Closure of ‘a third of Scotland’s banks’ to come under parliamentary scrutiny

08.03.2018

The closure of more than a third of Scotland’s banks since 2010 is set to come under the microscope, as the Scottish Parliament’s Economy, Jobs and Fair Work Committee calls on local businesses and consumers to ‘speak out’ on the impact on local communities and economic growth.

Bank closure numbers vary across Scotland. According to 2018 figures from the Office of National Statistics (ONS)*:

  • Renfrewshire, West Dunbartonshire, Glasgow and East Ayrshire have seen its bank numbers reduce by around a half;
  • In Aberdeenshire, Moray, Dumfries and Galloway, Dundee and Falkirk bank numbers have decreased by around at least 20%;
  • The city of Edinburgh has experienced the greatest decrease of more than 60% of its banks.

Reasons for the steep decline in numbers of Scotland’s banks are said to be varied and range from the impact of the financial crisis and new regulatory costs bearing down on banks’ profits; to falls in demand for the use of cheques and increased use of electronic payment services. ** In its inquiry, the Committee will scrutinise the impact of these bank closures on local businesses and economies, including tourism and SMEs; and on consumers. The Committee has today launched a survey and a call for written views asking personal and business banking customers for their views on bank closures.

Convener of the Economy, Jobs and Fair Work Committee, Gordon Lindhurst MSP said:

“For Scotland to lose more than a third of its banks in just 7 years seems a staggering statistic. This inquiry will work to respond to significant public concern that the impact of closures is felt most in places where no viable alternative exists.

“We are calling on small businesses and consumers to speak out on vital questions, such as: Will closures of local banks have an impact on your business? What is the impact of local ATMs closing or imposing charges for transactions? And how do bank closures impact on your local high street?

“The committee wants to know what can be done to help remedy a seemingly relentless decline in Scotland’s banks. Crucially, what are the alternatives that can help support local businesses and communities, and enable them to thrive for the benefit of all?”

The Economy, Jobs and Fair Work Committee will examine the impact of bank branch closures on local businesses, consumers and the Scottish economy and explore what steps can be taken to address any issues identified by the Committee. It will hear views and opinions from a range of organisations and individuals at formal committee meetings at the Scottish Parliament from April 2018, and will meet with individuals and organisations across Scotland to hear their views first-hand. The Committee’s report is set to be published in summer 2018.

Background

A copy of the Committee’s survey can be found here. It will run until Friday 23 March 2018. The call for written views can be found below; these should be sent to the Committee by Friday 13 April 2018.

*UK Business Counts data, available through the NOMIS website, is an extract compiled from the ONS’s Inter Departmental Business Register (IDBR). This records the number of Enterprises that were live at a reference date each year. As well as recording commercial bank brank closures, the bank figures (discussed above) will also include HQs/administrative offices and some private investment banks closures.

**Please see the House of Commons briefing paper, Bank Branch Closures for further details.

The Committee inquiry:

Economy, Jobs and Fair Work Committee

Bank closures: impact on local businesses, consumers and the Scottish economy inquiry

Call for views

Background

According to official figures, the number of bank branches across Scotland reduced by a third between 2010 and 2017. The Economy, Jobs and Fair Work Committee is launching a short inquiry with the following remit:

To examine the impact of bank branch closures in Scotland on local businesses, consumers and the Scottish economy and to explore what steps can be taken to address any issues identified by the Committee.

The Committee wants to hear the views and experiences of as many people, businesses and organisations as possible, so it is now seeking written views on the following themes.

Impact of bank closures on local businesses and the local economy

Will closures of local banks have an impact on your business?

If so, in what way? What could be done to mitigate any negative impact?

Have you received business advice and support from your local bank? What will be the impact of local bank closures on the provision of such advice and support?

Are there any ways in which such advice and support could be accessed through a different channel?

Will closures of local banks have an impact on the wider local economy? What steps could be taken to mitigate any negative impact on the wider local economy?

Is there reduced footfall in towns or areas where local banks have closed?

How would local bank closures impact on tourism in your area?

What should happen to the bank premises when they are vacated by local banks? How does this impact on the local High Street?

Impact on consumers and other organisations and on the community

Will closures of local banks impact on you as a consumer or local organisation?

If so, in what way? What could be done to address any negative impact?

Will closures of local banks impact on the local community?

If so, in what way? What could be done to address any negative impact?

What is the impact of local ATMs closing or imposing charges for transactions?

Alternatives to local banks

What are the alternatives to local banks?

Are Credit Unions, Post Offices or internet banking suitable substitutes for local banks?

What are the barriers to success for any alternative to local banks?

What steps could be taken to address these barriers?

The Economy, Jobs and Fair Work Committee scrutinises a broad range of topics within the remit of the Cabinet Secretary for Economy, Jobs and Fair Work including energy policy, the impact of the UK vote to leave the EU, fair work and matters relating to the Scottish economy. It comes to a view after taking evidence from, and engaging with, a wide range of stakeholders ‘on the frontline’ and applies authoritative, expert, effective and influential scrutiny to policy.

Photographs of the committee are available free of charge

Further background on related work undertaken by House of Commons, UK Parliament:

Scottish Affairs Committee work

The Scottish Affairs Committee held a one off session on RBS bank closures on 17 January 2018. They heard from RBS, the Post Office, Scottish Chamber of Commerce, Unite and Scottish Rural Action. They received written evidence from a number of organisations and individuals, including FSB.

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