £4 million. “It always seems to be that it’s art education that seems to be this expendable thing, as if it’s not important, and it is,” the singer said.