The Revenue and Benefits Programme Manager talked through the Council’s approach to supporting credit union services over recent years, which was an essential part of supporting the Council’s Financial Inclusion Strategy. The

Panel heard that the evaluation report was commissioned after the breakdown of a proposed merger of the two credit unions operating in the City, whereby the smaller Blackbird Leys Credit Union (BBLCU) would have been effectively subsumed by Oxfordshire Credit Union (OCU). The evaluation report had set out what actions the credit unions could take in order to become sustainable and how the Council could support them. A meeting had been held to discuss the outcomes of the report with the credit unions. The Panel heard that OCU had followed the recommendations and addressed a number of issues, including budgeting to pay dividends, but BBLCU was now thought to be pursuing a merger with a credit union based in South Northamptonshire.

The Board Member for Customer and Corporate Services said that the evaluation report was a valuable piece of work that had made useful recommendations following an impasse over the failure of the proposed merger.  She said that the Council had spent some £100k on supporting credit unions, which was a lot of money to spend without realising the aim of having self-sustaining credit unions.

The Chair of OCU said that OCU had 100 new members, had increased lending and was trying hard to expand. OCU had also increased their capital asset ratio from 3.4% to 5% and had budgeted to pay a dividend of 1% this year, although that would be subject to a decision at their annual general meeting. The Panel heard that OCU was now self-sustaining but had some further asks of the Council. These were to activate the payroll deduction facility and promote OCU to Council staff, and to consider contributing funding for a part-time development manager who would promote OCU much more extensively on the ground.

The Panel noted regret that the merger had failed and heard that there was no prospect of this proposal being resurrected because the two credit unions had very different operating models. BBLCU wanted to continue to have a presence in the community that would not be compatible with OCU’s operating model.

In response to a question, the Panel heard that OCU did not require funding to continue to operate but would require funding to continue to expand. The Panel advised OCU to submit a funding application through the Council’s open grants programme when it next opened. The Revenue and Benefits Programme Manager advised OCU to be clear when making a bid as to what tangible outcomes the funding would deliver, such as increases in membership and income.

The Board Member for Customer and Corporate Services said that she was pleased with the progress made by OCU. In terms of promoting OCU to staff, this would require further thought and she would want to be sure that this would be in the best interests of Council employees. Most staff had opportunities to access better interest rates on savings, although plans to pay dividends were a positive step, and the Council’s own loan option was likely to be more advantageous to them.

The Chair of OCU said that OCU did not just want to attract people who were financially disadvantaged but also people who wanted to save. Their borrowing facility was different from the Council’s own scheme and there may be some financially excluded staff who would not feel comfortable borrowing from their employer.

In conclusion, the Panel agreed to:

·         Encourage OCU to submit a grant application through the Council’s open bidding process;

·         Recommend to the City Executive Board in September that the Council promotes OCU to staff alongside other options and within a carefully framed context.