Supplementary memorandum by Help the Aged
I note that in the course of your Committee's
inquiry into Financial Inclusion you will be meeting the chief
executives of the clearing banks. I write to urge you to use the
meeting as an opportunity to re-open the issue of shared branches—as
a mechanism to stem the tide of bank branch closures, and to retain
an important financial service in local communities.
It is perfectly understandable that the retail
banking sector has a diminishing appetite for maintaining an infrastructure
of branches, as new platforms for financial transactions are developed
and the financial behaviour of the population changes. But if
the end result is the closure of all bank branches, the consequences
for communities and individual citizens would be dramatic. People
need a locally accessible point of financial information and advice:
their community organisations and the small businesses which service
their needs require a locus from which to organise their business
affairs.
The parallel problems confronting the Post Office
are part of this debate, because for its own commercial reasons,
the Post Office is increasingly fighting for a share of the services
side of retail banking, whilst obviously without the capacity
to provide financial advice and assistance.
These strands all come together under the banner
of financial inclusion. The perfectly laudable ambition of the
Government, to build a framework in which people both take the
greater freedom and responsibility to organise their own financial
affairs, still requires a catalyst. It is simply unrealistic to
presume that everybody has the time, flair and capacity to organise
all aspects of their complicated lives from within their own resources.
So this brings me back to bank branches as a
resource. Individually, the independent retail banks, responsible
to their shareholders, have no reason to factor into their thinking
the consequences of their trading decisions for local communities.
But a resource of financial advice in the local community is necessary.
Shared branches have been mooted as a solution, and your Committee
explored this issue in your July 2002 report, "Banking,
Consumers and Small Businesses". That report noted that
the idea deserved further attention, but the only attention it
has received was a rather imperfect pilot run in six rural and
unrepresentative locations. The clearing banks have consistently
rejected any further work to test the idea.
Older people are amongst those with the least
capacity to use the new platforms. Yet the Pensions Service is
pushing them towards a wider use of bank accounts, and the Department
of Health is encouraging them to organise more of their care needs
for themselves with direct payments. The Post Office network is
shrinking, and being deserted by Government agencies such as DVLC,
TV Licensing and the Passport Office. The energy suppliers and
local Councils (in respect of Council Tax collections) are seeking
a wider use of direct debit payments. The banks are under whelmed
by meeting the needs of these customers with relatively modest
demands, but their needs must be addressed by some, easily accessible,
mechanism. As must be the needs of the local small business community
whose services sustain the ideal of an older population with the
opportunity of living successful and independent lives in their
own homes.
May 2006
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