Counting the Costs: Fair Wages and Maintenance for 16-18 Year Olds

Indirect costs such as transport can have a significant bearing on 16-18 year old’s decisions to participate in apprenticeships and full-time further education.

Fair Wages for Apprentices

The National Minimum Wage for apprentices stands at just £4.15, well below half the National Living Wage – the minimum wage for workers aged 25 and above. Despite the lower minimum wage for apprentices, non-compliance is widespread. The government’s own survey of apprentice pay released earlier this year found that one in five level 2 and 3 apprentices were paid below the legal minimum, a rate of illegal underpayment far higher than that seen for non- apprentices.

Child Benefit for Parents of Apprentices

The situation is further complicated by rules around Universal Credit and the benefits system. A young person succeeding in getting onto an apprenticeship can have an impact on their parents’ income under Universal Credit. While parents can claim Child Benefit for children living with them under age 20 who are in approved education or training, parents are ineligible to claim if their child is on an apprenticeship. This can mean a young person’s family losing out on over £1,000 a year in vital financial support if they start an apprenticeship.

This is in part a classic problem around joined up government, with responsibilities falling between departments, and between tiers of government. The issue around child benefit is a challenge for Department for Education in its impact on apprentices and their families, but the rules around eligibility are set by Department for Work and Pension. Central government can argue that decisions on transport discounts should be left to local areas, but local government has seen a decade of decline in funding.

Education Maintenance Allowances for Full-Time Students

The Education Maintenance Allowance was designed to address some of these barriers, and to ensure that cost is not a barrier to young people participating in education and training. This means tested allowances was paid to young people aged 16 – 18 whose parents were earning less than £31,000.

The allowance, which cost £580m a year in 2009/10 and provided support to one in three young learners, was scrapped in England in the early years of the Coalition Government. This came despite positive evaluation evidence which found that the EMA was successful both in increasing participation, retention and attainment among disadvantaged young people, and therefore represented a cost-effective way to narrow inequalities educational outcomes. The government has been consulting on the 16 – 19 Bursary Fund, which repealed EMA, and which aims to ensure that all students – regardless of their financial situation – can fully participate in education.

A Cross Government Maintenance Review

If this new government is seeking to level up skills and opportunities across the country, to narrow entrenched inequalities and deliver opportunities for all, it should ensure that no young person is priced out of the education and training opportunity that is right for them. The new government should look across the piece at the barriers to participation, and develop a cross government strategy – with sufficient funding behind it – to ensure that all young people are able to take the path that is right for them.

Joe Dromey, Deputy Director of Research and Development, Learning and Work Institute