The Cubie report

December 24, 1999

Setting the scene

The Independent Committee of Inquiry into Student Finance was set up on July 2 1999, and was the first committee to be set up by the Scottish Parliament. We have been determined that our work be open, accessible and responsive. We have been aware that our work would set a precedent for future committees in Scotland. The views of others, individuals and organisations have been important to the inquiry. We have travelled widely throughout the country, listening and gathering information. Some of the personal testimonies we heard confirmed that the time was right for far-reaching change in the student finance system. We recommend the adoption of our guiding principles, which have already been welcomed in draft form. They underpin all of our detailed recommendations.

Our terms of reference were as follows:

* To conduct a comprehensive review of tuition fees and financial support for students normally resident in Scotland participating, part-time or full-time, in further and higher education courses anywhere in the UK

* To have regard to the desirability of promoting access to further and higher education, particularly for those groups currently under-represented, while taking account of the need to maintain and to develop quality and standards, and the position of Scottish further and higher education in the wider UK system

* To make recommendations for any changes to the current system, and provide costed options where these may require additional resources

* To present a report of its findings to the Executive by the end of 1999.

Our report was presented to the Scottish Executive on December 21 1999.

Assessing opinion

Obtaining and understanding the views and ideas of students, tertiary education institutions, political parties, equity groups, individuals and academic experts was essential to our work. To this end, our consultation process has been comprehensive and accessible. To gain an understanding of the facts and figures behind the system, we also commissioned our own expert research.

Our first consultation document, Student Finance: What Do You Think? was published on August 11 1999. Over 100,000 copies were distributed, and several thousand people accessed the document on the internet. The document set out issues and ideas relating to the student finance system and the inquiry. It asked five key questions about living costs, tuition costs, access, quality and the position of Scottish further and higher education in the wider UK system.

The views of the whole country were essential to us. We wanted to hear and understand the specific issues that affect people in all Scottish localities. We held 13 public hearings, in places from Dumfries to Lerwick, Stornoway to Aberdeen. We also heard oral evidence from student bodies, political parties, trades unions and business organisations, and visited several further and higher education institution campuses to hear the views of students and staff.

We received over 700 responses to the first consultation paper, in addition to the contributions of many who came to our public hearings. From these, several trends became apparent. Firstly, there was widespread discontentment with the existing system, regarding means-testing, hardship, fees and loans. Secondly, there was a lack of coherence in the system. Thirdly, different areas of Scotland had very different requirements.

On the basis of the information we had received from the first round of consultation, we began to look at improvements to the system. To assist our developing thinking, we published our second consultation paper, Draft Guiding Principles, Preliminary Costings on October 26 1999. In this paper we presented what we believed to be the guiding principles for our recommendations, and also offered costings for some of the options that had been suggested to us, in order to inform the public debate about solutions. The response to this was generally positive, particularly with regard to the draft guiding principles.


To move forward in producing recommendations that fulfilled both our terms of reference and our guiding principles we had to have an objective picture of the current situation. A number of academics submitted their research as evidence, and we commissioned our own in other areas. We carried out a comprehensive survey of student attitudes to financial questions, looked at the effects of part-time work on study, examined student income and expenditure patterns and the cost of living. We looked at the ways in which finance affects decisions regarding participation and access, as well as how institutions are funded and the ways in which some systems work better than others. We looked at systems in other countries in a desk-top research exercise.

Our guiding principles

The most important element of our second round of consultation was the establishment of our starting point: the guiding principles. These have been used to evaluate the current systems and appraise all other options. The principles will encourage opportunity for all to engage in further and higher education. They will create an equitable, effective and efficient system that will benefit both the students of Scotland and the Scottish people.

Bearing these ideas in mind, our final guiding principles are as follows: Student support should maximise opportunity for all to be able to access high quality lifelong learning. Such support should promote social inclusion, the knowledge economy and an enhanced civil society, by having a system which is:

* Clear, simple and easily accessible

* Comprehensive and consistent

* Flexible and responsive

* Based on fairness and equal opportunity ó n Easily administered, with a learner focus n Adequately resourced.

Thereby such support should ensure that students in all modes of study are enabled to access a sufficient package of funding, whether from families, employers, graduates, government or through paid employment, none of which should be to the detriment of their studies.

To achieve this, government should remove barriers to widening access andparticipation by:

* Targeting resources effectively on sections of society under-represented in both further and higher education programmes

* Providing flexible means of support to accommodate the changing nature of the student population

* Assisting, in particular, those students who may not otherwise obtain sufficient support so that education is available to all those who have the ability to benefit from study.

These guiding principles are highly commended to the Scottish Executive as an essential, steadfast reference point for all policy decisions made regarding student finance in the future.

Where are we now?

