Cash scheme checked

Tony Tysome reports on the government's nest egg scheme

The government has been urged to tread carefully with plans to give young people cash handouts to help pay for their higher education - by an American academic who has helped raise worldwide interest in the idea.

Bruce Ackerman, Sterling professor of law and political science at Yale Law School, whose proposals for state-funded starter nest eggs have caught the attention of policy-makers in the United States and Europe, warned that the British government might fail to even out opportunities between the richest and poorest without the right approach to the scheme.

He said ministers' reported interest in tax relief on savings in individual learning accounts; requiring parental contributions into the accounts to release

nest-egg funds; and allowing recipients to choose at the age of 18 between spending the money on education or on buying a house showed they were in

danger of "missing the point".

This week the Department for Education and Employment confirmed that David Blunkett, the education secretary, was interested in exploring ways of closing the gap between the means of young people from well-off families and those from poorer families to get a good start in life.

Mr Blunkett and chancellor Gordon Brown are understood to be interested in introducing "18th birthday accounts" which could be worth up to Pounds 10,000 to the poorest young people.

The idea is already being considered seriously in the US, where President Clinton has proposed "universal savings accounts" and some politicians and academics have been pressing for share-the-wealth schemes worth up to Pounds 50,000 to each young person.

Professor Ackerman, who with Yale colleague Anne Alstow has written a book on the subject, The Stakeholder Society, welcomed the government's apparent interest in the idea.

But he added: "I oppose the idea that parents should have to pay into the accounts, because each young person should have equal opportunities regardless of the fecklessness of the parents. Tax relief tends to help better-off families. And if you offer money for a house at the same time as money for education, too many people may go for the house. The government should think carefully about how it goes about this."

Diana Warwick, chief executive of the Committee of Vice-Chancellors and Principals, said: "The CVCP welcomes the government's individual learning accounts scheme. It could encourage more youngsters to go to university."