Bank closures possible as pilot fails

There was little take-up of the shared banking pilot

By Louise Greenwood BBC Radio 4's Money Box

The High Street banks are being accused of clearing the way for a new round of branch closures, after it was announced a shared banking pilot is to end.

A public outcry followed the campaign of branch closures in 2000, when 340 were shut down, half by Barclays on a single day.

This led to a trial scheme to see if banks could let each others' customers use their branches at no extra cost, enabling at least one branch to remain in each town or village.

But that experiment has now ended with a report saying the trial had only led to a five per cent increase in business.

Customer disappointment

However, customers in the pilot areas claim it was a success for them.

Nick Osborne, an electrical contractor from Lenham in Kent told BBC Radio 4's Money Box programme:

"Several local businessman... all praised the service.

"It gives us the ability to pay our cheques straight into Nat West Bank which goes into Barclays Bank at no cost.

The economic drivers of branch closures are still there

Campaigner Derek French

"The alternative is that I either have to go to Maidstone or Ashford, a journey of nine miles."

Geoff Dwyer, parish clerk in Lynton in Devon believes the trial in his town was not given enough time to prove itself.

"[The banks] have spent years and years closing, people have learnt to (go) elsewhere... if people had realised they could do their banking, they could pay in money, they could get cash in Lynton, it would have risen over the year."

Banks accused

The Campaign for Community Banking has accused the banks of deliberately designing the pilot to fail.

Derek French from the campaign said: "10 very remote locations were chosen, nine of them were historically dominated by one bank...

"The economic drivers of branch closures are still there and the pause we have now, that has existed for three years, is a result of a public outcry.

"This was a window of opportunity to trial a number of different formats and alternatives to branches and the banks have wasted this time."

Ian Mullen, Chief Executive of the British Bankers' Association which ran the pilot scheme could not rule out further bank closures in the future.

"I have no idea as to what our banks will be doing" he told the programme, adding that the banks would be working closely with the Post Office to optimise banking services through the new "universal bank".

BBC Radio 4's Money Box was broadcast on Saturday, 10 May, 2003 at 1200 BST.