Financial Indicators

Financial Indicators



New Start magazine



Scotland is using its devolved powers to make financial inclusion a priority. But how well is it doing and what more needs to be done? Henry Palmer and Julian Dobson report. 




What we found


New Start interviewed a range of experts from the private, public and voluntary sectors. Here are the key findings:


The research recognised a need for a move away from dependence on traditional approaches, which involve maximising income through benefits and managing debt. Too many ‘repeat offenders’ are coming back with the same problems.

lt’s too early to gauge the impact of the Scottish Executive’s financial inclusion plan, but there is general support for its aims and delivery so far and optimism that it will make a difference.

There is a lot of talk about partnerships with different agencies from the voluntary, public and private sectors, which is encouraging, but some partnerships can be clumsy and unwieldy. It may be most effective to work with small dynamic partnerships that are capable of tackling issues in a determined way.

Credit unions have an important role, but won’t make a huge difference by themselves. Innovative approaches such as personal lending CDFls [community development finance institutions] can lever money from banks, housing associations, councils and so on.

Credit unions have a poor track record in winning market share from doorstep lenders.

Legal teams at local authorities and statutory agencies are worried that investing in CDFls may distort the market and therefore contravene state aid rules. The Scottish Executive could take the lead in supporting any organisation accused of acting anti- competitively.

To break the cycle of debt intensive support is needed. The work of Greater Easterhouse Money Advice Project (Gemap) was universally recognised as a progressive approach.

Face to face work can be costly, but it’s effective. If resources are targeted where they’re most needed important progress could be made.

A lot of innovative work is starting in schools, including setting up school banks.

More work is needed with older people. Low take-up of benefits is a problem: in one case an elderly lady living in absolute poverty was found to be entitled to £23,000.

Banks could help by relaxing rules on ID. For instance, RBS is running a scheme where schools can confirm students’ ID to enable them to open bank accounts.

Devolution has meant people are closer to Scottish politicians, but arguably further away from the driving force of the Treasury. Is the community sector now too focused on the Scottish Executive rather than on Westminster?


The Scottish Executive’s Financial Inclusion plan can be downloaded at: