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Cancellations, cuts and opportunity knocks

MyBnk CEO Lily Lapenna on how some schools and councils are pulling up the drawbridge on specialist education whilst others build for the future

Wednesday’s, our Tower Hamlets HQ is pretty quiet. The education team are jumping on buses and trains to schools all over the city, emails are flying about and people are trying to come up with another 10 buzzwords for money. We all knew the spending review was today yet carried on regardless letting our PR man and the interns huddle around a radio and take notes. No matter what came out of the statement, we could handle it – yet as we heard ‘specialist school status’ and ‘education maintenance allowance’ uttered across the room, one by one we stopped what we were doing and our own House of Commons debate began.

90% of UK adults have had no form of financial education, personal debt is at a record high, job markets are getting tougher and university degrees are getting more expensive and selective – I passionately believe that what we do has never been as important.

For three years, our financial education and enterprise charity has been giving 25,000 young people the skills, knowledge and confidence to deal with money and in that time the effects of credit crunch and bank bailouts have had a solidifying and sobering effect on how we operate.

In effect, demand for our work from schools and youth organisations has more than doubled.

We run seven jargon busting hands-on practical financial workshops and microfinance enterprise schemes that put young people at their heart. Youths aged 9-24 take part in and found savers clubs, business idea generators, real-life market battles and Dragons Den style competitions, alongside interactive and fun workshops on practical money management.

In the days and weeks since that Wednesday, concrete details have been thin on the ground and even now almost a month on the pieces are still in flux as radical reform pours out of the Department of Education.

We have some sense of the new order and are already feeling the effects, both positive and negative as head teachers and councils pour over budgets and try to anticipate the reallocation of resources.

Within a week, a few, not many, schools and councils cancelled or scaled down programmes due to cuts real, perceived and anticipated.

MyBnk work on a local authority level in London and the South East, engaging directly with individual schools, Council provided services (Connexions, Youth Services, and Positive Activities for Young People etc) as well as independent youth organisations such as Kids Company and Rathbone.

We are most vulnerable to the potential loss of £450m Specialist School Status funds which 95% of schools draw on and the £13m Specialist Schools and Academies Trust fund, both of which are not ring fenced. The 25% cut to council funding is already resulting in local authorities slashing child services, Brent for example have just axed £9.64m from their budget and across the capital excellent youth centres like the Salmon Trust may be left with just a pretty building – several have already been told grants will not be renewed.

Months ago, just before the general election, when the government dropped plans to make Personal, Social, Health & Economic Education a compulsory part of the curriculum and the opposition failed to offer any proposals, we feared only forward-looking schools would create the time and commit to an essential agenda.

Yet despite the extra financial pressures, parents and teachers realised the false economy in not teaching our youth how to bank, save and borrow money. They continued to recognise the increasingly critical role MyBnk plays in helping young people move into independent living be it from a school to university or social care to work – that prevention is always cheaper than the cure.

It works both ways and we have continued to put our money where our mouth is offering interest free loans for up to £100 for business start ups in 30 youth-led school enterprise banks.

Now, Heads of Children’s Services tell us that funds are effectively “missing in action” – central specific grants withdrawn in favour of a flat cash settlement. As half of their revenue comes from the DofE there has been some hesitancy to commit to even ongoing projects.

Anecdotally, teachers tell us they are having to pay for things that were previously free, from councils and Education Business Partnership’s. This is having a fortnight-by-fortnight impact on enterprise programmes that had already been signed off.

In principal the idea of a Pupil Premium makes sense but Gove admits the scheme is not new money and there will be losers as budgets are withdrawn and reallocated.

An aspiration nation is something we can all agree on but we could be leaving the aspirational behind. Certain aspects of the settlement do run the very real risk of abandoning some young people to a low skilled existence in a shrinking job market, thus paralyzing social mobility.

MyBnk believes young adults must become innovators and leaders to stand out from the crowded labour market and build a new enterprise economy.

Vocation and skills may be sacrificed as some schools fear ‘failure status’ and narrow their focus towards core subjects. By shifting the agenda so sharply, Head teachers are warning this might lead to more disaffection among less-academic students.

It is in this 16+ area that changes effecting specialism’s, tuition fees, EMA,  even charging youths in their twenties for taking GCSE’s and A Levels could damage young people’s aspirations and opportunities. All this spells danger in the capital where in some parts 31 people are chasing a single job.

From an operational point of view our specialist trainers are already helping young people adjust to the withdrawal of the EMA’s this Christmas. But it is in one particular programme we run, Uni-Dosh that has seen a dramatic rise in demand and scope.

The tripling of tuition fees to £9,000 a year has resulted in a sharp increase in requests for tailored programmes for Sixth Formers and young people worried they’ll be priced out university, struggle with huge debts or be sapped by unemployment. Demand has soared fourfold this year.

When the President of the National Union of Students told young people that the message from government is “you’re on your own” pupils asked us “ok, what do I do now?”

Most schools double up with MyBnk-In-A-Box youth-led microfinance schemes –  two thirds of students already work through their degree and the trend suggests tomorrow’s students are set to become practicing entrepreneurs during their degree.

Parents are very keen because in the long run it takes pressure off the Bank of Mum & Dad by instilling youths with an independent entrepreneurial attitude to avoid the kind of mistakes and hardship we are struggling with.

The systematic way in which the state is now allocating money is forcing all of us to conduct our own comprehensive spending review and creating armchair auditors. Even the simple act of publishing department spending is having an effect – “they spent how much on pens?! Oh, that pizza was £20 last night”. Surveys suggest 71% of us will make lifestyle changes to save money – cutting on average £183.

MyBnk is acting as a key enabler in this seismic but generally positive shift towards personal financial freedom.

Our generation is working longer for lower pensions and incurring more debt. Young people are not immune, they see for themselves in their own households, the effects of the past three years and now the squeeze on public services – we have to educate to prevent it happening again.

Everyone is faced with the same dilemma, doing more with less and doing it better. The only thing we can do is deliver and push home a positive agenda to galvanise minds and get people thinking about why the financial crisis is happening.

Every banker, teacher, homeowner, and professional I’ve ever spoken to about what MyBnk is doing says the same thing “I wish I had that when I was in school”.

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