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Education Maintenance Allowance

Volume 517: debated on Tuesday 2 November 2010

This is my first opportunity to speak under your chairmanship, Mr Hollobone. I look forward to it and wish you well on the Panel of Chairs. I am grateful to have secured this debate, and for the opportunity to exchange views with the Minister. I look forward to hearing his opinions on the wider issues that I shall raise.

I would like to discuss the education maintenance allowance and the effect that axing the scheme will have on those young people and families who rely on it. Even though I am a Scottish MP, and the EMA was first attacked by the tartan Tories—the SNP—I fight for the rights of young people as a UK MP.

During the previous Parliament, I secured an Adjournment debate on 2 February this year. If hon. Members want a good example of the differences between the previous Government and the current Government, they should look at the policy on the EMA. Last time I spoke, the then Minister, my hon. Friend the Member for Hartlepool (Mr Wright), committed the Labour Government to maintaining the EMA in its current form until 2011 and beyond. Many of the young people who contacted me following that debate with their support and thanks will feel disappointed by politics and by having their fears and hopes raised and then crushed in a matter of months. Let there be no mistake—that is what happened.

I will give an example from the campaign that I support. Since the announcement to abolish the EMA was made in the comprehensive spending review, many young people have posted comments on the website saveema.co.uk. I was struck by comments such as this one from Nick:

“Without EMA I wouldn’t be able to go to college and become what I have always dreamed of being.”

Alex said:

“I need EMA otherwise I will have no education. In other words… no future.”

It is obvious from comments left on the website that the families of pupils who receive the EMA will also suffer. Ms Robson states:

“I am a single parent and work 37 hours a week and have 3 children of whom two of those attend sixth-form college. They both receive £30 EMA and it helps them buy books and helps with their bus fares. Without that, I don’t think I would be able to give them the money for bus fares, books etc. Please don’t scrap it, it is a great help for me.”

Does my hon. Friend agree that there will be tens of thousands of students across the country from low-income families who will be anxious about their future chances of going to college aged 16 if no allowance is forthcoming? Worse still, they will find themselves seeking work without the benefit of the future jobs fund, which has also been axed by the Government.

My hon. Friend is absolutely right, and I will go on to talk about such people in detail. In my speech, I will refute the Government’s reasoning for scrapping the scheme, and shed light on the path they have taken to arrive at their position. Let me give a brief explanation for those in the Chamber who may be unaware of the EMA and why it is such an essential part of further educational support.

The EMA is a means-tested allowance of £10, £20 or £30. It is paid to 16 to 19-year-olds who stay in education and come from families where the annual household income is below £30,810. The top rate of EMA payment is £30, which requires the student to come from a family where household income is below £20,810. Some 80% of all recipients are on that top rate of £30.

The EMA was introduced nationally in September 2004 in order to reduce the country’s post-16 drop-out rate, which was one of the worst in the developed world at that time. The policy intent of the EMA is to broaden participation and improve the retention and attainment of young people aged 16 to 19 in post-compulsory education. The EMA is already strictly means-tested, so tightening the eligibility criteria further will only harm already disadvantaged young people. The scheme is close to my heart because it is based on providing a platform for poor families so that economic barriers will no longer stand in their way to getting an education and getting on in life.

I expect the Minister to say that the EMA is not being axed but rather “replaced.” However, if we turn to page 42 of the comprehensive spending review, we see that the so-called “saving” from replacing EMA is £500 million from a £550 million budget. It is not necessary to be Einstein or to have a university degree to realise that removing 90% of the budget of any scheme means effectively axing it, or severely undermining its implementation. I say to the Minister: do not insult my intelligence or that of our young people, and be honest.

