Royal Bank of Scotland branch closures Contents

Conclusions and recommendations

Closure programme

1.The closure of these branches will be a devastating blow to the affected communities, removing vital services relied upon by businesses and disproportionately affecting vulnerable customers. We are not convinced that RBS fully appreciate the damage these closures will do to the communities and businesses that rely on these branches. (Paragraph 13)

2.RBS have told us that these closures are not motivated by a desire to save money but are about responding to changes in customer behaviour. RBS themselves have told us that the savings these closures will make are small relative to the size of their business. During the course of this inquiry, we have heard compelling evidence about the adverse impact these closures will have for individuals, communities and businesses. If RBS truly wants to meet the needs of its customers it should respond to this overwhelming evidence—which shows that there continues to be a strong demand for in-branch services—and halt its closure programme. Given the recent profits reported by RBS this is a cost they can easily afford to bear. (Paragraph 17)

3.We welcome the detailed information that RBS has provided on the impact on staff, although we believe they should have been upfront about the true scale of job losses when they first announced the closures. We are encouraged by the steps RBS is taking to minimise the number of compulsory redundancies and urge it to do all it can to work with the 12 members of staff without job offers to find them suitable positions. We would welcome an update on this situation in response to our Report. (Paragraph 21)

4.There is still a lot of uncertainty around how the ten branches which have been granted a six-month reprieve will be evaluated and on what basis decisions on their futures will be taken. Given the lack of information available, it is not currently possible for us to have confidence that this process will be fair and independent. We are concerned that no reviewer has been appointed and no decision has been made on how branch performance will be judged, almost four months after the initial announcement was made. This is not fair on the staff who work in these branches nor the communities they serve. The fact that it was not until two weeks after our second hearing that RBS announced that the independent reviewer, rather than RBS itself, will decide the criteria these branches are judged against casts doubt on how well RBS has planned and managed this review process. We recommend that RBS should postpone the review of these branches until 6 months after the independent reviewer has been appointed and the targets these branches will be judged against have been announced. RBS should also set out what additional support it is providing to these branches to ensure that they are not being setup to fail. (Paragraph 30)

5.We welcome the assurance that RBS has no plans for further closures in Scotland and that this would only change if “circumstance changed in particular areas or technology changes in a way that we cannot imagine right now”, and Ross McEwan’s statement that there would be no further reviews until 2020. We intend to hold RBS to this commitment. Should any future review lead to more branch closures in Scotland, RBS must provide detailed information about how the local or technological situation has changed to such a degree as to justify a further round of closures. (Paragraph 33)

Government involvement

6.We were disappointed that no UK Government Minister appeared to respond to our questions about the closure programme and that we did not have the opportunity to test the policy that the Government “does not intervene in commercial decisions” with a Minister. Notwithstanding the Government’s position that it does not interfere with commercial decisions, we are disappointed that the UK Government has not sought to make stronger representations to RBS about the impact these closures will have on communities across Scotland. If RBS does not act on our recommendation to halt the closures we recommend that the Government use any influence that its majority shareholding provides to apply pressure on RBS to reconsider the closure programme. (Paragraph 41)

Access to Banking Standard

7.RBS’s Impact Assessments only go part of the way to meeting the requirements of the Access to Banking Standard. They do not provide sufficient information on the situation in relation to individual branches, for example whether customers have access to a suitably reliable broadband connection to allow them to use online banking, the practicality of traveling to the next nearest branch or the effective availability of alternative services such as mobile branches and community bankers. Without this information we do not see how these documents can be said to have properly assessed the impact of the closures on customers, businesses and communities. The Lending Standards Board’s current interpretation of impact as being “how far the customers are going to have to travel to the nearest branch” is far too limited, and we recommend that it adopt a more comprehensive view of impact in future reviews. (Paragraph 49)

8.Despite the consultation that RBS has done since announcing the closures, it appears to us that there would have been real benefit in RBS consulting more widely ahead of the decision to close its branches. The Access to Banking Standard requires banks to make an assessment of the impact closures will have on customers when closures are announced, but it is difficult to see how this can be achieved without banks directly consulting customers before closure decisions are taken. As one witness put it: “How can you know if you don’t ask?” (Paragraph 52)

9.We recommend that the Lending Standards Board consult on amending the Access to Banking Standard to require banks to consult its customers before the final decisions on branch closures are taken and announced. We believe this would be consistent with, and enhance, the current requirements the Standard places on banks to assess the impact of closures on their customers. (Paragraph 53)

10.RBS’s closure programme presents a real challenge for the LSB, as the highest profile closures since it took on responsibility for overseeing the Access to Banking Standard. It needs to be seen as a robust and independent regulator if it is to earn public confidence in the current self-regulatory regime. We recommend that the LSB reconsider its decision not to publish the result of its work on the RBS closure process and any action plan that is agreed; having an open and transparent review process is essential if the public are to have confidence in the current system of self-regulation. (Paragraph 59)

11.We recommend that the Government monitor the effectiveness of LSB as the guardian of the Access to Banking Standard. If the LSB is unable to maintain public confidence in the current regime the Government should consider intervening and consult on introducing a scheme of statutory regulation. (Paragraph 60)

Alternative banking methods

12.Online banking has changed the way that many people bank, providing an easier and quicker way for customers to perform some everyday banking services. We welcome the efforts that RBS is making to help customers develop the digital skills they need to confidently and safely bank online. However, we are disappointed that RBS does not appear to have analysed the availability of decent quality broadband in the catchment areas of the banks they are planning to close. (Paragraph 66)

13.While we welcome RBS’s attempts to mitigate some of the impacts of branch closures through alternative provisions, such as mobile banking vans, we have heard that mobile banking is in no way a replacement for traditional in-branch banking services. There are particular concerns about the availability and quality of mobile banking vans. RBS must properly engage with the views expressed by affected communities, and further expand its fleet of mobile branches if this is required to meet its customers’ needs. (Paragraph 75)

14.We welcome the introduction of community bankers by RBS, but believe that their current plans will fall far short of meeting customer needs. 21 individuals cannot cover the geographic area previously served by 62 physical branches, especially given their proposed role in providing home visits to vulnerable customers, which will be a resource intensive task. RBS need to radically increase the number of community bankers, otherwise these plans risk looking like a tokenistic attempt to deal with customers concerns. (Paragraph 78)

Post Office banking services

15.While the Post Office is not a replacement for a high street bank, we welcome the fact that the Post Office provides some of the day-to-day services that customers would otherwise do in their local bank branch. We recommend that the Government, Post Office and Royal Bank of Scotland work together to improve awareness of the bank services offered by the Post Office. (Paragraph 83)

16.Given the increasing importance of the Post Office as a provider of basic banking services, it is essential the banks and Post Office communicate with each other about their closure decisions, and work together to ensure all communities have a location where it is possible to access face-to-face banking services. We recommend that the Lending Standard Board review the effectiveness of communication between banks who decide to close branches and the Post Office in a future thematic review of branch closures. (Paragraph 88)

Published: 27 May 2018