French find surplus francs in kitty

In what the French education minister Francois Bayrou described as a "pleasant surprise", an extra Ffr3 billion (Pounds 337 million) has been found for student support.

The French government is committed to strict budget limits in order to meet the Maastricht criteria for a single currency, so no extra money was made available for the long-promised reform of the student support system.

Instead, an audit of all existing state-funded student aid was carried out by a former ministry finance director, Bernard Cieutat, and the extra money was "discovered" in the course of the exercise.

His findings were presented to the joint ministry-universities-unions committee set up to overhaul the way student support money is used. With 10 per cent extra money to redeploy, the committee has now achieved a far wider margin for manoeuvre.

The negotiating process had become tense, firstly because no new money was available, then because the ten-week wait for the audit was perceived by unions as a delaying tactic.

Instead of a delay, the unions now see the audit findings as a windfall. "This is positive. Instead of the Ffr23 billion we thought was available, there are Ffr26 billion. We are making proposals for transfers from tax breaks for parents to direct aid to students," said Guillaume Testa, delegate of the UNEF-ID student union on the committee.

The Pounds 140 tax cut for offspring in full-time higher education is being phased out. The student unions also want parents to lose further tax breaks which allow them to include student offspring in the calculation of numbers in the household which serves as the basis for French income tax.

"It is one of the most unfair types of student aid in social terms, with higher-income parents reaping most benefit. We want that to be scrapped too in favour of direct student aid," Mr Testa said.

The negotiating positions of the parties to the review of student support are still far apart. Although it has not yet made its position known, the government is opposed to the wide access to rent rebates that students fiercely defend.

The right to a rent rebate, given by the last Socialist government in its final days in office, has mushroomed in the past five years to become the single biggest direct aid to students.

Outstripping means-tested grants, which go to just 360,000 students - 18 per cent of the total student population - rent rebates worth an average Pounds 1,000 a year now go to over half a million students.

In his audit, Mr Cieutat notes that although the rent rebate is means-tested, "only student income is taken into account. When students can also rely on family income, that means-testing is more theoretical than real".

Family means testing could pare down the number of students getting the rent rebate but would be political dynamite. The last attempt to do so led to street demonstrations.