Bronwyn Twizell Strategic Financial Inclusion Champion Northumberland Tyne and Wear

Leeds City Council Sheffield City Council South Tyneside Council

“As we enter a period of increased economic, social and environmental uncertainty, the consequences of the obsession with growth have become clear: a financial system increasingly disconnected from the real economy, unsustainable levels of debt and the strain placed on the planet by our high- consuming lifestyles” New Economics Foundation

Angela Rai Leeds Eric Thompson Sheffield – Lynne Owen South Tyneside

Financial Inclusion in Leeds Dave Roberts Economic Policy Team Leeds City Council

Initiative started early 2003 Research undertaken 2004, including 410 households surveyed Findings: –Cash based economy –Higher dependency on door step lending –Serious debt problems Origins of the initiative

Partnership 50 Partner Organisations Inc - Debt Advice Agencies, Credit Union, Landlords Credit Union Affordable Credit Scheme Network of Debt Advice Agencies Expansion CU Branch Network

Economic Impact and Regeneration £3m to £9.5m “Excess” interest paid by Leeds residents Comparison Neighbourhood Renewal Funding £8.4m NRF for 2004/5

The Regeneration Agenda Credit Union Affordable Credit –Interest Savings, £1.8m (low income) Debt and Money Advice –Income maximisation, £1.7m Housing Business Case –£8,500, cost per eviction

Economic Impact Research Linkages between financial inclusion initiatives and economic regeneration Survey of 527 recipients of: – Debt Advice – Credit Union Services – Welfare/Benefits Advice Telephone interviews Clients from last six months (MAP), current clients for others

Financial Inclusion Interventions Studies Leeds Benefit Service Leeds MAP Connect Housing ENEHL Leeds Corporate Debt Unit Leeds City Credit Union npower Leeds Welfare Rights Unit

Business Intervention Model Client survey Partners performance management information Audited accounts Estimation Didn’t measure impact of generalist advice services

Methodology Economicimpact Costs Benefits Business intervention model Survey Input- output model Return on investment

Input-output modelling Uses Yorkshire Forward’s input-output tables –Quantified the income per beneficiary –Using FRS estimated how service users would utilise money –Adjusted for external expenditure & inward commuters –Use input-output tables to calculate distribution of spending Developed multiplier software to calculate impact

Key Survey Results

Amount better off Number feeling better off Number giving a figure Total per week MAP9069£2,872 LCCU8963£1,856 WRU/LBS9681£4,583

Borrowing Decisions BeforeNow Take out bank loan / overdraft 11%1% Take out door step lender loan * 22%1% Credit Union loan2%74% Credit union respondents needing £250 in a hurry *Note – Debt advice sample number reduced from 11% to 3%

Overall costs & benefits Total increase disposable incomeTotal costs ABLT7,742,760673,577 Leeds MAP1,995,138808,543 Connect20,09517,863 LCCU3,021,468312,500 LCDU355,39388,335 npower925,08467,192 WRU9,404,653847,394 Leeds FI TeamNA113,601 Total verified23,464,5912,929,005 ENEHL1,164,005184,660 Leeds MAP (NHS)1,320,337236,297 Total unverified2,484,342420,957 Total25,948,9333,349,962

Stress Levels Change in stress levels about financial matters

Arriving at Economic Impact (1) Increase disposable income Income spent in local economy Cumulative impact regional economy ABLT 7,742,7606,891,0568,599,685 Leeds MAP 1,995,1381,775,6732,215,949 Connect Housing 20,09517,88422,319 LCCU 3,021,4682,258,8492,818,928 LCDU 355,393316,300394,726 npower 925,084823,3251,027,467 WRU 9,404,6538,370,14110,445,506 Total verified 23,464,59120,453,22925,524,580 Leeds MAP (NHS) 1,320,3371,175,0991,466,464 ENEHL 1,155,4771,028,3751,283,359 Total unverified 2,484,3422,211,0632,759,294 Total 25,948,93322,664,29228,283,874

Arriving at Economic Impact (2) Cumulative impact local economy Operating costsReturn on £1 invested ABLT 8,599, , Leeds MAP 2,215, , Connect Housing 22,319 17, LCCU 2,818, , LCDU 394,726 88, npower 1,027,467 67, WRU 10,445, , Leeds FI TeamNA113,601NA Total verified 25,524,580 2,929, Leeds MAP (NHS) 1,466, , ENEHL 1,292, , Total unverified2,759,294420, Total28,283,8743,349,9628.4

Concluding remarks Financial inclusion should be viewed holistically – Don’t Cherry Pick Involve public expenditure & not investigated whether spending elsewhere will produce a better return Valuable regeneration vehicle Research shows what local authorities can achieve but need more fundamental changes if going to solve problem Appendices

Contact details Further information Leeds City Council Economic Policy Team

Financial Inclusion in Sheffield Eric Thompson DWP Strategic Financial Inclusion Champion for South Yorkshire

Facilitated by Sheffield City Council Led by the 3 rd Sector Community Banking Partnership model Sheffield Investment Bond Advice Consortium Proactive role of ALMO Key differences in Sheffield

Recent developments Commissioning of Debt Prevention research Recognition this undermines deliver of the City Strategy Recognition of the need to work with those already engaged with the agenda locally

Other thoughts There is a need to link into other key initiatives such as Champions Look at potential to work regionally and sub regionally Learn from others – there is no need to re- invent the wheel Be prepared to be in it for the long term – there isn’t a short term fix

Eric Thompson DWP Strategic Financial Inclusion Champion for South Yorkshire Financial Inclusion Services (Yorkshire) Ltd 6 The Gallery, Castle Market, Sheffield, S1 2AJ Mobile: