Councils pledge to support credit unions and help share good practice

04 February 2014

Following on from its work on financial inclusion and family poverty, the Association of North East Councils has been looking at the role credit unions can play as an alternative, trusted source of financial services and credit.

On 28 January ANEC hosted a seminar in Darlington on the future role of credit unions. It attracted over 50 delegates from local authorities, their partners and the credit union sector. Opening the meeting, Councillor Bill Dixon (Leader, Darlington Borough Council), said: “I want to pay tribute to the work of credit unions – they represent much that is good in society and provide support to many people in challenging times. Councils and their partners already do much to support them, but it is vital that we learn from each other and share good practice, so that credit unions can develop and flourish”.

Speakers included the Chief Executive of the Association of British Credit Unions Limited and representatives of the Department of Work and Pensions, Darlington Credit Union and the Gentoo Group.

The seminar focused on the practical measures that local authorities and their partners can take to help credit unions develop and expand, and what credit unions themselves need to do. There are certainly opportunities for expansion – credit union membership in England, Scotland and Wales is relatively low at 2% of the population (compared with 45% in the USA). The DWP has commissioned a Credit Union Expansion Project aimed at making credit unions financially sustainable by 2015, and increasing access to their services by enrolling at least 1 million more people by 2019.

There is already much good practice among local authorities in terms of supporting credit unions, through such initiatives as payroll deduction schemes, taking deferred shares and seconding staff with relevant expertise. A number of interesting ideas were put forward at the seminar: for instance, local authorities can play an important role in ‘opening the door’ to organisations with whom they have contacts, potentially enabling credit unions to extend their services to private sector employees.

The Association will now bring together the lessons learnt from the seminar and discuss them in detail with its member authorities.