The government estimates the “total net present value” for the FE loans scheme – which will affect all learners aged 24 and above studying at level three or higher from 2013 – to be £11,197 million.
However, the “business net present value” is estimated at a cost of £6 million, with a further £0.8 million as the “net cost to business per year”.
“Given tighter resources as a result of the Spending Review 2010 – the overall further education and skills budget will be reduced by 25 per cent between 2011/12 and 2014/15,” the report says.
“The challenge for government is to ensure that its remaining investment in this area is targeted such that economic impact, and therefore value for money, is maximised.”
The impact assessment report also reveals that the FE loans policy will be reviewed in September 2014.
(A full analysis of the the impact assessment and equality impact assessment reports will be published in the next edition of FE Week.)