The Bank of Salford Could Start a Revolution

The Bank of Salford could start a revolution in local finance
As mayor, I hope community banking will help to rebuild our recession-battered community. We could be a model for change



I have lived in Salford for 50 years. I raised my family here; this is where my roots are. Salford is a great city and we have a proud history. But there is a terrible and shameful secret that haunts our community, one that we have to be honest about and address. We have a problem with debt.

In Britain, a third of people do not earn enough to cover their living costs. In Salford this is more like 50%. For many, the family budget is impossible to manage. Lots of people borrow out of necessity and they pay too high a price through astonishing levels of interest.

As our city's first directly elected mayor I have made it part of my mission to use every power I have to try to lift living standards and tackle debt. Salford was the first local authority in Greater Manchester to implement a full living wage of £7.45 for every member of staff. Now 1,200 of our lowest paid staff – including all our apprentices – are guaranteed a wage that allows them to live with some dignity.

We have established an employment standards charter for the public, private and third sectors – which pushes for a full living wage, is tackling in-work poverty and is combating the odious practice of blacklisting.

All of this is important. But in Salford, we know that we can't stop there. That's why we've decided to set up a bank.

Working with colleagues in the trade union movement, local credit unions and partners from other sectors we are now in the process of creating a genuinely local bank to serve the people of Salford – using Salford money to improve Salford people's lives. This is a radical agenda with a practical focus on lifting people out of the mire of debt pushed on them by unscrupulous lenders. People who can't afford to live day-to-day deserve the support of their communities. In Salford, we are trying to put our money where our mouth is.

Setting up a bank isn't easy. It takes a huge amount of commitment, work and – above all – cash. That's why Salford local authority is exploring innovative ways to help create and sustain a local public interest bank for the common good of Salford people and organisations. We're looking at the potential of running our payments, payroll and reserves through a Bank of Salford – to ensure that taxpayer's money is being used to improve the lives of our people.

We are also working with employers, local communities, workers and other organisations to bring the resources we need into the city. In the same way that Salford is clear with our partners that we expect them to pay the living wage and treat their workers with decency, so we will ask them to look at the Bank of Salford as an affordable ethical alternative to unethical commercial banking and loan companies. To reduce the impact of dependency we must reform services and transform our own place as well as creating decent jobs, wages and growth.

We want to succeed in breaking the stranglehold of predatory finance. And, I hope, we will set an example to other local authorities of what can be achieved through innovation and working in partnership. Of course we need reform at the centre. And the pioneering work of people like Maurice Glasman and Arnie Graf – focused on fighting the dominance of financial fat-cats in Westminster and Whitehall – is inspiring and important. But decent, caring local authorities cannot just sit on our hands and wait for a change to come. We need to be that change.

A new Bank of Salford will use local money to help local people and local businesses. It should revolutionise the way Salford does business and liberate consumers from over-priced, irresponsible credit. Personal debt is the toxic legacy of the financial crisis and it has to be tackled before we can hope to get back on our feet as a country. My local authority is taking action; I hope others will soon join us.

http://www.theguardian.com/commentisfree/2014/jan/19/bank-salford-revolution-local-finance

Absolutely bloody brilliant, more power to his elbow.

The present government are considering forcing the 5 main banks to sell off some of their branches.

It would be good for competition.

No it wont - because they will simply sell off the branches in the poorest areas that have a high percentage of customers who dont make a profit leaving ordinary people without access to banking.

Could we possibly stick to the op and how it might spread a new way of helping people.

It would only work if the system applied an equal amount of time and effort into teaching people to manage their money and live within their means.

sphinx wrote:No it wont - because they will simply sell off the branches in the poorest areas that have a high percentage of customers who dont make a profit leaving ordinary people without access to banking.

Well if that's the case then we will see things like the above happen.

If sassy is trumpeting the above, then what is wrong with the poor areas going that way?

And how do you know what will happen - I don't think that has been revealed yet. What if a stipulation is that they have a spread of branches from different areas?

sphinx wrote:It would only work if the system applied an equal amount of time and effort into teaching people to manage their money and live within their means.

