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Letting down the next generation

How David Cameron is kicking away the ladders of opportunity for young people

Labour will always stand up for young people. Charging fees of up to £9. Labour opposes a system in which the university you go to is based more on your finances than it is on your talent and potential.000 young people pay their bus fare to college and buy books so they could stay on in education and get good qualifications.000 would be the exception rather than the rule. a place at university or buying their first home. Whether it’s a good school.000 a year will mean that many teenagers will be put off applying or will make their choice of university based on which is the cheapest. But it is not just on tuition fees where young people are being let down. The opportunity for young people from all backgrounds to access higher education is under threat from the decision by the Tories and Liberal Democrats to triple university tuition fees. Nowhere is this betrayal more apparent than over the issue of university tuition fees. David Cameron trebled tuition fees and promised that the maximum fee of £9. a decent good job. young and old. which helped thousands of young people in to jobs has been scrapped. rather than which offers the best course for them. telling young people that they won’t get the same life chances as their parents. there is a deep and growing sense of concern amongst many families.Kicking away the ladders David Cameron is betraying young people. This Tory-led Government has cut Sure Start funding and now hundreds of children’s centres are under threat. David Cameron’s Government is kicking away the ladders that support the next generation. We believe it is our duty to speak up for those who have been betrayed by the Government and we are determined to do so. that Britain is becoming a harder place to give children the future they deserve. At every stage. The reality is very different – it is becoming increasingly apparent that tuition fees of £9. His Tory-led Government is making it harder and harder for the next generation to get on.000 will be the norm. The Future Jobs Fund. 2 . They have scrapped the Educational Maintenance Allowance (EMA) which helped over 600.

12 The Government slashed the overall resource budget for higher education. Based on what universities say they are charging is it possible that the shortfall in funding could be up to half a billion in 2014-15 according to independent House of Commons research. Universities have made it clear that they need to charge high fees to try and recoup the funding taken away through the cuts.10 The House of Commons has calculated the potential implications for student numbers of differing levels of average fees11. not the exception • David Cameron promised that universities would only charge £9. there may also be far fewer university places to apply for.6 If the average fee is higher than £7. For instance.9 billion reduction by 2014/5. So far. the Government would potentially need to cut student numbers by as much as 36.500 to be the average fee3.500 for some or all of their courses.2 In addition. excluding research funding.1 billion to £4. of the universities that have announced their planned fees. and therefore reduce the number of loans it has to pay for. The Government expected £7.4 • • Clawing back the extra cost of higher fees • The Government based its financial plans on a £7.1 • But.9 The Government has indicted it is likely to restrict student places. This leaves the Government with a major problem. the average fee is well over the Government’s expected fee level. 60 universities have already announced how much they plan to charge in fees and 42 of these have chosen to charge £9.500 average fee. from £7. But 95% of all the universities who have announced their fees intend to charge over £7. that if average fees were to be £8.000 per year.600 then.£9000 tuition fees: the rule.000.000 – 70%.6bn. have gone for £9. and therefore the taxpayer.5 Based on this. to cover the short fall in funding.000 the shortfall will be £430 million over the next four years This leaves the Government with a difficult decision.8 The Government has already cut student numbers by 10.500 then the Treasury. will be seriously out of pocket.13 The hardest hit was the teaching grant.000 tuition fees in ‘exceptional circumstances’. So not only will students have to contend with higher fees than ever before. • • • • • 3 .000 in 2012/13.2 billion – a 40% or £2.7 Even if fees average £8. it can either claw back even more funding from universities or it can restrict the number of young people going to university in the first place. cut by 80%. the Treasury calculated the cost of funding student loans to be £3. Vince Cable himself has admitted that the Government “has two ways of dealing financially with collective overpricing: either cutting the teaching grant or student numbers”. 100% of the elite Russell Group universities who have so far declared their fees (13 out of the 17 institutions in England).

But if fees are set higher than the Government assumed the savings will fall accordingly.500 additional public spending on the subsidy element for the loans will be around £450 million16.7 billion now to £3.500 .18 • • • • 4 . Independent voices.£7.3bn between 2010-11 and 2014-15.17 However. head of Offa. including the expert Higher Education Policy Institute. has been busy reiterating that he does not have the power to set fees and cannot force universities to charge less.• The saving the Government is assuming it will make with its scheme is offset by an increase in the cost for subsidising loans to students. Sir Martin Harris.3 billion in 2014-1514. will fall by £1. In total on the Government’s own figures. On the Government’s own assumptions about the average fee that they expect . a real cut of 23%15. have calculated that Government looks set to save very little money from these cuts and could even end up spending more. For example.the cost of subsidy increases from £1. all this pain will offer little gain to the taxpayer. the total public spending for higher education. excluding research. It is clear that Ministers were unaware of the limitations of Offa to regulate on tuition fees. if average fees are around £8.

