Advisors compete for £ 1million investment in ‘Preston Bank’

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Cllr Martyn Rawlinson was defending the Labor-controlled council’s involvement in the creation of the North West Mutual Bank, which will lend money and offer accounts only to businesses and residents based in the area.

The company – a collaboration with Liverpool City Council and Wirral Council – has been in the works for more than two years and will also provide banking services to those who might otherwise have difficulty accessing them.

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Should Preston City Council Support a Regional Bank?

However, Liberal Democrat leader John Potter told a plenary council meeting the authority was ‘gambling’ the money pledged to the program – of which £ 100,000 was pledged this year, with the rest to be invested. in 2022/23.

When discussing the financial challenges the authority will face in the years to come, Cllr Potter said there were good reasons he thought banking was a “stupid idea” – but he didn’t could not develop them because they were never presented to the advisers in private.

“The members… should be absolutely aware that by injecting this million pounds there could be losses of services and jobs on this council that you could have avoided by not spending that money in the bank.

“If you think it’s worth it, that’s fine – but you have to live with it. Serving a million pound debt is not free, ”warned Cllr Potter.

However, Cllr Rawlinson – cabinet member for resources and deputy head of council – dismissed the charge of recklessness, saying community banking was the only game in town if Preston was serious about being leveled.

“Money from the government – the Cities Fund [Preston has received £20.9m] and the Leveling Up Fund if we get it [up to £20m] – will not level anything.

“We’ll do the right things with it, we’ll do our best to make Preston vibrant and exciting and [to enable it] thrive – but the bank is the only real upgrade program that’s going to happen for this city… and everyone should support it, it’s worth every penny, ”he added.

Meanwhile, community wealth building cabinet member Freddie Bailey accused the Lib Dems of lacking ambition.

“[The bank] is a risk and we obviously know it… but if it works, we could potentially invest millions and millions of pounds in small and medium-sized businesses and social enterprises.

“With the effects of Brexit and Covid, I truly believe there is no better time to [modern UK] just… to do it, because it’s something we seriously need, ”said Cllr Bailey.

Documents presented at the meeting show city council will need to save £ 600,000 in 2023/24 – a year later than forecast in the February budget, due to insufficient spending.

The council has previously said it has identified £ 1.3million in emergency savings that it could leverage from its non-statutory services, but will first attempt to generate them through digital efficiency.

The authority’s reserves are also expected to rise from £ 7.2million this year to just over £ 2million by 2024/2025.

Cllr Potter suggested that the council had been slow in trying to sort out their financial problems.

However, Cllr Rawlinson said the authority “always makes the big decisions when the time comes”

He added: “After ten years of austerity and three big savings exercises – drastically reducing our overheads [and] halve the workforce – we still cannot balance the books without destroying vital services. All we have left is vital.

The councils need more funding from the central government. Housing and business taxpayers pay too much [of the] burden of the cost of local services relative to other taxpayers – this is not sustainable.

“It’s time to invest in ourselves, not to push ourselves to the limit. “

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