Lib Dem’s to scrap Child Trust Fund

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Last year the Liberal Democrats announced that they would scrap the Child Trust Fund should they win the next election. The Child Trust Fund is a Labour Scheme set up in 2002, whereby the government gives the parents of every new born child £250 to invest on behalf of their child, followed by another £250 when they are seven. Families can then add to this up to the amount of £1200 per year. The child can use the money accumulated from their eighteenth birthday.

The Lib Dem's have said that the £20 billion that has been spent on the Child Trust Fund over the last few years has been "wasteful". They believe that there are better ways of investing in children. Many families have failed to take up the Child Trust Fund (resulting in the government investing it on their behalf), which is one of the reasons sighted by the Lib Dem's for it having been a failure. They think that both government money and families' money can be better spent elsewhere. The party's Treasury Spokesman, Vince Cable, said in December that families would be better off spending money on repaying debts rather than putting it towards their children's Child Trust Fund. This could be a particularly important point in the current economic uncertainty. The BBC has released figures that the average Child Trust Fund has fallen by 29%, which outlines the obvious disadvantage of the scheme; that the investment can go down as well as up.

The Lib Dem's have vowed to spend the money currently used for the Child Trust Fund on childcare and schools should they come into power. Their aim is to reduce class sizes to around fifteen pupils, half of the current number. They would do this by training an extra 38,000 teachers. The Lib Dem's plan is to introduce a system they call ‘Pupil Premium'. This is a scheme designed to help children from disadvantaged backgrounds, by allocating a large proportion of the extra money towards them. Lib Dem leader, Nick Clegg, told BBC Radio 4's Today Programme in February that this would allow those needing the necessary extra help additional classes or one-to-one tuition. He said that this would give everyone the same opportunities. He claimed that at present bright children from poorer background were usually overtaken at school by less bright children from wealthier backgrounds by the age of 6 or 7.

Mr Clegg stated that money currently used for the Child Trust Fund would be used to fund this training of extra teachers. He said that this would cost £500 million per year, which is the same amount as the Child Trust Fund is costing the government.

The Child Trust fund is something that has caused mixed opinion since it was introduced in 2002. Education is something that always comes up around election time, and next time it will be no different.

Andrew Marshall ©

Chid Trust Fund

BBC Report on Liberal Democrat Education Policy

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