Sir Ron fears

September 5, 1997

Sir Ron Dearing said this week that his committee proposed student fees because of the need for extra cash in higher education.

"For the money not to come to higher education would be a denial of one of the major recommendations of my committee," he said. "We were appointed because of the recognition of huge problems in the sector. Indeed our terms of reference were specifically to address them.

"If the money is not coming to higher education the Government faces a major problem because all three political parties have stated that no more taxpayers' money can go to higher education."

Two senior education economists will tell the House of Commons select committee on education later this month that the Government's plans for university funding will bring "not a single extra brass farthing" to the sector unless there is a fundamental change to national accounting rules.

Iain Crawford, research associate at the London School of Economics and Nick Barr, LSE senior lecturer, will tell the committee on September 23 that the new university funding plans - student tuition fees and the abolition of the student grant - will be fruitless unless student loans are removed from the Public Sector Borrowing Requirement.

Under national accounting rules dismissed by Barr and Crawford as "arcane and ridiculous", all student loans are classified as public expenditure, as if they were grants.

Universities are still pinning their hopes for more money on tweaks to departmental budgets in the Government's ongoing Comprehensive Spending Review. But Mr Crawford dismisses such hopes as a scramble for "petty cash". "But next year loans could amount to Pounds 20 billion. Everything else is just twiddling about on the margins and comes nowhere near the sort of cash shortfall Dearing identified", he said.

The Treasury has also made it clear that the Comprehensive Spending Review will not be completed until July 1998. A Treasury group will meet throughout the autumn to discuss the progress of the review, but there will be no autumn statement.

A Treasury spokesman said: "The overall spending for 1998/99 and the amount going to each department has already been set."

More money could come from the reserves, from reallocations within departments and from changes in inflation - but few believe that such money would make its way to higher education.

from the Public Sector Borrowing Requirement.

Under national accounting rules dismissed by Barr and Crawford as "arcane and ridiculous", all student loans are classified as public expenditure, as if they were grants.

Universities are still pinning their hopes for more money on tweaks to departmental budgets in the Government's ongoing Comprehensive Spending Review. But Mr Crawford dismisses such hopes as a scramble for "petty cash".

"But next year loans could amount to Pounds 20 billion. Everything else is just twiddling about on the margins and comes nowhere near the sort of cash shortfall Dearing identified", he said.

The Treasury has also made it clear that the Comprehensive Spending Review will not be completed until July 1998. A Treasury group will meet throughout the autumn to discuss the progress of the review, but there will be no autumn statement.

A Treasury spokesman said: "The overall spending for 1998/99 and the amount going to each department has already been set."

More money could come from the reserves, from reallocations within departments and from changes in inflation - but few believe that such money would make its way to higher education.

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