Financial education in Wales: a pending subject

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?

Bethan Jenkins is an Assembly Member for South Wales West and Plaid Cymru

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