Summary
As part of its financial inclusion strategy, Leeds City Council has developed programmes on financial capability. These include work with young children, as well as programmes for primary schools and older children. Financial capability training is also given to council staff by the Consumer Financial Education Body (CFEB).
Key learnings for other councils
Partners stress the importance of a strategic, holistic approach to tackling financial exclusion and improving financial capability.
Council staff involved in the project say that providing a forum for partners is critical. They urge other local authorities to:
"...be creative in terms of how financial capability is delivered".
It is relatively easy to work with children and young people of school age. But it is more difficult to reach the adults most in need of help to understand their finances. Workplace learning, projects in children's centres, the extended schools agenda and work in prisons are all good avenues.
Background
Over the past six years, Leeds City Council and partners have been developing a strategy to tackle financial exclusion. The overall aim is to assist people and provide an alternative to high-interest doorstep lenders and loan sharks. The programme has three main objectives. They are to:
- increase access to affordable financial services
- provide free debt advice
- improve financial capability.
In 2007, Leeds City Council was awarded Beacon status for ‘outstanding' work in ‘promoting financial inclusion and tackling over indebtedness'.
Who was involved?
The council and Leeds City Credit Union identified problems of high-interest loans from doorstep lenders. Research by the University of Salford, overseen by a steering group of key partners, was commissioned to look further at financial exclusion in Leeds.
Following the research, partners from across the city joined the Leeds Financial Inclusion Steering Group. Theme-based working groups were established, including the Financial Literacy Project Group with partners from:
- banks
- colleges
- debt advice agencies
- the faith sector
- JobCentre Plus
- city council department
- the NHS
- social housing providers
- West Yorkshire Joint Services.
The problem and how it was tackled
Research found low usage of bank accounts by residents and high usage of doorstep lenders, particularly among single parents. A fifth of those who borrowed used the money to pay off other debts or for day-to-day living.
Financial capability support was clearly important in providing people with knowledge and confidence to make informed choices about how to:
- make ends meet
- manage money
- plan ahead
- choose different financial products and services.
The partners in the project had explicit health improvement goals. There is a wealth of qualitative evidence that when people's income improves, and their debt worries reduce. They also have more money to spend on healthier food and are less stressed. This leads to fewer visits to the doctors and reduces costs for the NHS.
In 2004/05, Leeds received £8.4 million to invest in regeneration through the Neighbourhood Renewal Fund. While this funding was going into poor communities, research estimated that between £3 million and £9.5 million was leaking out in ‘excess' interest paid by residents in these communities. This is part of the ‘poverty premium' that sees people on low incomes pay more for essential goods and services, including financial services.
Count Me In
The ‘Count Me In' programme is aimed at children from aged zero to 14. It was developed in partnership with Yorkshire Bank and the council's Library service. It has three strands targeting different age groups; the under-fives, those aged five to 11 and the 11 to 14s. More than 1,800 people participated in ‘Count Me In' events in 2009 and 2010 including children, parents and teachers.
The aim of ‘Count Me In' is to develop mathematical ideas and concepts for young children through story and rhyme. Parents report a greater understanding of numbers in their children, parents who have never played games with their children learn how to do so. Libraries contribute to the financial inclusion programme throughout Leeds, and to helping children develop both literacy and numeracy skills.
Financial literacy packages for school-age children
Education Leeds runs a range of enterprise programmes for young people from 10 to14 and from 14 to16 years. These aim to develop financial skills in a real-life context. They impart a real understanding of how business works through helping young people to run their own or a simulated business. The Social Enterprise programme runs throughout the year. It enables children from aged six to 16 run their own social enterprise, benefiting their community. Young people make all decisions relating to the running of the business, including all financial accounting.
Financial capability training for council staff
Leeds City Council works with the Consumer Financial Education Body (CFEB) to roll out the ‘Make the most of your money' workplace programme to its staff. The free and impartial one-hour sessions are undertaken by trained professionals from the financial services industry.
The council's priority was staff on lower grades, and those who worked part-time and casual hours. Research by the University of Salford has shown that people on the lowest incomes are most likely to have financial difficulties. They are also subject to the ‘poverty premium' described above, and are most in need of financial capability skills. Three pilots were undertaken within the council's City Development Directorate.
In total around 400 staff members participated in the pilot. In terms of feedback from attendees:
- 96 per cent said that their understanding of money matters had improved.
- 95 per cent said they would take positive action related to their finances as a result of the session.
- 100 per cent intended to use CFEB resources in the future.
Overall the key finding of the pilot was that the sessions should be delivered in easily-accessible locations and where possible across departments. Plans are now being developed to roll out the project throughout the council.
Outcomes and impact
This work requires substantial investment but provides strong evidence of good potential returns. Research by the University of Salford has shown that:
- financial inclusion activities created £26 million of additional disposable income for people
- every £1 spent by beneficiaries generated an extra 25p in the regional economy
- every £1 invested in financial inclusion generated £8.40 for the regional economy.
People spent the extra money mainly on food, bills, their children and saving. Furthermore a substantial number also reported improved health, making fewer visits to the doctor and needing fewer prescriptions.
Of Leeds' financial inclusion objectives, addressing financial capability is perhaps the most challenging. This is primarily because there is such a vast range of projects. In addition it is difficult to evidence outcomes which in many cases will not appear for some years.
Next steps
Where possible, despite funding constraints, the council and its partners plan to develop existing projects, pursuing new ideas and new sources of funding.
The Leeds Financial Literacy project group will coordinate activity with the West Yorkshire and Yorkshire and the Humber Financial Capability Forums. It will be facilitated by Citizens Advice.
References and useful links
Dayson, K and Dawson (2004). J., ‘Research report on financial exclusion in Leeds: its impact on individuals, communities and the city economy', Salford University
Dayson, K. et al. (2009). ‘Financial inclusion initiatives - economic impact and regeneration in city economies: the case of Leeds', Salford University, 2009
Dayson, K and Dawson, J (2004): Financial Exclusion: its impact on individuals, disadvantaged communities and the city economy, Leeds: Leeds City Council
Contact
Jo Rowlands
Dave Roberts
Telephone: 0113 24 75760
Email: [email protected]