16 July 2014
Article written by Anne Thomas, National Assembly for Wales Research Service
A Private Member’s Bill that seeks to promote financial inclusion in Wales has been laid before the Assembly by Bethan Jenkins AM.
Bethan Jenkins says that the Financial Education and Inclusion (Wales) Bill aims to address the position where many people in Wales are falling into financial difficulty due to a lack of knowledge and skills in managing money. The Bill’s Explanatory Memorandum argues that this is compounded by a tendency, in an adverse economic climate, for people to turn to high interest, unsustainable borrowing as a route to address their financial problems.
There are three main elements to the Bill:
- Firstly, the Bill provides a legislative footing for financial education in Wales by making it a statutory part of the school curriculum for maintained schools.
- Secondly, the Bill will require local authorities to adopt a financial inclusion strategy outlining what steps they intend to take to promote the financial inclusion of residents in their area.
- Thirdly, the Bill places requirements on local authorities in respect of providing Advice to citizens about financial services and financial management.
Under the rules governing how the Assembly carries out its business, or ‘standing orders’ as they are formally known, Bills can be introduced by individual Assembly Members (AMs), as well as by the Welsh Government which is the most common source of Assembly legislation. Assembly Committees and the Assembly Commission itself can also propose legislation. Bethan Jenkins was successful in a ballot amongst AMs in July 2013 and was therefore given the opportunity to propose a new law on her chosen topic of financial education and inclusion. Consultation was held on her proposals in March and April this year.
When the proposal was initially discussed in the Assembly at a very early stage last October, the Welsh Government pointed to action it was already taking to deliver information about money management to pupils in schools. This is mainly through the Literacy and Numeracy Framework, which was introduced in September 2013, and a new GCSE in mathematical numeracy to be taught from September 2015. However, Bethan Jenkins has highlighted the inconsistent delivery of financial education between schools in Wales – something also reported by Estyn in 2011 – and argues that more needs to be done so that financial education has a secure place in the curriculum, rooted in primary legislation.
In respect of the role of local government, the Welsh Government does have an all-Wales Financial Inclusion Strategy in place. However, the Bill’s Explanatory Memorandum argues that it is difficult to judge the progress made by local authorities in furthering financial inclusion and to identify tangible outcomes. Bethan Jenkins therefore says the legislation is needed to oblige local authorities to plan strategically to promote the financial inclusion of their residents.
The Bill will now begin its journey through the Assembly’s legislative process, which will include scrutiny by an Assembly Committee this autumn leading to potential amendments and a final debate and vote by all AMs in Plenary on whether to pass the legislation or not. This process is expected to last until early next year. But first, Bethan Jenkins will make a statement to AMs in Plenary today (Wednesday 16 July) to mark the formal introduction of her Bill.