Official Report 398KB pdf
Individual Learning Account (Scotland) Amendment (No 2) Regulations 2008<br />(SSI 2008/204)
Agenda item 3 is subordinate legislation. From the Scottish Government, we are joined by Hazel Rutherford, the course costs team leader, and Elspeth MacDonald, the solicitor with the development, education and local authorities division. I thank them both for attending and for being patient enough to wait until now so that members can ask them questions.
The Executive note on the proposed changes to ILA100, which is to be withdrawn, states:
When the scheme was set up under the previous Administration, I think that the target was higher than that. That might be where the word "only" came from.
I ask the question because I do not know whether the rationale for changing the ILA100 scheme is that the Government has a policy position of moving towards means testing and away from the universal offering of £100, or that that individual aspect of the scheme failed to live up to expectations. Further on, the Executive note certainly gives the impression that the move away from universal provision for ILA100, which will now be income assessed and means tested, is the result of Government policy rather than because that aspect of the scheme was a failure.
The regulations will implement the decisions that the cabinet secretary announced at the end of March. I think that the £100 scheme is being withdrawn for both reasons: the scheme had a low level of uptake and the policy intention is to target the ILA scheme at people who earn less than £18,000.
I understand that rationale, but let me just ensure that the committee is absolutely clear. We are moving away from a situation in which ILA100 provided a universal offering for some learners—ILA200 was always income assessed—to a position under the new Government in which all ILA schemes are means tested.
Yes.
Convener, are we going through the instruments in order?
Yes.
The regulations on individual learning accounts will introduce means testing of pensioners. I assume that the uptake of ILAs among pensioners was not low. Was it not quite extensive?
I am not sure of the exact figures for uptake among pensioners. Again, the reason for introducing that change is to ensure that the scheme is more targeted at people on lower income levels. In effect, pension income will now be included in the assessment, whereas such income was not included previously.
Do we not have figures on how many pensioners have taken advantage of the ILA scheme in the past?
I do not have the figures to hand.
I am concerned that there has been no formal consultation on that. Obviously, I do not want to put questions to officials that I should put to the minister, but I am concerned that the Government is introducing a means test for pensioners without asking any pensioner groups or organisations for their views on what the impact of that change would be. It seems strange not to ask for their views. Was a conscious decision made not to consult?
I do not think that it was necessarily a conscious decision. An evaluation of the scheme took place over the past two years, the results of which were published at the end of last year; the learner report was published in March. Most changes came about because of the evaluation's findings. The feeling was that we should means test pensioners in the same way that we means test everyone else. Certainly, people who earn less than £18,000 a year would still receive their ILA.
We are straying into a policy decision. Surely no findings concluded that we should means test pensioners. That has just got to be a policy decision. Were there any findings that would automatically lead to the conclusion that we should means test pensioners?
I would need to refer back to the evaluation. I have not got that information to hand.
I assume that that was a policy decision. It is interesting.
On consultation, the Executive note says:
I am not aware that it was. The evaluation findings were from externally commissioned reports on learning providers and learners.
That concludes the committee's questions on this matter. No motion to annul has been lodged and, as members may be aware, the Subordinate Legislation Committee determined that it did not need to draw the attention of the Parliament to SSI 2008/204. Does any member wish to comment?
I am sorry—this is my own fault—but I was under the impression that the minister was here to talk about not just the petition, but the subordinate legislation. I have a number of concerns about SSI 2008/204 and the other SSIs on the agenda. I am concerned that we do not have a minister here to explain the policy change that is clearly reflected in the SSIs. It would be unfair to question the officials on policy. For example, SSI 2008/204 reflects a specific policy change to means test pensioners. The regulations will get rid of the £100 ILA and bring in means testing, so that everybody who would otherwise qualify will lose their eligibility.
