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Education Maintenance Allowances

Volume 114: debated on Tuesday 7 April 1987

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Motion made, and Question proposed, That this House do now adjourn.— [Mr. Malone.]

11.32 pm

I am grateful for the opportunity, even at this late hour, to raise the question of education maintenance allowance and social security disregards. Before I go into detail about the subject, I should put it into context. We are concerned with those grants that are paid to young people aged 16 to 18. The basic problem that concerns me is that far too few young people remain in education. This is particularly unfortunate when one makes comparisons with our competing countries. About 32 per cent. of our young people remain in full-time education, whereas in the United States it is 79 per cent., in the Netherlands 70 per cent., in Japan 69 per cent., in Italy 48 per cent., in Germany 44 per cent. and in France 58 per cent.

I realise that the figures look a little better if one includes those taking part-time education between the ages of 16 and 18, when the figures go up to 64 per cent., but we are still way behind countries such as Denmark, Belgium, the United States, the Netherlands, Japan and Germany with 84 per cent.

We have to consider why we do not do far better at persuading young people to remain in education. When we start to look at one or two of the more detailed figures, we can see that there is a considerable waste of resources of young people who would benefit from either full-time or part-time education, but do not do so. A letter sent to me by a physics teacher illustrates the problem. He says that he is proud of the fact that, having been appointed to the school, he has been building up physics as a popular subject.
"This year I have 15 pupils likely to get good O levels, five of them girls, and out of that group I hope that eight boys and two girls will stay on at school to take A level physics."
He goes on to ask me to imagine his horror when one of the girls announced that as soon as she had completed her O-level exams she intended to leave. He investigated the matter to see why, with her obvious ability, she wanted to leave. He discovered that, like many others in Britain today, she was the only person in the household earning any money.
"She has two younger brothers, and both her parents have been out of work for over three years. She has a part-time job working in a shoe shop on Thursdays and Fridays after school and all day Saturdays."
It seems that the shopkeeper had offered the girl a full-time job selling shoes as soon as she could leave school. The physics teacher is horrified that she should be pushed, because of financial hardship, into leaving school, rather than staying on with, he believes, a good chance of getting A-levels, including a good A-level in physics, and going on to university.

If hon. Members think I am quoting just one example, I assure them that when we look into what is happening in local education authorities throughout the country we see that a substantial number of youngsters with five or more O-levels do not remain in education. In Tameside, part of the area I represent, 23 per cent. of youngsters who get five or more O-levels do not remain in full-time education. In Trafford, it is 20 per cent., in Rotherham 22 per cent., in Dudley 20 per cent. and in Sutherland 19 per cent. In the country as a whole, 13 per cent. of youngsters with five or more O-levels do not remain in full-time education.

The figure is somewhat better in inner London, with only 9 per cent. of those with five or more O-levels leaving. In the city of Manchester it is 11 per cent. I mention those two as being better because those authorities pay education maintenance allowances. They do not pay particularly large allowances, mainly because of the way in which the allowances link up with the social security system.

Since I entered the House I have argued strongly for the introduction of education maintenance allowances as the most effective way of persuading youngsters who would benefit from continuing their education to remain. Up to 1974 I taught in a variety of secondary schools and I was always aware that some very able pupils did not remain in education because of financial pressures.

I took part in deputations to various Ministers at the Department of Education and Science between 1974 and 1979 to press for the introduction of education maintenance allowances. It is with regret that I say that the last Labour Government did not bring in a national scheme.

But while we discussed in Parliament whether a national scheme should or could be introduced, authorities such as Manchester and ILEA set up their own local schemes. The trouble was that the amount that they could pay was fixed by the inter-relationship of those sums with the social security regulations. I understand that in 1978, the amount of education maintenance allowance that could be paid before it reduced the supplementary benefit that a family received was £7·50 if a child was staying on into the sixth form and £9·50 if the child was continuing its education in an FE college.

I think the difference was designed to allow for the fact that if pupils remained in school they were in most instances entitled to free school meals, whereas if they went into FE colleges there was no provision for free school meals. There might also have been a slight difference in the amount of help available for transport to and from school. However, since 1978 no attempt has been made to uprate those allowances. The education maintenance allowance has, in practice, steadily lost its value. None of the local authorities is prepared to pay out more than the £7·50 and the £9·50, because the family would not benefit from it; it would simply be clawed back by the Department of Health and Social Security.

