SCRUTINY MANAGEMENT BOARD – 28TH JANUARY 2015

Report of the Policy Scrutiny Group ITEM 7 CREDIT UNION UPDATE Purpose of Report To present the recommendations of the Policy Scrutiny Group following its consideration of a report providing an update on the Council’s partnership with Clockwise Credit Union and its services and delivery in Charnwood. Recommendation That the Credit Union Update report, together with the views of the Policy Scrutiny Group, be submitted to Cabinet for consideration, as a matter of urgency. Reason To advise the Cabinet of the Group’s disappointment at the slow progress made with Clockwise since support by all political groups was given to the provision of a Credit Union, at the meeting of the Council on 27th February 2012 and to request that the Cabinet seeks to overcome the problems identified by the Group, detailed in the relevant minute, given the importance of the issue and the will of the Council to expand credit union provision. Policy Justification and Previous Decisions At its meeting on 6th January 2015, the Policy Scrutiny Group considered a report of the Head of Neighbourhood Services, attached as an annex to this report, which provided an update on the Council’s partnership with Clockwise Credit Union, including services and delivery in Charnwood. The following extract from the minutes of that meeting details the consideration and decisions of the Group: ‘42. CREDIT UNION UPDATE

A report of the Head of Neighbourhood Services was submitted, providing an update on the Council’s partnership with Clockwise Credit Union, including its services and delivery in Charnwood (item 8 on the agenda filed with these minutes).

The Neighbourhoods and Partnerships Manager introduced the report, stating that progress had been slower than anticipated, due to reasons detailed in the report. The Head of Neighbourhood Services stated that a 1 year agreement had been made with Clockwise in June 2014, rather than 2/3 year agreement,

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because of a lack of confidence that Clockwise could deliver Charnwood’s expectations.

RESOLVED that it be recommended to the Scrutiny Management Board that the submitted report, together with the Group’s minute in respect of the matter, be forwarded to the Cabinet as a matter of urgency. Reason To advise the Cabinet of the Group’s disappointment at the slow progress made with Clockwise since support by all political groups was given to the provision of a Credit Union at the meeting of the Council on 27th February 2012 and to request that the Cabinet seeks to overcome the following problems identified by the Group, given the importance of the issue and the will of the Council to expand credit union provision: (i) Concern was expressed that Clockwise’s view to move towards virtual

banking would make it inaccessible to some of the people the Council was trying to reach, specifically older people with little or no knowledge or access to the internet. However, officers did anticipate Clockwise would have a presence in the Community Shop, once that was established in Loughborough.

(ii) Clockwise appeared to have a lack of capacity to deliver the scale of

change originally envisaged. Clockwise also had its own governing Board and would only deliver on anticipated return, thus restricting its work in the area.

(iii) While no pressure should be put on Council employees, it was

disappointing that there had not been a greater take up of accounts following a promotion by Clockwise.

It was also noted that the Head of Finance and Property Services had been unable to offer support through payroll giving, due to a lack of resources.

(iv) Customer Services staff should do more to promote Clockwise, for

example when customers were assisted with benefits or money advice enquiries, when working with tenants or through the Supporting Leicestershire Families programme. The Council was not reaching those most in need of assistance.

(v) Publicity for Clockwise was circulated by leaflets and letters, both of which

experience shows were not successful ways to interact with the hard to reach groups the Council was trying to support.

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(vi) As there were no other Credit Unions with common bonds in the area, there was no competition or alternative provider for the Council to approach.

(vii) Clockwise needed to build a strong ‘good customer’ base to support the

more ‘risky customer’ base.

(viii) Further work could be undertaken through the Council’s Financial Inclusion Strategy to support Council tenants through Credit Union Budget Accounts.’

