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Financial Inclusion Carlisle : A Red Alert Area

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

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Financial Inclusion Carlisle : A Red Alert Area

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  1. Financial Inclusion Carlisle : A Red Alert Area Amanda Pyper Financial Inclusion Strategic Champion

  2. 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

  3. What is Financial Inclusion? • Bank Account • Advice and Information • Savings – a little and often! • Insurance – home contents • Credit – affordable and responsible lending

  4. 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

  5. The role of the Financial Inclusion Strategic Champion is to raise awareness of this and stimulate change by: • Collaborating with key stakeholders to embed change through local strategies and partnerships • Stimulating demand for the financial services set out in the BASIC model and ensuring that structure are in place to meet that demand

  6. 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

  7. 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

  8. 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%

  9. 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

  10. Carlisle Cu has provided 100 handy-loans totalling £44,000 to people in the Carlisle district

  11. Measuring the impact • In the first eighteen months the CUs through DRAMA have provided over: • 1,000 loans across the county • valued at £500,000 If 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…

  12. £ 800,000

  13. In Carlisle the estimate is that around £75,000 will remain in the local economy as a result of those 100 loans to date

  14. 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 CUs staff skills, premises, volunteers and governance Embed Financial Inclusion as key priority for Councils, Social landlords, NHS Trust, Third Sector

  15. 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

  16. 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?

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