Budget reaction: What the experts say

Experts from the University of Sheffield give their reaction to Chancellor George Osborne's final Budget before the General Election, announced today (18 March 2015).

On plans to offer PhD and research-based Master’s students income-contingent loans of up to £25,000:

Dr Tony StrikeDr Tony Strike, Director of Planning, Strategy and Change at the University of Sheffield, said: “While access to loan funds is a welcome addition, we fear that the funding released from the National Scholarship Scheme which could have been used to support widening participation scholarships for those most able and least likely to progress will be lost with lending seen as the only solution and to the detriment of efforts to widen participation.

“Similarly, the announcement today to extend access to lending for postgraduate research students is to be welcomed if it provides options for students and does not threaten existing funding sources.”

On the introduction of an Apprenticeship Voucher, putting employers in control of the government funding for the training apprentices need:

He added: “The University of Sheffield is playing its part in becoming a provider of higher apprenticeships, providing choices and progression pathways into higher education and equipping people with the skills they need to compete in the labour market.

“Given our desire to create parity of esteem, we are concerned that the proposed separated funding and regulatory models between Higher Education Funding Council for England and the Skills Funding Agency could falsely divide these learners.

“The government, through the introduction of an Apprenticeship Voucher, will put employers in control of the government funding for the training apprentices need. The question is, do the universities and more importantly the learners have choices? HEFCE regulated undergraduate students, with funding from the Student Loan Company, will be studying part-time on programmes delivered through blended learning and work placements. They should be indistinguishable from and indeed learn alongside graduate apprentices on programmes meeting the new trail blazer standards, but the proposed separated regulation, quality assurance and funding models may divide groups who should be united.”

On the Help to Buy ISA:

Dr Alasdair RaeDr Alasdair Rae, Senior Lecturer in the Department of Town and Regional Planning, said: "The Chancellor's announcement in today's Budget of a new Help to Buy ISA was welcomed by many, but it's unlikely to make any serious inroads to the UK's housing crisis, much less do anything about housing inequalities. But that's not the point of the scheme.

“This is high-profile giveaway to wealthy younger voters, who are more likely to be prospective first time buyers currently locked out of the housing market. There is however a real danger here that the Help to Buy ISA will actually reinforce the problem it attempts to solve by increasing house prices rather than increasing supply, which is a much more important long-term goal.

“The new scheme allows savers to invest an initial £1,000 in an ISA followed by a £50 top-up from the government for every £200 saved. If someone saved £24,000, this would increase the total savings to £30,000, which is roughly the amount of the average deposit of first-time buyers in the South East, according to the Council of Mortgage Lenders, who today welcomed the announcement.

“In Greater London, with the average deposit now at nearly £70,000, and with savings capped at £200 a month, the scheme looks less promising than it does in the North West, where the average deposit in 2014 was £18,000. Saving up for a deposit of this size is out of the reach of most people, even with this new scheme.

“Overall, the Help to Buy ISA scheme has hit the headlines because it appears to offer hope to the millions of young people currently locked out of the housing market but this could come at the cost of hundreds of millions of pounds and without beginning to tackle the chronic supply problem that characterises the housing market in this country. A longer-term solution would be to divert the taxpayer cost of the Help to Buy ISA project into more broad-brush, supply-side housing policies which help stimulate house building across the entire country."

Views posted in comment articles are those of the author(s) and do not necessarily reflect the opinion of the University of Sheffield.