(13 years, 1 month ago)
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Lord Willis of Knaresborough
To ask Her Majesty’s Government what plans they have to offer support to 16 to 18 year-old students in full-time education.
The Deputy Chairman of Committees (Baroness Fookes)
My Lords, I intervene at this point because we believe that a Division in the Chamber is imminent. We must make a start but once the Division is called, I then have to suspend the Committee immediately for 10 minutes. I am extremely sorry if that interrupts anybody’s flow of speech but I thought it important to mention it.
Lord Willis of Knaresborough
Thank you for that warning.
I am grateful to noble Lords for speaking in this not so packed Room in this short debate on support for 16 to 18 year-olds in full-time education. It is rather sad that the Room is not packed for such an important topic. I am particularly grateful that my noble friend Lord Fink is with us. We are delighted that he is making his maiden speech and we very much look forward to his contribution. I actually sought this debate in July 2010 and it is testimony to the potency of EMAs that, despite last week’s announcement of a very welcome replacement bursary scheme, the question of support for 16 to 19 year-olds remains a contentious issue. Indeed, when the Mayor of London argued on BBC “Question Time” last week that the new scheme did not go far enough, he expressed—
Lord Willis of Knaresborough
My Lords, I am very grateful that we are having this debate on support for 16 to 18 year-olds and particularly delighted that my noble friend Lord Fink has chosen to make his maiden speech this evening. I sought this debate in July 2010 and it really is testimony to the potency of this issue that, despite the Secretary of State’s very welcome Statement last week, the issue of support for 16 to 19-year-olds remains contentious. Indeed, when the Mayor of London—an uncontentious figure—argued on BBC “Question Time” last week that the new scheme did not go far enough, he expressed the views of many of us who believe that the Government produced little sound evidence for ending EMAs and threatening participation, other than the need to save money.
The decision to save £560 million by scrapping EMAs was hardly unexpected. Indeed, given the parlous state of our finances, I appreciate that the money had to come from somewhere. However, the argument for doing so—that this was an ill targeted scheme, that it was unsuccessful and that it had huge deadweight costs—simply did not bear scrutiny. The Government largely pray in aid the 2007 IFS evaluation, claiming that 90 per cent of students in receipt of EMAs would have stayed on regardless. Those are the so-called deadweight costs. Yet the IFS did not make that claim. Rather, it was a somewhat shoddy report by the NFER that surveyed students prior to them even entering post-16 education. In fact, the IFS concluded in 2007 that the EMA achieved its aim of increasing and retaining participation by some six percentage points—the key aims of the previous and the current Governments.
What is more, if deadweight costs are to be key criteria for revenue reduction, what about the winter fuel allowances for the over 60s, many of whom, like those in your Lordships’ House, could well afford their own heating? What about subsidised student loans, which go predominantly to the better-off, not to mention child benefits paid to large numbers of those whose children are not remotely at risk? Indeed, a far more reliable source of evidence about the effectiveness of EMAs came from the CfBT Education Trust 2009 research project, Should we end the Education Maintenance Allowance?, which clearly showed the success of the programme. So does the mountain of direct survey evidence from the AoC, the 157 Group and from schools, demonstrating the crucial part that EMAs have played in providing support for students, especially for travel and equipment and particularly for vocational courses.
However, the Minister will be surprised to hear that I am not calling for the EMA scheme to be retained. The direction of travel announced by the Secretary of State last week is right and I pay tribute both to the Government and to my honourable friend Simon Hughes, the MP for Bermondsey and Old Southwark, for producing an interesting proposal. It passes responsibility to schools and colleges for its execution and secures £70 million of Treasury cash to achieve the welcome but modest £180 million budget for the new scheme. Perhaps the Minister, in his summing up, will confirm that this is new money and that he is not simply top-slicing existing 16 to 19 programmes.
I am calling for the restoration of more of the £570 million that the scheme currently spends so that a wider group of students can be supported. Without a larger bursary fund we cannot start to tackle issues such as travel costs, which are one of the largest obstacles to participation and retention post 16.
Lord Willis of Knaresborough
My Lords, for the third time, I am making the case not to retain the EMA scheme as it stands but to retain a significant part of its budget. However, to make a credible case for retaining resources while still delivering substantial savings to the Treasury actually requires us to think differently. I concede that young people from families with household income of up to £16,200 a year—the maximum income level for free school meals—have largely been protected to some degree by the bursary proposals, although the IFS paper last Tuesday made a different assessment. But if parents have a joint gross income above £30,800, young people at present do not get a single penny of EMA. My concern is that the Government are putting at risk participation by young people from families with incomes between £16,200 and £30,800—hardly the affluent middle classes.
There is a widespread belief that 16 to 19 financial support is simply limited to EMAs; it is not. There are two other significant sources of financial support: 16 to 19 child benefit and 16 to 19 child tax credit, which are treated not as education but as social security. However, at 16 plus, child benefit and child tax credit are not paid to parents for every child. They are paid only on condition that young people are in full-time education or unwaged training. Parents with 16 to 19 year-olds in jobs, apprenticeships, part-time education and those not in education, employment and training—the NEET group—do not receive child benefit or child tax credit. That is, some 15 per cent of all 16 to 18 year-olds.
