Budget Report 2015: How Does It Affect Bangor?


On July 8th, Chancellor of the Exchequer George Osborne presented his budget to parliament. This is the first Tory budget without Lid Dem input since 2010, and the second of the year. Undoubtedly, this budget will have an effect on the students of Bangor; past, present and future. We at Seren have combed through over 100 pages of statistics, numbers, and political thinkspeak to bring you the Budget for Bangor, demonstrating how the Budget will impact our students.

The Good News

  • “The government has […] committed for the first time to remove the cap on student numbers, enabling thousands more students to enjoy the returns that higher education brings.” – Allowing universities to place their own caps on student numbers will undoubtedly benefit young people interested in academic vocations.
  • “The government will deliver on the science capital commitment, investing £6.9 billion up to 2021 in infrastructure to investigate the great challenges of today, whether domestic, international or in space.” – This investment should, in theory, benefit universities by enabling them to fund more scientific research. However, the fund is not solely intended for universities, and will also be allocated towards cities and corporations.
  • “The government will also introduce new Regius Professorships in order to recognise excellence in universities across the UK.” – Rewarding excellence in academia is never a bad thing, although it is important to note that this measure will cost the government barely anything to implement.
  • “Maintenance […] support will rise for students from low and middle income backgrounds up to £8,200 a year for those who are studying away from home, outside London. This is the highest level ever. “ – This will undoubtedly be a boon to students struggling with living costs though, as our next point proves, this measure may not exactly be a benefit for students in the long term.

The Bad News

  • “The government must […] ask graduates to meet more of the cost of their degrees once they are earning. From the 2016-17 academic year, maintenance grants will be replaced with maintenance loans for new students from England, paid back only when their earnings exceed £21,000 a year, saving £2.5 billion by 2020-21. “ – Let’s put this in real, cash, terms. Currently, a student from a low income household from outside of Wales will graduate with £38586 worth of debt after 3 years (and that’s without interest.) Welsh students under the current system graduate with less debt (£19,296).
  • However, following these changes, these numbers will skyrocket. An additional £24,600 of debt will be heaped upon low-income students.
  • There are two very small silver linings. One is that this decision won’t affect current undergraduate students. Another is that the changes might not affect students from outside England, given than Higher Education Funding is currently devolved. However, that will be of little consolation to English students starting university this September.
  • It doesn’t seem like a great long-term move for the government either. By increasing the maintenance amount and changing it over to a repayment based system, the government will almost certainly lose money as thousands of such loans are written off, along with their accumulated interest. As a short-term cash injection, it looks to be effective, but the long-term effects are startling.
  • “[A]llowing institutions offering high teaching quality to increase their tuition fees in line with inflation from 2017-18” – And it gets worse. Inflation tends to hover around 1.5%-2.0% a year, though we have had low inflation for the past couple of years. An increase of 2% may seem small, but in real cash terms it’s £180 for a £9000 course. And interest accumulates; by the end of the current Tory government, tuition fees could conceivably be £9550.
  • “[The government] expects to sell the first tranche of the pre-Browne income contingent repayment student loan book.” – While this move doesn’t affect current students, it’s important to make a note of it. To put it in basic terms, the government is selling off the student loans accumulated by those who began studying between 1998 and 2011. The government, if the sell these loans, will sell them at a loss to private loan companies in an attempt to raise some quick cash. It’s interesting to us because it gives us an idea of what might happen to our loans over the next few years.

Work and Wages

  • “For younger workers, the priority is to secure work and gain experience, which is already reflected in the existing NMW [National Minimum Wage] rate structure. In order to maximise the opportunities for younger workers to gain that experience, the NLW [National Living Wage] will only apply to workers aged 25 and over. The wages of younger workers will continue to be underpinned by the core NMW.” – People under 25 will not benefit from the newly introduced National Living Wage, which will increase the wages of the lowest paid to over £9. The government emphasised that such a movement will in fact benefit under-25s, as it will provide an incentive for employers. This feels like a slightly hollow sentiment, considering that youth unemployment rates are the worst they’ve been for 20 years, despite the current gap in minimum wage.
  • “The government believes that people working 30 hours a week on the lowest pay (the NMW) should not pay income tax.” – Good news for the part-time workers among you; the government plan to introduce legislation that would get rid of income tax for part-time workers completely.


  • “The government will legislate to freeze working-age benefits, including tax credits and the Local Housing Allowances, for 4 years from 2016-17 to 2019-20.” – Pretty simple; benefits for non-pensioners will be frozen until 2020.
  • “From April 2016, the government will reduce the level of earnings at which a household’s tax credits and Universal Credit award starts to be withdrawn for every extra pound earned.” – Another cut which will disproportionately affect those entering the workforce for the first-time .
  • “To help young people move into and get on in work, the Budget will introduce a new Youth Obligation for 18 to 21 year olds on Universal Credit. From April 2017, young people will participate in an intensive regime of support from day 1 of their benefit claim, and after 6 months they will be expected to apply for an apprenticeship or traineeships, gain work-based skills, or go on a mandatory work placement to give them the skills they need to move into sustainable employment.” – These new measures will apply to many graduating students. The success of such a measure, as always, depends on the competence levels of those who implement such measures.. In the right hands this could be an effective technique to get young people into work. In the wrong hands, it could be exploitative (making young people work for far less than minimum wage under the guise of “work experience.”)
  • “To prevent young people slipping straight into a life on benefits, from April 2017 the Budget will also remove the automatic entitlement to housing support for new claims in Universal Credit from 18-21 year olds who are out of work.” – Another measure that will affect many graduating students.

Devolution and the EU

  • “The government has a clear plan of reform, renegotiation and referendum, to make the EU a source of growth, jobs, innovation and success. The EU must make sure the interests of both those inside and outside the euro area are fairly balanced. The single currency is not for all member states in the EU, but the single market and the EU as a whole must work for all.“ – Good new for EU students. Given the emphasis that the budget places on EU membership, it seems unlikely that the government will be pushing a ‘Leave the EU’ agenda at the coming referendum.
  • “The government is committed to taking forward the St David’s Day agreement for Wales to the timetable set out in the Command Paper. This includes implementing a funding floor at the Spending Review in the expectation that the Welsh Government holds a referendum on the devolution of income tax. “ – Given that the Welsh government has a history of supporting Welsh domiciled students with non-repayable grants, this could be a major positive for Welsh students, and may mitigate the effects of the new Maintenance loan scheme.

Housing and Transport

  • “The government will restrict the relief on finance costs that landlords of residential property can get to the basic rate of income tax. The restriction will be phased in over 4 years, starting from April 2017. “ – Costs for private landlords will go up after 2017, and it seems likely that tenants will have to foot the cost. This is another measure which will affect students, as they rely on private landlords for their housing.
  • “[The government will increase] the standard rate of insurance premium tax from 6% to 9.5%, and extends the time before a car needs its first MOT test from 3 years to 4.” – While the rise in insurance premium tax is aimed the insurance companies, the extra costs will likely be passed on to consumers. The increased time for MOTs is obviously meant to alleviate these costs, but it’s likely to help younger students much, considering that they rarely have the financial means to purchase brand new cars.

About Author

Emily Houlston-Jones

News Editor 2014/15, 2013/14

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