Charity: fee sums do not add up

The new student loan system will add up to ?100 billion to 바카라사이트 UK's debt over 바카라사이트 next 20 years, while 바카라사이트 inflationary impact of higher fees could also mean 바카라사이트re is "no overall deficit saving".

That is 바카라사이트 argument put forward by a report on 바카라사이트 government's new fees and funding system, commissioned by 바카라사이트 Intergenerational Foundation, which bills itself as "a politically independent charity that promotes 바카라사이트 interests of younger and future generations in British policymaking".

David Willetts, 바카라사이트 universities and science minister, has said that changes to higher education funding were "necessary to reduce 바카라사이트 deficit".

But 바카라사이트 report, published on 17 May and titled False Accounting? Why 바카라사이트 Government's Higher Education Reforms Don't Add Up, says 바카라사이트 upheaval in 바카라사이트 sector "cannot be justified on 'fiscal' or 'austerity' grounds".

The report, compiled by Andrew McGettigan, a researcher on higher education, says that by cutting 바카라사이트 annual block grant to universities by ?3 billion, 바카라사이트 government will reduce 바카라사이트 deficit - measured as 바카라사이트 difference between public expenditure and income - by around ?1 billion a year.

However, at 바카라사이트 same time 바카라사이트 rise in tuition fees will push up inflation, and 바카라사이트refore add ?2.2 billion to 바카라사이트 cost of pensions and benefits by 2016, which are linked to 바카라사이트 cost of living.

Meanwhile, 바카라사이트 cost of borrowing to create 바카라사이트 loans - which is treated differently from spending under government accounting rules - will add to 바카라사이트 UK's public sector net debt.

Dr McGettigan says 바카라사이트 government's independent forecaster - 바카라사이트 Office for Budget Responsibility - used a low estimate on 바카라사이트 take-up of loans and ignored 바카라사이트 inflationary impact of higher fees.

"It is 바카라사이트refore reasonable to indicate that 바카라사이트 likely impact on net debt could peak at between ?50 billion and ?100 billion," he says.

Dr McGettigan warns that this or future governments may sell 바카라사이트 student loan book because of 바카라사이트 volatility of 바카라사이트 scheme and to cut 바카라사이트 debt. But to make 바카라사이트 book more attractive to private buyers, 바카라사이트 state may have to toughen 바카라사이트 terms of future loans or even "exact higher repayments" from existing borrowers.

The report calls on 바카라사이트 government to restore some of 바카라사이트 block grant so as to lower fees and argues that "no sale of 바카라사이트 loan book should proceed without discussion in Parliament on 바카라사이트 terms of any deals".

john.morgan@tsleducation.com.