Wednesday, January 21, 2009

How to Cut Public Expenditure: Part 1

This is my Mum. Over the last three months she has noticed that every week, £30 appears in her bank account. Despite numerous phone calls she has been unable to find out what it is or where it has come from. Yesterday, she spent more than an hour at her bank and they finally found out.

It seems that Her Majesty's Government thinks she is a sixth form student, and is paying her £30 a week to attend school. I kid ye not. Mrs Dale may be many things, but a sixth form student ain't one of them. Naturally, she is taking steps to ensure that the money is stopped and she repays what she has been paid. So, OK, we all make mistakes and I am sure that this is a one off mistake (actually, I'm not, but that's not the point I am wanting to make with this post).

I have no idea how much it is costing the taxpayer to pay £30 a week to all sixth form students, but I suspect the figure runs into hundreds of millions of pounds. I was against the grant when it was first introduced, and I see no reason to change my mind. My point is that it is this sort of public expenditure which is going to come under very close scrutiny in the coming months when government is forced to rein in its spending horns whether it likes it or not.

The Conservatives should be looking at every scheme like this and evaluating its economic and social worth. I would axe it tomorrow, if it were down to me, but politically it may well be difficult to do. But it is this sort of hard decision which will determine whether our politicians are capable of taking the hard decisions which need to be taken.


Newmania said...

Cue the Led Zep- Buda buda dum buda buda )

OK Pop Pickers coming in at number 10 its a top mover this week

Regional Development agencies

Still in the charts at number 9 its

ID Cards

In like bullet at number 7 its the one and only

Barnett Formula

Now shout and shimmy for No. 6 ...

Membership of the EU


Martin said...

When I was in sixth form, I qualified for £30 a week EMA (Educational Maintenance allowance), and in the second, I qualified to get £20, but didn't.

Despite the fact that I had absolutly no use for it, other than feeding my Pink Floyd and Frank Zappa collections. The only reason I qualified is because my family, having recently retired, technically was on a low income. Not the most honest thing for us to do. In the second year, I told my parents I wouldn't accept any more payments, on the grounds it was public money. I also wish I didn't claim in my first year- the money could have been used for something more worthwhile, or, even better, been left in the pocket of the taxpayer to begin with.

Unsworth said...

So you have to wonder who is the sixth-former that isn't being paid his/her EMA?

Quite a few of them, by all accounts. Maybe that nice Mr Balls can sort it out for your mum - and the teenager, too

Unknown said...

"This is my Mum."

Going by that picture, there are no prizes for working out which parent you're following!

I also agree about stupid schemes like that. They have Labour written all over them.

The system of "free money" in this country for various things, such as the dole etc... was designed to be a safety net to ensure that society's weakest aren't abandoned. It's now clear that under Labour it's become a hammock rather than a safety net. Now you no longer need to be part of society's weakest to have money from the government for doing buggar all. It's a national disgrace.

We should be a socially conscious capitalist nation. That is, survival of the fittest, encouraging society's strongest while ensuring that society's weakest are not left to rot.

Instead we are a politically correct socialist nation. The strongest are vilified, the subject of hatred and resentment and penal rates of tax, while society's lower (not even lowest) rungs are given handouts to give them an increased standard of living.


Unless we get a Tory government to restore these principals some time soon then i'm leaving.

Anonymous said...

A perfect example of a "you couldn't make it up" story.

Plato said...

Personally I'd stop Child Benefit for anyone in the 40% tax bracket.

Everyone I know who gets it uses it as free piggy-bank fodder and spends it on nonsense or as holiday cash.

Now I'm all for splashing my cash on fripperies but not using tax payers money to do so.

Trend Shed said...

Your mum has officially been 'fiscally stimulated', by bringing forwards government expenditure because 'it is the right thing to do'.

This £30 of government money is allocated to a 6th form student in 5 years time - because that person is only 10 years old at the moment, to make the fiscal stimulus work, the investment has been brought forward and the money has been paid to your mum.

Case solved.

Sherlock Holmes.

Guthrum said...

Not one kid at my sons school has received EMA not one. It was an electoral stunt that was to employ more public servants.

Two girls have now left the six form because they only took the course because of this promise of funding, they feel that in this downturn they need to bring income into their household.

Yet everybody still gets Child benefit whether they need it or not,

Anonymous said...