The Government will tell us that there is a dead weight to the scheme and that according to a poll, only 10% of people say that they need the EMA. However, that argument barely stands up to closer examination. First, that was the only research on which the Government based their decision, despite the weight of widely available evidence showing that the EMA works. One example of how bad that research was is the fact that the Government poll was carried out on school pupils instead of college students. As we know, those still in school are in receipt of free school meals and free travel, as well as a uniform allowance and the full measures afforded to school pupils. In contrast, the National Union of Students conducted a poll this year looking at actual recipients of the EMA in college. Almost 60% of those students said that they would not be able to continue in education without the EMA.

Let us take the Minister’s argument to its natural conclusion. His research suggests that 10% of students would be affected, which equates to over 60,000 of the poorest teenagers in this country—the sort of numbers mentioned by my hon. Friend the Member for Stockton North (Alex Cunningham). Does the Minister feel that that is a price worth paying?

For a long time, many supporters of the Conservative party have argued that the scheme is a waste of money and that the allowance is misspent by those receiving it. Before last week, the Conservative party, the Secretary of State for Education and the Prime Minister all said that they would support the EMA. In March, the Secretary of State told The Guardian:

“Ed Balls keeps saying that we are committed to scrapping the EMA. I have never said this. We won’t.”

It is not only the Secretary of State who has said one thing in opposition and another in government. In January this year, the Prime Minster, then leader of Her Majesty’s Opposition, told the Save EMA campaign in an ironically named “Cameron Direct” event in Hammersmith that he supported the EMA. That was after he had refused to give a straight answer on the EMA in an interview with Sky in 2007, so I was pleased to hear that he had seen the light and was supporting the EMA.

A couple of weeks ago, however, we had the announcement on page 42 of the CSR about axing the EMA. It is safe to say that the Prime Minister’s support did not last long. I hope for the Minister’s sake that the Prime Minster does not offer the same level of support for him as he did for the EMA, or the Minister will be out of a job by Easter—then again, perhaps I do hope that.

On a serious note, I do not ignore the fact that there may have been some fraudulent claims, just as there are those who claim other benefits fraudulently or who avoid paying tax by using offshore bank accounts. I despise fraud whether it is by Tory grandees or benefit scroungers. However, if EMA fraud follows the levels of other benefit fraud, we are looking at a meagre 1%. It seems draconian to axe an entire scheme because of the actions of such a minority; it is tantamount to cutting off the head to cure a cold.

I hope that the Minister does not try to link the end of the scheme with the deficit, because that would show a lack of economic competence on his part. First, if he is telling me that taking money out of the pockets of the poorest teenagers in the country is our salvation, we are beyond redemption. Secondly, it makes very bad long-term economic sense to do that, because according to the Treasury, by 2020 the number of unskilled jobs will be half what it is today, meaning that more unskilled people will be fighting for even fewer jobs. I would be interested to know whether the Minister denies that.

Lastly, we need more people in employment. With rising youth unemployment, the decision we are discussing will swell an area that does not need increasing any further. What is more, as the Directgov website page for EMA clearly points out, for every extra skill and qualification that someone earns, they are £3,000 a year better off. Research by the Office for National Statistics shows that people without the minimum set of qualifications earn on average £55 a week less. I am sure the Minister will agree with me that paying people £30 a week in the short term so they can earn £55 a week more in the long term will help us not only to upskill our work force, but to pay down the deficit faster.

A 2009 survey by the Chartered Institute of Personnel and Development found that only 17% of employers were planning to recruit from the pool of 16-year-olds leaving school, and that only one third of employers planned to recruit those leaving school at 18. We know that being unemployed for more than 12 months under the age of 23 has a hugely negative impact on a person’s future, causing a permanent scar of disadvantage. Those who have experienced long periods of unemployment in their youth will suffer sizeable wage penalties well into their 40s.

There has been talk that the Government plan to budget for EMA at local authority level. That concerns me greatly. With no ring-fencing of council spend, how will that be achieved?

