Student Support
The next item of business is a statement by Fiona Hyslop on student support.
I welcome this opportunity to make a statement to the Parliament announcing the decisions that I have reached on how the Scottish Government intends to improve financial support for full-time higher education students, with an additional investment of £30 million from 2010-11.
The Government's stated purpose is
"to create a more successful country where all of Scotland can flourish through increasing sustainable economic growth."
That vision for the future of our country becomes more important, not less, as a guiding principle for responsible government through these toughest of economic times.
Despite the tightest settlement that has been received from the United Kingdom Government since devolution, with cuts of about £500 million imposed on our budget in the next financial year, we have put in place a range of policies that will help students today, tomorrow and in the future to overcome the financial barriers that they face. Those measures make a real difference to students and include abolishing the graduate endowment fee; replacing loans with grants for part-time higher education students; increasing student hardship funds year on year since we came into office; introducing fairer assessment of income for further and higher education students, to ensure that the available funding gets to the students who need it most; and making further improvements to the support that is available for part-time students, through changes to individual learning account 200 and ILA 500. Between April and September, 42 per cent more people attended courses supported by ILA funding than was the case last year.
On 15 December 2008, the Scottish Government launched "Supporting a Smarter Scotland: A consultation on supporting learners in higher education". The consultation set out a number of options for how higher education student support could be improved through additional investment of £30 million from 2010-11. It ran for 20 weeks, which reflected the importance of the issues and my express wish to engage widely with students and other stakeholders during the process. I thank everyone who took the time to submit a response.
What I will announce today has been heavily influenced by a range of factors. First, it has been influenced by the evidence in the consultation responses, the findings from the recent higher and further education student's income, expenditure and debt in Scotland survey and findings in the National Union of Students publication, "Overstretched and Overdrawn: A survey of student hardship".
Secondly, what I will announce has been influenced by three ministerial meetings with the main Opposition parties in the Scottish Parliament, which have taken place since September, and by our discussions with NUS Scotland. Thirdly, it has been influenced by the operational implications. Any changes must be capable of being designed, tested robustly and delivered by the end of March 2010. Finally, and most important, it has been influenced by the economic situation. According to official figures that were released last week, this is the first time since records began in 1955 that United Kingdom gross domestic product has contracted for six consecutive quarters. This is the worst recession for a generation.
When I launched the consultation, I said that we would consider the responses in the context of the wider economic and social environment and that we would listen to stakeholders' views. Our response to the consultation was published on 7 October and set out three options, which I said that I would discuss with the Opposition parties and the NUS before I came to a final decision. I am pleased that I have found common ground with the NUS on the need to improve financial support for independent students, in particular. I welcome the NUS's recent change of approach and its acknowledgement that the Government's direction of travel in the area is fundamentally correct.
The overwhelming majority of independent students are over 25 and many have dependent children. Our evidence on student income and expenditure tells us that the budgets of such students are under the most pressure and that those students have the highest levels of commercial debt. The majority of respondents to our consultation highlighted the inconsistency of the current student support system and thought that the additional resources that we are making available should not be focused exclusively on dependent students. This time last week, the Universities and Colleges Admissions Service published data that show that the largest percentage increase in applications to Scottish universities is in applications from independent students. That is another compelling reason why such students must be better supported. I am sure that in many cases the increase has been driven by the impact of the recession, as people enter higher education before they seek to re-enter the job market after being made redundant.
As a result of the discussions that I mentioned and after consideration of all the factors that I set out, I am able to announce additional measures for higher education students at university and college. They are based on option A in our consultation response of 7 October, but I decided to vary elements of that option in light of further discussions with the NUS.
Under option A we said that we would provide—for the first time—a new grant of up to £1,000 for independent students who are studying in Scotland, increase by £2 million the amount of money that is available to all students to meet the costs of child care, and increase the maximum level of the income-assessed student loans. We will still do each of those three things. We will also increase the amount of money for young students, as we said that we would do. To ensure that the money goes as far as possible and is targeted at improving the income levels of the poorest students, at a time when other sources of finance are more limited, we will do that through a further increase in student loans, rather than through student grants. We will therefore widen the scope of the additional loan to include independent students, and we will increase it to £785 for those who are eligible. That means that the income of up to 75,900 students will rise by up to £442; up to 44,500 students will see their incomes rise by up to £622; and up to 14,000 new students will now receive a grant and benefit from the introduction of the new independent students bursary.
