Education Maintenance Allowance (Walsall North)
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The Minister of State, Department for Education (Mr Nick Gibb)
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.
Mr Winnick
Am I to take it that our economic survival depends on the abolition of EMA?
Mr Gibb
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.
Mr Winnick
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?
Mr Gibb
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.
Mr Winnick
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.
Mr Gibb
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.