Financial Inclusion Carlisle : A Red Alert Area

Amanda Pyper

Financial Inclusion Strategic Champion

Purpose• Introduce the financial inclusion champions

initiative and national perspective• Explain how Financial Exclusion impact on

individuals and the local economy• Bring your attention to Carlisle’s position as a

red-alert area• To discuss what is already happening in Carlisle• Make some recommendations about how we

can harness our energies to take the agenda forward

What is Financial Inclusion?

• Bank Account• Advice and Information• Savings – a little and often!• Insurance – home contents• Credit – affordable and responsible lending

The National Context• The government has committed 130k for the

spending period 2008-2011• Mapping exercise helped target resources (map 1)• Cumbria has 4 areas within the top 50 most

financially excluded in UK• Carlisle is top priority; 21st out of 25 red alert areas• The Financial Inclusion Strategic Champion for

Cumbria has been appointed to target resources in the county and co-ordinate activity

The role of the Financial Inclusion Strategic Champion is to raise awareness of this and

stimulate change by:

1. Collaborating with key stakeholders to embed change through local strategies and partnerships

2. Stimulating demand for the financial services set out in the BASIC model and ensuring that structure are in place to meet that demand

How can Carlisle benefit from the national initiative?

• A window of opportunity to 2011 - money and commitment nationally and regionally!

• The DWP Growth Fund tackling reliance on door step lending through the Credit Unions

• Half a million already invested - up to 2 million available for Cumbria until 2011

• Savings to the local economy • The strategic alliance with the County Council

bringing funding and in-kind support to achieve district wide coverage

What is the impact for individuals?

• Higher incidence of mental illness and overall sickness• Higher suicide rates and likelihood of substance abuse• Direct link with child poverty • Direct link with worklessness and ability to get a job• The poverty premium – the poorest paying more for

basis services• A lasting legacy that affects generations to come

What is the impact for the local economy?

• Carlisle is a red priority area due to the lack of access to affordable credit (map 2)

• In Cumbria as a whole estimated that 3 million is out on loan through doorstep lenders at any one time

• In just one ward over a quarter of million was flowing out to door step lenders each year

• Loan sharks are known to be operating in Carlisle with interest rates in excess of 1000%

Carlisle CU as part of DRAMA (Debt Rescue and Money Advice)

A multi agency partnership formed in 2006 has evolved to include:• 7 credit unions• Most of larger housing providers inc Riverside and Two Castles• Local district councils, CCC, local LSPs• Cumberland BS• Local CABs• Nationally recognised as an exemplar delivery model• Delivering DWP growth fund to break the cycle of reliance on

predatory lenders

Carlisle Cu has provided 100 handy-loans totalling £44,000 to

people in the Carlisle district

Measuring the impact In the first eighteen months the CUs through

DRAMA have provided over: 1,000 loans across the countyvalued at £500,000If people we assume that people access

these loans rather than use doorstep lenders we estimate that the money generated by way of capital and saved interest payments is in excess of…

£ 800,000

In Carlisle the estimate is that around £75,000 will

remain in the local economy as a result of those 100

loans to date

What more needs to happen? Increase awareness amongst front line staff to allow proactive identification and sign posting Increase capacity to deliver more services to more local people Increase CU membership numbers & diversity Extend coverage Build the capacity and infrastructure of the CUsstaff skills, premises, volunteers and governance Embed Financial Inclusion as key priority for Councils, Social landlords, NHS Trust, Third Sector

What are other councils doing that are making the biggest impact?

Top 5 actions:

• Embedding Financial Inclusion action points in key strategies and are a priority for the exec team and the LSP

• Increasing public take up and awareness of FI through marketing and training front line staff on how to spot the indicators and where to sign post customer (e.g. benefit teams)

• Promoting CU membership to staff and introduce pay roll deductions

• Offering collection points on specific estates and outlying rural areas

• Facilitating professional volunteering schemes to help build skill and capacity within the CUs

Discussion Point

Where does the Financial Inclusion agenda sit within the councils strategic framework and how can we work together to build on what’s

already been achieved?