Social and Economic Impact

Financial Inclusion & Affordable Credit in Leeds

Research, Partnership & Action

Research• Household surveys in 2004, 2010 & 2018• Economic Impact of Financial Inclusion initiatives• Improving Health through income maximisation• Cap on the total cost of credit• Problem Gambling in Leeds• Poverty Fact Book

Strong collaborative partnership approach through the Leeds Financial Inclusion Steering Group;

• Increase access to affordable financial services• Increase access to free debt advice• Improve financial capability

www.leeds.gov.uk/fi

Action and Initiatives

• Integrated Advice Provision• Work with LCU on joint projects• Work with Food Aid Network and Fareshare• Healthy Holiday’s• Financial Literacy projects• Front Line Staff Training• Corporate Debt Policy• Problem Gambling • Welfare Reform & UC• Response to COVID-19

Financial Inclusion Research

Household Surveys- banking, savings, credit and debt

2004- Boom years2010- Eye of the storm2018 – Economic growth (slow) and austerity

Findings from 2004- starting point for a partnership approach to tackle financial exclusion

• Cash based economy• Lower utilisation of bank accounts• Higher dependency on door step lending• Serious debt problems

Household Finances: Banking Services

Use of Direct Debits or Standing Orders for Fuel Bills (35%)Homeowners 3 x more likely than Social Tenants

2 x more likely that Private Tenants

17 to 29 year olds and Lone parents less likely than all other groups to pay by these methods.

Household Finances: Savings

No savings or less than £100

Almost 70% social housing and private rented tenants compared to 33% of homeowners79% of lone parents67% of low income families73% of 17-29 year old

Household Finances: Debt

40% of the sample debt caused stress and anxiety

Digital Inclusion

Young people and households with children most likely to have access to the internet (around 90%)Over 60’s (36%) and households earning less than £200 pw (59%)least likely22% said they found it difficult to use the internet and 11% rated their skills as fair

Leeds Credit Union

Lone parent households were significantly more likely to be members compared with any other group.

Heard of LCU Member of LCU

2004 30% 6%

2010 52% 11%

2018 67% 14%

Conclusions

• Increase in banked households

• Savings level same as 2004

• Fall in high cost credit use

• More people borrowing to cover day to day living expenses

People most impacted

Social and private rented tenants, lone parents and families with

children, low income and people not in work, & younger age groups

Overall

In 2018 households are less resilient and worse prepared for an

external shock or crisis than in 2004.

Assessing the Economic Impact

Organisations and Services studied (2009)

• Leeds City Council– Welfare Rights Unit

– Corporate Debt Unit

– Benefits Service

• Leeds Debt Advice Agencies

• Social Housing Providers

• Leeds City Credit Union

• Utility company

Assessing the Economic Impact

Methodology

• Quantify the income per beneficiary- through customer survey and organisational assessments

• Family Resource Survey (FRS) data estimate how service users would spend money, i.e. amount in the local economy

• Use regional economic modelling to analyse economic impact of increased disposable income

• Results - Economic Impact & Return on Investment

Assessing Economic Impact

Increased

Disposable

Income

Impact on

Regional

Economy

Cost of

Delivery

Return on

£1

investedPer

Annum

£26M £28M £3.3M £8.4

Leeds Credit Union – Social Impact - Loans

cash issued via our community

branches

£265m

110,000 £92mloans issued Our impact

in the last 10 years

alone

worth of loans issued

Every £1 spenton financial

is worth£9inclusion work interest saved to

the community*

£47m

for the community**

The value of Affordable Credit to

members, families and the local economy

Example: MAPS Financial Wellbeing Survey - Leeds City Council staff/Leeds Credit Union Payroll Savings Scheme:Completed by 2,816 LCC staff

91% would recommend Leeds Credit Union 93% of LCC staff satisfied with Leeds Credit Union?78% more likely to save. ( v 48% not in the scheme)“The service is amazing and always recommend it to new staff

Leeds Credit Union Social Impact –Savings

Savings provides the funds for Affordable Community Credit

Leeds Credit Union Social Impact –Money & Budgeting

Example: HACT* Social Impact Report on Leeds Credit Unions Money & Budgeting ServiceFor Housing Leeds (Leeds City Council)

* HACT – Housings Associations’ Charitable Trust

£9 return for every £1 invested

Leeds Credit Union

LA’s served: Leeds, Wakefield, Harrogate, Craven.

(We can form partnerships with LA’s anywhere)

8branches

45staff

£25massets

£11mloans

£21mdeposits

36kmembers

Key facts

Further information Jo RowlandsLeeds City CouncilFinancial Inclusion Team0113 378 9219/ jo.rowlands@leeds.gov.ukwww.leeds.gov.uk/fiwww.leedsmic.org.uk

Chris SmythLeeds Credit UnionChris.smyth@leedscitycreditunion.co.uk07920116136www.leedscreditunion.co.ukwww.money4upayroll.co.ukwww.yourloanshop.co.uk