Implementation Timetable including Future Decisions If the Scrutiny Management Board resolve to submit the report to Cabinet, it is anticipated that Cabinet will consider the item at its meeting to be held on 12th February 2015. Report Implications As detailed within the attached Annex. Background Papers: None Officer to contact: Frances Whittington Democratic Services Officer (01509) 634734 frances.whittington@charnwood.gov.uk

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POLICY SCRUTINY GROUP – 6TH JANUARY 2015

Report of the Head of Neighbourhood Services

ITEM 8 CREDIT UNION UPDATE

Purpose of Report

To provide an update on the Council’s partnership with Clockwise Credit Union and its services and delivery in Charnwood.

Background At the Council meeting on 27th February 2012, it was proposed that ‘provision be made in the Original General Fund Revenue Budget, for a Credit Union to provide money (such as Clockwise Credit Union) and to lend out to those requiring loans throughout Charnwood’.

At Cabinet on 15th March 2012, it was announced that a Member Group had been established, to look into the possibility of the Council working with a Credit Union for the benefit of people within the Borough. At Cabinet on 30th August 2012 the following recommendations of the Credit Union Working Group were approved: 1. that the principle of providing a partner credit union with restricted

revenue funding to enable the expansion of operations in Charnwood be supported;

2. that signposting of credit union services to residents of the Borough

via the Council’s various channels of communication is enhanced; 3. that, subject to the agreement of recommendations 1 and 2, above,

the Council writes out to eligible organisations inviting them to set out their proposition for the creation of a branch in Loughborough, and other ideas for working with the Council, in accordance with a defined specification and timetable;

4. that a further report be submitted to Cabinet to provide an

update following the conclusion of the Expressions of Interest process.

Cabinet at its meeting on the 14th February 2013 received a report providing a comprehensive update on the development of Credit Union services. It also gave a consolidated overview of the developments within the Credit Union sector and the impact that this had on progress of the proposals for expanding Credit Union services in Charnwood. The following recommendations were approved:

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1. That approval is given to develop a three year partnership arrangement with Clockwise Credit Union to develop and expand its services in Charnwood;

2. That the Head of Neighbourhood Services be given delegated authority, in consultation with the Strategic Director of Neighbourhoods and Community Wellbeing and the Lead Member, to negotiate and enter into a three year partnership arrangement within the revenue resources included in the 2013/14 budget onwards;

3. That the Head of Neighbourhood Services be given delegated authority to finalise the terms and conditions of the partnership agreement.

Clockwise Credit Union

Clockwise Credit Union was established in 2002. Credit Unions are financial co-operatives owned and controlled by their members. They offer savings and great value loans plus they are local, ethical and know what their members want. Each Credit Union has a common bond which determines who can join it. The common bond may be for people living or working in the same area, people working for the same employer or people who belong to the same association, such as a church or trade union. For a credit union to operate it must have a ‘common bond.’

Clockwise’s ‘common bond’ is a live and work common bond which covers Leicester, Leicestershire and Rutland. Clockwise are the only credit union that has a common bond that covers the Charnwood area and are therefore the only credit union in a position to offer expanded credit union services in Charnwood. Clockwise deliver a service which provides fair and affordable financial products and services that challenge the poverty premium often faced by many on a low income. As a financial co-operative Clockwise has its members at the heart of everything it does and focuses its activities on improving the financial wellbeing of its members. As a not-for-profit Clockwise gives all its members their share of any surplus made in the form of a dividend. Essentially all Clockwise Members are shareholders. Clockwise have been a key player in the East Midlands Consortium of Credit Unions and they have also extended their common bond to cover Northamptonshire and a number of Housing Associations and providers. Clockwise are also part of the successful consortium bid led by the Association of British Credit Unions Limited (ABCUL) to the DWP Credit Union Expansion Project Tender, which is having an impact on their Business Plan and local delivery model. It is hoped that this may bring financial resources to Clockwise for the development of credit union services.

