By Sean Coughlan
BBC News education reporter
The delays to allowances is causing hardship, say students and parents
The private contractor blamed for delays with education maintenance allowances faces £3m penalties, says the Learning and Skills Council.
The LSC which hired Liberata to administer the allowances in England says this is how much it estimates it will deduct from payments.
The EMA allowances, intended to help teenagers stay in education, have been disrupted by administrative delays.
Liberata said it was dealing with the backlog of 150,000 applications.
'Running hard to stand still'
A spokesman said: "Liberata is committed to solving this challenge for our client and continues to apply increasing resources in order to address the backlog of applications.
"Even though we are processing more applications every day, the backlog remains high as we are at peak time in terms of application receipt."
Rob Wye, the LSC's director of young people's learning and skills, says that the contractual penalties for the delays are currently estimated at £3m.
The contractor, Liberata, also has to pay for the extra staff hired to tackle the delayed applications for allowances, says Mr Wye.
Applications are still arriving, he says, and as such it is a case of "running hard to stand still". But he said the LSC was "pressing the contractor very hard".
Mr Wye says he is "very loathe to put a date" on when the backlog will have been completely tackled.
Students and their families have been complaining about growing hardship caused by delays in receiving education maintenance allowances.
"I live alone, EMA makes up nearly half of my weekly income so I was desperately in need of it... With living costs rising, I am really beginning to struggle and am having to choose between heating or eating," writes Sian from Leicester.
'Humiliating, frustrating, annoying'
The Learning and Skills Council has written to further education college principals promising that it will fund any emergency support given by colleges to students.
But e-mails suggest that support and advice is not always proving easy to access.
"No news whatsoever. We can't even get through to anyone on the phone.
"In the past week since my eldest started at college, in all her classes she hasn't found one single person yet who has received any EMA," writes Sandra from Barnsley.
"The college's student support is inundated with hundreds and hundreds of kids who haven't had anything."
This mother of two sent off documents to support her application for her daughter in June - and she says that the failure to process the allowance is now disrupting other benefits, where she needs to prove that she has a dependent child in full-time education.
"It has been humiliating, frustrating, annoying and so, so upsetting. You can only imagine what our children are feeling like, at seeing their families put through this hell; they are getting upset and confused because they are not getting the EMA they were promised, and they are seeing their family being financially penalised," writes Sandra.
The intention of EMAs is to prevent youngsters drifting out of education too early - but there have been e-mails claiming that teenagers are considering dropping out.
"I am missing one lesson a week to work a shift so I can have money to spend on food the week after. I can't ask my mum for money as she is only on benefits.... I'm going have to drop out and work full time as not only me but my family need to get by," said Layla from Manchester in an e-mail to the BBC News website.
The means-tested EMA allowances, worth up to £30 per week, were introduced to help young people stay in education beyond the age of 16, paying for expenses such as bus fares and meals.
About 600,000 students were expected to receive them this year in England - but the system has been struck by administrative problems, with 150,000 applications being caught in a backlog. Applicants in the rest of the UK are not affected.
Students and colleges have also complained about difficulties in contacting a helpline.
The Learning and Skills Council says the problems have been caused by the private contractor it appointed to administer the allowances, Liberata.
In a letter sent to further education college principals on Friday, the LSC says that Liberata's "speed of processing applications is unacceptable".
It also says that customer service has been unsatisfactory, the contractor has been asked to "re-train" staff and the telephone system is "unreliable".
The contractor, Liberata, employed an extra 460 staff to clear the delay and last week was expecting the backlog to be cleared by the end of September.
In April 2008 an arm of Liberata - Liberata Financial Services - was fined £525,000 by the Financial Services Authority for "failures in its systems and controls for producing and issuing documents". Liberata sold this part of its business earlier this month.
David Collins, president of the Association of Colleges, says that the processing of EMA applications seemed to be improving.
"Where students are still awaiting payment colleges have continued to assist them through emergency funds - in particular with travel, food or text book costs for those in greatest need," said Mr Collins.
Some of your comments on this story:
At our college nobody has had payments, some have been accepted but others still waiting, but we havnt beenoffered any emergancy funds or anything !?!