I am inviting the Minister to view 16 to 19 child benefit and 16 to 19 child tax credit as financial support for education, not simply for social security. Currently, around £1.5 billion is spent on 16 to 19 child benefit and £2.3 billion is spent on child tax credit, which, when added to the EMA spending, amounts not to £700 million but to £4.3 billion of taxpayer support. Is the Minister confident that this entire £4.3 billion pot is being deployed in such a way that maximises post-16 participation, supports students and delivers value for money for taxpayers? No doubt the Minister will argue, correctly, that the Government are increasing the level of means-tested child tax credit, including for families with 16 to 19 year-olds in full-time further education. But at the same time the availability of child tax credits is being scaled back to those with a gross household income of around £26,000 from 2012-13. In any event, the extra payments for those below £26,000 a year were never intended to compensate for the loss of EMA which, as the Secretary of State has admitted, is up to £1,000 a year.
No one can deny that the EMA is not progressive, as payments are restricted to young people from households where less than £30,800 is coming in, but if there are deadweight costs in the EMA, what is the level of deadweight cost in 16 to 19 child benefit? The reality is that 16 to 19 year-olds from better-off families will stay on in full-time education irrespective of whether their parents get £20.30 or £13.40 in child benefit.
A week ago in the other place the Secretary of State argued that,
“there are real questions as to whether it is socially just to pay 45% of students a cash incentive to stay in learning when we could concentrate our resources on removing the barriers to learning faced by the poorest”.—[Official Report, Commons; 28/3/11; col. 52.]
The fact that he made that statement is quite interesting. If that is the case, how can it be socially just to pay child benefit to better-off families with 16 to 19 year-olds who will stay on anyway? So rather than cut £360 million in financial support from the EMA, which risks reducing participation of young people from relatively poor families, the Government should look at finding the £360 million from 16 to 19 child benefit paid to better-off families, which will not put participation at risk. That is the tenor of my argument. At present, the Government have opted to divert EMA funding from the relatively poor to the poorest, rather than divert 16 to 19 child benefit funding from the better-off to the relatively poor. We should debate that argument.
I believe that there is an overwhelming case for decoupling payments of nought-to-16 child benefit, paid to every child, and payments of 16 to 19 child benefit paid only to young people in full-time education and unwaged training. I also believe a common means test should apply to financial support for all 16 to 19 year-olds. I accept that that would extend means-testing. If you are going to target support, you have to have some form of means-testing.
As for balancing the books, my noble friend Lord Sassoon provided Written Answers to me on 7 December about potential savings from restricting 16 to 19 child benefit. For illustrative purposes, if 16 to 19 child benefit was restricted to those with less than £31,500—just £700 above the present maximum threshold for the EMA—the Treasury could save a whopping £875 million. Restricted to those with a gross household income of £37,500, the savings would be £600 million, with the equivalent savings just for England being £740 million and £510 million. I am arguing that there is an alternative way of providing the support for 16 to 19 year-olds, which could be targeted through the bursary scheme hugely effectively following the Government’s proposals, and by thinking differently about how we use the maximum resource rather than having pots of money in silos which do not move.
Lord Fink
My Lords, I thank the noble Lord, Lord Willis, for securing a debate in which I can make my maiden speech. While I have spent the majority of my time in the Lords in the Chamber, it gives me particular pleasure to make my maiden speech in the Moses Room. As well as the ancient ancestral connection, I also feel that the warmth and intimacy of this Room offers a comfortable place for making such a speech. To have the chance to speak in a debate on supporting 16 to 18 year-olds in full-time education is a particular pleasure as it touches on two or three strands of my particular interest and family history.
I thank your Lordships for the warm welcome that I have received from so many of you during my three months in the House, and in particular the staff of the House, who have shown great patience and helpfulness to me. I also thank my introducing Lords, my noble friends Lord Harris of Peckham and Lord Howard of Lympne, for the warmth of their introduction and my mentor, my noble friend Lady Fookes, for the time and patience she has shown me.
My life and family journey have been centred around education, which is one reason I was particularly pleased to make my speech on this subject. Growing up in Manchester in a happy family, albeit of modest circumstances, I never visited the Palace of Westminster, let alone dreamt that one day I would be privileged to attend your Lordships’ House. It is for this reason that I feel both very fortunate and humbled to be standing here.
My main education was at the Manchester Grammar School, where I received a free place to study as my parents could not have afforded to pay the fees. While I remember my early years at school with fond memories, I was acutely aware of the privilege I had in studying my chosen A-level subjects in science, together with free options to study one or two other unrelated subjects. Given how much I enjoyed and benefited from those last two years at school, I would not wish to see any other child deprived of that opportunity for financial reasons.
A law degree at Cambridge was a relatively dramatic change of direction for me but I saw it as a good way to study some arts subjects to balance my more natural skills in mathematics and science. However, being a mediocre lawyer, I was rapidly tempted to move back to accountancy and business, which I did after leaving Cambridge in 1979. Since then, my 30-year business career has spanned time in both industry and banking but, for the most part, I have worked in the world of investment management. I was proud to be able to work at Man Group for over 20 years and to help it develop from a medium-sized commodity trading business into a financial services group.
