The petition of residents of the constituency of North East Fife,
Declares that bank branches, particularly those in Cupar, Falkland and St Andrews are the heart of their communities, and are relied upon by local communities, those who need access to cash and those without internet banking.
The petitioners therefore request the House of Commons urges the Government to ensure that the bank closures in North East Fife are reversed and all local bank branches are protected.—[Presented by Wendy Chamberlain, Official Report, 18 July 2023; Vol. 736, c. 879.]
Observations from The Economic Secretary to the Treasury:
The Government thank the hon. Member for North East Fife (Wendy Chamberlain) for submitting the petition on behalf of her constituents regarding the closure of the Bank of Scotland’s Cupar and Falkland branches and the closure of the Barclays UK branch in St Andrews.
The Government are sorry to hear of her constituents’ disappointment at the planned closure of these branches. However, the way consumers interact with their banking is changing. In 2022, almost 9 in 10 (88%) UK adults used a form of digital banking, such as an app or online banking platform, up from 77% in 2017. Indeed, according to Bank of Scotland, 75% of the customers of the Falkland branch and 82% of the customers of the Cupar branch also used other Bank of Scotland branches, internet banking or telephone banking.
Meanwhile 97% of people who use the St Andrews Barclays have also banked using the app, online and by phone; less than 10 customers use this branch regularly as the only way to do their banking.
As with other banking service providers, Bank of Scotland and Barclays will need to balance customer interests, market competition and other commercial factors when considering their strategy. Although the Government can understand constituents’ dissatisfaction, decisions on opening and closing branches are taken by the management team of each bank on a commercial basis.
The Government hope that the hon. Member can appreciate that it would therefore be inappropriate for the Government to intervene in these decisions. The Government cannot reverse the changes in the market and in customer behaviour; nor can they determine firms’ commercial strategies in response to those changes. Having the flexibility to respond to changes in the market is what makes the UK’s financial services sector one of the most competitive and productive in the world, and the Government want to protect that. Having a dynamic and competitive financial services sector drives innovation and incentivises banks and building societies to keep developing their banking products and services, creating better outcomes for customers.
None the less, the Government firmly believe that the impact of branch closures should be understood, considered, and mitigated where possible so that all customers, wherever they live, continue to have appropriate access to banking services.
As the hon. Member may know, guidance from the Financial Conduct Authority (FCA) sets out its expectation of firms when they are deciding to reduce their physical branches or the number of free-to-use ATMs. Firms are expected to carefully consider the impact of a planned closure on their customers’ everyday banking and cash access needs and to consider possible alternative access arrangements. This is to ensure that the implementation of closure decisions is done in a way that treats customers fairly. The new consumer duty also requires firms to act to deliver good outcomes for customers. The FCA is closely monitoring banks and building societies in this regard and if a firm falls short in its provision of reasonable alternatives, the FCA can and will ask for closures to be paused or for other options to be put in place.
In the customer information pack that Bank of Scotland has published for the Cupar branch closure, customers are pointed to the nearby free-to-use ATMs at the nearby Supersaver (0.03 miles away), Nationwide building society (0.05 miles away) and Keystore Cupar (0.07 miles away), as well as alternative Bank of Scotland branches in St Andrews Queens (8.77 miles away) and Leven (9.89 miles away). Meanwhile the information pack for the Falkland branch directs customers to the Bank of Scotland branch in Glenrothes (6.1 miles away) and also signposts the free-to-use ATM at Freuchie Stores (1.86 miles away) amongst other alternatives. Barclays also points to free ATMs at the Tesco Express, a minute’s walk away from the current St Andrews branch location. These branches are all accessible from the closing bank branch via public transport. On its website, Barclays also indicates that it will be providing alternative in-person services in the St Andrews community and will share further information once the arrangements are finalised. Where Barclays closes a branch, it often provides a community service within walking distance under its “Barclays Local” banner, to support customers with non-transactional banking such as opening and closing accounts, checking balances, digital skills support and money management advice.
Alternative options to access everyday banking services can be via telephone banking, through digital means such as mobile or online banking and via the Post Office. The Post Office banking framework allows 99% of personal banking and 95% of business customers to deposit cheques, check their balance and withdraw and deposit cash at 11,500 Post Office branches across the UK. The nearest Post Office branch to the Cupar Bank of Scotland branch is 0.1 mile away at 69 Crossgate, Cupar; for the Falkland Bank of Scotland closure, the closest Post Office can be found close by, just up the High Street two shops (246 feet) away. Meanwhile, the St Andrews Post Office on South Street is also less than 500 feet away, a short walk up Logies Lane from the current position of the St Andrews Barclays bank branch. The Government hope this will prove convenient for the hon. Member’s constituents who prefer to use an in-person service for their everyday banking.
In recognition that cash continues to be used by millions of people across the UK, the Government legislated through the Financial Services and Markets Act 2023 to establish a new legislative framework to protect access to cash. The Act establishes the Financial Conduct Authority (FCA) as the lead regulator for access to cash and provides it with responsibility and powers to seek to ensure reasonable provision of cash withdrawal and deposit facilities. As part of this responsibility, the FCA must also seek to ensure that there is reasonable provision of free withdrawal and deposit facilities in relation to personal current accounts.
Following the passage of this legislation, the Government recently published a cash access policy statement, which sets out the Government’s policies on access to cash. The FCA is required by law to have regard to these policies when determining its regulatory approach in this area. The FCA will publicly consult on its regulatory approach in due course. The Government’s policy statement is available online:
In the context of the Government’s legislation, the financial services sector is working together to develop and provide shared services. This includes a process for Link, which operates the UK’s largest ATM network, to assess a community’s access to cash needs. These assessments take place in the event of the closure of a core cash service or a request to Link directly from a local community. In circumstances where Link considers that a community requires additional cash services, participating firms within the financial services sector will provide a suitable shared solution, such as an ATM, deposit service or shared banking hub for cash users in that community. The Government understand that Link has recommended an alternative cash deposit service as a result of Bank of Scotland’s plans to close its Cupar branch. We also note that as a result of the Falkland Bank of Scotland closure, a replacement Link ATM is required. Petitioners may wish to contact Link for further information. Contact details can be found on Link’s website: www.link.co.uk/consumers/request-access-to-cash/