We began our work with an assessment of the present system in further and higher education, for both full-time and part-time students, in the light of our guiding principles. The diverse systems prevalent at the moment mean that some aspects meet our criteria better than others.

The full-time further education system, with locally administered bursaries, is effective in fulfilling the principle of maximising opportunity for all. Further, it provides a system that is flexible and accessible through prompt response and learner focus. It does fall down, however, because the guidelines established by the Association of Scottish Colleges are not implemented consistently. The amount of financial support available is less than in higher education, despite the courses being full-time, and the contribution from parents is also expected to be higher. This is balanced by the fact that the support available to further education students takes the form of non-repayable bursaries.

The full-time higher education funding system is almost entirely based on repayable loans, available to all full-time higher education students. This system does not target resources effectively. It runs counter to our guiding principles, for those from low income backgrounds with a particular aversion to debt. Additionally, the means test expects too much from low to middle-income parents and too little from better off parents. This, and the idea that the system as a whole is ineffective, insufficient and indecipherable, came across strongly in public meetings. There was considerable anecdotal and research evidence that many students are taking on high levels of additional paid work that is detrimental to their studies. This goes against the principle of sufficiency of support. Concerns were further raised over questions of access for those from rural areas, particularly travel costs.

Part-time students in both further and higher education face situations that do not meet the guiding principles criteria. Part-time students do not have any guidelines on which to base expectations of funding. The situation in higher education is somewhat eased by the provision of fee waivers and loans, targeted to those who need support. This is welcome and moves towards the criteria of flexibility and promoting access.

It is thus clear that many aspects of the current support systems do not meet the guiding principles. This is particularly the case with regard to consistency, flexibility, fairness and promotion of access for all who would benefit from courses of study.

The committee was thus faced with the task of designing a support system that overcomes a history of piecemeal reform resulting in a lack of internal coherence. The system needs to reflect the diverse and changing nature of the student population, needs to be well explained and have a learner focus. This is necessary particularly in the promotion of lifelong learning, access from all backgrounds, and the removal of barriers such as childcare costs and loss of benefit eligibility.

Who should pay for student finance?

Having assessed the current system, we looked at who should pay for student finance, based on our guiding principles.

The benefit of further and higher education to participants varies. Our research suggested that graduates have the potential to benefit more financially, while those who undertake courses of further education become more employable and gain more skilled employment as a result of their qualifications.

The research also concluded that most families will continue to provide financial support to their student relatives in terms of living costs, provided the means of assessment were fair. This would require a restructuring of the means test to ensure that those with more than one child were not prejudiced, and further that ability to pay was taken more accurately into account. Systems should be harmonised across further and higher education to ensure this. The system should also be more progressive to ensure that those on low incomes are encouraged that resources are appropriately targeted, and that parents on higher incomes make a fair contribution.

A significant part of student support comes from the earnings of the student. Evidence, including independent research, was submitted to us, suggesting that many students work excessively long hours and hence harm their studies. This runs contrary to our guiding principles. We do not conclude, however, that all forms of part-time work are inappropriate, whether for work experience or to supplement income. Research and public hearing evidence also suggested that in many areas of Scotland both term-time and vacation work was hard to find.

Support toward living costs

A major part of our research was concerned with assessing the true cost of being astudent. We received many estimates and studies suggesting figures and have been particularly assisted by Dr Sheila Watt of Dundee University and Professor Claire Callender of South Bank University.

Our conclusion, based on their workand other submissions, is that the assumed level of support for a full-time highereducation student away from home should increase from Pounds 3,635 to Pounds 4,100, for students living at home from Pounds 2,875 to Pounds 3,240 and for students studying in London from Pounds 4,480to Pounds 5,050.

Targeting support

Non-repayable support from government should be targeted to meet our guiding principles. This targeting should recognise the changing nature of the student population, taking into account that much of the student and potential student population is not now straight from school.

Issues such as ethnicity, gender, age and disability interact and can affect access and participation. In order to achieve equity of access, it is important that available resources are targeted on these groups: young people from low-income backgrounds; lone parents; mature students; students with disabilities.

Young adults from low income backgrounds. Support should recognise the importance of further education to this group in permitting entry or re-entry into the education system. Support ought to be suitable both for those who wish to make further education a step on the way to higher education, and for those for whom a further education course alone is appropriate. This requirement necessitates a high degree of integration between the further and higher education systems.

We have concluded that further education students should continue to be supported by non-repayable bursaries. Given the high level of debt aversion among low-income groups, we also favour a move towards a larger element of support for higher education students also on a means-tested and non-repayable bursary basis.

Lone parents face the problem of childcare costs in addition to costs of living. It is therefore proposed that this group should receive a Pounds 1,500 childcare allowance which would not be offset against benefit.

