Today’s 2015 Budget, the sixth and last of this parliament, announces details of an income contingent loan scheme of up to £25,000 for research-based masters and PhD students.
The announcement follows last year’s Autumn statement in which George Osborne announced a £10,000 postgraduate loan scheme for taught master’s students available in 2016/17.
The government will introduce a package, ‘to broaden and strengthen support’ for postgraduate researchers, including both masters and PhD’s. This will include a review into strengthening government funding for postgraduate research, assessing options to strengthen partnerships and co-funding between government, industry and charities and finally, the introduction of income-contingent loans of up to £25,000 to support PhDs and research-based masters degrees.
The loans will come in addition to existing funding and are designed, ‘to minimise public subsidy’. “The government will work with research councils, universities and industry to examine how best to design them so that they complement existing funding streams and continue to support the most excellent research” says the Treasury. It is expected that this consultation will also include details of the previously-announced loan scheme for taught postgraduate students.
However no details are offered today about how the new scheme will be structured or implemented, or exactly who it would be made available to. Additionally it is unclear when the mooted consultation will appear. If the government intend to publish it before May’s General Election, they have until 30th March (only 7 working days from now) before election purdah begins, as the purdah rules would likely prevent it being published in the run-up to the election.
The Budget document released today states that “the government is developing a more highly-skilled UK labour market by strengthening support for postgraduate research and apprenticeships, and setting out plans for further investment in the UK’s world-leading science and innovation base”.
The 2015 Budget also recognises that the US and China’s PhD student numbers have increased in recent years while in the UK PhD enrolment has remained relatively flat.
Whilst on his feet making his statement in The House of Commons, George Osborne strongly criticised Labour’s policy to lower undergraduate tuition fees from £9,000 to £6,000 calling the policy ‘neither progressive nor fair’. Elsewhere in the Budget, the government announced that it was reducing pension tax relief – which Labour had partially earmarked themselves to pay for the tuition fees cut. However, Ed Miliband re-confirmed to the House of Commons that the party would lower the headline fee to £6,000 if in power after May. Shadow Chancellor Ed Balls told the BBC that 20% of the funding needed to pay for the lower fee was no longer available following the Budget, and the Labour Party’s manifesto would set out how that new hole would be plugged to fund the fee cut to £6,000, as has been previously announced. He told the lobby that “That fox is alive and well and running.”
For science and innovation in this Budget, the government will “will commit £400 million to 2020-21 for the next round of funding for cutting-edge scientific infrastructure”.
“This will be a competitive fund” the document reads, “based on scientific excellence, which seeks to lever industrial and charitable funds. The government will also provide £138 million of funding towards the UK Collaboratorium for Research in Infrastructure and Cities (UKCRIC), £100 million for Research and Development into Intelligent Mobility and £40 million for demonstrator programmes, business incubator space and a research hub to develop applications for Internet of Things technologies in healthcare and social care, and Smart Cities.
The Budget also confirms that the government will invest a further £100 million in cutting-edge research projects through the current UK Research Partnership Investment Fund round. According to the document the successful projects will leverage over £350 million of private sector investment.
Find the 2015 Budget documentation in full here.
Today’s budget proposes a reduction in the Lifetime Tax Allowance for pension savings to £1 million in April 2016 The Treasury estimate this will save £300 million in 2016-17 rising to £590 million by 2018-19. This matters for higher education because this was one of the tax increases which Labour planned to use to fund the £6,000 fee plan. The Coaltion have got in there first and plan to use it to reduce tax on savings. I’m sure a Labour-led government could find another revenue source but it’s a reminder that their £3 billion fee reduction plan may have fragile foundations. Incidentally I’m not sure that the Treasury have an effective way to measure the extra tax they’ll raise from these changes and the people affected (eg senior university managers) will probably take action to avoid paying any extra tax.
Ed Balls said this afternoon that they had anticipated losing this portion of the cash needed to cut fees. I haven’t run the numbers, but they reckon it is 20% of the cost of lowering fees. Apparently the Labour manifesto will detail how that will be plugged to pay for their policy.
DO YOU NEED A LOAN? IF YES,CONTACT US ON OUR COMPANY EMAIL: BENITALOANINVESTMENT@FASTSERVICE.COM