Bethan Jenkins AM explains why she believes financial education is so important that it needs to be written into law.
The announcement of PISA results every three years has become one of those diary events that opposition parties use to scrutinise the Welsh Government on the effectiveness of its work.
Less attention is given to the purpose of these OECD tests than to how we compare against other countries, particularly the home nations. As such, the debate becomes one about devolution’s record – a political issue – than about whether students are ready to apply what they have learned in the real world, which is what parents and businesses really care about.
If there were ever a time to examine how we prepare children for their future it is now. The high tide of recession has fallen back a little, but what we’re finding is an economy built largely on debt, one in which employers increasingly call the shots through zero hour contracts, and austerity. All of this has to be seen against a 100-year-old process of deindustrialisation in Wales, a legacy that successive governments have failed to address.
We also know – although it remains to be seen whether it will be practised by our big financial institutions – that we swiftly return to recession if we forget the lessons it delivers.
Yesterday, I introduced the Financial Education & Inclusion (Wales) Bill. It is a Bill of two parts, one that looks to the future in equipping school leavers with the knowledge to successfully handle money, and one that addresses the present by compelling local authorities to put the financial well-being of its citizens at the heart of everything it does.
The Bill was designed particularly to bring direct benefit to the Welsh economy. In my South Wales West region alone, I can think of half a dozen companies that have closed local factories and moved work to emerging economies, losing well-paid jobs with disposable income that bring local benefit. We cannot compete with those countries on wages. Arguably, it is attempting this that has brought new, disadvantageous working practices. We must look for other ways.
Making financial education a statutory part of the Welsh curriculum sends a message to the world and to inward investors that Wales is serious about creating a financially capable workforce that can add value to a business through the quality and precision of their work.
Not only is it reputation building in design, and a proper answer to those legacy issues, it also uses existing Assembly powers to bring it about. I get sick and tired of hearing ministers say there’s nothing that can be done because Wales does not possess the “economic levers”. Wales does possess them. They lie in our education system.
The Bill would compel ministers to consult with experts when developing curriculum content on financial education. No more tail-wags-dog. I would expect to see lessons directly informed by the financial industry as well as from more conventional sources.
Ministers would also have to report back to the Assembly each year on the progress of financial education in our schools. This places responsibility directly in their hands, where it should be, rather than moving it down the chain of command and adding it to the growing list of school responsibilities. They will answer for it, and we as Members will be able to tweak and improve delivery regularly.
The Bill will compel local authorities to draw up a financial inclusion strategy, revising it every five years and producing an annual report on its progress. The strategy must lay out how the local authority will:
- · promote the financial inclusion of people in their areas;
- · encourage people to improve financial competency;
- · work with other organisations to promote financial inclusion;
- · facilitate free access to online financial education.
The last point, though innocuous, effectively recognises the internet as a right and, I believe, would be a world first for legislation. Away from that, with the rollout of Universal Credit we will have people budgeting for the first time, and it is vital that they are helped. This benefits us all. I found that housing associations put a lot of effort into financial competence because the alternative is far more costly.
The Bill also calls for local authorities and further and higher education institutions to work together to ensure that students are signposted to effective financial education, as well as ensuring that looked-after children receive the same.
None of this Bill gets in the way of the current work that the Welsh Government is undertaking, which includes the Literacy and Numeracy Framework, the new numeracy GSCE – a natural place for financial education, and subject areas expected to be announced this week – or the curriculum review by Professor Graham Donaldson, one of many people I have met with during the course of drawing up the Bill. And, because this work is underway, many of the Bill’s costs – such as training for teachers – would be tied up in what’s already happening.
So why legislate? Earlier this year, my office conducted Freedom of Information research among secondary schools across Wales. Of the 81 that replied, we found that the number of hours of financial education taught in mathematics and PSE from ages 11 to 16 ranged from 270 to just six hours.
That is a complete postcode lottery. With results showing huge variations in schools as little as 10 miles apart, what parent wants their child’s future financial capability to depend on the school they attended?
Making financial education compulsory is about sending a message and making sure it gets done. If the Welsh Government says it is being taught then it should show courage in its convictions and make it compulsory. After all, what reason – other than the end of money – would it or any future administration have for ever taking the subject out of the curriculum?
I think that their is much merit in this proposal . The concept of teaching “finance” as a curriculum item seems to me to be a critical part of a child’s understanding of the world today. Would be pleased to hear the follow ups on this subject.
This sounds good. At school (as part of my maths lessons) I was taught how to work out my future hire purchase agreements, and loan repayments; not the best of financial or any education at such an early age. I hope instead that children will be encouraged to save, and to use their resources well. Financial education given in a Wales that backs up young people’s understanding with supportive, progressive commercial practice would certainly be preferable to educating them to be the next generation of consumers.
I was lucky. I got Financial Education when I was in school the Finance Industry was much less fraudulent than it is now.
Education of the cons and deceptions used (don’t trust any Financial institution that refers to their services as “products” for a start) will help but is only a part of the problem.