If those figures had been uprated in line with inflation between 1978 and now, the rate in schools would be £14·70 and the rate in FE would be £18·60. There has thus been a substantial deterioration in the assistance that can be given to young people. In 1978, if a young person left school and got a job, he would obviously be much better off; if he did not get a job, the difference between the education maintenance allowance and the social security that he would draw in his own right was fairly small. Now, the difference between the £7·50 and the £9·50 and what a young person can draw on a youth training scheme—£27 in the first year and £35 in the second—is much larger.

The Government should consider uprating the disregards. However, the position is slightly more complicated, because in 1988 a new system of social security uprating will be introduced. Why cannot the Minister uprate the social security disregards now to £14·70 and £18·60, so that at least local authorities could uprate their education maintenance allowances so that they are worth in real terms the same as in 1978? If the new social security regulations are brought into effect, what will happen to education maintenance allowances?

I understand from the new housing benefit regulations, which are now in the Library, that education maintenance allowances will be disregarded in relation to those benefits from 1 April 1988. I hope that the Minister will confirm that it is intended that the social security regulations will be the same as the housing benefit regulations. It appears that, 12 months from now, there will be no limit on the level of education maintenance allowances that a local authority will be able to pay, because the entire allowance will be disregarded—as, I understand, will part-time earnings for a young person who has a paper round or works in a shop at weekends.

If I am right, and the Goverment intend to disregard entirely an income from education maintenance allowances, it seems very sad that for 12 months young people will not be able to obtain an uprated education allowance, although from April 1988—assuming that the new legislation comes into force—they will receive a total disregard. I press the Minister at least to uprate the £7·50 and the £9·50 first introduced in 1978 to £14·70 and £18·60, as a first step. I hope that he will also take the trouble to make it clear to education authorities that, as from next April, no limit will be placed on what they can pay in education maintenance allowances, and that, during next year, some of them can take into account the change in the regulations and will be able to put forward proposals for a substantial increase in education maintenance allowances.

I should like further progress to be made and a national scheme of education maintenance allowances to be introduced in the next 12 months. They would substantially address the problem that far too few young people remain in full-time education at 16 or over. There is increasing evidence that some of those who would benefit from full-time education are being lured into youth training schemes that are of less benefit to them and to the community as a whole. I await with interest the Minister's reply.

11.45 pm

The Parliamentary Under-Secretary of State for Health and Social Security
(Mr. Nicholas Lyell)

The hon. Member for Denton and Reddish (Mr. Bennett) has a long-standing interest in education that is very well known to the House. Through his chairmanship of the Joint Committee on Statutory Instruments he will also be as aware as any hon. Member of the social security regulations that are laid before the House. It is therefore a particular pleasure that in responding tonight to his comments I am able to combine the two strands.

The hon. Gentleman began by quoting some international statistics. They are very much a matter for my right hon. Friend the Secretary of State for Education and Science. I know that the hon. Gentleman does not expect me, as a DHSS Minister, to follow him too far down that route. However, I know enough about European comparisons to realise that they can be very misleading. I think that what I have to say later will be welcome to the hon. Gentleman. But before I come to our plans for the future I should like to say a few words about the present arrangements and their background.

As the hon. Gentleman has explained, local education authorities have the power to award grants to young people who choose to remain at school or in further non-advanced education beyond the age limit for compulsory schooling. These are known as education maintenance allowances in England and Wales. In Scotland they are bursaries. Their broad purpose is to enable pupils to continue their education without causing hardship to themselves or their parents. They are related to parental income. The powers to make such allowances are discretionary. It is for each authority to decide whether and how to exercise their powers. If they decide to make an award, in England and Wales it is equally open to the local authority to decide the amount paid. In Scotland, as in many areas of our law, the arrangement is slightly different. Where the authority has decided to make an award to someone in full-time education there are fixed rates, depending on the age of the young person and whether they are at home or elsewhere.

The policy on use of the powers in the education legislation and decisions on individual cases are therefore very much a matter for the local education authority. Equally, the hon. Gentleman will appreciate that ministerial responsibility for the education legislation rests with my colleagues in the Department of Education and Science. I know he will understand why I shall therefore concentrate in the remainder of my remarks on the implications of education maintenance allowances for the social security system.

The first point I wish to make is that the question of education maintenance allowances is just one small element in consideration of the overall support that is available in the income-related social security benefits for those with children continuing at school beyond the compulsory school leaving age.

People on supplementary benefit with children staying on at school receive an amount for the living expenses of the young person. This is currently £18·75 for someone aged 16 or 17. The amount is the same as an unemployed young person of the same age living in his parents' household would get. So the same direct financial support is available to the low income family overall, whether or not the child remains at school. The value of these scale rates has increased by some 6 per cent. since we took office. Such families can also receive help with their rent and rates—automatically if the parent is on supplementary benefit. For other people on low incomes, including those in work, the system of needs allowances, which determine how much housing help is paid, takes account of the fact that the claimant is supporting a young person continuing at school. Finally, family income supplement is also available to people on low income in work, with children. Again how the amount paid is worked out would take account of the fact that the young person was continuing at school. There is, therefore, an extensive system of direct financial help to low income families which takes account of the needs of the young person continuing at school after 16.

