Hansard

With your permission, Presiding Officer, I will make a statement on the partnership response to the Cubie committee proposals on student funding.

In our "Partnership for Scotland" document, the Executive agreed that it was our policy to widen access to further and higher education. Although higher education expanded rapidly over the early 1990s, the result was a continuing social divide.

More than half of youngsters and others from wealthy families go into higher education. Although we welcome such participation, we recognise that a national shame remains. The stark reality is that only 10 per cent of youngsters from our lowest income groups make their way into higher education. That legacy cannot last in a modern Scotland, and the situation must be improved if we are to deliver social justice and to build a knowledge economy for all Scotland's people.

Of course, concerns were raised about student fees and students' financial difficulties, which is why the independent committee of inquiry into student finance was established by Parliament last year. Its report set out some important guiding principles, which were widely endorsed in consultation and are fully in line with our intention to widen access to further and higher education and our general aim, supported by the Parliament, of achieving social justice.

Those principles suggested that student support should

"maximise opportunity for all"

to access high-quality lifelong learning, and

"promote social inclusion, the knowledge economy and an enhanced civil society".

The committee made 52 recommendations covering a wide range of matters that I will not cover today. I am sure that members are familiar with its main conclusions.

In our response, we followed the committee's guiding principles very closely. However, it was not constrained, as we were, by affordability. We had to judge the recommendations against the Executive's other priorities. We had to ensure that funding was available for the growing number of students over the coming years and for the quality of education to be maintained.

Our response is framed around a package of measures that are affordable, fair and focused. It is designed to widen access to higher education for groups that are currently under-represented and to promote lifelong learning through helping mature students. No student should have more debt at the end of his or her course than under the present scheme and many will have reduced debt.

Our main proposals are as follows. First, tuition fees should be abolished from this autumn. The Scottish Executive will make up the £42 million shortfall in university and college incomes. That is vital for continuity.

From 2001, access payments of up to £2,000 a year will be focused on students who need support most while studying—those from low-income groups. We have agreed that young students from low-income groups deserve and should have more support. Around 10,000 young students will receive an access payment of £2,000 a year. The combined payment and loan entitlement means that for those students there will be support while they are studying of £4,135 per year. Taking account of adjustments in loan entitlement, they will be better off when they most need support and also will have significantly reduced debts on graduation.

Approximately 5,000 further students will also benefit from improved support while studying. All other young students will have no more debt at graduation than at present, even taking into account the payment of the graduate endowment. Mature students will also benefit from a wider access bursary fund of £10 million, as well as their existing loan entitlement.

A graduate endowment will be established, to which graduates will contribute. It will help to fund more maintenance for student groups that are currently under-represented in higher education. The endowment will be set at £2,000. As an incentive to participation, those exempted from payment of the endowment will include mature students, lone parents, students with disabilities and students on higher national certificate or higher national diploma courses. That will bring the total of those exempt to 50 per cent.

Under the Cubie committee's proposals, all graduates would pay an endowment and some could have increased debt at the end of their course. We tackled that risk as a priority. We propose that mature students will be exempt and will all share in a £10 million bursary fund. Young students will pay the endowment, but no student will have more debt on graduation than they would have under the present arrangements. The committee's proposals included bursaries for students from families earning up to £23,000. We agree with that as a means to keep a graduate's debt down.

Most students will have less debt on graduation. Those from the least well-off families will get the greatest help through access payments. For example, young students from families earning under £10,000 will get £8,000 in non-repayable support over a four-year degree course. Even if they borrow the extra £2,000 in loan entitlement that we propose, taking the graduate endowment into account, they will still have £4,000 less debt than under the present scheme. Even those from middle-income groups, for example £20,000 a year, will see a marginal reduction in debt.

With that secure, our decision was that we should avoid the creation of a new body to collect the endowment. We propose to use the existing student loan system. Payments are income- related, so graduates will pay according to what they earn, not what they owe. Paying the endowment that way means that monthly payments will not be different from those under the current scheme; as we are keeping debt at least as low as at current levels, nobody will end up paying for a longer period.

Over the next few weeks, I will be meeting student groups, to explain to them how the system will work and what its advantages are.

We are putting more money into the further education sector. We will align the system with the higher education means test and weekly support levels, and ensure that full-time further education students have their fees paid.

We have not accepted the recommendation for an across-the-board increase in support levels. It cannot be afforded and we have chosen to target the increase at the least well-off. The parental contributions for some better-off families might increase, as against the current position, but all students will have a minimum loan entitlement of £750. That is in contrast to the Cubie committee's recommendation, which would have removed the loan entitlement completely for students from higher-income families.

We were aware that any scheme that paid the

fees of Scots students would also need to benefit European Union students in Scotland. We carefully considered whether it would be sensible to extend the arrangements to Scots who wished to study at universities or colleges elsewhere in the United Kingdom. We concluded, on the best information available, that there was a serious risk of successful challenge on the ground of discrimination against EU nationals attending UK institutions outwith Scotland. That advice applies to the committee's own recommendations and to any other schemes—from the Conservatives or from the Scottish National party—to pay tuition fees or bursaries to pay fees.

We stress that any Scottish student studying at a college or a university elsewhere in the UK would be no worse off than under present arrangements. A student from a low-income family would be exempt from fees and would not be required to contribute to the graduate endowment. On present figures, about 37 per cent of the 5,900 Scottish students studying in other parts of the UK are exempt from tuition fees.

Aside from the abolition of fees, the new arrangements will begin in 2001. As a result, around £50 million extra funding will go into student support in a full year. In this financial year—2000-01—the net cost will be about £18 million. The funds required for the new arrangements will have to be found from within the Scottish block. In the first instance, they will be sought from the funds of the enterprise and lifelong learning department. That necessarily will involve difficult choices.

We will respond fully to the committee's other recommendations in the spring. That will include further details of the way in which our proposals will be implemented. We will undertake information gathering, consultation and discussion with those who will be affected by, and will benefit from, those measures. We need to ensure fair transitional arrangements for students who are already studying. When we have done so, I will ask the Enterprise and Lifelong Learning Committee to consider my report.

The Cubie committee produced an excellent report. It set a new direction in student support and new principles that we can whole-heartedly endorse. In an ideal world, we could look at all of the committee's recommendations. However, our response has to take into account our other priorities. We have chosen the path that focuses resources on the groups that need them: the equity groups identified by the committee.

The committee's three main areas have been accepted: tuition fees will be abolished; bursaries, targeted at low-income students, will be introduced; and a graduate endowment will be introduced, to fund the support of future students.

In addition—and I wish to emphasise this—mature students, lone parents, disabled students and those taking HNCs and HNDs will be exempt from paying the graduate endowment. No student will have more debt at the end of their course and graduates will pay no more a month in loan and endowment than they do at present.

Our proposals are designed to meet our social values and the standards of our world-class higher education system. I commend them to the Scottish Parliament and to the people of Scotland.