Ministers' row delays review of student finance

A much-trumpeted review of student finance has been severely delayed by disputes between ministers.

A much-trumpeted review of student finance has been severely delayed by disputes between ministers.

The package of reforms, originally due to have been announced early in the new year, will be delayed for several months. The earliest any changes can be implemented is in the autumn of 2003.

The hold-up has been caused by the Prime Minister, the Treasury and the Department for Education and Skills wrangling over the way forward.

The Treasury wants the cost of any package to be paid for with existing funds, with students paying back any increase in their funding after they start to earn. However, the idea of a graduate tax – such as the one that operates in Australia – is said to be off the agenda because it is considered deeply unpopular with Middle England, which would regard it as an extra tax.

A suggestion from the Department for Education and Skills, backed by Estelle Morris, the Secretary of State for Education, that maintenance grants should be restored has been scuppered because of the extra cost to the Treasury.

Scrapping tuition fees altogether is also considered too costly. Universities estimate it would lose them at least £400m a year in funding.

Ministers have opposed any attempt by the more popular universities to bring in top-up fees for students.

The review was announced by Tony Blair at the Labour party conference, prompted by the number of complaints about the cost of higher education encountered during the general election campaign.