17 December 2018 
Matt Sisson, Projects and Membership Manager
The big sector news this week is the ONS report on the government’s accounting treatment of student loans. The statistics authority has concluded that, as there is such a large proportion of the loan that will be written off, it cannot all be counted as a loan on the government’s books. Instead it must be split, with the amount expected to remain unpaid to be recorded as current year expenditure, rather than lending.
As the ONS’ David Bailey indicates, “our new approach will lead to the deficit being increased by approximately 0.6 percentage points of GDP a year, which equates to around £12 billion in the current year”. However, there is still a considerable degree of uncertainty as to exactly how this will impact government accounts, as it is still dependent on estimations of expected loan repayments in 2040 and beyond, as well as on any changes to government policy on the student funding system, expected from the Augar review in 2019.
As always there is a wealth of coverage on where this leaves the HE sector. Here’s a round-up article from the BBC, with a bit more depth from the FT. Andrew McGettigan takes the analysis up another level in an excellent long-read on Wonkhe, while the resident team look at the potential implications for the sector. One such issue is how the changes muddy the waters of universities public-funding thresholds. David Hansom, Partner at law firm Clyde and Co takes a brief look.
