What is the Financial Contingency Fund?
The Financial Contingency Fund is a pot of money given by the Welsh Government to Universities to offer discretionary funding to vulnerable students in times of financial hardship.
The total budget from the government is £2.1million.
The Financial Contingency Fund is used to provide financial assistance to students who need extra help to meet costs which can’t be met from other sources of funding; to provide emergency payments during unexpected crises; and to assist in cases where a student may be considering leaving their course of study because of financial problems.
Who typically receives it?
This funding directly targets vulnerable students or ‘priority groups’ - people returning to learning, disabled people, students from low-income backgrounds and vulnerable students who face funding crises not of their own making.
The Financial Contingency Fund is also typically accessed by those who cannot rely on other forms of financial assistance, for example parental support.
9 per cent of students in Wales currently rely on discretionary funding such as the FCF, according to the recent NUS Wales research Pound in Your Pocket.
For these students, the funding is a vital lifeline that supports them to stay in education.
Why is it being cut?
In their letter, the Welsh Government claim that the sector no longer ‘needs’ the Financial Contingency Fund.
The response from University student support services would suggest otherwise, as would the external audit into the Fund commissioned by the Government last year. This report concluded that all evidence pointed to the necessity of the existence of the Fund.
Universities have always been required to report in detail each year to the Government how they spend money in this Fund. Since the introduction of the £9000 tuition fee regime, there has been no significant change in demand, and the Welsh Government has not made significant changes to how they guide Universities to spend the money.
The excuses being given by the Welsh Government as to why the Fund must be cut are poor, and we believe that this relatively small amount of funding is sustainable and its necessity justifies its cost.
Why is removing it damaging?
NUS Wales believes this decision is damaging and short-sighted for several reasons:
· The removal of ring-fenced government funding will result in a disparate system where access to hardship funding is dependent on which institution a student attends. This postcode lottery risks exacerbating the inequalities between institutions and the support students are able to access.
· Whilst the Financial Contingency Fund required institutions to direct funding to those who needed it most, this removal of regulation on spending will lift requirements on institutions to budget for hardship funding and remove the protection of funding for priority groups.
· Many of those students who accessed the Fund cannot rely on parental support or other sources of money to provide financial support in times of hardship. With most full-time students unable to access the benefits system – itself the subject of massive cuts – there may be no safety net at all for Welsh students in hardship.
· The Fund existed to keep vulnerable students on their courses. Scrapping it will mean more students drop out, making this cut a false economy. Despite the significant investments made in students’ education, fewer will qualify, impacting on social mobility, and with fewer earning the wages necessary to repay their student loans.
· This relatively small pot of funding has had a huge impact on the lives of students, and its removal can only be detrimental. The ability of students to remain and succeed in education will be diminished.
· This funding directly targets students who the Welsh Government wants to help: people returning to learning, disabled people, students from low-income backgrounds and vulnerable students who face funding crises not of their own making.
· The Financial Contingency Fund has made a difference to Welsh students and their families for more than a decade and makes Welsh higher education fairer and more inclusive.
· At a time when the Welsh Government has made public commitments to social justice and increasing the number of students from low participation backgrounds, this decision is clearly contradictory to those aims.
· Removal of the Fund risks entrenching the inequalities that already exist in access and participation in higher education in Wales. It is the most vulnerable who will bear the brunt of the cuts and this is why the Welsh Government must reverse their decision immediately.
What to do if you’re worried about your financial situation
If you’re concerned about managing your finances for the year ahead or your financial situation, get in touch with your university student support services, who will be able to advise you on support that is available. You’ll be able to find contact details for your university student support services on your university website. Alternatively, get in touch with your students’ union who can signpost you to available support and help.
In 2011, 166 candidates for the Assembly election, including a significant majority of current Assembly Members, made a pledge to Welsh students that they would not cut student support, including the Financial Contingency Fund.
Just three years later, the Welsh Government is breaking their promise to us. Deciding to now cut the Fund goes directly against the pledge made in 2011, and in the lead up to two years of significant elections, now is the time for us to show politicians that we will not accept broken pledges.
If your Assembly Member signed our pledge in 2011, now is your chance to hold them to account for their promise, by using our lobbying tool to email your Assembly Member and asking them to help us campaign to save the Financial Contingency Fund.
The full list of candidates who signed the pledge can be found here.