COUNCILLORS have rubber-stamped a £50,000 grant for a North-East credit union as it continues to battle payday lenders and loan sharks.
Darlington Borough Council is giving the one-off windfall to Darlington Credit Union, to expand its provision of low-cost loans for hard-up members of the public.
The grant, announced by council leader Bill Dixon last week, was formally approved at a meeting of the council’s cabinet on Tuesday (April 29).
Councillor Andy Scott, cabinet member for health and partnerships, said the grant was from ring-fenced funding and comes directly from Central Government coffers, rather than being drawn from council reserves.
He said: “This grant will help make the credit union more accessible and an attractive alternative to payday loans and doorstep lenders that offer ridiculously high interest rates.
“The credit union is a credible alternative to these horrendous lenders.”
A report prepared for cabinet members highlighted an increase in the number of Darlington residents who are on a low income or claiming benefits.
It is estimated that, as of August last year, more than 8,700 16 to 64-year-olds in Darlington were on ‘out of work’ benefits.
As well as developing the existing low-cost loans scheme, the grant will also enable the credit union to provide a cheaper method for purchasing white goods than those offered by high street lenders.
Credit union chairman Tony Brockley has welcomed the windfall.
Conservative group leader Heather Scott was also in favour of the move, adding: “There has been some criticism that it was the council spending public money on this, which is not the case.
“We welcome this and I am pleased that we are able to help Darlington Credit Union, which is well worth supporting.”
Coun Heather Scott also addressed comments about the fact that the credit union has a presence in the new customer services centre at Darlington Town Hall.
She added: “We have to try to help people who are in difficult circumstances and for the credit union to have a facility within the town hall is ideal.”
Coun Chris McEwan, cabinet member for economy and regeneration, stressed that the credit union is also a safe place for people to invest their money.
He added: “I know quite a lot of people who are starting to save with them.”