Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the extent to which the current banking hub assessment process takes account of (a) public transport availability, (b) journey times, (c) geographic barriers, (d) seasonal population changes and (e) the cumulative impact of multiple bank branch closures in neighbouring communities; and whether she plans to make changes to those factors following the independent review of access to banking services.

The way people across the UK use retail banking services has changed significantly, with many customers now choosing to bank online. In response, banks and building societies have reshaped their branch networks, reflecting changing customer preferences. However, the Government understands the importance of banking services to communities and high streets and is committed to supporting the financial services industry’s roll-out of 350 banking hubs by the end of this Parliament.

Over 275 hubs have been announced so far, and more than 235 are already open. Of these, 70 are temporary hubs. Temporary hubs offer the same services as permanent hubs.

LINK, the operator of the UK’s largest ATM network, is responsible for assessing a community’s access to cash needs and does not consider bank service provision. When asked to carry out a cash access assessment, LINK takes into consideration a wide range of criteria, including those unique to each location, such as the size and vulnerability of the population, existing and remaining cash access facilities and the number of shops. Specifically, LINK takes into consideration population demographics, seasonal population change, public transport times and cost, geographic barriers, and whether it is reasonable for people to travel to nearby facilities.

LINK uses a catchment area of 3 miles in rural locations and 1 mile in urban areas and considers if there is a significant impact on nearby towns. As part of its assessments, LINK will consider the available services in a community, including existing ATM provision, and recommend additional solutions if it is deemed necessary to ensure reasonable access to cash.

Where a hub is recommended by LINK following a planned branch closure, the branch cannot close until a suitable replacement service is in place. The average time to open a hub driven by the closure of the last bank in a town is under 12 months. Where a hub is recommended following a community request, Cash Access UK aims to provide a temporary solution within three months. FCA rules also require that, where additional services are needed, a solution must be put in place within 12 weeks, which may initially be a temporary service ahead of a permanent hub.

The provision of a bank’s services is a commercial decision for the firm, and the Government does not intervene in these decisions. However, the Financial Conduct Authority (FCA) guidance expects firms to carefully consider the impact of planned branch closures on their customers’ everyday banking and cash access needs and put in place alternatives where reasonable.

In addition to bank branches and banking hubs, the Post Office Banking Framework allows personal and business customers to withdraw and deposit cash, check their balance and pay bills at more than 10,500 Post Office branches across the UK. The Government protects the Post Office network by setting minimum access criteria. These include ensuring that 99 per cent of the UK population lives within three miles of a Post Office and 90 per cent of the population within one mile.

The Government is committed to ensuring that people who need in-person banking can continue to access essential services. That is why on 14 May the Government commissioned an independent Review into Access to Banking Services, to assess whether changes in access to in-person banking services are causing consumer detriment, the scale of any detriment, and who it affects. The Review will consider access to in-person banking services for both personal and business customers.

The Call for Evidence has been published on GOV.UK at the following link: https://www.gov.uk/government/calls-for-evidence/access-to-banking-services-review-call-for-evidence. It will run for 6 weeks and will close on 20 July.

Responses to the Call for Evidence can be submitted online via: https://www.smartsurvey.co.uk/s/accesstobankingservices . Those wishing to submit via email, including supplementary evidence, research or data can do so at accesstobankingservices@hmtreasury.gov.uk.

The evidence collected by the Review will inform future decisions on whether further action is needed.