withdrawn funding from 21 Sure Start centres between them. The EIG is made up of several different grants used to help vulnerable children. despite the savage cuts to the councils budget. on average across England. simply a mask for cuts to a service they promised to protect.20 A recent 4Children and Daycare Trust survey predicted up to 250 Sure Start closures across the country this year.ensuring that every child gets the best start in life. 27 • • 5 .21 Education Secretary Michael Gove has also removed the ring-fence for Sure Start funding and wrapped it into a new “early intervention grant” (EIG).25 Labour Councils are already proving that Sure Start is for them a priority.600 Sure Start centres across the country23 .19 But the Government has cut the Sure Start budget in real terms by 9%. 22 • • Labour: your voice in tough times • Labour created Sure Start and there are now over 3. is one of Sure Start’s greatest strengths. and many in the children’s sector. believes the fact it is a universal for every community .Cuts to Sure Start Children’s Centres • • David Cameron promised to protect Sure Start. and Sure Start. Labour controlled Liverpool Council has granted its centres an extra year of protection and funding while it tries to plan a way to protect them in future.24 Government talk of refocusing Sure Start back to its ‘original purpose’ has been shown for what it is. in stark contrast. Labour. The House of Commons Library found that. The Government has taken the total value of these grants and slashed it by 22% next year. childcare. there will be funding cuts of £50 per child for ‘early intervention’ services.26 Tory controlled Bromley and Barnet have. free to all and with no stigma attached.

Despite minister’s claims. EMA supported 643.5billion.37 Labour councillors are fighting to maintain some funding to support young people to stay on in education now that the EMA has gone.31 The Government has also ignored the views of leading economists who urged the Government to use the budget to save the EMA and “continue a programme that not only benefits poorer students.28 But in October last year the Government announced the EMA budget would be cut by 90%.Scrapping the Education Maintenance Allowance • • David Cameron promised to protect the EMA. the Government has chosen to ignore independent expert advice from the Institute of Fiscal Studies on the cost-effectiveness of the EMA and its positive impact on staying on rates.30 In cutting the EMA by two thirds.38 • • • • 6 . announcing an EMA replacement scheme totalling £180m. but the economy as a whole. and increased the proportion of eligible 17-year-olds in education from 54% to 61%. Labour councillors have put aside a contingency fund so they can continue to offer financial assistance to disadvantaged young people who want to continue learning. It increased the proportion of eligible 16-year-olds staying in education from 65% to 69%. As a weekly payment. The Government’s replacement scheme is ill-thought through. the independent IFS has confirmed that students on FSM will be on average £370 per year worse off under this scheme.000 young people34 to stay in education and gain qualifications and training to help them succeed. At a time when youth unemployment is at an all time high it is even more important that young people stay on and get good qualifications. are also warning that if colleges distribute the funding. rather than it going directly to students. the replacement for the EMA doesn’t make the poorest pupils better off. a saving of £0.33 • • • • Chaotic policy-making and its impact on young people • The EMA was a lifeline for young people from less well-off backgrounds who wanted to continue their education. conditional on attending classes. Concerned about the likely impact on education drop out rates of scrapping the scheme the OECD argues that the EMA is a better way to encourage participation in education and training post-16.36 Colleges are already reporting that the uncertainty over who will qualify for a bursary in future and how much they will receive is already having an impact on the numbers of young people applying to stay on in education. the Government has partially retreated and instead announced cuts to the EMA budget of £380m.29 Such was the public and political backlash. it could reduce transparency and certainty for young people and put them off applying to stay on in the first place. In reality.35 Independent experts.”32 This month the OECD also called on the Government reintroduced the EMA. such as the IFS. In Camden.

890 starts to Future Jobs Fund vacancies. there were 963.39 • In Government.41 Those figures represent real jobs for real young people – who have benefited from Labour’s determination to take action. training or work experience placement to young people after 6 months unemployment.before the election. up until January 2011there were 91. up 12. trebling tuition fees and scrapping the Future Jobs Fund. Labour is committed to doing everything we can to help young people – in contrast to this Tory-led Government which is hitting them with the triple whammy of abolishing EMA. The Tory-led Government needs to explain to young people worried about their future why this scheme was cut. The Tories need to explain why they have scrapped these opportunities.a successful scheme to get young people into work .000 from the three months to November 2010. That means that more than one in five young people are out of work. According to the latest figures.000 unemployed 16 to 24 year olds in the three months to February 2011. According to the latest figures. • This Government’s choices are already taking there toll. • • • • 7 . especially when it was showing signs of immediate success and getting people back into work.Youth unemployment and scrapping the Future Jobs Fund • David Cameron praised the Future Jobs Fund .40 The Future Jobs Fund guaranteed a job. David Cameron has scrapped the Future Jobs Fund and has offered no credible alternative. That was a real commitment to young people struggling as a result of the global financial crisis.

