The 2004 research, uncovered significant evidence of the extent of deprivation resulting from the absence of access to financial services and highlighted the impact of this on people's lives.
Since that time Leeds City Council and a significant number of voluntary and private sector partners have worked to implement many initiatives to attempt to deal with these problems. In doing so the council was always convinced that these initiatives, in addition to providing significant support for citizens, also had a potentially major impact on the city economy.
The original 2004 research concluded that up to £9 million each year was lost to the local economy through people having to pay out excess interest to doorstep lenders. However, this value was not calculated using a detailed analysis of the local economy. Therefore, with the support of Yorkshire Forward, the council commissioned further research, to be undertaken by Salford University, to find out in some detail if there was a general economic benefit and if so, the value of this to the local and regional economy. An economic model of the city economy was developed in order to arrive at a definitive answer to this question.
Research findings
- The research included a survey of residents who have had support from Leeds City Credit Union and Debt and Welfare Advice Agencies delivering affordable credit, debt and welfare benefits advice.
- When the research was commissioned, the full extent of the value which we would find when the research was analysed could not possibly have been envisaged. The research shows that every year, £26 million additional income is generated in the local economy in Leeds with an impact on the regional economy of over £28 million.
- This economic impact is produced from total operating costs of £3.3 million, which means that for every £1 invested in financial inclusion initiatives £8.40 is generated for the regional economy.
The Council believes the research shows that investment in this area of work is doubly worthwhile: it provides a significant benefit to individuals, many who are living in poverty. It also provides a boost to the economy, not only to the city as a whole but, of important significance, it provides a boost to the economy of those communities which all governments and public agencies have had such difficulty in reaching and regenerating.
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