One of the reasons I left Man in 2008 was that I had suffered from a brain tumour three years earlier which had required major neural surgery. I received extraordinary treatment at the National Hospital for Neurology and Neurosurgery in Queen Square, where I was fortunate enough to be treated and diagnosed by a neurologist who, coincidentally, happened to be a friend from university, together with an incredibly dedicated neural surgeon as well as a fabulous team of nurses and speech therapists, who looked after me for nearly four weeks and helped me to speak again.
Along the way, I always tried to practice philanthropy in the way my parents had instilled in me, starting off in youth voluntary work, which was how I met my wife, Barbara. As well as managing to do some good on visits to the elderly people in Manchester, we made good friends with each other, of course, and with others. As well as supporting community causes, today my real philanthropic passions are the improvement of children’s health and education. I believe that with these two attributes the potential of our children is infinite, yet with poor health or education early lives are sadly blighted. I also never take for granted the joy of being blessed with three healthy and well educated children.
Noble Lords can see that these two main themes strike deep chords with my life experience and hence my commitment and passion. For this reason, I became a trustee of Absolute Return for Kids, which is a leading UK children’s charity focused on children’s health and education issues. That charity has the aspiration in education that every student should have the opportunity to go to university and that we should try to achieve five or more good GCSEs for each student under our care. The charity currently operates about 10 schools, and growing, in some of the poorest inner-city boroughs, mainly in London but, increasingly, in the Midlands.
In a personal capacity, I became a very enthusiastic supporter of the academy schools programme, directly supporting two schools: the North Liverpool Academy and Burlington Danes Academy in Hammersmith. The students at both these schools face enormous challenges and in both cases the ratio of children receiving free school meals is around 50 per cent, which is one of the highest marks of deprivation. Both schools also face non-financial challenges. In the case of Liverpool, it is a dependency culture, with many children coming from homes where there is literally no memory of a successful job. In the case of Hammersmith, it is a school with a large proportion of recent immigrants whose natural language is not English, many of whom are from Somalia.
What I have found so inspiring about the academy programme is that with the help of really committed staff many of the students’ lives have been transformed, while the rate of successful passes at GCSE has improved dramatically over the past four or five years, from less than half the national average to approaching 70 per cent in both schools. It is vital that schools have the ability to keep these less well off students in full-time education until the age of 18, at which point the students can choose whether to go to university or into a relatively skilled job or apprenticeship.
While I recognise and appreciate the necessity of saving public funds during a period of such fiscal constraints, I fully commend the coalition Government for focusing financial support on such students between the ages of 16 and 18 who are most needy, when financing those students makes a key difference in enabling them to remain in full-time education. I also believe and hope that the students who may miss out on the tightened criteria will also continue to proceed to A-level. The drop-out rate of the most able students is a statistic that might be monitored over the next three or four years, in order to see whether the targeting has adverse consequences. The first cohort of students from Burlington Danes Academy is finishing its A-levels this summer and I would be tremendously proud to see the first of these students go to a good university.
In conclusion, I thank all noble Lords for the kindness, courtesy and advice that I have received from all the Members of the House and look forward to being able to make a positive contribution over time.
Baroness Walmsley
My Lords, it is my pleasure to thank and congratulate the noble Lord, Lord Fink, on his maiden speech. Like myself, he comes from the north of England and therefore he and I are very modest. Modesty forbad him from telling your Lordships how successful he was in business. I read that in the 12 years that he was managing director of his Man Group, he managed to increase its assets under management 70-fold. That may be the reason why he was appointed the treasurer of the Conservative Party in October 2010.
Apart from being a committed business person, the noble Lord is also a committed philanthropist and a very successful fundraiser. He has told us about his chairmanship of ARK; he has also worked on the Mayor of London’s charity and Guy's and St Thomas' Charity and was chairman of the 2009 Lord Mayor’s Appeal. But his most successful fundraising was £10 million for the Evelina Children's Hospital Appeal. Your Lordships will have noticed how very passionate he is about education and health, and I am quite sure that it is on those subjects that we will hear very much more from him.
I congratulate my noble friend Lord Willis on his groundhog day speech. He explained with great cogency and passion the point that he makes about the financing of student support for 16 to 18s. I welcome the statement on the EMA replacement and I do not believe that it was a U-turn, as some are saying. Some £110 million was put aside immediately the abolition of the EMA as it stood was announced. Simon Hughes was commissioned to work out how to target that money better, and he has been working on it for months. I do not believe that the EMA had been well targeted. Even Labour acknowledged that it had planned to restructure 16 to 19 financial support anyway in 2013 once participation became compulsory up to 17 and, two years later, 18. It also planned to use the EMA as a replacement for child benefit for 16 to 19 year-olds. I welcome the fact that the poorest students will be better off under this more targeted system and that schools and colleges, which know their students’ needs better than any centralised system, will be charged with distributing the enhanced discretionary funds.
As to the groups included in roughly the 1,200 of the poorest young people who will get a bursary as of right, can the Minister tell me whether they include asylum seekers?
Transport was cited as the greatest issue of concern by many students and colleges. It could be a real attraction if colleges were allowed to guarantee that free transport would be provided to students within their catchment area. Can the Minister confirm that they will be able to do this under the new arrangements?