45 And despite a pre-election promise that families earning under £40. The child benefit freeze is real terms cut for families – irrespective of their earnings.42 A reduction in the amount of support that parents can claim for childcare43 hits single parents particularly hard44 and could cost some families who claim the benefit up to £1500 a year. particularly in difficult times. hitting families in their pockets49.51 We are proud of Labour’s record in supporting families. Inflation is currently running at twice the earnings annual growth rate.46 the Tory-led Government has admitted that over three-quarters of a million (775.that’s still double the Bank of England’s target.48 Even before the Government’s VAT rise and spending cuts are taken into consideration families up and down the country are already feeling the squeeze.47 Middle income families will also be hit particularly hard by cuts to public services.Squeeze on family budgets • The tax and benefit changes introduced at the beginning of April are hitting families hard. Analysis of local authority council tax charges for 2011/12 shows that Labour councils charge council taxpayers on average £207 less than Tory councils and £40 less than Lib Dem councils. • • • • 8 .000 will this year lose £210 through reduced working tax credit payments as a result of measures in the October 2010 Spending Review. Councils are also struggling with the effects of the Tory-led Government’s deep cuts to local authorities.000) households with incomes between £12.000 would not lose their tax credits. By investing in a flexible Tax Credit system – including the introduction of the Working Tax Credit and Child Tax Credit in 2003 – we provided work incentives by topping up the incomes of those on low wages and of families raising children.50 With families feeling the strain.000 and £30. Analysis has shown that low and middle income families consume almost as twice as much in public services than the wealthiest. Labour is their voice in tough times. Cuts direct from Downing Street will hit the average two adult household with children by £182 in 2011/12. And even though the Consumer Prices Index (CPI) annual rate of inflation has fallen to 4% .

for example in the case of Coventry university which has announced it will charge between £4600-£9000 the median figure for our calculation is £6800. Reading 29. Bradford 5.000 to allow increased investment in our world-class universities. Manchester 23. Bath 3. Durham 9. We then envisaged an average fee of £7. Newcastle 24. and means we do not have to reduce university places. Keele 14. City University London Nottingham HEFCE annual conference. Brighton and Sussex Medical School because it delivers sufficient resources for a high-quality student experience. Essex 10. some universities will be allowed to charge £9.” Vince Cable. Oxford 26.centreforum. ‘under £9000’ we have used the the lowest fee level possible: £6000. Hull 12. Kent 15. Oxford Brookes “We set the higher amount at £9. Queen Mary. Leeds 17.000. Imperial 4 3 So far of the 56 universities which have announced their planned fees. Liverpool John Moores 21. Cambridge 7. That’s the absolute maximum. 7 April 2011. for example. Royal Agricultural College 9 . Leicester 18. 15 April 2011. speech to CentreForum.php?option=com_content&view=article&id=221:david-cameron&catid=35:recent-events&Itemid=59 2 1 BBC online.Notes “In exceptional circumstances. protects the financial interests of graduates and taxpayers. Lancaster the average fee is £8657. Aston 2. These are the headline figures. 8 December 2010. http://www. http://www. For those universities which have given a range of possible tuition fees we have used the median figure for the range . and they are the figures that I know people are concerned about. The figure we have used for each institution is shown below. Birmingham 4. Exeter 11. http://www. Lincoln 19. For those universities which have stated. University of London 28. we have used the figure given by universities themselves for their planned fees levels. To calculate the average fee. Loughborough 22. Liverpool 20. Universities charging £9000: 1. “ David Cameron.

