Financial Support (Students)

Bill Esterson Excerpts

Wednesday 15th December 2010 Westminster Hall

[Teresa Pearce]

I agree. It makes a difference if people know that they can concentrate on their education without worrying about the bus fare.

Some 43% of students at Bexley college and 38% of students at Greenwich college—the two largest colleges serving my constituency—receive EMA, the vast majority receiving the higher rate of £30 a week. Some argue that this money does not have an effect, but the principal of Bexley college, Danny Ridgeway, has confirmed that, in the past two academic years, students at his college in receipt of EMA have been more likely to pass their course than their colleagues who have not received EMA support. I believe that this positive outcome is linked to the attendance requirement attached to EMA payments.

[Bill Esterson (Sefton Central) (Lab)]

On that point, I received an e-mail from the principal of Hugh Baird college in Bootle, telling me that 84% of young people at the college currently receive EMA. She says that it is clear that the EMA has become a key part of family income and that its discontinuation is very likely to impact on the participation rate locally. In addition, a study in Merseyside colleges shows that the results of those on EMA are 7% higher than those of people who do not receive it.

[Teresa Pearce]

I agree. More importantly, Danny Ridgeway, the principal of Bexley college, agrees. He says:

“It is our view that the conditions that link payment to attendance and completion of work have been a motivator to help these students to success and progress”.

At this stage, we do not know whether the Government’s plans for enhanced discretionary learner support will have a similar attendance requirement. Will the Minister tell me whether it will?

The Government’s current line is that many students would have stayed in education anyway and that EMA is therefore a dead-weight. When the Minister makes this point—I am sure that he will—I would be grateful if he commented on the following points. First, research underpinning the dead-weight assertion was flawed, because it was undertaken only among schools, when 69% of the recipients of EMA attend colleges not schools. Furthermore, a significant number of EMA recipients are black and ethnic minority, yet those surveyed were 91% white. If a survey is undertaken with an unrepresentative sample, I believe that the results are irrelevant to the debate.

Secondly, research from the Institute of Fiscal Studies showed that where EMA is available, participation in education and attainment levels increased. Does the Minister not think that those are worthwhile objectives?

Thirdly, many public policies involve a high amount of dead-weight—for example, the initiative announced in the June Budget about temporary relief from national insurance contributions for new businesses. The Treasury’s costing shows that 96% of that tax cut will go to employers who would have set up anyway and that 4% will go to employers who have set up in response to the incentives. If the sole aim of this policy is to stimulate new business, it would be regarded as 96% dead-weight. Why are employers worthy of support, while young people, who are the future of this country, are not?

Before I turn to the details of the enhanced discretionary learner support fund, I wish to discuss what will happen to those students who currently receive EMA and are mid-way through their courses.

--- Later in debate ---

[Julian Sturdy]

Absolutely, and that is what I want to go on to. For me, the fundamental point is ensuring that the money gets through to the people who really need it, and ensuring that they can make the decisions that could change their lives.

[Bill Esterson]

Will the hon. Gentleman give way?

[Julian Sturdy]

I am not getting far, but I will give way.

[Bill Esterson]

The issue of how to tell who really needs EMA to attend college has been raised with me by a number of college principals. Does the hon. Gentleman have any thoughts—I hope that the Minister will also address the point—on how college principals are supposed to identify who really needs support, and who to withdraw it from and who to leave it with under the new arrangements? What will be the basis for those decisions? There is an estimate that 10% of students will drop out. How will they be identified?

[Julian Sturdy]

If I am correct—I hope the Minister will highlight this point—we are saying that we will give college principals the power to allocate funding. It is about devolving local decisions to local people and I will speak further about that later in my remarks. I am looking at this issue from the point of view of those in my constituency, including the two principals who have contacted me. I believe that such people are best placed to take such decisions because they have local knowledge, which is important. I am not present just to speak in support of the Government—I do broadly support them, but I have some concerns that I shall outline in more detail.

The flaws in the central administration of EMA are well known. Last year alone, the running costs of the scheme totalled a staggering £35.8 million. That is of concern and I welcome news of the increased discretionary learner support funds that will replace the EMA. That support will be targeted more directly towards those from the lowest income households to ensure that accessibility to post-16 study remains viable and attractive for all students. That is the crucial part of the policy.

I welcome the decision to localise the distribution of the learner support funds by empowering local colleges and educational providers to carry out that administrative role. That process will hopefully save money that should be going to students in the first place. Some will argue that such a transfer of responsibility will increase the workload for colleges, but in my view it is right for local education providers to use their local knowledge to tailor the support offered to young people in their specific areas. That is a local and flexible solution to the problems of poor and costly administration.

I am generally supportive of the measures outlined by the coalition but I hold two reservations about the new system. First, I am concerned about ending the scheme for those students who will be only half-way through their courses by next summer. I support the new system, but I believe that it would be better for those already receiving EMA payments to see the initial agreements honoured. My second concern, which has been raised already, relates to transport. Many students who attend colleges across York and North Yorkshire rely on EMA to help meet their travel costs. Many have £10 automatically withdrawn from their allowance in return for a free bus pass. Given the likelihood of cuts to local authority transport subsidies, I would be interested to know whether the Government are considering the introduction of any transport-related financial assistance for full-time 16 to18-year-old students. In essence, however, I hope that all of us in the Chamber today share the same goal to protect and enhance the accessibility to education that our 16 to 18-year-olds currently enjoy and deserve. That is a noble and worthwhile ambition, and countless colleagues across the coalition genuinely share that vision.

The choice is not merely between EMA on one hand and no financial support whatsoever for 16 to 18-year-olds on the other. If that were the case, it would be quite wrong. Instead, an unwavering commitment to those who face genuine financial barriers to participation can be delivered through a more localised and efficient scheme, and that is why I broadly support what the coalition Government are doing.