Cost of living: don’t bank on government support, UK sector told

UK universities have been put in a “tricky position” when considering their next moves to combat the student cost-of-living crisis as the Westminster government digs in its heels over requests for more funding.

Ministers have so far rebutted repeated pleas from the sector to provide targeted support for students – or tweak existing measures such as maintenance loans – meaning many will begin the new term after Christmas with less money than they need to get by.

Institutions have attempted to provide stop-gap support through hardship funding and – in some cases – one-off payments to cover bills for all students but face many competing demands for the diminishing amount of money available.

Policy experts told Times Higher Education they were sceptical that the government will come up with significant new funding, meaning many higher education institutions will have to reassess their priorities to do more to help students in the new year.

Andy Westwood, professor of government practice at the University of Manchester and a former adviser to Labour ministers, said cost-of-living support for students was probably “a fair way down the government’s agenda” and the recent Autumn Statement offered very little “wriggle room” for the Department for Education to act.

“That leaves universities in a tricky position as the new year begins and winter – and high inflation and energy costs – continues,” he added.

He said that the government would probably rely on the measures it has put in place for the population as a whole – such as a cap on energy bills – to have some effect on students, although many do not qualify for such support because of their living situations.

Some more targeted measures may be considered in the new year, Professor Westwood added, but the case will have to be “collectively and demonstrably” made for “some if not all” of the student population to benefit from this.

The Institute for Fiscal Studies (IFS) thinktank has highlighted how students’ maintenance loans – which are intended to cover living costs – have only risen in line with inflation forecasts from two years ago because of the way rises are calculated.

One way of providing more funding to students would be to correct this, the IFS has said, but Kate Ogden, a senior research economist at the organisation, said changes could only plausibly come for next year’s cohort, particularly because they will be the first to pay back loans for longer, meaning the government is likely to recoup more of this investment in time.

“One option to do something a bit sooner is to make the next two loan payments bigger,” she said. “I imagine that is difficult to implement in practice so there might be a bit of pushback on that.”

Another option, she said, would be to top up the amount given to universities’ hardship funds – as was done during the pandemic.

However, polling carried out by the Public First consultancy over the summer found little sympathy for the students’ cause among the general public, meaning that the government could decide to target funding elsewhere. Just 25 per cent of respondents said students were the group who will struggle with the cost of living the most, compared with 63 per cent who selected pensioners and 61 per cent who named families with young children.

Nick Hillman, director of the Higher Education Policy Institute, said that the right-of-centre government may decide other groups are a higher priority for support but he cautioned “this would be a mistake electorally as well as morally”.

“The Conservative Party has a problem among young voters they need to fix,” Mr Hillman said, adding that providing funding could also win support among parents who live in marginal seats. Furthermore, “the whole country loses if people cannot stay on their courses due to financial constraints”, he added.

Diana Beech, chief executive of London Higher and a former government adviser, said that universities “can only offer financial support for so long” and squeezes on their own budgets by fee freezes, rising operating costs and, in some cases, funding cuts were pushing them to “breaking point”.

A whole generation of students was at risk of being plunged into poverty, potentially leading to higher dropout rates and therefore depriving businesses of the highly skilled graduates they need, she added.

London was particularly badly affected, Dr Beech said, because whatever uplifts there have been – such as UK Research and Innovation’s 10 per cent extra for PhD stipends – have not included corresponding rises in London weighting, the extra money available to those in the capital that accounts for the high costs of living in the UK’s most expensive city.

“If DfE ministers remain unlikely to flex on student maintenance loans, then it is imperative the Treasury steps in to allocate emergency cost-of-living grants to universities to cover essential institutional support based on their respective student populations and demographics,” Dr Beech added.

tom.williams@timeshighereducation.com