8000 University of Portsmouth has announced it plans to charge fees of £8.000 3 at 8000 = 24. Anglia Ruskin are considering £8000. considerably higher in some [courses].6000 Hertfordshire are charging between £7. – 8000 Teeside.7500 Coventry have announced plans for fees between £4600-9000.500 for foundation degrees. .500. 36. – 7950 Huddersfield has announced £7950.000. – 7500 Birkbeck. 9. 2. 32. http://www. 41.” . 8.6800 Derby University is setting its fees at less than £7. 13 April. has said the fees for the majority of its courses will be set at £7.with a lower fee of £7.500. 18. £8000-9000 – 8.500 University Campus Suffolk has said it will charge £8. £6000-9000 . 13. 39. 7. London Met is charging less than £6000 for some courses.000 1 at 6800 = 6800 1 at 6000 = 6. 33. 17.000 1 at 6500 = 6500 1 at 8. 16.900 6 at 8500 = 51. 14.8500 Sources: BBC It said that the “average [fee] will be £6.500 Manchester Met. 15. 38.000 .400 and £8.000 2 at 7950 = 15.390 = 8390 1 at 7800 = 7800 = 519.500 – 8.800 – 7. http://www. considerably lower in others. £8.500 – 8.500 for the majority of courses.500. £8.000 2 at 7500 = 15.500 Southampton Solent are charging £7. Royal Holloway Sheffield St George’s. 12880840?utm_source=twitterfeed&utm_medium=twitter Universities charging under £9000 for some or all of their courses (the underlined figure is the figure we have used for our calculation): 1.7950 Kingston. 35.500 Leeds Met has said it will charge £8500. 5. 4. Twickenham is to charge £8.000 to £7. – 8.390 Northumbria. Figure used: £8000 Bishop Grosseteste University College. . Lincoln. 3. 13 April. 6. 19 April 2011 So this equals: 42 at 9k = 378. 10. . 11.800 St Mary’s University College.6500 London South Bank has announced fees of £8.390 10 .uk/news/education 12880840?utm_source=twitterfeed&utm_medium=twitter BBC Press Association.500 – 8. 18 April 2011. 37.. . 12. London SOAS Southampton Surrey Sussex University of Central Lancashire University College Falmouth University College London University of East London University of the Arts Warwick Source: BBC online. £8.30. 34.

in The Independent. so that university independence is enhanced and competition operates.aspx?ReleaseID=419032&NewsAreaID=2 9 8 “As a provisional planning assumption.000 or even £8.html 11 .000 places will not be repeated. 20 December 2010.500 the Treasury will be out of pocket. I want Government to step back at the earliest opportunity. “ BBC = £8657 5 “We set the higher amount at £9. the cost of funding student loans would be £ 7 April 2011.500 because it delivers sufficient resources for a high-quality student experience.” Vince Cable.independent. We are very reluctant to go down either route. letter to Higher Education Funding Council for England. But if average fees are more like £8.6bn.bis. On the contrary. Vice-chancellors were told the government could not allow this to happen and the Treasury would claw back any excess spending on student loans from university teaching grants. universities and colleges should work on the basis that this pulse of additional entrant places will not not be repeated in 2012/3 and so the extra 10. We then envisaged an average fee of £ protects the financial interests of graduates and taxpayers. HEFCE annual conference. 6 April 7 "My main point here is that Government essentially has two ways of dealing financially with collective over-pricing: either cutting the teaching grant or student numbers. and means we do not have to reduce university 6 “On the Treasury model. and do not believe we need speech to HEFCE annual conference.” Vince Cable. http://www.coi." Vince Cable. 12 February 2011.000 to allow increased investment in our world-class universities. http://www. http://www.

