University degree
'Removing grants from higher and further education sectors represents major policy departure'iStock

The government is proposing to take grants away from around half a million of this country's most disadvantaged students and replace them with maintenance loans. It's a massive issue. Yet ministers are trying to shut down parliamentary scrutiny by introducing the changes through a type of secondary legislation that cannot be amended and requires no formal approval procedure in either the House of Commons or Lords.

Removing grants from the higher and further education sectors represents a major policy departure and should have been dealt with as primary legislation. However, this U-turn comes four years after grants for students from disadvantaged backgrounds were hailed by the government as an essential element in its higher education strategy. Something that helped to compensate for the loans many students take out to pay for their tripled tuition fees.

The government's own equality impact assessment, published in December 2015, shows this change will affect unfairly a huge swathe of students.

"Female students would be 'particularly affected by the freeze. BAME students would be disproportionately worse off."

Female students would be "particularly affected by the freeze to childcare grants, parents' learning allowances and DSAs [Disabled Students' Allowance] given their significant over representation in these populations". Black, Asian and minority ethnic (BAME) students would be disproportionately worse off. And older learners would be "disproportionately impacted by the policy proposals to remove the full maintenance grant and replace them with additional loans as well as the freezing of targeted grants".

The assessment also spells out the potential for discrimination because of religious beliefs, stating: "There is evidence to suggest that there are groups of Muslim students whose religion prohibits them from taking out an interest-bearing loan."

Removing grants makes even less sense when you consider the Institute for Fiscal Studies (IFS) conclusion that "this change won't improve government finances in the long-term".

Its recent report went on to say: "The replacement of maintenance grants will raise debt for the poorest students but do little to improve government finances in the long run. The net effect is to reduce government borrowing by around £270m per cohort in the long run in 2016 money – a 3% decline in the government's estimated contribution to higher education."

The government's decision to axe maintenance grants was not in the Conservative election manifesto. There was little or no consultation with the various representative bodies. And it did not commission any research on the issue from independent policy groups and think tanks.

"The Government decision to axe maintenance grants was not in the Conservative election manifesto."

It is clear however, as the IFS points out, that the rationale behind the change is political. The government will gain in the short term because current spending on grants counts towards current borrowing, while current spending on loans does not impact borrowing until the debt is written off. At the end of the 30-year repayment period.

The change helps Chancellor George Osborne balance the books in this Parliament, even though it will be at the cost of higher borrowing three decades into the future.

Next Monday evening (25 January) in the House of Lords, Labour will argue that students should not be paying for the government's financial shenanigans. If ministers care about educating our young people, economic growth and social mobility, they should think again.

The switch from grants to loans is a major change. At the very least, it warrants a proper and meaningful debate in Parliament.


Wilf Stevenson is a shadow business minister in the Lords, and speaks on trade matters, higher education and science, and also a shadow DCMS minister.