When I rang up EMA to ask why I had not received the contract to give to my learning provider, the phone would ring as with the proper dial tone and then after a while it would hang up and it took me about 2 - 3 hours to get through to the EMA helpline and in the end I had to use 2 different phones to try and get through to find out information.
Liam Woods, Gorleston, Great Yarmouth, Norfolk
I administer the EMA scheme in a Sixth Form college, and the transfer to Liberata is driving me mad. Not only has the processing of applications been held up severely, but the web-based payment system hasn't even been completed yet, and the interim version lacks a lot of necessary functions. I can't help but think that the LSC is contracting out to the cheapest deal offered, rather than actually ensure that they get good service for their (i.e. our) money.
Lee, Manchester, UK
As someone who works as an EMA administrator I can say the EMA system is a farce. Some of the NOE which have come into me, have a ref. number which is not recognised on the Liberata system. I leave voicemails and send e-mails but it can take between 7 - 10 days to get replies and if I am fortunate enough to get through on the phone lines the staff are obviously inadequately trained for the job.
Jo Myler, Widnes, Cheshire
It's not just EMA that LSC can't manage. My wife is a childminder who looks after the child of a girl who goes to college. She is still waiting for payments from LSC that back date to May. She has filled in two additional sets of paperwork, all of which seem to get lost somewhere within LSC. The third set is being posted this week - fingers crossed.
EMA have taken at least 5 weeks to process my application, after around 40 attempts at trying to contact them via phone they finally decided to answer. The operator didn't have access to real time information, simply repeated himself that there was a delay in processing applications however he did disappear for about 5 minutes and came back to tell me I should receive my NOE sometime this week. I'll just play a waiting game now then? - I rely on EMA for paying for meals, transport and college equipment - How does the government expect me to pay for equipment with no money? - Should I just drop out of college and get a full time job at McDonalds? - SORT IT OUT!
Adam, Mablethorpe, Lincolnshire
I had a job right from the time I became old enough to at 14. I've had one ever since. All this appears to be doing, considering most kids on EMA don't seem to have jobs, is proving that you don't have to help yourself to get along - the state will just give you a hand-out for you idleness.
Dr Toes, Carharrack
i applied for EMA in july havent had a reply back since then, i have paid for a work textbooks which cost a fortune. started college this week and need money for train fares and course materials, and even with my part time job I cannot afford it! It's driving me to the edge, I'm not sure what to do. so Liberata sort something out fast.
Whilst I agree that the length of time taken to process these applications appears to be unsatisfactory, I'm not entirely sure I understand why these teenagers are becoming "upset and confused" because they are not getting the money they were promised. I think the only people who are right to be upset are the parents, as they are clearly under financial pressure. If these children are so upset at seeing their families "put through hell" then perhaps they ought to get a weekend job? I fear we're raising a generation of children who think that life owes them a living and that they don't need to earn money.
Both of my parents were on benefits when I grew up and therefore I know what it's like to live with next to no money. We didn't have EMA when I was in sixth form so I went and got a part time job. It's common sense. Jobs are quite easy to find at this time of the year too, what with many employers taking on for Christmas.
Leanne, Bath, UK
In response to Leanne from Bath's comment - before criticising students for not getting a job in order to help with the financial struggle, perhaps you would care to see that most of the students who are complaining, do already have a part time job.
Joe Bloggs, Worcester, UK
Some people are commenting on getting part time jobs, i have a part time job, and i still do not have enough to purchase essntials for college, i have been waiting 6 weeks for a reply from EMA now, and finding another job may sound easy, but most employers take one look at teenagers now and make a judgmental opinion
Dave Smith, Newcastle
I totally agree with Leanne in Bath, i was actually lucky enough to be the first generation to get EMA, and although it did help a lot with travelling costs to and from college i did also hold down a 5 day week evening job to support myself and my family. Its not difficult, its students who want an easy life as possible. It certainly shouldnt be "relied" on, it should be more "support" if anything.
