MPs are preparing to vote on proposals to scrap the EMA tomorrow (19 January). But Unison is warning that penalty charges as a result of the cancellation of the Capita contract will be high.
The union is backing MP Nic Dakin who has written to parliament requesting information on how much the government will pay towards cancelling the Capita contract.
Unison general secretary Dave Prentis said: "The government says it is forced to withdraw this vital support from the most disadvantaged young people, yet the cost of severing the contract with Capita two years early could cost up to £40m in penalty charges.
"Hundreds of thousands of students receive this vital support but 70 per cent of them may be forced to drop out of their courses if it is removed in the summer. The trail of destruction from abolishing the EMA could also lead to redundancies at Capita."
The Capita contract, which was worth £68m, was due to expire at the end of August 2013.