The best thing about EMA is that it ensures parity of payments throughout the country. Let us take, for example, someone under 18 who is a care leaver. As payments controlled by local authority children’s or leaving care services vary, young care leavers could fall victim to a postcode lottery of support. A care leaver living in Croydon in south London, where almost 5,000 young people are on EMA, could receive less than someone in Richmond upon Thames, which is only a bus ride away but has only 900 young people on EMA, as there is less demand locally and it has a bigger budget to go round.

The evidence speaks for itself on why we should save EMA. Research by the Institute for Fiscal Studies shows that attainment at GCSE and A-level by EMA recipients has risen by 40% since its introduction, and by even more for those living in the most deprived neighbourhoods.

In addition, RCU market research services carried out research on the national scheme and published in 2007 a report called “Evaluation of the EMA National Roll-out”, which concluded:

“EMA has had a positive impact on the retention, achievement and success of certain groups of learners…traditionally associated with lower levels of achievement”.

I thank the hon. Gentleman for securing this important debate. As a Conservative, I am a fan of EMA; 65% of students in my constituency going to Nelson and Colne college receive EMA. The Government are not scrapping EMA; they are simply replacing it with more targeted support. Surely that is a sensible and credible step in clearing up the worst public sector deficit in the G20, which was bequeathed to them by the hon. Gentleman’s party.

I did not see, but the hon. Gentleman must have come into the Chamber late, because he obviously has not listened to my speech and has not read the CSR. I point him to page 42 of that document; he obviously was not listening.

If the hon. Gentleman was here, how sad.

As we can see, the scheme is widely recognised by independent authorities as a success, and the arguments by those opposed to the scheme are easily silenced.

The Minister will be aware that the EMA scheme is devolved and each Administration have their own policy responsibility for EMA. The Scottish National party Administration in Scotland have been as inconsiderate as this one when it comes to protecting students from low-income families during the recession. They cut the £10 and £20 payment scheme and lowered the threshold for the top rate of £30 to below £19,000, despite warnings from NUS Scotland that that could lead to about 8,000 students dropping out this year alone. This year, EMA for my constituency of Glasgow North West has been cut by 20%.

However, figures released by the Scottish Government last year show that the old system, developed under Labour, was successful. The figures showed an increase in uptake on previous years and that the allowance helped school pupils from low-income families to stay on in education, just as it was planned to do.

I know that the Minister has no responsibility for the administration of EMA in Scotland, but I use that as an example of what will happen if support is removed from students on EMA. That view is supported by the National Union of Students for Scotland, as well as by many education experts and independent think-tanks.

The Minister should also take into consideration those living independently at an early age, who may need particular support. Lack of access to financial support may be one of the main barriers to participation in education. There are some key barriers: course fees; travel expenses; the cost of food and other essential items; costs associated with the course or placement, such as equipment; and a lack of comprehensive advice and guidance for young people on their entitlement to benefits.

For example, a young person aged from 16 to 18 is far more likely to be independent of their family than younger students, and as such to require more support to enable them to participate in learning. For those living with families on a low income, the overall impact on the family finances should be considered. In some instances, young people have been discouraged from taking part in education. Economic barriers should not be part of someone’s choice about whether to stay on in education.

Does my hon. Friend agree that, particularly in communities where education is not highly valued, the EMA has played a fantastic role in allowing young people to make for themselves the decision to stay on in education? That is particularly the case for girls and young women, whose families often see no purpose in their girls continuing in education. The EMA has played a very valuable role in ensuring that those young people can stay on in education.

I thank my hon. Friend for her intervention. She is absolutely right. That is why I have tried on several occasions to secure a Westminster Hall debate on this subject. We must raise the issue of the plight of people who need extra help in education. At the end of the day, education is the doorway to their future. If we take EMA away from them and do not give them that opportunity, we are destined to repeat the class system of history, and I do not want that.

I shall put to the Minister one of the comments on the Save EMA website. Cassie Campbell says:

“I need EMA. My mum is on benefits and I am a full-time student at college. Without EMA I can’t go to college. I will have to drop out and I don’t want to do that.”

