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Education Maintenance Allowance (Walsall North)

Volume 521: debated on Wednesday 12 January 2011

Motion made, and Question proposed, That this House do now adjourn.—(Mr Dunne.)

Much has been said, and rightly so, about the Government’s decision to end the education maintenance allowance. This debate relates purely and simply to my constituency, however; it addresses the impact that the abolition of EMA will have on Walsall North.

We should be quite clear that those 16 to 19-year-olds who are eligible for the allowance come from households that would certainly be considered to have low and, at most, medium incomes. The full benefit is £30 a week, which is not a very large sum, but it is very useful for those who take it up. In order to receive that full benefit, the person concerned would need to come from a household whose gross income is under £21,000. To receive £20 weekly, they would need to come from a household whose income is between £20,818 and £25,521. To receive £10 a week, the household income—gross, I again emphasise—would need to be between £25,522 and £30,810. Since EMA was introduced, there has never been any allowance for those from families whose income is above £30,810. We know the sorts of households that will be affected, therefore. The pupils involved would, understandably, be under some financial pressure. In some instances, they could well be under pressure to leave school at the first opportunity.

EMA was introduced by the Labour Government to encourage such pupils to stay on at school beyond the compulsory school leaving age. We should bear it in mind that it is almost taken for granted that the sons and daughters of MPs and other people earning a reasonable sum will carry on their schooling beyond 16. There are exceptions, but they are very much the exception. We should therefore be clear about the people we are talking about in this debate.

The purpose of EMA is not only to encourage pupils to stay on at school beyond 16; it is also to give them some financial assistance. Although £30 a week may not seem much, it is certainly a help. It helps pay for fares, food and other costs, and it comes in very handy.

I decided to write to the heads of the secondary schools in my constituency and Walsall college to find out the proportion of their students who are in receipt of EMA. Let me give some of the figures from the replies I received. The head of Willenhall school sports college stated in her reply to me that 63% of those in the sixth form received EMA. The figure for Pool Hayes arts and community school is 57%; for Frank F. Harrison engineering college, it is higher, at 75%; and for Walsall academy it is 51%.

I congratulate my hon. Friend on securing this debate on what is such an important issue for Walsall. Does he agree that while cuts to EMA affect all communities, they hit the Asian community hardest, because the Pakistani community has a take-up of 77%, and the Bangladeshi community has a take-up of 88%?

My hon. Friend, who has made a very useful contribution since her election last May as the Member for Walsall South, makes a very important and valid point.

I have mentioned Walsall academy, so I move on to Walsall college. Its principal states:

“Walsall College provides education and training for the largest number of young people in the…borough”.

The college has 2,136 pupils—slightly more than 58%—in receipt of EMA. I said that these figures and percentages are not surprising because the annual income in my borough is about £21,000. Obviously I am pleased that these pupils are staying on, and I am sure that my hon. Friend would say the same about the pupils in her constituency. Many of them are likely to be the first generation in their family to continue in education beyond the school leaving age. I would have thought that we should use every means to try to persuade youngsters, particularly those to whom I have just referred, who might leave school at the first opportunity, to stay on. I would have thought that we should also give them some financial support. That is why I, like my hon. and right hon. Friends, think that the introduction of EMA was a welcome step.

What will be the position of those currently in receipt of EMA who will not have completed their course and will not be at the maximum age of 19 by the end of this academic year? They had no warning that EMA was coming to an end; they were certainly given none by the Conservative party when it was in opposition. The Prime Minister denied that EMA was going to go when he was Leader of the Opposition. What will happen to these students at the college and at secondary schools in my constituency and elsewhere? They will certainly feel that they have been left in the lurch.

All those who replied to me—the heads of the schools and the college principal—expressed much concern about what will follow the abolition of EMA. The Minister is almost certainly going to emphasise that a substitute is being put forward: the enhanced discretionary learner support fund. However, there is not much doubt that all the evidence indicates that the total amount of central Government money—the only money involved is central Government EMA and what I have just mentioned—will be much more limited than under EMA. That is the justification for getting rid of EMA.

One does not normally give way, given the very limited time available and the fact that the Minister should have adequate time to reply. That is the normal parliamentary procedure, but if the hon. Gentleman is so desperate, so be it.

I greatly thank the hon. Gentleman, my constituency neighbour, for giving way. Does he not accept that EMA is a very flawed system and does not take into account families’ current needs because it actually looks at the last tax year? It never dealt with a lot of people—for example, families where the main income earner had lost their job. It is a truly flawed system.