To ensure that Mr Macintosh is aware of the procedure, and to be fair to the cabinet secretary, I explain that there is no motion to annul. No member has lodged a motion to annul, and the cabinet secretary would come to the committee only if such a motion had been lodged. When she does not come to the committee, we have the opportunity to have Government officials here in case the committee wants to pursue any technical points.
We heard that no motion to annul has been lodged. We also heard some questions, which are now on the record. If you are intent on not putting the question today, convener, it would be sensible to ask the minister to respond to the questions so that, when the question is put, we are sure that we have dealt with the substantive points. Fundamentally, if members have come to the committee with a view to opposing the regulations, they should have lodged a motion to annul. However, it would be useful if we went through with the process of seeking information and got answers from the minister in writing.
I appreciate your point, Mr Gibson. However, the process is a moveable feast. Sometimes, it becomes apparent that one wants to move a motion to annul only when information is provided by Government officials. That is not always apparent after one's first reading of the subordinate legislation or the explanatory notes, so I am not sure that the point you make in condemning members of the committee for not lodging a motion to annul is necessarily accurate. Also, we do not want to get into a situation whereby members routinely lodge motions to annul Government legislation just for the sake of it.
I understand Rob Gibson's point. However, it came to light only today that representative bodies for older learners were not consulted, even though the regulations would have a big impact on them. That information came to light only when we got factual evidence from officials; it was not available to members before the meeting. It is therefore unfair to state that a motion to annul should have been lodged in advance. Considering the information that we have in front of us is the purpose of the committee, is it not?
We heard in evidence that evaluations were published earlier this year, in March. That information would contain such references. Also, you offered to provide us—through the chair—with that information if required.
Yes. The evaluations have been available on the Government's website since they were published.
I remind committee members that the use of the term "you" is not acceptable. Since we have no sheep around, it is hard to work out to whom members are referring.
So pleasant.
I remind members of the committee that they should be respectful of one another at all times.
I want to make a couple of points, convener, because I believe that Ken Macintosh raised some issues that are perhaps not pertinent to the committee, such as bus travel and central heating. Last week, during First Minister's question time, the First Minister made it clear that there was no change in eligibility—
Ms Campbell, that is just not—
Well, I do not know how appropriate—
I am sorry. We are not having a debate here.
I was just clarifying—
This is not the debating chamber, and members are not here to respond to debating points.
Education (Student Loans) (Scotland) Amendment Regulations 2008<br />(SSI 2008/205)
I am grateful to Elspeth MacDonald and Hazel Rutherford for staying with us. Do members wish to raise any concerns, questions or clarifications on SSI 2008/205?
I would like further information about the implications for some of the categories of learners, which—as has been highlighted—may well be affected. I looked at the review of means testing in further education and higher education in 2008-09—is that not relevant to the measure?
These regulations, which concern student loans, are the final change to introduce the new part-time support for higher education students. They abolish the student loan for part-time students.
Forgive me, convener—I am obviously following the order incorrectly. I thought that this instrument changed the eligibility for some of the students.
No, the regulations remove the student loan that part-time students are currently able to use for their travel and study costs. The regulations abolish that, because we have put in place new arrangements for part-time higher education students. The committee discussed those arrangements with Maureen Watt in January.
I am ahead of myself.
You got carried away, Mr Purvis. I assume that you have no further questions to ask on this SSI. I see that no other members have questions—the witnesses will get off rather lightly on this item of subordinate legislation.
I suspend the meeting briefly to allow Ms MacDonald and Ms Rutherford to leave. Thank you very much for your attendance.
Meeting suspended.
On resuming—
Education (Means Testing) (Scotland) Amendment Regulations 2008 <br />(SSI 2008/206)
We move to agenda item 5, which is further subordinate legislation. We are joined by Government officials. First, I apologise to Ms MacDonald, whom I tried to dismiss prematurely. She is now accompanied by different Scottish Government officials: Gavin Gray, who is the living costs support team leader, and Anne Marie Hoey, who is the policy writer.
