The delayed annual grant letter was received by the Higher Education Funding Council for England on 10 February. Annex 3 (Conditions of Grant on Regulated Fees) seems to raise an important and emerging question of principle.
The stated “conditions of grant” relate solely to the setting of tuition fees. The secretary of state is empowered to impose conditions of grant by the Further and Higher Education Act 1992. But tuition fees no longer form part of the annual grant or the annual Hefce allocation of the grant; these now flow through the Student Loans Company. Money for tuition fees is not “provided by the council in respect of activities carried on by the institution”, the words used in the legislation to define the scope of Hefce’s activity. Although they are government-funded, student loans would appear to constitute personal loans to students. Nevertheless, the penalty for failure to comply is to be a deduction from a Hefce grant given for other purposes.
It may be true that the legislation can be construed to cover this financial sanction – just. But should it be? (It is as if I agree to pay you for mowing my lawn on condition that you do not eat ice cream on Sundays.)
And in Annex 3, the grant is still described as the “teaching and research grant”, as if the old block grant were still a reality. If we are to believe the press coverage, the letter’s delay has been caused by disagreements between departments of government and conflicting party wishes to protect classes of pre-allocated funding, such as that for research funding. “Teaching” funding as such now forms a small and still shrinking part of the grant. So is a penalty for non-compliance in respect of a payment that falls outside the grant to be met almost entirely from any research funding a university might receive from Hefce?
G. R. Evans