Scrapping parent tax breaks could fund university finance scheme

Monday 12 June 2017

Tax reliefs for parents with children in higher education could be scrapped in favour of direct funding for students if the government accepts recommendations from a damning report that revealed that Jersey spends less than most European countries on higher education.

At present, the majority of parents of children over 17 studying towards a three-year degree are entitled to an income tax break of £2,340 per annum over four years – a cumulative reduction of £9,360.

But an Education and Home Affairs Scrutiny report published in March argued that the system was an, “…indirect and poorly targeted method of assistance.”

In his response to the report, which comes over two months later, Treasury Minister Alan Maclean accepted that there were “limitations” to the current method, which does not offer any help to parents without a source of income but instead assists those, “…with the very highest income who do not require any form of financial assistance from the States in order to send their children on to higher education.”

But while he stated that he would “in principle” be prepared to phase out the allowance, this will only happen on the condition that a, “…broader solution for assisting with the costs of higher education” is identified by the government.

This “solution” is expected to be brought by the Higher Education sub-committee, which was apparently formed last year and includes Education Minister Rod Bryans and Chief Minister Ian Gorst. But in more than 11 weeks since Scrutiny published their findings, neither party provided a formal reply, for which they were heavily criticised by a lobby group of parents and students.

Pictured: Education Minister Rod Bryans published his formal response to the damning Education and Home Affairs Scrutiny Panel report last week - five weeks more than the customary time of six weeks later.

That criticism continued into last week's States Assembly meeting, in which several deputies challenged Senator Gorst over the committee’s “woefully slow response.”

But the Chief Minister maintained that the sub-committee were “making progress” despite having only had two meetings, and were investigating student loans, bursaries, student saving schemes and easier access to EU universities. 

Those comments were partially reiterated in the official reply of the Education Minister Rod Bryans, who made no formal commitments with regards to new or alternative funding options, stating that many families with lower incomes were already, “…grateful for the assistance they receive through the current grant system” and that the debt associated with a loan scheme may act as a “deterrent.”

He also confirmed that no meetings had taken place “at a political level” with regards to allowing island students access to the UK loan scheme, whereby students are entitled to full funding and pay it back via a “graduate tax” on their income when they reach the £21,000 annual salary threshold.

Despite this, Deputy Bryans pointed out that correspondence was being “drafted as part of the Island’s Brexit negotiations””, requesting that Jersey – like other British Overseas Territories – should be permitted to access this scheme.

While the Jersey Student Loans Support Group declined to comment officially while they considered their response, the pressure group expressed initial concerns on social media over the Chief Minister’s comments in the States, observing: “Again delays, and 'looking at' are features of Chief Min replies.”