Educational Maintenance Allowance: how hard is it for the new policy to be better?

Yesterday Michael Gove, finally, announced the government’s proposals for replacing the Educational Maintenance Allowance (EMA) scheme. As previously trailed, Liberal Democrat pressure has secured more than £100m extra for the plans.

The £180m being spent on the new scheme compares to the £560m cost of the EMA. At first glance, that is a large cut. But if you view the key objective for the funds to be helping more people to take part in post-16 education, then the picture looks very different. That’s because several different studies of EMA concludes that the vast majority of its funds went to people who would have been in post-16 education anyway.

The IFS, for example, concluded in December that,

The Government argues that the impact generated by the EMA does not justify the £560 million spent on this policy in England. Underpinning this argument is a finding from some qualitative research. One of the questions asked those who were in receipt of EMA what they would do in its absence: only 12% reported that they would not be in education. The Government infers from this that the EMA policy carries a ‘deadweight’ of 88%, i.e. 88 out of every 100 students receiving EMA would still have been in education if EMA did not exist and are therefore being paid to do something they would have done anyway. The estimates from the IFS research reports above imply a level of deadweight that is consistent with this: 65 out of every 69 individuals aged 16 who are eligible for the EMA would have stayed in education without the payment.

So on those figures, only between £32m (IFS research) and £67m (government survey) of the £560m spent on EMA actually went to people who otherwise would not have been in education. With the new scheme having a budget of £180m, its does not have to be targeted particularly well to be able to afford to reach all of those people – and more.

Will it? For the 12,000 students who are amongst those in the greatest need, such as pupils in care, care leavers and the severely disabled, the new scheme will certainly be marginally better as it will give them slightly more money each year and, as they look to be clearly defined categories, the money should get to the right people.

For other students, the new scheme involves giving colleges and schools discretionary powers to make grants, so it is only when we see how those powers are used that the question can be answered for sure. But they would have to use those powers remarkably badly not to manage to at least match EMA’s record at getting money to those who would otherwise not be in education.

Or to put it at the simplest, £180m would have to be spent very badly indeed not to get at least even the higher figure of £67m into the right hands.

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22 Comments

  • Sorry Mark but this reads just like a Govt announcement. EMA needed modest reform not abolition. The unprecedented drop in FE enrolments for September in many institutions has been the direct impact so far. The partial U turn by M Gove is I believe recognition that the scheme had more value than thought at the time of its announced abolition.

    Correct me if I am wrong but I thought LD policy was to revise and streamline EMA so why the clamour to support something that emerged from the right wing Tory think tanks. This is a major part of why the LDs are so unpopular right now. Re-read Dominic Carman’s accounts of Barnsley to get a feel for the loathing for policies like cutting EMA.

  • @Mark Pack

    “The £180m being spent on the new scheme compares to the £560m cost of the EMA. At first glance, that is a large cut. But if you view the key objective for the funds to be helping more people to take part in post-16 education, then the picture looks very different. That’s because several different studies of EMA concludes that the vast majority of its funds went to people who would have been in post-16 education anyway.”

    No amount of weasel words can evade the fact that this is a massive cut. And how cynical to suggest that it should be used as a carrot to keep people in education and therefore those who engage willingly shouldn’t get it. The attraction of the EMA is that it empowers all young people and encourages them to be responsible and independent. It should only be taken away from them if they have broken their contract in some manner with the educational institution they are attending, i.e. by not doing course work; not attending lectures; anit social behaviour in class etc. The people are not stupid. They can see that there has been a massive cut to EMA. Why do you think all those people were on the TUC march on Saturday?

    And by the way, shouldn’t your party condemn the appalling slur on Ed Miliband and Ed Balls perpetrated by the Mayor of London when he said that they would be “quietly satisfied” with the disorder?

  • I’m sorry I find the Government, and this threads, argument a simplistic use of the available statistics. It is interesting that neither use the quote that:

    “The simple cost-benefit analysis mentioned above suggests that even taking into account the level of deadweight that was found, the costs of EMA are completely offset.” So how much in reality is this measure going to save?

    If EMA were not available then, in the majority of cases, it would be the parents, and not the students who would need to find the required funding for travel etc. The same parents who are now financially worse off than when the study was carried out. Parents do not have an obligation to fund further education and, as sad as it may be, some will not.

    It should also be considered whether asking 16 – 18 year olds, with no real experience of managing personal finance, what they would do without EMA is likely to be a true reflection of what would actually happen.

    Is it valid to ask those with no experience of the lack of the benefit how they would act. Perhaps asking those who did not attend further education BEFORE the introduction of EMA whether they would have attended with the benefit of EMA would be a more credible approach.

