The government will target remaining teaching grant rather than student support as it seeks immediate cuts in the higher education budget, sector sources have suggested.

A report on BBC Two¡¯s Newsnight on 11 June suggested that the Department for Business, Innovation and Skills is looking at converting student maintenance grants into loans as part of cuts required for 2015?16.

Although that may form part of the government¡¯s plans for cuts in the longer term, many in the sector believe that it cannot play a part in delivering the ?450 million savings required of BIS for 2015?16. They argue that it is too late for the government to amend student support regulations in time for the Student Loans Company to implement the changes for 2015?16.

Instead, the most likely target for 2015?16 cuts is seen as the ?1.4 billion teaching allocation. The sum includes ?380 million in student opportunity funding to assist widening access and retention for the poorest students, and ?661 million for high-cost subjects.

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Pam Tatlow, chief executive of Million+, said the ¡°real risk¡± was that student opportunity money was ¡°again seen as a target for a reduction¡± despite its playing ¡°a key role¡± in promoting social mobility.

Nick Boles, a BIS minister, delivered a parliamentary answer on 10 June to questions on the 2015?16 cuts put by Labour MP Iain Wright. ¡°The majority of BIS¡¯ ?450m savings will be delivered through known underspends and releasing unallocated funding,¡± he said. ¡°Funding for apprenticeships and student maintenance will not be affected,¡± he added.

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Also among the Higher Education Funding Council for England¡¯s 2015?16 grant allocation is ?52 million to help institutions through the transition to the research excellence framework and to support PhD supervision. Some think this could be cut without breaching the research funding ring-fence.

Meanwhile, the Student Funding Panel, an independent group set up by Universities UK, published a report on 15 June saying that the current system of funding in England ¡°is broadly fit for purpose¡­and needs to be given time to work¡±.

It calls for student maintenance support to be ¡°improved¡± and says that loan repayment thresholds for graduates (currently set at ?21,000) should be frozen if any money needs to be saved longer term.

Sir David Bell, vice-chancellor of the University of Reading and a member of the panel, said that the current cuts were a ¡°down payment on future funding squeezes¡±. The sector, he added, had to ¡°build a strong case for investment¡± ahead of the next major government spending review due this autumn.

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john.morgan@tesglobal.com