Fears over future of Colchester savings scheme (From Gazette)

Fears over future of Colchester savings scheme

6:22pm Friday 20th November 2009

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FEARS have been raised for the future of a savings scheme after it missed out on a cash boost.

The Colchester Credit Union, a savings and low-interest loans scheme, was not given any cash by Essex County Council, which dished out £170,000 to the Essex Savers Credit Union instead.

County council bosses say the money was given exclusively to the county-wide union to allow people from all parts of Essex access to a union.

However, community leaders in Colchester say they are concerned that if the Colchester Credit Union is forced to close, vulnerable people will fall prey to loan sharks who charge extortionate interest for loans.

Colchester councillor Gerard Oxford said: “Our taxpayers are paying for other districts to get extra help, while their own credit union is struggling to stay afloat.”

“During a recession, the poorest people in society, particularly as we approach Christmas time, feel under pressure to be able to provide things for children and grandchildren.

“This is when they fall into the trap of borrowing from loan sharks and end up paying ridiculous amounts in interest.”

Speaking at a Colchester Council finance and audit scrutiny meeting, Colchester councillor, Nigel Offen, said the scheme had unfairly missed out, adding: “The Colchester Credit Union needed £19,000 to stay on its feet, but was told there was no money.

“Then Essex County Council received a large grant from the Government and gave it all to Essex Savers.”

Paul Probert, Essex County Council’s head of economic policy, told the meeting: “Our aim is that anyone in the county, regardless of where they live, will be able to access a credit union.”

The Colchester Credit Union has fallen into financial trouble in recent months. The volunteer-staffed organisation normally meets its running costs with earnings from deposits, but falling interest rates have seen returns dwindle from £400 to just £12 a month.

There are 400 adult members in the Colchester Credit Union, as well as 800 children who save through schools in Colchester and Tendring.

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