Credit Unions Tackle Community Development at the ABCUL Annual Conference 2024

Thursday 21 March 2024

 Reporting on the ABCUL Annual Conference 2024, Co-op News gave insight into the action-packed agenda, with the need for community development high on the agenda as the credit union sector gathered at the Midland Hotel in Manchester for the Association’s flagship event.

Opening the conference on Friday 15 March, Economic Secretary to the Treasury, Bim Afolami spoke to delegates with a reminder of the sector’s mission to support communities.  The sector is an important one, said Afolami: “The 240 credit unions in Britain hold collective assets of over £2.6bn and combined annual revenues of about £88bn in 2022 – 3.5% of the GDP. The Minister saluted “the essential role that credit unions play from fostering financial inclusion to encouraging savings habits and providing affordable loans to their members”, he urged the sector to “redouble your efforts and evangelising about the importance of credit unions, but also encouraging members to join because that’s the only way we’re going to grow in the long term”.

Afolami listed recent government actions support for the sector, including the allocation of £145m in dormant asset funding to initiatives like Fair4All Finance, the pilot Prize Saver scheme and reforms allowing credit unions to offer new services such as hire purchase.

“I strongly encourage you to explore how you can make full use of these powers and factor them into your business strategies,” he said. “They provide an exciting opportunity to diversify your income streams, appeal to new members and enhance operational resilience as organisations.”

He also praised steps in this direction including the cloud-native core banking solution from Clockwise Credit Union and the green loan introduced by Hull and East Yorkshire Credit Union.

Following the Minister’s speech, the conference featured a panel discussion from UK credit unions involved in a CDCU pilot project, chaired by Scott Butterfield from US service organisation Your Credit Union Partner.

Butterfield said GB credit unions already “stack up with other countries in terms of the difference you make in people’s lives”.

But he warned: “You have to grow at a healthy rate to generate that extra surplus keep up with tech, keep up with human resources and afford pay future leaders. We need to see GB credit unions grow and prosper and live out their best mission.”

Panellists from a CDCU pilot scheme run by ABCUL set out lessons they had learned, stressing the need to identify members of the common bond who are not being served, to grow membership and gather evidence to support the case for government funding.

Julie Mallinson, from Celtic CU, said she hoped the pilot will bring “recognition and awareness of what we do – we struggle for that”. She cited Welsh government’s failure to incorporate a “fully worked out programme for financial education in schools”, developed by Celtic eight years ago, into its national curriculum.

“We’re very active in schools and communities,” she said. “If this pilot helps us grow than that’s a good thing.”

Credit unions were reminded of their role in reviving the UK’s economy, with Dele Adeleye from the Bank of England speaking in a plenary session, hoping the country can “see some growth”.

He urged members to deal quickly with arrears, and plan for the impact on liquidity now that the PRA has stopped easing. They should also be mindful of a regulatory environment that is growing in complexity, with issues like data risk and climate change entering the picture.

Key to all of this is governance, added Adeleye. “At heart of problems like bad loans, it all goes back to bad governance”, with problems including a lack of succession planning, poor allocation and understanding of responsibilities, the absence of performance assessments, and a reluctance to accept responsibility for unpopular decisions.

The second half of the year will see a supervisory team from the PRA visiting a number of credit unions to assess their governance procedures, he added.

The second day of the conference saw a speech from Andy Burnham, Labour/Co-op mayor for the Greater Manchester Combined Authority, who said the credit union sector had a part to play in “the philosophy of economic localism” that devolution was bringing to GB regions.

Burnham said he was hopeful for an end to a neoliberal, market-led era which has left British people “far too exposed when it comes to the cost of the essentials of life … people on the lowest incomes have struggled badly and that can’t be right in a country like ours.”

For credit unions, this means an opportunity to help local authorities deliver inclusion in energy, housing if these come under local control. For instance, in Greater Manchester, where the bus network is now run by the combined authority, Burnham has made a manifesto commitment to make the Sound Pound credit union consortium an official partner, to deliver an interest-free loan that will allow people to buy annual travel passes up front, and benefit from the discount this brings.

“We will make sure it works for credit unions,” he said. “We will bring more people to your doors and help people get the benefits of a credit union. That will mean people’s weekly travel will be much cheaper than it might have been.”

Burnham said the credit union sector has a role to play in “making sure people on lower incomes can access the benefits wealthier people can”, in relation to his plans for social housing, the green transition, community wealth building and an “Our Business” platform for non-profits.

“We’re pioneering a different kind of economy with a focus on inclusive growth where people grow with the economy,” he added.

The final speaker, hailed from the States – Sandra McDowell of the CU eLeadership Academy, discussed inclusive leadership which, she said, is vital to the functioning of an organisation, adding: “With inclusive cultures we need to think about how we move to a place where we think as ‘we’.”

This delivers benefits in terms of reducing employee burnout and stress, improving productivity and profit, and eliminating confirmation bias from decision-making, she said. “When you get more perspectives together it brings better thinking: 80% of job applicants are looking for diverse place to work.”

The full story from Co-op News, which details more insight into breakout sessions of the event is available here.

ABCUL would like to thank CMutual for its continued support and sponsorship at the ABCUL Annual Conference 2024.