FFS!!!!!!!!!!!!!!!!!!!!!!

In Britain, a third of people do not earn enough to cover their living costs. In Salford this is more like 50%. For many, the family budget is impossible to manage. Lots of people borrow out of necessity and they pay too high a price through astonishing levels of interest.

We know you think they should live on oats and cheap bread and suffer from vitamin and mineral deficiency!!!

Sassy can trumpet the above all she likes - it is a simple propaganda exercise mimicking multitudes of similar - mostly started and driven by solid capitalists I may add. The brutal fact is that it is not the Bank of Salford and will not become a bank under its present form.

The term "Bank" is actually legally protected in this country with very very very strict rules on what can and cannot call itself a bank. Many tens of thousands of people up and down the country are changing the way they manage their money - and banking as we know it may well be at the start of its decline.

The problem in poor areas is the removal of branch facilities means people are having to pay to access their money - the above system is not replacing the branches nor will it prevent poor people being restricted in the way they access their money.

Sassy wrote:

sphinx wrote:It would only work if the system applied an equal amount of time and effort into teaching people to manage their money and live within their means.

FFS!!!!!!!!!!!!!!!!!!!!!!  

In Britain, a third of people do not earn enough to cover their living costs. In Salford this is more like 50%. For many, the family budget is impossible to manage. Lots of people borrow out of necessity and they pay too high a price through astonishing levels of interest.

We know you think they should live on oats and cheap bread and suffer from vitamin and mineral deficiency!!!

Yeah we have been here before - define living costs, necessity, etc.

I think you will actually find what many people eat from choice is far worse than I put up - which as I have repeatedly pointed out was a unrealistic ten minute off the top of my head exercise to prove a single person does not need to spend £40 a week on food.

I am happy to admit there are major problems with the lending and banking system - are you prepared to admit their might be a poor person somewhere who is crap at budgeting and irresponsible with their money?

  Of course, being the Mayor he doesn't have access to legal advisors who know what they are talking about. You obviously didn't see the documentary about David Fishwick starting his own bank: http://www.huffingtonpost.co.uk/david-fishwick/bank-of-dave-why-i-opened-it_b_1664967.html

The whole journey, from my first attempts to get a licence to the first six months of opening was filmed by a crew from Channel 4, but this was no TV stunt. Burnley Savings and Loans is still there in Burnley, taking investments and making loans to the community. I want to show that banking shouldn't be about computers and ruthlessness, but about people and compassion.

Sassy wrote:   Of course, being the Mayor he doesn't have access to legal advisors who know what they are talking about.   You obviously didn't see the documentary about David Fishwick starting his own bank:  http://www.huffingtonpost.co.uk/david-fishwick/bank-of-dave-why-i-opened-it_b_1664967.html

The whole journey, from my first attempts to get a licence to the first six months of opening was filmed by a crew from Channel 4, but this was no TV stunt. Burnley Savings and Loans is still there in Burnley, taking investments and making loans to the community. I want to show that banking shouldn't be about computers and ruthlessness, but about people and compassion.

Yeah again you missed my point about "bank" being a protected term?

Burnley savings and load is still a savings and loan is not allowed to use the term bank nor eligible to use some of the systems that benefit banks and is bound by legal restraints that dont apply to banks preventing direct competition with them.
Have a look at your average credit union.

He has his licence and is making a difference, that's all that matters, its working.

Have you ever read anything other than the Grundiad Sassy.

This is a good thing though I'll agree for once.

I prefer the Independent, unfortunately it stops my computer, The Guardian doesn't.

Big banks have too much control and too many greedy share holders and as we all know, they don't give a monkeys about the public. If the big banks were to sell off their branches in the poorer areas, it should give incentive for more authorities to set up credit unions with the aim of becoming a bank. It could offer advice to those who have trouble managing their money, help them understand how finance works.
I'm sure Salford will sadly struggle to become a full blown bank, decision makers in Westminster are in the pockets of the big banks and won't easily (or ever) change legislation to allow this kind of people and community friendly banking. I hope it does change or the local authority can circumvent the current rules (like the banksters), top idea Salford and good luck.