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Clockwise Credit Union Provision in Charnwood Since Cabinet approval in February 2013, numerous meetings and discussions were held with Clockwise with regard to expanding credit union services within the Borough. Due to capacity issues and the impact of the National Credit Union Expansion tender that they were involved in with ABCUL, Clockwise took longer to submit a Business Plan proposal. Whilst these discussions were ongoing and Clockwise were developing their Business Plan a number of interim activities were undertaken in preparation. These included:

a member of staff was recruited to work with the volunteers, providing support, training and guidance

a review of the services at the two existing access points in the borough was undertaken

recruitment and training of additional volunteers

a customer consultation exercise

an additional day’s development time was secured from the Clockwise County Development officer to look at creating a business and marketing plan.

At a meeting in April 2014 it was agreed that Clockwise should submit a Business Plan proposal focusing on activities for an initial one year agreement, with a view to presenting a more detailed two year business proposition, early in 2015, that builds on the work already delivered and sets out Clockwise’s model for service delivery in 2015/16 and 2016/17. It should be noted that the reason for the delay and initial one year agreement is that Clockwise have been working through the implications of the ABCUL Credit Union Expansion Project (CUEP) Tender, of which they were part of Phase 1 delivery. In addition, they have also been revisiting their own delivery model as an organisation. Due to the complexities of both of these issues it has impacted on Clockwise’s ability to respond.

An initial one year Business Plan was finally agreed to start on 1st June 2014. Clockwise Year One Business Plan The aim of the Business Plan is to improve access to a credible and affordable alternative to savings and loans for all Charnwood Residents. The Business Goals set were as follows: 1. improve access to its services in the Loughborough area by:

a. adding an extra access point in Loughborough Town Centre: i. Existing Partnership with LCC Your Library, Your Work Club ii. Provides access to an application opening service only (no

cash) b. Increase Clockwise visibility across the Borough

i. Awareness raising with local community groups

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ii. Forming robust partnerships with Agencies operating in the Borough

iii. Increased media advertising and marketing

2. Challenge the usury lenders in Loughborough and support changes brought about by the welfare reforms by:

a. Actively marketing credit union products in direct competition to the usury lenders where there is high activity

b. Promoting the credit union to employees of Charnwood borough council through Employer payroll membership (regular savings and lending deducted by payroll)

3. To provide Loughborough with a co-operative alternative to high street

banks through the provision of: a. Competitive Cash and Junior ISAs, loans and dividend return b. Tool kit and support for Loughborough schools to start their own

school bank project

4. To Provide a robust Business proposal which will steer the second phase of the Project (Year 2/3)

a. an initial vision of what an enhanced presence might look like based on learning and intelligence from Phase 1

b. what could be achieved and timescales to deliver c. the indicative costs and the assumptions made

Progress to Date An update of work that has been undertaken since June along with an update on the agreed year one Action Plan is attached at Appendix A. In addition:

Clockwise continue to deliver their regular weekly session at the Baptist Church, Baxter Gate on Thursday mornings.

Following a review of access and footfall at the Baptist Church, Clockwise have now planned to relocate their Thursday sessions to Loughborough Library starting in January 2015.

Clockwise have also agreed to support the Community Shop and will be meeting with them along with other partners to agree sessions to support the Community Shop members.

With the recent agreement for the Council to operate a Hub in Syston Clockwise have agreed to have a regular presence and build up a customer base from January 2015.

A communications plan has been developed with adverts (including Charnwood News) and a mailing campaign that is currently taking place.

Clockwise have presented to partners at several partner events and have run a series of workshops for officers from the Council and external partner organisations.

Clockwise ran an awareness roadshow at the Council to encourage Council employees to open their own Clockwise accounts.

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Products and Services Clockwise offer customers banking, savings and loan services. Clockwise are currently reviewing their products and services. This includes the decision to stop the current cash service offered at the Baptist Church. Demand for this service has fallen with more people using payment cards. In recent months only around 20% of all new accounts were set up from people visiting the session the rest were done via on line services and it is these services that Clockwise continue to promote and develop. They have specific banking services including Budget banking which works by taking a client’s money and dividing into agreed pots that cannot accidentally be spent before the bill is due. The one year agreement does not reflect the agreement of service delivery that they currently have with the Council’s Housing Service.

