Minutes:
Councillor Neil Coyle introduced this item saying that there was currently a national campaign against irresponsible lending led by members of the community. Payday lenders, especially on the Walworth Road, and irresponsible lending were a big problem in the borough, with the council and voluntary groups often having to help residents through financial difficulties. 7,000 people in the borough had become reliant on food banks, ten percent of whom were in work. There was cross-party agreement on this issue, but one of the problems was the presumption in favour of planning consent in planning law. This had led to extra problems in Southwark, e.g. the council had lost in court in a recent case, where it had refused a change of use applied for by a payday lender. The council was working closely with the credit union and other organisations on the issue.
Councillor Stephanie Cryan, deputy cabinet member for financial inclusion, explained that the council plan, which ran until 2018, had four core priorities: supporting people into work, helping businesses to grow and prosper, creating vibrant town centres and promoting financial well-being. To achieve this last goal, the council and its partners were giving support to people with the most complex needs and families in difficult circumstances. These were designed to get them to the point where they could access employment support, were able to manage their finances independently and not be reliant on payday lenders. Futher aims were a higher uptake of financial and debt advice services, and higher levels of credit union membership.
The council would be looking to ensure education, employment or training for every school leaver; support 5,000 local people into jobs; create 2,000 new apprenticeships and scholarships; and had created a childcare commission. Further aims included a £10 credit union account for every 11-year-old in the borough; improving the teaching of financial literacy and budgeting abilities in secondary schools; 10,000 more people signing on to a credit union; stopping the spread of pawnbrokers, payday lenders, betting shops and online betting; and encouraging business start ups. The council had recently introduced the living wage for all its workers and subcontractors and encouraged all local businesses to do the same. A “Universal support” pilot, which was run together with Lewisham and Lambeth was currently testing debt advice, and levels of employment and digital support. The work was being undertaken with Peckham job centre and the aim was to see 100 people a month. Furthermore, the council’s rightfully yours team had supported 3,639 residents and raised over £6m for them last year.
There was also a Southwark emergency support and hardship fund, for example for emergency utility bill payments. The council had also implemented an article 4 direction, which meant any new payday lending shops now had to come through the planning committee.
Rightfully yours
Jay Daisi, from the council’s revenue and benefits department, presented facts and figures regarding the financial health of the community council area. He explained that there had been five major changes to benefits which were affecting residents: changes to council tax benefit, housing benefit, the benefit cap, and the changes to the Social Fund and Disability Living Allowance. The council had been monitoring the impact of these: one in ten residents was affected by one or more of the changes; more than 6,500 in the Borough, Bankside and Walworth Community Council area. The council had put in place the hardship fund for the most vulnerable.
Jay explained that from April to August 2014, 317 of the most vulnerable people had been helped by the council’s hardship fund. While these numbers were small, about three times as many people were eligible for this fund. Second group of people helped by the council were those who were out of work, with a special emphasis on younger and older unemployed residents. For those who did not fall in those categories, there was the discretionary housing fund from central government, which Southwark had dispersed. The issue was how to get in touch with these residents in order to help them access the fund. Officers were therefore working with organisations like job centres. He urged anyone who was struggling financially and thought they might be entitled to benefits they were not receiving, or anyone who knew someone in that situation, to contact the rightfully yours team, on Tel: 020 7525 7434, email: rightfullyyours@southwark.gov.uk .
In answer to a question from the floor, Jay said that according to the council’s calculations, in Cathedrals ward 146 people would be affected by the changes to housing benefit, and 1,018 by changes to council tax benefit; in Chaucer these figures were 174 and 1,084; East Walworth 160 and 1,087; Faraday 176 and 1,231; and for Newington ward the figures were 255 and 1,358. The figures were also available on the council’s website.
At this point, Councillor Karl Eastham joined the meeting.
London Mutual Credit Union
Lucky Chandrasekera, Chief Executive of the London Mutual Credit Union (LMCU), introduced this item by saying that there had been a credit union in Southwark since 1982. While it was initially mainly for council employees, the organisation had since expanded into Lambeth, Camden and Westminster. Today the LMCU had 20,000 members, 10,000 of them in Southwark. Credit unions allowed people to borrow money, but also offered savings products. Only 3% of the UK population were members of a credit union compared with 75% in Ireland and 45% in the USA. In the last year, £12m in loans had been given to members. LMCU were looking to open a branch on the Walworth Road and were working with the council to try to find a site. The organisation was also working on creating junior savings accounts for every secondary school child in the borough. They were keen to promote these services and to expand the membership, and had delivered 200,000 flyers in the borough, for example via council rent statements. Lucky explained that central government looking at capping interest rates, and that the number of payday lenders had gone down, as the market seems to have shrunk. Part of the problem with payday lenders was the lack of awareness of their practices by their users. He went on to encourage people to join the credit union, which gave any profits made back to its members. Lucky explained that the credit union, too, had a payday loan product, but their lending was based on ethical lending.
Southwark Citizens Advice Bureau
Sally Causer, advice service manager, informed the meeting that there had been citizens’ advice bureaux (CAB) in Southwark since 1939. Currently the CAB had 25 staff and 130 volunteers who provided advice in offices in Peckham and Bermondsey, with outreach sessions held on the Kingswood and Aylesbury estates. Southwark CAB was the busiest in London advising 13,000 people a year; 1,000 of which were seen at welfare reform events around the borough. Legal aid cuts, as well as the changes to the employment support allowance and personal independence payments had also had a big impact on people in the borough, and on how many people were attending CABs. The CAB also provided advice on discretionary housing payments and as part of the “Money Savvy Southwark” programme, which was funded by the Big Lottery Fund and provided advice around credit and store cards, but also around fuel bills, council tax and rent arrears, and around managing money and budgets. Part of this programme was training community champions, who went out into the community to sign-post people to the advice services offered by the CAB. Other support that was available related to homesearch and leaseholder advice.
In response to a question from the floor, Sally Causer said that the “Money Savvy Southwark” programme was aimed at educating people about their personal finances. It offered 1-2-1 support, debt advice, group workshops and advice for new tenants. There was also a target of 2,000 residents a year (10,000 in 5 years) receiving advice sessions. More information was available at www.moneysavvysouthwark.org.uk.
Councillor Eleanor Kerslake reported back on the efforts to open a credit union on Walworth Road, which was very much needed as the area had the highest concentration of payday lenders in the country. This had been raised by residents and by the youth community council. Officers and councillors were working with churches and the Walworth Society on this project. An option of having a pop-up branch (for example in a church) was being explored. Councillors would bring the issue to council assembly. Residents could sign a petition against payday loans, join a credit union, and paticipate in a day of action to spread the word about credit unions.
The meeting heard that this was an incredibly important issue; everyone should join the credit union. Apart from loans, the credit unit offered favourable rates to savers.
The meeting heard that zero-hour contracts, cuts in legal aid and other employment law issues exacerbated the problem. The chair explained that he had been approached by representatives of payday lenders, but had decided the community council was not the appropriate forum for them to attend. This meeting was about discussing the possible credit union location, the advantages of saving and raising awareness of the problem of debt.
The meeting heard that the Mayor’s “common good” fund was also available. Thanks to the council’s actions no council tenants had been evicted, despite the borough being the 12th most affected by the benefits changes. There was a suggestion to launch a petition about payday loans.
The chair thanked all participants for their contributions.