Community Forum, Glasgow, April 2019

If ever one needed proof of the scale and diversity of the economic contribution made by the voluntary sector, it was to be found at the Albany Learning and Conference Centre in Glasgow.

This former school in the city’s west end today acts as a hub for the hundreds of organisations which are convened from time to time by the Glasgow Council for the Voluntary Sector. On the day of my visit it was positively buzzing with discussions between those who lead or support charities that carry out wide-ranging types of vital work in their communities across the city.

The voluntary sector needs to be included in conversations about the economy. In Glasgow alone the sector employs more than 12,500 paid staff and at least three times that number do unpaid voluntary work every week. Combined, their annual income is almost £1bn, comparable with some of the city’s biggest private companies.

Our Community Forums are designed to cast a broader lens on the economy: to deepen our understanding by asking people to tell us about the biggest economic and financial challenges they face. And, more importantly, what do they think can be done to make things better?

Those were the two questions we asked those in attendance at the Albany Centre to discuss on their tables. I had the privilege in sharing in all of those discussions during a session lasting around two hours. It gave me new insights on a whole range of issues.

What did we hear?

Although employment levels are high across Scotland, we heard concerns that a significant part of this work is relatively low-paid. Some young people in particular feel ‘under employed’, i.e. working on zero-hours contracts or part-time, or are over qualified for the jobs they are in. Often they don’t feel they have the opportunity to fulfil their potential.

At the same time, others are working too many hours and this is having a detrimental impact on mental health. We heard calls for a wider discussion on work/life balance and the importance of employee wellbeing. We also heard concerns about the benefits system and how the cost of childcare can be a barrier to parents returning to work.

Although headline inflation is below the Bank of England’s 2% target, we heard how that some costs were particularly relevant for those on lower incomes. Housing costs and utility bills, in particular, are rising and leaving little left over to pay for life’s other essentials.

One of the most prevalent themes was financial inclusion – the ability of individuals, families, charities and businesses to access affordable and suitable financial products and services.

We heard how people in some parts of Glasgow still use door-to-door lenders which charge very high interest rates.  Others are nervous about opening bank accounts or lack the basic means to do so (e.g. because they don’t have any photographic ID).

With many people still dependent on cash for making daily transactions, there were concerns that free ATMs were rarely to be found in housing estates. Some people now have to pay for a bus ride into the city centre to access cash.

Technology will provide some of the answers to the issues that people raised.

The positive potential of financial technology (or ‘fintech’) is huge: it can deliver consumers more choice, keener pricing and better services. But there is also a risk that it widens the digital divide at the expense of the poorest in society.

At Albany Learning and Conference Centre, we heard about low levels of digital literacy and access to the internet in some communities in Glasgow. Digitalisation can leave some people unable to apply for jobs or access their benefits.

The Bank of England will play in influential role in shaping the future of fintech. I am determined that, properly regulated, it can deliver a step change in levels of financial inclusion that will be felt in Glasgow and across the UK.

Many of the insights that we gleaned from our discussions in Glasgow will feed into our work on the future of finance, including the important role that cash will continue to play for many years to come. We’ll report back on our progress in the summer.

What else will we do? 

First and foremost, I’m excited that our partnership with the Glasgow Council for the Voluntary Sector has introduced many organisations in the city to the Bank of England for the first time. Many of those who attended have asked to maintain an ongoing dialogue with the Bank’s Scotland Agency which is based in the city. I am sure that will be a mutually beneficial relationship which may also help to foster stronger links between the private and third sectors.

One interesting point raised in the discussions was how difficult it is to measure the productivity of the voluntary sector. I have asked our Chief Economist Andy Haldane, who is undertaking a lot of work on productivity in his role as chair of the UK government’s Industrial Strategy Council, to consider what can be done to address this.

In my opening remarks at Albany Learning and Conference Centre I talked about the profound influence that Scots have had on the discipline of economics and the Bank of England itself. In particular I highlighted the work of the father of economics, Adam Smith, and his Theory of Moral Sentiments, in which he highlighted the importance of social capital.

Social capital is about drawing upon values such as co-operation, trust and reciprocity to produce goods and services for the common good.  I am pleased to see Adam Smith’s legacy lives on in Glasgow and, in particular, in the vast and diverse voluntary sector that plays such a key role in the city.

I’m grateful to Helen MacNeil and Sim Sharp at the Glasgow Council for the Voluntary Sector for their hard work in putting on the Community Forum and to all those who took part.