Tag: finance

Time’s running out for budget comments

CityChambersEdinburgh residents have only TEN DAYS to submit their views on the Council’s draft budget for 2014/15 – the consultation period closes on Friday 20 December.

Councillor Alasdair Rankin, the city’s Finance Convener is urging  Edinburgh folk to make sure they don’t miss the opportunity to give their feedback on the proposals.

He said: “In my opinion, setting the Council’s budget is the single most important thing we do each year. Every other service the Council provides follows on from this key decision and it has the potential to impact on many lives across the city.

“That is why it is so important that people take some time to look at the proposals and have their say on how we are planning to spend money next year. As elected representatives of the city our priorities should of course reflect the priorities of our residents but we need people to give us that important feedback.”

The full budget proposals can be accessed at www.edinburgh.gov.uk/budget

Feedback can be given in a number of ways:

– fill in the simple online feedback form

– email councilbudget@edinburgh.gov.uk

– Write to Freepost, RSJC-SLXC-YTJY, Budget, Council Leader, City Chambers Edinburgh EH1 1YJ

– talk to a local councillor.

– tweet using #edinbudget

– comment on Facebook

Government set to act on pay day lenders

palliament

The Westminster government is to introduce legislation to cap the cost of payday loans. In a move that’s likely to be welcomed by campaigners, the Treasury says there is “growing evidence” in support of the move.

The cap will be included in the Banking Reform Bill, which is currently going through Parliament, and the level of the cap will be decided by the new regulator the Financial Conduct Authority (FCA).

Chancellor George Osborne told the BBC there will be controls on charges – things like arrangement and penalty fees – as well as on interest rates. “It will not just be an interest rate cap, you’ve got to cap the overall cost of credit,” he said.

Although the level of the cap is yet to be determined, the announcement will be welcomed by opposition and campaign groups who have been urging the government to take action against some pay-day lenders’ practices: eye-watering interest rates and hidden charges which hit the poorest hardest and drive desperate people deeper into debt.

payday loansJust last week, Citizens Advice Scotland claimed that many payday lenders in Scotland are breaking the promises they made last year to clean up their act. According to CAS research, lenders continued to break ‘most of the pledges in their own code.’

The main points were:

  • less than half of payday lenders in Scotland are telling people that loans should not be used for long-term financial problems;
  • only 1 in 3 are checking peoples’ financial background before giving them a loan;
  • only 14% of customers felt the lender was sympathetic when they got into difficulties repaying the loan; and
  • only a third of lenders are warning their customers about the dangers of roll-over loans.

CAS Chief Executive Margaret Lynch said: “When the payday lenders published this voluntary code last year we made clear we would be watching them like a hawk to make sure they kept to their word. Because there’s no point making promises if you don’t live up to them.

“Our survey results – together with the experience of other clients we see every day in the CAB – show very clearly that this Code of Conduct Is being ignored repeatedly.

“Across Scotland, CAB advisers are currently seeing over 100 cases every week of people who are in crisis debt to a payday lender. That’s a third higher than this time last year. Our evidence is that many lenders are operating in ways that result in people getting into debts they can’t handle.

“So the Payday Lenders have had their chance to clean up the industry, and they have failed. It’s time now for the regulators to step in and do it properly.”money

Meet the Funders event in April

Meet The Funders 18 April

Is your community group looking for funding? Daft question, really – things have never been tougher for the voluntary sector. There are still some funding opportunities out there, however, and next month at the Assembly Rooms there’s a chance to meet potential sponsors.

The city council-organised Neighbourhood Partnership ‘Meet the Funders’ event takes place on Thursday 18 April from 1 – 4pm at the Assembly Rooms on George Street. An impressive group of funding providers will be exhibiting on the day, so if you’re a group looking for support this is an opportunity not to be missed. It’s completely informal and you can drop in any time – put the date in your diary now!

MeetTheFunders

Swinney calls for welfare cuts U-turn

The Chancellor should use next week’s UK Budget to revisit welfare reforms which stand to place real strain and hardship on Scottish families, Finance Secretary John Swinney said today. Writing to the Chancellor ahead of Wednesday’s Budget, the Finance Secretary has highlighted the impacts in Scotland of the UK Government’s welfare reform programmes.

The letter sets out Scottish Government analysis which shows, for example, that whilst the bedroom tax will save the UKG money, this will be outweighed by the costs imposed on the Scottish economy. Over time the policy will remove £110m from the economy, through its impact in Scotland alone. This does not capture the wider social costs of the policy nor the distress and disruption that it will cause.

The letter also highlights that the full package of welfare reforms will present significant financial and operational challenges for all layers of government in Scotland. In his letter to the Chancellor Mr Swinney urges the UK Government to:

  • Provide immediate support for investment and jobs
  • Withdraw its bedroom tax policy
  • Take action on the distribution of European Structural Funds (ESF)
  • Improve access to finance for small and medium sized enterprises
  • Devolve responsibility for Air Passenger Duty to the Scottish Parliament

Commenting on his letter Mr Swinney (pictured below)  said: “Since 2010 the UK Governments fiscal policy has been premised on the need to maintain market confidence and the UK’s AAA credit rating. The Chancellor has chosen austerity over investment in growth and jobs and the cost has been the continuing deterioration in the public finances, prolonged recession and the downgrade of the UK’s credit rating.

