Alan Milburn and his compatriots on the Social Mobility Commission waited until they saw the Budget details and had launched their annual report before making their resignation statement, but others are still chewing over the Budget details. As the Brexit deadline for moving on to trade negotiations looms, it seems all the characters in this political play want to be on stage at the same time.
The outgoing chairman of the Commission may be right in saying that the Government’s agenda is swamped with Brexit, and that it’s like pushing water uphill: but that’s not a reason for throwing his toys out of the pram. Something can be done, and we can all contribute towards change - and simultaneously press the Government to raise it up their agenda. Meanwhile the Commission’s annual status report enables us to check on progress and their report last week, with its detailed geographical analysis of progress, is certainly helpful in this regard.
This newsletter put forward a radical, large scale and specific proposal for incentivised learning on 26th September, which was included in The Share Foundation’s Budget submission.
Operated across all four nations in the United Kingdom, it would be offered to all young people from the most disadvantaged households – those in receipt of Child Tax Credit - and the funds to enable it could be at least notionally hypothecated from the tax levied each year on inheritance. Essentially incentivised learning would reward young people who make the effort to progress through a structured programme of building their life skills with small but meaningful tranches of capital to provide a resource base for starting adult life.
The terms would be carefully constructed, being focused on young people from poorer families: those in receipt of Child Tax Credit (c. 16% of the population). This would benefit c. 150,000 young people in each annual cohort. Incentivised learning would be offered in the years immediately before adulthood in order to give some experience of stewardship of capital as ‘financial education by experience’. If 10% of the current HMRC receipts of Inheritance tax (2016/17: £4.8bn) were applied in this way, the average receipts per young person completing the programme would be about £10,000.
The objective of building assets generally for young people is an established concept: the Child Trust Fund attempted to do this, but there was no incentive element, no reward for the young person’s effort. The scheme was also far from egalitarian as it relied on family contributions, not re-distribution, for its main effect. As a result children from well-off homes were bound to benefit substantially more.
However the Child Trust Fund did provide a platform for identifying children most in need – those looked-after by the state - and set them up with a capital account: so The Share Foundation was set up to work with the Child Trust Fund structure on a voluntary basis. This led to its being appointed to operate the Junior ISA scheme for Looked After young people throughout the United Kingdom on behalf of the Department for Education. As a result it has now introduced a truly incentivised learning programme for young people in care, the ‘Stepladder of Achievement’, as part of that scheme, which has now been widened to include Child Trust Funds held for young people in care in Autumn 2017.
There are six incentivised learning steps in the Stepladder incorporating a positive attitude, life skills and some resources, which in total contribute the relatively modest sum of £1,500 to a young person's Junior ISA: literacy (£150), numeracy (£150), initial financial education (£200), 250 words on ‘my plans for the future’ (an indicator of attitude change) (£250), the 8-week Managing My Money course (£350), and mentoring to help find a job or a place in higher education (£400).
At completion there is a Certificate of Participation and, of course, the young person has access to their Junior ISA money at 18.
So as the evidence builds that this does indeed achieve results, the Government should introduce the programme for 15-17 year olds in all families in receipt of Child Tax Credit. If a young person aged over 15 did not have a Junior ISA on registering for the programme, one would be opened with an initial, say, £200 for the first step - but of course all those aged between 6 and 15 have a Child Trust Fund in any case.
Meanwhile the involvement of mentoring volunteers to work with these young people, helping them through the steps and showing interest in their progress, would help bind society together, repairing the damage caused by family and social fragmentation.
This kind of inter-generational support for the disadvantaged young places no burden on natural inheritance within families: indeed it may suggest better ways to make that inheritance process more effective itself. However it does offer society a more stable future, based on social integration and mobility.
Alan Milburn commented that in leaving the Social Mobility Commission he plans to set up an institution to help groups with projects that boost social mobility. Great! He can come and help us with The Share Foundation’s programmes for incentivised learning, where actions speak louder than words.
Gavin Oldham
4th December 2017