Tackling financial exclusion: an area-based approach, by Sharon Collard, Elaine Kempson and Claire Whyley

(The Policy Press, 2001), pb, 52pp, £12.95.Order this book
This is a report on research carried out in a participative fashion in a deprived area of Bristol. Through focus groups, local people identified the difficulties they face when they attempt to gain access to financial services. The researchers then put the questions raised to providers of financial services; an audit of financial provision in the neighbourhood was undertaken; and finally groups of local people questioned financial providers, evaluated the responses received, and identified priorities for action.
Banking, loans, savings, loans for micro-entrepreneurs, financial services for Muslim Somalis, and financial information and education, were identified as priorities; and the new basic bank accounts offered by Natwest (‘Steps’) and the Bank of Scotland (‘Easycash’) were regarded as meeting local needs, as was the proposed universal bank account to be operated through Post Offices.
The research was carefully conducted, with genuine local participation; and the conclusions drawn will be helpful to the providers of financial services as they seek to serve poorer communities.
What is now required is in-depth research on how people in more deprived communities do actually manage their finances, along the lines of Jordan et al’s research in Exeter into the ways in which low-income families make decisions about sources of income. (Bill Jordan, Simon James, Helen Kay and Marcus Redley, Trapped in Poverty? Labour-market decisions in low-income households (Routledge, 1992)). In this way the detail as well as the broad outline of what is required will become clearer.
Bill Jordan’s conclusion was that low-income families operate as if means-tested benefits were non-withdrawable benefits, until earned income reaches a certain level, at which point earned income is declared and means-tested benefits lost or reduced. The decriminalisation which reducing means-testing would achieve is a strong argument for establishing a small and growing Citizen’s Income.
Any future research into financial services provision will need to address this question: How are decisions about which financial services to access linked to decisions about how income sources are managed? For instance: Is a family receiving means-tested benefits and undeclared casual earnings less likely to open a bank-account than a low-earning family not in receipt of benefits? If so, then the conclusion which Jordan et al draws has relevance to any future debate on the provision of financial serves in more deprived areas.