Those measures will mean that the income of dependent and independent students from low-income backgrounds who are living away from home and studying courses of higher education in colleges and universities will rise to £5,852 per annum. For the first time since devolution, every student who qualifies for an income-assessed student loan, irrespective of their age, will be eligible for the same level of financial support. Over and above that, I can announce another first. These proposals are to provide low-income students aged over 55 who study in Scotland with access to grants through the new independent students bursary for the first time.
Although I have gone further than many in the chamber would have anticipated, I am anxious to make further progress. I accept that the system of student grants and loans should be examined more closely to see what further changes can be made and what scope we have to spend our existing budget smarter. I am prepared to agree to adapt our option A in the way that the NUS requested to ensure that our shared goal of the best possible deal for Scotland's students is achieved. Although the strict terms of the motion that the Parliament passed on 21 May might not have been met, particularly the Opposition's original wish to increase the young students bursary, the main element of it—addressing student hardship—has, I believe, been realised.
Our proposals also demonstrate that the Scottish Government is prepared to adapt its policies in the short term to raise students' income at a time when part-time work to supplement the support that they receive from the Scottish Government is harder to come by. Evidence suggests that banks are lending less money to students and on less favourable terms, with many students resorting to credit card debt. We have no choice but to respond to those concerns with proposals to alleviate debt where we can and make loans available on the best possible terms where debt is still accumulated.
Although a number of factors surround access to learning, we believe that the availability of realistic levels of student support plays an important part in any decision to study beyond school. Our colleges and universities have never been more popular: acceptances to universities are up by 5.5 per cent this year alone, and the greatest rise is in the number of independent students who will benefit the most from what I have announced today.
In these toughest of economic times, I believe that we have a duty to protect and promote the income and interests of this generation of students. I take that duty seriously, which is why I commend the £30 million-worth of proposals to support students to the Parliament.
The cabinet secretary will now take questions on the issues raised in her statement.
I thank the cabinet secretary for the advance copy of her statement.
Although I wish to welcome the statement, it must be acknowledged that it is because of the consistent calls and pressure from Opposition parties, along with the student movement, that the Government has been forced to listen and shift its position. I am glad that the campaign, which has been led by Labour, Liberals and the Conservatives, along with the student movement, has resulted in a package that will put more into students' pockets and that has recognised that tackling student hardship must be the Parliament's priority when addressing student support issues. Is the cabinet secretary able to explain why her junior minister—who I understand is rushing to a photo call at the University of Edinburgh after the statement—dismissed this exact same proposal out of hand last week? Surely that was a low point in what was largely a constructive dialogue.
Does the cabinet secretary agree that £30 million does not go far enough towards addressing the levels of identified student hardship? It is but a sticking plaster over the hardship problem. Does she agree that more needs to be done to tackle the levels of commercial debt and the long working hours that many students will continue to experience?
Finally, the cabinet secretary agreed that the grants and loans system needs to be examined. Will the Government acknowledge Andrew Cubie's comments today that the time has come for a broadly based, comprehensive review of funding and support an independent review?
One of the issues for a minority Government is responding to the views of other parties. Following the instructions that we had on 21 May, that is exactly what we did. A number of people made constructive proposals, including in response to the consultation, and we listened to them. I agree that the Government has had to compromise on increasing the loan element of the package. I also agree that the Opposition parties acknowledged that independent students needed consideration of a kind that those parties had not included in their initial proposal. The NUS agreed with that as well. We are doing what the Parliament is meant to do, which is to respect the views of minorities and reach compromise and consensus. That is what I have sought to do.
From the initial discussions right back in September I indicated that the independent students issue was serious and had to be addressed. I conceded in the September and October meetings with the Opposition that I was also prepared to compromise on the loan element. As far as the meeting on 21 October is concerned, Keith Brown admitted that the NUS proposal had just been delivered to him for consideration, as it had been to Opposition members who were at that meeting. Within the timeframe for consideration, we therefore looked at what the NUS proposed. It proactively and positively came with a view on 21 October that we were happy to consider. Since it was not a brand new option but a variation of what we had already set in train as one of the three options that the Student Awards Agency for Scotland was working on, it was possible to consider it. I was very pleased that, at a constructive meeting that I had subsequently with the NUS, we were able to agree that the proposal would be a way forward.
At a time when we have a real terms cut in the Scottish budget for 2010-11, for a Government to come forward with £30 million in that year alone is a considerable achievement. The previous Administration put forward resources of £22 million a year to support students. This Administration is already putting forward improvements to student support of £44 million a year. Today's announcement provides an additional £30 million for student support. I think that that is a good record at a time of pressing financial pressures on this Government, and that it should be congratulated.