we’d like to set universities free. there are a variety of mechanisms open to the government to make sure that fees do not rise to unrealistic levels unrelated to costs. or £2.500 £8. 16 17 But Sir Martin said: “It is very important that everybody understands that Offa is not a fee regulator. The average public sector cost per student is £1.900 £9.100 £8.000 £12.House of Commons Research Paper. This teaching funding allocation amounts to £3.000 20.000 14.000 26.000 3.200 £11.500 £11. but for reasons of financial control.000 7.600 £ 14 “The cost of the subsidy element of student loans which are expected to increase from £1.000 33.900 £12. 10 March.200 £12.7billion in 2010-11 to £3.700 £11. Sky News.900 £8.800 £8.500 Assumed fee loan £7.400 £12.” Asked if ministers had been aware of his limited powers when plans to treble the cap on fees were approved by 12 .000 23. we don’t want to be in that world.400 £8.000 47.700 £8. All fee loans above this level have no effect on direct public funding.000 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% Note: Assumes a 'breakeven' tuition fee of £7.650 plus the resource costs of loans.700 £7.600 £11.100 £12. http://www. a 40%.400 £11.9 billion. 8% are assumed not to continue to year two and a further 5% are assumed not to continue to year three. there is control over numbers.300 £8.000 students are assumed to start courses and take out loans each year.000 where up to this level a £100 increase in fees is accompanied by a £100 cut in direct funding. 2011 15 See footnote 14.5 billion in 2014-15. 02 March 2011 11 [House of commons library figures on potential implications for student numbers] Student loans: Implications of variations in loan assumptions Cuts in new entrants needed to keep public spending constant Number % Total loan £11." Million+ Briefing: Financial implications of the Comprehensive Spending Review & Browne Review." BIS press release.000 £8.000 36. there is. Adding these two elements together means total public funding for higher education (excluding research) is expected to fall from £8.000 17. and it isn’t just a question of access they have to satisfy a condition that they don’t have high drop out rates.000 44.600 £8. Sources: BIS student loan ready reckoner model and House of Commons Library estimates 12 “Browne assumed the Spending Review would cut 80% of the annual teaching grant that is currently allocated to universities via the Higher Education Funding Council for England (Hefce).bis.000 10.300 £12.3billion in 2014-15.000 38.2 billion. excluding research funding. 20 October 2010. reduction by 2014-15. See footnote 8.800 £11. 28 October 2010 13 "This means the overall resource budget for Higher Education.100 £11.5bn and Browne recommends that this should be reduced to just £700m.1 billion to £4.10 “Well there are different mechanisms available to us.000 41.000 29. will reduce from £7.800 £7.300 £11. 320. then that is what will” Vince Cable. That is to say that if universities set a fee and they provide the support arrangements for students that I am legally empowered to require.8billion in 2010-11 to £7. a real cut of 23%” ‘Changes to higher education funding and student support from 2012-13’ . the government still has a degree of control over numbers.200 £8.

http://www.1% -£30 -311. It's a disgrace that Gordon Brown has been trying to frighten people about this. National Childbirth Trust message (pre-election).org. “The Sure Start programme.4children.0 8 March 2011 “It is apparent that whether or not the government's assumptions are correct.ft. the chancellor. But education is in fact being cut hard at every 22 E IGallocations and com parisons 2010-11 'baseline allocations' after cuts A llocation Com parison w ith 2010/11 original allocation Allocation 2010-11 prices £m illion E arly Intervention G rant 2011-12 allocations C om parison w ith 2010/11 origina 2010-11 allocations before cuts in area based grants £m illion C ash £m illion 2010-11 prices £m illion D ifference in cash term s a £m illion % Per capita D ifference in real term s a £m illion % Per capita C ash £m illion £m illion D ifference in cash term s a % Per capita England 2. will be marginal. 20 October http://www.html 19 18 “I want not just to repeat our commitment to keep Sure Start.conservatives.aspx “We are strongly committed to Sure Start Children’s Centres” David Cameron. 11 january 2010. its calculations of future savings are extremely sensitive to the assumption that 14 December 2010. http://www.4 2. I would like to know whether these centres will continue to receive funding? David Cameron: Yes. and indeed that the government's new proposals are as likely to cost as to save public money.212. he replied: “I think that the powers of Offa became clearer as this debate went on and they were of course set out in 2004 in a different environment and for different reasons.169. the education system for pre-school children.” Higher Education Policy Institute. D fE 13 .6 we back Sure Start. Supporting Parents speech. 28 January 2011. told the Commons on Wednesday he had succeeded in finding “more resources for our schools and for the early years education of our children”.483. This is a highly approxim ate estim ate of theim pact per potential beneficiary.0 2. He's the Prime Minister of this country but he's been scaring people about something that really matters.” David Cameron.794. http://www.” The Times. The Questioner: As a parent who relies heavily on Sure Start centres for the educational and social needs of my child.0 -311.0 -581.Parliament.483. if any. 5 May 2010 20 “George Osborne.html#axzz1CirIxH4I 21 “250 Sure Start Children's Centres Face Closure Within a Year” 4Children press notice. is being reduced by 9 per cent in real terms. http://www. and for that reason we think it would be wise to assume that savings.0 -11.1% -£30 2.nct. But to set out how we will improve Sure Start. N ote: All figures includedistrict council allocations w here relevant Prices adjusted to 2010-11 figures using H MTreasuryG D Pdeflators at D ecem ber 2010 Source: Early intervention grant“ Financial Times.0 2.8% -£50 (a) Total differencedivided by the estim ated num ber of residents agedunder 20 in the m id-2009 populationestim ates.

