Someone change the classical record please!

The government's approach to teaching culture in schools doesn't work.

The government's latest drive to find a solution for teaching culture in schools has missed a big opportunity. It's nothing against Classic FM boss Darren Henley. He had a remit. It's just that ultimately we all know the record and unfortunately adding another layer into the English Baccalaureate doesn't seem like an ideal result for kids or teachers.

The problem is that while we all know teaching cultural subjects for longer in schools should in theory produce more balanced, cultural and artistic young adults, the reality is somewhat different. Teachers we know struggle with making strict curriculum subjects relevant and it feels as though Henley's report will do nothing more than trigger self-professed maths lover Michael Gove into some sort of halfway house, knee-jerk reaction.

I'm not against teaching drama and dance in schools. I do fear, though, that any formal, Department of Education-driven changes may focus too much on the "higher arts" and alienate kids from culture still further. I am also not suggesting that we teach them just street dance, pop songs and Banksy. The balance will no doubt be set but it is the same old methods, formulaic approach and academic expectancy that concern me.

Teaching culture in schools is not about throwing in extra lessons and giving out certificates. Take music. The trouble with teaching music in schools is that it is difficult to define its benefits beyond the obvious value of learning to play an instrument. Yet music at all levels can boost confidence in kids (and adults) and this in turn can open new doors and breed new opportunities. You only have to watch Gareth Malone in The Choir to see it in action.

There should be more music in schools across other subjects and not necessarily as a stand-alone class. Music, dance, drama and art have the ability to feed into many subjects. They are engaging mediums that can bring alive other topics and while I know some teachers try and do this, many are under pressure, working within the constraints of league tables and the three Rs. It is the culture that is the problem and the unwavering insistence on a strict curriculum that no longer has much relevance with the real world we live in.

Is this a bit of government box-ticking perhaps? Is the government jumping on bandwagons and paying lip service to culture in an attempt to keep the critics happy? Either way I cannot see how this will change anything. Gove says he doesn't want it to end up being elitist but it is difficult to see it will be anything but. The good kids with most parental support will get better and the rest will be disenfranchised, again. What it calls for is radicalism, a re-writing of the system and recognition of relevant subjects and reference points while maintaining educational values. Times have changed. Kids are playing downloads but it feels like the government is still stuck on vinyl.

Martyn Ware, former Heaven 17 and Human League musician and founder of the Illustrious Company, will be speaking at X Media Lab Bath on 16 March.

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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation