Ethical lending supported by Worthing Council

More people will be able to access fair and affordable ways to manage their money thanks to Worthing Borough Council.

As part on ongoing work to assist low-income and vulnerable communities, the Council has been working with local credit union BOOM to provide safe and ethical loans and savings. The work also involves helping members of the street homeless community open bank accounts to ensure they can receive welfare payments.

Formed out of a merger between the former Surrey and West Sussex Credit Unions, the not-for-profit organisation said nearly half of all loans agreed in recent months have been in Worthing - with nearly £1 million now lent to residents in our communities.

To ensure BOOM can continue to support those in need, senior councillors on Adur & Worthing’s Joint Strategic Committee agreed at a meeting this week to invest a further £25,000 in member-owned co-operative.

Mary D’Arcy, Adur & Worthing Councils’ Director for Communities, said: “We know that having access to affordable credit is essential for many residents.

“Without help to access credit and support to manage tight budgets as well as encouragement to save, some people could very quickly find themselves in financial difficulties after resorting to doorstep lenders and ‘so called’ payday loans.

“By investing in BOOM we are investing in our communities and ensuring that this valuable resource can continue supporting our residents.”

Both Worthing Borough Council and Adur District Council invested £25,000 in the credit union in 2014.

Recent months has seen BOOM receive an increasing number of queries from Worthing residents to consolidate expensive loans into affordable payments. Requests for loans to cover rent arrears and deposits on new tenancies are also on the rise.

In light of this extra demand, Council leaders believe the extra money will ensure support can continue be provided.

The investment will have the added bonus of helping local residents save - as anyone with a BOOM loan has to put an amount aside each month, meaning they have a nest egg after paying off the debt.

Andy Johnson, General Manager at BOOM, said: “The continued support from Worthing Borough Council has been invaluable to us. With investments like this, we are able to help many of the local residents avoid financial exclusion or the option of high interest lenders with can easily lead into a spiral of debt.

“We actively campaign to create opportunities for people to save and manage their money more effectively, working with our members to try and reduce situations of stress and difficulty which the demands of money troubles can bring. In fact, we want that saving ethos to start so early, we have recently started our new Junior Savers campaign to encourage this.

“We are also looking to support those residents that may struggle to access high street banks and working with Engage we are able to provide a Current Account option as an alternative.”

The Council also said it will continue its work with BOOM to prepare local residents for the full rollout of Universal Credit which is planned for Worthing and most parts of Adur in July 2018.

While officers admitted that some of concerns around the initial stages of the Universal Credit process of payment of benefits have been addressed by the government, work continues to ensure our communities understand the changes.

This includes issuing advice and guidance on a range of financial and other related issues - such as working with the credit union to reduce the amount required to open an account from £5 to £2.50 for some particularly vulnerable clients. The Council has also worked with BOOM to support our street homeless community to open accounts despite individuals not always being able to provide the standard forms of identification.

As well as supporting financial inclusion, the Council is also helping people to get online through its IT Junction programme. Established with the Department of Work and Pensions, there are more than 10 centres across the area which provide support for new Universal Credit claimants to manage their claim online.

The Councils are committed to continuing to provide our communities with information and support to navigate the changes as they occur,. A separate web page has been established on the Councils’ website and an easy-to-understand video explains the impact of Universal Credit. Please feel free to share this widely.