I thank the cabinet secretary for advance sight of her statement. The £30 million on offer for student support is, indeed, welcome, although it of course falls far short of the estimated £2 billion cost of implementing the now infamous Scottish National Party manifesto commitment to wipe out student debt.
The Scottish Conservatives welcome the extra £2 million for child care and the increase in student loans that has been announced today. The latter element represents a substantial shift in stance from the SNP, which as recently as last week was maintaining the position, contrary to all the evidence from student groups, that reducing student debt on graduation was the priority for additional resources. Fortunately, the united front presented by the Conservatives, the Labour Party, the Liberal Democrats and the National Union of Students in Scotland has seen a change of heart, with an admission today from the Scottish Government that the key issue to tackle is, in fact, student hardship and putting more money into students' pockets. I am pleased that the SNP Government has at last acknowledged that.
I believe that students will generally welcome the proposals. However, £30 million was never going to be enough to address entirely student hardship. Today, Sir Andrew Cubie is backing calls that were first made by the Scottish Conservatives for an independent review of university funding and student support so that we can take the next step forward. Will the cabinet secretary join the growing consensus in support of those calls? If not, why not?
This Administration has increased the university funding share of the overall budget to 3.87 per cent in 2010-11, compared with the position inherited from the previous Administration of a 3.73 per cent share. We also conducted, with Universities Scotland, a thorough joint review of funding mechanisms. Professor Anthony Cohen, former principal of Queen Margaret University, has said:
"This Government has I think manifested an extraordinary commitment to the universities since they came to power. The taskforce itself was the closest engagement which any Government in my recollection has had with the universities".
On tuition fees, Professor Steve Smith, who is the new president of Universities UK, said:
"The issue is almost completely irrelevant in Scotland … It's not something we are thinking about. Because the funding level is roughly comparable (with England's) it seems to me there is no issue."
Whether or not the cap on fees is removed in England in the longer term, implementation of that will be some way down the line. Our job in the here and now is to ensure that support for universities, as I have evidenced already, continues to be strong. Rather than wait for some long-term review of student support, we are delivering an additional £30 million now. That money will make a difference in the pockets of more than 75,000 students by this time next year. Such action by the Scottish Government is to be welcomed.
I acknowledge that we have changed our position on loans, just as the Conservatives have changed their position on independent students, but we have come to that compromise because that is the correct thing to do. Having listened to what everyone has said, we have come up with a package that will make a difference. Given the comments from Opposition members, I hope that the package will receive support.
I thank the cabinet secretary for the advance copy of her statement.
For many months, the shared goal of the Liberal Democrats, the Labour Party, the Conservatives and NUS Scotland has been to equip Scotland's students with the support that they need, in their pockets, at a time of recession. We have consistently made the case that hardship is now the most important issue for students. Therefore, the Liberal Democrats welcome the Government's shift in focusing on hardship rather than on moving from loans to grants, which would have put no extra money into students' pockets.
The cabinet secretary is right to say that there has been movement on all sides, but that is why people enter into such discussions. The negotiations were to try to find a way forward that would benefit the students whom we seek to help. We made the case for an additional £2 million for child care funding, so we welcome the cabinet secretary's announcement on that. We support the introduction of an independent students bursary, given that research shows that such students are most affected by hardship and commercial debt.
The Government's original response, which was published on 7 October, acknowledged the Parliament's motion calling for a cross-party approach to tackle student hardship among the poorest students, but the Government still failed to propose any options that would tackle such hardship. That is why we welcome the Government's decision to think again on the option that was put forward last week by NUS Scotland, which was backed by the Opposition parties that attended the meeting.
The £30 million is a step in the right direction, but it falls far short of the Government's election pledge of £2 billion. Given that the cabinet secretary has said today that she has been prepared to adapt policies in the short term, when can we expect her to deliver the rest of the £2 billion?
Will the cabinet secretary also provide further details and the timetable for the review of whether child care funding should continue to be discretionary or should—as we all agree should happen—become an entitlement? What further issues does she intend to include in the wider review of the system of grants and loans to ensure that we spend our money as wisely as possible to the benefit of Scotland's students?
The member makes an important point about the £2 million child care fund, on which we will obviously make progress as soon as possible. However, she must recognise that issues with the systems of implementation might restrict the introduction of the fund until 2010-11. However, I recognise that we need to try to work on the issue as quickly as we can.
Let me say that there was no manifesto commitment for £2 billion servicing of debt. That would not cost £2 billion.
