Memorandum submitted by the Welsh Assembly
Government
1. EXTEND THE
ENTITLEMENTS MADE
TO THE
CHILDREN' TRUST
FUND (CTF) ACCOUNTS
OF THOSE
RAISED IN
CARE BY
LOCAL AUTHORITIES
The Assembly Government is presently consulting
local authorities in Wales on arrangements to establish a new
CTF grant scheme from autumn 2006 to encourage local authorities
to make annual contributions to the CTF accounts of certain categories
of children for whom they have responsibility. Officials are presently
unable to outline the predicted cost of this initiative, but it
is estimated that following the target launch date (1st September
2006), and according to the definitions used in the consultation,
approximately 650 children will be immediately eligible, with
a further 200 children made eligible annually each year thereafter.
Consideration is being given to reimbursing local authorities
up to £50 for the costs incurred in contributing to each
eligible child's account.
2. IMPROVE THE
STANDARD AND
EXTENT OF
FINANCIAL LITERACY
EDUCATION IN
SCHOOLS
ACCAC (the Qualifications, Curriculum and Assessment
Authority for Wales) is presently revising the curriculum and
is hoping to incorporate new elements as well as strengthen the
existing elements on financial education within the Personal and
Social Education Framework. Consideration is also being given
to the possibility of adapting the Mathematics curriculum. The
revised curriculum is to be issued for formal consultation during
academic year 2006-07 and it is hoped that it will be implemented
in September 2008. There is, however, an apparent need to sensitively
and delicately deliver such educational initiatives, so as to
avoid increasing the stigma experienced by the children of low
income families. Consideration will be given to the potential
synergy between the activity of credit unions and financial literacy
initiatives in school, including exploring with credit unions
the possibility of establishing savings schemes through schools.
3. ESTABLISH
A NATIONAL
CENTRE FOR
FINANCIAL EDUCATION
The Assembly Government fully intends to emulate
in Wales the Scottish Executive's Scottish Centre for Financial
Education, an innovative institution that ensures the dissemination
to schools and local authorities of the teaching materials, guidance
and best practice necessary to the professional delivery of a
financial literacy education framework. It has recently been agreed
that the Financial Services Authority will act as an agent of
the Assembly Government in liaising with prospective private sector
investors to examine options for the establishment and funding
of the Centre. It is envisioned that a Centre in Wales could build
links between service providers such as credit unions, the Basic
Skills Agency and individual Citizens Advice Bureaux (all of which
play an important role in the delivery of financial education
and the training of money advisors).
4. DISTRIBUTE
TO CITIZENS
AFFECTED BY
DIVORCE/JOB
LOSS THE
CONTACT DETAILS
FOR MONEY
ADVICE AGENCIES
Financial exclusion is often caused or reinforced
by life-changing incidents such as these and we are presently
establishing the level of support that local authorities might
proffer and intending to build links with Community Legal Service
Direct Wales, the Law Society and the Probation Service to effectively
disseminate contact details to those independent, local organisations
that provide money advice. This process would encompass (1) identifying
the partners needed to signpost those in need, and (2) research
into the effects of such events on the individual particularly
regarding health and child poverty.
5. ENCOURAGE
AND SUPPORT
INCOME MAXIMISATION
AND DEBT
MINIMISATION INITIATIVES
These will include co-working with Job Centre
Plus on local initiatives; ensuring maximum take-up of benefits,
tax credits and pension credits; council tax rebate etc through
proactive awareness raising initiatives within the community;
and active promotion of credit unions. Efforts will be made to
investigate the possibility of rolling-out those income maximisation
measures that have already been tested on the ground: a Citizens'
Advice Bureaux has provided advice on the relationship between
the new Tax Credits and Maternity Grant entitlement, and the Flintshire
Bureau's `Family Matters' project advises families at risk of
losing the grant given misconceptions of the new system.
6. SUPPORT THE
DEVELOPMENT OF
THE CREDIT
UNION MOVEMENT
IN DEPRIVED/DISADVANTAGED
AREAS (AS
EXEMPLIFIED BY
THE WELSH
ASSEMBLY GOVERNMENT'S
COMMUNITIES FIRST
PROGRAMME)
These bodies are often located in the immediate
community, sensitive to local conditions and encourage saving
and sensible spending. Critical to the Assembly Government's financial
inclusion agenda, credit unions provide a workable alternative
to the sub-prime/illegal money-lending markets. There is the possibility
of expanding debt redemption schemes such as the DRAMA project
(Debt Redemption and Money Advice) in the Welsh coalfields (in
April 2003, the Coalfields Regeneration Trust granted the sum
of £115,000 to the Wales Co-operative Centre to oversee a
three-year pilot for a Loan Guarantee Fund partnership between
credit unions located in the Welsh coalfields and the providers
of free money advice services in those areas). The scheme enables
credit unions to redeem high interest loans or make emergency
bill payments and offer loans at lower interest rates. Before
taking out loans borrowers are encouraged to seek budgeting and
money advice from specialist money advisors.
The Department for Work and Pensions £36
million Third Sector Growth Fund provides financial assistance
to credit unions and community development financial institutions—the
proportion of this made available for use in Wales should accurately
recognise the severity of the situation in Wales relative to England,
Scotland and Wales.
7. CHALLENGE
THE ILLEGAL-MONEY
LENDING MARKET
We are keen to monitor the findings of the DTI
funded pilots in Glasgow and Birmingham. We understand that the
DTI is presently undertaking research into the prevalence of illegal
money lending and it should help establish to what extent and
in what areas of Wales it exists. Interim reports on the operation
of the project and associated costs are expected imminently. A
Welsh-specific evaluation and mapping of loan sharking may be
undertaken should the report on the pilots fail to account for
the situation in Wales.
8. STUDY THE
EXPERIENCE OF
THE SCOTTISH
EXECUTIVE IN
CO-ORDINATING
DEBT ADVICE,
WHICH HAS
INCLUDED EXTRA
INVESTMENT, 120 NEW
MONEY ADVISORS
AND WORKING
TOWARDS MINIMUM
STANDARDS
Of the DTI's £45 million Face-to-Face Debt
Advice Fund, £3.15 million has been made available for use
in Wales and the future use of this Fund should properly acknowledge
the severity of the situation in Wales. We would recommend greater
co-operation with the Legal Services Commission, one of the largest
funders of advice and information services in Wales and the UK.
9. INVESTIGATE
CO-WORKING
WITH UTILITY
COMPANIES TO
REDUCE THE
BURDEN ON
TARGETED GROUPS
Water poverty is particularly fundamental and
talks with Dwr Cymru (Welsh Water) revealed that around £20
million could be saved by the company if bill collection were
administered by local authorities throughout Wales (currently
only 11 local authorities do this). The Welsh Assembly Government
hopes to broker discussions between the Welsh Local Government
Association and Dwr Cymru, and savings from local authority collection
could be recycled to tackle the issue of water poverty with a
particular focus on helping disadvantaged groups, such as families
with very young children. This mode of negotiation should then
be explored with gas and electricity providers.
10. STRESS THE
MUTUALITY OF
FINANCIAL INCLUSION
INITIATIVES AND
SOCIAL ENTERPRISE
The Assembly Government has acknowledged the
importance of social enterprise in its Social Enterprise Strategy
for Wales (published June 2005) and our objectives in supporting
financial inclusion measures and the development and growth of
this sector are coterminous. Social enterprise "closes the
circle" of financial inclusion and provides employment and
wealth-creating opportunities in those areas where public and
private provision is no longer able to satisfy essential local
need.
June 2006
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