Ministers ‘lose control’ of BIS budget

Ministers may cut student grants worth £350 million and reduce research funding by £215 million, according to a report of leaked documents

November 25, 2013

Ministers are considering cutting student grants worth £350 million and reducing research funding by £215 million, according to a report of leaked documents.

The Department for Business (BIS) is looking to plug a £1.4 billion hole in its finances, with huge cuts likely to take place before and after the 2015 general election, the Guardian reported.

Internal documents set out plans to convert £1,000 a year from the maximum £3,250 award received by each eligible student into repayable student loans after the next election, the paper said.

More than 500,000 students from lower income backgrounds would be hit by the plans, which eliminate about a quarter of the student grant budget, it added.

Students whose parents earn between £35,000 and £42,600 would likely lose all or most of their access to student grants under the plans reportedly drawn up by David Willetts, the universities and science minister.

According to the documents, BIS will have to find more than £570 million in savings and a further £860 million after the election, which will end the ring-fence around the UK’s science budget.

To save £215 million over two years, the science budget is expected to be cut by 2 per cent, the newspaper said.

Liam Byrne, shadow universities, science and skills minister, said “ministers have lost control of university finances and now the country’s students and science might pay the price”.

The memo reportedly admits the failure to apply student number controls to private colleges have contributed to budget pressures, with the budget for this area trebling to £175 million in one year.

A BIS spokesman said that it would not comment on leaks, adding that “a range of proposals are being considered but final decisions have not been made”.

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Reader's comments (1)

The real sadness is that these pages and many others were filled up by people quite sensibly pointing out the loan scheme was a sure fire overspender and not fit for purpose. The sale of the loan book confirms the desperate nature of finances at BIS. What really ticks me off, is no one every apologises, lessons are not learned. Instead because it belongs to politics we get Liam Byrne hyperbole and no doubt vapid 'We have more students than ever I wont apologise for etc' from Willetts. Meanwhile the simple issue of incompetence in the civil service is not faced.

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