Political

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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