Issue - meetings

See Agenda item 2 – Exclusion of the Press and Public

[Please note that following the announcement from the Financial Services Authority  that North Yorkshire Credit Union has been placed into liquidation, this report can be now made public]

RESOLVED:       That Cabinet agree to:

i)          Approve a grant contribution of up to £50k to be allocated from the Economic Infrastructure Fund towards the development of the South Yorkshire Credit Union.

ii)        Note that the £50k allocated from the EIF is included in the £300k being recommended within the financial inclusion policy report, also included on this agenda.

iii)       Recommend appointment of an officer with ‘observer status’ to monitor the work of the new Union by attendance at Credit Union Board Meetings.

REASON:        In order to promote a Credit Union offering in North Yorkshire and York in line with the Council’s Plan to ‘build stronger communities’ and ‘grow the economy’

Members considered a report which outlined work undertaken to establish a level of support from the City of York Council to secure an on-going Credit Union presence in York and North Yorkshire.

Officers updated Members confirming that North Yorkshire Credit Union had, over a couple of years, encountered severe financial difficulties mainly as a result of a high level of bad debts and overheads and over dependence on non-recurring grants. This had resulted in the recent Financial Services Authority announcement that the North Yorkshire Credit Union had now been placed into liquidation.

It was confirmed that Members of the Council had been on the Union’s Board as members in their own right, responsible to the Credit Union and not representing the Local Authorities interests.

Further information on work undertaken to secure an on-going Credit Union presence in York and North Yorkshire and consultation undertaken was set out at paragraphs 5 to 13 of the report.

The possibility of the South Yorkshire Credit Union working out of York Explore and ultimately the new West Office building was also noted.

Councillor Cuthbertson, spoke as Treasurer of the Credit Union from April 2010, pointing out that set up of the Credit Union had had cross party support. He spoke at length of his concerns that the Union had not been run as a business, to the wide range of problems including high overheads and management and operational issues. He expressed support for the recommendation pointing out that the Union should have a financial inclusion aim and a delivery strategy but that there was also a requirement for a monitoring role at meetings.

The two options then considered were to:

1.   Approve the one-off cost of £50k to South Yorkshire Credit Union and a Credit Union presence remains in York.

2.    Not approve the £50k one-off cost and South Yorkshire Credit Union do not operate a Credit Union in York.

Members questioned the possibility of an officer in an ‘observer role’ attending meetings and the remit of this role.

Following further discussion it was

RESOLVED:       That Cabinet agree to:

i)          Approve a grant contribution of up to £50k to be allocated from the Economic Infrastructure Fund towards the development of the South Yorkshire Credit Union.

ii)        Note that the £50k allocated from the EIF is included in the £300k being recommended within the financial inclusion policy report, also included on this agenda.

iii)       Recommend appointment of an officer with ‘observer status’ to monitor the work of the new Union by attendance at Credit Union Board Meetings. ^1.

REASON:        In order to promote a Credit Union offering in North Yorkshire and York in line with the Council’s Plan to ‘build stronger communities’ and ‘grow the economy’