Housing Financial Inclusion Strategy Clockwise have continued to work directly with the Council’s housing teams. In November 2014, the Council’s Landlord Service, presented their Financial Inclusion Strategy to Policy Scrutiny Group. Some of the information presented had not been fully updated to reflect the Business Plan agreed with Clockwise. The Council’s Landlord Service is developing its offer around financial inclusion. This includes extending the range of information available to tenants around affordable credit and the promotion of Clockwise Credit Union. In October 2014 Income Officers in the Landlord Service attended training on products and services offered by Clockwise. Leaflets and information are available via the dedicated Financial Inclusion Officer, and the tenant Newsletter Your Homes Matter has carried information around Clockwise in its summer and autumn 2014 editions. Work will continue through the Council’s Welfare Reform Action Group to identify opportunities for further joint working with Clockwise to ensure that residents are equipped in preparation for Universal Credit. Conclusion The Council continues to support and work with Clockwise, as the only available credit union services provider, to develop and expand credit union services in Charnwood. A one year agreement has been agreed with Clockwise and they are working to deliver the agreed objectives. Clockwise are scheduled to produce a Business Plan to cover 2015/16 and 2016/17 and submit it to the Council early in 2015 for discussion and agreement.

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Changes to access points and increased marketing should ensure an increase in customers. Other access points will be reviewed. An increase in the range of products and services will also be reviewed. Housing officers will work directly with Clockwise for the delivery of their specific services.

Background papers: Cabinet Paper 14th Feb 2013 - http://www.charnwood.gov.uk/files/papers/cab_14_feb_2013_item_16_credit_union_working_group/Cab%2014%20Feb%202013%20Item%2016%20Credit%20Union%20Working%20Group.pdf

Officers to contact: Verity Graham Neighbourhoods & Partnerships Co-ordinator 01509 632516 verity.graham@charnwood.gov.uk Julie Robinson Head of Neighbourhood Services 01509 634590

julie.robinson@charnwood.gov.uk

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Appendix A

Progress Report for Clockwise – Charnwood

Completed By:

Clockwise Period Covered

1st June 2014 – 30th November 2014

Summary / Key Achievements

In summary, the Development Team have held several meetings with key local services and providers to promote Clockwise. In addition, plans are confirmed to move the current access point in Loughborough from Baxter Gate to Loughborough Library in Jan 2015. This move is being driven partly because demands on Baxter Gate facilities has increased and partly to enable us to support the growth of Clockwise in Charnwood and become more accessible to more users who can benefit from our services especially those who are experiencing financial exclusion or other banking issues.

Planned Activities Completed this period

Agreement and support confirmed by Loughborough Library to relocate Access Point wef January 2015

Several meetings with key local services and providers to promote Clockwise.

CBC Staff Promotion completed

Guidelines for PRF Loan Delivery Proposal have been signed off with CBC

Editorial written for next edition of the Charnwood News

Christmas Leaflet promoting Baxter Gate Access and Products available produced

2 leaflet drops planned to CBC priority households to maximise impact

1st Christmas Leaflet Drop to CBC priority households completed in the last week of November

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Activities Planned for next period

2nd Christmas Leaflet Drop to CBC priority households in the first week of December

Complete Activities to enable planned move of Loughborough Access Point from Baxter Gate to Loughborough Library

Plan and undertake activities to promote move to Loughborough Library

Continue engagement of local Organisations and Community Hubs to progress meetings, promotion of services / including promotion of new access point

Promote and Implement PRF Loan Delivery

Support progression of Community Shop initiative

Support progression of Syston Town Council initiative

Complete detailed Future Planning

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YEAR 1 ACTION PLAN (UPDATED) The following table identifies the key Activities and Milestone that will be delivered in Year 1 and what would be required to support such activity.

