Phasing out of Government grant underlines need for new funding system

The UK Government has confirmed the final phase of its staged reduction of direct grants to The Open University.

Teaching grant in England fallen by 80%

Government support for students in England – paid through the teaching grant – has now fallen by 80 per cent since the university funding reforms of 2012. The latest reduction removes a further £10.6 million from the University’s income.

The Open University, in common with all higher education institutions operating in England, has been obliged to make up the shortfall by raising fees. The change has had a serious impact on student numbers because part-time students, who often have family and caring commitments or chronic health problems, have proved much more sensitive to the cost of study than school leavers.

‘Erosion’ in public subsidy

Prof Mary Kellett, Acting Vice-Chancellor of The Open University

Prof Mary Kellett, the acting Vice-Chancellor of The Open University, said: “We knew that a further cut in teaching grant in England was due this year and had factored it into our budget. This is funding for ‘transitional students’ – who started their studies prior to 2012 when fees were lower – and this transitional arrangement has now come to an end. Separately, we welcome the on-going allocation we have received recognising and funding our extensive work in attracting and supporting students from disadvantaged backgrounds.

“The loss of £10.6 million marks a further erosion in public subsidy that we believe has been a central factor in driving away students. The startling fall in part-time students in England coincided directly with the introduction of higher fees in 2012.

Part-time study has a vital role

Professor Kellett continues: “Stripping people of the ability to learn while they earn deprives them of the chance to improve their lives and deprives the economy of the skills needed to tackle our low productivity. We believe the UK Government should recognise the vital role of part-time study in training the workforce of the future and reverse the impact of fee rises in England.

“Stripping people of the ability to learn while they earn deprives them of the chance to improve their lives and deprives the economy of the skills needed to tackle our low productivity.”

“The Government says it values the role of part-time and flexible study. If so, it must urgently consider some form of ‘flexible learning incentive’ that would help bring down direct costs to students.”

How the teaching grant in England has reduced

Figures from the Higher Education Funding Council for England show the reduction in teaching grant in recent years.

A dramatic fall in overall OU student numbers from 240,000 to 174,000 coincides exactly with the introduction of the changes. The reforms did not apply to Wales, Scotland and Northern Ireland, which have not seen the sharp decline experienced in England.

As well as making the case in Whitehall for a return of some form of direct financial support to part-time students, the OU is implementing a plan to identify savings to help place itself on a firm and sustainable financial footing.