On the cheap

The government is determined to "smash" school dropout rates, Charles Clarke, the education secretary, said today. But amid the celebration over today's announcement that the poorest 16-19 year olds will be offered ?30 a week to stay on at school came the warning that the amount may not be enough.

The UK has the highest dropout rate at 16 in the western world, Mr Clarke said this morning. "We must address this 'opportunity gap' through the new EMA [Education Maintenance Allowances], using financial incentives to help replace the 'culture of dropping out' at 16 with a 'culture of getting on'," he said.

But as the education secretary was making this pledge, the Association of Colleges (AoC), which represents the institutions at which most of the pupils on EMAs will study, was hinting that the government had turned its back on the most effective version of the EMAs for a cheaper alternative.

"The Association of Colleges supports the move of offering up to ?30 per week grants. However, our research from the DfES [Department for Education and Skills] pilots shows that ?40 EMAs given directly to the student and accessed easily are the most effective at improving attendance and punctuality," it said in a statement.

The three year pilot of the EMAs, which began in 1999, involved 56 local authority trials. The trials, which were monitored by the Institute for Fiscal Studies (IFS) with Loughborough University, tested several varieties of EMAs.

Two local education authorities in England, Nottingham and Oldham, were given a ?40-a-week option: students whose families earn ?30,000 or less a year were eligible for the EMA, but the full ?40 a week was paid where the family income was less than ?13,000 a year. These students were also entitled to retention and achievement bonuses worth ?50 each. Slightly more than 21,000 students were eligible for an EMA in the two authorities and 86% claimed it.

East Lancashire, Sunderland and Suffolk offered grants to help with students' transport costs, and only 48% of those who were eligible claimed it.

The largest trial involved the plan that the government has adopted. Some 12 urban local education authorities gave students up to ?30 a week plus the ?50 achievement and retention bonuses. The take-up rate was 69%.

The IFS report showed that increased take-up tallied with an improvement in retention rates. Mr Clarke said the research showed that EMAs would help to "smash" high dropout rates. Sixteen-year-old participation in full-time education across the pilot areas increased by 5.9% among the eligible cohort; it had an even bigger impact upon 16-year-old boys with a 6.9% rise in participation. Moreover, EMAs increased the staying-on rate of 16-year-olds from the lowest socio-economic group by around 10%.

The interim results from the trials last summer were enough to make the AoC's chief executive, John Brennan, lobby for the higher grant. "These figures suggest that both local and national governments need to do more to make next year's national roll-outs a success. The government needs to think carefully about the value of the EMA and weight the costs of keeping it to ?30 a week against the potential benefits of a higher allowance on participation and staying-on rates."

However, the AoC welcomed the decision to make the grants payable to students themselves - in some pilots the money was handed to their parents and the incentive to stay on did not appear to be as strong.

The bottom line is that money talks. At a time when gap year students are being offered ?45 a week to volunteer during their year off, a real commitment to narrowing the opportunity gap for young people would have been a beefier hand out than the government's plans for ?30 a week.