A budget chance to promote social mobility

George Osborne's Budget tomorrow has variously been presented as an opportunity to scrap air duty, national insurance and VAT on petrol. But for thousands of young people from less well off families, its most important feature will be what it does about the Education Maintenance Allowance. Until this year, 16-18 year-olds in full time education with family incomes below £30k a year have had a conditional allowance of up to £30 a week, payable provided they attend school or college and intended to enable them to continue studying after GCSEs. The government has announced that there will no further payments, not even for those young people who started two year courses last September. There will instead be a small discretionary fund expected to be worth around £70m (though this is likely to increase after Simon Hughes's review) to replace the £490m distributed by EMA, of which most goes to young people in the poorest families. And while higher education fees have been the main media focus of student protest, the greatest injustice and potential hinderance to student mobility is the abolition of the EMA.

The irony is that its abolition was only made necessary because the Liberal Democrats insisted that their pupil premium should not lead to a reduction in overall school funding, and the Treasury insisted that the Dept for Education must fund it from within its wider budget. But the EMA is far better targeted than a pupil premium that is likely merely to provide sticking plaster for wider school cuts, and which lacks the same degree of conditionality on the recipient. Truanting or tardy EMA recipients can lose their allowance; there is no sanction as yet proposed for schools that show little to justify their premium.

So, tomorrow's Budget offers Osborne an opportunity on two fronts. The first is to restore the EMA for those students with a reasonable expectation of receiving it for 2011-12, those in the second year of A-level courses for example. If Osborne doesn't make this change, the courts almost certainly will. And I would be astonished if DFE lawyers haven't already reached this conclusion: after all, they made clear that university tuition fees could not apply to existing students when they were first introduced in 1998. The second is to introduce a much more comprehensive replacement to the EMA for new statements. Simon Hughes has certainly been arguing for this, as have many FE colleges. There needs to be enough money to cover the costs of transport, books and learning materials for all students with family incomes below the £20k where the full £30 EMA was currently paid.

Ministers make the argument that the EMA did not significantly increase participation, and that with compulsory staying on coming in from 2013 for 17 year-olds and 2015 for 18 year-olds, the scheme has substantial deadweight costs. But EMA has increased participation, especially among 17 year-olds, as the IFS has shown. More importantly, it has a conditionality that is absent from child benefit for young people over 16. And it creates a sense of responsibility in the young person that is crucial in today's mollycoddled times. Looking at the two benefits in the round together with an increased apprenticeship offer could offer a way out of the funding dilemma, but not without some additional resource for the poorest students. After all, what exactly is the point of introducing a pupil premium for under-16s only to remove an important ladder of opportunity when they reach 16. George Osborne has the chance to put things right in his Budget.

Time for a few more U-turns

I'm afraid I hadn't got around to stirring myself into a righteous rage about the management of the forests before David Cameron ruthlessly hung the hapless Caroline Spelman out to dry over the ill-communicated and poorly considered proposals. He badly needs to get a grip from No 10. But I am sure that its impact would have been far less damaging than two other government plans that remain a core part of the coalition project: forcing GPs to take over most of the NHS budget and the scrapping of the EMA. Both require swift retreats or they will lead to future problems when it is too late.

As I have said here before, there is nothing wrong with GP fundholding, where GPs actually want to hold the funds and where certain services that they will have no interest in commissioning are provided elsewhere. There is a lot wrong with simply handing over £80 billion of our money to consortia on the hunch that it might be a bit less bureaucratic or a bit more efficient. After all, the King's Fund has shown decisively that the Government's rationale for change is wholly bogus. Some GPs may have a natural aptitude for strategic decision-making. But just as some are lousy at diagnosing diseases, some will be hopeless budget-holders, at least when it comes to dealing with such large sums. This policy has disaster written all over it. Like the forest sell-off, it has no real support except from a few keen fundholders (and if they are keen, let them do it). In his heart, the PM must know this. Since he's in u-turn mode, here's what he should do. First, slow the reform timetable and the abolition of primary care trusts to allow reluctant fundholders to join as volunteers rather than conscripts, as with academies. Second, make the policy permissive, so that those with good business plans get the right to commission and those without must go back to the drawing board. Third, introduce a quality threshold alongside price into the value-for-money criteria, so that the policy doesn't end up replacing good provision with weaker but cheaper alternatives. Oh, and give Andrew Lansley another job where he can be less destructive.

On EMAs, it is a little different. This is a policy driven not by ideology but by funding. Ironically, the determination to pretend that school budgets were not being cut to fund the pupil premium led to the destruction of a proven, targeted measure to encourage ambition and achievement for poorer pupils to fund an untried, untargeted pot of money that will merely be used to plug funding gaps in schools that receive it. Michael Gove told school leaders six months ago that he wanted to persuade the Treasury that EMAs should stay. He clearly didn't succeed. But now that we are seeing the combined impact of government policies on young people, he needs to try again. Not least because without it, in the absence of compulsion when the participation age is raised, there will be nothing to persuade poorer young people who should do so to stay in further education when that is a better long-term option than a badly paid job with statutory part-time training tacked on. I know poorly paid young people lack the voting power of weekend forest-goers, but if the government cares about social mobility, it will make important changes.

Here's what Gove should do. First, all students who received an EMA in Year 12 should get one for Year 13 or the college equivalent. Scrapping an EMA mid-course is unforgivable: have university students been asked to pay a higher fee mid course? This will also avert another court defeat if a legal challenge takes place. Second, savings are needed, so the EMA should in future be made available to all students entitled to free school meals while at school whose family income remains low. This would encourage students to claim FSM at school, helping schools in areas where there is a stigma about FSM to claim the pupil premium. But it would still save money by confining eligibility to the poorest students. Third, the EMA's requirements for study and attendance should be strengthened, with rewards for those gaining good qualifications. Fourth, there should be a differential transport element depending on where students go to college or school. Such a scheme could be introduced at lower cost than the existing EMA but it would make a direct link with the pupil premium and bridge the gap between school and university, where poorer students receive significant support.

A wise education secretary would make the change before a beefed up Number 10 policy and strategy function works out what a disaster EMA abolition will prove to be - and before he loses another court case.

Don't scrap social mobility benefits

There is some logic in Chancellor George Osborne's clawing back of child benefit from better off families through the tax system, whatever the practical difficulties involved. The idea of a universal credit is also a good idea, though more difficult in practice. But there is absolutely no sense in scrapping child benefit and education maintenance allowances for the over-16s as suggested in the weekend press.

Legislation will soon compel young people to remain in training or education beyond their 16th birthdays. Their choice of what to do - school, college, a training programme, apprenticeship or work with training - should be informed by their ability not their ability to pay. If families and students lose child benefit and EMAs (worth up to £200 a month combined) even the brightest students from poorer families could find themselves forced by financial considerations to take a paid training programme or job with training, rather than a school or college course, and give up hopes of university (where, despite the rhetoric around a graduate tax, it is graduates not students who pick up the living costs through loans). Moreover EMAs are one of the few successful conditional benefits we have. At the very least, they should stay for the poorest students.

How could Vince Cable, with his enthusiasm for easing graduate burdens, support an end to opportunity for poorer young people aged 16+? And how could Michael Gove, with his passion for social mobility, countenance the removal of the funds that enable these young people to continue their studies? Martin Narey is absolutely right on where these funds should be prioritised. He should be heeded on this issue.