We're in the money now

A government review recommends combating financial illiteracy, so the next likely item on the agenda for schools and colleges is teaching students how to make and handle money.

Helen Hague reports.

From the classroom to the boardroom" was the headline the Treasury chose for its press release announcing a review of the way education tackles the heart of economics: making money. The Treasury release started with the news that business leaders had welcomed proposals to train Britain's next generation of entrepreneurs. But the review covered much more than this and goes much deeper - indeed, right to the heart of the way we tackle money management.

The review was led by Sir Howard Davies, the former chairman of the Confederation of British Industry and now head of the Financial Services Authority. His wide-ranging report published in February aims to do more than encourage those keen to follow in the footsteps of Richard Branson or Martha Lane Fox of lastminute.com. It is about many things - not least how to equip youngsters with the nous to avoid falling prey to loan sharks if they run up debts on unserviceable store cards, and how to get the best deal when out shopping.

It is also about the crucial role that schools and colleges play in preparing young people for work and "employability", to use one of Sir Howard's much-favoured terms. He defines it as "the knowledge and understanding, skills, attitudes and qualities that young people will need to thrive in their future working lives".

Today's students are more likely to work in small enterprises or for themselves than in big-hitting firms, and they will need to be more flexible and entrepreneurial than their parents.

The skills of generating business are now more highly valued than before in big firms and the voluntary sector. But the review found that "few schoolchildren are exposed to basic concepts about finance and the economy which form part of the essential toolkit of the entrepreneur". Fewer than 30 per cent of young people took part in any form of enterprise activity at school. Such work, the review said, plays a key role in developing the skills and confidence to equip young people to work for themselves or start up businesses.

Against this background, Howard Davies makes his main statement: "The time is right for a step change in both enterprise activities and in the promotion of economic and financial literacy." Undoubtedly, this is a view that chimes with thinking in Downing Street and the Treasury.

The reorganisation of the 14-19 curriculum "offers an opening to revisit the place of enterprise learning in schools". And the new Learning and Skills Council, which covers that age range, the addition of citizenship to the curriculum from September, plus the Financial Services Agency's new duty to promote public awareness of the financial system, he thinks, "present a series of opportunities for greater integration of enterprise learning into young people's education".

But Sir Howard follows up with a stark warning. "It will not happen unless the Government secures commitment to a clear strategy for enterprise learning, provides the resources to deliver it and ensures that the performance of schools and colleges is monitored and reported." In the run-up to the comprehensive spending review, the pitch for pound;54 million annually from the Treasury - with a pound;30 million contribution from business in time and resources - is unequivocal. The money would be needed annually by 2005-6 to bankroll many initiatives.

But the review promises a payback: an enterprising, flexible, entrepreneurial workforce that can manage risk and will lead to a more rapid rate of business and job creation. Enterprise learning, it says, could help to develop the necessary skills and attitudes to fuel dynamic economic growth.

Ultimately, Sir Howard identifies one "overarching outcome" to which he believes his review can contribute: the employability of young people. He breaks the concept into three categories, which may well become a staffroom mantra in the coming years: enterprise capability, financial literacy and economic and business understanding. If these concepts are embedded in the minds of tomorrow's workforce, future economic growth will be well primed. The review found little evidence of an anti-business culture among young people. Surveys suggested that more young people tended to regard entrepreneurship as a good thing, as distinct from big business. Running your own firm was seen as much better than working for a big company.

A survey for the Davies review team found that 85 per cent of 15 to 18-year-olds had a "very or fairly positive" attitude to people who run their own businesses - the highest scoring job in pupils' perceptions - while 73 per cent felt the same way about being a senior manager in a big company. Civil servants scored lowest - 40 per cent gave them the thumbs up - while teachers scored 59 per cent.

So expect a shift in the way schools introduce young people to the world of work. The Davies review's own survey found that while more than 80 per cent of young people had undertaken work experience, fewer than 15 per cent had taken part in the kind of mini-company scheme found to be highly effective in developing young people's enterprise activity and whetting young appetites for entrepreneurship. Certainly, the review recommends that the two-week work experience for 15 and 16-year-olds should offer much more in the way of enterprise and business experience.

In a neat demonstration of the kind of basic economic concept young people are being encouraged to grasp, many who responded to the Davies review's "call for evidence" claimed that demand from pupils for enterprise learning far outstripped supply. This was backed up by the review team's research with young people, which found that a generally positive attitude to business and entrepreneurship was often twinned with a lack of the kind of skills and expectations that would be needed to develop enterprise capability.

A strong message emerges from the review: we should be equipping young people to assess risks and rewards, and how to change jobs and handle economic uncertainty in order to thrive in the economy - be it starting up a business, becoming self-employed or building their own careers to stay employable. Enterprise must be seen as a set of skills, attitudes and capabilities that can "help weaken the link between economic uncertainty and social exclusion". And this, of course, fits in well with Labour's social inclusion agenda.

Not all pupils are destined for the boardroom, or to be headline-grabbing tycoons. But weaving enterprise capability into the fabric of learning for life at school and college should help many young citizens to attain the employability they will need to thrive in their future working lives. It should benefit the economy, too.

Review of Enterprise and the Economy in Education is available at www.daviesreview.org

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