Govt's finance-in-schools plans slammed

Government plans to weave financial education into the school curriculum offer “little more than a tasty soundbite”, the Minister for Schools has been told.

In a House of Commons debate yesterday, Phil Willis, the Liberal Democrat MP for Harrogate and Knaresborough, also told Jim Knight a stand-alone, compulsory, accredited personal finance subject in the curriculum could be the only viable solution to financial ignorance among young people today.

However, Knight says the government’s plans for improving education across the country are adequate and described the idea of a compulsory subject as “not necessary”.

The government says it is introducing a number of initiatives over the next five years to improve financial knowledge in young people, including starting lessons in schools such as enterprise education, citizenship education and, from 2010, GCSE functional mathematics. All of which, the Government says, will teach finance skills.

In addition, the government says the current personal, social, and health education (PSHE) subject would be extended to PSHEE to include an economics segment.

But Willis told the House that would not do. He pointed out research by the University of Manchester last year concluded “specific designated course in which students know that its total aims relate to areas of financial management is more effective than courses that cover a wide range of areas”.

He said: “Until it is recognised that financial education is a key skill that should sit alongside literacy, numeracy, and ICT as a stand-alone element of the national curriculum, it will remain a lottery, and the nation will continue to regard financial illiteracy as the norm,” he said. “But sadly, the Department for Education and Skills (DES) does not agree that a stand-alone element is needed.”

He criticised the government’s plans for PSHEE, describing it as “simply optional”.

“The government plans to introduce economics into PSHE, but that will not improve matters,” he said. “Like the existing programme, it will be non-statutory and non-examinable. In other words, it will be simply optional.”

He also rubbished the government’s plans for enterprise education, citizenship education and GCSE functional mathematics.

“This is not financial education,” said Willis. “Government initiatives offer little more than a tasty soundbite but no real substance. Indeed, if I could make one plea to the Minister tonight, it would be to move away from the idea that maths is a natural home for anything relating to personal finance. Financial capability is first and foremost about behaviours, not about numeracy.”

Jim Knight said introducing a compulsory subject would not work, and said the government is making adequate plans to tackle the problems of financial ignorance.

“Making the subject compulsory will not necessarily improve the way in which it is taught, and we think that that is the crucial factor that we need to focus on,” he said.

“An FSA survey of teachers showed that there is little support for personal finance to be made statutory and that what schools need is flexibility within the curriculum.

“There is scope not only within personal, social and health education, but also in citizenship – however flawed the honourable Gentleman [Willis] may think it is. Within PSHE, pupils develop their financial skills through age-appropriate activities. Younger children are introduced to ideas such as saving and planning, whereas older pupils study more complex concepts, such as influences on saving and how to budget.”

He also said the government is spending £60m a year until 2011 to help schools embed enterprise across the curriculum, although he did accept that citizenship studies did not include direct personal finance teaching.

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