The Budget 2015: A Community Investment Coalition (CIC) response

Dear Chancellor,

No-one can say that the last five years have not challenged Britain. A difficult economic climate has meant that government and households alike have had to keep a watchful eye on their budget. Although the UK economy has begun to recover, there is still much the UK Government can do to ensure that banks are doing their bit to build a stronger economy that gives all families, businesses communities a chance to thrive.

The Community Investment Coalition (CIC) – which campaigns for access to affordable finance for families, businesses and communities – believes that the following steps must be taken:

1. Committing to greater improvements in transparency: The voluntary framework for disclosure of bank lending, which came into effect in December 2013, has already had a significant impact.  A number of organisations, including CIC, have commissioned research analysing the data to support financial inclusion work such as improving flows of affordable finance to small businesses in poorer communities. We urge the UK Government to commit to further strengthening the data transparency framework. This means HM Treasury facilitating the data transparency by all financial service providers (including payday lenders) across the whole of the United Kingdom, so that providers can better understand market trends and refine their products and services to better serve local markets.

2. Reforming the Social Investment Tax Relief (SITR): CIC believes that the Community Investment Tax Relief (CITR) and the Social Investment Tax Relief (SITR) should be aligned in terms of the benefits they provide for investors (30 per cent over 3 years), and marketed as a tax suite for investors interested in boosting the social economy.  It is CIC’s view that SITR has not been as frequently used as was initially hoped, so it is essential that the advantages to the investor is simple to understand and use.  We urge the Government to continue raising awareness of SITR, alongside CITR.

3. Supporting a Community Finance Fund: CIC supports Citizens UK’s proposal to establish a Community Finance Foundation, which would support and champion sustainable growth in the community finance sector.  In particular, we support plans to establish a £200 million fund – financed by bank fines levied over the next Parliament by the Financial Conduct Authority – to not only meet the growing capital requirements of the sector, but also enable investment in infrastructure and research to support the overall growth of the sector.

4. Implementing the recommendations laid out in the Financial Inclusion Commission’s report: Last week, the Financial Inclusion Commission published its report – ‘Improving the financial health of the nation’. Mirroring CIC’s Community Banking Charter, the Commission issued a comprehensive action plan for a UK Government to implement immediately that ensures universal access to a package of financial tools to help active participation in the economy.

I hope you will consider these suggestions and adopt them as an effective way to improve the economic and financial health of the nation. If you would like to learn more about CIC, then please do contact me at Jennifer.Tankard@cdf.org.uk or 07971 510085.

We hope that you consider taking some of these steps.

I look forward to hearing from you.

Yours sincerely,

Jennifer Tankard
Director, Community Investment Coalition
Web: www.communityinvestment.org.uk
Tweet: @BankingBetter