It has been a longstanding principle of the social security system that there should not be double provision from public funds for the living expenses of its claimants and other members of their families. That is why benefits such as child benefit are taken into account. There are also problems of equity if people assessed as having the same level of needs can in practice have fairly different levels of income depending on whether some have other forms of income and what the source of that income is.

If that were taken to its logical conclusion there would be no disregards of other income. Successive Government have, however, recognised that there are good reasons for limited disregards in particular circumstances. As a result education maintenance allowances have received special treatment. The present position is that, for children at school, we ignore the first £7·50 per week when calculating the family's benefit entitlement. For young people in other further non-advanced education it is £9·50 per week; the difference relates to the fact that people at school can as the hon. Gentleman surmised get free school meals during term time. The case for this special disregard has broadly been to cover extra needs connected with education, as the supplementary benefits scale rates themselves already cover normal living expenses.

It is true that there have been no increases in these disregards since they were set in 1978. But that is not unique to this particular form of income. For example, the general disregard of part-time earnings for most claimants has remained at the same level for some years. No Government have made a practice of automatic or regular uprating of disregards. This to some extent reflects the difficult issues of principle in allowing disregards within income-related schemes. Generally, I think it fair to say that Governments have given greater priority to the level of support available to all claimants in similar circumstances, rather than specific concessions which can benefit only a minority of them.

We have, however, taken a fresh look at the question of the treatment of education maintenance allowances in the context of our wider social security reforms. One of the main objectives of our proposals——and one that has been widely welcomed—is to put the rules for the income-related benefits on as common a basis as possible. We have, therefore, reviewed carefully the way in which claimants' resources are treated in the three present schemes to see how they can best be brought together.

At present there are different rules in housing benefit and family income supplement from those in the supplementary benefit scheme. In housing benefit and FIS now no account is taken of education maintenance allowances received by the parents.

For the future, we have concluded that no account will be taken of education maintenance allowances and their Scottish equivalents in any of the three reformed income-related benefits—supplementary benefit, housing benefit, and family credit. This will apply from April 1988 when the wider changes take place. This will give local education authorities a further, useful, measure of flexibility in deciding how they use the powers under the education legislation where they wish to help encourage young people in families of modest incomes to stay at school.

I am sure that everyone outside who reads this report of our proceedings will welcome the flexibility that is being offered to local authorities to put up the education maintenance allowance. But would it not be logical to increase the disregards as from next September so that local authorities could pay education maintenance allowances effectively at a higher rate for the whole of next year rather than being able to start paying the higher rate only from 1 April?

I understand what the hon. Gentleman says. I am glad that he welcomes this significant improvement as from April 1988. He argued persuasively, though not persuasively enough for the Labour Government to make significant improvements. I do not think logic assists him. I think that we are doing the logical thing, which is to make the change at the time when we are making substantial changes, improvements and simplifications in the social security system as from April 1988.

Returning to the point as to the increased flexibility which this will give local authorities, I would expect them to take account of the fact that direct financial help may also be available from the social security system in relevant cases. I am sure they would wish to avoid creating, through their actions, their own inequities in the position of young people in families with similar incomes staying on at school.

I must also make the point that we have been able to take this step in the context of the present education maintenance allowance system designed to provide a further encouragement of education opportunities arid thus directed primarily at education needs. The circumstances would have been rather different if the education maintenance allowance system had been a significant alternative system for meeting the living needs of young people. If that had been the case, I think we could not have offered the improvement in the rules that we are now proposing. Equally if the education maintenance allowance system were ever to develop in such a way that it became, in effect, a routine and overlapping form of support for living expenses, we would have to look again at the question of its treatment in the social security system.

I am, however, very pleased to say that we have been able to plan this worthwhile improvement in the rules. They will give local education authorities greater flexibility in how they use their powers. The charges provide a useful simplification in the treatment of resources which can be seen as a complicated part of the social security system, and it is part of our general objective of bringing the rules for the various income-related schemes closer together and making them easier to understand. I am grateful to the hon. Gentleman for enabling me to put this improvement on the record before the House, even at this late hour. I hope he will welcome, as I know that he does, the response that we have been able to make to the concern expressed on this issue over a number of years.

Question put and agreed to.

Adjourned accordingly at five minutes to Twelve o'clock.