Warning that fund for poorer students faces £200m cutback

http://www.theguardian.com/education/2014/jan/14/students-fund-disadvantaged-cutback-treasury

Version 0 of 1.

Funds to help disadvantaged students attend university could be slashed by as much as 60% as the Treasury seeks to close the budget deficit of the Department for Business, Innovation and Skills (BIS), according to a group that represents universities.

The student opportunity fund – a £327m programme for disadvantaged students paid to universities through the Higher Education Funding Council for England (Hefce) – could be slashed by about £200m, it fears, after wrangling between the Treasury and BIS over the latter department's shortfall, caused in part by an explosion in course fees paid to private further education providers.

The million+ policy group, which represents many new universities, claimed that the Treasury and the Cabinet Office were pressing for the reductions as part of the cost savings being imposed on BIS.

Paul Blomfield, the Labour MP from Sheffield who sits on the BIS select committee, said: "I'm deeply concerned that the last direct funding of universities to enhance social mobility is threatened.

"I think if this budget is cut it will have a devastating impact on those universities which are doing the most to reach the most disadvantaged communities."

The threat of the cut comes almost a month after the chancellor, George Osborne, announced an unlimited expansion of higher education from 2015, removing the cap on student numbers applied to universities in England and attempting to finance the move by selling off the student loans book.

The details of the cuts were due to be revealed by BIS in its annual grant letter to Hefce last week, but a row behind the scenes over which part of the grant to cut has delayed the letter, which sets out the total funding universities are to receive for teaching.

The business secretary, Vince Cable, and the universities minister, David Willetts, are understood to have made bipartisan efforts to oppose the cuts in the face of Treasury and Cabinet Office pressure, with Willetts trying to defend the fund in private to his Conservative colleagues.

Labour accused the government of giving with one hand and taking away with the other, having already cut £150m of the national scholarship fund designed to boost social mobility.

"George Osborne promised full funding for new student places after the election and now we know he lied," said Liam Byrne, the shadow spokesman on higher education. "In fact £200m is being slashed from helping poorer students pursue their dreams to pay for the chaos and deception at the business department. "Vince Cable now has big questions to answer about how he ended up charging Britain's poorest students for a toxic mix of dogma, deception and pure financial mismanagement at his department," Byrne said.

A BIS spokesperson said ministers would announce the detail of funding for higher education shortly through the grant letter to Hefce. "The government has been very clear about the importance of widening participation and improving fair access in higher education – all those with the ability should be able to study at university, irrespective of family income," the spokesperson said.

Student opportunity funding operates similar to the pupil premium in schools, with funds following students from disadvantaged areas or with special needs. It is distributed to universities and colleges through Hefce based on the students recruited – meaning that the cuts will disproportionately hurt universities that recruit students from the most disadvantaged backgrounds.Pam Tatlow, chief executive of the million+ group, said the student opportunity fund was the last remnant of direct government support to students from more disadvantaged backgrounds. "It would be a real blow to the social mobility agenda if the major cut that is made in the grant letter is to the student opportunity fund," she said.

Blomfield said that the fund was part of the package that encouraged wavering Lib Dem backbenchers to support the university tuition increases introduced in 2010.

In the autumn statement on 5 December, the chancellor had announced the boost in student numbers, boasting: "We will abolish the cap on student numbers altogether. Extra funding will be provided to science, technology, and engineering courses. The new loans will be financed by selling the old student loan book, allowing thousands more to achieve their potential."

It was later discovered that sales of student loans would bring in less than originally expected, meaning that further cuts would be needed to fully fund the policy.

Our editors' picks for the day's top news and commentary delivered to your inbox each morning.