. 6 January 2010 29 “In the context of raising the participation age. Decisions of Cabinet.barnet. in 2012-13. amongst the most deprived areas.000 in 2011-2012 and £2. http://www. 11 January 2010. http://www. 11 January 2010." Barnet “The original plan was to create 23 centres across three phases. ‘Cameron Direct’.BROMLEY__Council_approves_more_than_150_budget_cuts_totalli ng___33m/ 28 26 23 24 25 27 “We’ve looked at Educational Maintenance Allowances. Daily Mail. 11 August “Funding is set to be withdrawn from all Phase Three children's centres in the London Borough of Barnet after costsaving proposals were approved by a council cabinet meeting last week. Too narrow a focus on deprived families may jeopardise this. saving around £ “There is a criticism sometimes of Sure Start that a great new centre is established and the sharp-elbowed middle classes – like my wife and me – get in there and get all the services.” LB Bromley budget papers: there will be unit cost reductions in the 16 to 19 participation budget and the support currently provided by Education Maintenance Allowances will be focused on the most disadvantaged children.” David Cameron.nurseryworld. something that families tell us is very important.” 14 . March 19 2011. But to set out how we will improve Sure Start by taking it back to its original purpose Sure Start funding is now included in a new unringfenced Early Intervention billion. 23 February 2011. Liverpool Daily Post.aspx Liverpool has chosen to extend its consultation period for a year to save its Sure Start centres from cuts and try and find a solution to funding them over the long term. http://committeepapers.aspx?ID=6329 "Having just three children and family centres across the borough rather than the 23 originally planned – saving £600. no we don’t have any plans to get rid of 14 February 2011.. The Cabinet Member stated that this was driven by the need to target resources where they were most needed." News Shopper. Supporting Parents speech.early intervention. Further savings could be made in 2012/13 by reducing to 3 centres in total.” David Cameron.liverpooldailypost. Decisions already taken by the CYPPH to reduce phase 3 from 7 to 2 centres releasing £600k in 2011/12. 28 February 2010.” David Cameron. The people who need it most – disadvantaged and dysfunctional families – are not getting enough of the "Cllr Helena Hart welcomed the support for Model X – this would ensure the future of the Stonegrove Centre and would be a prime example of the Council meeting growing need.bromley. and we would urge Mr Cameron to maintain a universal approach. http://www.html#ixzz1CbwnYY74 Sure Start has lost its focus.” Nursery World. emphasising that universal provision was no longer an affordable So today I want not just to repeat our commitment to keep Sure 73054 “One of the great advantages of children's centres is that they do not stigmatise families because they are available to all.” Anne increasing its focus on those who need its help most and better involving organisations with a proven track record in parenting interventions. 2 in areas of deprivation plus one boroughwide centre for children with disabilities. http://www.

gov. to stay on in education (Hughes calls for £100m to help poorer students.George Osborne. aged 16 to 19. So the EMA. The argument that there is no alternative to scrapping EMA is false. and has instead argued that the abolition of EMA is justified by high levels of "deadweight" – ie that many young people in receipt of the EMA would remain in education even without it. it increased the proportion of eligible 16-year-olds staying in education from 65% to 69%. but the economy as a And. Mr Osborne should listen to Save EMA's Deal's a Deal campaign and provide funding for the 300. published in 2008. published in 2005. Department for Education press notice. unqualified jobs in our economy by 2020.000 teenagers enrolled on two-year courses who expected to receive the EMA in their second year. At the very least. Institute for Fiscal Studies. even if the EMA had no impact on educational outcomes. subsequent IFS research. which may in its own right represent a valuable policy objective. as the chancellor will be aware. On a day when figures show youth unemployment at an unacceptable level. http://cdn. Comprehensive Spending Review.000 unskilled. In particular. and concluded that its impact was "substantial".hmtreasury. the last thing our country and those who govern us should be doing is removing or cutting support to that very age We. moreover. growth depends above all on the skills and qualifications of the workforce. support the Save EMA campaign and oppose the government's plans to abolish the education maintenance allowance. found that the EMA significantly increased participation rates in post-16 education among young Unemployment for young people without qualifications is already about 40%. the Treasury estimates that there will be only around 600. "The simple cost-benefit analysis mentioned above suggests that even taking into account the level of deadweight that was found. the IFS concluded that even looking at only the narrow economic benefits of EMA – the higher wages that its recipients would go on to enjoy in future – these are likely to exceed the costs in the long run. the undersigned economists. More importantly. or more study time as a result of not having to take on a parttime job. it is not a sound economic argument for abolishing EMA it could equally be argued that the government should not vaccinate children against meningitis or polio. showed. The government has chosen to ignore this rigorous and independent evidence. http://www. extensive quantitative evaluations of the EMA have shown that it has significantly improved both staying-on rates and qualifications for students from poorer backgrounds. that the EMA significantly improved their educational outcomes. 14 March). since the vast majority of children wouldn't contract these diseases anyway. And this takes no account of the wider social and economic benefits.pdf The Government today announced a new £180 million bursary scheme to help the most vulnerable 16-19 years olds continue in full-time education. But even if this is true." Haroon Chowdry and Carl Emmerson. 28 March 2011." "Those who receive EMA and would have stayed in education regardless of it might still benefit educationally through other channels. The real question is whether the and increased the proportion of eligible 17-year-olds in education from 54% to 61%. for example through better "Moreover. have some deadweight cost. We urge the chancellor to use the opportunity of the budget to reconsider the government's plans and to continue a programme that not only benefits poorer students. is not a deadweight loss as the government claims. the costs of EMA are completely offset. 32 15 .uk/inthenews/pressnotices/a0076112/180-million-new-bursary-scheme-to-help-themost-vulnerable-16-19-year-olds 30 31 “the EMA significantly increased participation rates in post-16 education among young adults who were eligible to receive it. of the EMA exceed its costs overall. Virtually all government programmes.ifs. it would still represent a transfer of resources to low-income households with children. On this. http://www. Econometric evidence from researchers at the Institute for Fiscal Studies. December 2010. which costs the government £550m. But over the long term. The chancellor has promised a budget for growth. even the most successful. economic and social. October 2010. a scheme which helps and encourages students from poorer backgrounds in England. Abolishing the EMA – which enables many young people to gain the qualifications that they will need in the future – is not a recipe for long-term growth.

