Natural England

Local cashpoint vital for market town business - 12 March 2002

The last bank branch in Ibstock, a rural Leicestershire market town, closed in 1995. In response Ibstock Community Enterprises (ICE), an innovative social enterprise, struck a deal with Bank of Scotland to run a local cash point and with Hinckley & Rugby Building Society to provide an agency point. ICE is paid a small commission, which it uses to promote local regeneration. Local businesses have said for a number of years that they believe much of their current trading is due to the existence of the cash point and building society run by ICE.

Survey author Rachel Elliott, from Ibstock Community Enterprises, set out to test whether there was any merit in these local business claims. To do this, Rachel surveyed the users of both ICE's cash point and building society agency point to track where they spent the money they had just withdrawn.

The survey found that every £10 withdrawn from the cash point led to £6.30 being spent in Ibstock  and every £10 withdrawn from the building society led to £3.80 being spent locally – clear evidence of how important finance facilities are in supporting local communities. The survey also found that the vast majority of users (87%) lived within Ibstock and that 72% of people used either of the cash sources at least once a week. Furthermore, just 9% of respondents answered that they used any non-Ibstock sources of cash.

Commenting on the outcome of the survey, NEF's Director, Ed Mayo, said: "Rural areas desperately need banking facilities. Closing the last branch is like pulling the plug on the local economy. Ibstock  is a groundbreaking partnership, using local agencies to deliver cash. It shows how banks can restore their good name and save Britain's rural communities." 

Margaret Clark, a director of the Countryside Agency said: "By 2000 only 9% of rural parishes had a bank or building society, so alternative sources of access to finance are essential to maintaining healthy rural economies. In the absence of traditional financial institutions social enterprises like ICE, can play a critical role in providing access to cash and finance to rural communities and businesses."

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NOTES TO EDITORS:

1. The survey is the third in a series of pilots being undertaken by the New Economics Foundation, funded by the Countryside Agency, measuring the 'local multiplier effect' of business activity and community initiatives in rural areas. A key feature of the studies is that they are designed to be participative – so that anyone can take an active interest in local economic development. The results of the pilots will feed into a series of workbooks that will allow any community group, business or local authority to measure the impact of their activities on the local economy for themselves.
2. The study was conducted through surveys in late 2001 by Ibstock Community Enterprises – a social enterprise based in Ibstock – a Leicestershire market town.
3. For the purposes of the study, 'local' was defined as being within the town of Ibstock and surrounding villages. The methodology employed was based on traditional multiplier analysis, adapted to be accessible and manageable for community participation.
4. The Countryside Agency is responsible for advising Government and taking action on issues affecting the social, economic and environmental well-being of the English countryside. 
5. The New Economics Foundation (NEF) is an independent research, training and advocacy think tank seeking to build the new economy with ideas and action that put people and the environment at the heart of economic decision-making. NEF's Plugging the Leaks programme allows community groups to map and measure local money flows in order to gain a better understanding of how money circulates within a defined locality. The programme is funded by the DTLR Special Grants Programme, the Countryside Agency, and the Esmee Fairbairn Foundation. www.neweconomics.org