In this case study we’ll look at Leeds City Council’s approach to financial inclusion; the process of making services such as banking, accessing loans, and debt management support available to more people.
We heard from Jo Rowlands, Financial Inclusion Manager at Leeds City Council who discussed their evidence-based approach, the importance of partnerships, as well as the need to constantly learn and develop the programme.
Financial Inclusion in Leeds
Leeds City Council’s strategy towards financial inclusion started taking shape in 2004. The initial programme was based on research, collaboration, and partnership to inform the actions undertaken.
In 2004, Leeds’ economy was booming and showing promising signs of becoming a northern powerhouse. However, there was a significant minority who were not enjoying the economic uplift.
To find out the extent of the disparity, Leeds City Council carried out a large amount of research, across the following areas:
- Surveying households on bank account ownership, savings, credit, and debt in 2004, 2010, and 2018
- Assessing the economic impact of financial inclusion initiatives
- Improving health through income maximisation
- Putting a cap on the total cost of credit
- Addressing problem gambling in Leeds
- Maintaining a poverty fact book
Some of the key findings of the research were that the use of direct debits or standing orders to pay fuel bills was 35%.
Homeowners were 3x more likely to pay via one of these methods than social housing tenants and 2x more likely than those renting privately.
The least likely group to pay via these methods was 17- to 29-year-olds, and lone parents.
Whilst the increase in bank account ownership is promising, the relatively low number of people using standing orders or paying via direct debit is worrying as, paying via these methods is the cheapest way to access utilities.
Almost 70% of those with no savings or less than £100 were social housing and private rented tenants, compared with around 33% of homeowners.
79% of lone parents fall into the category of having little to no savings, as well as 67% of low-income families, and 73% of 17–29-year-olds.
The increase in people borrowing to cover their daily living costs, coupled with the worryingly low numbers of people with any savings has been an area of concern for Leeds City Council.
40% of people in debt said it was causing stress and anxiety, which has been heightened by the Covid-19 pandemic.
Another key factor that has been exacerbated by the pandemic is the number of households with access to the internet.
Young people and households with children were the most likely to have access to the internet, at around 90%. Only 36% of over 60’s and 59% of households earning less than £200 per week have internet access.
Access to the internet is one part of the problem, as actually using the internet is a different issue. 22% of those surveyed said they found it difficult to use the internet, and a further 11% said they weren’t confident, rating their skills as ‘fair’.
Some conclusions from these findings were that the people most impacted are those renting, with social housing tenants affected slightly more.
Lone parents, families with children, low-income and people not in work are also amongst those most affected, as well as younger age groups in general.
In 2018, households were less resilient and worse prepared for an external shock or crisis, something such as the Covid-19 pandemic, than they were in 2004.
Before the pandemic, problem debt impacted 8.3 million people across the nation and 113,000 people in Leeds.
The Situation in 2021
In response to the pandemic, there have been multiple financial interventions made to stop people from spiralling into unmanageable debt.
Some of the actions taken include:
- Granting mortgage holidays
- Allowing forbearance
- Giving temporary uplifts in benefits
- Introducing the furlough scheme
However, despite these measures which have provided vital support for many, there are still worrying signs developing.
- Incomes have fallen due to reduced hours and furlough payments
- An estimated 6 million people have fallen behind with at least one payment
- Increasing number of people facing financial hardship and destitution
- Potential of a debt crisis looming
In Leeds alone, the number of those claiming Universal Credit (UC) has more than doubled between February 2020 and February 2021, from 33,715 to 75,166.
Partnerships are key to Leeds City Council’s financial inclusion process.
In 2005, the Leeds Financial Inclusion Steering Group was established as an open forum, with regular attendees from:
- Council services
- Advice agencies
- Credit unions
- Housing agencies
- Department for Work and Pensions (DWP)
- Health agencies
These parties have met three times a year since 2005, with three key areas of focus on the agenda:
- Increasing access to affordable financial services
- Increasing access to free debt advice
- Improving financial capability
The partnership is central to the council’s plans, as it ensures services and projects are influenced by the people they are aiming to support.
Partnership underpins each and every project the council undertakes, and it aims to empower its partners to help those who are suffering.
It also means joint accountability for the actions that are undertaken, with a core focus on building out the capacity for each project, trusting partners to carry out the work sustainably and with longevity.
The partnership has proved essential in the city’s response to the Covid-19 pandemic over the past year.
Offering financial support has been crucial in helping those struggling understand where they can get help. The Money Information Centre includes details of where and how to access free, independent, and confidential advice and support.
It is aimed at both the public and referral staff, and it is updated regularly to reflect the current situation. It required a huge overhaul in March 2020 in response to the rapidly changing situation following the lockdown.
Providing affordable financial services forms another part of their action plan. Leeds Credit Union membership has increased from 11,000 in 2005 to 37,000 in 2020.
It now boasts six branches and information points in community hubs offering a range of products and services, and a schools savings club.
It also works alongside Housing Leeds to offer a money and budgeting service. Also, as a large employer, it offers advice on payroll savings and ‘getting workforces’ savings. 
Money buddies are employed to support, educate, and empower clients to maximise their income, save money, and reduce money worries.
The volunteers help clients to take action on options following debt advice, helping those struggling to build confidence when dealing with financial matters.
They also identify money-saving ideas, help clients apply for affordable financial services, and negotiate bills to get better tariffs on utilities.
This results in more confident, less stressed clients who are able to call upon their money buddy if things do get beyond their control.
To support vulnerable children, the council has introduced Healthy Holidays to provide food, fun activities, continued learning and support for those children at risk of going hungry.
The programme is delivered through schools, third sector organisations, and community hubs. Since 2018 it has been funded by Leeds City Council, local businesses, and the Department for Education.
There are an estimated 35,000 children living in poverty across Leeds. Currently, 28,614 children are entitled to free school meals, which is an increase of 2596 since the first lockdown took place.
Healthy Holidays caters for around 5000 children on a referral basis, and the Department for Education pledged in 2021 to fund the scheme through the Holiday Activities and Food Programme, across all local authorities.
Changes due to Covid-19
In response to the pandemic, there have been weekly meetings held between the partnership to discuss financial inclusion and emergency food requirements.
It has become an essential practice, sharing key information and resources across the partnership, which has, in turn, strengthened the depth of the relationship.
Some key activities that the council have launched include:
- Hosting a Covid-19 helpline for information and resources
- Setting up a local welfare support service and food warehouse
- Improving Leeds Credit Union branch accessibility
- Keeping information across various websites clear, concise, and consistent
Going forward, Leeds City Council and its partners are determined to continue sharing, learning, and improving.
The key lesson that has been learnt and consolidated throughout the pandemic is that a strong evidence base is crucial to align stakeholders.
Also, the power of partnership has been proven repeatedly throughout many of the successful executions of projects. Sharing and learning from others is key to this success.
These findings will be embedded in the overall strategy, policies, and everyday practices of those in the partnership.
 Rowlands, Jo. 2021. Financial Inclusion Manager, Leeds City Council. Local approaches to addressing financial inclusion
 Leedscreditunion.co.uk. 2021. About us
 Gov.uk. 2021. Holiday activities and food programme 2021