WELSH taxpayers will spend an estimated £14m subsidising university students from England and elsewhere next year, the Assembly Government admitted yesterday.
The cost is a direct consequence of Labour's 2003 Assembly election promise not to introduce top-up tuition fees before 2007.
As Rhodri Morgan continues to seek a way out of the difficulty caused by his administration's top-up fees defeat last month, further details emerged of how any future arrangements may operate in Wales.
The subsidy to English and other students arises out of the introduction of top-up fees in England next year. Students going to universities in England will have to take out a loan of £3,000 a year from the government-funded Students Loan Company. The cash will be paid directly to the institutions where they are studying. But in Wales, where no students will be paying top-up fees during the academic year 2006-07, the extra £3,000 per student will be paid out of the Assembly Government's core budget.
A senior Assembly Government official last night told the Western Mail that the cost to the Assembly of making up the funding shortfall in 2006-07 was estimated at £36.7m. As 38% of students attending Welsh universities come from outside Wales - mostly England - the effective subsidy from the Assembly's budget will amount to around £14m.
Plaid Cymru's Shadow Education Minister, Janet Ryder, said, "We, of course, are against top-up fees for anybody. But I find it very ironic that Labour AMs have accused us of seeking to get poor Valleys families to subsidise middle-class students from England when - for one year at least - that is a direct consequence of their own policy.
"Given that top-up fees are being introduced in England next year, Labour's promise not to bring them in here before 2007 means poor families from the valleys will be subsidising students from wealthy families in Windsor and elsewhere.
"Talks between the party leaders are still going on, but we are trying to get the Assembly Government to agree not to charge top-up fees to students living in Wales attending Welsh universities."
Education Minister Jane Davidson said, "We have only made a commitment to support Welsh universities with additional funds to compensate for not being able to charge £3,000 per head for one year while we considered the best kind of student support and funding mechanism for Wales.
"The opposition appears prepared to do it for the students' lifetime, irrespective of the cost to the Assembly budget or the evidence contained in the Rees Commission report."
Responding to Ms Ryder during an Assembly plenary session yesterday, First Minister Rhodri Morgan said it could be argued that Wales had subsidised English students since higher education funding was devolved in the early 1990s.
A senior Assembly Government official told the Western Mail, "As the Rees report stated, the cross-border flow of students is a key issue. At English universities, 95% of students live in England, while at Scottish universities, the proportion of students living in Scotland is 94%. The situation in Wales is very different, where only 62% of the students attending our universities are domiciled in Wales.
"The Department for Education and Skills (DfES) in England will soon be transferring control over the administration of loans and grants in Wales to the Assembly. Out of that money, the Assembly will be expected to fund the education of Welsh students studying in England - it has to be remembered that student fees form only a relatively small part of university funding.
"Any generosity above the system that will be operating in England will have to be paid for out of the Assembly's core budget."
Last month AMs voted by a majority of one to instruct the Assembly Government not to introduce top-up fees in Wales for students living here.
The opposition victory was possible because Blaenau Gwent AM Peter Law left Labour to stand as an independent at the general election.
Talks are continuing between Rhodri Morgan and the other party leaders with a view to reaching an agreement on a future student fees policy for Wales.
The Assembly Government is due to present its own proposals to AMs on June 22.