Government to pay maintenance allowance to thousands of work-based students -but there are fears they may end up worse off, report Joe Clancy and Ian Nash
More than 65,000 unwaged job trainees will be entitled to grants of up to pound;30 a week as the Government extends education maintenance allowances to all full-time students over 16.
Until now, EMAs have only gone to students at school or college. But from next Monday, work trainees with no other income can claim them if their parents earn less than pound;30,000.
The grants replace the pound;40-a-week minimum training allowance (MTA).
The Learning and Skills Council says families of students will gain overall because this change means they will no longer lose other payments such as child benefits and tax credits.
But training providers are sharply divided over whether trainees will win or lose. They say there is no guarantee that parents will give the extra benefits cash they get to trainees. They also point out that firms will be banned from giving bursaries to top up the EMA, and that, unlike the MTA, the new grant will be means-tested.
Colleges - which run around half of all work-based training - say the new scheme is fairer and will encourage people to stay on.
Julian Gravatt, Association of Colleges finance director, said: "The pound;30 maximum of the EMA is a compromise - we were pressing for pound;40. But with an extra pound;120 million from the Treasury and child benefits secure, this is a step forward.
"Colleges have had experience running EMAs. There have been problems getting them through the system and getting the evidence of student bank accounts, but we are getting there. These changes will put students and trainees on the same footing and, we believe, encourage more to stay on."
But the Association of Learning Providers says the changes could deter young people from taking up unwaged training programmes. These include pre-apprenticeship programmes such as Entry to Employment which attract some of the most disadvantaged teenagers.
Paul Warner, the ALP's operations manager, said: "The MTA is not means-tested and every youngster was given at least pound;40 a week irrespective of what their parents earned, money which went into their own pockets.
"With the EMA scheme they will only be paid amounts of pound;10, pound;20 or pound;30 a week. Though their parents may be better off, there is the assumption that they will make up the difference."
Members of ALP are also concerned that, under the new rules, companies will be barred from offering bursaries or sponsorship to top up the grant - yet school and college students are allowed to do part-time paid work.
One company director said: "If young people at schools and colleges can supplement their income by working part-time, but those on work-based learning can't, then financial considerations will still affect their choice."
But the LSC said the point of EMAs was to prevent students having to seek paid work. Evidence from EMA pilots showed improvements in recruitment, retention and achievement as a result of them.
Trevor Fellowes, Director of Learner Support at the LSC said: "EMA is making a real difference to young people across the country. The financial support EMA provides removes a barrier to learning that some young people face enabling them to continue with their education and improve their skills and job prospects.
"The EMA pilots demonstrated the positive effect it had on participation and achievement. The total national impact on participation was predicted to be around 4 per cent and we are well on course to meet that target.
"With around pound;315 million of Government funding invested in the scheme in the 2004-5 academic year, and this figure set to rise in the coming year, we are confident that the extension will have a very positive impact and create real opportunities for many more young people.
There was also Treasury concern that training providers did not always pass the full pound;40 MTA to their trainees.