The Credit Crunch - what Wigan Council is doing

Leading Wigan councillors and the town’s MPs have met bank and building society bosses in a bid to throw a lifeline to thousands of residents suffering from the effects of the credit crunch.

The meeting, which was requested by the council, was welcomed by the banking representatives, who said Wigan was leading the way in working with the financial sector to help residents and businesses worst affected.

Senior managers from the Royal Bank of Scotland, the Coop Bank and the Nationwide and Yorkshire building societies joined cabinet councillors Kevin Anderson and David Molyneux, MPs Ian McCartney and Neil Turner, and council officers led by deputy chief executive Sue Johnson.

Deputy council leader Cllr David Molyneux said afterwards: “It was a really positive meeting looking at the scale of the problem. One of the banking representatives said we were the first of the 160 councils his bank deals with to approach them in this way.

“We’ve recently had some alarming figures on how the credit crunch has started to bite in our borough and we want to work with mortgage providers on helping those likely to be hardest hit.

“We looked at how we could help people who are under threat of eviction stay in their own homes and the lenders have confirmed that they are extending the time they will take to start repossession from 3 to 6 months in line with government requests.

“We also discussed whether the repossessed homes that are with banks and building societies could be bought by registered social landlords in a managed way, rather than just auctioning them off, and about matching people who want housing with empty houses that are available in Wigan, regardless of who owns them.”

A recent report to the council’s cabinet revealed the potential scale of the problem, with a dramatic rise in early mortgage repossession action - up nearly 60% in the last three months - and advice agencies struggling to deal with a big increase in demand.

The Citizens’ Advice Bureaux alone are reporting a 35% increase in debt clients, rent and council tax arrears are climbing and bankruptcy referrals have shot up by a massive 360%.

A new report by the Local Futures group has also listed Wigan as one of the twenty areas most likely to be affected by job losses as a result of the recession.

Cllr Molyneux added: “The council has a duty to do whatever it can. Our MPs have agreed to take the key messages back to government and we have agreed to continue meeting with the banks on a regular basis.”