Activity Target Resources Milestone Status

Increase visibility by opening a second

access point in Loughborough Town

Centre (application processing only)

Loughborough Library –

in partnership with Your

Library, Your Work Club

supported by LCC

Development Staff On-Hold until footfall

increases at Baxter gate.

Relationship with YLYW

on-going for info provision

opportunities

On Hold

Community News Article to local media

to promote increase presence in Town

Centre

Loughborough

community

Charnwood News, Loughborough Echo, Shepshed

Echo, etc. Development Officer to communicate to

local partners and organisations

01/10/2014 Completed

Establishing payroll savings with

Charnwood Borough Council

Charnwood Borough

Council employees

Staff/volunteers to do a ‘road show week’ at

Charnwood Borough Council – this will be to promote

general products as Payroll cannot be implemented at

CBC

01/11/2014 Completed

Establish relationships with partner

organisations and utilise existing partner

relationships

Citizens Advice Bureau,

Community Centre,

library, link

organisations; Extended

Team Meetings

Development Staff with support from Charnwood

Neighbourhood Development Officer

Ongoing Activities

Completed to be Reported

Monthly wef 01/09/14

Ongoing

Awareness raising Local community

groups, mother and

toddler groups, play

groups and church

groups

Development Staff to telephone, email, visit centres

and distribute posters and flyers

Ongoing Activities

Completed to be Reported

Monthly wef 01/09/14

Ongoing

Facebook campaign Loughborough Facebook

users

Cost for Facebook advertising

Ongoing Not Started

Re-contact/make initial contact with

housing associations to increase new

members/loan growth

Loughborough Housing

Associations

Development officer to research housing associations

in Loughborough and make contact/re-contact existing

housing associations.

01/11/2014 Not Started

Leaflet drop Lower income

communities

Development Staff to produce leaflet and cost of leaflet

drop

01/11/2014 Completed

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Refer a friend campaign with £5

incentive for referrers

Existing Loughborough

members, advertise on

social media and website

Development Staff member to product promotional

material, disseminate information to existing

Loughborough members and post on social media

pages

01/08/2014 Incorporate as part

of Baxter Gate

Move Promotions

Charity stall at Loughborough market

either on Thursday or Saturday market

days

Loughborough

community

Staff member to explore booking stall/ Staff/volunteer

to attend stall for the day and raise awareness/signpost

new branch

01/11/2014

Contact Local Schools to promote

school bank initiative

40 Primary Schools in

Charnwood area – aim to

sign up 2 in low income

and 2 in higher income

communities

Development Staff to contact schools in partnership

with CBC and implement by start of Autumn Term

01/12/2014 Not Started – pick

up at start of 2015

Seasonal events Loughborough

community

Staff/volunteers to look into any seasonal events taking

place that we can join or piggyback to leverage our

promotion and increase publicity

Ongoing Activities

Completed to be Reported

Monthly wef 01/09/14

Ongoing

Monthly Progress Report Charnwood BC Development Officer to report on milestone progress

and growth

Monthly Progress Report

wef 01/09/14

Ongoing

Detailed Business Plan for Phase 2 Charnwood BC Development Officer to use intelligence gathered in

Phase 1 Activities to document proposal option(s)

Plan Issued 01/02/14

Plan signed off 31/03/14

Ongoing

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Monitoring Information

Active Members

Dec-12 295 Dec-13 408 Jun-14 446 Oct-14 463

New Members 2012 63 2013* 113 2014 (to end

Oct) 99 (*increased membership partly

resulted from Warmer Homes Project)

Total Balances Lending Saving Nov-13 £140,857 £243,727 Jun-14 tbc tbc Oct-14 £169,495 £270,750

New Lending 2013 2014 July £17,323 £16,980 August £9,900 £8,300 September £12,710 £6,460 October £15,650 £17,360 £55,583 £49,100

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