Funding cuts reduce options for teenagers forced to stay in education after GCSE
22 August 2014
22 August 2014
Geraint Johnes and Beth Foley argue that as reforms to the school leaving age kick in, it’s far from clear whether the reforms will be effective, as institutions responsible for the training provision face significant cuts to resources.
Students collecting their GCSE results this summer will now be obliged to participate in education and training until at least the end of the academic year in which they turn 17. From the summer of 2015, this will be extended until their 18th birthday. The reforms, brought in under the Labour government’s 2008 Education and Skills Act, are the first time since the early 1970s that the leaving age has been increased.
Ed Balls, then secretary of state for education, wrote at the time that in “no area of the education system has comprehensive and systematic reform been as long-awaited, and nowhere is it more important.” But as the reforms kick in, it’s far from clear whether they will be effective in reality, as institutions responsible for both the implementation and provision face significant cuts to resources.
The arguments for raising the participation age were varied. First, the UK continues to lag behind many other nations in the Organisation of Economic Co-operation and Development (OECD) on the education participation rates of 15-19 year olds. In 2011, the UK’s rates stood at 78%, compared to an OECD average of 84% and an EU average of 87%. In an increasingly knowledge-based labour market, this figure is viewed as an important indicator of future economic competitiveness.
Second, after declining in the mid-1990s, the proportion of 16-18 year olds not in employment, education or training (NEET) has remained fairly constant at around 9-10% of the cohort, despite various attempts to reduce the figure.
Spending periods as NEET at a young age has been associated with future wage and employment penalties, so reducing this rate is vital to improving young people’s prospects. It would also lead to savings for the treasury, both in terms of additional tax revenues and foregone benefit payments.
Back in 2008, the government’s intention was to pass legislation that raised the participation age. Young people and employers not complying with the new rules would be subject to some form of sanction. But this has changed under the Coalition administration. In a bid to avoid the imposition of sanctions on young people, reduce costs and reassure employers, in 2012 government announced the suspension of duties to comply and their associated penalties, for both young people and employers.
The switch to a largely voluntary system for teenagers to participate in education and training appears to be a significant departure from the previous provisions. Yet this may not necessarily be a step backwards. The outcomes of learning are dependent on interest and engagement, rather than compulsion.
But it is also important to recognise that without such legal “sticks”, realising this potential will be crucially dependent on “carrots”, such as the attractiveness of the options available and the support offered to help young people access them.
While participation rates for 16 and 17-year-olds are relatively high, the non-participating 10% of the cohort will include some of the most disaffected and disadvantaged young people. Reaching them will be challenging. Not least because recent years have also seen the removal of a number of financial and advisory support systems designed to encourage young people to remain in education.
Our most recent report from the Work Foundation at Lancaster University argues that it is far from clear whether the reforms will be effective in reality, either in their practical implementation or wider intention. Aside from the decision not to enact some of the legal duties, the current government has made other changes which may have a significant impact on effectiveness.
Many of these changes are linked to the funding cuts being applied both to local authorities – who hold responsibility for implementing the new participation age – and to further education budgets. With the schools budget ring-fenced, spending cuts within the department for education have disproportionately fallen on provision for 16 to 18-year-olds. Total government spending on this group fell from £7.7bn in 2010-11 to £7bn in 2012-13.
This has affected both funding for training providers and the financial support available to young people: the Educational Maintenance Allowance, previously offered to learners from low-income families remaining in education post-16, has been replaced by a Bursary Fund with only a third of its former budget.
Local authorities have also been facing real terms spending cuts of around 10% per year since 2009. This has led to the removal of certain statutory services, such as an end to the duty to offer universal careers advice to young people. Yet the new duties, set out in the legislation, still exist for local authorities to both promote the effective participation of young people in education or training and secure suitable provision.
Our report recommends greater political acknowledgement of the attention and investment required to do this. It means improved post-16 options, financial support and guidance for young people and more funding for the bodies taking on new duties in this area.
If the ultimate aim of participation is to secure better long-term outcomes for young people, it is the current uncertainty around these factors that poses the greatest obstacle to effectively raising the participation age.
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The opinions expressed in our Comment and Analysis articles and in any attached comments are personal, and may not reflect the opinions of Lancaster University Management School. Responsibility for the accuracy of the information contained within these articles resides with the author.
Beth Foley's research on youth unemployment and young people’s experiences in the labour market has been supported by the Trust for London, Impetus – the Private Equity Foundation and Barclays
Geraint Johnes does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.
Beth is a researcher with The Work Foundation’s Socioeconomic Centre. Beth was previously a Researcher for the Social Market Foundation think tank, carrying out projects on public service reform, mental health and welfare reform, behavioural economics and the issue of insecure employment.
Geraint Johnes is Professor of Economics in the Department of Economics and Director of The Work Foundation.
He has published widely in the area of the economics of education, including papers in the Economic Journal, Oxford Economic Papers and Oxford Bulletin of Economics and Statistics.
He researches labour market destinations in BRICs, labour market flows, and costs and efficiency in educational institutions.