I will ask about the different decision that was taken in England. I understand that when changes to align higher education means testing with further education means testing were introduced there, they did not apply to existing students—they applied only to new students. However, the Government in Scotland decided to take a big-bang approach, whereby the changes will apply to all students. Did you consider following the model that was adopted down south?
We considered several options, which we presented to the cabinet secretary, who decided to go ahead with the big-bang introduction. One of those options was a phased introduction for new students only.
Can you give reasons why the big-bang option was chosen? Was that the minister's decision?
Yes. Ultimately, the decision is for the minister. We tried to weigh up the pros and cons of the impact on students. Obviously, the big bang changes circumstances for some students during their course. However, we balanced that against the wider impact on the student body of running two different assessments at the same time. Having separate application forms might have caused confusion and the Student Awards Agency for Scotland might have experienced operational issues, which might have meant that students did not receive payments on time. Several such matters were considered. The advice focused on what would have the minimum impact on students in general.
One or two points follow from that. One difficulty seems to be the idea of running two systems at the same time, although England ran two systems at the same time. However, the most important question is about the impact on students. Was an impact assessment undertaken in Scotland to determine how many students—particularly those who are currently studying—the changes would affect?
On the first point, we are aware that changes have happened in England, but we have not examined them in detail. We discussed with SAAS the implications in Scotland and proceeded on that basis.
So the policy will be introduced without any understanding of whom it will affect.
We know the main groups and the characteristics of the students who will be affected. As the policy papers say, we will work closely with SAAS, which will be in touch with institutions during the year, to monitor the impact on students. If anyone is to receive less support or is in danger of falling into hardship, they will have recourse to university hardship funds.
I appreciate that the minister has given the commitment that the savings from year 1 will go into discretionary funds for students. However, I am concerned about a gap between savings being collected in year 1 and discretionary funds being increased—savings from year 1 might be used in funds in year 2. The minister's commitment is for year 1, but have commitments been made on the cumulative savings from the policy changes beyond year 1?
We will obviously monitor the situation from year 1 to year 2, and money will be moved into the hardship funds. There will be dialogue with SAAS about its budgets; SAAS has the flexibility to move money between budgets as the year goes on.
Ms Baker asked about future decisions. The minister’s commitment is clear: we will do this in year 1, but that is on the understanding that cohorts of students still have to move through the system. Once we understand the impact of that, we will be able to factor it into future budgets for SAAS. Any change to the balance between what is paid out in fees and awards or loans and what is paid out through the hardship funds or the discretionary funds, will be factored into future budgets.
That was a helpful answer, thank you.
Will any savings made in the first year be used for the hardship funds? Claire Baker was asking about the second and third years.
This is supposed to be a cost-neutral exercise, so we are not looking to generate efficiencies or savings. We are aware that less support will be available to some people as a result of the changes. However, if people are genuinely put into hardship, the hardship or discretionary funds will be used.
We will all be aware that demand tends to exceed supply when it comes to hardship funds. Will students who are affected by the changes be given any preference over the students who would normally apply to a hardship fund?
They have been made a priority this year in the guidance that has gone out to institutions. Obviously, we will have to consider the money that is to be allocated throughout the year; however, anybody who has to go to the institutions as a result of the means-test changes will be given priority.
And guidance to that effect has already gone out.
Yes.
Regulations 9 and 10 refer to inserting, after the word "parent", a range of possible partners of that parent—whether a spouse, a civil partner or a person living with that parent. Does the student involved actually have to reside with the parent and one of those categories of partner?
At the beginning, when the student applies for support, there are different categories. Certain categories are classed as independent—for example, if the student is married or has been self-sufficient for three years. However, if the student is classed as dependent by the Student Awards Agency for Scotland, the assessment of their income will be based on what is at present called the parental income but which will be called the household income from 2008-09. If a student moves away, they will still be assessed using the household income.
