Bank branches cull leaves local authority at loss

MONEY: Council chiefs fear operational issues will arise due to lack of premises

A continuing cull of rural branches has left Angus Council chiefs short-changed when it comes to selecting a bank for the authority’s own £40,000-a-year custom.

Faced with the withdrawal of big names from towns and villages across the district, finance bosses say they fear “operational issues” will escalate in the future, as the options for depositing cash collected through council premises reduce.

The closure of Arbroath’s Clydesdale Bank branch in August has already forced bosses to think up alternatives for depositing cash in the town.

Now the crisis has forced the authority into a major reversal of the criteria it will apply before awarding a banking services contract, estimated to be worth £200,000 over the next five years.

It comes amid growing anger over the closure of bank branches in rural areas, with Angus among the worst affected by the shutdown of 15 outlets in less than a decade.

Perth and Kinross and Fife have also seen a number of branch closures in recent years as bank bosses take steps to reduce their bricks and mortar and encourage more people to bank online.

Angus Council’s current contract with the Clydesdale is up for renewal next April and councillors have now agreed the new deal will be done on a 30:70 price/quality split, reversing the opposite ratio previously applied.

Finance service lead Steven Mill said consideration would be given to the potential providers’ ability to support a network of Angus-based payment points.

He said: “We have limited ability to influence the direction of travel by the banking sector, given the marginal nature of our contract value compared with the cost reductions they are delivering, but provision of local facilities will be part of the tender evaluation process.”

He said the authority had already had to put arrangements in place in Arbroath to allow for cash to be picked up from local offices.

Arbroath SNP councillor Alex King said: “The public seem to be more determined than ever that we take cash for services – and quite rightly so. That does leave us with a problem in where we, as a council, deposit our cash.”

The Scottish Affairs Committee has called on the UK Government to intervene in the escalating closure of branches following the closure of a third of branches in Tayside and Fife in the last eight years.