An odd footnote in the Spending Round
Buried away in Footnote 5 to Table A1 on page 59 of the Appendix to Osborne’s Spending Round, is the following statement:
Figures for [the Department of Business, Innovation and Skills] include the Resource and Budgeting charge for student loans, which is £2.9 billion in 2014-15 and £4.4 billion in 2015-16.
The ‘resource and budgeting’ charge is better known as the estimated loss on student loans recorded in accounts at time of issue. This year-on-year increase is so large that BIS’s overall expenditure budget actually increases from £17billion to £17.7bn.
You won’t see much trumpeting of this figure though since it undermines the claims to be putting HE finances on a ‘firm financial footing’.
Something else is a little rum too.
Neither of those figures is what was given to parliament in 2012: the estimated write-off for 2014/15 was then thought to be £3.3billion rising to £3.7bn in 2015/16 as annual tuition fee loans rise. (See p. 7 here )
So in the Spending Round footnote, one number looks too low and the other too high. And what should be a year-on-year increase of about £400million has turned into one of £1.5bn.
What might be going on here?
I can only guess, but perhaps the upwards revisions to write-offs that we have seen in recent months are being recorded in 2015/16 – postponed and thus inflating that figure – in order to improve the figures for 2014/15, when there’s an election to be fought.