The figures on household gross income show that, without any doubt, those who receive EMA come from households with a much more limited income than us and than those who earn much more than Members of Parliament and so on. I have given all the reasons why EMA was justified and why I would like it to continue.

What the heads particularly emphasised in their replies to me, apart from their concern about the abolition of EMA, was that there is a possibility—perhaps it is more than that—that under the substitute they will be in the rather invidious position of deciding which of the pupils staying on beyond 16 should receive the financial help, limited is it will be. At the moment, of course, the school is not involved. The school or college is only involved over attendance, ensuring that those who receive EMA attend. If they do not, they lose the allowance, and rightly so.

I congratulate the hon. Gentleman on securing the debate tonight. It is a very important issue for a great many of us. The situation in Walsall is replicated in other constituencies, including Strangford. There are more students than ever in this financial year, more courses than ever and a greater demand for EMA. I support the point that he is making, but does he agree that the largest number of people who will be affected will be those who can least afford it?

Indeed, and I hope that the Minister has taken on that point. I have been emphasising all along the sort of people and the households affected.

The principal of Walsall college—perhaps the hon. Member for South Staffordshire (Gavin Williamson) will listen to this with particular attention—writes that the students in receipt of EMA

“are primarily drawn from the poorest parts of the Borough. This financial support has enabled parents to encourage their children to stay on in education and training, where previously they would have encouraged them to take low paid employment rather than fund their studies.”

In conclusion, he writes:

“Unless we see a significant rise in our DLSF to offset the reduction in EMA, we will undoubtedly see a reduction in enrolments from learners from the poorest families.”

He adds:

“If we do not support our young residents to become skilled, professional and enterprising by supporting them to access and remain in high quality post 16 education and training,”

the borough

“will never achieve its ambitions for regeneration and sustainable prosperity.”

I endorse everything that he says.

I hope—although it is rather optimistic for me to do so—that even at this late stage, Ministers will reconsider the position and recognise that there is a great deal of justification for continuing with EMA. The argument has been paraded before and will be again—I understand that there is a debate on this subject of a national character next week—that, in the main, those who are eligible for EMA would stay on all the same. I question that, but again I come back to the point that I made earlier. Even if that were so—I do not accept it for one moment—is it not right to give a modest sum, and this is a pretty modest sum, of £30 weekly to those who come from low-income households? Is it not right to give some help to those who would otherwise be short of financial assistance in carrying on their education? Is it wrong? Is it some sort of crime to give this sum—£30 a week? I find that difficult to believe.

I do not want to make too much of it, but if we look at the Cabinet and at where they were educated and where it is quite likely that their children will be educated, we know that those children will not receive EMA. If someone comes from a prosperous household, they know full well that there will not be any financial difficulties in their staying on in education right up past university. I am dealing with constituents, and their children, from a very different background. I, like my hon. Friend the Member for Walsall South (Valerie Vaz), want to do everything in my power to encourage the 16 to 19-year-olds who would otherwise leave school at the first opportunity to continue in education for all the reasons that we know are so important: for their future and for the future of our country.

I congratulate the hon. Member for Walsall North (Mr Winnick) on securing the debate. I know that he cares passionately about supporting young people in continuing their education, as he said in his closing remarks, and we on the Government side share that passion, as do I personally.

The context to this debate is the state of the public finances, with spending outstripping income to the tune of £156 billion a year. Capital markets no longer regard sovereign debt as being risk-free, particularly for countries such as Ireland and Greece that have huge structural deficits. It is to avoid that fate that the Government have had to take difficult decisions to tackle our structural deficit, which is the highest in the G20. We pay £120 million in interest charges and the independent Office for Budget Responsibility reports that if no further action to tackle the deficit were taken, interest payments would rise to a staggering £67 billion a year by 2014-15. That is almost two years’ worth of the total spending on all the schools in England—twice what we spend on the salaries of all the teachers in England and twice what we spend on running all the state schools in the country—just to pay interest on the debt.

That is all assuming that the capital markets would be willing to lend us those huge sums, but the experience of Greece and Ireland demonstrates that they might not, and that if they did it would be at significant cost.

I shall explain how it fits in with tackling the deficit. The longer our economy languishes in crisis, the later the economic recovery and the later we have the jobs that are so desperately needed, particularly for young people, including the young people about whom the hon. Gentleman is concerned in his constituency. It is young people who bear the brunt of a stagnant economy as companies freeze recruitment. We do not want to be in the position of the economies of Ireland and Greece, which stumble and teeter from crisis to crisis, so that their economies are not revived and their young people bear the brunt of their economic crises.

