The review, set to report in spring 2010, will explore how best to improve current systems of financial support. It will include looking at the role of the Education Maintenance Allowance (EMA), which provides 16- to 18-year-olds with up to £30 a week to stay in education.
The move comes ahead of the forthcoming increase in the participation age, which means that all 17-year-olds will be required to stay on in education or training by 2013, extending to all 18-year-olds in 2015.
Professionals across education and children's services are being asked to submit evidence on whether cash incentives are the best way to engage young people.
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