Sir Hector Sants speech at launch of Church Credit Union Network
It is a privilege to be able to speak to you today on such an important topic.
Financial distress is one of the principle causes of social detriment. Archbishop Justin has emphasised that helping alleviate financial distress should be central to the Church's mission.
A few statistics to remind us why:
- the debt of the average UK household, excluding mortgages, is now almost £13,000
- 7 million people are using high cost credit providers
- 1m payday loans are taken out each month
- 1.4 m people have no bank account
These statistics are in themselves justification for action, but for me, even more concerning is encountering the impact of financial distress at the personal level.
Over the last few months I have met many individuals who are in financial distress and such encounters have brought home to me the extent of the personal suffering that results. Christians Against Poverty, the well-known debt advice charity, has shared with me the following statistics about their debt advice clients:
- 36% have contemplated or attempted suicide.
- 67% visited their GP due to the negative effects of debt.
- 76% said that their financial situation had adversely affected their primary relationship.
- 23% said their relationship had broken down entirely.
- 42% were prescribed medication due to the negative effects of debt.
These statistics alone demonstrate that tackling these issues would impact every aspect of life, which is why, in my view; the church should get involved with passion and commitment.
So how is the Archbishop's Task Group assisting this endeavour?
Our goal is to promote responsible credit and savings. We are not seeking to solve the whole problem but rather to identify a set of practical and achievable actions, through which the church community can make a difference.
We have grouped these actions into four work streams:
- Direct Service provision
And the one that we are here to talk about today:
- Church community support
In all cases we are not seeking to 'reinvent the wheel' so wherever possible we will draw on existing work, of which there is much within the Church already. We are seeking best practice and to do whatever we can to assist its development, growth and geographical spread. At all times we will be conscious of the fact that this initiative will only succeed with the support and enthusiasm of Church communities at Parish level.
- A brief word on the first three work streams
Education: In relation to education we are going to focus on the most neglected area: primary schools. Currently less than a third of all primary schools offer any financial education. However 25% of all pupils in England attend a Church of England primary school. We are therefore looking to partner with the relevant groups, in particular the Personal Finance Education Group, to accelerate the spread of financial education in this area. The approach would combine learning in the classroom with the practical experience of opening and running an account in a local credit union. There are already examples of this working well and we would like to see it universally introduced.
Influencing: This work stream aims to help and add value to the many existing initiatives designed to promote the growth and development of community finance. We are working closely with Government and with the Credit Unions' Trade Association (ABCUL) to ensure we avoid duplication of effort. At this point I would like to express our gratitude for the support given by the major retail banks. In particular I would like to mention Lloyds Banking Group who are providing generous financial support for the Credit Champions Network pilot schemes.
Direct Service Provision: This is a complex area. For the moment therefore may I just say we are asking the question: could the Church community be encouraged to save and borrow within itself, using the opportunities provided by new technology, for example in peer to peer lending? It will take us a while to reach a conclusion and thus I am not offering an answer today. Of course we would welcome any comments or suggestions you may have in this area.
Outside the work of the Task Group, however, there is one project that is already in the pipeline, namely the Church's Mutual Credit Union. This is due to launch in the autumn to provide a service to Church employees.
- Finally we come to Community Support: the subject of today's event.
The Church of England is the best branch network in the country. A major high street bank has at most 3000 branches, but the Church of England has 16,000! The purpose of the Champions Network is to harness that unparalleled presence in the community. The goal is both to help those afflicted by financial problems and equip us all to save and borrow in a responsible way.
The vision is for a countrywide network of 'centres of excellence' staffed by Credit Champions. We hope that, in time, every Diocese will have enough of these trained volunteers and clergy to deliver help for all who seek it.
We envisage that the core mission of these Champions will be to:
- Support local community finance organizations, such as credit unions, to help them grow and develop. This would include raising awareness among and encouraging active membership by the church community.
- Ensure that those in financial distress have access to quality debt advice appropriate to their needs.
- Work with the education initiative in the local primary schools.
- Provide information and help for those who wish to save and borrow through ethical organizations.
- Encourage the use of church premises for the delivery of community finance, such as hosting the branch of a credit union.
Underlying this mission is the concept of promoting responsible credit and savings. A word therefore on what we consider responsible credit to be:
It is difficult to be precise, but I believe we would agree that responsible credit would have the following features:
- Realistic: offered with the reasonable expectation that the borrower can meet the terms of the contract.
- Affordable: that the interest and charges are fair.
- Flexible: the repayment terms are flexible to allow for unforeseen changes in people's circumstances.
Another way of expressing this is that the contract should be in the long-term interest of both the lender and the borrower.
Over time, as our project develops and we gain experience and valuable feedback from the Champions, the role will evolve.
This is the opportunity to stress that this is a grass roots initiative that will only succeed with the enthusiasm and engagement of the local
Church. Central to this engagement will be the flexibility to adapt to local circumstances and the willingness to learn from all as we go along. I hope that today's event will demonstrate to you the impact success in this area would have, not only on the mission of the Church, but also, crucially, on individual lives.
In conclusion: I am confident that the successful implementation of the Credit Champions Network will equip churches to be even more relevant to their local communities, and transform the lives of the many people we hope will be served as a result.