An English student, a Scottish student, a Welsh student and a Northern Irish student walk into a bar. Who should buy the round? Across the four territories of the UK, different types and levels of grant and loan are available to students. This means that students from some parts of the UK are getting more support from their devolved government than others.
A new report by London Economics for the University and College Union has benchmarked this funding per student across the UK. It has done this for different types of student – such as full-time or part-time and undergraduate or post-graduate – and by funding source. The fact that the funding systems are so different makes this kind of comparison tricky, particularly as there are differences in the type and level of data that is available on each education system.
For full-time undergraduate students at university, there was a wide variation in the total level of resource per student in 2013-14 – ranging from £13,983 in England to £11,310 in Scotland. In Wales it was £13,441 and £11,358 in Northern Ireland. This includes funding from all sources, including government grants to the universities directly for teaching and research, and grants and loans paid to students to fund tuition and maintenance.
The total level of funding per university student is higher in England than in Scotland because of the higher tuition fees in England that students are expected to pay themselves. But the fees paid by students in England are largely supported by tuition fee loans from the government to students. Given that a proportion of these loans will never be repaid, to calculate the total level of public funding per student, assumptions must be made about what proportion of these loans will not be repaid.
Who gets what
The proportion of a loan that will not be paid back is known as the RAB charge (Resource Accounting and Budgeting). This is because students only have to pay their loans back when they earn above a particular threshold.
Assumptions about the RAB charge are critical in determining the value of the total public subsidy per university student, and the public-private split in total funding. The assumed RAB charges used in the report vary depending on the type and value of loan. RAB charges for tuition fee loans in England for example are assumed at 45%, (implying 45% of the total value of student loans will not be repaid), whereas the RAB charge is lower for Northern Irish and Welsh students, who face lower tuition fee caps and therefore borrow less.
Once RAB charges for fee and maintenance loan repayment are factored in, as the graph above shows, the level of public funding per full-time undergraduate is broadly similar in England, Wales and Scotland – £8,900, £9,500 and £9,000 respectively – although lower in NI where it is £7,700. But the proportion of this funding provided per full-time undergraduate by the public sector varies from 80% in Scotland to 63% in England.
The report also highlights discrepancies between the level of resources available to those students domiciled in each of the four countries who decide to go and study in another country. For example, relatively few Scottish students choose to study in England, given the increase in costs to them of doing so, and the fact that relatively little support funding is available to them if they did.
In contrast, English students face no differential cost in where they enrol. The result, according to the report, is that approximately £10m of student support resources flow from Scotland to England, while £73m of resources flow from England to Scotland.
Learning from different policies
The report highlights a number of funding inequities, particularly in terms of the total resource per full-time undergraduate. In itself, however, it is not immediately apparent that such differences are undesirable. After all, the objective of devolution is to allow devolved governments to allocate spending as they (and their electorates) see fit.
But what is clear is that balancing the need to maintain (or increase) total funding for higher education, while ensuring accessibility to university by students from all backgrounds, is likely to become increasingly challenging.
Important questions to be debated include where the public-private funding split should lie across the UK and how this split should be distributed across students of different financial means. There’s also a question on whether private contributions should be paid upfront (as they currently are through loans), or, for example, through a higher graduate tax payable throughout their working lives.
The core case for devolving policy responsibility in areas such as education is that it enables the devolved governments to tailor policy to the needs and preferences of their electorates. The resulting variation in policies informs understanding of which approaches work best under different circumstances, enabling “policy learning” to take place more quickly than if policy approaches were uniform. We need more comparative benchmarking studies such as this one if we are to benefit from the “policy learning” that devolution is hoped to provide.