“Logical flow-throughs” – is expansion funded by a sale? (redux)

Plashing Vole has shared some correspondence with Wolverhampton MP, Paul Uppal, relating to higher education and student loans. Uppal is David Willetts’s parliamentary private secretary, which makes one particular paragraph extremely interesting.

Regarding the proposed programme of student loan sales, Uppal writes:

Current market conditions are favourable and BIS advisors have confirmed there is potential interest from a range of buyers in investing in the loan book. This has informed the estimates of potential proceeds of approximately £12 billion over a five year period. It has been calculated that the additional outline of loans for the expansion of students numbers over the forecast period will be more than financed by proceeds from pre-2012 loan sales. If the sale of the loan book does not go ahead or does not provide the expected receipts, The Treasury will need to consider the impact on public sector net debt. This will be a wider consideration of the state of the public finances, but will include the affordability of higher student numbers.

You might want to compare the final sentences with what was recorded at the BIS Committee in January with Willetts in attendance as a witness and a senior civil servant from his department answering here:

Q113   Chair: Can I get it clear?  You are saying that the Treasury has agreed to underwrite this policy [expansion of student undergraduate numbers] irrespective of the sale of the student loan book.

Matthew Hilton: It would be fair to say that the Treasury do intend to underwrite this policy. If there is a shock to their expected budgets that changes some of the planning that they have in hand, we would have to sit down and talk to them, as would any Department; but there is no logical flow through from a decision on the loan book [sale] to a decision on the expansion of HE budgets.

Chair: So that could considerably alter Treasury expenditure projections. …

It’s obviously all hedged and garbled, but doesn’t Uppal’s statement about the ‘affordability of higher student numbers’, and its reconsideration in light of a weak sale or no sale, contradict the idea that ‘there is no logical flow through from a decision on the loan book to a decision on the expansion of HE budgets’?