Colleges need information as soon as possible about how the new system will work so that they can communicate with their students and potential students, who are, at this moment, considering whether they can afford to stay on. Can the Minister say how soon colleges will get the details of the operation of the new system? The consultation is out now but when will the conclusions be drawn?
Although financial support is very important, I should like to take the question posed by the noble Lord, Lord Willis, somewhat wider to include curriculum and careers advice, partly because I could not have addressed the financial issues as well as he did. Two recent reports have commented on these two issues—the review of vocational education by Alison Wolf and the recent report from Demos and the Private Equity Foundation, called The Forgotten Half, about the 50 per cent of young people who do not go to university. Both reports have important points for our consideration in this debate.
There are to be changes to careers advice with the establishment of an all-age service. Schools will have a duty to provide independent advice and Connexions will be scrapped. I am concerned that there will be a 12-month gap between the scrapping of the one and the establishment of the other—a hole through which some young people could fall. Can the Minister say how the Government will avoid this?
Careers advice should be high quality, comprehensive and timely. I think that there should be an entitlement to careers advice which is available face to face and not just online. Alternative paths to work and work with training need to be explained to these young people. Advice about apprenticeships must be given to all young people as of right. An entitlement to this was dropped from an earlier Bill under the previous Government. Do this Government plan to reinstate it?
Work is currently being done on the curriculum. Schools are very affected by the various ways in which they are measured. The latest of these is the EBac. I have concerns in relation to young people aged from 14 to 19 who are disengaged and are more likely to be engaged by a more practical and vocational curriculum. I do not want to see schools making it impossible for young people to choose a combination of courses to suit their needs. Of course, it is important to provide a foundation in core subjects but my view is that the EBac categories are too narrow and will suit only the half that go to college or university. Yes, all our children should study a humanity, a language and a science subject, as well as English and maths, but is it really necessary for them to take a GCSE in all of them? They will already have had eight years of all those subjects before they start on their GCSE courses as part of the school curriculum from age five to 13, so it can hardly be said that they have studied no history if they do not take history GCSE.
The university technical colleges have the right idea. They offer technical training opportunities for 11 to 19 year-olds. Today we are considering 16 to 18 year-olds, in particular, but it is important that they have had the right range of opportunities further down the school.
However, there is no doubt that vocational education requires revision. Alison Wolf quoted it to be,
“sclerotic, expensive, centralised and over-detailed”.
We need to look at the courses that she described as dead-end courses which lead nowhere and which are sometimes currently ascribed as equivalent to several GCSEs. Crucially, we need to listen to employers as to what they need from young people starting work, and it is clearly not just GCSEs that they are looking for. The CBI welcomed Wolf’s focus on English and maths, ensuring that young people continue to study them beyond 16 if they have not achieved a grade C GCSE. I agree with that proposal, but do the Government plan to accept it, too?
The Demos report also focuses on the importance of literacy and numeracy, but it adds three additional “proven labour market premiums” which, it says, provide the best insurance for young people against becoming NEETs. They are: a character premium, which is basically acquisition of the soft or wider skills; a technical premium, essentially a level 3 qualification; and a graduate premium. It calculates that, if you have all five, you stand the best chance of progressing in the labour market. It is on the soft skills that I want to speak finally.
There are many young people who do not get from their home environment communication skills, problem-solving, punctuality, perseverance, conscientiousness, the ability to work in a team, social and emotional maturity, drive and energy, initiative, ability to adapt to change, the skills needed to learn new things et cetera—all the things that make a successful employee. It is important for those young people that schools and colleges provide opportunities to develop all those. This is where PSHE comes in, as well as courses such as the Certificate of Personal Effectiveness, Wider Key Skills and other qualifications developed by ASDAN and other providers. Last week, I was at a function where employers told how, when they interview, they look for young people with these skills as well as the appropriate academic qualifications. That is why these courses are as important to making a child life-ready and work-ready as English, maths et cetera. That is why I would like reassurance from the Minister that the department will discriminate carefully between these high-quality courses and qualifications and those dead-end, over-equivalenced courses that Alison Wolf was talking about. Schools must continue to be credited for these qualifications in the league tables. If we are dedicated to improving social mobility in this country, and this Government are, we must ensure that the most disadvantaged young people, as they approach the end of their compulsory schooling, are given the skills for life that the more advantaged children learn at home.
Lord Watson of Invergowrie
My Lords, I congratulate the noble Lord, Lord Willis of Knaresborough, on securing this debate, not least because it took him nine months and I admire his perseverance. I also join others in congratulating the noble Lord, Lord Fink, on an admirable maiden speech. I am sure that he will make a considerable contribution to the workings of this House and I look forward to witnessing it.
The Government tell us that the EMA has to go because it has not proved its worth. Yet research by the 157 Group has shown that, in some colleges, the EMA has boosted attendance and course completion to more than 90 per cent. Students at Lambeth College in south London who receive the EMA are 13 per cent more likely to pass their courses than those who do not.
In its report assessing the success of the EMA, the Institute for Fiscal Studies found that it resulted in a 20 per cent increase in participation among females and 14 per cent among males. A DfES survey found that the figure was, across the board, some 12 per cent. Surely a policy that increases participation among those groups most prone to chronic underachievement by somewhere in the 12 to 20 per cent range is a successful one, and should be built upon and not destroyed.
