Labour's shadow cabinet has launched a wide review of student grants, awards and benefits affecting the entire post-16 education and training system to stop students dropping out through poverty.
The review team is shadow chancellor Gordon Brown, education spokesman David Blunkett and social security spokesman Chris Smith. They will scrutinise the effectiveness of a range of support schemes including child benefit, mandatory awards, discretionary grants, loans, tax relief, benefits for the unemployed studying part-time and the recently introduced career-development loans.
A restructuring of the different funds could release in excess of Pounds 2 billion for support grants for students post-16 and a relaxation of the 21-hour rule (16 hours from October) which limits the time claimants can study without losing benefit.
The latter is a particularly sensitive area as the Government failed in an earlier pledge to ease unemployed people's path to study. Research in The TES's FE Focus this week shows that at least 20,000 jobless students have quit their courses because of the uneven interpretation of the rule by benefits offices.
The Labour investigation will go towards its submission to Sir Ron Dearing's review of higher education. With 10 per cent of degree and diploma students studying in the FE sector, Sir Ron has pledged to look at how his reforms will affect these as well as the traditional university students.
But Labour fears new injustices will arise in the system of grants post-16 and post-19 unless financial support is given to encourage poorer children to stay on at school.
Mr Brown attempted to counter Tory claims this week that his proposed reform of the child benefit scheme post-16 - estimated at around Pounds 700 million - was an attack on equality and middle-class perks.
In the propaganda war of words and numbers, he said: "Eighty per cent of the sons and daughters of unskilled workers do not stay in full-time education. " He claimed as evidence the 1993 statistics of the them Department of Employment.
Unveiling the plans in the John Smith Memorial Lecture, he went wider than the proposal for a rethink on universal child benefit post-16. He attacked the elitist use of mandatory grants and arbitrary amounts given for discretionary grants from one local education authority to another.
Labour says that only 3 per cent of families benefit from discretionary awards - nationally estimated at Pounds 113m - which vary from 90p to Pounds 20 a week for a post-16 student. The party has set no figure for a typical grant post-16. That would be a subject of the review.
The global figure is a decline on last year's Pounds 170m and 1990's Pounds 230m - reflecting continued cuts in LEA budgets for discretionary awards.
Only 50 per cent of young people aged 16-18 qualify for child benefit. One-quarter of 17-year-olds on child benefit are at fee-paying schools. Mr Brown said the cash should be targeted to encourage young people to stay on. "The present arrangements do not work and to achieve real equality of opportunity, the review must look at other options," he said.