Wednesday 23-11-2016 - 16:43
Earlier today, Phillip Hammond presented his first Autumn Statement as Chancellor of the Exchequer. We’ve pulled out the main headlines to give you a summary of how today’s announcements will affect students.
Each year, an Autumn Statement is delivered to update the country on the government’s plans for taxes and spending, and to update the UK’s economic forecast.
In a year rocked by the outcome of the EU referendum, the focus of today’s statement was seemingly on productivity and the future of the UK economy with Brexit looming.
Interestingly, today Phillip Hammond revealed that this will actually be the last of its kind – announcing that the Autumn Statement will be replaced with a Spring Statement and Autumn Budget.
While today’s Statement didn’t outline any major changes regarding higher or further education, the detail of the plans announced will have a long term impact on students.
Changes to the economy and inflation
The Chancellor outlined changes to the forecasts for the UK’s economic growth for the next five years, in part due to the result of the EU referendum and the depreciation of the pound. This was accompanied by changes to forecasts for rates of inflation under both the Retail Price Index (RPI) and RPI-X.
Under the government’s plans to increase university fees in line with inflation through the Teaching Excellence Framework (TEF), higher forecasts in the coming years for RPI(X) will mean a higher rise in fees than expected. RPI(X) will be the rate of inflation used to determine the TEF’s inflationary fee increase.
Meanwhile, higher RPI will also impact student loan repayments as the interest accruing on graduate’s student loans is linked to RPI.
The Autumn Statement revealed little to no detail on further education or plans for investment. The Chancellor confirmed that the Adult Education Budget and employment support services will be devolved in London to the Mayor, and that funding will be awarded to Local Enterprise Partnerships (LEPs), who will be involved in the delivery of the government’s Post-16 Skills Plan.
Beyond this news, further education was largely untouched by today’s Statement.
The Chancellor was more forthcoming with details on housing, announcing plans to provide more ‘affordable’ housing, to ban letting agents’ fees, and to launch a Housing White Paper and consultation.
In a shock move, Phillip Hammond also announced that this will be the last Autumn Statement: in the future, the Budget will happen in the Autumn, with only a ‘Spring statement’ at the beginning of the year – when annual Budgets have been previously announced.
What happens next?
There were no high profile announcements regarding education funding or investment today so the priority for further education and higher education students remains to make the case against sustained cuts to funding and grants that we have seen over several years.
The projections for RPI and RPI-X, and their respective impacts on student loan interest and tuition fees, make it all the more clear that the government’s plans for higher education must be resisted.
NUS will continue to campaign on the Higher Education and Research Bill as it makes its way from the House of Commons into the House of Lords.
The total absence of FE shows clearly why students must keep calling for government to put its money where its mouth is. With ongoing area reviews, the newly published Post-16 Skills Plan and the Technical and Further Education Bill, the government is quick to call FE and skills a national priority – and we can’t let them get away with doing nothing to make that a reality.
The announcement of a Housing White Paper and consultation on banning letting agents’ fees will give students and students’ unions the opportunity to submit their views about the state – and cost – of accommodation for students. NUS will support students and students’ unions to work on these when further details are revealed.
For further information, please contact Alexander Lee, Political Affairs and Advocacy Manager (firstname.lastname@example.org).