Further, given already or soon-to-be implemented cuts to benefits elsewhere, not least in housing benefit, the impact of EMA would increase if it remained in place. Families are surely far more likely to be comfortable about a 16 to 18 year-old staying in full-time education with EMA.
As other noble Lords have said, Mr Gove says that EMA has too much “dead weight” and points to a lack of firm evidence that it makes pupils stay on. However, official government figures estimate that an extra 10 to 12 per cent of pupils stay on. Surely that is a significant number. We are talking about some 60,000 young people who would in the main be unqualified, unemployed and educational drop-outs otherwise. How can something that benefits at least 60,000 youngsters be worth doing away with? I am well aware of the counter-argument, that there are those who benefit from it who do not really need it. But it is a universal benefit like many others. It is a safety net for the less well-off and should not be done away with simply because there are some people who receive it who do not benefit from it. The noble Lord, Lord Willis, highlighted the winter fuel allowance which, like him, I have received. I frankly question its value in the grander scheme of things.
The Government seem to have reacted in some small measure to the widespread criticism of this savage cut by announcing last week an additional £180 million to help students from the poorest families continue with their education. That is to be welcomed because it is being targeted at those students most in need, including those in care and those with disabilities. Yet it means simply that the Government are cutting the resources associated with the EMA by 60 per cent rather than 90 per cent, leaving the support to enable young people to stay on at school or college still far short of the £575 million provided through EMA.
We hear that of the £180 million, £110 million is to come from what is described as a contingency fund within the DfES while the source of the remaining £70 million is not clear. It is simply entitled Treasury funds. I am sure that I would not be alone in welcoming clarification of where that additional funding will come from. I would particularly like confirmation that it will not come from other 16 to 19 budgets within the DfES. Now we learn that replacing the scheme will actually cost far more than the additional £180 million announced. Information received by the Opposition from the House of Commons Library reveals that the Government may have to find up to £130 million more to fund a promise to maintain EMA for students who started two-year college courses last autumn and who will receive weekly payments of at least £20 until the end of the next academic year. Because Mr Gove has promised to protect only those on the top rate of £30 a week—a payment that will be cut to £20—it is expected to cost around £130 million on top of the £180 million bursary fund that he announced.
As has also been mentioned, the Secretary of State can apparently anticipate a robust knock on his door from none other than his friend, London’s mayor, who is concerned about a disproportionate impact of withdrawing EMA on young people in the capital. “I don't think we have seen the end of this story”, Mr Johnson told the BBC “Question Time” audience last week. On this point, if on no other, we can only hope that the mayor is correct.
Colleges have welcomed the Secretary of State’s intention to entrust them with maximum discretion to determine how the additional resources are to be spent, as there will be freedom to use them to fund transport, food and learning materials. Following the Secretary of State’s original announcement of the ending of EMA, colleges and students expressed great concern about transport costs, which an Association of Colleges survey had identified as a key barrier to students continuing with their courses. Ninety four per cent of colleges have stated that abolishing the EMA will affect students’ ability to travel to and from college.
Since 2000, colleges and schools have been able to claim so-called entitlement funding, specifically for activities which support a broad education for young people, resources that they use to pay for tutorials, additional courses and so-called enrichment activities such as sport and the creative arts. Colleges use the entitlement funding to directly support student achievement in their chosen courses and qualifications and to help them progress into higher education or employment. The Government’s 16 to 19 funding statement announced a massive cut in entitlement funding from 114 hours to 30 hours, as well as cutting the maximum funding for each student by 10 per cent.
A number of colleges use their entitlement funding to assist students with their applications to university, particularly those groups who are less well represented in higher education. Many activities supported by enrichment funding provide students with additional information for UCAS personal statements which, as I am sure noble Lords are aware, are becoming increasingly important for acceptance into Russell group universities. Some colleges use the funding to provide additional one-to-one coaching for students to prepare them for Oxbridge interviews—the kind of support that students at private schools receive as a matter of course, with long-established outcomes. The Government should reconsider this cut, given the impact it will have on disadvantaged young people in preparing them for an enriching life of post-school education or employment.
One major benefit to flow from devolved government to Northern Ireland, Scotland and Wales is of course that young people in those parts of the UK will continue to receive EMA. That means that, unlike their counterparts in England, those school pupils and college students most in need will not be forced to leave education earlier than they or their parents would wish. Another factor affecting young people in education, along with those who are older, in one part of the UK differently from those in others is the so-called 16-hour rule. Officially, the rule applies across the UK. In response to a parliamentary Question which I submitted last year, Lord Freud replied:
“All Jobcentre … staff are given the same appropriate advice and guidance relating to full-time and part-time study to ensure that the rules are followed consistently”.—[Official Report, 9/12/10; col. WA 80.]
That may be the theory but it is not the practice. What is required most of all on the 16-hour rule is flexibility in the benefits system and the relaxation of its strict application. The previous Government had announced their intention to trial a relaxation of the 16-hour rule in certain areas. This Government have chosen not to do so.