I started my first year at college this month, and due to family circumstances, I am entitled to the full £30 a week. I need that money to pay for ridiculously overpriced text-books, bus and train fares, as well as all other expenses I will have coming soon, such as driving lessons. And I think Leanne is missing the point. Many of us DO have part-time jobs, but the pay no where near can cover the costs. I was earning barely £35 a week for working in a ~30`C room that smelt of rotten food and alcohol.
Of course, by having that part time job, you have less time to study, and you're under constant stress due to having almost no free time. Until I quit my job recently, I'd be getting back from college at 5, having to run home, get changed, and instantly go to work until 10pm, all so I could actually afford to go to college. Luckily, I did get my first EMA payment yesterday morning, so I can start paying for my textbooks whilst looking for a new job - which means travelling at least 12 miles; and thus spending some of that EMA on bus fare.
Andrew Tindall, Bransgore, UK
Whether or not EMA is fair is not the question asked here, but whether the policy of outsourcing to the cheapest contractor is actually providing value for money. The EMA scheme ran effectively without these problems. My Stepson has applied for a job and is travelling to college on foot. His Mother and I continue to support him, and that is just and reasonable but he is entitled to that money and it would help our budget. Our main problem with the backlog is that we are still awaiting the return of our documents, including my P60, which I need for other purposes. Like many people who applied I was not aware that my documents were going to anyone outside of a Government run body and I am now very concerned about the safety and security of these documents.
Jason Hollman, Derby
I think the EMA means testing assumes that students with wealthy parents give them the equivalent money - which just isn't the case! The same is true for university tuition fees. A friend of mine whose parents were divorced, but whose father was very wealthy, had no fees to pay. I, with two parents working hard and earning just over the means testing limit, had to pay the full whack. Is this fair? I think everyone should be entitled to the same!
Matthew, Cambridge, England
I believe that the way the EMA is given out isn't thought out enough. For example what if a family was under the same stress as a family on benefits because of having more than one child does that mean they are not entitled??
Jonathan Trick, Norwich
God almighty. You start a scheme like EMA to give an incentive to poorer kids to stay on, and what do you get... Rich kids who whinge that they should be entitled to this that and the other. And poor kids who suddenly claim they are completely dependent to live on the money they previously weren't getting. Put through hell indeed... Can everyone get a grip please.
Matthew, Cambridge, UK
Having just read the article, I am appalled that this should be happening. I am not affected by it but I know how difficult it can be when badly needed money does not turn up. In a climate that is encouraging students to go on studying this is totally unacceptable. Fining the company is one thing, but will they be allowed to go on handling the EMA payments next year, or would it not be better to find a company that can do the job properly.
Ann Moon, Redhill
My son is 2nd year A level student who qualifies for EMA. He has not as yet received a penny and neither have any of this friends. He also works part time to give him a sense of the value of money before he goes to university. It is another example of outsourcing to the cheapest provider, not the best.
I sent off for my EMA about 7 weeks ago and still not got it.
Adam, Flint, North Wales
I sent off for my EMA at the end of July and got a reply shortly saying I'd sent the wrong paperwork, so I sent back the right one straight away. I haven't heard anything since. I started college this week and need money for train fares and course materials, and even with my part time job I cannot afford it! It's driving me to the edge, I'm not sure what to do.
I worked my way right through college. I worked 19.5 hours a week in my first year, and then 24 hours a week in my 2nd year. This meant that I was working twice as hard as my friends to pay for things like textbooks, which aren't cheap! I found it highly inappropriate that I wasn't entitled to any help from EMA. My parents may have earnt over £30000 but they also had a mortgage to pay and another child to look after. I think everyone should be entitled to the same amount. At the same time i think if you could live without EMA during school, why does starting college mean that, all of a sudden, not receviing the EMA is a problem?
EMA is extremely unfair and does not create the equality in students that it's intended to. I could go to school on time and attend all my lesson and so can my buddy next to me. However, he would receive money where as I would not. I had to take out a new job to get the sort of money they receive. To make things worse, I was taxed on that job, essentially paying for my friend! 9/10 students I knew that were on EMA did not have a job, this is teaching young people that the government will look after you, no lesson to the new generation just coming into the real world.
David, Ipswich, UK