The UK sold a second tranche of its student loan book on Tuesday, achieving roughly similar valuations to a much criticised first sale a year ago.
Secretary of state for Education Damian Hinds released a written statement to the House of Commons on Tuesday afternoon saying that the government had “today completed its sale of part of the older pre-2012 student loan book achieving a value of £1.9bn.” The loans had a face value of £3.7bn.
Last year the government sold a batch of student loans to specialist investors, including hedge funds and pension funds for £1.7bn.
Those loans had a face value of £3.7bn but were marked down to £2.6bn on the government’s balance sheet to reflect the fact that they were unlikely to be repaid in full.
The National Audit Office questioned the valuation achieved in that sale and said it had cost the UK government £604m in lost revenues and the cross-party public accounts committee said last month that the government received “too little in return for what it gave up”.
On Tuesday, Damian Hinds wrote, “this sale is good for the taxpayer. It releases money that is tied up and serving no policy purpose, to invest in other policy priorities now, whilst keeping within the spending limits we need to strengthen public finances.”
Angela Rayner MP, Labour’s Shadow secretary of state for Education, commenting on the Government’s written statement on the latest student loan sell off, said:
After being told that student loan sales do not strengthen the public finances, and without even having a Universities Minister in place, this Government is privatising assets at a loss, and it will be taxpayers who lose out in the long run.
These loans have been sold at less than half of their face value, a similar loss to the previous sale, when the Government lost hundreds of millions of taxpayers’ money. This is a scandal. The Government must reveal exactly how much more public money has been lost to serve the Conservatives’ ideological obsession with privatisation.