Debt is now widely used in the Public and Private sector to create money that does not exist. This is linked with other factors, such as the circulation of money and value, to create the impression of more wealth than actually exists. The misleading term for this is “growth”.
Wealth and money is not a product of nature but a creation of the human mind. It used to be that the amount of gold that a state could beg, steal or borrow (mainly steal) determined how much money they could print. Now it’s decided by a committee it seems. Once you restrict the amount of wealth that’s available and the population grows the pressure is on to make the negative numbers appear positive.
Teach as much as you like, unless you deal with the core dishonesty at the heart of our financial systems and Government’s preference at looking the other way rather that regulating, you have a perfect storm that will always catch too many people out.
Children and young people very soon learn about money – they have to in ‘real’ life outside school if they want to survive. Making more and more laws about teaching it is not necessary and would be ineffective as kids wouldn’t listen. They would still go outside and spend on cigarettes, sweets and chips and end up in wongaland whatever was taught.
The harshest and most effective ‘financial’ lessons are taught by life not school. Fact.
Give a man a hammer and everything looks like a nail. Now the Assembly has legislative powers its members seem to think everything requires a law. A few things do. Most things require appropriate direction of existing powers and appropriate allocation of resources. Those things are more difficult than just passing a law that obliges others to do something. Yet without the method and the means the obligation will not be discharged and the law is a waste of time. Samuel Johnson’s lines should be framed and hung in the Senedd: How small of all that human hearts endure, that part which laws or kings can cause or cure. Dunno about ‘kings’ or ’cause’ but the laws and cure bit is dead right.
I’ve lived in Wales for most of my life. But, thankfully, I had parents who cared about my education and so I was sent elsewhere for schooling.
To this very day I still find it hard to believe that we have so many poorly educated here in Wales. Poorly educated kids, poorly educated parents and, if you don’t mind me saying, downright thick AM’s.
Perhaps we could entice Mr Gove to come to Wales ……………
You can’t teach ‘finance’ to the innumerate. It’s amazing how many degree qualified people are still functionally innumerate never mind school kids! I’m talking about people who can’t work out their change in a shop let alone deal with simple or compound interest or loan amortisation. I wonder how many of them are teachers?
Fincos know that a high proportion of adults are now functionally innumerate and they have developed seemingly endless ways to obfuscate and/or fraudulently display their headline numbers. We are supposed to have financial regulators to deal with this but they have failed dismally.
Then we have the problem of easy access to virtually unregulated gambling where even fewer seem to understand that the system is designed to make most people lose most of the time… Sadly, the media tend to concentrate on the ‘winners’ not the losers when gambling is generally injurious to your wealth.
I’m not convinced that it’s possible to teach people not to be conned because that is now the core of teaching ‘finance’. It should be a given that schools turn out kids who are, at least, functionally numerate and they are clearly failing to do this in many cases. Schools are therefore churning out potential victims and that cannot be right.
It may be worth reading the explanatory memorandum for a greater understanding of how the Bill would deliver financial education, and why there is a requirement for primary legislation.
You can download the EM here: http://www.senedd.assemblywales.org/mgIssueHistoryHome.aspx?IId=9333
Duncan Higgitt
I would say the memorandum shows why primary legislation is a diversion. It says the legislations will::
o improve financial capability amongst school-age (ages 8-16) children and young people by making it a legal requirement that financial education is included in the school curriculum.
to strengthen the role of local authorities in helping people avoid falling into financial difficulty, by requiring local authorities to adopt a financial inclusion strategy.
to give local authorities duties in respect of providing advice and arranging for advice about financial management, both generally and specifically to former looked after children and to students.
the last two in particular make someone else responsible for something you would like to see without providing any technical guidance or any resources. Exactly the kind of pass-the-buck, aspiration and ultimately vacuous legislation we don’t need. The very words “financial inclusion strategy” should warn you that we are in the realm of meaningless verbiage.
Martyn Lewis, Money Saving Expert, has been campaigning for this at a UK level for some time. He has also tried to reduced the possibility of different groups having access to different amounts of material by providing some of it. Research uncovered an education group called PFEG that provides free resources. My thought is that this is something that, perhaps, PTAs could help deliver? Where there is a school with a parent – an IFA, an accountant or just someone who is good at balancing the domestic budget, you have the basis for delivery. There are also packages available to be delivered to various groups such as job clubs. For every Wonga, there is a debt advice group that can provide not only a route out of debt but, by giving the man a fishing rod rather than just the fish, a means to stay out of debt.
R Tredwyn: Thanks for your comments. It would be good to have a contribution from yourself when the Bill goes out for formal consultation in the Autumn. A critical eye should only serve to make it a more robust piece of legislation, I believe.
Nigel Davies: we’ve worked with MSE and PFEG and have their’s and Martin Lewis’ backing for this Bill, and the intention is to make people financially capable (the rod rather than the fish, as you say), but I confess we haven’t considered using PTAs. Thanks for the idea – we’ll look now as to how we could incorporate this over the comming Bill stages.