Committee raises concerns about rural access to banking

This story was published 4 September 2018

The chair of our Corporate and Partnerships Overview and Scrutiny Committee has raised concerns about access to face-to-face banking services in rural parts of the county with the government.

rural scene

The committee recognises that small and medium-sized businesses are vital to the sustainability of rural areas and that the closure of branch banks in those areas poses a risk to their future. They also recognise the adverse effect of branch bank closures on older people, many of whom do not use internet banking. In December 2017, members launched a scrutiny review of the effect of bank closures and the loss of cash-based, over the counter banking and Post Office services.

At its meeting yesterday (3 September), the committee approved its final report on access to cash-based over-the-counter banking services in North Yorkshire. The review included questioning national representatives of the banking sector and the Post Office.

Committee chairman Councillor Derek Bastiman said: “As a committee, we are concerned about the number of people that, as bank branches close, may be left behind without access to banking services as we increasingly move towards a cashless society and use of online technologies.”

The committee also felt assumptions were being made about the ability of post offices to fill the gap in banking services. While there was no post office closure programme, post offices did close due to retirements or contractual or commercial issues and these closures were often hard to reverse. On top of this, the lack of access to cash machines meant it was becoming increasingly difficult to undertake cash transactions in market towns and rural areas.

Cllr Bastiman said: “The committee has become increasingly concerned that a series of bank branch closures in the county are making it more and more difficult for small businesses and local people to undertake cash-based over-the-counter transactions where they live and work. Increasingly, they are forced to travel further afield to access the services they need.

“As a committee, we recognise that the County Council has a leadership role to play. That is why, on behalf of the committee, I will be writing to the Secretary of State for Business, Energy and Industrial Strategy and the Secretary of State for Environment, Food and Rural Affairs to raise these concerns and to urge them to explore new ways of working that enable the long-term sustainability of over-the-counter cash-based transactions and cash machines. I look forward to hearing their response and also to engaging with the North Yorkshire MPs.”

Cllr Bastiman emphasised that growing costs to small businesses associated with providing a cash machine was exacerbating the situation. He said: “What we need is for financial service providers to work together to ensure that people are not excluded from the services they need solely because they do not use telephone or internet banking.”

The committee is also in discussions with the Rural Services Network, which champions rural services, to identify good practice that could be adopted in North Yorkshire by the banking and finance sector.