New embarrassment for Ed Balls as payments are held up to 150,000 teenagers on student grants


Knitwit: Schools Secretary Ed Balls faces fresh embarrassment over student grants

Colleges have been forced to to raid their own budgets to pay grants to students after computer failures held up payments for 150,000 teenagers, it emerged today.

They have taken the emergency measure in an attempt to prevent technical problems at private contractor Liberata sparking a surge in the drop-out rate this year.

The grants of up to £30 per week are intended to encourage teenagers from low and middle-income homes to stay on at school after 16 and form a centrepiece of Government plans to raise the education leaving age to 18.

But college bosses fear administrative problems at the firm delivering the payments for the first time this year are so severe the grants will be delayed for up to six weeks, potentially provoking the most hard-up students to give up their places.

The fiasco is acutely embarrassing for Schools Secretary Ed Balls who is still mired in a row over delays and technical problems which plagued the marking of SATs tests this year.

He yesterday told head teachers of his 'deep frustration' at the SATs chaos, which shares many common features with the latest IT failure.

Both involve firms who have taken over the delivery of major public sector contracts for the first time.

Liberata has a six-year £80million contract to administer the student grants after winning it from Capita.

The problems with this year's grant payments, named Educational Maintenance Allowances (EMAs), are thought to centre on a computer system designed to process applications.

A separate programme due to be used for the first time this year to allow students to apply online had to be abandoned because it was not judged to be ready.

Students have also reported jammed helplines and the lines recording a busy signal even though there were operators available to take calls.

In echoes of the SATs debacle, the Government agency responsible for the payments, the Learning and Skills Council, said 300 extra staff had been hired to sort out the backlog.

Trevor Fellowes, director of learner support at the LSC, said: 'We are running at about half of what I would like us to be.

'There is no getting away from the fact that some people's will be delayed because the processing has not worked as fast as we intended it to.'

The LSC estimates around 150,000 applications for EMAs are affected by the problems, including from students who are applying for a second or third year.

It believes 133,000 have so far been approved and has promised that all payments will be backdated and no students will miss out on cash.

However some colleges are taking action to tide youngsters over until they receive the money to which they are entitled.

At South Cheshire College, principal David Collins said the means-tested allowances could be 'the difference between students continuing to study or dropping out and getting a low-paid job'.

His college is offering emergency payments to help students with bus fares and meal costs which they would then repay when the technical failures are resolved.

Meanwhile Barry Hansford, chairman of the National Association of Managers of Student Services, warned that in some colleges the numbers of students being successfully awarded EMA contracts is 80 per cent below last year's levels.

'One college said this time last year it had 150 learners with contracts but this year has 22. Another said it had 80 but 500 last year,' he said.

'Liberata are painting as good a picture as they can.

'It should not stop any student starting a course but it could have an effect on a student who is relying on that money to pay for travel to college or relying on it to buy equipment and books.

'Some colleges are starting to pay students out of their own funds.

'The Learning and Skills Council has said it could be two to three weeks before they are back on track but I am a little bit more sceptical and think it will be more like six weeks.'

Students with household income below £30,810 get part of the EMA; those with households earning less than £15,000 get the full £30 per week.

Liberal Democrat children's spokesman David Laws said: 'After the shambolic management of the SATs, this is yet another example of an outside company making an utter mess of delivering an important service to students.

'Ministers may blame private companies for these administrative disasters, but it is the Government which is ultimately responsible for ensuring it selects firms which are capable of delivering.

'It should not be necessary for hard pressed colleges to fund the educational maintenance allowance out of their own resources.'

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