Mature students are the main focus of lifelong learning and a system must support this group appropriately. Given the fact that many mature students have dependants, the support system should take into account the particular needs of a group for whom full-time study is often inappropriate. In view of the responsibilities of many mature students, it is recommended that they receive both childcare support at a comparable level to New Deal students and have a transitional benefit safeguard.

Students with disabilities face a complex situation, covering issues such as the need for specialist equipment or provision, transport costs and so on. Additionally, there are difficulties in the provision of the Disability Living Allowance. It is therefore proposed that all higher education students with disabilities should receive such allowance. We also propose the Scottish Higher Education Funding Council monitors provision for students with disabilities in higher education.

Introducing bursaries in higher education

Non-repayable government support should be targeted on those from low income backgrounds. Specific allowances should also be non-repayable. Other student support in higher education should be in the form of loans. Additionally, we propose a review of the means test, which should be made more progressive, such that at the top of the parental income scale, there is no entitlement to government support even in the form of a loan.

Students from low-income backgrounds require our priority

support. We propose that young adults from low-income backgrounds should be entitled to receive a non-repayable bursary of half the value of the support available to them, with the remainder in the form of loans. For some particularly disadvantaged students, this may not be sufficient. We therefore propose a Wider Access Bursary scheme. Particularly disadvantaged mature students may also require bursary support. We therefore propose a Mature Student Bursary scheme.

Wider Access Bursary scheme

A Wider Access Bursary scheme, administered by the universities and colleges, with guidance on criteria for allocating the funds set centrally offers the prospect of a locally administered scheme that targets effectively, not unlike the present arrangements in further education. Maximum resource should be made available to this important scheme. Only in this way will the universities and colleges help attract students from under-represented groups. While the local administration of the scheme should fall to the university and college, an important central role is to evaluate the schemes, as they develop, and promote best practice.

Mature Student Bursary scheme

A Mature Student Bursary scheme should be developed, which targets non-repayable support to particularly disadvantaged mature students. Limited information is available on the socio-economic background of mature students. Research should be commissioned to develop criteria for allocating bursaries at half the level of support available.

Tuition fees

Providing high quality courses inevitably requires funding. Graduates have been shown to benefit most from their education, both broadly and financially: the financial results of further education are less certain. Our research and the results of our consultation process emphasised the burden and inequity presented by the requirement to pay a contribution up front at the beginning of each year. On the basis of the guiding principles, the committee has concluded that tuition cost arrangements should be established on the following basis:

* A "mixed economy" of fees should be maintained, ranging from the full state funding of fees in further education to a flexible support package for part-time students and postgraduate students

* The abolition of up-front fees in full-time higher education

* The introduction of legislation to set up a Scottish Graduate Endowment

* The new system for higher education should be in place by October 2001, with transitional arrangements.

We propose the abolition of the up-front contribution to tuition fees in higher education paid by students, parents or spouses. This does not mean we propose any reduced funding to higher education institutions. We recommend that government makes up the shortfall. This will cost a net Pounds 12 million in cash terms.

The Scottish Graduate Endowment

We propose that legislation be brought before the Scottish Parliament to set up the Scottish Graduate Endowment, with a matching adjustment to the loan entitlement. This will be paid after graduation based on contractual undertakings given by undergraduates at the time of matriculation.

It is fair and equitable for all graduates to contribute to the endowment. Contributions to the Scottish Graduate Endowment would begin when income rose to above Pounds 25,000, with an overall total contribution of Pounds 3,075. The endowment would apply equally, irrespective of the degree course taken and the period of study. It would not apply to students completing their studies with an HNC or HND qualification. The contributions would be collected by our recommended successor to the Student Awards Agency for Scotland (SAAS) to ensure ease of administration. The new system should be in place by October 2001, with appropriate transitional arrangements.

We also recommend the establishment of the Scottish Graduate Endowment Foundation, which will have charitable status. The purpose of the foundation would be to provide support either to students or institutions in a manner consistent with the guiding principles. The foundation will receive voluntary contributions from prior beneficiaries of the higher education system, parents and others to assist successors to obtain similar benefits.

Administering and informing

For the further and higher education system to be truly accessible, its administration must be effective and efficient. Information on courses and funding should be freely available. We recognise the steps taken towards this by the Scottish Further Education Funding Council (SFEFC) and SAAS, especially the move to a "one stop shop" for higher education funding at SAAS. However, the decentralised system prevalent in further education also has extensive support, as was shown at many public hearings. We suggest that the way forward, preserving the best elements of these systems is to provide more consistent guidelines for further education.

We propose a new body, Student Finance Scotland. It will subsume SAAS and take on a range of new statutory responsibilities, to become the focal point for providing financial support to Scotland's students. In this way, we can help Scotland maximise opportunity for all.


Our recommendations will require additional resources from the Scottish Executive. We estimate these to be Pounds 62 million in cash terms, and Pounds 71 million in resource cost terms. These resources are an investment in Scotland's future.

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