EMA's demise creates a deficit we can't pay off

4th February 2011 at 00:00

Those who cheer its demise claim that the education maintenance allowance (EMA), a grant of up to pound;30 per week paid to post-16 students in full-time education, is a needless extravagance - "paying children to go to school", as the headlines had it when it was introduced.

We don't want to assign that particular point of view to the Government, which we believe is genuinely committed to eradicating poverty. Indeed, the Coalition says that the EMA's replacement, the learner support fund, will concentrate spending on the most disadvantaged students.

Unfortunately, we feel that in this case big ambitions are poorly served by small funds. The learner support fund will eventually disburse pound;78 million per year - a figure that pales in comparison with the pound;560 million awarded through EMAs and falls far short of the pound;225 million that the 157 Group of leading FE colleges says is the minimum needed to support disadvantaged students. With most EMA claimants learning in FE colleges, the 157 Group's assertion has to be given credence.

In deciding if the EMA has been a success, the Government might like to consider the issues of participation and access. The Institute for Fiscal Studies - which was quoted freely by both Coalition parties while in opposition - found recently that EMAs had improved participation by 6 per cent. The same report said that EMA recipients' A-level grades were typically four Ucas points higher than would have been the case without the funding, and that "the costs of providing EMAs was likely to be exceeded in the long run by the higher wages that its recipients would go on to enjoy". As the Government hunts for savings, surely it has to consider the potential long-term reduction in welfare payouts and the increase in tax revenues promised by higher earnings.

Turning to access, one of the EMA's "selling points" is that it improves students' ability to access the colleges they want to attend. For 16 to 18-year-olds, especially those in rural communities or at the poorer end of the poverty scale, this is vital in helping them avoid the need for part-time work to fund their studies and travel. With inflation on the rise, child tax credits going to fewer families, petrol costing more and public transport fares at a new high, now is not the time to make it harder still for young people to go to college.

These are the pragmatic arguments for the EMA. However, it is also important to consider the fact that the grant provides young people with a valuable life skill, in the form of financial management. EMA funds are distributed to students through their own bank accounts, placing the onus on them to manage and spend their grant in the way that best improves their education.

Early critics of the scheme complained it was "free money" that students could spend as they saw fit. We see it differently. In giving disadvantaged young people their first regular income, however meagre, the EMA plays an important role in teaching them the principles of managing a personal budget. As our society reels from the consequences of bad personal debt, we shouldn't be too hasty in claiming that a voucher-based system can match the EMA in this respect.

If the Government wants to make it easier for young people to find long- term work, it has to consider in more detail the many disadvantages of withdrawing the EMA. At the very least it has to spend more on its replacement, and make sure that in targeting the very poorest it doesn't neglect others who genuinely need financial help. Worryingly, a recent survey by the Association of Colleges and the University and College Union suggests that 70 per cent of EMA recipients would drop out if the grant was withdrawn. This is far too serious an issue to allow misconceptions and ideology to dominate.

Andy Wasley is communications manager at the City amp; Guilds Centre for Skills Development.

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