What if the student has never lived within that household? Would they still be included?
If the student is classed as dependent, then yes.
I will try one more time. If a student lives with her grandparents and has not lived in her parental home for some time, will she be included in the scheme?
It depends on the circumstances of the case. If SAAS classes the student as a dependent student, they will be assessed currently on parental income and in future on household income. If it classes the student as an independent student, because they are self-sufficient and live on their own, the household income will not be taken into account.
So the crucial factor is whether a student is classed as dependent or independent.
Yes.
That is helpful.
It was helpful to hear that guidance has been issued to institutions. The guidance will have been published, so we will be able to see it. In answer to parliamentary questions, the Government stated that the funding that will be saved from the first year of the scheme will be allocated to discretionary funds and that no decisions have been taken about savings in subsequent years. Is that correct?
Yes. As I said earlier, the funding will be factored into future budget decisions. We are aware that the effect of the savings is not limited to one year and that subsequent cohorts of students will be affected.
Am I correct in saying that nursing or midwifery students cannot apply to institutions' hardship funds?
Separate arrangements have been made for nursing and midwifery students.
What are they?
The Deputy First Minister and Cabinet Secretary for Health and Wellbeing decided that such students would receive the same level of support and would not be any worse off as a result of the changes.
How will the arrangements work in practice?
The arrangements for student support in nursing and midwifery are very different—a different kind of support is provided and the bursary that students receive is not means tested. However, students are still eligible for a dependents allowance that is means tested—they can claim for children. Because the arrangement is unique to nursing and midwifery students, the Deputy First Minister and Cabinet Secretary for Health and Wellbeing decided that, when those students apply to SAAS, the support that they receive will be made up to the level that they were awarded in the previous year, so that they are no worse off.
It would be helpful if we could receive more information on how the arrangement will work in practice. I understood that nursing and midwifery students will be eligible to claim dependents grants for their partners but that partners' income will be means tested. There is means testing for nursing and midwifery students.
The additional dependents allowance for children is means tested, but the bursary that nursing and midwifery students receive is not. If a nursing student is living with her partner and is claiming for a child, her bursary will not be affected by the fact that her partner has high earnings, but she may lose out on support for her child. The Cabinet Secretary for Health and Wellbeing has said that she will ensure that the same level of support that was awarded in previous years will be provided.
The arrangement does not apply to non-nursing and non-midwifery students in that category.
No. The support to which I refer is specific to nursing and midwifery students.
Does SAAS have to operate a separate procedure to provide the same level of bursary to that category of students?
The same application process and computer system are used to provide support for such students.
When the Government was asked why it opted for a big bang approach, it said that the cost to SAAS of operating two systems was estimated at £1 million. It is worth asking whether a second system is in operation for nursing and midwifery student support.
No. Nursing and midwifery students are paid through the same grants and student support system.
Because the number of nursing and midwifery students is relatively small compared with the total number of students with which SAAS deals, their cases are dealt with on an individual basis—there is no need to design an entirely new system. Representatives of SAAS are not here to provide details of the operational impact of the issue on SAAS, so we will need to double-check that with the agency.
It might be helpful to have information on that area.
SAAS does not record that information, so those data are not available. Currently, SAAS does not take maintenance payments into account in any respect. The situation was different with regard to FE colleges and, because the policy was designed to align the situation in the HE sector with what has been happening in the FE sector, it was decided to take such payments into account. We are aware, however, that we do not know how widespread the impact will be, because we do not have any data for the HE sector.
Is it definite that students who have gone through the new process and are in considerable hardship will be able to access universities' discretionary funds? The criteria for discretionary funds are such that they are not available if a student has gone through the normal, means-tested route of applying for grants and bursaries. The students about whom I am talking will probably have gone through that process, as they are allowed to apply for everything that is open to them. Is it absolutely the case that they will be able to apply for hardship funds for this year?