“That cost is increasingly borne by the most vulnerable in our society and public services in Scotland urgently seeking to mitigate the worst impacts of the UK’s disastrous welfare reform programme. Scottish Government analysis shows that based on reasonable assumptions the projected UK Government savings from the bedroom tax are significantly outstripped by the net loss to the UK of over £100 million over the long-term. This policy is unfair, is unlikely to deliver savings in real-terms and cuts across devolved policies. The Chancellor should use his forthcoming Budget to withdraw it.

“While we welcomed the Chancellor’s partial recognition of the need for urgent investment to boost growth in the Autumn Statement. we again call on the Chancellor to use this Budget to provide a real stimulus and greatly expand capital investment With colleagues from Wales and Northern Ireland, I have also called on the Chief Secretary to the Treasury to invest in growth.

“Small and medium sized businesses are the lifeblood of Scotland’s economy. Growth will be led by the private sector yet it continues to be choked by half-hearted Coalition measures. Figures released last week on bank lending again confirm that the UK Government’s action to improve access to finance for the country’s small and medium sized businesses is failing to deliver. We continue to press the Coalition Government to go further and faster in improving access to finance.

“With the powers of independence Scotland would have the economic levers and the scope to tailor welfare policies in line with Scotland’s interests, to ensure that Scotland’s businesses and people no longer have to fund the failures of a UK Government.”

Swinney

 

Credit Unions – a local alternative to payday loans

PayDay

A couple of news items caught my attention last week. One was about the number of empty shops on high streets and in shopping centres across the country. The economy is still in the doldrums, and people are just not spending. Apparently one in five retail units currently lies empty. It’s not all doom and gloom, however – recessions and depressions bring business opportunities for some, and it’s boom time for pawnbrokers and ‘pay-day loan’ companies. It seems these enterprises are springing up all over the place – perhaps our only growth industry, even.

The other piece of news was the Westminster government’s crackdown on these very same companies – the top fifty have been ordered to get their house in order or face closure by the summer.

The Office of Fair Trading said that the £2 billion a year industry has got to clean up it’s act. OFT Chief Executive Clive Maxwell said: “We have found fundamental problems with the way the payday market works and widespread breaches of the law and regulations, causing misery and hardship for many borrowers”.

He added: “Payday lenders are earning up to half their revenue not from ‘one-off’ loans, but from rolled-over or refinanced deals, where unexpected costs can rapidly mount up. This irresponsible lending is not confined to a few rogue payday lenders – it’s a problem across the sector. If we do not see rapid, significant improvements by the fifty lenders we inspected, they risk their licences being removed.”

For most, payday loans are something to avoid – everyone knows about the eye-watering interest rates being charged. Pay day loan companies often only quote what a loan will cost you in pounds and pennies, but take out a typical payday loan and you could find yourself being charged at a rate of anything between 1,600 % and 2,700%.

And that’s all the more shocking at a time when personal loans from ordinary high street banks have never been cheaper, available for as little as 9% APR – assuming, of course, that you can get one. But for those that can’t – an increasing number of desperate people –payday loans are the only option, the last resort. And these same people then often find themselves mired in a nightmare spiral of ever-growing debt, sometimes facing the distinct possibility of losing their homes – local advice organisation like Granton Information Centre have reported a significant increase of people tackling serious debt issues.

So a crackdown on payday loan companies – however welcome – won’t help the thousands of people who are currently tied in to horrific loan arrangements. What can they do?

Firstly, seek independent advice, from an organisation like Granton Information Centre or your local Citizens Advice Bureau. DON’T take on another loan to cover your last one.

And think about going a Credit Union. Credit Unions were set up to help people just like you, offering mutual and ethical savings and affordable loans. Credit Unions are regulated ‘Not for Profit’, Member-Owned (mutual), Financial Service Co-operatives and can best be described as organisations that encourage their members to save together and lend to each other responsibly. This allows these members the opportunity to gain greater control over their finances.

Community-based, community owned and community operated, two Credit Unions operate in the local area – North Edinburgh Credit Union in Wardieburn Drive and Capital Credit Union in Stockbridge.

Association of British Credit Unions Ltd (ABCUL) Chief Executive Mark Lyonette said last week: “Given the anecdotal evidence we hear from credit unions that help payday loan customers pick up the pieces, we are not surprised that the OFT has found evidence of such large scale poor practice in the payday lending industry.

“Loans repayable in full within a few weeks are rarely appropriate or affordable because this only stores up problems for later. If a loan is needed, spreading repayments over a few months will usually make more sense. Credit unions are a great source of affordable credit and many have helped people get out of the expensive habit of using payday loans. They can also help people to look at their finances and get into a savings habit so that they do not have to rely on a short-term loan next time they are short of money.”

North Edinburgh Credit Union’s Annual General Meeting

will be held on Thursday 21 March at 6pm at the NECU office on Wardieburn Drive.

Go along and support your local credit union

NECU