org. any children on free school meals are currently entitled to the full £1. http://www.pdf 35 “Under the current arrangements. ‘UK Country Notes’. it could reduce transparency and certainty for students. 1 April 2011. http://www.” 13 March 2011.” Haroon Chowdry and Luke Sibieta. if their circumstances do not change. IFS. their household income cannot total more than £16. Senior economist and associate director for economic policy. Emeritus professor of economics.and if so. and fellow at the New Economics Foundation John Van Reenen. Save EMA Jonathan Portes.170 for EMA. IPPR Robert 29 March 2011.oecd.James By 39 38 36 37 Conservative leader David Cameron visited Liverpool and pledged Tory support for continuing job creation schemes aimed at helping young people who have “slipped through the cracks” get back into work. http://www. Montague Burton professor of industrial relations. 27 January 2011. 7 April 2011. Professor of economics. The system will also need to be carefully designed to avoid perverse incentives. and University of Stirling Ann Pettifor. then they will not know. This could have an impact on their decision to stay on in the first place.” Haroon Chowdry and Luke Sibieta.000 “contingency fund” to help 16 and 17-year-olds due to start courses this year who would have been eligible for the payments of up to £30 through EMA. He said: “Colleges have been running open days and having prospectuses printed since last Camden councillors have set aside an £ 33 “Encourage participation in secondary education by reintroducing the Education Maintenance Allowance. LSE Tony Dolphin.camdennewjournal. IFS. Bruce V Rauner professor of economics. I think it will undoubtedly have an effect on enrolment for September. a social enterprise helping the long-term unemployed in Everton. ‘Economic Policy Reforms: Going for Growth 2011’. Dartmouth College. said members were trying to attract students without knowing how much support would be available until June at the University of Cambridge Paul Gregg. University of Bristol William Brown. http://www. 29 March Colleges are braced for a fall in enrolments as students face months of uncertainty over whether they will be eligible for the Government’s new bursaries. Director of Prime (Policy Research in Macroeconomics).190. to the tune of £370 a year.817 are entitled to a full EMA payment of £30 per week (or £1. whether they will receive a bursary . http://www. children with household incomes less than £20. In other words. 16 . http://www. Many unanswered questions over EMA successor. Many unanswered questions over EMA “if students must apply for the bursary after enrolment. Professor of economics.170 per year). how much. 13 January 2011. Camden New Journal.” FE Focus.pdf 34 House of Commons briefing note. Cambridge University Marcus Miller. University of Warwick The to be eligible for free school meals. when applying for a place in post16 education. Julian Gravatt.on average. Former chief economist at the Cabinet Office and director of the National Institute of Economic and Social Research David Blanchflower.ifs. Professor of economics. executive director of Advocacy International. “But if the discretion is used. http://www. It must be the case that most such students would be worse off under the bursary scheme that they would have been under the EMA . “Mr Cameron and his entourage descended on Merseystride. assistant chief executive of the Association of Colleges.

