Deprived families resort to risky loans

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People in the most deprived parts of Banbury are defaulting on bills and resorting to ‘payday’ borrowing and loan sharks.

The plight of some of the town’s poorest residents is highlighted in a Which report showing that in spite of Banbury being in one of the most prosperous parts of the UK there are pockets where one in six families is struggling to pay bills.

The areas focussed on in the report are Ruscote, Neithrop and Grimsbury, with Bicester West and some Oxford city wards also problem areas.

Conservative councillor Cllr John Donaldson, Cherwell’s lead member for Brighter Futures in Banbury, said: “There are pockets called ‘super output areas’ (SOAs) in Banbury wards with high levels of deprivation. These areas have problems stemming from unemployment, housing 
and houses in multiple occupation.

“We are focusing on early years, education, employment and skills, people not in employment, education or training, financial inclusion, housing and safer communities.”

Mr Donaldson said a partnership of agencies has worked hard over the past four years and will continue to try to improve lives for families in the deprived wards.

He said he hopes the new Cherwell Community Bank – launched on Saturday in Banbury – will provide an alternative to Wonga and loan sharks.

“It won’t help those who are refused by companies like Wonga though – it isn’t a solution but its interest rates will be far lower,” he said.

James Richards, Credit Union development officer, said the bank is a community-owned facility in which those who deposit money become the ‘shareholders’.

Their pooled savings are used to provide affordable loans. But the community bank also provides services such as rent payment accounts and budget accounts – to manage the cost of such regular bills as utilities – to help customers manage their income.

“We do also encourage them to save, even if it’s only £1 a week, so they have something to fall back on if the road gets bumpy or if they have occasional expenses like school uniforms or car repairs,” said Mr Richards.

This week, Cllr Sean Woodcock, Labour leader on Cherwell District Council, said: “The coalition government claims that the UK is coming out of recession, citing lower unemployment figures and lower inflation, but this research shows that many families are either taking out payday loans or unauthorised overdrafts, or defaulting 
on household bills just to survive.

“It is symbolic of the unfair way in which this government is running our economy to benefit a few people at the top.

“We saw this with their tax cuts for millionaires while most families struggle to make ends meet.

“Council schemes like Brighter Futures in Banbury have their place but they cannot undo the damage that is being done at a national level, especially when key agencies supporting the scheme are facing draconian cuts in their funding.

“Talk of recovery is a myth for many people in Banbury.”

l The bank will be open on Mondays from 9.30am-noon at the Citizens Advice Bureau, Cornhill, Banbury.

Otherwise it can be contacted through Northamptonshire Credit Union on 01604 250016 or see its website at