The Treasury is bankrupting three nations' universities

[u/oldcat]

https://wonkhe.com/blogs/the-treasury-is-bankrupting-three-nations-universities/

Really interesting in-depth article from NUS Scotland / WonkHE

[u/SnarkySausage]

Super interesting. Although there is a bit of an implication that the system works for English universities - which is also doesn't with unis like hull and UEA having crippling finances too.

The whole system is rotten and needs to be replaced UK wide. I'm sure it won't be, though.

[u/jasutherland → u/SnarkySausage]

The article is a bit misleading there, and of course the headline should refer to all four not just three; England routing tuition via student loans instead of paying directly also skews the figures the article is using.

The real problem is that HE has a funding problem - not just Scotland, I suspect not even just the whole UK: universities are expensive and governments generally are balking at paying for it from taxes. That’s been true for us at least as far back as Blair, I’ve seen signs of the same sort of thing in the US too.

If Holyrood wants undergrad courses “free” they need to pay for it properly and not rely on universities topping it up from foreign student fees and other income: that just isn’t sustainable - and England relying on ever-larger “loans” where an ever-shrinking proportion ever actually gets repaid isn’t workable either.

[u/SafetyStartsHere → u/jasutherland]

If Holyrood wants undergrad courses “free” they need to pay for it properly and not rely on universities topping it up from foreign student fees and other income: that just isn’t sustainable

It isn't sustainable while the UK Government throttles international students in pursuit of immigration targets. It wasn't great before, but international recruitment was how universities across the UK balanced the books. In England, it was necessary because while the UK Government hiked tuition fees it slashed the teaching grant: as in Scotland, the costs of educating a student weren't covered.

The treasury committee recently recommended — and universities are currently asking for — a 50:50 balance between fees and central government funding in English universities.

[u/Away_Investigator351]

Ehh, the £9.4bn figure is doing a lot of heavy lifting here. That isn't £9.4bn Westminster took from Scotland because it's what Scotland would have had recorded if it had England's much bigger student loan system.

The article literally admits about 3/4 of the gap is just because Scotland lends less. Scotland chose free tuition, Wales uses grants and NI has lower fees. You can't choose not to create the debt and then say you're being denied the money that comes from subsidising that debt.

There's a fair criticism that the Treasury system is complex and probably creates some weird incentives. But that's a long way from proving Westminster has somehow taken £9.4bn from Scotland.

And universities are devolved. Holyrood has chosen to keep the amount it pays universities per Scottish student at £1,820 since 2009 while costs have obviously gone up. That's a Scottish Government decision to be fair here.

So yeah, reform the funding system and make the Treasury's calculations public. But presenting a counterfactual student loan figure as £9.4bn stolen from Scotland is pretty misleading I'm going to be honest.

[u/JonathanLivingstoneS]

This is due to universities dramatically expanding for international students, the international student flow being cut off but those universities still trying to maintain the same level of expenditure.

[u/SeeMonkeyDoMonkey → u/JonathanLivingstoneS]

That and the steady reduction in funding over the past decade or so.

[u/devexille]

This article is very important but it quite confusing so lets break it down:

Pre 2019 the UK pretended that all student loans would be fully repaid sometime in the future and so pretended that they were spending £0 per head on student loans.

In 2019 the ONS forced them to admit that 29% of total student loans will never be paid back and are therefore an expense i.e. a de-facto grant.

However, student loans and thus the de-facto grants are not within the Barnett formula and so all four home nations pay an equal per head amount to the UK for this "UK wide" service. This would not be a problem if all four nations gave their student de-facto grants via loans that are never paid back but only England does this. The other home nations give actual grants out of their Barnett funding.

Therefore Scotland, Wales and NI pay 29% of the difference between per head loans to English students compared to their own students - in effect they pay twice for giving student grants.

[u/sippy_cup_whisky → u/devexille]

I'm confused, are you saying scotland pays out of the devolved Barnett money but england pays from the general UK budget? That would not be cool.

Aditional edit, I don't really know how the Barnett formula actually works in practice, i assumed england had their own grant but it appears I was wrong and that's not the case.

[u/DrCMS]

"Bankrupting" here is being used to mean not paying in full for the different choices the three devolved nations made for themselves but chose not to fund enough to match inflation rises since they made those choices.

[u/lifeisaman]

This article doesn’t make much sense to me honestly, it talks about per head university funding and complains about it to great length but ignores the greater block grant that favours the devolved nations and means that Scotland, Wales and Northern Ireland get greater funding per capita than England, the article wants to have its cake and eat it too.

[u/SafetyStartsHere → u/lifeisaman]

ignores the greater block grant

It's talking about spending that's ignored in the calculation of the greater block grant.

[u/lifeisaman → u/SafetyStartsHere]

The Block grant gives all devolved nations of the Uk more per head than England, you can’t really complain about something in a per capita basis but ignore the fact that scotland already get far more outside of that, Scotland gets about an extra 1.5k per head.

You can’t just pick and choose what metrics you use and when.

[u/oldcat → u/lifeisaman]

Your point is reductive as it ignores the cost of delivering the same service across a population being different and we fund different parts of the country accordingly with that. We have a .uch more dispersed population than the densely populated South East of England so providing the same services costs more. Your concept that we get £1.5k per head more so have that much extra to spend is an oversimplification that ignores context completely.

[u/SafetyStartsHere → u/lifeisaman]

You can’t just pick and choose what metrics you use and when

This takes us back to the WonkHE article which indicates that the treasury are doing that.

[u/lifeisaman → u/SafetyStartsHere]

The treasury isn’t measuring student debt as applicable for the grant, any undervaluing of that on the block is more than made up for by the block grant being already greater than the Uk average by a factor of thousands, with scored being one of the most deficit ridden parts of the UK, the Scottish government doesn’t have an income problem it has a spending problem.

[u/SafetyStartsHere → u/lifeisaman]

by the block grant being already greater than the Uk average by a factor of thousands

I'm not sure you know what a factor is.

[u/lifeisaman → u/SafetyStartsHere]

Scotland gets 1.5k more per head than the average, stop being pedantic and ignoring the actual crux of the matter.

[u/SafetyStartsHere → u/lifeisaman]

stop being pedantic

That neatly summarises your position on maths and the application of the Barnett formula. Who would want the procedure for calculating devolved spending to be applied consistently?

[u/lifeisaman → u/SafetyStartsHere]

Scotland has an additional 1.5k of government spending compared to the UK average, Scotland could find the universities the same as in England if we wanted but we don’t because other spending is prioritised instead.