HIGHER EDUCATION COSTS (Hansard, 23 November 1994)

Lord Lucas

The Government's plans allow for around 1 million full-time home and EC students on higher education courses in the UK in 1994–95. An increase or decrease of 5 per cent. in that figure would change it by around 50,000. It is not possible to estimate the precise effects of such a change on public expenditure.

At current average unit costs and current assumptions about the proportion of mandatory award holders and levels of take up of student loans, expenditure on student support would increase or decrease by around £175 million. There could also be knock-on effects on social security budgets.

Assuming that unit funding through the Higher Education Funding Councils and the Department for Education, Northern Ireland is the same as unit funding through the Higher Education Funding Council for England, and that block grant to higher education institutions would change in line with student numbers, the implied change in block grants would be around £150 million—£200 million. In practice, institutions might be able to make efficiency gains if student numbers were increasing and there could be diseconomies of scale if student numbers were reduced. Changes in student numbers could also have implications for capital expenditure. The Government's public expenditure plans for higher education for 1995–96 onwards will be announced in the Budget.

My right honourable friend the Secretary of State for Education, is currently undertaking a review of higher education. The initial stage of the review is concerned primarily with questions about the size and shape of higher education. I know that the Secretary of State wishes to take fully into account the views of those who have an interest in the development of higher education and that she would be pleased to hear from the noble Lord. I am sending him a copy of the announcement of the review.