Scheme to tackle loan sharks wins Guardian prize
David Brindle, The Guardian
An initiative by Glasgow city council to rescue people from doorstep lenders and instead provide access to mainstream financial services was last night named overall winner of the Guardian Public Services Awards 2008. http://www.guardian.co.uk/society/publicservicesawards
The creation of Scotcash by the council and its partners, a social enterprise, has proved highly successful and is seen as a template for other local authorities in the UK that want to take positive steps to help communities weather the recession.
The awards aim to honour innovation and excellence in provision of public services and to help spread good practice. This year more than 850 entries were received for 13 team awards and a special category for individual public servant of the year.
The broadcaster Kirsty Wark, who presented the awards at a ceremony in London, said: ‘Scotcash was described by the judges as an enormously impressive example of a large partnership with great timing, with so many people having problems accessing credit. Despite being a new project, it is already making a huge difference to citizens in Glasgow who face social exclusion and is a great example of an initiative at the hard edge of social policy.’
Scotcash, run with the backing of Glasgow housing association and the Royal Bank of Scotland, was set up to offer affordable loans to low-income households. Doorstep lenders in Glasgow charge interest rates as high as 160% APR.
The scheme has snowballed, however, and people who might otherwise face difficulty opening current or savings accounts, because of their personal circumstances, are now enabled to do so and offered free money advice.
In the first 18 months of the scheme 319 people opened basic bank accounts and 140 opened savings accounts. Some 1,500 people took out loans worth a total £819,000. One single mother, paying less than £25 interest on a £200 loan compared to the £120 interest demanded by a doorstep lender, said: ‘I now understand about savings and budgets and I can explain to my friends and family how it all works. Once you understand, you’d never go back to doorstep lenders.’
The winner of public servant of the year award was Lee Peck, a principal officer at Warren Hill prison and young offender institution in Woodbridge, Suffolk, who beat four other shortlisted entrants in an online vote by Guardian readers.
The awards are run in partnership with Hays Specialist Recruitment.