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Education Maintenance Allowance

Volume 485: debated on Wednesday 17 December 2008

To ask the Secretary of State for Children, Schools and Families what plans his Department has to alter the education maintenance allowance system following the introduction of requirements for 16 to 18-year-olds to remain in education or training. (244546)

As published in the Delivering 14-19 Reform: Next Steps document Delivering%201419%20Reform%20Summary.pdf

some young people will always require support to help them overcome any barriers—financial or otherwise—to participation. We must ensure that financial constraints are not a barrier for young people. This will entail providing support to those who need it and we are looking at a variety of methods to ensure that this is done in the most effective way. This will include building on the education maintenance allowance, which from September this year links financial support more closely to attainment and behaviour. We will continue to look at ways of supporting all young people to enable them to participate.

To ask the Secretary of State for Children, Schools and Families what assessment he has made of the effect on the economy of the introduction of education maintenance allowance; and if he will make a statement. (244549)

Assessing the economic impact of EMA is not simple but our analysis of the education maintenance allowance shows that the expected economic benefits far outweigh the costs. For the first cohort of recipients in the national rollout in 2004-05, evaluation evidence suggests that an extra 18,000 16-year-olds participated in full-time education than would have done so without EMA and an extra 16,000 participated at age 17. This is estimated to have generated an additional 10,100 Level 2 and 11,900 Level 3 qualifications being gained by the age of 18. Based on these benefits, our best estimate of the net benefit to the economy from supporting this cohort is around £880 million over the lifetime of these individuals. Given the range of assumptions that are necessary in carrying out such as assessment, our estimate should be seen as indicative.

To ask the Secretary of State for Children, Schools and Families if he will consider assessing eligibility for education maintenance allowance on the basis of net rather than gross family income. (244550)

The education maintenance allowance (EMA) has had the biggest impact on participation of any policy initiative in over a decade. From 2003-04 to 2004-05 the national participation rate for 16-year-olds in full-time education increased by 3.7 percentage points, exceeding expectations. EMA was one of the key policies aimed at increasing participation and has been a major contributor to this increase. One of the factors that has contributed to the success of EMA has been its simplicity. There are a range of alternatives to using gross income to assess eligibility for EMA, including using net income. All of these have various advantages and disadvantages. We currently believe that out of the available options for assessing eligibility for EMA, the simplicity of using gross income is preferable.