Launched at the Co-operative Party’s Annual Conference in Cardiff the Guide sets out practical ways in which local councils can support the formation and expansion of credit unions in their local area.
The guide features examples of best practice including:
- Working in local schools to encourage financial literacy and good saving habits
- Helping local residents adapt to paying their rent under Universal Credit by providing rent guarantees to local social landlords
- Providing payroll deduction facilities to council staff, making it easier for them to save
- Support from local councils through the use of deferred shares or changes in procurement procedures.
The Guide comes in response to increasing concern among local councillors about unsustainable levels of debt being built up in their communities as a result of the proliferation of high-cost payday lenders on the high street – which they fear will be exacerbated by upcoming changes to tax credits and the introduction of Universal Credit.
Credit unions –not-for-profit financial co-operatives, which are owned and governed by local residents and which have their interest rates capped at a maximum of 42.6% have widely been recognised as an alternative, with credit union membership doubling over the past decade. But their national body ABCUL, along with the Co-operative Party’s hundreds of local councillors (who stand jointly with Labour as Labour & Co-operative), say that there is more that can be done:
Cllr Joe Goldberg, Labour & Co-operative Cabinet Member at Haringey Council said
We hope this guide will be useful to Councillors who want to know how they can support their local credit union. In Haringey we have helped our credit union grow as a viable alternative in the marketplace, by offering a subordinated loan. We are also worked with them to ensure every secondary school starter in Haringey was offered a free £20 credit union account.”
Matt Bland, Head of Policy & Communications, ABCUL said
There is fantastic work happening across the country. There is much to be gained by working closely as councils can provide investment and access to residents, in return credit unions provide much needed access to financial services and help councils deal with issues such as welfare reform. “