Hard-up schools start hard sell

Is a pretty picture a responsible way to promote credit cards? No bank would dream of encouraging you to take out a credit card in these terms. Yet this is precisely how an enthusiastic maths teacher at my daughter's school promoted the school's affinity card at a parent liaison group meeting a couple of years ago.

Is a pretty picture a responsible way to promote credit cards? No bank would dream of encouraging you to take out a credit card in these terms. Yet this is precisely how an enthusiastic maths teacher at my daughter's school promoted the school's affinity card at a parent liaison group meeting a couple of years ago.

The card is a Bank of Scotland Mastercard available through the Card for Schools scheme, which has been running for five years. There are 30 schools subscribing to the scheme and 260 people hold cards. Each school gets a small fee when the card is used, when money is spent, and as a loyalty bonus. Even if you spend nothing in 20 months the school gets £7.50 from your willingness to add to your plastic card collection (decorative or otherwise).

The card has not been heard of again at my daughter's school. Perhaps many other parents, like me, felt they would prefer not to enter into a credit agreement merely to provide a small donation to school funds. Lately the school has joined another scheme which brings a benefit in exchange for an advertising platform to parents.

The school, a well-known Cambridgeshire secondary with a history of accolades from the schools regulator, Ofsted, has recently subscribed to a service called Parentmail, which provides an e-mail delivery service for letters home from the school. Parentmail, its director, Paul Hughes, says, gives the service free to schools, and it is paid for by running small adverts at the bottom of school letters.

A product called Mumscover has also popped up on letters about the school ski trip and the forthcoming auction of promises. The product plays on parents' fears, such as, "What if Mum gets ill?" and aims to make a quick online sale in as little as three minutes.

Mumscover is an insurance policy designed to pay the bills for non-working mothers who become too ill for their normal childminding and homecare duties. It claims to be "the first insurance created just for mums", ignoring houseperson cover in most of the 50-plus income protection policies on the market. For a monthly premium of £17.90, Mumscover pays specified bills up to a £750 a month for six-months' disability. The policy will only pay bills; it does not just hand over the sum assured. For example, replacement childcare can only be through the use of a registered childminder.

You can extend the policy to give 12-month cover for a £27.50 per month premium. But for a 35-year-old female non-smoker a £32 monthly premium would provide £800 a month cover which will last, if necessary, until age 60 under a standard income protection policy from Legal & General. Mumscover is sold by a small marketing company under the aegis of the income protection insurer Pinnacle, a subsidiary of BNP Paribas. Mumscover's originator, Barry Wilding, defends its short claim period. "Most people who get ill get better within six months," he says.

Mr Hughes says Parentmail will be dropping advertising and funding itself through fees as from next term. This is not because of the complaints he has received about advertising, he says, though several users apparently agree schools should not be promoting products to the parent body. Mr Hughes is dropping advertising because, times being what they are, it has been hard to find enough companies willing to advertise. But even if this scheme has met a setback, it is easy to see how juicy a market parents of schoolchildren must be for the financial services industry, a massive group of families, many of them homeowners, who represent an easy sell for savings, loan and protection products. Parentmail, which went live only in September last year, reaches 30,000 parents at 1,400 schools across the country.

The Personal Finance Education Group (PFEG), soon to be chaired by Ron Sandler, the author of last year's government report into long-term savings, is funded by financial companies and is sensitive to the charge that its industry backers are in it to promote their own products. The chief executive, Wendy van den Hende, says: "We are aware there is a danger children might be sold things, and parents through their children. Of course they will be an interesting market for financial companies to tap into." PFEG tries to ensure sponsorship of its recommended educational materials is as low-key as possible. "There are many reasons why companies take part in our campaign and one is undoubtedly recognition of their name," Ms van den Hende adds.

The financial and educational issues here are hard to disentangle. Schools have a unique standing within their community. Even if they do not explicitly endorse a product, something of the privileged nature of the parent/school relationship will affect the viewpoint of the target market. "Ordinary parents will think, 'It comes from the school; it must be OK', Nick Seaton, chairman of the Campaign for Real Education, says.

There is little official guidance for schools on issues such as this. A best practice document, Commercial activities in schools, available at www. teachernet.gov.uk, mentions only sponsored educational materials and "collector schemes" such as Tesco Computers for Schools. But it does recommend that schools should have a policy on the subject.

From the school's point of view, it all comes down to funding. "This Government was supposed to ensure state schools were properly funded," Mr Seaton says. But this has not happened, he adds.

My daughter's headmaster, Stephen Munday, recently back from a conference where the Cadbury confectionery-maker is promoting a "vouchers for sports equipment" campaign, echoes this view. "In a perfectly funded educational world, all this would probably not raise its head. In the imperfectly funded educational world in which we operate, difficult decisions might have to be made."

Mr Munday agrees that funding from some sources would be an undoubted no-no. "A relationship with a tobacco company would be an obvious example." he says. "Where to draw the line seems the key issue." In my view, as a parent and as a financial journalist, the line has already been overstepped when a school's name is used to sell a financial product. Any selling message from a school exerts inappropriate pressure on parents to buy. And schools have enough to worry about without being associated with financial misselling. I would be interested to hear from other parents whose children have been actively sold financial products.

cstopp@btopenworld.com