Council buys shares in community bank
North West Mutual BankA council has agreed to purchase £250,000 worth of shares in a new community bank.
It comes as North West Mutual announced where it planned to open its first branches in Lancashire.
Preston City Council has had £1m earmarked to invest in the launch of the venture for the past six years – but this is the first time it will financially support the project.
The authority's leadership says it wants to provide residents with an alternative to large-scale banks, but opposition politicians have condemned the commitment of taxpayers' money to the project with, they say, no guarantee of getting it back.
What is a community bank?
The North West Mutual concept revolves around creating an "ethical" customer-owned bank that provides accounts, loans and other services only to individuals and businesses based in the region it will serve.
The aim is to strengthen the local economy by "recycling" an estimated £900m of money within it – rather than allowing the cash to leak out to other parts of the country.
What will it offer?
The bank is promising to offer traditional high-street style outlets, as well as online banking.
North West Mutual chief executive Dave Burke said: "Our aim is to provide access to as many people and businesses in the North West as possible, with 95% of residents and small and medium-sized businesses within a 30-minute drive to a branch."
Where will the banks be located?
Sixteen fully-staffed banks are proposed for Lancashire – in Preston, Chorley, Leyland, Skelmersdale, Garstang, Lytham St Annes, Fleetwood, Blackpool, Lancaster, Morecambe, Clitheroe, Blackburn, Burnley, Accrington, Rawtenstall and Nelson.
They are amongst more than 60 possible bases being eyed across the region, along with a head office at a yet-to-be-disclosed location, which North West Mutual intends to open this summer.
When will they open?
The organisation is planning to apply for a banking licence later this year and wants to open its first branches by the end of 2026, with a full rollout planned by spring 2027.
What has the council said?
Labour-run Preston City Council's decision to buy shares in North West Mutual was taken during a behind-closed-doors meeting of members late last month.
The move was opposed by the Liberal Democrat and Conservative groups, who have long criticised the authority's planned involvement in the scheme.
Council leader Matthew Brown said he was "delighted" to hear of plans for a branch in the city.
"Market research shows the public would welcome this new model of banking owned by – and run in the interests of – local people," he said.
However, Liberal Democrat opposition group leader John Potter branded the bank "an ideological vanity project by Preston Labour".
The share purchase was approved by 22 votes to 17.
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