Sharia-compliant Student Finance

Debate between Lord Sharkey and Baroness Smith of Malvern

Wednesday 13th November 2024 Lords Chamber

[Lord Sharkey]

To ask His Majesty’s Government what progress they have made towards the introduction of a Sharia-compliant student finance product.

[The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)]

My Lords, we are committed to delivering an alternative student finance product that is compatible with Islamic finance principles as quickly as we can. We are making good progress to achieve this. This month we are reconvening the alternative student finance working group for its first meeting since the election, which I am grateful to the noble Lord for being part of. We have also appointed a secretariat to take forward the sharia certification of the product.

[Lord Sharkey (LD)]

My Lords, Muslim census research shows that over 6,000 students annually miss out on university entirely due to the lack of sharia-compliant finance. I know that the Minister is alive to the problem, its scale and its 11-year history. I thank her and her predecessor, the noble Baroness, Lady Barran, for the work that they have done or are doing in moving the alternative student finance project forward. However, progress is slow, largely because ASF is being produced sequentially to the lifelong learning entitlement, which is delayed in the Budget by a year. What is now the latest date for the full implementation of the ASF? We should surely be able to move faster. Can, for example, ASF development be uncoupled from the LLE and progressed in parallel? What consideration has been given to the use of outside contractors to speed things up?

[Baroness Smith of Malvern (Lab)]

I think it would be fair to say that that was the question I asked at the point at which it was suggested to me that we should link the delivery of the ASF to the introduction of the lifelong learning entitlement. I think that the last Government were right in making that decision, because the lifelong learning entitlement brings about a fundamental change to the system of student finance, and it is important that, to be able to access the alternative student finance provisions effectively, they are linked to the overarching system for student support. We are introducing the lifelong learning entitlement for applications from September 2026 and for courses and modules that begin from January 2027.