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Friday 24^th October 2003

PRESS RELEASE

BISHOP CALLS FOR GOVERNMENT TO TACKLE DEBT IN OUR POOREST COMMUNITIES

The Bishop of Sheffield, Jack Nichols, speaking in the House of Lords on Tuesday called for the Government to fund and encourage the development of an strategy to address debt, particularly in our poorest areas where, for many people, there is no alternative to loan sharks.

He used evidence from 3 years research by IMPACT Communities in Partnership for Action. It is a broad-based organisation with 27 communities in urban and suburban areas, mostly of Anglican, Roman Catholic and Methodist churches.

He continued - more money is leaving our weakest communities in payments to loan sharks than is put in through regeneration activities.    He said that if the Government is serious about the creation of sustainable communities then they needed to take this issue seriously.

A £300 washing machine to you or I will cost £900 to a single parent living on a housing estate who has no access to the usual sorts of credit. It is no good simply throwing the responsibility to do something about that appalling situation at the Government. Responsibility must be shared between national and local government, the faith communities, the voluntary sectors, businesses and statutory bodies, as well as the financial sector, in whose long-term interest it must be to encourage financial responsibility.

In Sheffield we plan to set up, in co-operation with one of the large high-street banks, a strategy for financial inclusion for our poorer areas.

¨      The setting up of a community finance initiative—a non-profit-making company. There are several examples in other places which lend money to those who cannot find it elsewhere. More than 90 per cent of the loans are returned. So much for being high-risk businesses justifying excessive interest rates. Such a company will fill the gap which some credit unions are not able to meet because they tend to be small, limited to communities which are poor and made up of people who in the main want to borrow rather than invest. An City-wide credit union makes much more sense because it can become self-supporting.

¨      Increase accessibility to credit unions by having collection points in schools. We need to encourage payroll deduction to credit unions from our local authorities.

¨      More and better debt support and money advice.  And, last, but not least,

¨      A financial literacy initiative in our schools. Many young people leave school with no knowledge of how to handle finances. Some families have for generations had no experience of financial services and they do not know what to do with a bank account. It can do more harm than good if they do not know how to use it.

Source:  An extract from "UK Government Lords Hansard report 21st October 2003"

Note to Editor

This would be the first known example of such a unified strategy in the UK. 

Contacts

Mandy Aitken – IMPACT  - Tel:  0796 6054959

Dr Ian McCollough, Diocesean Faith in the City Worker - Tel:  07764 412783

Peter Armstrong, Chair North West Sheffield Credit Union – Tel:  0774 7010700

Brian Parfett – IMPACT – Tel:  07905 149505