For the privilege of having a child born after 6 April, my wife is now entitled to £190 - Pregnancy Maintenance Grant, whatever that is. (the child better not be early)
Once the child is born, I understand she get another £250 - Child Trust Fund Payment and can then claim child allowance.
Now, I'm sure this is all laudable in its intent, but it is not means tested in anyway.
Fortunately, we do not need this money, but I'm buggered if we're not going to take it. After all it's only a return to us of some of the many many taxes we already pay.
Despite intending to claim this, we shall not fritter it away. We will save it for the child.
However, I absolutely agree that all these munificent schemes need to be looked at very closely. They are surely now unaffordable.

BenSix said...

"I have no idea how much it is costing the taxpayer to pay £30 a week to all sixth form students..."

Well, they're not giving £30 to all sixth form students, as my bank account can attest.

Anonymous said...

Northern Rock employees to get 10% bonus on their pay !!!

You can tell this is a nationalised bank now can't you?

Word Verification - 'farliter' ,TD's definition, 'an ancient Cornish type of firelighter'

dibberdoo said...

My niece was able to claim EMA even though her parents' income was probably over £70k a year. This was because her father had been out of work the previous year when the EMA assessment was made. She would have stayed on at school in any case and didn't need the EMA for encouragement. In fact, she didn't see the money herself as her parents' added it to the family funds.

I say good luck to anyone who is able to claim it but from the point of view of the country and the taxpayer, it's an extravagant waste.

Lola said...

If you want a real rant on this topic of EMA I'll ask my youngest daughter to do a post. She doesn't get EMA. Nearly all her mates do. They get it because of some generally irresponsible disfunctionality in their familes or a cunning method of hiding true income. It really really pisses her off that both of her parents work and pay taxes.

Bob said...

@ Plato "Everyone I know who gets it uses it as free piggy-bank fodder and spends it on nonsense or as holiday cash."

I am a 40% tax payer and use it to pay for things for my son, like a garden climbing frame, some expensive toys and the like.

I could use it for the £30 a week on food and nappies I spend, but prefer to utilise it on nice things for him.

Yak40 said...

Is your Mum in a Zeppelin in that photo ?

Unknown said...

@Half The Story
"I could use it for the £30 a week on food and nappies I spend, but prefer to utilise it on nice things for him."

The point personified. If you can afford to do that, then you don't need it. Sorry.

I mean, just why should the taxpayer be forking out cash for "nice things" for your son? The money should instead go to the poorest of families - the one's worrying about food and clothing. It's those people that deserve our help, not those who see the £30 as "extra".

I don't mean to be hostile to you in any way though, it just irks me to see clear examples of how this government has just thrown money around without a care of where it's going or the taxpayers who pay for it. So i'm blaming the government, not you. If it were me i'd take it and do exactly the same as you btw, so to criticise you would be hypocritical :)

Tom said...

Very easy politically - roll it back in at the end of each year - no sixth form student will feel he or she is worse off.

Shouting Into The Void said...

"I have no idea how much it is costing the taxpayer to pay £30 a week to all sixth form students"
Not all sixth form students qualify to get it Iain. Only those whose parents manage to fiddle their numbers so they earn less than £30,810 per year (if in England) get it. And Old Aged Pensioners such as your mum. Obviously.
I think it costs around £500m a year. So perhaps even a bit more than you thought!

Sixxstring90 said...

You're going to cut public investment at a time when people need it the most... YOU HEATHEN!!! YOU DEVIL WHORE! I SHALL HAVE YOU BEATEN TO WITHIN AN INCH OF YOUR SPENDING CUTTING LIFE!!!

Just kidding

BlueTechy said...

I remember this! Now when I was at School, taking into account I went to a full board boarding school, students who came from certain LEA's, not mine..., were told in an announcement that the government had deemed it had enough money to give then free money for staying in education. Bearing in mind 100% of students were expected to stay in education and then go on to University it was a surprise. All I know is that the people who got it found it came in very handy for going to the local pub or spending on cigarettes and filling up the tuck each week..

Lady Finchley said...

The EMA is a joke - badly administered - it falls on the teachers to fill out endless forms. If the student doesn't catch the teacher at the right time the form doesn't get signed and the kid doesn't get the EMA. I am not blaming the teachers - they should not have to be form fillers as well as teachers.

Jules said...

My son does not get the EMA but I will not just give him £30. He has to earn it working in shop on Saturdays. Many of his friends who do not get the EMA also work to earn it. In contrast, his friends in sixth form who do get the EMA do not have jobs because they see no reason to work when their spending money comes free. So kids from wealthier families gain work experience while poorer ones learn to relax on benefits. The EMA might be well-intentioned but its consequences are perverse.