As a minority Government, we face a real challenge to get proposals through the Parliament when there is distinct opposition. I am pleased that the Liberal Democrats joined with the Government to abolish the graduate endowment fee, but the vote was very close. Indeed, Labour and the Conservatives would still have required students to pay £2,300 at the end of their period in university. In the teeth of such opposition, attempting to deal with some other debt issues that we want to tackle would have been challenging, especially if one bears in mind the resistance that we have already seen to our proposal to look at grants and loans.
For the first time under devolution, students from low-income households will now be entitled to the same income whether they are under 25 or over 25. That is a major step forward. In the past, the Parliament has abolished front-end tuition fees and the graduate endowment fee. Let today be the day that we recognise that we need to provide a universal grant that is available to people from low-income backgrounds, whether or not they are over 25. Such students will get financial support from the Scottish Government.
If we can have short, focused questions, I will be able to get everyone in.
The SNP Government came to power with the principle that access to education should be based on the ability to learn, not the ability to pay. Today, Labour called for tuition fees in Scottish education. Will the cabinet secretary assure me that the principle of free education remains a policy of the SNP Government and that she will not introduce any proposals for the reintroduction of tuition fees in Scotland?
It is recognised that tuition fees have not been welcomed in Scotland. Indeed, the abolition of the back-end tuition fee through the abolition of the graduate endowment has been welcomed throughout the country. However, there are issues with student support. The Government down south overcommitted £200 million and has had to recoup £100 million from students, which is jeopardising places. England has a complex student loans system, even compared with ours. In considering some of the issues on student support, we have all found and continue to find that more could be done to make a budget that will be limited in future go further. However, as far as the Scottish Government is concerned, there is no place for tuition fees in higher education in Scotland.
Like others, I welcome the cabinet secretary's announcement. I am pleased that she has responded to representations from Opposition parties and the NUS and will provide an additional £2 million for child care. Discretionary funds that support students with child care responsibilities or those in hardship often make the difference for such students between staying in university or college and dropping out. However, given the 5.5 per cent increase in acceptances that UCAS has revealed, discretionary funds for hardship and child care will be put under added pressure. Will the cabinet secretary guarantee that such funds will not run dry this year, as they did at some universities last year?
The independent universities and colleges are responsible for their own funding streams but, as Karen Whitefield will be aware, the Scottish Further and Higher Education Funding Council responded quickly—in fact, within three weeks—when concerns were raised last year.
We have to monitor the position closely. Indeed, we discussed that subject in the Education, Lifelong Learning and Culture Committee this morning. I have asked the funding council to keep a close account of what is happening in the here and now. As we speak, it is engaged with colleges and universities to ascertain what the initial response has been to discretionary funds this financial year. However, the extra £2 million next year will benefit students across the piece. We are increasing the support for independent students, many of whom have families. That is the key focus of today's announcement.
Page 9 of the cabinet secretary's statement says that she accepts
"that the system of student grants and loans should now be examined more closely, to see what further changes can be made and what scope we have to spend our existing budget smarter",
which is an interesting phrase. What is the timescale for that review and when can we expect the cabinet secretary to report back to Parliament?
Although we are investing an additional £30 million for 2010-11, Elizabeth Smith will be aware that we are moving into a new spending review period and that we have heard from a variety of UK parties that there should be cuts, whether savage cuts or other degrees of cut. Going into the next spending review period, we will know what resources are available to us and we will be in a position to consider what improvements can be made. There can be slight adjustments. We have already made some, such as changes to means testing, within a short period of time, and we will make any further improvements that we can in the short term. I expect the review to inform some of our thinking, particularly going into the next spending review period.
The minister is aware that Scottish students who study courses in England that are unavailable in Scotland are hit not only because they have to pay tuition fees but because many receive a maximum loan support of only £900 a year while their English counterparts receive more than £3,000. When will she give those students real help to avoid the credit card debt to which she rightly referred by raising the level of the non-means-tested loans for all students above the impossibly low level of only £900 a year? She is forcing students into commercial debt.
Mike Rumbles has pursued the issue previously. Loans are available to help Scottish students to fulfil the tuition fee obligations that they have in England. I will write to him to address the impact that today's announcements would have on any Scottish students who study in England and to address some of the issues that he continues to raise with me. The issue that affects students from Scotland who study in England is not necessarily tuition fee support but income for day-to-day living. I am not in a position to respond to him immediately, but I will do so in writing.
