The Auditor General for Wales has issued his opinion and report on the Welsh Government accounts for 2024-25. 

He has qualified his true and fair opinion on the Welsh Government’s student loan asset because he cannot determine whether the fair value estimate at 31 March 2025 is reasonable. 

The Welsh Government Group’s reported net assets at 31 March 2025 were £37.7 billion. Included in this balance is an £8.9 billion student loan asset - the value of student loans estimated to be repaid. 

The calculation of this figure involves complex modelling. Welsh Government has adapted modelling files provided some years ago by the Department for Education (DfE). 

The Auditor General identified concerns around the sufficiency of this now aged model in producing a reasonable estimate. The intention was for Welsh Government working with DfE under 4-Nations Service Level Agreement to transition to a newer model in 2024-25, but Welsh Government concluded that it could not be tested and quality assured in time to include outputs in the 2024-25 financial statements. Welsh Government therefore used the only model available at the time to produce the draft financial statements. 

His 2021 report on Student Finances highlighted that in 2015-16 the Welsh Government estimated it would recover 81p for every £1 owed through student loans. By 2019-20 that estimate had fallen to 65p. Actual repayments are currently around 50% of those currently forecast under the existing model. It is therefore likely that the new model will result in a substantially lower student loan asset value in 2025-26 which could have implications for future student finance policy. 

To date HM Treasury has fully funded the student loans schemes on the basis that costs are broadly comparable across the four nations. 

Welsh Government plans to adopt the new model in 2025-26.