Our starting point was that this £560 million spending programme had to be in the scope of spending review decisions. The research of the National Foundation for Educational Research that was commissioned and published by the Labour Administration showed that about 90% of EMA recipients would have stayed on after the age of 16 even if they had not received EMA. In making changes to EMA, we were determined that the 10% or 12% of students who might be prevented from staying on in education because of financial difficulties should be helped.

I understand the concerns of the hon. Gentleman and the college principals whom he quoted. He mentioned Walsall college, at which 2,136 students receive EMA—58% of the students there. That percentage is significantly above the national figure for EMA recipients, which is 45% of the national cohort. In Walsall as a whole, 4,182 students are receiving EMA in this academic year. We share his concern about those students, which is why we have decided to use a portion of the EMA budget to increase funding to the discretionary learner support fund, which is used to support those who have financial difficulties. Final decisions about the quantum of that extra funding have still to be taken, but we have spoken of a value of up to three times the current value of the fund, which is now at £25.4 million.

Let me ask two questions. First, what will be the position of those who continue to receive EMA who have not finished their studies and who would have continued to receive it as their studies continued? Secondly, will schools be involved in deciding who should receive the funding the Minister just mentioned?

EMA will end at the end of this academic year and we will make a decision about the size of the fund.

The decision is being consulted on right now—I shall come to that in a moment. This will be decided before the end of the academic year; indeed, before the end of this financial year.

A fund of the size I was talking about would enable 100,000 young people to receive £760 a year—about 15% of the number of students currently receiving EMA. That £760 is more than the average annual EMA paid in 2009-10 of £730, and only slightly less than the £813 paid to 16-year-olds receiving the full £30 a week or the £796 paid to 17-year-olds receiving the full £30 a week.

The Government will not set expectations for how much young people should receive from the enhanced discretionary fund. It will be up to schools and colleges themselves to determine which young people will receive support under the new arrangements, and what form that support should take. We are currently consulting on how the fund will be administered and disbursed, with the National Union of Students, the Association of Colleges, students from Northamptonshire college and a whole range of other stakeholders—head teachers and colleges involved with the original trial areas for raising the participation age in education or training. We are working with my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) in his role as advocate for access to education for the most disadvantaged young people.

We shall not dictate to schools and colleges how they should use the fund. It is discretionary, and schools and colleges will have the flexibility to allocate it in ways that best meet the needs of their students—for example, on how much young people will receive. [Interruption.] I do not think that is invidious.

It is invidious to the extent that schools do not decide about EMA, but now they will apparently need to make a judgment. As one of the heads replied to me, it is not the role of heads to decide whether A, B, C or D or X, Y or Z should receive financial support. I am sure my hon. Friend the Member for Walsall South (Valerie Vaz) agrees. That should be outside the professional role of a teacher or head teacher. The way that the whole scheme is being planned is unfortunate, to say the least.

We are consulting on the issues right now. At present, a £25 million discretionary support fund is being distributed by college principals and head teachers with sixth forms. Principals who do that work do not regard it as invidious.

The enhanced discretionary funding will not be an EMA and it will not necessarily be paid in the form of a weekly allowance. Current discretionary support is often provided in the form of books or equipment, or payment for field trips. We know that discretionary support works because discretionary learner support funds are already used very successfully in schools and colleges. They allow the professionals who actually work with students to decide what type of support the young person needs to stay in education. Colleges value the fund because they can provide support to the young people they consider to be most in need.

The hon. Gentleman did not mention transport, but it is a concern of students in many areas. I emphasise that local authorities have a statutory duty to ensure that no young person in their area is prevented from attending education post-16 because of a lack of transport or support for it. If that duty is not being met, young people and families should raise that matter with local authorities, but they were never expected to use a significant proportion of their EMA to pay for transport costs. Under the current arrangements for discretionary support funding, EMA cannot be used routinely for transport to and from college, because local authorities have that responsibility, but we will consider flexibility in that restriction as we develop the arrangements for the enhanced discretionary learner support fund.

In today’s economic climate, we have a duty to ensure that we continue to invest where investment is needed and to get the best possible value for taxpayers’ money. We cannot justify spending more than £560 million a year on an allowance when 90% of its recipients would have stayed on in education even if they did not receive it. Of course, we want all young people to benefit from post-16 education. We are committed to full participation for all young people up to the age of 18 by 2015, but a payment designed as an incentive to participate is no longer the right way to ensure that those who face real financial hardship and barriers to participation get the support that they need. That is why we have looked again at the most effective way to support the most vulnerable young people to stay on in education.

Question put and agreed to.

House adjourned.