Agenda item

Report of the Chief Executive.

The Cabinet Member with the Stronger Communities Portfolio introduced the report of the Chief Executive (previously circulated) requesting that consideration be given to proposals to support the Darlington Credit Union (DCU), as part of its investment and growth plan and in light of the financial impact the credit union has sustained through the pandemic, by allocating £25,000 as one-off grant funding from the Additional Restrictions Grant (ARG) and a £75,000 interest-free loan, to be repaid over a 10-year period.

The submitted report stated that the DCU provided a broad range of affordable, sustainable and ethical financial services to its members; encouraged the development of good financial practice across the community; had made an important contribution to the town since its formation in 2009; provided support to around 1,200 people per year with the MoneySmart project, which offered financial literacy education and holistic support to those who were financially vulnerable; and had helped children start in the habit of saving, with over 1,300 pupils in 13 schools having saved over £180,000.

It was reported that the Council had, since its foundation, supported the DCU, which had allowed it to offer interest-bearing accounts and affordable loans, which reduced the risk of residents using loan sharks; the DCU were seeking £150,000 of funding to enable growth but also to assist with the financial challenge the pandemic had presented; Darlington Building Society (DBS) had been approached and had agreed to provide funding of £50,000; and that £100,000 had been requested from the Council.  The DBS and this Council had reviewed the 2022 and 2023 financial forecasts which had shown a positive return and both were satisfied that the credit union had plans and actions in place to achieve those estimated returns.

RESOLVED – (a)  That one-off funding of £25,000 from the Additional Restrictions Grant (ARG) fund, as detailed in the submitted report, be approved.

(b)  That a £75,000 interest-free loan, repayable over 10 years to support the sustainability and growth of the Darlington Credit Union, as detailed in the submitted report, be approved.

(c)  That the authority to draw up a funding agreement for the loan, be delegated to the Group Director of Operations.

REASONS – (a) Using the credit union enabled individuals to receive advice and support about saving and appropriate lending as well as helping them to avoid reaching crisis through high cost lending.  It also helps them to meet other commitments including payment of council tax and housing rent.

(b)  ARG funding was designed to assist organisations which had been impacted by the Covid-19 pandemic.