Councils agree to support the creation of a local bank to support the local economy
Both South Hams District and West Devon Borough Councillors have pledged their support for the creation of a local financial institution, a local bank for local people.
The new venture, which is yet to be named, would be the first ever high street bank dedicated to Cornwall, Devon, Somerset and Dorset (Subject to regulatory approvals).
The bank, known for now as South West Mutual, would be owned by its members and would pursue only what is in the customers’ best interests. Unlike national financial institutions, the Mutual would not engage in financial speculation, or pay huge bonuses to staff for selling financial products.
Cllr John Tucker, Leader of South Hams District Council, explains why the Council is supporting this initiative: “I am really interested by this proposal and the benefits it could offer our communities. We all know that the local branches are being lost at an astonishing rate, making it more difficult for older and more vulnerable people and trading businesses to access their finance or seek support. The South Hams has lost 13 bank branches since 2015, leaving major towns such as Dartmouth without any banks at all. We understand that banks have to move with the times and more business is done online, but who will support our high streets and market towns in the future?”
“We also know that our SME businesses can find it difficult to get funding. This proposal would see a new kind of banking institution, one that is not tied to the costly overheads of the National banks, who can use the latest technology because it is starting from scratch. We welcome the commitment of South West Mutual to be a permanent presence in the region and to serve our residents and businesses by building a branch network.”
Cllr Philip Sanders, Leader of West Devon Borough Council said: “Councils do not want to get into the business of banking but it is our business to support a thriving economy in West Devon.
We recognise that South West Mutual’s mission to serve our residents and smaller businesses and its commitment to financial inclusion are closely aligned with West Devon Borough Council’s own objectives and strategy and so we are delighted to be able to support them in the early stages of their application for a banking licence.”
Both Councils agree that this is one way that they can use some of the money generated from the Business Rates pilot to support the local economy without using money that has come from Council Tax Payers.
Each council will invest £50,000 to help support the formation of the new entity. The proposal is not without risk, but without the funding, the proposed benefits to the local economy may never be realised.
South Hams and West Devon are the two first local authorities in the area to pledge their support, leading the way for others who have also expressed an interest in this venture. More information can be found at: https://southwestmutual.co.uk/