From the outset providing an incentive for students from low-income families to stay on at school seemed like a reasonable idea. It encouraged those who the government feared would prioritise the short-term gains of instant employment (often in low-paid jobs) before the long-term benefits of further and higher education, to remain in some kind of education/training.
However, as time went by it became clear that there were some gaping holes in this theory. First of all, given the massive investment behind the scheme (a whopping £560m a year) the government had worryingly little evidence to suggest that the students receiving the pay-outs were remaining in education because of EMA alone. In fact, research from the National Foundation for Educational Research concluded that “90% of students who receive EMA would continue with their education without the payment”. Something that the Chancellor rightfully described as “90% deadweight costs”. This figure was disputed by the Institute for Fiscal Studies and the National Union of Students (who produced figures of 36% and 45% deadweight costs respectively) but still the fact remained that a large percentage of students who already recognised the long-term benefits of education and training were receiving large pay-outs to continue studying – something they had always intended to do.
Those figures hid another astonishing problem with the EMA system: a small number of students from fee-paying private schools, who’s parents had divorced were managing to work the system in their favour, a favour that came in the form of a weekly £30 EMA payment. Feel free to correct me if I’m wrong, but surely someone who is likely to be paying in excess of £12,000 a year for a private education, needs no incentive to continue with their studies. Especially when the incentive accumulates to less than 10% of the amount they’re obviously willing to pay for an education*. I acknowledge that this was not ubiquitous across the system but it highlights just some of its flaws.
* assuming a 40 week school year with fees of £12,000
This is the problem of a government-run pay-out scheme aimed at encouraging students to remain in education. The government had very little idea of who the money should actually be going to, yes they made educated decisions based on the drop-out rates per quintile of the population, but as the data mentioned earlier highlighted: a trend does not necessarily suggest a rule, and the new system (although with far less funding) should go some way to solving this problem. The allocation of the bursaries now lies at the discretion of the schools, who have a far more informed opinion regarding which students are motivated by incentives and those who are not. As Michael Gove put it to the House of Commons: “schools and colleges [will] have the freedom to allocate the bursaries because they [are] best placed to know the specific needs of their students.”
At this point it’s important to mention that EMA had become redundant in another key way: from 2013 onwards the school leaving age will be increased to 18, almost eliminating the risk of students dropping out of school/training (legally).
The final point I would like to address is one that was raised by Harriet Harman during the recent mayhem across England: she appeared to link the the riots to the scrapping of the Education Maintenance Allowance: “There are some things which are short sighted and you should not be going ahead with”, she insisted to the furious education minister. If she’s right (which is incredibly unlikely) and the EMA reform really was one of the causes behind the reckless rioting and looting then it would merely increase the case against EMA; because this would suggest that the allowance has increased people’s perception that the state is indebted to them and that they should expect payment to increase their own skills/knowledge. On the other hand perhaps Harriet Harman forgot that the EMA was meant as an incentive to remain in education not to dissuade people from rioting. If it had infect become the latter (which it almost definitely hadn’t) then it points to even deeper problems within our society.
The bottom line is: the old system was inefficient, even if we go with the lowest deadweight cost figure of 36% that is still an exceptional amount of waste and would suggest that ministers previously underestimated student’s appreciation for the benefits of education. The new alternative is not perfect, but it is definitely an improvement – school’s are in fact, as Gove suggested, at least better placed “to know the specific needs of their students” than the government is. Ultimately, whatever scheme the government pursues in the future they must not stray from the underlying goal of increasing pupils appreciation for the long-term merits of education and training, which will become increasingly more difficult if students continue to see unemployment amongst qualified workers rising and job prospects falling.
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