North Northwester said...

Stop paying all child-based benefits, tax credits, allowances and 'free' services after each mother's third child.

If Britain needs a fourth at bridge, I'm sure we can find one.

John Buckingham said...

It is rather telling Iain that you say you would axe it tomorrow if it were you - before reviewing whether or not it works? Surely that's the antithesis of the kind of evidence-based policy-making we should be aiming for? Whether this scheme works or not in increasing the number of low-income students who stay on is a question for social science and statistics - but it is a question that must be answered before saying you'd axe the scheme, surely? If it works, then it may well be worth it. Ideological knee-jerk reactions are hardly sensible.

Sam Freedman (@samfr) said...

It costs £500 million a year. And is paid to 46% of sixth formers.

Not a sheep said...

If she can spell and count to 100 then she could probably get on an A level maths course

Nick Thornsby said...

Iain, the EMA is not paid to every sixth form student. It is paid in graduated amounts to those on low incomes. Only those from the very poorest backgrounds get the full £30. Some get £20, some get £10, and most get nothing.

It is far from the most wasteful government initiative, and the figures seem to show that it works. After all, it is incredibly tempting for someone whose parents are on a low income to just leave school at 16 and get a dead-end job, or worse still to sign on and get stuck in the beneifts cycle.

Or perhaps you don't support the idea of a more educated society?

Iain Dale said...

Let me make it clear. I do not support paying people to go to school full stop. End of story. If kids from poorer families are discouraged from staying on at school that needs to be addressed, but throwing £30 a week at them is not the way to do it. Typical socialist solution to everything. It's this sort of thing that has contributed to the mess we are in at the moment.

Anonymous said...

Let's make something perfectly clear here about this socialist scheme designed to benefit the poorer families in society (under £30000 pa by the sound of it.)

It's there to deter some kids from going straight from school to Job Seekers Allowance, simple. A little bribe to stay in school for another couple of years, which helps the government of the day massage the unemployment figures.

If we reduced employers NI contributions we may be able employ a lot more of them instead of making them endure the nonsense of two further years not learning anything because they don't want to.

Unknown said...

@Iain Dale
"Typical socialist solution to everything. It's this sort of thing that has contributed to the mess we are in at the moment."

*Applauds loudly*

That's all socialists know how to do. If there's a problem, then throw money at it and hope it goes away. The thing is, it doesn't work and it NEVER has worked. Still doesn't stop them trying though. Tossers.

Blackacre said...

It is a lot less than the cost to the state of them being on the dole, though, and some of them may get better qualifications as a result and better jobs paying more tax. I think you would want to do an analysis of the position before deciding to ditch the payment.

Of course, if that showed it did not work, then ditch away.

Oldrightie said...

Can I become a sixth former and get £30.00 a week?

Iain Dale said...

Some people don't seem to get it. In the end the only way to restore confidence is to live within our means. That means slashing government spending, just like the Callaghan did in its last 18 months. Many schemes will go. Some will go which are actually not bad. This one will go because it is frankly impossible to determine whether it works or not. I agree with Curly. It was introduced to massage the unemployment figures. Just like YOP in the 1980s.

Nick Thornsby said...

"If kids from poorer families are discouraged from staying on at school that needs to be addressed."

Well that is exactly what the EMA is addressing.

And people are not being paid to go to school, they are being encouraged to stay on and study for A-levels or similar. Completely different, because it is addressing the problem that because it is not compulsory, those from poorer families are disproportionately less likely to stay on after the leaving age.

It will be interesting to see what happens when the leaving age goes up, because I think the argument for EMA would be much less convincing, and probably should be scrapped.


Unknown said...

@Nick Thornsby

"Well that is exactly what the EMA is addressing."

Only it isn't addressing it at all.

"And people are not being paid to go to school"

Well, they are. That's exactly what's happening.



Ed said...

To the point someone above made re child benefits. Some years ago my wife tried to stop receiving these benefits (we have two children) but was told that there was no mechanism that allowed the payments to cease.

We don't need these 'benefits', hardly notice it and consider it wasteful to the country. And yet it still arrives, all £33.20 pw, regular as clockwork.

Up to Iain's post I was only dimly aware that such a thing as EMA exists. Not only does it neatly massage the unemployment stats, it also trains children of the 'merits' of government dependency. A lifelong lesson never to be unlearnt.