    EMA will not affect my children, one is at University already and other is only 6. I am also in a wage bracket where they would not be eligible anyway. But for those children without the benefit of relatively well paid parents EMA was an enabling benefit. It gave a sense of worth to continuing education. I believe this is a betrayal that will be remembered along with Tuition fees by those who will be voting for the first time at the next election.

  • Simon McGrath 29th Mar '11 - 10:15am

    @steve way
    “If EMA were not available then, in the majority of cases, it would be the parents, and not the students who would need to find the required funding for travel etc.”
    Parents spending their own money to support their children. You think this is a bad thing? Why?

  • Mr Pack –

    There may well be something in this, but why are the young being singled out. The winter fuel payment for example is so badly targetted that people are entitled to it if they are dead (I’m not making this up). The same can be said for bus passes, TV licence freebies and so on. I can make a guess at why the young are being targetted, but I’d hope I’m wrong.

    Simon McGrath – ‘Parents spending their own money to support their children. You think this is a bad thing? Why?’

    Who is saying it is a bad thing? Or are you saying that families that get EMA are therefore feckless? Don’t get me wrong here by the way – if you know a part of the country where they are falling over themselves to take on 16 year old school-leavers and offer generous study subsidy and ample day release (like the boomer generation got, often paid for by the taxpayer via nationalised industry) then please can you let the rest of us in on the secret?

  • Just a couple of points.

    12,000 “amongst those in greatest need”represents less than 2% of the number currently receiving EMA, so that wouldn’t be much help in targeting, even if you knew they were all in the magic 12% (which you don’t).

    That leaves me with no idea how it’s intended to try to identify the magic 12%. I would suggest that just asking students whether they need the money will result in a figure closer to 100%!

    Regarding that magic 12%, it relates only to those who were definite they would not have done a course or training without EMA. We don’t know how many weren’t sure whether they would have. Other research indicates that an additional 42% would have needed to earn more money to stay in education. Even assuming they could all have got additional work, that would obviously have affected their studies. (The IFS pointed this out but you chose not to quote that part.)

    Finally, according to estimates, 80% of those currently receiving EMA are from households with an income of less than £20.8k. Another part of the IFS opinion that you chose not to quote was this: “even if the EMA had no impact on educational outcomes it would still represent a transfer of resources to low-income households with children, which may in its own right represent a valuable policy objective.” No longer in Lib Dem eyes, apparently.

  • Mark Pack –

    ‘I think there’s a case that means testing works far less well for pensioners than for younger people’

    So in other words, the young are fair game.

    ‘because (a) they often struggle more with forms etc.’

    Well, I suspect my grandparents would giive you a piece of their mind for that tacit statement on their capacity. But this is simply not a reason for differential benefit systems. Not even close.’ Differential advice, possibly.

    ‘and (b) the folk memories of the appalling means testing pre-1939 means that for people of that generation and the immediately succeeding one the idea of applying for a means testing benefit comes with a lot of very off-putting historical baggage.’

    Why should what happened in 1939 have any relation to now? For that matter, why is the baggage different?

    ‘But I’ve only seen anecdotal evidence of both points, so as ever if someone has evidence to point to…’

    But this is not the issue here. In a time of supposed national austerity it is clear that the Coalition has targetted the young. This is not a partizan political point by the way. I argued against the way both Labour and the Conservatives priced three generations out of housing to give their boomer client votes an inflation lollipop.

  • Richard Heathcote 29th Mar '11 - 12:28pm

    i personally think the deadweight argument is poor, people want their kids to stay in Further Education, so yes if you take £30 away from some kids the shortfall will be made up by parents who will pay for travel and will pay for food for their kids. if you apply that logic of deadweight to the 50% tax band then people will still go to work if they pay a little extra in tax.

    i think its a poor argument and is going to put more pressure on very low income families.

    ive also seen in other posts ive made in blogs about EMA why should peoples taxes be used for things like this, well my answer to that is ive worked since i was 16 ive paid income tax for the entire duration of my working life is it wrong for me to expect some help for my son to attend college when my taxes have been used over the years to fund crap i dont like.

  • “”

    You’re saying that because you could give the same funding to nearly 30% of current recipients, and you’re trying to identify 12%, you have some leeway.

    Maybe so, but I’ve yet to hear any suggestion at all as to how this deserving minority can be identified. You can’t do it by parental income, because the 80% who currently get the full amount are all from households in which the income is well below average. You really can’t do it by asking them whether they need the money. So I think you need to give us some suggestion about how this is meant to work, rather than juggling with numbers to make it look less of a problem than it is.

    And the fact is that this is yet another regressive change. Doesn’t that concern you? It’s no answer at all to claim (with doubtful veracity) that the critics are arguing about other aspects – particularly when the critics you yourself quoted – the IFS – highlighted this issue!

  • @Simon McGrath
    “Parents spending their own money to support their children. You think this is a bad thing? Why?”

