Memorandum submitted by the Department
for Education and Skills
INTRODUCTION
1. My Department's belief is that all learners,
whatever their age, background and circumstances, need good financial
capability to enable them to participate in modern society and
manage their finances effectively. My Department attaches great
importance to improving financial capability and emphasised this
in the 14-19 Education and Skills White Paper. As part of our
14-19 reforms, financial capability education will be taught more
explicitly in the curriculum by including it in the new functional
mathematics component of GCSE mathematics. But we also recognise
that a range of other subjects such as, Personal, Social and Health
Education (PSHE), Citizenship, Business Studies and Careers Education,
offer good opportunities and contexts for exploring and improving
young people's understanding of financial issues. The broad range
of contexts offered within the different subjects will help ensure
that young people develop knowledge and skills that can be applied
in real life situations and decision making.
2. In addition, responding to the 2002 Howard
Davies report, my Department has allocated £60 million a
year for the three academic years from September 2005 to support
a new focus on enterprise education in all secondary schools in
England. We have stated that our definition of enterprise education
includes the need to support enterprise capability through teaching
of financial capability, and economic and business understanding.
3. My Department is also taking steps to
strengthen adult financial capability, especially for groups with
particular needs. Building on the work of the Skills for Life
Strategy in improving adult literacy and numeracy skills, we will
embed financial capability into functional mathematics and also
encourage local authorities to provide more financial education
to parents through Sure Start Children's Centres and locally delivered
family numeracy programmes.
THE CURRICULUM
AND FINANCIAL
CAPABILITY
4. A range of subjects such as Mathematics,
Personal, Social and Health Education (PSHE), Citizenship, Business
Studies and Careers Education, offers good opportunities and contexts
for exploring and improving young people's understanding of financial
issues.
5. Personal finance education, a prerequisite
of financial capability, is covered in the curriculum as part
of the PSHE framework. PSHE provides for personal finance education
to be taught throughout Key Stages 1 to 4. Pupils should be taught:
(5-7 year olds) that money comes
from different sources and can be used for different purposes;
(7-11 year olds) to look after their
money and realise that future wants and needs may be met through
saving;
(11-14 year olds) what influences
how we spend or save money, and how to become competent at managing
personal money; and
(14-16 year olds) to use a range
of financial tools and services, including budgeting and saving,
in managing personal money.
6. Citizenshipwhich is compulsory
in secondary schoolsprovides that 14-16 year old pupils
should be taught about how the economy functions, including the
role of business and financial services.
7. New resources for Enterprise Education
allow for, amongst other things, up to five days of enterprise
activity, such as running a real, or realistic, business, which
builds on existing work-related activities like work experience,
and which can readily include financial literacy. An enterprise
education entitlement will provide all KS4 pupils with the equivalent
of five days' activity which develops enterprise capability, encompassing
innovation, creativity, risk-management and risk-taking, and financial
and business understandingwith financial capability and
economic and business understanding. This concept embraces future
employees, as well as future entrepreneurs, helping them to develop
a can-do attitude and the drive to make ideas happen.
8. New functional mathematics, English and
ICT skills, announced in the 14-19 Skills White Paper, are scheduled
to be fully in place from 2010. My Department has asked QCA to
address financial capability more explicitly in the curriculum
by incorporating functional mathematics in GCSE mathematics. The
revised GCSE will be implemented from September 2010. This will
give financial education a more secure place in the school curriculum.
The QCA are currently developing standards of functional mathematics
for Entry 1 to Level 2 qualifications, and these will include
appropriate references to financial capability.
9. Functional mathematics will also form
part of the core of the new 14-19 specialised Diplomas. In addition,
from September 2009, Diplomas in Finance and Business Administration
will be taught for the first time. Although the content of these
is yet to be devised, as preparation for careers in the financial
industry, they are likely to cover financial literacy. The Financial
Services Sector Skills Council is to lead the development of these
Diplomas.
10. The Department will also consider what
role the new National Centre for Excellence in the Teaching of
Mathematics can play in supporting better teaching of financial
capabilities and disseminating good practice to practitioners.
DFES SUPPORT
FOR FINANCIAL
CAPABILITY IN
SCHOOLS
11. Teacher guidanceDfES offered
guidance in Financial Capability through Personal Financial
Education, which was published in July 2000. the Department
has also recently worked with the QCA to develop and publish guidance
on personal, social and health education at key stages 1 to 4
(5-16 year olds), which includes units exemplifying classroom
practice. This was published in November 2005 and includes two
units on financial capability for key stages 2 and 3 to help teachers
with lesson planning and assessment of pupil progress.
12. DfES continues to work with Pfeg (Personal
Finance Education Group) a charity that seeks to provide all young
people with the confidence, skills and knowledge they need in
financial matters. DfES provided financial support for Pfeg to
produce a guide on how to use mathematics to improve financial
capability.
13. The FSA has developed a draft schools
strategy for financial capability. The DfES supports the objectives
of the strategy and my officials are working directly through
the relevant project groups which have been set up by the FSA
to take forward the various work streams. We are also working
closely to align plans in the FSA's strategy for promoting financial
capability to adults with my Department's overall strategy for
all learners. For example, through the development of the Adult
Financial Capability Frameworka tool which maps the skills
and competence of being "financially capable" to the
adult literacy and numeracy standards and curriculum. The Financial
Secretary and I have agreed in principle to co-hose a seminar
later this year to share the outcomes of the FSA's strategy with
relevant organisations whose help will be crucial in its long-term
success.
SKILLS FOR
LIFE STRATEGY:
FINANCIAL LITERACY
PROJECT
14. Since 2001 the Skills for Life Strategy
Unit has funded the Basic Skills Agency to take forward a Financial
Literacy Project. The project supports the FSA's Financial Capability
Strategy and focuses specifically on activities that contribute
towards the Skills for Life Strategythe national strategy
to improve adult literacy, language and numeracy skills. The overarching
aim of the project is to improve literacy, language and numeracy
skills by using finance as a context for learning.
15. Work has included producing a variety
of teaching and learning materials and other support for Skills
for Life teachers and money advisors to address the Skills for
Life needs of learners. Testing and mainstreaming innovative approaches
to Skills for Life and financial literacy eg through family learning,
UFI online packages and working with the Citizens Advice Bureaux.
16. Pilot projects are also underway in
six different settings, providing Skills for Life programmes in
the context of finance. These include a Prison, Sure Start children's
centres, an FE College, a workplace through Union Learning Reps,
and a community setting. The pilots will explore models of delivery.
Lessons from these pilots will also be fed into the FSA's strategy.
January 2006
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