EMA in Scotland: a case study in getting political value for money

An increase in the income threshold for EMA reported today confirms that politics of the traditional sort are alive and well in Scotland.

At a public Cabinet meeting in Oban yesterday, the First Minister announced that the income threshold for EMAs is to be increased by around £4,000 and eligibility extended to those in part-time FE.

Or rather, she re-announced it: the extension of EMA to more people was highlighted in the FM’s speech to the party conference in March, as discussed here.  None of the reporting notices this.  The only new part of the announcement is that precise figures are now being put on the increase in the income threshold and on the cost (£16m, as predicted here in March).

This sort of re-tread announcement is not unusual by governments in any period or part of the UK.  The double hit on this one stands out for three reasons, the first two of which were discussed in this earlier post.

First, there was a large cut in EMA spending in 2009-10 (when the current First Minister was Deputy First Minister). That year the SG abolished a £20 weekly payment previously available at incomes up to £26,769 and a £10 payment at incomes up to £32,315.   In 2010-11, a bonus payment was removed, which saved around £6m. The remaining weekly amount for EMA (£30) has remained unchanged since 2004, when it was first introduced,  eroding its the real terms value significantly.   At current prices, spending on EMAs in 2008-09 would now be worth around £40.4m.  For the latest year for which we have figures (2013-14) it was £28.2m.  So most of the £16m is simply making up lost ground.

Second, the funding for this seems to be coming from the cash removed in-year from university budgets.  The  Scottish Government made a politically important claim in 2013 that Scotland was the only part of the UK increasing its grant to universities. However, the £21m the SG has told the Funding Council to hold back from universities this year is enough to mean that is no longer the case. So this money has been worked hard politically, parked long enough in the budget for universities to serve one purpose, before being moved (outside the budget process) to be announced (twice) in another area.

Third, the new threshold is one also used for FE bursaries. Yet a link to the FE bursary threshold was first announced in 2009-10.  It turns out that as the FE threshold has risen, the one for EMAs has remained frozen.  So the reason the FM is able to announce an increase of some £4,000 now is because the government hadn’t increased this threshold at all for six years.

The EMA increase takes effect in January.  That seems a lost opportunity if the aim was to encourage people to stay on in education: the academic year starts now and there’s been 6 months since the initial announcement to get something in place for that.

The delayed start will keep the cost down in the current year, so  the universities may yet see some of their money back.  However, with the student support budget held flat, but student numbers rising, there must be a reasonable possibility that some of the money held back from universities will be needed to plug a gap there.  Indeed, the delayed start to the rise in the EMA threshold may have as much to do with emergency calculations about the SAAS budget as political calculations (the next Scottish Parliament elections are in May).

As a final point,  following this change and despite all the political priority attached to widening access to higher education, there are now a few students who will see their entitlement to grant funding fall by more than one-half when they move from school into higher education (they are those with family incomes of £24,000 and just over, whose £500 grant is equal to only £13 a week, over 39 weeks). If any of the affected students are part of the large minority of the poorest students who choose not take out loans and try to manage on the grant alone, they will find that going to university leaves them poorer than before.  Also, bringing in part-time FE to EMAs leaves part-time HE as the only post-school option  attracting no living cost support at all.  That now looks very odd indeed.

This announcement therefore reinforces the need for a more coherent approach to student funding policy.  Once the various systems for EMAs, FE bursaries and HE bursaries and loans are put alongside each other, at any given income there’s significant variation in what’s available, and even what is guaranteed (FE bursaries are first come, first served). This is not a new phenomenon:  it was recognised as an issue requiring attention  more than a decade ago.  However, since then the fascination with fee policy for those in full-time higher education appears to have absorbed most of the political attention in government.  Funding for living costs in Scotland in the past few years has instead been characterised by ad hoc initiatives and announcements, freezes and cuts quietly made and then more loudly restored in whole or part. Less headline chasing and more strategic policy-making would serve the poorest students better.