Last November, the UK Government announced its Financial Inclusion Strategy – a new approach to tackling the systemic barriers that prevent people from accessing things like bank accounts, affordable credit, savings and insurance.
It’s a good initiative. My colleagues and I have written here many times about how important these basic services are to living a decent life in today’s rapidly changing economy, and how difficult it can be for those who don’t have access to them.
The problem with the current UK strategy is that it doesn’t really cater for the specific challenges that we have in Scotland, for example our greater spread of remote and rural communities.
For that reason, I believe it is time Scotland had its own Financial Inclusion Strategy. This could bring together all levels of government plus other key players like financial firms and charities, enabling them to work collectively to make real change.
The aim of such a strategy would be to empower people to manage their money better and handle unexpected financial shocks, and to ensure no one is locked out of the economy. It would complement the UK strategy, not compete with it, and would drive better outcomes for people in Scotland.
Because the current policy landscape in Scotland around financial inclusion is fragmented, siloed and lacking clear strategic direction. The issues I outline above sit across multiple Scottish Government portfolios, under different policy teams such as Anti-Poverty, Child Poverty, Economic Growth and even Education.
Without clear governance structures, there are few pathways to collaboration which can bring together the expertise of key players, or shared delivery mechanisms that align strategic policy goals into a coherent plan.
Piecemeal policy initiatives won’t really cut it, especially if they get lost in the gaps between different agencies and government departments.
But with a new Scottish Government in Holyrood, we have an opportunity to create a focused, meaningful strategy that could really make a difference.
Such a strategy would be able to properly tackle digital exclusion, limited banking access and the fact that Scotland has higher rates of financial exclusion than the UK as a whole.
Our infrastructure, for example, is a significant barrier to online banking and digital payments. CAB advisers tell us that many people – especially in remote or rural areas – can find digital access difficult due to lack of reliable broadband or mobile phone coverage.
For people and communities who rely on cash, including those on a low income, or who have ill health or low digital capability, it can be even harder to cope with the changing financial landscape. Especially when both accessibility and acceptance of cash is declining.
A more joined-up policy approach could take account of regional differences to ensure that the landscape is designed to be inclusive and doesn’t make assumptions about what people want and need.
This would also have a meaningful impact on tackling wider issues of poverty and the cost of living, which the new Scottish Government has (rightly) talked about as being priorities.
Scotland has never had its own Financial Inclusion Strategy before. Maybe it’s time we did.
Sarah-Jayne Dunn is part of the Financial Health team at Citizens Advice Scotland