000 per annum resulting from implementation of proposals contained in the comprehensive spending review in the Spending Review period. All the main parties agree that public spending will have to be cut in future years. House of Commons written answer. so we have said that under a Conservative Government these families would stop receiving tax credits. We support tax credits and we will keep them. 31 March 2010 40 Office for National Statistics.000 and receiving working tax credits will receive a reduced working tax credit payment in 2011-12 and 2012-13 respectively as a result of the comprehensive spending review.statistics.7% of people who claim the childcare support are lone parents. 12 44 According to independent research by the Resolution Foundation 63. then Shadow Work and Pensions Secretary. “We are all in this together – we need to pay off our debts so our children don’t have to. “He said the Government’s Future Jobs Fund programme – aimed at 16 to 24-year-olds struggling to find work – was a ‘good scheme.’” Liverpool Daily Post.” Theresa May.000 and 810.000 and £ “Our priority is to find a way to get spending under control that is fair and protects the poorest. Labour Market Statistics. “They say our policy will take away tax credits from families with incomes of £ We don’t think that is affordable anymore. I think it’s important that people know the truth. 6.“And. the freeze in child benefit will cost a family with one child £33.php/2010/02/11/labour-lies-on-child-tax-credits/ 47 Alison McGovern: McGovern To ask the Chancellor of the Exchequer what estimate he has made of the number of households with earnings between £ this has fallen to £210 a week – a loss of £30 a week and £1560 a year.80 and a family with three children £75. http://www.000 and receiving working tax credits will receive a reduced working tax credit payment of £210 and £290 in 2011-12 and 2012-13 respectively as a result of the comprehensive spending review. No families with a combined household income of £40. compared to the annual uprating in line with RPI. http://blog. and it is irresponsible for Labour to be scaremongering in this way and worrying families and £30.000 per year whose working tax credit payments will be reduced as a result of the implementation of proposals in the comprehensive spending review. But Labour’s irresponsibility now means that we have to look again at what we can afford as a country. Hansard. The Blue Blog. House of Commons written answer. 13 April 2011. But now that the support has been cut to 70%.000 and £ 073803) 46 45 “Labour lies on child tax credits “In the last couple of days the Labour Party briefly paid for a misleading advert on the popular MumsNet site about our plans for tax credits. That means making tough choices. (Direct Gov. http://www. http://research.conservatives. Column 774W-775W Mr Davidson: Davidson To ask the Chancellor of the Exchequer what estimate he has made of the average reduction in working tax credits for households on incomes between £12. [23984] Justine Greening: Greening Households with incomes between £12. Hansard.40 this year. 16 November 2010. Department for Work and Pensions.000 and £30.pdf 41 Young Person’s Guarantee Official Statistics. but we are now paying them to families earning over £50.000 or more. Childcare support Until April 2011 parents with two or more children could get the maximum support of £240 a week. 43 Spending Review 2010. Mr Cameron said he had been ‘inspired’ by what he had seen. 11 February 2010. That is a lie.000 or less will be affected by our policy. We are being honest about the challenges we face and how we will deal with them. “So I want to be very clear. p. [23983] Justine Greening: Greening 775.pdf 42 Figures from the House of Commons Library show that. Tax credits are designed to help families on low incomes. Table 3. It’s time Labour did the same. 13 April 2011.000 households with incomes between £12. We think that tax credits provide a vital boost for families across the country. after meeting young people who had secured work at the Great Homer Street site assembling and selling p. 16 November 2010. Column 775W 17 .

The average cut per person this year is £47.809.48 “More generally.88. The distributional analysis set out in the October Spending Review suggests that households in quintile 2 (the middle of the LME group) consume public services with a value of around £10. p.500 a week in the top quintile. 51 The table below shows the average council tax per dwelling in councils controlled by each party. The cut for the average family with two adults and children is therefore £182. households pay on average £207 less per year than those living in Tory top-tier local authority areas and £40 less than those in Lib Dem top-tier local authority areas. p.700 a year. Top tier/ unitary control LAB CON LD NOC Average council tax per dwelling £1.305 £1.” Resolution Foundation. November 2010. 13 April 2011.098 £1. (based on control of the top-tier county council in 2 tier areas).138 £1. The population in England is 51.900. LMEs [low to middle earners] will be hit harder than higher earners by cuts to public services.480.105 18 . 4 50 Tory-led Government cuts to funding to local authorities mean that in 2011/12 the Revenue Spending Power (RSP) of local authorities will fall by £2. compared with just £5.000. Labour Market Statistics. 9 49 Office for National Statistics. ‘Squeezed Britain’.000. It demonstrates that that in areas where Labour controls the unitary or top-tier local authority.