Making banking work
Over the last few years, parish and town councils have expressed their frustration that high street and other banks need help understanding what they are, how they work, and what sector they are in.
Parish and town councils must, however, be able to discharge their statutory financial duties under the Local Government Act, 1972, the relevant audit and accounts regulations, and other statutory regulations and banks to make and receive payments. In recent years, however, this has not been possible for parish and town councils, making the task almost impossible in some instances.
We are lobbying the trade association for banks, UK Finance, government departments and the Know Your Customer teams of high street banks to highlight these issues.
Issues and causes
In 2020, Oxfordshire, Nottinghamshire and Lincolnshire county associations completed their surveys of parish and town councils in their areas to gauge what banking issues these councils were experiencing. In many instances, these issues were the same nationally. For example, inability to complete mandate drawdowns for bank accounts, change of signatory problems, repeatedly being threatened with account closure, councillors being asked to go en masse to bank branches 50 miles away to open accounts, and more recently, clerks being asked to produce financial evidence to confirm that their councillors were not or had not been bankrupt.
Possible causes for these issues have been many and varied, including the transition to online banking, the onset of post-Brexit money laundering regulations, the closure of bank branches, banks' miscategorisation of local councils as clubs or charities, and banks' off-shoring of their call centres to Asia or the USA.
Our lobbying
We met with UK Finance in 2020 and highlighted various banking issues raised by county associations during and since the COVID-19 lockdowns. This was followed by a further roundtable with high street banks, UK Finance, county associations and high street banks in the summer of 2021. Since then, further engagement has occurred with Action for Communities in Rural England (ACRE) on banking problems in rural areas. After further engagement with UK Finance, they have produced a guidance note for high street banks regarding how to categorise parish and town councils as customers, how councils function and their various functioning roles.
Engagement with banks
We have engaged with the Barclays Know Your Customer team in March and September 2023. These discussions resulted in positive changes as Barclays updated its customer categorisation of parish and town councils across all its teams, including contact details for councils.
Following a meeting between the Northamptonshire County Association of Local Councils and Unity Trust Bank (UTB) in the summer of 2023, it was agreed that UTB could work with and engage with county associations to provide updates on relevant contact data for certain parish and town councils as needed in the same way that the external auditors work with them. For example, if UTB sends an email to a council, then a chaser, and has not received any reply, they could reach out to the relevant county association for any intelligence on why there is a lack of response. The county association may know about a change of clerk, email, or any other extenuating circumstances that might help UTB, but most of all, it will help the council. Parish or town councils can contact UTB on banking issues and services at [email protected].
Useful links