Bastiat1 said...

what a corker. would love to give her one up th'ass

Unknown said...

Iain I happen to know for a fact most of this £30 a week goes to buy much needed sustenance such as Ginster Pies, Red Bull, Mayfair Cigarettes & Chewing Gum.

I know this because every weekday from 10am onwards the local 6th Formers sit outside my local Morrisons consuming vast quantities of the above.

BJ said...

I agree: the Department for Education, Children, Families, Cuddly Toys, Stabbing and Rusks (or whatever it's called) could scrap this, and scrap Teachers' TV and just give the money to schools to employ more, or better, teachers.

Doubting Richard said...

John Buckingham

"... before reviewing whether or not it works?"

What do you mean works? You are presupposing that there is a legitimate purpose to the EMA, or a need for it. There is not.

Unknown said...

there is absolutely no need to employ more teachers.

Just get the ones we do have to teach the 3 bloody Rs to the little sods by the time they start at secondary skewl.

Nick Thornsby said...

John, what a really constructive post.

"Only it isn't addressing it at all."

Well, the evidence shows that it is, unless you have some proving otherwise.

"Well, they are. That's exactly what's happening."

Well we're getting into arguments about wording here, but I would describe school as compulsory education. You evidently describe it as all education- including university?

And I think I'm in a better position to judge my ideological views. Last time I looked, believing in the EMA didn't make you a Socialist.

Lola said...

Nick Thorsby - it is bollocks you do talk. My daughter doesn't get. her friends do. They go on two or three holidays a year to DisneyWorld USA, Africa or wherever. They usually ahve divorced parents but the new partners of each parent are on a good screw so everyone is better off, except my daughter and me who do not go on holidays - at all.

It is a totally shit system and should be scrapped, now.

housewife said...

Re Ed c.7.30 -

Can't remember where I read it, but some kindly soul, who didn't need the state pension, had contacted local GP and found some worthy recipient.

Idea might be of use to you.

Nick Thornsby said...

Lola. Another gracious and constructive post.

I didn't get EMA when I was at 6th form a couple of years ago. However I know many people who did whose parents whose parents were generally poor.

Of course there are people who fiddle the system, but that isn't a particularly convincing argument for not having a system at all.

housewife said...

My mother-in-law is lovely, delightful and caring. And she thinks I am too. Which confirms her doolally-ness, I guess. But, she's losing her marbles in lots of ways.

We recently had to dig her out of an insurance problem.

She'd been approached in Debenhams, by an insurance blokey, who sold her a policy that guaranteed her credit card debts be paid in the event that she lost her job.

She's 85. And she doesn't have a credit card.

Which is funny, as long as you have family looking out for you ...

housewife said...

Sorry - should have added, Iain -

It's good that your mother has someone to turn to, who can sort things out quickly and efficiently.

Lord help those who haven't got that, is my implication.

DespairingLiberal said...

Essex looks more hilly than I remember it Iain. said...

OH. It's youre mum. I thought it was one of gordons classmates still doing their doctorate......

Yer a tory Ian. But big ups to yer maw :-)

Did you know the consitututional games are afoot in Scotland?

e.g. the Bank of England refusing to meet with the Scottish parliament to discuss what it knows regarding the economy.

Nice of Labour to deny the DEMOCRATCALY elected parliament by using their civil servants.

Not very democratic for a party who waxes lyrical regarding the issue.

Gordon Brown said...

I was once "paid" several thousand pounds in Tax Credits by HM Government into "my" bank account. Regrettably, there was just one problem - I had never applied for the money, and it wasn't my own bank account.

Despite alerting the Inland Revenue about this at the very earliest opportunity both in writing and on the 'phone, they did nothing. Payments continued and bumph kept on arriving in the post. I returned all of it but to no avail.

One day, I received a letter telling me that I had been "Overpaid" £1000 and if I did not return the money, I would be taken to court. At this moment, I had a sense of humour failure.

Eventually, someone in their fraud investigation department did take up my case and stopped the payments. But the delay of 18 months was simply farcical.

Cases like your mother's does make one wonder simply how much money is going into the wrong hands and fraudsters.

Robert said...

The EMA has been paid to 6th Form Students for a number of years and is to cover such expenses as travel to school, lunch and books where necessary.

If it encourages poorer students to continue their studies then it has to be cheaper and better than putting them on the dole. Not everyone has parents who push their children and earn enough to pay tax at 40%.