    Perhaps putting my comment into it’s context would help rather than trying to use it to make a point that it was never intended to do…

    My point is that the questions were, mainly, aimed at the students and not the parents who would have to find the additional money. Some will not be able to due to any number of reasons, some will not be willing to. Parents should do all they can to support their children, but if they won’t, there is currently no legal compulsion to do so.

    Surely a “liberal” society would be looking to enable its youngest members not condem them because their parents do not wish, or are not able, to support them….

  • Actually, listening to Gove’s brief announcement in the Commons, the only suggestion he seems to have is that pupils on free school meals could be given payments of about £16 a week, which he describes as “more than many receive under the current EMA arrangements” (a grossly misleading statement if ever I heard one – only about 10% from the highest-income households currently receive less than £16 a week).

    That would amount to giving (presumably) about 60% of current recipients about half of what they’re now receiving, not targeting higher levels of support to the magic 12% Mark Pack refers to. So, in Mark’s terms, most of the money would still be going to those who would be in education anyway, and presumably many of the 12% would indeed be unable to continue studying when offered only half the current level of support.

    This seems to be just the kind of half-baked mess we’ve come to expect from this government.

  • “Surely a “liberal” society would be looking to enable its youngest members not condem them because their parents do not wish, or are not able, to support them….”

    I have sympathy with this argument. But there is a difficulty with it, which is that by providing a safety net to help those who have no choice in the matter (children) you provide an enabler for parents to evade their responsibilities. It is writ large in the case of people having children to generate extra benefits payments, rather than considering whether they are able adequtely to support children – the unintended consequence of a system designed to protect children from hardship caused through no fault of their own.

    A tough nut to crack.

  • James from Durham 29th Mar '11 - 3:56pm

    I am not at all convinced that the elderly are less capable at form filling than the young. I remember how crap I was with official stuff when I was 18 and I don’t think I was unusual. I suppose it is true that the young have parents who can deal with the forms…

  • Tabman –

    ‘But there is a difficulty with it, which is that by providing a safety net to help those who have no choice in the matter (children) you provide an enabler for parents to evade their responsibilities. It is writ large in the case of people having children to generate extra benefits payments’

    Conflating people in receipt of EMA with people having children to play the benefit system is very cheap.

    Leaving aside the cheap shot though, there is a wider point that no one seems to be addressing. In future, people will have to be in education (if not per se schooling) to the age of 18. Put another way, that will need to be funded in some way. This effectively asks far-reaching questions about the entire structure and funding of education. At the moment we are just muddling along.

  • Chris Keating 29th Mar '11 - 5:28pm

    The people who are losing their EMA now are exactly the same people who will spend their working lives paying off the debt built up in the Labour years.

    Gordon Brown might have given £20 a week with one hand, but he was taking away a great deal more in the future by building up an unsustainable budget deficit.

    Doubtless I will now be told that the answer is to tax “the rich”, “bankers” and “tax evaders” and that by doing so all the Government’s cuts can be avoided, at least all the unpopular ones. I don’t believe it.

  • So governemnt give with one hand a cut down version of EMA worth 180 million, and astonishingly government are cutting 150 million from schools standards grant with zero notice with the other hand, if this is true it is yet another rob Peter to pay Paul… shh don’t tell anyone

  • Until now I had no knowledge of the IFS or governments statistics on how much of the EMA grant was actually spent on those that could of otherwise not gone into post-16 education, but I do have first hand experience of the EMA system, whilst not a claimant some of my friends in Sixth Form were.

    The scheme was very poorly targeted and the amount of cash given rarely matched up to the needs of the claimant. My best friend who recieved EMA would often still not show up to class all days and miss her payment for the week, but to her that wasn’t a financial problem (if she did go for a whole week the money would pay for travel for more than one week). This is not so say that all claimants could take or leave the funding, but more often than not the money given was more than enough.

    I don’t remember having to buy all that many books for college, much more of a minimal expense than in University where I’ve forked out loads with no financial assistance from government schemes.

    I think that Simon Hughes’ criticisms and identifying the needs of claimants were very accurate and I’m very happy with the replacement.

  • The real fact is that the current [to be scrapped] EMA actually helps young men and women remain in further education, in many case this little grant is the main reason why youngsters can afford to go into sixth form education. You got the best deal you could, and thats your problem, the best deal will have a neet solution, oh dear

  • Old Codger Chris 30th Mar '11 - 9:39pm

    @Duncan
    The Old Codger bit of my blog name is accurate – and so are your points about the old not being means-tested (there are, of course, many elderly people in real need) while services to the young are cut.

    The elderly are (a) more likely to vote and (b) more likely to vote Conservative, especially those elderly people who don’t need bus passes and winter fuel payments but happily accept them.

    The Lib Dems presumably gained many young voters at the last General Election with their “honest party, anti-tuition fees” pitch. Shame about that.

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