Jane Lutton’s comment to my previous article on cheques has prompted me to write another little piece.
Jane works for PAVIS Foundation for Visually Impaired People, a small registered charity set up in 1998 that provides a tremendous range of services for those with sight difficulties. Jane’s concern is that it is this sort of charity – and I think that there must be hundreds around the United Kingdom – that will be disadvantaged by the removal of cheques, as proposed by the Payments Council [see this summary note for a reminder of the plans]. If PAVIS cannot identify the resources to invest in direct debit facilities to manage donations, then I presume that, if it can no longer raise the necessary funds, then this is a charity whose very existence could be determined by the usability and cost-effectiveness of any cheque replacement.
It is the threat to vulnerable individuals that concerns me most.
For instance, the Conservative administration at Basildon Council has decided that it is no longer cost-effective to provide housing benefit by cheque and so has announced it is to withdraw that option. The Cabinet member with responsibilities for resources, Cllr Phil Turner, claims it costs £10 to process each cheque, making it too expensive. In a further telling comment, he explains that it is more convenient for the claimant. It is refreshing to see that for all of Cameron’s Conservatives’ pretence at reinvention and identification with modern Britain, its members remain as patronisingly paternal in their treatment of those less fortunate than themselves. They, it would seem, are not entitled to decide what is the most convenient way for them to be paid.
For those who are might be defined as vulnerable, the threat is two-fold.
Firstly, the interplay between the continuing “electronification” of financial services will lead to a particular form of financial exclusion amongst those unwilling or unable to adapt to new technologies. If you think this is a small number of people, Lavinia Mitton’s 2008 study for the Joseph Rowntree Foundation, entitled Financial Inclusion in the UK: Review of Policy and Practice, will shock you with its reporting of a 2003 review in Scotland that showed that a third of disabled people in Scotland did not even have a current account with a cheque book. (There are two other superb studies on the JRT website, both ten years old, that look at financial exclusion: Understanding and combating ‘financial exclusion’ and Family finances in the electronic economy. Both highlight some of the issues that are coming to light in the current debate around cheques.) Andrew Harrop, for Age Concern, was similarly concerned:
“Many older people rely on cheques as their main form of payment and will be very worried about how they will manage if they are withdrawn.
“Our fear is that setting a date will give the green light to banks and retailers to withdraw cheques even earlier than 2018‚ as some already have. It is vital that before cheques are phased out‚ the Payments Council ensures there is a practical‚ safe‚ paper-based alternative in place which serves the needs of this group.
“Chip and pin is problematic for many older and housebound people and we know 6.4 million over 65’s have never used the internet. Without cheques‚ we are very concerned people will be forced to keep large amounts of cash in their home‚ leaving them vulnerable to theft and financial abuse.
“We are being asked to take on trust that the banking industry will create an alternative people can use‚ but new forms of payment can take a long time to develop and no action has been taken to date.”
Secondly, as Jane’s example shows, there is a very real threat to the plethora of voluntary support services that provide assistance to the vulnerable.
By way of representative organisations, Jane mentions the Institute of Fundraising. In its own words:
“The Institute of Fundraising is the professional membership body for UK fundraising. Its mission is to support fundraisers, through leadership, representation, standards-setting and education, and it champions and promotes fundraising as a career choice.”
Sadly, in their list of top stories in fundraising, the issue of cheques doesn’t feature. This is a significant omission as, whilst it is unlikely that this decision can be reversed, development of a suitable alternative needs to be championed by an organisation that can represent the broad range of interests in fundraising – not just the corporate donors. If you are interested in raising this issue, even to establish their opinion, you can contact the Institute of Fundraising here.
Finally, the Lib Dems have started a group on their new social networking site ACT, which is dedicated to saving the cheque. You don’t have to be a party member to join ACT and the group is called Save The Cheque Campaign.
By way of a small distraction, Cllr Turner’s eagerness to refuse to pay by cheque is not matched by his readiness to refuse payment. Enter “cheque” into the Basildon Council Website search facility and you produce 41 results (including the press release linked above). If you require reports from planning services, you are instructed to pay by cheque. If you are disabled and eligible for aid, you are instructed to pay the builder by cheque. If you want to get a season ticket you are to fill in a form – and pay by cheque. Paying fines? Cheque is an option. Rebate on your council tax? Basildon can pay this by cheque. I do not know if Cllr Turner is planning to cancel all these facilities shortly or if these cheques are somehow cheaper to process. If I were less generous, I might think that he is starting with desperate people who will go through whatever Council hoops are forced on them in order to keep a roof over their heads (the comments on the Echo story linked in the main piece suggest that housing benefit claimants are not particularly popular and therefore an easy target for a Council wanting to save some money). Thoughts would of course be appreciated, together with suggestions for questions that should be asked.