Students who have been adversely affected by the changes to the means test and who are in genuine hardship can access the discretionary funds.
Will they be able to access the same amount that they are losing?
That is a decision for the institutions. The pay-outs are discretionary.
When I said to the First Minister that students could face hardship, he said:
We have never made decisions about what is paid out from discretionary funds.
But it is not in the guidance.
That the pay-outs should be like-for-like? No.
For those applying now, there is currently no statutory basis for the decisions. Is that correct?
It was decided that SAAS should progress on the assumption that the regulations would be passed. The other option was to ask it to stop assessing applications, which would have created a bottleneck. However, anything that SAAS is doing can be undone.
No payments will be made until after the regulations come into force, although the assessments are being made at the moment. If the regulations do not come into force, the work that SAAS is doing could be reversed.
When are students told what the awards are?
They will already have been given an indication, in some cases. It depends on when they applied. The majority of students who have applied will already have been given an indication of their eligibility.
And when will we know how many students are affected?
SAAS will start to build a picture of roughly what the changes in eligibility might be.
So after the summer recess we will know how many students have been adversely affected.
Without talking to anyone from SAAS or any of our analytical colleagues, it is difficult to say what data SAAS will be able to mine. However, we hope that we will have a better indication of the situation.
Currently, however, awards are being denied on the basis that legislation might well be approved—which is to say, there is no legislative basis for the denial of those awards.
The key point is that no payments have yet been made. We are assessing the awards on the basis that the changes will go through.
So even though the cheque has not been sent, students who have been given an award can appeal it, because there is no statutory basis for an eligibility decision by SAAS.
We made an administrative decision to process awards in anticipation of the regulations being approved. If the regulations are not approved, SAAS will have to reassess all the applicants using the previous means-test arrangements.
This is quite significant. If I were a student—or indeed a lone parent—whose income had been assessed I would be able to challenge my award, because there is no statutory basis for SAAS having made its decision.
Off the top of my head, I am not sure about the legal status of the award letter from SAAS. I do not think that it is a definite statement that that is what someone will get.
Does the Government know?
We would have to look into it and get back to you.
Have legal officers in the Government considered the issue?
We have not looked at that specific point.
So the Scottish Government legal directorate has not considered whether it is legal to send out letters making indicative awards.
The work that we have done to try to get the regulations in place would support this. We have been working quickly to try to address the anomaly in the system and the unfairness—
I understand that, Mr Gray. It is a subjective point whether there are anomalies. Award letters are being sent out, presumably this week—
They will have been sent out.
In the award letters that have been sent out, some students will have had their eligibility changed because of the new requests from SAAS. You are telling us that the Government has not checked whether it is legal for SAAS to make those indicative awards. You need urgently to come back to the committee with clarification. I do not think that there is any more that we can ask at this point. The Government does not know, and nor do we. We need urgent clarification.
Hopefully the officials will take that message back to the minister. It would appear that Mr Purvis's line of questioning has highlighted what could be a considerable concern.
I am not sure how we will address that, because the parliamentary recess is looming. It is clear that the minister will need to answer our questions. I am struck by the contrast between this measure and the measure that we are about to consider. I have every sympathy for SAAS and the Government wanting to be ready to implement policy changes, but presuming parliamentary authority for something can lead to difficult situations, such as the one that we are in now. Like Jeremy Purvis, my concern about the changes is that we may have deterred students who are at university already or who are entering university from proceeding, on the basis of a letter that has no standing. It is a serious matter that the minister will need to address urgently.
You can certainly suggest it and I am sure that it was meant constructively, but the committee does not have the power to do that. The options that lie before it are to approve or annul the regulations.
Mary Mulligan has a question for the officials.
On regulations 9 and 10, to which I referred earlier, am I right in thinking that, when somebody applies for financial assistance, they are asked for information about their income and that that is the basis of the assessment?
Yes.
