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Student Finance

8. Simon Hughes (Southwark, North and Bermondsey) (LD): How much the average student loan taken out by students was in each London borough in the 2002–03 academic year. [154517]

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The Secretary of State for Education and Skills (Mr. Charles Clarke): On the basis of information provided by the Student Loans Company, the provisional average income-contingent student loan taken out by full-time students in the London borough of Southwark in the 2002–03 academic year was £3,900. I will write to the hon. Gentleman giving the average loan figures for other London boroughs, and place a copy of such information in the Library.

Simon Hughes : I am grateful to the Secretary of State for that reply. Those figures—and figures given by his right hon. Friend the Minister for Lifelong Learning, Further and Higher Education for last year for the whole region—show that students who are resident in inner-London graduate with a much higher level of debt than those living anywhere else, and that outer-London students are placed third in the league table. What will he do, therefore, to ensure that his current policy, with top-up fees included, does not inevitably result in students who live in London graduating with higher debt than those who live elsewhere? That would inevitably prove a disincentive to students' coming to, and staying at, universities in the capital.

Mr. Clarke: First, as I announced in the debate about this, the level of maintenance loans for students in London will be increased significantly. One of the main reasons why they get into debt now is the fact that they have to borrow to live, because their maintenance loans are insufficient to meet their costs. We are dealing with that, and what we are doing will make a very positive difference.

Secondly, the decision to abolish the up-front fee means that students will no longer have to borrow money on plastic, for instance, to pay a fee that, for whatever reason, their parents would not pay. That has been happening in many homes in London.

Both those moves represent a significant improvement for students in London.

Kali Mountford (Colne Valley) (Lab): People such as my constituents who want an education in London are not supported by their families in the same way as many who already live in London. Is it not important for loans and fees combined to reflect the actual cost of the education that they want? My right hon. Friend mentioned credit cards. The average cost of a credit card this Christmas was £6,500. The rate of repayment is what matters, and students should be made aware of the benefits of an interest-free, affordable rate.

Mr. Clarke: My hon. Friend is entirely right. First, we have addressed the up-front fee question. People have been getting into debt because it has not been addressed properly until now. Secondly, we have addressed the problem of the maintenance loan in London, thus reducing the pressure on those living there while receiving their education. Thirdly, as my hon. Friend pointed out, repayments after graduation will be made at a zero real rate of interest and through the tax system. That is a major improvement, at each stage, on the current state of affairs.

Mr. Tim Yeo (South Suffolk) (Con): Now that it is clear that the next generation of students will be

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burdened with a record level of debt because the Government broke their promise not to introduce top-up fees, may we be clear about what that means to universities? Will the Secretary of State confirm that just as the introduction of tuition fees five years later has left universities with less funding per student in real terms, the introduction of top-up fees will not increase universities' net income by a penny, because he has not persuaded the Treasury to increase his departmental limit? This is a policy that, uniquely, achieves the triple whammy of being bad for students, bad for universities and bad for taxpayers.

Mr. Clarke: What an extraordinary question. Perhaps the hon. Gentleman should spend a bit more time on his health or golfing responsibilities.

The fact is that there will be upwards of £1 billion of extra money coming into universities. Do not ask me; ask Universities UK, and ask every vice-chancellor. Vice-chancellors are telling Conservative Members, just as they are telling Labour Members, that they should support the Higher Education Bill because they know that the extra resource will make a difference to their universities. What must be borne in mind—and we will point this out every day between now and the next general election—is that the vote of the hon. Gentleman and his colleagues in the House the other day was a vote to take money away from universities and to damage them. We will not forget it; the country will not forget it.

Children's Fund

9. Norman Lamb (North Norfolk) (LD): If he will make a statement on the children's fund. [154518]

The Minister for Children (Margaret Hodge): The children's fund was allocated £450 million in the 2002 spending review. By September 2003, 302,000 children and families were using the services provided by the fund. However, efforts to ensure that all allocations were spent have resulted in a projected overspend. Reductions were therefore made in allocations for 2003–04 onwards.

Following my discussions with key stakeholders, we have taken action from 2003–04 to address the most difficult problems, and I am now urgently re-examining the allocations for next year. I expect to write to partnerships in the next few days.

Norman Lamb: I thank the Minister for that response, but how does she respond to the real anger and frustration felt locally at the far too late announcement of cuts to next year's funding allocation, which puts at risk the important work of groups such as Asperger Norfolk? Representatives of that organisation wrote to me expressing its dismay at the Government's announcement—it may result not only in jeopardising important work for children, but in redundancies—and the fact that it was made at such a late stage in the planning process for next year. Yesterday the Prime Minister confirmed that work was ongoing, so can the Minister offer any help to local groups and would she be prepared to meet a local delegation to hear directly about their concerns?

Margaret Hodge: I certainly understand the concerns expressed by Asperger Norfolk—I received a copy of a

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letter written to my right hon. Friend the Secretary of State—and by other voluntary organisations throughout the country. That is why we are urgently re-examining the allocations for 2004–05 to establish whether we can do any more to help. I would be happy to meet any delegations representing organisations from Norfolk to discuss their problems with them. I would also like to give an assurance that we greatly value the work of the voluntary sector in respect of the children's fund, which has been a successful programme. Such preventive work among a given group of children is precisely what we want to carry forward as we implement the Green Paper in the coming years.

Ms Sally Keeble (Northampton, North) (Lab): I accept the problems created for the programme by the underspend, but would my hon. Friend accept that, now the projects are under way and are spending up to profile, cuts that represent a quite small amount of overall Government spending will have profound implications for the ability of some of the projects to continue and to serve some extremely vulnerable children? The work is highly valued locally and many people are anxious to see it continue.

Margaret Hodge: Again, I am aware of problems in my hon. Friend's constituency, not least because she has talked to me about them. The projects are extremely important in providing a valuable contribution to the infrastructure and they are helping us to reach young people who could not be reached in other ways, thus preventing things from going wrong. That is precisely why I am having urgent discussions to see what we can do to help, and I hope to be able to write and inform the relevant authorities over the next few days.

Charles Hendry (Wealden) (Con): The Minister will recall the Chancellor saying:

How hollow that sounds now. Against that background, will the Minister meet representatives of national voluntary organisations that work with children to explain face to face why they have been told to brace themselves for cuts of up to 30 per cent. over the next couple of years? They could then explain to her that it will mean redundancies and even the closure of some programmes. Are the budget cuts the result of mismanagement, incompetence or because the money is being diverted to other spending commitments? Does it not show that, in spite of the Chancellor's fine words, there is less rather than more cash available and precious little care and compassion?

Margaret Hodge: I am in constant communication with all the national organisations. Indeed, just this morning I had a conversation with one of the national charities that is responsible for running several partnerships in the country. Although I understand and applaud the hon. Gentleman's current commitment to the role of the voluntary sector, it is rather sad to note that he was among the Members who opposed the Budget, which enabled the Chancellor to provide the moneys to set up the fund, which has been so successful. However, I accept that there are lessons that the

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Government need to learn from the administration of the fund. That is why I am currently in urgent discussions with my colleagues to establish how to sort out the current position in order to ensure that the contribution of the voluntary sector to the well-being of children can be sustained over the long term.

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