Last year, Scotland’s Colleges—the equivalent of the Association of Colleges north of the border—published a report entitled Back to Work, which concluded that where the 16-hour rule is implemented strictly it acts as a clear disincentive to study and therefore to make a meaningful return to the job market. Students forced to go part time rather than full time are delaying their potential entry into the workforce. Many students want to take up a full-time college place but cannot do so because if they do they will lose their benefits. Colleges would not advise students to come off benefits just to study full time if that meant they would be worse off. As a result, they study part time and claim benefits for longer.
It is not the actual government regulations but the interpretation of full-time education that are the problem. The deciding factor appears to be whether or not a course or qualification has been designated full time or part time by the learning provider. However, there can be flexibility as shown in the way that the regulations are interpreted in Northern Ireland, but a willingness to interpret the rule more sensibly is unfortunately lacking in other parts of the UK.
The benefits system in Northern Ireland is different, although the 16-hour rule still applies there, but education opportunities have been adapted to make studying on benefits possible. A student is classed as full-time for further education purposes if they attend a minimum of 15 hours a week for seven sessions over a 30-week period. This allows the college to receive funding to provide the learning, but students can still collect benefits, as they are available for work and the course is less than 16 hours a week. Why cannot this flexibility be extended across the UK so that all can benefit from it? A blanket lifting of the rule would be preferable but, if that is deemed unacceptable by the Government, I very much hope that there might be, at the very least, selective relaxation to cover areas of high unemployment.
Baroness Hughes of Stretford
My Lords, I, too, congratulate the noble Lord, Lord Willis, on securing this debate. It is an extremely important time to be talking about these issues. He has a reputation from the other place and from his earlier career of being a terrier on these issues, a real champion of young people in education. It is good to see him continuing that.
I also thank all Members for their contributions, particularly the noble Lord, Lord Fink, for his maiden speech. I was very pleased to hear that his priorities as a new Member of the House are the improvement of children’s health and education. They are very fine objectives and I very much look forward to hearing his contributions to future debates.
Among Members right across the House and among teachers, parents and others working with young people up and down the country, there is a growing concern about this generation of young people, particularly those aged 16 to 25. That concern, which in some ways is unintentional, is none the less the cumulative effect of many of the cuts being brought in by the Government and they are falling hardest on that age group. We have seen dramatic cuts in youth services, in Connexions, in services to address teenage pregnancy, NEETs and so on, limitations on the school curriculum, on sports, music and enrichment activities, tuition fees and rising unemployment for young people and for their families. In this context it is even more important that as many as possible of the subset of the 16 to 25 group, the 16 to 19 year-olds, can stay in education or training as long as possible. There are in fact a range of cuts that, taken together, make it more difficult for thousands of young people and they fall disproportionately on disadvantaged young people affecting their ability to stay on. We have seen the scrapping of the September guarantee, the abolition of the diploma entitlement, the abolition of the apprenticeship guarantee, mentioned by the noble Baroness, Lady Walmsley, and the abolition of the EMA. I want to touch briefly on the apprenticeship guarantee before talking about the EMA, as most Members have done.
The additional funding for more apprenticeship places for young people is very welcome, but I wonder whether the Minister understands that in this regard funding is the easy bit. From my experience in government, it is much more difficult to secure high-quality places, engaging employers and matching young people to those placements. The guarantee was designed to put the onus on local agencies and the providers to ensure that the apprenticeship placements were there and to give a guarantee to a young person. I am concerned that if this guarantee is abolished as the Education Bill proposes—the previous Government did not abolish it, they introduced it; the current Government are proposing to abolish it—then, despite the funding, we will not see a substantial increase in apprenticeships.
Baroness Walmsley
The noble Baroness has slightly misunderstood what I said. It was the guarantee for information about apprenticeships that was dropped, not the guarantee of an apprenticeship if suitably qualified.
Baroness Hughes of Stretford
I thank the noble Baroness for her clarification but my point remains valid: there is a proposal to abolish the guarantee itself, which is arguably more important. What are the Government going to do to ensure that there is a sufficient supply of good placements?
Secondly, on the abolition of EMAs, despite repeated promises from the Prime Minister and the Secretary of State before the election that they would not abolish them, and despite the independent evaluation from the IFS, to which my noble friend Lord Watson referred, that EMAs increased participation and boosted grades, even if you accept the Government’s dead weight costs, which are dubious, the cost of EMAs is still outweighed by the financial gain of getting young people into training. Despite all this evidence, there was a rush, without consultation and without any alternative plan in place, to abolish them.
The bursary scheme that has now been announced after fierce public protest and the threat of legal action from students in the middle of courses is not only much reduced, with about a third of the previous level of funding, but also has a number of questions about it which I hope the Minister can clarify. First, on the guaranteed bursary of £12,000 for a tiny minority of the most vulnerable students—less than 2 per cent—the Secretary of State made much of the claim rehearsed by the noble Baroness, Lady Walmsley, that this is more than those students would have received under the EMA. It is more—it is 77p per week more. Does the Minister agree that it is only 77p more per week than those students would have received under the maximum EMA to which they would have been entitled?