However, because we have not agreed the regulations yet, there is no legal basis on which you can ask for that information. Is that correct?
I am not sure off the top of my head whether we would need that. We would have to check that with SAAS and our legal colleagues would have to consider further what the legal requirements would be. I cannot answer that question right now, but we can look into it further.
How would SAAS make the assessment if somebody did not provide the information?
It may be that SAAS makes provisional assessments and then seeks further information before it finalises assessments. I do not know whether provisional assessments are made in this case. We will have to check that and get back to you.
When you say "provisional assessments", would SAAS staff base those just on the information that they had in front of them?
Yes.
But they would recognise that that might not be the whole picture, depending on how people responded.
Yes.
I appreciate that it is difficult for the officials to answer, given that they are not dealing with such applications on a day-to-day basis, but I have concerns that are informed by issues that have arisen in my dealings with SAAS.
I have another practical suggestion. For the same reason that Mary Mulligan and Jeremy Purvis outlined, single parents and lone-parent families, whose vulnerability to changes in income is well known, will be among those who are affected. Perhaps we should record our expectation—it is certainly my expectation—that SAAS contact each student that it can identify and let them know that the information that they have received so far is only a guide as to what will happen if the regulations go through. It is important that we do not just wait for two months before Parliament reconsiders the matter and that the individuals concerned are contacted and given information on their situation. If that does not happen, they might act on the wrong information and take the wrong decision for their futures.
The committee cannot recommend a course of action to SAAS at the moment, but when the minister reads the Official Report of the meeting, she will realise that we have serious and highly legitimate concerns that people are being placed in an extremely difficult position and might make wrong decisions based on information they have been given. Our letter to the minister can stress the urgency of the situation.
I, too, have a question for the officials. What is the content of the letters that have gone out? Do they contain an indication that the situation might change?
I do not have a copy of an award letter in front of me. In general, whether someone will definitely get an award or whether their award is provisional depends on their circumstances. We can check the position with SAAS and get some copies of the award letters.
It would be good to find out about the content of the letters—that could inform our decision.
It is unfortunate that SAAS is not represented here today. It was up to the Scottish Government to decide which officials came along this morning, but I hope that when the minister appears before the committee in September, serious consideration will be given to bringing along a representative of SAAS who deals with such matters on a day-to-day basis, because such input would be of great assistance to the committee.
I absolutely support the convener's suggestion on the way forward and hope that the process can be expedited. I understand that Ms MacDonald is the divisional solicitor in this area. Tomorrow is the final day of the parliamentary term. I do not know whether it would be possible for us to get any information from the Scottish Government this afternoon on the legal position, but it is of the utmost urgency for those who have received such letters to find out what their legal status is. I agree with Aileen Campbell: we do not know the answer to that, nor does the Government and nor do students. The fact that we urgently need absolute clarity will dictate the letter that we send to the cabinet secretary. I hope that my request is reasonable; clarification is required today.
I am not sure whether Ms MacDonald feels able to respond to that; she might feel that it would be more appropriate for the minister to respond.
It is more appropriate for us to consider our views. I accept Mr Purvis's points on urgency, but points have been raised today that neither I nor my colleagues have had a chance to consider. We may be good, but we may not be able to respond that quickly.
It is important that we write to the Cabinet Secretary for Education and Lifelong Learning as a matter of urgency. In the letter, we will stress the committee's serious concerns and the serious potential consequences for students the length and breadth of Scotland, and ask her to consider the issues as a matter of urgency.
Meeting suspended.
On resuming—
Graduate Endowment (Scotland) Regulations 2008 (SSI 2008/235)
The sixth and final item on our agenda is further consideration of subordinate legislation. Elspeth MacDonald and Gavin Gray have remained with us and we are joined by Mark Batho, the director of lifelong learning with the Scottish Government, to answer any questions that the committee may have.
