Residents and small businesses will soon be able to benefit from a ‘community bank’ as plans take another step in the right direction.
Wirral Council has joined forces with other local authorities to support the opening of a community bank. In partnership with Preston and Liverpool Councils, the registration of the new mutual society, called North West Mutual Ltd, was approved under seal by the FCA on 28 May 2020. The establishment of the Mutual is a key factor in the Council’s Local Economic Recovery Strategy.
The strategy, supported by the Centre for Local Economic Strategies (CLES), will enable the rescue, recovery and reform of the Wirral economy post Covid-19 and will be enhanced by innovative initiatives such as the community bank.
The move will see a main branch and a number of “satellite” branches opened at key locations across the borough, in the first step to creating a customer owned bank dedicated to and based in the North West. The aim is to help the most vulnerable people and small businesses in Wirral struggling to access the banking services they need. Cllr Janette Williamson, Cabinet Member Finance and Resources & Deputy Leader of Wirral Council, said:
“The closure of many high street bank branches continues to have a significant effect on small businesses and residents in Wirral. “Many small traders in our borough, who work mainly with cash, struggle to deposit their money – which can disadvantage them either in costly daily travel to deposit to a high street branch or in insurance to keep their money at their premises overnight. “Alongside our partners in Preston and Liverpool, we are stepping in to support the provision of service that Wirral’s local economy needs. “With the enormous task of rebuilding local businesses and confidence after the pandemic, we need a strong financial institution backing our region more than ever.”
The initiative will also benefit individuals as well as businesses. Cllr Williamson said:
“Thousands of Wirral families pay extra for many essential goods and services because they struggle to open bank accounts. Many people also struggle to open accounts. They may not have permanent accommodation, not have lived somewhere long enough to qualify to open an account or have a poor credit history. Branch closures in more rural or coastal areas can also affect those who take a pension but can’t travel very easily. “These extra costs – the poverty premium – lock people in a cycle of poverty and can cost between £470 - £790 extra per year. “It costs more to be poor, but it shouldn’t. “North West Mutual will be a community bank with the social mission of serving the everyday financial needs of ordinary people, community groups and small and medium companies that drive Wirral forward.” The operation of a North West Mutual bank in the borough would align with strategic priorities and support the local authority’s existing policy objectives set out in the draft Community Wealth Building Strategy and the 2020 Plan. On 30 September 2019, the Cabinet agreed to invest £5m into the North West Mutual, from its capital programme. This is funding that cannot be used for day to day items like running council services so there will be no service reductions to pay for this. In return the Council will receive shares in the Bank which should generate an income dividend for the Council once the bank is up and running.