What are the principles behind supporting independent students, who are a group that has never previously had direct financial support? What benefits will such support bring for many who are retraining through the recession?
As I mentioned, the UCAS figures show that the number of independent students going to university reduced in previous years but has now increased. Financial support can make a difference to whether they go to university in the first place and, more important, some of the feedback that we have on independent and older students at universities indicates that the issue puts pressure on the retention of such students once they have accepted a place and are at university. The problem can often be issues of income, family responsibilities and debt. The fact that independent and older students have up to £4,000 commercial debt, compared with several hundred pounds for younger students, shows that commercial debt is hitting independent students hard. An income of £1,227 more than they had previously will be welcomed by independent students throughout Scotland.
I, too, thank the cabinet secretary for her statement, although I do not fully understand why it has taken more than a year to agree on the distribution of a sum of money that, from the cabinet secretary's evidence to the Education, Lifelong Learning and Culture Committee this morning, seems to be a recycling or reallocation of savings from within the existing departmental budget—putting students' money back in their own pockets, as it were.
Could the cabinet secretary clarify the language that she used? She referred to rises of "up to £442" and "up to £622". Can she reassure me that all the 76,000 students identified will receive £442? If not, how many will be affected and how much will they receive?
Ken Macintosh perhaps misunderstood the comments that were made at the committee this morning—£30 million has been earmarked for student support from the start of the spending review period for the year going forward and it was identified for 2010-11. That funding is certainly not resourced by savings identified elsewhere in the budget.
Ken Macintosh raises a substantive point about who will benefit. With the Presiding Officer's indulgence, I will give Parliament some additional information. We have focused in particular on lower-income families. The £442 increase in income will apply to under-25-year-old dependent students with household incomes between £25,000 and £40,000. Students from that income bracket—both dependent and independent—will receive an increase of £442. Those under 25 who are dependent students will receive an increase of £622 in their income. The real winners today are independent students with income levels of around £17,000 or less, as they will receive an increase in income of £1,227.
As the cabinet secretary said, we are now in the worst recession for a generation. Can she detail and confirm the support available to the universities and colleges sector to help those who are faced with redundancy during these difficult times?
The announcement today is about support for individual students, but in the university sector we have already introduced measures such as the ILA 500, which has for the first time replaced loans with grants for up to 20,000 part-time students. The ILA 500 was not initially intended to tackle the recession, because it was announced and agreed before the recession, but we are finding that it provides a bridge and an opportunity for some people who have been made redundant and who have to continue to work part-time to keep their families to retrain to go into a different profession and to train at universities. Replacing loans with grants for part-time students has added an extra boost at this time of difficulty during the recession. Independent students, many of whom may have been made redundant and are going to university to retrain—applications are increasing in particular in science, technology and engineering—provide a great opportunity for the country to take that talent and ensure that those people can contribute to the economic recovery in the future. The steps that we have taken help to ensure that they can support their families in the meantime.
I, too, welcome the minister's statement, particularly with regard to the progress that has been made on support for poorer students. Further to Karen Whitefield's question, I press the cabinet secretary on the guarantees that she is prepared to give on hardship funds, which have run dry in some institutions. We are looking for an assurance from the cabinet secretary that she will do something to ensure that the hardship funds do not dry up.
We have increased the hardship funds in response to the demands that were being placed on them. The fact that there has been an increase of 17 per cent in the available hardship funds under the current Administration is evidence of that. If any member or constituent has concerns about the response that they are getting about hardship funds, they should please let us know. However, the hardship and discretionary funds are not a guaranteed source of income; they are discretionary and are for the universities to deploy. Nevertheless, we will respond in a timely way to any request that is made in that regard.
The experience is perhaps different in different universities. Pauline McNeill is correct to say that, last year, the bursaries and hardship funds in a number of universities and colleges ran dry and were swiftly supplemented by additional income from the Scottish funding council. However, other institutions did not apply because there was no demand for the funds.
There is a difference between institutions in the distribution of hardship funds. As I explained to the Education, Lifelong Learning and Culture Committee this morning, that is perhaps because of the experience that has been built up over a number of years. However, we are in a volatile situation just now and more women with dependants are entering higher education, so the system must be responsive.
A number of institutions throughout Scotland did not have to apply for additional hardship and discretionary funding, but I am aware of all the concerns that people are raising. As of now, the Scottish funding council is working with colleges and universities to see what pressures are arising this year. Last year, it responded within three weeks of concerns being voiced. The funding council is ensuring that it can respond but, until we know what the demand is, it is difficult for it to respond.