Secondly, the Secretary of State also announced two other elements—a discretionary pot of the balance of £165 million for colleges to pay out, as well as transitional protection for those students already receiving EMAs to the end of the course. However, he did not make clear whether both of those elements are to be paid out of the £165 million that is left after the bursary for the vulnerable students. Can the Minister clarify this matter? Does he agree that the transitional protection for existing students at the level announced by the Secretary of State will come to about £130 million, as my noble friend said? Does that mean that there is a balance of only £35 million for the discretionary pot for colleges? They already receive £26 million, so if that is the case it is not much of an increase. If these two elements are not coming out of the discretionary pot, where is the £130 million for the transitional protection coming from and what other services have been cut to pay for it?
Thirdly, the Secretary of State claimed that the poorest students on free school meals would receive more than they do at present, with a potential under the discretionary pot scheme of £800 per annum. Does the Minister agree that with a household income of under £17,000, as the noble Lord, Lord Willis, identified, to qualify for free school meals, these students would be entitled now to the maximum of £1,170 of the EMA and that therefore, under this scheme, they would face a reduction of over £300 a year?
Fourthly, does the Minister agree that many thousands of young people, whose hard-up families have an income of more than the threshold of just under £17,000 for free school meals but less than the threshold of £21,800 for the maximum EMA—let alone the £30,800 to get any EMA at all—will not be guaranteed anything under this scheme and could end up with nothing?
Finally, as the IFS pointed out, after the proposed discretionary scheme—and this is a very important point, notwithstanding the limitations that we have already identified—young people will not know from their colleges whether they qualify for any support from the discretionary pot before they decide to apply for courses. My big concern is that, unless many young people from very hard-pressed families have some certainty that they will get some financial support, they may well not take the chance and sign up for the course.
The noble Lord, Lord Willis, has made an interesting suggestion of diverting child benefit to preserve a larger budget for EMA under the scheme proposed by the Government. I think there were any number of ways, with the right commitment, that the Government could have approached this differently, with careful consideration and a real attempt to keep the main benefits of the scheme for more of those who qualify. As it is, I feel that the Secretary of State acted very rashly and irresponsibly on this, reneged on those pre-election promises and created a great deal of uncertainty and potential hardship for many hundreds of thousands of young people.
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)
My Lords, like other noble Lords, I congratulate my noble friend Lord Willis of Knaresborough on securing today’s debate and setting out the issues, which he did quite clearly. I know he cares passionately about supporting young people to continue their education, a passion that everyone here today obviously shares. I also congratulate my noble friend Lord Fink on his speech. He said, rather movingly, that he was taught to speak again after he had a brain tumour. We are all extremely glad that the noble Lord was taught to speak again and we hope that we hear him speak again on many occasions in your Lordships' House.
I shall try to respond to the main themes raised today. There were some specific questions which, if I may, I shall follow up if I do not respond to them all in the time that we have. Like the noble Baroness, Lady Hughes of Stretford, I want to start briefly by setting some of this in a broader context.
I start with the question of why 16 to 18 education matters. It matters for the economy because to compete internationally we need a well trained and well educated workforce. It matters financially for the young people concerned because better-qualified people earn more in their working lives. But, above all, it matters educationally because, regardless of any financial benefits, education is a good in itself. It enriches lives and opens the doors of opportunity. For all these reasons, this Government, like the previous one, are committed to reaching full participation in education, training or employment for all young people up to the age of 17 by 2013 and 18 by 2015.
In difficult financial circumstances we have secured funding for 1.6 million places for 16 to 18 year-olds in education or training, which includes 230,000 apprenticeship places, for 2011-12. Total funding for 16 to 18 participation in 2011-12 is over £7.5 billion, which is a record. I recognise that there are concerns, which have been perfectly fairly spelled out by the noble Baroness, Lady Hughes of Stretford, but overall it is important to emphasise that the commitment to full participation and the funding for 1.6 million places as well as the increase in the number of apprenticeship places—and I shall respond to the noble Baroness’s point on the guarantee—are all there. I do not pretend for one moment that this means that there will not be financial challenges for schools and sixth forms—there will be—but at a time when many other budgets are facing heavy cuts, it is a reflection of the priority we attach to 16 to 18 education.
We know we have challenges to overcome. Despite the best efforts of the previous Government, we have a wide gap in attainment between rich and poor. Half of our 16 year-olds fail to secure five decent GCSEs, including English and maths. As Professor Alison Wolf has shown in her recent report on vocational qualifications, too many of them, sadly, do not seem to be respected by employers and colleges.
I agree very much with my noble friend Lady Walmsley that it is important that we listen to employers. I also agree that some of the soft skills that she talked about—employees turning up on time, for example—are as important as some of the academic qualifications if they are going to get on in life. We also know that we have a group of 16 to 18 year-olds who are not in education, employment or training, although I am glad to say that in the last quarter the number of NEETs in that age group fell by 15,000.
What are we doing to raise standards and increase participation? We know that the biggest determinant of whether students stay on is their attainment at 16, and specifically whether they secure good GCSEs in subjects that universities and employers value. Therefore, we have introduced the pupil premium to try to tackle disadvantage from the earliest years and narrow the attainment gap. The funding for that will grow to £2.5 billion by 2014-15. We have announced a new focus on reading at age six; we have increased our emphasis on tackling under-performing schools; we have rolled out our academies programme; and we have introduced the English baccalaureate.