In conclusion, I have to ask the following questions. Does the Minister agree with me that because of the importance of EMA to students from low-income families, it should be supported beyond 2011? What will replace EMA and how can we ensure that it reaches the young people who need it, no matter where they live? What assessment have the Government made of the cumulative impact of cuts on young people aged 16 to 25? How many students have the Government estimated will no longer be able to afford to continue studying under their plans to administer student support with 90% less funding? How does the Minister believe that young people should fund their transport to and from college once EMA has been abolished and local authorities have withdrawn subsidised travel passes? Considering the number of students, particularly those from a wider range of backgrounds, who have EMA to thank for their being at university today, have the Government given up on widening participation in higher education altogether?

People put honesty, loyalty and trust at the top of their agenda. The Secretary of State and the Prime Minister have failed those tests. I look forward to hearing from the Minister and seeing whether he, too, fails those tests.

May I start by congratulating the hon. Member for Glasgow North West (John Robertson) on securing the debate? I know that he is passionate about the issue—as he said in his opening remarks, education maintenance allowances are close to his heart.

I share the hon. Gentleman’s desire to see more young people, from lower income households in particular, staying on in education and gaining the qualifications they need to contribute to and enjoy the culture of our country and to obtain good employment. I assure the hon. Gentleman that one of the main priorities for the Government is to ensure that our education system is on a par with the best in the world. We want our schools and colleges to prepare their students for success. We will continue to provide support for the most vulnerable young people, so that they can stay on in education.

I acknowledge that the evidence from the EMA pilots shows that the EMA was successful in its early days at encouraging young people to stay on in education. The decision to end the scheme will be disappointing to many young people, in particular to those from the website whom the hon. Gentleman cited in his opening remarks: Nick; Alex, who said that without it he would have “no education” and “no future”; and Cassie Campbell, whom he cited towards the end of his speech and who said that without the EMA she would have to drop out. I will come to that point later in my comments, when I say that they will not have to drop out of education as a consequence of this decision.

We are, today, in a different world. Already, 96% of 16-year-olds and 94% of 17-year-olds participate in education, employment or training. Attitudes to staying on in education post-16 have changed. We are committed to going further still, to full participation for all young people up to the age of 18 by 2015. However, a payment designed as an incentive to stay on is no longer the right way to ensure that those facing real financial barriers to continuing their education get the support that they need. We need to look again at the most effective way of supporting the most vulnerable young people to stay on in education.

As the Minister might well know, I was the principal of a sixth-form college until fairly recently. I can say from personal experience that the EMA has supported widening participation, the raising of aspiration and greater attainment among young people from a wide range of backgrounds. The EMA has certainly underpinned those developments—it is not an incentive, but an underpinning of continuing in further education. The Minister would be foolish to move away from his statements of only June this year, when he gave assurances that EMAs would continue into the future.

I take the hon. Gentleman’s point. There is evidence that EMAs have helped a small number of young people to stay on in education. However, that same evidence suggests that the scheme has a significant deadweight cost. Indeed, pilot evidence throughout the scheme, and more recent research, to which the hon. Member for Glasgow North West referred, from the National Foundation for Educational Research, found that almost 90% of young people receiving the EMA believed that they would still have participated in the courses they were doing if they had not received it.

The fact is, the EMA is a hugely expensive programme, costing more than £560 million a year, with costs of administration amounting to £36 million, but impacting on the participation of only around 10% of the young people who receive support. In effect, the taxpayer has been paying £9,300 for every extra young person who has stayed in education due to EMA. Most of the young people who receive the EMA would have made the same choices and achieved the same qualifications without it.

The research quoted by the Minister has been questioned by other research, some of which has shown that the EMA has increased participation. My point is that it is not just about either/or, and whether the children or youngsters go into education, but it is about supplementing poorer families’ incomes so that they are encouraged to stay in education. It is not whether they go into it, it is helping them a little—with some cash—so that they stay in education.

Again, I shall come to that point in just a moment.

