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SNP breaks promise on student debt
John Swinney announces council tax freeze but first SNP budget ditches promise to scrap student debt
Sarah Clark Anonymous
Monday, 19 November, 2007 | 10:10
Salmond swinney AP picture SNP budget

Students in Scotland have expressed dismay after the SNP shelved plans to scrap student debt.

Nationalist finance minister John Swinney announced last Wednesday that the government would not deliver its manifesto promise to eliminate the debt accrued by students.

The news was delivered at Holyrood as part of the SNP's first budget since the party came to power in the elections last May. The conference saw the government drop a number of key election promises which had comprised their manifesto for the Scottish Parliamentary Election.

While funding for free prescription charges, a tax cut for smaller businesses and NHS waiting list guarantees were approved, the SNP's pledge to cancel student debt was relinquished.

The SNP had previously promised Scottish students that the £1.9 billion package of debt held by the Student Loans Company Scotland would be cancelled.

Student leaders in Scotland expressed deep concern for this turnaround in government policy that will see the £1.9 billion debt remain unaffected. They claimed that the SNP's failure to deliver the promised financial support will have a damaging impact on Scottish students.

James Alexander, President of the National Union of Students (NUS) Scotland said: “Promises of more support for students, which formed a central part of the SNP’s election campaign, have not been met.

“The SNP’s costed manifesto promised £236 million to cover graduate debt payments, to transfer student loans to grants, and to abolish the graduate endowment."

He continued: "Large proportions of students from Scotland experience high levels of debt and endure extreme hardship. They need the endorsement of the Scottish government to assist in resolving these difficulties."

Edinburgh’s student unions have been working with NUS Scotland on the Final Demand campaign, designed to put pressure on the government to improve student support, drop student debt, cut course costs and improve access to further and higher education.

But in a speech to the Scottish Executive, John Swinney said: "I know there is insufficient parliamentary support for student debt servicing for loans to grants and we must therefore prioritise funding on policies that we can deliver and which will be supported by Parliament.

"I am therefore not allocating funding for student debt servicing in the period of the Budget.

"However, despite the constraints we face, we will deliver funding for a phased transition from student loans to grants, starting with part-time students."

Despite the short-term reduction in funding for the sector, the SNP emphasised that Scotland's higher education institutions remain a priority for the party.

Fiona Hyslop, Education and Lifelong Learning Secretary, outlined the SNP's long-term plans for higher education funding. In a statement last week, she said: "Scotland's universities and colleges are central to that sustainable economic growth.

"We will invest £5.24 billion in total in Scotland's further and higher education, with an extra £100 million capital funding package in 2007/08.

"We will deliver support for students of £1.55 billion over three years with £119 million to end the graduate endowment fee and a phased transition from student loans to grants starting with part-time students."

But Labour MSPs have criticised the SNP for breaking their promise to abolish student debt.

Labour finance spokesman Iain Gray commented: "For 18 months the SNP told Scottish students that it would write off their debt immediately. This pledge took Mr Swinney 18 seconds to ditch this afternoon."

The government’s retraction has illustrated the importance of the student-led Final Demand campaign in influencing the Scottish government to increase student funding.

Whilst Scotland's higher education institutions were disappointed by the allocated funding, other sectors fared considerably better. One particular highlight of the budget was the announcement that council taxes would be frozen at their current rates.

Mr Swinney gave the budget speech having agreed a ground-breaking "concordat" with the Convention of Scottish Local Authorities (COSLA).

This deal does not fully guarantee a council tax freeze, but the signatures on the agreement from the five presidents of COSLA carry considerable weight.

In return for this deal, 32 local authorities were promised up to £500m in extra funding over the next year.

Tory finance spokesman Derek Brownlee called for the local government deal to be fully assessed so that the council tax freeze would not affect spending on services.

If the agreement was fully ratified by all 32 local councils, rates would be frozen for three years, representing a real-term cut of 2.7 per cent per year.

In other areas, the drugs rehabilitation budget was cut, as well as the amount set aside for affordable housing.

The budget included a pledge to generate 50 per cent of power from renewable sources by 2020.

Mr Swinney also laid out plans to increase public sector efficiency saving from 1.5 per cent to 2.5 per cent.

Sources close to Mr Swinney have admitted that the efficiency savings were needed to balance the budget because resources were so tight.

The Finance Secretary blamed the cuts on a tight financial settlement from the UK treasury. He said: “We are in a tough financial climate and we will not be able to deliver on all our commitments just as we would have liked."

He added: "With investment in our public services, matched by lower and fairer tax, I believe this budget meets the aspirations of the people.”


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