I take the point made by my noble friend Lady Walmsley about the disengaged. That is why we are also seeking to increase the number of studio schools, which I think can play an important part in engaging children who have not been turned on by what goes on in the classroom. By learning some practical skills—for example, how to lay a wall—they also learn about angles and measurements, so there are many benefits there too. We have announced a review of vocational qualifications and more funding for technical academies and UTCs. We have expanded the apprenticeships programme for 16 to 18 year-olds from 116,000 last year to 131,000 in 2010-11 and 133,000 next year. Given that we are dependent on employers to provide those apprenticeship places, we are not able to give a guarantee on their behalf. If employers will not make the places available, we cannot offer such a guarantee. However, I share my noble friend’s commitment to apprenticeships. I also agree with everything that she said about the importance of securing high-quality places, and we will need to work at that.
We have also switched more funding to tackle disadvantage post-16, building on the pupil premium. Therefore, within the overall budget of £7.5 billion that I mentioned, £770 million is being spent on supporting the education of disadvantaged 16 to 18 year-olds. That is £150 million more than would previously have been available to schools and colleges, and it is specifically for the education of the most disadvantaged 16 to 19 year-olds.
Perhaps I may say a few words to try to pick up the questions raised about the end of the education maintenance allowance and its replacement by the 16 to 19 bursary fund. Clearly, we want young people to stay on in education and training and not to be discouraged for financial reasons. The education maintenance allowance was used by the previous Government to provide an incentive for young people to stay on and I recognise that it led to an increase in overall participation. I do not accept the picture painted by my noble friend Lord Willis of Knaresborough and the noble Baroness, Lady Hughes of Stretford, about the research into the impact of the EMA. This was not research conveniently commissioned by the new Government; it was commissioned by the previous Government to be carried out by a number of different research bodies. It seems that it was found that some 10 per cent of those in receipt of the EMA said that they would not have participated without it, yet it was paid to almost 45 per cent of young people at a cost of around £560 million. It is also the case that since it was introduced—and I recognise the argument that it was an incentive payment when it was introduced—we have moved further and further towards compulsory participation post-16. Therefore, the case for an incentive payment is, I think, reduced.
Rather than paying nearly half of all students an incentive to stay in learning when it is becoming compulsory, we argue that we should concentrate our resources on removing the barriers to learning which are faced by the poorest. Therefore, last week we set out our proposals. We have consulted extensively to ensure that we support those most in need, and we are grateful for the work that Mr Simon Hughes has done in helping us to refine our proposals. In response to the question raised by my noble friend Lord Willis of Knaresborough and the noble Lord, Lord Watson of Invergowrie, I can confirm that there is new money from reserves at the Treasury exactly as was described.
As a result of that additional funding and the funding that we have found from within the DfE budget, 12,000 students—those in care, care leavers and those receiving income support—should receive an annual bursary of £1,200 if they stay on in education. That is only slightly more, I accept, than they received under the EMA. Asylum seekers are not caught by the category of entitlement that my noble friend Lady Walmsley raised, but they would be eligible for support through the discretionary fund which schools and colleges would have at their disposal.
We want those most in need who are currently in receipt of the EMA to be protected. All those young people who began courses in 2009-10 and who were given a guarantee by the previous Government that they would receive the EMA will still receive their weekly payments. Young people who started courses in 2010-11 and received the maximum weekly payment of £30 should now receive weekly payments of at least £20 until the end of the next academic year. In addition, those students will be eligible for support from the new post-16 bursary scheme. That can help to cover the costs of travel, food and equipment, particularly for poorer students and those in rural areas where transport is an issue. One hundred and eighty million pounds will be available for that bursary fund.
Reference was made to the £800 figure in relation to those eligible for free school meals. That was intended as an illustrative figure, to demonstrate the amount of the money, rather than saying that those in receipt of free school meals would be eligible for £800.
Baroness Hughes of Stretford
Can I be absolutely clear? The Minister said that money has come from the Treasury reserves as well. Is the £130 for transitional protection coming from the Treasury? In other words, will the £180 million earmarked for the whole scheme be used exclusively for the two purposes of the bursary scheme and a discretionary pot?
Lord Hill of Oareford
Because the figures are complicated and time is short, I am very happy to set out the position as clearly as I can subsequently. The contribution from the Treasury is to help to cover the steady state of the scheme, and the other costs will be found from within the department, but I will clarify that for the noble Baroness.
Schools and colleges will have the freedom to decide on the allocation of the bursary because, as my noble friend Lady Walmsley said, they are best placed to know the specific needs of their students. We are consulting on the scheme. That will take eight weeks. I know how important it is that young people know what is happening, but it is also important that there should be a consultation.
I am grateful to my noble friend Lord Willis for his ambitious and imaginative proposal. It is probably career-limiting for me to respond in detail to his point, but I know that it is a discussion that he will continue to pursue in his terrier-like way.
In these difficult economic times, we are trying to prioritise the reform and investment that we need, particularly for those aged 16 to 18. We want all children to have the chance to benefit from education or training post-16. We believe that our package of measures and reforms, starting with the pupil premium, working through school, increasing the number of apprenticeships, funding post-16—which has increased—and providing a targeted package of support for 16 to 18 year-olds, will help to bring that greater participation about.