Banks meet 'cash desert' communities

Poorer neighbourhoods lack the essential financial services found in cities

By the BBC's John Andrew

High Street banks who have left some of Britain's most deprived areas have come face to face with the people they are accused of "deserting".

In a highly unusual move, representatives of seven leading banks - including Barclays, Natwest and HSBC - came together to meet directly with community leaders from run-down areas in London, Sheffield, Bristol and the Black Country on Tuesday.

The meeting, held with the blessing of Bank of England Governor Sir Eddie George, was to explore ways of giving people from disadvantaged neighbourhoods more access to financial services.

We think we can examine ways of giving the sort of re-investment these areas want

Martin Mosley, Barclays Bank

"We held it at Stratford in East London to honour the thousands of poor people from there who once pooled their resources to start some of the mutual lending societies which later grew into banks," said Neil Jameson of the Citizen Organising Foundation, a national body which helps people campaign on local issues.

Poorest neighbourhoods

One of the London neighbourhoods represented was Canning Town - a poor district only a few hundred yards away from Canary Wharf - home to many top banks and City institutions.

But in Canning Town, one of the capital's poorest neighbourhoods, there is not a bank to be seen.

All have moved out because of lack of business. Abbey National was the last to go, and although it left two cash machines people complain that they are often empty.

Since the banks left traders have seen their business fall dramatically.

"If people can't get cash here they simply go to another district and do their shopping there," said Tommy White, who runs a used furniture store on Barking Road.

HSBC was one of the banks which met with community leaders

The banks were told that in Sheffield, people in "cash deserts" have turned to cheque-cashing companies to get money, and face commission charges of 10% or more.

"We've seen the number of these outlets double in two years," said Mandy Aitken of the community group Impact.

"Surely if these companies can make money in deprived areas so can banks."

Though listening to their concerns, the banks refused to sign up there and then to a "re-investment partnership" with the community groups. They agreed to reach a decision by the end of next month.

'Shared branches'

But Martin Mosley, director of consumer and community affairs at Barclays, whose image has been damaged by a string of branch closures, said there had been a "healthy dialogue" and he did not rule out helping them.

"We think we can examine ways of giving the sort of re-investment these areas want. And it isn't a matter of putting back the branch or bricks and mortar. It's other ways of helping - perhaps through a cash machine, some sort of micro-credit, or access to a basic bank account."

Among the ideas the British Bankers Association is considering is a plan for "shared branches" where staff from different banks take it in turns to run High Street branches.

Nat West recently launched a series of TV adverts in an attempt to gain customers from competitors, especially Barclays, who have been accused of closing too many local branches and investing too much in telephone and internet banking, which is not an option for many low-income groups.