The issue with which the regulations deal is a matter of concern in my constituency and nationally. I have raised the issue with the Cabinet Secretary for Education and Lifelong Learning. How many students will be affected by the decision, which is a reversal of policy? How many students who are in postgraduate or continuing education have been asked to pay their graduate endowment in full?
The figure that we have is that 2,457 people had been allowed to defer payment of their graduate endowment under administrative procedures by the SAAS.
How many of them have paid off their endowment in cash?
I have the figures here, if you will bear with me while I look through my notes. Following March, 249 of them had paid by cash and 625 had added the amount of the graduate endowment fee to their student loan. That makes a total of 874 who had settled. I am not quite sure what the date of those figures is, but they are the latest figures that I have.
What is the current status of the others who are included, but who have not taken a decision, so to speak?
Their status is that they have not responded to a demand for payment. As the situation has unfolded in recent weeks, it has become clear that there was no formal legal legislative underpinning of the decision to defer. Technically, all the 2,457 people had an immediate liability to pay that may have crystallised at any time from 2005 onwards, depending on the length of the deferment that they were granted.
So those who did not respond to the SAAS letter will be allowed to continue to defer and will not have to apply for a loan.
They will not have to apply for a loan now. The substance of the regulations is that those students will have the choice at the end of the deferral period to either pay by cash or to take out a loan.
Is not that the choice they always had?
That is why the regulations are in front of us today. As the Government looked into the situation it became clear that, in practice, because the decision to defer did not have any legal basis, it had the knock-on effect that those students could not legally apply for a student loan when the period of deferment came to an end. Under the existing regulations, a student can apply for a student loan up to 1 April, when their liability crystallises. For example, a student who finished their first course in July 2006 became liable on 1 April 2007 and if they then deferred because they were going to go on to a one-year postgraduate qualification, they did not apply for a loan at that point, but their liability accrued at 1 April 2007, so they would not have the opportunity to apply later for a student loan, and the regulations would change that legal position to say that such students can apply for a student loan at any point up to 1 April after the second or subsequent higher education course for which the deferral was granted comes to an end.
That is all right. It is a difficult subject but I have a lot of cases about it, so I am aware of its complexities.
There will be no more deferment because the graduate endowment has been abolished.
That is right, but will those who are currently in the middle of a postgraduate course that has another two years to go be able to defer until the end of that two years?
Yes.
Will the 625 who have added their liability to their loans be able to claim back interest on those loans?
Technically, those loans were granted without legal authority, so they will be cancelled, the students will be able to replace them with new loans and the interest that will have accrued between the time that they took out the loan and the time of the new loan will be met for them. They will not have to pay it.
What is going to happen to the 249 who paid cash?
We are looking into that. It is not easy, but the cabinet secretary has asked us to consider the possibilities for them. The technical position is that they had a liability that they have now met. In fact, in legal terms they have had an unlooked-for benefit in that they were not allowed technically to have had that deferral take place and should have paid some time ago. The cabinet secretary has asked us to examine the position. I cannot say where that will end up because the situation is complicated.
I am not sure that those graduates would agree that they have had some sort of benefit.
I am speaking in legalistic terms. I refer back to the example that I gave before: if the liability accrued on 1 April 2007, they were due technically to pay from that time because there was no legal basis for deferment. The fact that they have not had to pay up to this point is, in legal terms, an unlooked-for benefit.
According to the note, the financial implications are minimal, but I cannot believe that. We have offered 625 loans to students at a substantial cost to SAAS if not to the Government. Has that cost not been included in the regulatory paper?
I invite Gavin Gray to respond.
The cost of providing the loans has always been accounted for in the general accounting for the graduate endowment scheme. As regards having to cancel the loans and replace any lost interest, the Student Loans Company is working with SAAS to look at each case. We are still waiting for the Student Loans Company to tell us exactly what the cost will be, but we think that it will be in the region of £10,000 to £20,000. Although we are still waiting for confirmation from the Student Loans Company of exactly what is involved and what the cost will be, we expect the cost to be met from within the company's existing running costs.
