Essex Council to form £50m community bank

by Gill Montia

Story link: Essex Council to form £50m community bank

Essex County Council is proposing to set up a bank that can provide loans for small firms unable to tap funds from the UK’s private, or even part-nationalised, banking sector.

The move is in response to pleas from local business people who say they are unable to secure credit from High Street banks.

According to council leader, Lord Hanningfield, viable businesses are being starved of funds and the intention is to create a £50 million community bank.

The Councillor referred to similar models in the US, adding that the county has strong links with the US through the Founding Fathers.

It will not be the first time Essex County Council has taken the lead in matters of financial services and community.

In March of this year, it became the first local authority in Britain to announce plans to take over post offices earmarked for closure by the Government.

Over three years it plans to spend up to £1.5 million saving 15 rural and urban branches.

Meanwhile, ministers continue to demand that banks restore their lending to individuals and commerce.

Business Secretary, Lord Mandelson, is developing a new code of practice on lending and it is understood that banks could face legal action if they fail to follow the guidance.