In this current climate, financial exclusion looks set to remain an ongoing challenge to address. Exacerbated by the recent downturn in the economy and the resulting credit crunch, mainstream financial institutions are less likely to provide financial services to those seen as being “risky” and unprofitable. An increasing number of consumers are likely to be priced out of the mainstream financial markets and denied access to affordable financial services, making it even more imperative for alternative solutions to be provided in their place. Financial exclusion and over-indebtedness are issues that need serious consideration and concerted action.
Local authorities can make an important contribution to the financial inclusion agenda through their day-to-day contact with excluded individuals and as funders and providers of financial inclusion services. They also have a key role to play in the delivery of financial education in their schools to ensure young people have a good understanding in personal finance issues before they leave school as this is key to tackling exclusion in the long term.
In addition, local authorities are well placed to provide a focal point and drive forward the financial inclusion agenda in their areas by encouraging the development of new and existing financial inclusion initiatives and engaging with other key stakeholders through local forums.
How Local Authorities can help to Promote Financial Inclusion
- Develop their own Financial Inclusion Strategy reflecting the needs of their areas and their local population
- Work closely with the Financial Inclusion Champions team for Wales to deliver the UK and Welsh Assembly Government’s key financial inclusion targets
- Provide affordable home contents insurance schemes to their tenants tied to rent
- Provide money advice and welfare benefits advice
- Develop links and make referrals to specialist agencies such as citizens’ advice bureaux and consumer credit counselling service for debt advice and the Wales Illegal Money Lending Unit
- Work in partnership with and support the development and growth of credit unions services in their area through grants and/or Service Level Agreements
The WLGA represents Welsh Local Authorities on the WAG Financial Inclusion Steering Group for Wales and the Champions Advisory Board. We are interested to hear more about work being done around financial inclusion issues to ensure that local authorities’ views are represented at a national level.