It might be of interest to the committee to find out exactly what that cost is, perhaps in writing at a later stage.
I am pleased that the cabinet secretary has responded to the pressure that has been put on her by my colleague Claire Baker and others: including me, actually—false modesty is a sin, is it not? I am interested in when the cabinet secretary took the decision that there was a problem. I wrote to her about the situation in March and got a response in April that suggested that there was no problem and that we were following the law. I wrote again in May and got a response by e-mail last night, interestingly. At what point between the abolition of the graduate endowment and today's debate on the regulations did the cabinet secretary cotton on to, or make moves to accept, the fact that there is a problem?
May I clarify what particular problem you are asking about? There are two issues on the table, one of which is the legality or otherwise of the granting of deferment, and the other is the capacity to pay a student loan to students who have deferred. The issues are interlinked and the problem emerged when a particular case was identified that caused us to look again at the whole situation. It was at that point—I have not got an exact date, but there was a report in The Herald, which is easily identifiable—that we identified that there was no formal legal basis for the deferment. Within a short time, we identified the student loan issue, which changed the context in which the original decision was taken in March.
That is interesting. I wrote in March to say that the Executive should defer payment. I received a response in April, saying that that was not the policy position of the Government. The Government is addressing the matter only because it is being forced to do so by an identified weakness in the law. Would the Government continue to penalise the students if it were not for that weakness? I suppose that that is a policy question for the minister.
I cannot comment on the latter part of your question, but I can confirm that the instrument is a response to an identified weakness in the law.
Thanks very much, Mr Batho.
Do other members have questions that they want to ask?
Ken Macintosh has covered many of the issues, but I would like to ask about deferment. The legal problems around the supplying of a loan at the stage of deferment arose only because a decision was made to withdraw the ability to defer. It is unclear who made that decision. I have received letters from the SAAS, which say that it was down to accounting procedures. However, Ken Macintosh has suggested that it was a policy decision. Can you give us some information on who made the decision? Was it a consequence of the abolition of the graduate endowment?
The way it works is that there is no legal basis to defer. That was an administrative decision that was taken by the Student Awards Agency for Scotland, which was not founded on statute. Therefore, as a legal consequence of the fact that there is no power to defer, there is no power for those people who have deferred to take out a student loan in order to pay after they have missed the cut-off date, which is the point at which they originally became liable. The one absolutely follows the other. As soon as it was identified that there is no legal basis for deferment under the existing regulations, which we are replacing, there could be no payment of a student loan.
So, you are suggesting that there was never any legal basis for deferment, under previous Governments or the current Government.
Indeed.
I understood that, previously, there had been a direction from ministers that the SAAS should allow deferment for postgraduate students.
No.
I am also interested in when the minister or officials became aware that there was a problem. The letters were originally sent out to students in February, but it has taken until now, towards the end of the academic session, for the amending regulations to be produced to deal with the issue. You have highlighted the fact that the coverage in The Herald brought the matter to the minister's attention.
Yes.
Do committee members believe that the officials have been able to answer all their questions? Are we happy to move to the question on the instrument?
I am delighted, although I have some concerns. I am concerned that a letter from an MSP highlighting several constituency cases was not enough to illuminate the minister's view on the matter but that an article in The Herald was. It says something about the Government if that is how ministers proceed. Nevertheless, whatever the decision was based on, it was the right decision. Of all the subordinate legislation that has come before us this morning, this is the one instrument that I have no hesitation in supporting.
In that case, it is appropriate that we move to the question on the motion. No motion to annul the instrument has been lodged, and the Subordinate Legislation Committee has determined that it does not need to draw the attention of the Parliament to it. Members' questions have been covered.
That concludes the committee's business today. I wish you all a happy recess, and I will see you in September.
Meeting closed at 13:39.
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