New money lending service opens in Sheffield

[ECCOnoob]

I would say this is an essential service.

 

When people are in dire straights and have nowhere else to turn this will prevent them going to loan sharks and all the attendant problems that that will bring. Hopefully it will at least be cost effective.

 

I expect it will work as an ethical loan service, so they should get the money back.

 

No it is not an "essential service". Its not the council's job. It never has been the council's job.

Those people in such "dire straits" can use a debt advice service, debt management company, seek advice from a CAB or go to a credit union as they have managed to do before.

 

63 million pounds of budget cuts and planned council tax rises this year.

 

Cuts to disability services

Cuts to respite care

Cuts to staffed carer hours

Cuts to learning disability services

Cuts to youth services

Cuts to homeless services

Amalgamation of departments

Job losses.

 

Those are essentials that SCC budget should be focused on.

 

Its not their remit to be a bank or a money advisory service. They already exist. £220,000 may be a "drop in the ocean" but it still £220,000 down the pan. They consider it will take 3 years before this vanity project will break even..... if they are lucky. What more cuts and increases between now and 2018 are to be faced in order to fund this completely unnecessary nonsense.

 

I say again. Its not the council's job. They have no business even having the inkling of such an idea.

 

"Finance for Sheffield" The initials say it all. Another quango filled with overpaid and underskilled bigwigs on the gravy train.

Edited August 10, 2015 by ECCOnoob

[Anna B]

No it is not an "essential service". Its not the council's job. It never has been the council's job.

Those people in such "dire straits" can use a debt advice service, debt management company, seek advice from a CAB or go to a credit union as they have managed to do before.

 

63 million pounds of budget cuts and planned council tax rises this year.

 

Cuts to disability services

Cuts to respite care

Cuts to staffed carer hours

Cuts to learning disability services

Cuts to youth services

Cuts to homeless services

Amalgamation of departments

Job losses.

 

Those are essentials that SCC budget should be focused on.

 

Its not their remit to be a bank or a money advisory service. They already exist. £220,000 may be a "drop in the ocean" but it still £220,000 down the pan. They consider it will take 3 years before this vanity project will break even..... if they are lucky. What more cuts and increases between now and 2018 are to be faced in order to fund this completely unnecessary nonsense.

 

I say again. Its not the council's job. They have no business even having the inkling of such an idea.

 

"Finance for Sheffield" The initials say it all. Another quango filled with overpaid and underskilled bigwigs on the gravy train.

 

All the services you mention are indeed essential. I am no lover of Sheffield City Council and have often accused them of inefficiency and incompetence, so you may be right, but let's give them a chance eh? This seems like a good idea to me, and may well nip other expensive problems in the bud. I hope so, but I could be wrong. I hope it's being properly administered, monitored and measured for effectiveness. Time will tell if it works.

[apelike]

As SCC is giving a grant can we also know how much these advisers are being paid?

 

Its another Community Benefit Society that operates like a charity with tax benefits. How long will it survive when the grants run out? Recently a food-bank, operating I believe as a CBS, closed most of their operations when council funding ran out. These are nice well paid jobs for those that set up and operate them..

[woodmally]

I would say this is an essential service.

 

When people are in dire straights and have nowhere else to turn this will prevent them going to loan sharks and all the attendant problems that that will bring. Hopefully it will at least be cost effective.

 

I expect it will work as an ethical loan service, so they should get the money back.

 

Firstly this is completely the wrong attitude and what got us into this mess in the first place. People shouldnt be borrowing money they cant pay back. We should be encouraging people to better manage their money and save for emergencies that come their way.

 

As for this service have you seen the interest rate. Its not that much better than Payday Loans at its worst is 89.9%!

 

Also why do we need another organisation when the Sheffield Credit Union does the job perfectly.

[Cyclone]

So the money has been given as a grant to start a new company. Is encouraging business not supposed to be part of the remit of the council.

 

The company, set up with a £220,000 grant from Sheffield City Council, provides a broker service to match people to products.

 

It's not seed money that is being lent, it's money to start a company.

 

I can't actually figure out under what scheme the grant was authorised though, there don't appear to be any existing schemes that would fund such a business (although there is a closed scheme that was running until late last year, it could have been funded under that scheme).

[cgksheff]

The set-up funding is from a £1m allocation for various projects arising from the "Fairness" consultation and was approved in the 2013/14 Budget.

 

More background is available in this officer report to Cabinet:

http://sheffielddemocracy.moderngov.co.uk/documents/s16225/Allocation%20of%20Funding%20to%20Finance%20for%20Sheffield%20Ltd%20Sheffield%20Money.pdf

[TJC1]

Of course sound financial advice should be to not borrow any money in the first place. Stop the cycle of borrowing. Earn more. Save.

 

---------- Post added 11-08-2015 at 09:35 ----------

 

Firstly this is completely the wrong attitude and what got us into this mess in the first place. People shouldnt be borrowing money they cant pay back. We should be encouraging people to better manage their money and save for emergencies that come their way.

 

As for this service have you seen the interest rate. Its not that much better than Payday Loans at its worst is 89.9%!

 

Also why do we need another organisation when the Sheffield Credit Union does the job perfectly.

 

Yes. Nothing ethical about a money broker.

The council could have put 220k into money education, instead of short term patch'ups.

 

---------- Post added 11-08-2015 at 09:43 ----------

 

They claim to be offering a low interest alternative to door step lenders.

89.9% APR is not a low interest alternative.

[Anna B]

Of course sound financial advice should be to not borrow any money in the first place. Stop the cycle of borrowing. Earn more. Save.

 

---------- Post added 11-08-2015 at 09:35 ----------

 

 

Yes. Nothing ethical about a money broker.

The council could have put 220k into money education, instead of short term patch'ups.

 

---------- Post added 11-08-2015 at 09:43 ----------

 

They claim to be offering a low interest alternative to door step lenders.

89.9% APR is not a low interest alternative.

 

You are right in that it's not a good idea to borrow money if you can avoid it, but unfortunately it's not always possible. The delays in benefits means people often start off in debt, and crisis loans are just that - loans.

 

Also the working poor sometimes have to borrow money just to make ends meet, pay the bills etc. We're not talking about borrowing money for luxuries, here, but for necessities, like electricity.

 

89.9% interest is excessive; where did you get that figure from?

[woodmally]

You are right in that it's not a good idea to borrow money if you can avoid it, but unfortunately it's not always possible. The delays in benefits means people often start off in debt, and crisis loans are just that - loans.

 

Also the working poor sometimes have to borrow money just to make ends meet, pay the bills etc. We're not talking about borrowing money for luxuries, here, but for necessities, like electricity.

 

89.9% interest is excessive; where did you get that figure from?

 

Here is my source for the above claim

 

http://www.theguardian.com/money/2015/aug/08/sheffield-money-payday-loans-rates-poverty

[TJC1]

You are right in that it's not a good idea to borrow money if you can avoid it, but unfortunately it's not always possible. The delays in benefits means people often start off in debt, and crisis loans are just that - loans.

 

Also the working poor sometimes have to borrow money just to make ends meet, pay the bills etc. We're not talking about borrowing money for luxuries, here, but for necessities, like electricity.

 

89.9% interest is excessive; where did you get that figure from?

 

From the sheffieldmoney website.