The hon. Member for Glasgow North West talked about how successful the EMA has been. I have acknowledged some important positive impacts, but it is also important to look at where the EMA has been less successful. That will help us to develop something that is fairer, more responsive to individual need and more efficiently targeted. Many young people and their parents think that the EMA is unfair and have told me that many people who receive it do not need it, and that some who do need it—the point made by the hon. Gentleman—are not able to claim it.

The young people in north Lincolnshire certainly needed all the support that they could get when the Labour council put their bus passes up by 500%. It is important that we target support in the right area.

I used to teach in a private school—only for a short period—where there were parents who were paying fees but whose children were still accessing the EMA. I am a big supporter of the EMA and of support for young people, but it is important that that support goes to the people who most need it, rather than through the somewhat scattergun approach we have seen.

I am grateful to my hon. Friend for that intervention. I know that some people have seen the EMA as an additional welfare benefit—the point made by the hon. Member for Rochdale (Simon Danczuk)—but it is important to clarify that the EMA has never been a support benefit. It was introduced by the previous Government to incentivise young people to stay in post-compulsory education. It has always been paid in addition to welfare payments. The Government have protected support for families with the lowest incomes and we will continue to support the most vulnerable while ensuring that all sections of society that are able to contribute to the deficit reduction do so. The withdrawal of child benefit from higher rate taxpayers, which will save £2.5 billion a year by the end of the review period, will ensure that people on lower incomes are not subsidising those who are better off.

I will not give way to the hon. Lady, because I am running out of time and I want to get to this point: child benefit for families without a higher rate taxpayer will be maintained and will be paid for children up to the age of 19 if they are in full-time education. The Government will use some of the savings from child benefit to help fund significant, above-indexation increases in child tax credit, which will be worth something like £30 in 2011-12 and £50 in 2012-13. That is in addition to the increases announced in the Budget: £150 in a year for 2011-12 and £60 in 2012-13.

I can also assure the hon. Member for Glasgow North West that none of us wants any young person to drop out of education because of financial difficulty. However, we cannot justify continuing to fund a programme that is so expensive, unresponsive and poorly targeted. Instead, we will introduce an enhanced discretionary learner support fund.

Currently, £25 million a year is given to schools, colleges and training providers through a discretionary learner support fund, to enable small payments to young people to help them meet the cost of their education. Colleges value the fund, because they are able to provide support to the young people whom they consider to be in most need. They can also respond to any changes that there might be in a student’s household income during the year. After the EMA is abolished, the fund will be significantly increased over the spending review period. The detail of the future arrangements is still being considered, but we envisage that the enhanced learner support fund will build on the principles of the current scheme to provide exceptional targeted support to students aged 16 to 18 who are experiencing financial difficulties.

I thank the Minister for saying that. Students in my patch who go to Greenhead and Kirklees colleges will welcome those announcements that the help will be more targeted. Some of the scaremongering around the EMA can now hopefully be put to one side, and I am pleased to hear that it is all about targeting the help on the students who really need it. I thank the Minister for clarifying that.

I am grateful to my hon. Friend for that intervention, because he encapsulated in one intervention everything that I have been saying for the past 10 minutes.

In conclusion, I ask the hon. Member for Glasgow North West to bear in mind the economic background to our decision to remove the EMA. In today’s economic climate, with a budget deficit of £155 billion, the highest of any G20 country, we have a particular duty to ensure that we continue to spend where spending is needed and to get the best possible value for taxpayers’ money. We cannot justify spending more than £556 million a year on an allowance 96% of the recipients of which would have stayed on in education even if they had not received it.

We will, of course, continue to support the most vulnerable and to provide help to those who need it. That is why all schools with children from poorer backgrounds will benefit from the pupil premium. That is why we plan to increase and enhance the discretionary learner support fund once the EMA is abolished.

The Government believe that we should trust the professionals working with young people to make the right decisions. Student support officers in schools and colleges are better able to identify those students who need support.